UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) August 22, 2011
Tuesday Morning Corporation
(Exact name of registrant as specified in its charter)
Delaware |
0-19658 |
75-2398532 |
| (State or other jurisdiction of incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
6250 LBJ Freeway, Dallas, Texas |
75240 |
| (Address of principal executive offices) | (Zip Code) |
Registrant's telephone number, including area code: (972) 387-3562
Not applicable
(Former name or former address, if changed since last report)
| Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: | ||
| [ ] | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
| [ ] | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
| [ ] | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
| [ ] | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |
Item 2.02. Results of Operations and Financial Condition.
On August 22, 2011, Tuesday Morning Corporation, a Delaware corporation (the "Company"), issued a press release announcing financial results for the fourth fiscal quarter and fiscal year ended June 30, 2011. In the press release, the Company also issued its guidance for the fiscal year ending June 30, 2012. A copy of the press release is attached to this Form 8-K as Exhibit 99.1.
Item 8.01. Other Events.
Also on August 22, 2011, the Company announced that its Board of Directors (the "Board") has adopted a share repurchase program pursuant to which the Company is authorized to repurchase from time to time shares of the Company's common stock, par value $0.01 per share (the "Common Stock"), up to a maximum of $5,000,000 in aggregate purchase price for all such shares (the "Repurchase Program"). The shares may be repurchased from time to time based upon market conditions in the open market or in privately negotiated transactions. The Repurchase Program does not have an expiration date and may be suspended or discontinued at any time. The Board will evaluate the Repurchase Program each year and there can be no assurances as to the number of shares of Common Stock the Company will repurchase, if any. The press release announcing the adoption of the Repurchase Program is attached to this Form 8-K as Exhibit 99.1.
Item 9.01. Financial Statements and Exhibits.
Exhibit 99.1. Press release dated August 22, 2011
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Tuesday Morning Corporation
(Registrant) |
||
| August 22, 2011
(Date) |
/s/ STEPHANIE BOWMAN
Stephanie Bowman Executive Vice President and Chief Financial Officer |
| Exhibit Index | ||
| 99.1 | Press release dated August 22, 2011 | |
EXHIBIT 99.1
DALLAS, Aug. 22, 2011 (GLOBE NEWSWIRE) -- Tuesday Morning Corporation (Nasdaq:TUES) today reported that, as previously announced, net sales for the fourth quarter of fiscal 2011 were $194.8 million compared to $200.8 million for the quarter ended June 30, 2010, a decrease of 3.0%. Comparable store sales decreased 4.5% for the fourth quarter of fiscal 2011 compared to the same period last year. The decrease in comparable store sales was comprised of a 5.4% decrease in traffic partially offset by a 0.9% increase in average ticket. Net loss for the fourth fiscal quarter ended June 30, 2011 was $1.4 million, or a $0.03 loss per share, compared to net income of $1.3 million, or $0.03 per diluted share, for the same period last year.
For the fiscal year ended June 30, 2011, net sales were $821.2 million compared to $828.3 million for fiscal 2010, a decrease of 0.9%. Comparable store sales decreased 1.2% for the fiscal year ended June 30, 2011 compared to fiscal 2010. The decrease in comparable store sales was comprised of a 1.7% decrease in traffic, partially offset by a 0.5% increase in average ticket. For the fiscal year ended June 30, 2011, the Company had earnings per diluted share of $0.22 versus $0.25 for fiscal 2010.
Tuesday Morning's board of directors has authorized the company to repurchase up to $5 million of the company's common stock. Repurchases will be made in accordance with applicable securities laws from time to time in open market or private transactions, depending on market conditions, and may be discontinued at any time. The repurchase program will be evaluated by the Board each year and there can be no assurances to the number of shares the company will purchase, if any.
Kathleen Mason, President and Chief Executive Officer, stated, "While we are disappointed with the results of our fiscal fourth quarter, we are focused on several key areas to optimize our marketing efforts, improve our customer's experience on our website and drive traffic to our stores. These efforts, combined with disciplined cost and inventory management, and prudent capital allocation, will be our focus this year as we strive to drive sales, improve profitability and enhance shareholder value. "
Financial Results for the Fourth Quarter Ended June 30, 2011
Gross Profit - Gross profit decreased $4 million, or 5.2%, to $72.6 million for the fourth quarter ended June 30, 2011 as compared to the $76.6 million gross profit reported in the same quarter last year. As a percentage of net sales, gross profit decreased to 37.3% compared to 38.1% for the corresponding period in fiscal 2010. This decrease of 0.8% in gross profit percentage was primarily due to merchandise mix and de-leveraging of inventory costs on the lower sales level.
Selling, General and Administrative Expenses ("SG&A") - SG&A for the quarter ended June 30, 2011 was $74.2 million versus $73.4 million in the same quarter last year. As a percentage of net sales, SG&A increased to 38.1% in the fourth quarter of fiscal 2011 from 36.6% in the same quarter last year. On a per store basis, SG&A was flat year over year.
Financial Results for the Fiscal Year Ended June 30, 2011
Gross Profit - Gross profit for fiscal 2011 was $313.3 million, almost flat compared to the $314.0 million in gross profit reported for fiscal 2010. As a percentage of net sales, gross profit increased to 38.2% for the fiscal year ended June 30, 2011 compared to 37.9% in fiscal 2010. This increase of 0.3% in gross profit percentage was primarily due to the sell through of merchandise acquired at more favorable pricing.
Selling, General and Administrative Expenses - SG&A for the fiscal year ended June 30, 2011 was $295.3 million versus $293.9 million for the same period last year. As a percentage of net sales, SG&A increased to 36.0% in the fiscal year ended June 30, 2011 from 35.5% in the same period last year. On a per store basis, SG&A increased by one half of one percent this fiscal year versus last year.
Balance Sheet
Inventory was $264.4 million at June 30, 2011 compared to $239.2 million at June 30, 2010, an increase of 10.5%. On a per store basis, inventory increased 9.4% compared to last year. Included in this increase are the remaining opportunistic buys that became available in the second quarter of fiscal 2011 that are selling through as planned. Net property and equipment was $77.0 million at June 30, 2011, an increase of $4 million compared to June 30, 2010.
Accounts payable was higher at June 30, 2011 by $18 million versus the same period last year due to higher year-end inventory levels as compared to the same period last year. There were no significant changes to our vendor payment policy during fiscal 2011. At June 30, 2011, we had no borrowings outstanding under our revolving credit facility. Outstanding letters of credit, primarily for insurance programs, were $8.3 million at June 30, 2011 compared to $10.1 million at June 30, 2010. At June 30, 2011, we had a cash balance of $19.4 million and availability of $124.1 million under our revolver and we were in compliance with the terms of our credit facility.
Store Activity
We operated 861 stores in 43 states as of June 30, 2011. During the fourth quarter of fiscal 2011, we opened 23 stores, relocated 9 stores and closed 2 stores. During the fiscal year ended June 30, 2011, we opened 44 stores, closed 35 stores and relocated 35 stores.
Guidance
Net sales for fiscal 2012 are expected to be in the range of $828 million to $834 million. Comparable store sales are expected to be in the negative low single digits and earnings per diluted share are expected to be in the range of $0.22 to $0.26. For fiscal 2012 capital expenditures are expected to be $15 million, and we expect to increase total square footage by approximately 2%.
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 861 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 2011 financial results today, August 22, 2011, 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 (800) 642-1687, conference ID number 71272854, until September 4, 2011.
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, 2010 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 Operations | ||||
| (In thousands, except per share data) | ||||
| Three Months Ended June 30, | Year Ended June 30, | |||
| 2011 | 2010 | 2011 | 2010 | |
| (unaudited) | (unaudited) | |||
| Net sales | $194,765 | $200,783 | $821,150 | $828,265 |
| Cost of sales | 122,122 | 124,190 | 507,834 | 514,270 |
| Gross profit | 72,643 | 76,593 | 313,316 | 313,995 |
| Selling, general and administrative expenses | 74,242 | 73,428 | 295,273 | 293,850 |
| Operating income (loss) | (1,599) | 3,165 | 18,043 | 20,145 |
| Other income (expense): | ||||
| Interest expense | (805) | (717) | (3,118) | (2,945) |
| Interest income | -- | 7 | 2 | 14 |
| Other income (expense), net | 144 | (390) | 620 | (545) |
| Other income (expense) | (661) | (1,100) | (2,496) | (3,476) |
| Income (loss) before income taxes | (2,260) | 2,065 | 15,547 | 16,669 |
| Income tax expense (benefit) | (858) | 770 | 5,968 | 5,921 |
| Net income (loss) | $(1,402) | $1,295 | $9,579 | $10,748 |
| Earnings (loss) Per Share: | ||||
| Net income (loss) per common share: | ||||
| Basic | $ (0.03) | $ 0.03 | $ 0.22 | $ 0.25 |
| Diluted | $ (0.03) | $ 0.03 | $ 0.22 | $ 0.25 |
| Weighted average number of common shares: | ||||
| Basic | 42,660 | 42,151 | 42,493 | 41,920 |
| Diluted | 42,660 | 42,775 | 43,078 | 42,483 |
| Tuesday Morning Corporation (continued) | ||
| Consolidated Balance Sheets | ||
| (in thousands) | June 30, | June 30, |
| 2011 | 2010 | |
| (unaudited) | ||
| Assets | ||
| Current assets: | ||
| Cash and cash equivalents | $19,400 | $23,522 |
| Inventories | 264,361 | 239,194 |
| Prepaid expenses and other assets | 13,684 | 9,756 |
| Deferred income taxes | 447 | -- |
| Total current assets | 297,892 | 272,472 |
| Property and equipment, net | 76,982 | 72,823 |
| Other long-term assets: | ||
| Deferred financing costs | 2,504 | 3,522 |
| Other assets | 1,778 | 1,719 |
| Total Assets | $379,156 | $350,536 |
| Liabilities and Stockholders' Equity | ||
| Current liabilities: | ||
| Accounts payable | $81,047 | $62,916 |
| Accrued liabilities | 28,760 | 34,317 |
| Deferred income taxes | -- | 288 |
| Income taxes payable | 65 | 96 |
| Total current liabilities | 109,872 | 97,617 |
| Revolving credit facility | -- | -- |
| Deferred rent | 3,198 | 3,181 |
| Income tax payable - non-current | 655 | 639 |
| Deferred income taxes | 5,297 | 1,207 |
| Total Liabilities | 119,022 | 102,644 |
| Stockholders' equity | 260,134 | 247,892 |
| Total Liabilities and Stockholders' Equity | $379,156 | $350,536 |
| Tuesday Morning Corporation (continued) | ||
| Consolidated Statement of Cash Flows | ||
| (in thousands) | ||
| Year Ended June 30, | ||
| 2011 | 2010 | |
| (unaudited) | ||
| Net cash flows from operating activities: | ||
| Net income | $9,579 | $10,748 |
| Adjustments to reconcile net income to net | ||
| cash provided by operating activities: | ||
| Depreciation and amortization | 16,103 | 15,583 |
| Amortization of financing fees | 1,018 | 1,059 |
| Deferred income taxes | 3,778 | 261 |
| Loss on disposal of fixed assets | 238 | 1,382 |
| Stock compensation expense | 2,332 | 2,206 |
| Other non-cash charges | (214) | 167 |
| Net change in operating assets and liabilities | (32,473) | 665 |
| Net cash provided by (used in) operating activities | 361 | 32,071 |
| Net cash flows from investing activities: | ||
| Proceeds from sale of assets | 100 | -- |
| Capital expenditures | (20,600) | (17,432) |
| Net cash used in investing activities | (20,500) | (17,432) |
| Net cash flows from financing activities: | ||
| Repayments-revolving credit facility | (152,352) | (61,605) |
| Borrowings-revolving credit facility | 152,352 | 61,605 |
| Change in cash overdraft | 15,400 | 3,391 |
| Payment of debt financing costs | -- | (370) |
| Excess tax benefit related to exercise of stock options | 557 | -- |
| Proceeds from exercise of common stock options | 60 | 79 |
| Net cash provided by in financing activities | 16,017 | 3,100 |
| Net increase (decrease) in cash and cash equivalents | (4,122) | 17,739 |
| Cash and cash equivalents, beginning of period | 23,522 | 5,783 |
| Cash and cash equivalents, end of period | $19,400 | $23,522 |
CONTACT: Stephanie Bowman
Chief Financial Officer
TUESDAY MORNING CORPORATION
972-934-7251
Farah Soi
ICR, LLC
203-682-8200