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Tuesday Morning Corporation Announces Fourth Quarter and
Fiscal Year 2012 Results and Guidance for Fiscal Year 2013
GlobeNewswire
2012-08-21
DALLAS, Aug. 20, 2012 (GLOBE NEWSWIRE) -- Tuesday Morning Corporation
(Nasdaq:TUES) today reported that, as previously announced, net sales
for the fourth quarter of fiscal 2012 were $196.4 million compared to
$194.8 million for the quarter ended June 30, 2011, an increase of
0.8%. Comparable store sales increased 0.2% for the fourth quarter of
fiscal 2012 compared to the same period last year. The increase in
comparable store sales was comprised of a 2.9% increase in average
ticket offset by a 2.7% decrease in traffic. Net loss for the fourth
fiscal quarter ended June 30, 2012 was $2.0 million, or $0.05 per
share, compared to a net loss of $1.4 million, or $0.03 per share, for
the same period last year. Excluding costs associated with the
departure of the our former CEO, net loss for the fourth fiscal quarter
ended June 30, 2012 was $0.7 million, or a $0.02 per share.
For the fiscal year ended June 30, 2012, net sales were $812.8 million
compared to $821.2 million for fiscal 2011, a decrease of 1.0%.
Comparable store sales decreased 3.1% for the fiscal year ended June
30, 2012 compared to fiscal 2011. The decrease in comparable store
sales was comprised of a 3.3% decrease in traffic, partially offset by
a 0.2% increase in average ticket. For the fiscal year ended June 30,
2012, the Company had earnings per diluted share of $0.09 versus $0.22
for fiscal 2011. Excluding costs associated with the departure of our
former CEO, earnings per diluted share was $0.12.
Michael Marchetti, President and Interim Chief Executive Officer,
stated, "As we move into the new fiscal year, we are focused on
improving our sales performance. Innovative sourcing of new
merchandise, implementing merchandise initiatives with respect to
better allocation and in-stock positions, improved e-commerce
performance, a new customer loyalty program, and continued improvement
in our store portfolio are all being deployed to drive sales growth and
improve profitability. With our strong balance sheet, characteristic
cost discipline and the initiatives to drive sales, we are well
positioned to deliver improved financial performance in fiscal 2013."
Financial Results for the Fourth Quarter Ended June 30, 2012
Gross Profit -- Gross profit increased $0.9 million, or 1.2%, to $73.5
million for the fourth quarter ended June 30, 2012 compared to the
$72.6 million in gross profit reported in the same quarter last year.
As a percentage of net sales, gross profit increased slightly to 37.4%
compared to 37.3% in the corresponding period in fiscal 2011.
Selling, General and Administrative Expenses: SG&A for the quarter
ended June 30, 2012 was $77.0 million versus $74.2 million in the same
quarter last year. As a percentage of net sales, SG&A increased to
39.2% in the fourth quarter of fiscal 2012 from 38.1% in the same
quarter last year. SG&A includes $2.7 million in costs associated with
the departure of our former CEO. Excluding these costs, SG&A as a
percentage of net sales decreased to 37.8% as compared to 38.1% in the
same quarter last year. On a per store basis, adjusted SG&A, which
excludes the aforementioned costs, increased by 1.1%.
Financial Results for the Fiscal Year Ended June 30, 2012
Gross Profit -- Gross profit for fiscal 2012 was $308.9 million
compared to $313.3 million reported for fiscal 2011. As a percentage of
net sales, gross profit decreased to 38.0% for the fiscal year ended
June 30, 2012 compared to 38.2% in fiscal 2011.
SG&A -- SG&A for the fiscal year ended June 30, 2012 was $301.4 million
versus $295.3 million for the fiscal 2011. As a percentage of net
sales, SG&A increased to 37.1% in the fiscal year ended June 30, 2012
from 36.0% in fiscal 2011. Excluding the $2.7 million in costs
associated with the departure of our former CEO, SG&A was $298.8
million or 36.8% of sales for fiscal 2012. On a per store basis,
adjusted SG&A, which excludes the aforementioned costs, increased by
2.2% this fiscal year versus last fiscal year. This increase was
primarily due to the decline in expense leverage from lower sales
volume and higher rent expense from increased square footage in certain
new and relocated stores.
Balance Sheet
Inventory was $265.6 million at June 30, 2012 compared to $264.4
million at June 30, 2011, an increase of 0.5% due to the timing of new
receipts late in the fourth quarter. On a per store basis, inventory
increased 1.5% compared to last year. Net property and equipment was
$75.8 million at June 30, 2012, a decrease of $1.2 million compared to
June 30, 2011.
Accounts payable was higher at June 30, 2012 by $17.0 million versus
the same period last year due to the timing of inventory receipts at
the end of the fiscal 2012 period compared to fiscal 2011. There were
no significant changes to our vendor payment policy during fiscal 2012.
At June 30, 2012, we had no borrowings outstanding under our revolving
credit facility. Outstanding letters of credit, primarily for insurance
programs, were $8.6 million at June 30, 2012 compared to $8.3 million
at June 30, 2011. At June 30, 2012, we had a cash balance of $39.7
million and availability of $123.5 million under our revolving credit
facility and we were in compliance with the terms of our revolving
credit facility.
Store Activity
We operated 852 stores in 43 states as of June 30, 2012. During the
fourth quarter of fiscal 2012, we opened 4 stores, relocated 8 stores
and closed 4 stores. During the fiscal year ended June 30, 2012, we
opened 24 stores, closed 33 stores and relocated 45 stores.
Fiscal 2013 Outlook
Net sales for fiscal 2013 are planned to be in the range of $820
million to $830 million. Comparable store sales are planned to be
roughly flat and earnings per diluted share to be in the range of $0.18
to $0.23. For fiscal 2013 capital expenditures are planned to be in the
range of $12 to $15 million and total square footage to increase
slightly primarily due to relocations.
About Tuesday Morning
Tuesday Morning is a leading closeout retailer of upscale, decorative
home accessories, housewares and famous-maker gifts in the United
States. The Company opened its first store in 1974 and currently
operates 852 stores in 43 states. Tuesday Morning is nationally known
for bringing its more than 9.0 million loyal customers a unique
treasure hunt of high-end, first quality, brand name
merchandise...never seconds or irregulars...at prices well below those
of department and specialty stores and catalogues.
Conference Call Information
Tuesday Morning Corporation's management will hold a conference call to
review fourth quarter and fiscal year 2012 financial results today,
August 20, 2012, at 4:00 p.m. Central Time. A real-time webcast of the
call will be available in the Investor Relations section of the
Company's website at http://www.tuesdaymorning.com, or you may dial
into the conference at 1-877-312-5376 (no access code required). A
replay of the webcast will also be accessible through the Company's
website or by dialing (855) 859-2056, conference ID number 97627370,
until August 27, 2012.
Forward-Looking Statements
This press release contains forward-looking statements within the
meaning of the federal securities laws and the Private Securities
Litigation Reform Act of 1995, which are based on management's current
expectations, estimates and projections. Forward-looking statements
typically are identified by the use of terms such as "may," "will,"
"should," "expect," "anticipate," "believe," "estimate," "intend" and
similar words, although some forward-looking statements are expressed
differently. You should carefully consider statements that contain
these words because they describe our expectations, plans, strategies
and goals and our beliefs concerning future business conditions, our
future results of operations, our future financial position, and our
business outlook or state other "forward-looking" information.
Reference is hereby made to "Item 1A. Risk Factors" of the Company's
Annual Report on Form 10-K for the year ended June 30, 2011 for
examples of risks, uncertainties and events that could cause our actual
results to differ materially from the expectations expressed in our
forward-looking statements. These risks, uncertainties and events also
include, but are not limited to, the following: uncertainties regarding
our ability to open stores in new and existing markets and operate
these stores on a profitable basis; conditions affecting consumer
spending and the impact, depth and duration of current economic
conditions; inclement weather; changes in our merchandise mix; timing
and type of sales events, promotional activities and other advertising;
increased or new competition; loss or departure of one or more members
of our senior management or experienced buying and management
personnel; an increase in the cost or a disruption in the flow of our
products; seasonal and quarterly fluctuations; fluctuations in our
comparable store results; our ability to operate in highly competitive
markets and to compete effectively; our ability to operate information
systems and implement new technologies effectively; our ability to
generate strong cash flows from our operations; our ability to
anticipate and respond in a timely manner to changing consumer demands
and preferences; and our ability to generate strong holiday season
sales. The forward-looking statements made in this press release relate
only to events as of the date on which the statements were made. Except
as may be required by law, we undertake no obligations to update our
forward-looking statements to reflect events and circumstances after
the date on which the statements were made or to reflect the occurrence
of unanticipated events.
Tuesday Morning Corporation
Consolidated Statement of
Income
(In thousands, except per
share data)
Three Months Ended Jun. Twelve Months Ended
30, Jun. 30,
----------------------- -----------------------
2012 2011 2012 2011
----------- ---------- ----------- ----------
(unaudited) (unaudited)
Net sales $ 196,376 $ 194,765 $ 812,782 $ 821,150
Cost of sales 122,864 122,122 503,918 507,834
----------- ---------- ----------- ----------
Gross profit 73,512 72,643 308,864 313,316
Selling, general and
administrative expenses 76,965 74,242 301,427 295,273
----------- ---------- ----------- ----------
Operating income (loss) (3,453) (1,599) 7,437 18,043
Other income (expense):
Interest expense (411) (805) (2,254) (3,118)
Interest income 9 -- 9 2
Other income 78 144 215 620
----------- ---------- ----------- ----------
Other income (expense) (324) (661) (2,030) (2,496)
----------- ---------- ----------- ----------
Income (loss) before income
taxes (3,777) (2,260) 5,407 15,547
Income tax expense (benefit) (1,768) (858) 1,494 5,968
----------- ---------- ----------- ----------
Net income (loss) $ (2,009) $ (1,402) $ 3,913 $ 9,579
=========== ========== =========== ==========
Earnings (Loss) Per Share:
Net income (loss) per common
share:
Basic $ (0.05) $ (0.03) $ 0.09 $ 0.22
Diluted $ (0.05) $ (0.03) $ 0.09 $ 0.22
Weighted average number of
common shares:
Basic 41,469 42,660 41,986 42,493
Diluted 41,469 42,660 42,536 43,078
Tuesday Morning
Corporation (continued)
Consolidated Balance
Sheets
(in thousands) Jun. 30, Jun. 30,
2012 2011
----------- -----------
(unaudited) (unaudited)
Assets
Current assets:
Cash and cash equivalents $ 39,740 $ 19,400
Inventories 265,630 264,361
Prepaid expenses and
other assets 11,357 13,684
Deferred income taxes 535 447
----------- -----------
Total current assets 317,262 297,892
Property and equipment,
net 75,771 76,982
Other long-term assets:
Deferred financing costs 2,603 2,504
Other assets 1,531 1,778
----------- -----------
Total Assets $ 397,167 $ 379,156
=========== ===========
Liabilities and
Stockholders' Equity
Current liabilities:
Accounts payable $ 98,009 $ 81,047
Accrued liabilities 30,295 28,760
Income taxes payable 19 65
----------- -----------
Total current
liabilities 128,323 109,872
Revolving credit facility -- --
Deferred rent 3,262 3,198
Income tax payable -
non-current 578 655
Deferred income taxes 4,813 5,297
----------- -----------
Total Liabilities 136,976 119,022
Stockholders' equity 260,191 260,134
----------- -----------
Total Liabilities and
Stockholders' Equity $ 397,167 $ 379,156
=========== ===========
Tuesday Morning Corporation (continued)
Consolidated Statement of Cash Flows
(in thousands)
Twelve Months Ended
Jun. 30,
-----------------------
2012 2011
----------- ----------
(unaudited)
Net cash flows from operating activities:
Net income $ 3,913 $ 9,579
Adjustments to reconcile net income to
net cash provided by (used in)
operating activities:
Depreciation and amortization 14,516 16,103
Amortization of financing fees 760 1,018
Deferred income taxes (572) 3,355
Loss on disposal of fixed assets 460 238
Stock compensation expense 1,987 2,332
Other non-cash charges 35 (214)
Net change in operating assets and
liabilities 38,382 (32,473)
----------- ----------
Net cash provided by (used in) operating
activities 59,481 (62)
----------- ----------
Net cash flows from investing activities:
Proceeds from sale of assets -- 100
Capital expenditures (13,765) (20,600)
----------- ----------
Net cash used in investing activities (13,765) (20,500)
----------- ----------
Net cash flows from financing activities:
Repayments-revolving credit facility (92,338) (152,352)
Borrowings-revolving credit facility 92,338 152,352
Change in cash overdraft (18,791) 15,400
Payment of financing fees (858) --
Excess tax benefit related to exercise
of stock options 288 980
Proceeds from exercise of common stock
options and stock purchase plan
purchases and other 77 60
Purchase of treasury shares (6,092) --
----------- ----------
Net cash provided by (used in) financing
activities (25,376) 16,440
----------- ----------
Net increase (decrease) in cash and cash
equivalents 20,340 (4,122)
Cash and cash equivalents, beginning of
period 19,400 23,522
----------- ----------
Cash and cash equivalents, end of period $ 39,740 $ 19,400
=========== ==========
CONTACT: Stephanie Bowman
Chief Financial Officer
TUESDAY MORNING CORPORATION
972-934-7251
Farah Soi
ICR, LLC
203-682-8200
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