Tuesday Morning Corporation Announces First Quarter Results

- Company Posts 21% Net Sales Increase -



- Tuesday Morning Opens 10 New Stores and Enters Seattle Market -



Apr 24, 2001, 01:00 ET from Tuesday Morning Corporation

    DALLAS, April 24 /PRNewswire/ --
 Tuesday Morning Corporation (Nasdaq:   TUES), North America's largest operator
 of first quality deep-discount and closeout home furnishings and gift stores,
 today announced financial results for the first quarter of 2001.
     For the first quarter of 2001, net sales increased 21% to $109.5 million,
 compared with sales of $90.5 million for the same period last year.
 Comparable store sales increased 8.4% for the quarter.  Net income for quarter
 was $1.9 million or $.05 per fully diluted share, compared with $2.3 million
 or $.06 per fully diluted share in the year-ago period.
     Kathleen Mason, President and Chief Executive Officer, commented, "Despite
 a weak retail environment, Tuesday Morning Corporation is off to a strong
 start in 2001.  During the quarter, we witnessed a substantial increase of 21%
 in our transaction volume, opened 10 new stores including our first foray into
 the Seattle market and experienced our most successful opening day in Company
 history."
     Ms. Mason continued, "Looking forward, we have undertaken several
 strategic initiatives, which we expect to produce meaningful expense
 reductions in the second half of the year.  Specifically, we are improving our
 distribution logistics and implementing new technologies to improve
 efficiency.  As a result, we have effectively eliminated the need for our
 regional warehouses.  To date, we have closed all but six of these regional
 distribution centers and we plan to close the balance during the second
 quarter.  Finally, I remain enthusiastic about our long-term growth potential,
 as we continue to increase our store-traffic, reduce our operating expenses
 and enter new regional markets."
 
     Business Outlook
 
     For the second quarter of 2001, the Company projects sales growth of
 approximately 11-12% with earnings per diluted share estimated at $0.07 to
 $0.08.  Additionally, the Company remains comfortable with previous guidance
 of approximately 10% sales growth for the year and earnings in the range of
 $.79 to $.81 per fully diluted share.
     The management of Tuesday Morning Corporation will host a conference call
 today at 10:00 a.m. Eastern Time that may be accessed via the Internet at:
 http://www.tuesdaymorning.com.
 
     Tuesday Morning Corporation operates the largest chain (currently 451
 stores) of deep-discount closeout home furnishings and gift stores in North
 America.  These stores open periodically during the year for four to six-week
 "events" during the retail industry's peak selling seasons.  A broad variety
 of closeout items are available in such product categories as gifts, crystal,
 luggage, linens, toys and seasonal items.  The Company specializes in
 famous-maker, first-quality merchandise, which is often found in prestigious
 department and specialty stores.  Such merchandise is sold by Tuesday Morning
 at prices 50%-80% below traditional retail levels.
 
     This press release contains forward-looking statements, which are made
 pursuant to the "safe harbor" provisions of the Private Securities Litigation
 Act of 1995.  Actual results may differ substantially from such
 forward-looking statements.  Forward-looking statements involve risks and
 uncertainties including, but not limited to, continued acceptance of the
 Company's products in the marketplace, the success of new store openings and
 the availability of new store locations, competitive factors, access to
 merchandise in a variety of foreign countries, economic trends, and other
 risks detailed in the Company's periodic report filings with the Securities
 and Exchange Commission.
 
 
                    Tuesday Morning Corporation and Subsidiaries
                       Consolidated Statements of Operations
                       (In thousands, except per share data)
 
                                                        Quarter Ending
                                                            March 31,
                                                      2001            2000
 
         Net sales                                  $109,518        $90,491
         Cost of sales                                68,361         55,162
                 Gross profit                         41,157         35,329
 
         Selling, general and
          administrative expenses                     32,931         26,880
 
                 Operating income                      8,226          8,449
 
         Other income (expense):
            Interest income                               54             30
            Interest expense                          (5,384)        (4,808)
            Other income (expense)                       186             53
                                                      (5,144)        (4,725)
                 Earnings before income
                  taxes and extraordinary
                  item                                 3,082          3,724
 
         Income tax expense                            1,177          1,415
 
                 Net earnings                         $1,905         $2,309
 
         Earnings Per Share
         Net earnings per Common Share
              Basic                                    $0.05          $0.06
              Diluted                                  $0.05          $0.06
 
         Weighted average number of common
          shares and common share equivalents
          outstanding:
              Basic                                   39,586         39,028
              Diluted                                 40,454         40,618
 
 
                   Tuesday Morning Corporation and Subsidiaries
                            Consolidated Balance Sheets
                       (In thousands, except for share data)
 
                                                                      Audited
                                             March 31    March 31     Dec. 31
                               ASSETS           2001         2000        2000
       Current assets:
            Cash and cash equivalents          $6,176      $2,099     $20,886
            Inventories                       192,968     204,185     174,813
            Prepaid expenses                    2,696       2,681       2,458
            Other current assets                1,406       1,293       1,102
 
                   Total current assets       203,246     210,258     199,259
 
       Property and equipment, at cost         83,510      74,584      81,038
            Less accumulated depreciation
             & amortization                   (45,047)    (39,983)    (43,552)
 
                   Net property and
                    equipment                  38,463      34,601      37,486
 
       Other assets, at cost:
            Due from Officers                     355          --         356
            Deferred financing costs            5,250       5,495       5,691
            Other assets                          396         357         355
 
                   Total Assets              $247,710    $250,711    $243,147
 
 
         LIABILITIES AND
          SHAREHOLDERS' EQUITY
 
       Current liabilities:
            Installments of mortgages         $1,671      $1,671      $1,671
            Revolving credit facility         17,760      35,250          --
            Installments of notes payable     20,853      13,662      19,148
            Accounts payable                  25,451      46,274      43,241
            Accrued liabilities:
                Sales Tax                      2,039         746       4,020
                Interest                       3,205       2,703       1,120
                Other                         10,335       7,082      10,166
            Deferred income taxes                666         546         666
            Income taxes payable                  --       1,101       5,455
 
                   Total current
                    liabilities               81,980     109,035      85,487
 
       Mortgages on land, buildings and
        equipment                              4,967       6,638       5,385
       Notes payable, excluding current
        portion                              152,894     151,247     160,821
       Revolving credit facility
        excluding current portion             15,000      15,000          --
       Deferred income taxes                   2,611       2,400       2,611
 
                   Total Liabilities         257,452     284,320     254,304
 
       Shareholders' equity
            Common stock par value $.01
             per share, authorized
             100,000,000 shares;
               issued 39,622,154 shares
                at March 31, 2001,
                39,080,735 shares at
               March 31, 2000, and
                39,562,547 shares at
                December 31, 2000                396         391         396
            Accumulated other
             comprehensive  income              (388)         --         124
            Additional paid-in capital       171,903     171,816     171,881
            Retained deficit                (181,653)   (205,816)   (183,558)
 
       Total Liabilities and
        Shareholders' Equity                $247,710    $250,711    $243,147
 
 
 
                       Tuesday Morning Corporation and Subsidiaries
                           Consolidated Statements of Cash Flows
                                      (in thousands)
 
                                                     Quarter Ending March 31,
                                                       2001              2000
             Net cash flows from
              operating activities:
                      Net earnings                   $1,905            $2,309
 
                     Depreciation and
                      amortization                    1,496             1,154
                     Amortization of
                      financing fees                    441               323
                     (Gain) on disposal of
                      fixed assets                       (1)               (2)
 
                     Change in operating
                      assets and
                      liabilities:
                       Inventories                  (18,151)          (62,651)
                       Prepaid expenses                (238)             (768)
                       Other current
                        assets                         (334)              (50)
                       Other assets                     (41)              (30)
                       Accounts payable             (17,790)            6,783
                       Accrued liabilities             (213)           (1,736)
                       Income taxes
                        payable                      (5,455)           (8,067)
 
                         Total adjustments          (40,286)          (65,044)
 
                 Net cash (used in)
                  operating activities              (38,381)          (62,735)
 
             Net cash flows from investing
              activities:
                 Capital expenditures                (2,471)           (2,667)
 
                 Net cash (used in)
                  investing activities               (2,471)           (2,667)
 
             Net cash flows from financing
              activities:
                 Proceeds from revolving
                  credit facility                    32,760            50,250
                 Payment of debt and
                  mortgages                          (6,640)           (2,574)
                 Proceeds from exercise of
                  common stock options/stock
                  purchase plan                          22                30
 
                 Net cash provided by
                  financing activities               26,142            47,706
 
             Net change in cash and cash
              equivalents                           (14,710)          (17,696)
 
             Cash and cash equivalents at
              beginning of period                    20,886            19,795
 
             Cash and cash equivalents at
              end of period                          $6,176            $2,099
 
             Non cash items:
                      Accumulated other
                       comprehensive
                       income                          $512              $--
 
 
 
                             Total Inventory Levels by Location
                                        ($ millions)
 
 
                                           3/31/01  3/31/00  3/31/99 12/31/00
 
               Stores                       $101.3    $72.5    $57.2    $84.0
               Warehouse                      91.7    131.7     88.2     90.8
                    Total                   $193.0   $204.2   $145.4   $174.8
 
 
                            Per Store Inventory Levels by Location
                                         ($ thousands)
 
                                            3/31/01  3/31/00  3/31/99 12/31/00
 
                Stores                         $230     $186     $162     $195
                Warehouse                       208      338      249      211
                     Total                     $438     $524     $411     $406
 
 
                                    Store Openings/Closings
 
                                              Three    Three    Three
                                             Months   Months   Months    Year
                                             Ending   Ending   Ending   Ending
                                            3/31/01  3/31/00  3/31/99 12/31/00
 
                Stores Open at
                Beginning of Period             431      382      347      382
                Stores Opened                    13       12       12       54
                Stores Closed                    (3)      (4)      (5)      (5)
                Stores Open at
                End of Period                   441      390      354      431
 
 

SOURCE Tuesday Morning Corporation
    DALLAS, April 24 /PRNewswire/ --
 Tuesday Morning Corporation (Nasdaq:   TUES), North America's largest operator
 of first quality deep-discount and closeout home furnishings and gift stores,
 today announced financial results for the first quarter of 2001.
     For the first quarter of 2001, net sales increased 21% to $109.5 million,
 compared with sales of $90.5 million for the same period last year.
 Comparable store sales increased 8.4% for the quarter.  Net income for quarter
 was $1.9 million or $.05 per fully diluted share, compared with $2.3 million
 or $.06 per fully diluted share in the year-ago period.
     Kathleen Mason, President and Chief Executive Officer, commented, "Despite
 a weak retail environment, Tuesday Morning Corporation is off to a strong
 start in 2001.  During the quarter, we witnessed a substantial increase of 21%
 in our transaction volume, opened 10 new stores including our first foray into
 the Seattle market and experienced our most successful opening day in Company
 history."
     Ms. Mason continued, "Looking forward, we have undertaken several
 strategic initiatives, which we expect to produce meaningful expense
 reductions in the second half of the year.  Specifically, we are improving our
 distribution logistics and implementing new technologies to improve
 efficiency.  As a result, we have effectively eliminated the need for our
 regional warehouses.  To date, we have closed all but six of these regional
 distribution centers and we plan to close the balance during the second
 quarter.  Finally, I remain enthusiastic about our long-term growth potential,
 as we continue to increase our store-traffic, reduce our operating expenses
 and enter new regional markets."
 
     Business Outlook
 
     For the second quarter of 2001, the Company projects sales growth of
 approximately 11-12% with earnings per diluted share estimated at $0.07 to
 $0.08.  Additionally, the Company remains comfortable with previous guidance
 of approximately 10% sales growth for the year and earnings in the range of
 $.79 to $.81 per fully diluted share.
     The management of Tuesday Morning Corporation will host a conference call
 today at 10:00 a.m. Eastern Time that may be accessed via the Internet at:
 http://www.tuesdaymorning.com.
 
     Tuesday Morning Corporation operates the largest chain (currently 451
 stores) of deep-discount closeout home furnishings and gift stores in North
 America.  These stores open periodically during the year for four to six-week
 "events" during the retail industry's peak selling seasons.  A broad variety
 of closeout items are available in such product categories as gifts, crystal,
 luggage, linens, toys and seasonal items.  The Company specializes in
 famous-maker, first-quality merchandise, which is often found in prestigious
 department and specialty stores.  Such merchandise is sold by Tuesday Morning
 at prices 50%-80% below traditional retail levels.
 
     This press release contains forward-looking statements, which are made
 pursuant to the "safe harbor" provisions of the Private Securities Litigation
 Act of 1995.  Actual results may differ substantially from such
 forward-looking statements.  Forward-looking statements involve risks and
 uncertainties including, but not limited to, continued acceptance of the
 Company's products in the marketplace, the success of new store openings and
 the availability of new store locations, competitive factors, access to
 merchandise in a variety of foreign countries, economic trends, and other
 risks detailed in the Company's periodic report filings with the Securities
 and Exchange Commission.
 
 
                    Tuesday Morning Corporation and Subsidiaries
                       Consolidated Statements of Operations
                       (In thousands, except per share data)
 
                                                        Quarter Ending
                                                            March 31,
                                                      2001            2000
 
         Net sales                                  $109,518        $90,491
         Cost of sales                                68,361         55,162
                 Gross profit                         41,157         35,329
 
         Selling, general and
          administrative expenses                     32,931         26,880
 
                 Operating income                      8,226          8,449
 
         Other income (expense):
            Interest income                               54             30
            Interest expense                          (5,384)        (4,808)
            Other income (expense)                       186             53
                                                      (5,144)        (4,725)
                 Earnings before income
                  taxes and extraordinary
                  item                                 3,082          3,724
 
         Income tax expense                            1,177          1,415
 
                 Net earnings                         $1,905         $2,309
 
         Earnings Per Share
         Net earnings per Common Share
              Basic                                    $0.05          $0.06
              Diluted                                  $0.05          $0.06
 
         Weighted average number of common
          shares and common share equivalents
          outstanding:
              Basic                                   39,586         39,028
              Diluted                                 40,454         40,618
 
 
                   Tuesday Morning Corporation and Subsidiaries
                            Consolidated Balance Sheets
                       (In thousands, except for share data)
 
                                                                      Audited
                                             March 31    March 31     Dec. 31
                               ASSETS           2001         2000        2000
       Current assets:
            Cash and cash equivalents          $6,176      $2,099     $20,886
            Inventories                       192,968     204,185     174,813
            Prepaid expenses                    2,696       2,681       2,458
            Other current assets                1,406       1,293       1,102
 
                   Total current assets       203,246     210,258     199,259
 
       Property and equipment, at cost         83,510      74,584      81,038
            Less accumulated depreciation
             & amortization                   (45,047)    (39,983)    (43,552)
 
                   Net property and
                    equipment                  38,463      34,601      37,486
 
       Other assets, at cost:
            Due from Officers                     355          --         356
            Deferred financing costs            5,250       5,495       5,691
            Other assets                          396         357         355
 
                   Total Assets              $247,710    $250,711    $243,147
 
 
         LIABILITIES AND
          SHAREHOLDERS' EQUITY
 
       Current liabilities:
            Installments of mortgages         $1,671      $1,671      $1,671
            Revolving credit facility         17,760      35,250          --
            Installments of notes payable     20,853      13,662      19,148
            Accounts payable                  25,451      46,274      43,241
            Accrued liabilities:
                Sales Tax                      2,039         746       4,020
                Interest                       3,205       2,703       1,120
                Other                         10,335       7,082      10,166
            Deferred income taxes                666         546         666
            Income taxes payable                  --       1,101       5,455
 
                   Total current
                    liabilities               81,980     109,035      85,487
 
       Mortgages on land, buildings and
        equipment                              4,967       6,638       5,385
       Notes payable, excluding current
        portion                              152,894     151,247     160,821
       Revolving credit facility
        excluding current portion             15,000      15,000          --
       Deferred income taxes                   2,611       2,400       2,611
 
                   Total Liabilities         257,452     284,320     254,304
 
       Shareholders' equity
            Common stock par value $.01
             per share, authorized
             100,000,000 shares;
               issued 39,622,154 shares
                at March 31, 2001,
                39,080,735 shares at
               March 31, 2000, and
                39,562,547 shares at
                December 31, 2000                396         391         396
            Accumulated other
             comprehensive  income              (388)         --         124
            Additional paid-in capital       171,903     171,816     171,881
            Retained deficit                (181,653)   (205,816)   (183,558)
 
       Total Liabilities and
        Shareholders' Equity                $247,710    $250,711    $243,147
 
 
 
                       Tuesday Morning Corporation and Subsidiaries
                           Consolidated Statements of Cash Flows
                                      (in thousands)
 
                                                     Quarter Ending March 31,
                                                       2001              2000
             Net cash flows from
              operating activities:
                      Net earnings                   $1,905            $2,309
 
                     Depreciation and
                      amortization                    1,496             1,154
                     Amortization of
                      financing fees                    441               323
                     (Gain) on disposal of
                      fixed assets                       (1)               (2)
 
                     Change in operating
                      assets and
                      liabilities:
                       Inventories                  (18,151)          (62,651)
                       Prepaid expenses                (238)             (768)
                       Other current
                        assets                         (334)              (50)
                       Other assets                     (41)              (30)
                       Accounts payable             (17,790)            6,783
                       Accrued liabilities             (213)           (1,736)
                       Income taxes
                        payable                      (5,455)           (8,067)
 
                         Total adjustments          (40,286)          (65,044)
 
                 Net cash (used in)
                  operating activities              (38,381)          (62,735)
 
             Net cash flows from investing
              activities:
                 Capital expenditures                (2,471)           (2,667)
 
                 Net cash (used in)
                  investing activities               (2,471)           (2,667)
 
             Net cash flows from financing
              activities:
                 Proceeds from revolving
                  credit facility                    32,760            50,250
                 Payment of debt and
                  mortgages                          (6,640)           (2,574)
                 Proceeds from exercise of
                  common stock options/stock
                  purchase plan                          22                30
 
                 Net cash provided by
                  financing activities               26,142            47,706
 
             Net change in cash and cash
              equivalents                           (14,710)          (17,696)
 
             Cash and cash equivalents at
              beginning of period                    20,886            19,795
 
             Cash and cash equivalents at
              end of period                          $6,176            $2,099
 
             Non cash items:
                      Accumulated other
                       comprehensive
                       income                          $512              $--
 
 
 
                             Total Inventory Levels by Location
                                        ($ millions)
 
 
                                           3/31/01  3/31/00  3/31/99 12/31/00
 
               Stores                       $101.3    $72.5    $57.2    $84.0
               Warehouse                      91.7    131.7     88.2     90.8
                    Total                   $193.0   $204.2   $145.4   $174.8
 
 
                            Per Store Inventory Levels by Location
                                         ($ thousands)
 
                                            3/31/01  3/31/00  3/31/99 12/31/00
 
                Stores                         $230     $186     $162     $195
                Warehouse                       208      338      249      211
                     Total                     $438     $524     $411     $406
 
 
                                    Store Openings/Closings
 
                                              Three    Three    Three
                                             Months   Months   Months    Year
                                             Ending   Ending   Ending   Ending
                                            3/31/01  3/31/00  3/31/99 12/31/00
 
                Stores Open at
                Beginning of Period             431      382      347      382
                Stores Opened                    13       12       12       54
                Stores Closed                    (3)      (4)      (5)      (5)
                Stores Open at
                End of Period                   441      390      354      431
 
 SOURCE  Tuesday Morning Corporation