UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

 

FORM 10-Q

 

(Mark One)

 

ý  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

 

FOR THE QUARTERLY PERIOD ENDED
SEPTEMBER 30, 2003

 

OR

 

o  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

 

FOR THE TRANSITION PERIOD
FROM                 TO                

 

Commission file number 0-19658

 

TUESDAY MORNING CORPORATION
(Exact Name of Registrant as Specified in its Charter)

 

 

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

 

Yes   ý   No   o

 

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

 

Yes   ý  No   o

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

 

 

 

Forward Looking Statements

 

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the federal securities laws and Private Securities Litigation Reform Act of 1995.  These statements may be found throughout this Form 10-Q particularly under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” among others.  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 consider statements that contain these words carefully because they describe our expectations, plans, strategies and goals and our beliefs concerning future business conditions, our results of operations, financial position, and our business outlook or state other “forward-looking” information based on currently available information.

 

Readers are referred to the caption “Risk Factors” appearing at the end of Item I of the Company’s Annual Report on Form 10-K for the year ended December 31, 2002 and in the Prospectus Supplement filed October 21, 2003  for additional factors that may affect our forward-looking statements.  In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this report might not occur.  We   undertake no obligation to update or revise our forward-looking statements, whether as a result of new information, future events or otherwise.

 

The terms “Tuesday Morning,” “we,” “us” and “our” as used in this Quarterly Report on Form 10-Q refer to Tuesday Morning Corporation and its subsidiaries.

 

 

PART I - FINANCIAL INFORMATION

 

 

		Page No.
Item 1 - Financial Statements
	Consolidated Balance Sheets as of September 30, 2003 and December 31, 2002	1
	Consolidated Statements of Operations for the Three Months and Nine Months Ended September 30, 2003 and 2002	2
	Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2003 and 2002	3
	Notes to Consolidated Financial Statements	4-6
Item 2 — Management’s Discussion and Analysis of Financial Condition and Results of Operations		7-11
Item 3 — Quantitative and Qualitative Disclosures about Market Risk		11-12
Item 4 – Controls and Procedures		12
PART II – OTHER INFORMATION
Item 1 – Legal Proceedings		12
Item 4 – Submission of Matters to a Vote of Security Holders		12
Item 6 – Exhibits and Reports on Form 8-K		13

 

 

Tuesday Morning Corporation and Subsidiaries

Consolidated Balance Sheets

(In thousands, except for share data)

 

		September 30, 2003			December 31, 2002
Current assets:
Cash and cash equivalents		$	7,042		$	31,929
Inventories		209,423			134,947
Prepaid expenses and other current assets		8,182			4,265
Deferred income taxes		2,934			2,934
Total current assets		227,581			174,075
Property and equipment, at cost		134,072			124,366
Less accumulated depreciation		(60,652		)	(56,870		)
Net property and equipment		73,420			67,496
Deferred financing costs		2,349			2,879
Other assets		995			844
Total Assets		$	304,345		$	245,294
Current liabilities:
Current portion – long-term debt		$	—		$	650
Revolving credit facility		15,000			—
Accounts payable		74,664			59,075
Accrued liabilities		32,310			25,790
Income taxes payable		—			13,365
Total current liabilities		121,974			98,880
Revolving credit facility, excluding current portion		20,000			—
Long-term debt, excluding current portion		69,000			72,574
Deferred income taxes		4,665			4,665
Total Liabilities		215,639			176,119
Commitments and contingencies:
Shareholders’ equity:
Common stock, par value $.01 per share, authorized 100,000,000 shares; 40,609,275 shares issued and outstanding at September 30, 2003 and 40,224,323 shares at December 31, 2002		406			402
Additional paid-in capital		177,937			177,118
Accumulated deficit		(89,778		)	(108,533		)
Accumulated other comprehensive income		141			188
Total Shareholders’ Equity		88,706			69,175
Total Liabilities and Shareholders’ Equity		$	304,345		$	245,294

 

The accompanying notes are an integral part of these consolidated financial statements.

 

1

 

Tuesday Morning Corporation and Subsidiaries

Consolidated Statements of Operations

(In thousands, except per share data)

 

		Three Months Ended September 30,						Nine Months Ended September 30,
		2003			2002			2003			2002
Net sales		$	173,898		$	154,644		$	501,665		$	449,006
Cost of sales		110,702			100,318			319,240			289,831
Gross profit		63,196			54,326			182,425			159,175
Selling, general and administrative expenses		50,494			43,159			145,407			126,792
Operating income		12,702			11,167			37,018			32,383
Interest and other income (expense):
Interest income		5			9			62			194
Interest expense		(2,441		)	(4,303		)