Exhibit 99.1
| CONTACT: | Loren K. Jensen |
| | Chief Financial Officer |
| | TUESDAY MORNING CORPORATION |
| | 972/934-7299 |
| | |
FOR IMMEDIATE RELEASE | | |
| | |
| | Laurey Peat |
| | LAUREY PEAT + ASSOCIATES |
| | 214/871-8787 |
TUESDAY MORNING CORPORATION ANNOUNCES 20% INCREASE IN
EARNINGS PER SHARE FOR THE THIRD QUARTER AND 15TH CONSECUTIVE QUARTER OF DOUBLE-DIGIT EARNINGS INCREASE
DALLAS, TX – October 21, 2004 — Tuesday Morning Corporation (NASDAQ: TUES) today reported earnings per share for the third quarter ended September 30, 2004 increased 20% to $0.18 per diluted share from $0.15 per diluted share in the same prior-year quarter. Net income increased to $7.5 million compared to $6.4 million for the third quarter last year. For the nine-month period ended September 30, 2004, earnings per share increased 38% to $0.62 per diluted share from $0.45 per diluted share in the prior-year period. Net income for the current nine-month period increased to $25.7 million compared to $18.8 million in the same prior-year period.
As previously reported, net sales increased 7.0% to $186.1 million for the third quarter ended September 30, 2004 compared to $173.9 million for the same quarter in 2003. For the nine-month period ended September 30, 2004, sales were up 12.7% to $565.4 million compared to $501.7 million during the same prior-year period. Comparable store sales decreased 4.0% for the quarter, but increased 1.5% for the year-to-date period.
“Our 20% increase in earnings for the third quarter, which is our 15th consecutive quarter to report a double-digit increase, is especially remarkable given the unprecedented severe weather that contributed to the comparable store sales decrease,” said Kathleen Mason, President and Chief Executive Officer. “Storms affected stores representing 33% of the total sales base and accelerated receipts of seasonal
product did not perform according to plan. We are encouraged, however, that traffic did increase during the third quarter in the balance of stores that were not affected by the storms.”
In the first quarter of 2004, Tuesday Morning refined its methodology for calculating comparable store sales results in light of changes to the timing of store openings during a quarter. Stores are now included in the same store calculation at the beginning of the quarter following the anniversary date of the store opening. Previously, stores were included in the same store calculation at the beginning of the quarter that contained the anniversary date of the store opening, because stores were opened only at the beginning of quarters. Using this refined methodology, the comparable sales gain for the third quarter of 2003 would have been 3.0% compared to the 2.8% previously reported, and for the 2003 year-to-date period 3.2% compared to the 2.8% previously reported.
Tuesday Morning management will review third quarter financial results in a teleconference call today at 10:00 a.m. Eastern Time.
About Tuesday Morning
Tuesday Morning is the leading closeout retailer of upscale, decorative home accessories and famous-maker gifts in the United States. The Company opened its first store in 1974 and currently operates 641 stores in 43 states during periodic “sale events.” Tuesday Morning is nationally known for bringing its more than 7.0 million loyal customers a treasure hunt of high-end, first quality, brand name merchandise at prices 50% to 80% below department and specialty stores and catalogues.
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. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “estimates,” variations of such words and similar expressions are intended to identify such forward-looking statements. Forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ materially from those projected or implied in the forward-looking statements. Such risks and uncertainties include: the success of new store openings, competitive factors, access to merchandise and unanticipated changes in consumer demand and economic trends, as well as other risks detailed in the company’s filings with the Securities and Exchange Commission, including the company’s Registration Statement on Form S-3 and Annual Report on Form 10-K for the period ending December 31, 2003.
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Tuesday Morning Corporation
Consolidated Statement of Income
(In thousands, except per share data)
| | Three Months Ended Sept. 30, | | Nine Months Ended Sept. 30, | |
| | 2004 | | 2003 | | 2004 | | 2003 | |
| | unaudited | | unaudited | |
Net Sales | | $ | 186,148 | | $ | 173,898 | | $ | 565,442 | | $ | 501,665 | |
Cost of sales | | 117,525 | | 110,702 | | 354,417 | | 319,240 | |
Gross profit | | 68,623 | | 63,196 | | 211,025 | | 182,425 | |
| | | | | | | | | |
Selling, general and administrative expenses | | 55,700 | | 50,494 | | 168,068 | | 145,407 | |
| | | | | | | | | |
Operating income | | 12,923 | | 12,702 | | 42,957 | | 37,018 | |
| | | | | | | | | |
Other income (expense): | | | | | | | | | |
Interest expense | | (868 | ) | (2,441 | ) | (1,751 | ) | (7,143 | ) |
Interest income | | 1 | | 5 | | 8 | | 62 | |
Other income (expense), net | | 190 | | 194 | | 637 | | 650 | |
Other income (expense) | | (677 | ) | (2,242 | ) | (1,106 | ) | (6,431 | ) |
| | | | | | | | | |
Income before income taxes | | 12,246 | | 10,460 | | 41,851 | | 30,587 | |
| | | | | | | | | |
Income taxes provision | | 4,724 | | 4,079 | | 16,131 | | 11,831 | |
| | | | | | | | | |
Net income | | $ | 7,522 | | $ | 6,381 | | $ | 25,720 | | $ | 18,756 | |
| | | | | | | | | |
Earnings Per Share: | | | | | | | | | |
Net income per common share: | | | | | | | | | |
Basic | | $ | 0.18 | | $ | 0.16 | | $ | 0.63 | | $ | 0.46 | |
Diluted | | $ | 0.18 | | $ | 0.15 | | $ | 0.62 | | $ | 0.45 | |
| | | | | | | | | |
Weighted average number of common shares: | | | | | | | | | |
Basic | | 41,061 | | 40,544 | | 41,029 | | 40,406 | |
Diluted | | 41,771 | | 41,754 | | 41,743 | | 41,577 | |
| | | | | | | | | |
Consolidated Balance Sheets
(in thousands)
| | September 30, | | Dec 31, | |
| | 2004 | | 2003 | | 2003 | |
| | unaudited | | | |
Assets | | | | | | | |
Current assets: | | | | | | | |
Cash and cash equivalents | | $ | 8,583 | | $ | 7,042 | | $ | 23,536 | |
Inventories | | 262,318 | | 209,423 | | 143,023 | |
Prepaid expenses and other assets | | 6,343 | | 8,182 | | 4,948 | |
Deferred income taxes | | 5,106 | | 2,934 | | 5,106 | |
Total current assets | | 282,350 | | 227,581 | | 176,613 | |
| | | | | | | |
Property and Equipment, net | | 85,035 | | 73,420 | | 74,875 | |
| | | | | | | |
Other long-term assets: | | | | | | | |
Deferred financing costs | | 895 | | 2,349 | | 907 | |
Other assets | | 2,590 | | 995 | | 999 | |
| | | | | | | |
Total Assets | | $ | 370,870 | | $ | 304,345 | | $ | 253,394 | |
| | | | | | | |
Liabilities and Stockholders’ Equity | | | | | | | |
Current liabilities: | | | | | | | |
Revolving credit facility, current portion | | $ | 60,700 | | $ | 15,000 | | $ | — | |
Accounts payable | | 86,144 | | 74,664 | | 66,091 | |
Accrued liabilities | | 34,909 | | 32,310 | | 36,321 | |
Income taxes payable | | 4,930 | | — | | 13,247 | |
Total current liabilities | | 186,683 | | 121,974 | | 115,659 | |
| | | | | | | |
Long-term debt | | — | | 69,000 | | — | |
Revolving credit facility, excl. current portion | | 20,000 | | 20,000 | | — | |
Deferred taxes | | 5,641 | | 4,665 | | 5,641 | |
Total Liabilities | | 212,324 | | 215,639 | | 121,300 | |
| | | | | | | |
Stockholders’ equity | | 158,546 | | 88,706 | | 132,094 | |
| | $ | 370,870 | | $ | 304,345 | | $ | 253,394 | |
Consolidated Statement of Cash Flows
(in thousands)
| | Nine-Months Ended Sept 30, | |
| | 2004 | | 2003 | |
| | unaudited | |
Net cash flows from operating activities: | | | | | |
Net income | | $ | 25,720 | | $ | 18,756 | |
Adjustments to reconcile net income to net cash (used in) operating activities: | | | | | |
Depreciation and amortization | | 8,289 | | 7,139 | |
Amortization of financing fees | | 399 | | 531 | |
Other non-cash charges | | 55 | | (59 | ) |
Net change in operating assets and liabilities | | (112,118 | ) | (69,802 | ) |
| | | | | |
Net cash used in operating activities | | (77,655 | ) | (43,435 | ) |
| | | | | |
Net cash flows from investing activities: | | | | | |
Capital expenditures | | (18,449 | ) | (13,051 | ) |
Other | | — | | — | |
| | | | | |
Net cash used in investing activities | | (18,449 | ) | (13,051 | ) |
| | | | | |
Net cash flows from financing activities: | | | | | |
Proceeds from revolving credit facility | | 80,700 | | 35,000 | |
Repayment of long-term debt | | — | | (4,224 | ) |
Other | | 451 | | 823 | |
| | | | | |
Net cash provided by (used in) financing act. | | 81,151 | | 31,599 | |
| | | | | |
Net decrease in cash and cash equivalents | | (14,953 | ) | (24,887 | ) |
| | | | | |
Cash and cash equivalents, beginning of period | | 23,536 | | 31,929 | |
| | | | | |
Cash and cash equivalents, end of period | | $ | 8,583 | | $ | 7,042 | |
