<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the Quarterly Period Ended June 30, 2000 Commission File Number 333-46013
TUESDAY MORNING CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 75-2398532
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
14621 INWOOD RD., ADDISON, TEXAS 75001
(Address of principal executive offices) (Zip Code)
(Registrant's telephone number, including area code) (972) 387-3562
NONE
(Former name, former address and former fiscal year, if changed since last
report)
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 X No
--- ---
Common stock outstanding as of July 31, 2000: 39,541,425 shares
<PAGE>
PART 1 - FINANCIAL INFORMATION
Page No.
Item 1 - Financial Statements _______
Consolidated Balance Sheets as of June 30, 2000,
June 30, 1999 and December 31, 1999 1
Consolidated Statements of Operations for the
Three Months and Six Months Ended
June 30, 2000 and 1999 2
Consolidated Statements of Cash Flows for the
Six Months Ended June 30, 2000 and 1999 3
Notes to Consolidated Financial Statements 4
Item 2 - Management's Discussion and Analysis of Financial
Condition and Results of Operations 5
Item 3 - Quantitative and Qualitative Disclosures about
Market Risk 10
<PAGE>
Tuesday Morning and Subsidiaries
Consolidated Balance Sheets
(In thousands, except for share data)
<TABLE>
<CAPTION>
Unaudited Unaudited Audited
June 30, June 30, Dec. 31
ASSETS 2000 1999 1999
------------ ------------ -----------
<S> <C> <C> <C>
Current assets:
Cash and cash equivalents....................................................... $ 447 $ 912 $ 19,795
Inventories..................................................................... 225,216 168,595 141,534
Prepaid expenses................................................................ 2,352 2,093 1,913
Other current assets............................................................ 1,223 438 1,243
Income taxes receivable......................................................... - 327 -
Deferred income taxes........................................................... - 354 -
------------ ------------ -----------
Total current assets....................................................... 229,238 172,719 164,485
------------ ------------ -----------
Property and equipment, at cost ..................................................... 76,403 67,944 71,924
Less accumulated depreciation & amortization.................................... (41,173) (36,672) (38,838)
------------ ------------ -----------
Net property and equipment................................................. 35,230 31,272 33,086
------------ ------------ -----------
Other assets, at cost:
Deferred financing costs........................................................ 5,134 6,469 5,818
Other assets.................................................................... 355 304 327
------------ ------------ -----------
Total Assets............................................................... $ 269,957 $ 210,764 $ 203,716
------------ ------------ -----------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Installments of mortgages....................................................... $ 1,671 $ 1,671 $ 1,671
Revolving credit facility....................................................... 51,187 26,230 -
Installments of notes payable................................................... 7,954 4,858 11,838
Installments of capital lease obligation........................................ - 41 -
Accounts payable................................................................ 53,020 41,137 39,491
Accrued liabilities:
Sales Tax.................................................................. 856 1,275 3,291
Interest Expense........................................................... 818 935 815
Other...................................................................... 8,592 7,210 8,160
Deferred income taxes........................................................... 546 - 547
Income taxes payable............................................................ 1,237 - 9,168
------------ ------------ -----------
Total current liabilities.................................................. 125,881 83,357 74,981
------------ ------------ -----------
Mortgages on land, buildings and equipment........................................... 6,220 7,892 7,056
Notes payable, excluding current installments........................................ 149,620 163,716 155,227
Revolving credit facility excluding current portion.................................. 15,000 15,000 -
Deferred income taxes................................................................ 2,400 2,211 2,400
------------ ------------ -----------
Total Liabilities.......................................................... 299,121 272,176 239,664
------------ ------------ -----------
Shareholders' equity
Common stock par value $.01 per share, authorized 100,000,000 shares; issued
39,099,133 shares at June 30, 2000, 38,802,648 shares at June 30, 1999
and 38,847,326 shares at December 31,1999....................................... 391 388 388
Additional paid-in capital...................................................... 171,764 171,941 171,789
Retained deficit................................................................ (201,319) (233,741) (208,125)
------------ ------------ -----------
Total Shareholders' Equity................................................. (29,164) (61,412) (35,948)
------------ ------------ -----------
Total Liabilities and Shareholders' Equity........................................... $ 269,957 $ 210,764 $ 203,716
============ ============ ============
</TABLE>
-1-
<PAGE>
Tuesday Morning Corporation and Subsidiaries
Consolidated Statements of Operations
Unaudited In thousands
<TABLE>
<CAPTION>
Three Months Ended June 30, Year to date as of June 30,
--------------------------- ---------------------------
2000 1999 2000 1999
----------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Net sales....................................................................$ 132,563 $ 107,681 $ 223,054 $ 179,442
Cost of sales................................................................ 87,852 72,103 143,014 115,490
----------- ---------- ---------- ----------
Gross profit....................................................... 44,711 35,578 80,040 63,952
Selling, general and administrative expenses................................. 32,266 27,021 59,146 49,534
----------- ---------- ---------- ----------
Operating income................................................... 12,445 8,557 20,894 14,418
Other income (expense):
Interest income......................................................... 2 216 32 303
Interest expense........................................................ (5,395) (5,370) (10,204) (10,866)
Other income............................................................ 202 161 255 379
----------- ---------- ---------- ----------
(5,191) (4,993) (9,917) (10,184)
----------- ---------- ---------- ----------
Net income before income taxes and extraordinary item.............. 7,254 3,564 10,977 4,234
Income tax expense........................................................... 2,757 1,353 4,171 1,588
----------- ---------- ---------- ----------
Net income before extraordinary item...............................$ 4,497 $ 2,211 $ 6,806 $ 2,646
----------- ---------- ---------- ----------
Extraordinary item related to debt extinguishment (net of tax)............... - (3,048) - (3,048)
----------- ---------- ---------- ----------
Net income (loss)..................................................$ 4,497 $ (837) $ 6,806 $ (402)
=========== =========== =========== ==========
Income Per Share
----------------
Net income (loss) before extraordinary item..................................$ 4,497 $ 2,211 $ 6,806 $ 2,646
Dividends on and accretion of preferred stocks..................... - (890) - (3,748)
Premium on redemption of senior preferred stock.................... - (4,395) - (4,395)
----------- ---------- ---------- ----------
Income (loss) available to common shareholders...............................$ 4,497 $ (3,074) $ 6,806 $ (5,497)
Extraordinary item related to debt extinguishment (net of tax)..... - (3,048) - (3,048)
----------- ---------- ---------- ----------
Net income (loss) available to common shareholders...........................$ 4,497 $ (6,122) $ 6,806 $ (8,545)
=========== =========== =========== ==========
Net Income (loss) per Common Share - Basic
Income (loss) available to common shareholders.....................$ 0.12 $ (0.09) $ 0.17 $ (0.18)
Extraordinary item related to debt extinguishment (net of tax)..... - (0.09) - (0.10)
----------- ---------- ---------- ----------
Net income (loss) available to common shareholders.................$ 0.12 $ (0.18) $ 0.17 $ (0.28)
=========== =========== =========== ==========
Net Income (loss) per Common Share - Diluted
Income (loss) available to common shareholders.....................$ 0.11 $ (0.09) $ 0.17 $ (0.18)
Extraordinary item related to debt extinguishment (net of tax...... - (0.09) - (0.10)
----------- ---------- ---------- ----------
Net income (loss) available to common shareholders.................$ 0.11 $ (0.18) $ 0.17 $ (0.28)
=========== =========== =========== ==========
Weighted average number of common shares
and common share equivalents outstanding:
Basic................................................................... 39,028 35,239 39,028 31,042
Diluted................................................................. 40,465 35,239 40,490 31,042
</TABLE>
-2-
<PAGE>
Tuesday Morning Corporation and Subsidiaries
Consolidated Statements of Cash Flows
Unaudited In Thousands
<TABLE>
<CAPTION>
Six Months Ended June 30,
--------------------------------
2000 1999
----------- -----------
<S> <C> <C>
Net cash flows from operating activities:
Net income (loss) $ 6,806 $ (402)
Depreciation and amortization 2,348 2,825
Amortization of financing fees 684 705
Extraordinary item - 3,048
(Gain) Loss on disposal of fixed assets (3) 15
Change in operating assets and liabilities:
Inventories (83,682) (71,852)
Prepaid expenses (439) (979)
Other current assets 20 28
Other assets (28) 167
Accounts payable 13,529 18,056
Accrued liabilities and deferred taxes (2,001) (2,526)
Income taxes payable (7,931) (7,530)
----------- -----------
Total adjustments (77,503) (58,043)
----------- -----------
Net cash used in operating activities (70,697) (58,445)
----------- -----------
Net cash flows from investing activities:
Repayments of loans from officers - 3,345
Proceeds from sale of assets - 28
Capital expenditures (4,489) (10,046)
----------- -----------
Net cash used in investing activities (4,489) (6,673)
----------- -----------
Net cash flows from financing activities:
Proceeds from revolving credit facility 66,187 41,230
Payment of debt and mortgages (10,327) (2,399)
Mortgage on warehouse - 6,500
Partial redemption of Senior Subordinated Note - (34,410)
Principal payments under capital lease obligation - (120)
Change in Equity from exercise of common
stock options/stock purchase plan (22) 49
Payment to cash-out Junior Preferred Stocks - (7,382)
Redeem Senior Exchangeable Redeemable Preferred Stock - (33,855)
Net proceeds from IPO - 76,135
----------- -----------
Net cash provided by financing activities 55,838 45,748
----------- -----------
Net change in cash and cash equivalents (19,348) (19,370)
Cash and cash equivalents at beginning of period 19,795 20,282
----------- -----------
Cash and cash equivalents at end of period $ 447 $ 912
=========== ============
</TABLE>
Supplemental cash flow information:
Our Senior Credit Facility and the Senior Subordinated Notes both limit the
Company's ability to pay cash dividends, accordingly dividends have not been
paid in cash. This statement does not reflect the accrual for 1999 of $1,907 for
dividends on the Junior Preferred Stocks or the accrual of $951 of additional
Senior Preferred Stock in 1999 as a dividend to the holders of the Senior
Preferred Stock.
<TABLE>
<S> <C> <C>
Non-cash items:
Conversion of: Jr. perpetual preferred stock - 553
Jr. redeemable preferred stock - 89,903
</TABLE>
-3-
<PAGE>
Tuesday Morning Corporation and Subsidiaries
Notes to Consolidated Financial Statements
(Unaudited)
1. The consolidated interim financial statements included herein have been
prepared by the Company pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations. These unaudited financial statements
include all adjustments, consisting only of those of a normal recurring
nature, which in the opinion of management, are necessary to present fairly
the results of the Company for the interim periods presented and should be
read in conjunction with the consolidated financial statements and notes
thereto in the Company's Form 10-K filing for the year ended December 31,
1999.
2. The Company considers all highly liquid debt instruments purchased with an
original maturity of three months or less to be cash equivalents.
3. Notes payable under the terms of the Company's revolving line of credit
agreement are classified between current and long term in accordance with
the terms of the agreement. This agreement is discussed in more detail in
Liquidity and Capital Resources on page 6.
4. Certain prior year amounts have been reclassed to conform to the current
period presentation.
5. On March 12, 1999, the Company filed a Form S-1 registration statement with
the Securities and Exchange Commission for the sale of shares of common
stock, which occurred on April 22, 1999. The Company used the net proceeds
of $76.0 million as follows:
(Amounts in 000's)
------------------
Net proceeds from IPO $ 75,953
Redemption of Junior Preferred Stock ( 7,382)
Redemption of Senior Preferred Stock ( 33,858)
Partial paydown of Senior Subordinated Note ( 34,410)
Includes prepayment premium of $3.4 million
Interest Income 179
---------
Increase in working capital $ 482
=========
4
<PAGE>
Tuesday Morning Corporation and Subsidiaries
Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations
The following table sets forth certain financial information from the Company's
consolidated statements of operations expressed as a percentage of net sales.
There can be no assurance that the trends in sales growth or operating results
will continue in the future.
<TABLE>
<CAPTION>
Quarter Ended June 30 Year to Date June 30
--------------------------- ---------------------------
2000 1999 2000 1999
----- ----- ----- -----
<S> <C> <C> <C> <C>
Net sales 100.0% 100.0% 100.0% 100.0%
Cost of sales 66.3 67.0 64.1 64.4
----- ----- ----- -----
Gross profit 33.7 33.0 35.9 35.6
Selling, general and administrative expense 24.3 25.1 26.5 27.6
----- ----- ----- -----
Operating income 9.4 7.9 9.4 8.0
Net interest expense and other income (3.9) (4.6) (4.5) (5.7)
----- ----- ----- -----
Earnings (loss) before income taxes and
extraordinary item 5.5 3.3 4.9 2.4
Net earnings (loss) before extraordinary item 3.4 2.1 3.1 1.5
Net earnings 3.4% (0.8)% 3.1% (0.2)
</TABLE>
Three Months Ended June 30, 2000
Compared to the Three Months Ended June 30, 1999
During the second quarter of 2000 sales increased 23.1%. Same store sales
increased 12.8% for the quarter. The increase in second quarter sales is due to
comparable store sales increases of $13.6 million and $11.3 million of new store
sales. Average store sales for the second sales events increased from $295
thousand to $327 thousand. The increase in comparable sales was comprised of an
11.0% increase in the number of transactions and a 1.6% increase in the average
transaction amount. The primary factors in our strong comparable store sales
growth include our buying organization's experience in providing value to
customers. Our unique niche as the nation's only high-end closeout retailer of
home furnishings and gifts and the strong economy also contributed to the strong
sales. In addition, we featured a larger percentage of higher quality, higher
price merchandise.
Gross profit increased $9.1 million from $35.6 million to $44.7 million
primarily as a result of the increased sales mentioned above. Our gross profit
percentage increased 0.7% compared with last year due to an increase in our
initial markup.
Selling, general, and administrative expenses increased $5.2 million due
primarily to the addition of new stores, variable store level expenses, and
inflationary increases. These expenses, as a percentage of sales, decreased to
24.3% from 25.1% due to the leverage resulting from comparable store sales
increases.
5
<PAGE>
The income tax provision for the three-month periods ended June 30, 2000 and
1999 was $2.8 million and $1.4 million, respectively, reflecting an effective
tax rate of 38%.
Interest expense decreased due to an early paydown of senior subordinated debt,
which is more fully explained in the Initial Public Offering discussion. The
decrease was partially offset by increased interest rates and increased
borrowing resulting from early receipt of inventory.
EBITDA increased from $10.3 million to $13.8 million due to the factors
mentioned above.
Six Months Ended June 30, 2000
Compared to the Six Months Ended June 30, 1999
For the first six months of 2000 sales increased 24.3% due primarily to
comparable store sales increases of 13.7% and $21.9 million of sales from new
stores. Average store sales for the six months increased from $526 thousand to
$559 thousand. The increase in comparable sales was comprised of a 10.1%
increase in the number of transactions and a 3.8% increase in the average
transaction amount. The increase was primarily the result of continued
improvement in merchandise selection, pricing, and mix.
Gross profit increased $16.0 million from $64.0 million to $80.0 million
primarily as a result of the increased sales mentioned above. The gross profit
percentage increased by 0.3% due to reduced markdowns, partially offset by
increased buying and distribution expense.
Selling, general, and administrative expense increased $9.6 million due to the
addition of new stores and inflationary increases. These expenses as a
percentage of sales decreased to 26.5% from 27.6% due to the leverage resulting
from comparable store sales increases.
Interest expense decreased due to an early paydown of senior subordinated debt,
which is more fully explained in the Initial Public Offering discussion. The
decrease was partially offset by increased interest rates and increased
borrowing resulting from early receipt of inventory.
EBITDA increased from $18.0 million to $23.5 million due to the factors
mentioned above.
Liquidity and Capital Resources
We have historically financed our operations with funds generated from operating
activities and borrowings under the revolving credit facilities.
Net cash used in operating activities for the six months ended June 2000 and
1999 was $70.7 million and $58.4 million, respectively. These amounts were due
primarily to the seasonal buildup of inventory. Cash and cash equivalents as of
June 30, 2000 and 1999 were $0.5 million and $0.9 million, respectively.
Capital expenditures principally associated with new store openings and
warehouse equipment were $4.5 million and $3.5 million for the six months ending
June 2000 and 1999, respectively. In June of 1999, we purchased a warehouse for
$6.5 million that we had been leasing. This was financed through a ten-year
mortgage with a floating interest rate, currently at 8.319%. We expect to spend
approximately $2.7 million for capital expenditures for the remainder of 2000.
6
<PAGE>
As part of the recapitalization, discussed in detail in the December 31, 1999
financial statements, the Company entered into the Senior Credit Facility, which
is comprised of the $110.0 million Term Loans and the $90.0 million Revolving
Credit Facility. Subject to compliance with the terms of the Senior Credit
Facility and the Indenture, borrowings under the Revolving Credit Facility may
be increased by $25.0 million to accommodate future growth and for certain other
purposes. At June 30, 2000, the Company had $88.6 million outstanding under the
Term Loans and $66.2 million outstanding under the Revolving Credit Facility,
with $20.2 million of remaining availability thereunder. The Term Loan A loans
and the Revolving Credit Facility loans mature in five years, and the Term Loan
B loans mature in seven years. For 30 consecutive days during each twelve-month
period, beginning April 1999, the aggregate principal amount of loans
outstanding under the Revolving Credit Facility is not to exceed $15.0 million.
On July 5, 2000, the Company amended and restated its Senior Credit Facility by
increasing the Term A loans $25.0 million and the availability under the
revolver by $35.0 million. The remaining term of the notes did not change, new
financial covenants were established and interest rates were adjusted to reflect
current market rates.
The Senior Subordinated Notes bear interest at 11.0% and are due on December 15,
2007. These notes are subordinated to any amounts outstanding under the Senior
Credit Facility. Interest is payable on June 15 and December 15 of each year.
Upon consummation of the recapitalization, our total debt and interest charges
increased significantly. Interest payments on the Notes, under the Senior
Credit Facility and on the Exchange Debentures, represent significant liquidity
requirements. The Notes require semi-annual interest payments, and interest on
the loans under the Senior Credit Facility is due quarterly. We anticipate that
cash flow generated from operations and borrowings under the Senior Credit
Facility will be sufficient to fund our working capital
needs, planned capital expenditures, and scheduled interest payments (including
interest payments on the Notes and amounts outstanding under the Senior Credit
Facility).
The instruments governing the Company's indebtedness, the Senior Credit Facility
and the Indenture contain financial and other covenants that restrict, among
other things, the ability of the Company and its subsidiaries to incur
additional indebtedness, incur liens, pay dividends or make certain other
restricted payments, consummate certain asset sales, enter into certain
transactions with affiliates, merge or consolidate with any other person or
sell, assign, transfer, lease, convey or otherwise dispose of substantially all
of the assets of the Company. Such limitations, together with our highly
leveraged nature could limit corporate and operating activities, including our
ability to invest in opening new stores.
Inventory
The Company's inventory increased from $141.5 million at year-end to $225.2
million at June 30, 2000, for an increase of $83.7 million from December 31,
1999.
As reflected on the chart below, the increase in warehouse inventory is due to
the seasonal nature of our business in which inventory levels increase from the
beginning of the year to June 30. In addition, our second sales event for 2000
began nine days earlier than it did in 1999 and our third quarter sales event is
scheduled to begin two days earlier. In order to support both the double-digit
comparable sales we have experienced and our expanded level of growth, we have
purchased higher levels of inventory. These inventories are arriving earlier
than in the past in order to allow adequate time for processing.
7
<PAGE>
Total Inventory Levels by Location
($ millions)
6/30/00 6/30/99 6/30/98 12/31/99 12/31/98
-------- -------- -------- --------- ---------
Stores $ 68.4 $ 54.4 $ 62.1 $ 72.8 $ 58.8
Warehouse 156.8 114.2 76.9 68.7 37.9
-------- -------- -------- --------- ---------
Total $ 225.2 $ 168.6 $ 139.0 $ 141.5 $ 96.7
======== ======== ======== ========= =========
Per Store Inventory Levels by Location
($ thousands)
6/30/00 6/30/99 6/30/98 12/31/99 12/31/98
-------- -------- -------- --------- ---------
Stores $ 169 $ 149 $ 186 $ 191 $ 169
Warehouse 387 313 231 180 109
-------- -------- -------- --------- ---------
Total $ 556 $ 462 $ 417 $ 371 $ 278
======== ======== ======== ========= =========
Store Openings/Closings
Six Months Six Months
Ending Ending FYE
6/30/ 2000 6/30/1999 12/31/1999
---------- --------- ----------
Stores Open at
Beginning of Period 382 347 347
Stores Opened 27 25 44
Stores Closed (4) (7) (9)
---- ---- ----
Stores Open at End
of Period 405 365 382
==== ==== ====
8
<PAGE>
Tuesday Morning Corporation and Subsidiaries
Management's Discussion and Analysis of Financial Condition and
Results of Operations
<TABLE>
<CAPTION>
Three Months Ended June 30 Year to date as of June 30
--------------------------- ----------------------------
2000 1999 2000 1999
---------- --------- ---------- ---------
<S> <C> <C> <C> <C>
Earnings Per Common Share
Net income (loss) $ 4,497 $ (837) $ 6,806 $ (402)
Add: Extraordinary item related to debt
extinguishment (net of tax) - 3,048 - 3,048
---------- --------- ---------- ---------
Net income (loss) before extraordinary item $ 4,497 $ 2,211 $ 6,806 $ 2,646
Less:
Junior preferred dividends $ - $ (562) $ - $ (2,469)
Senior preferred dividends - (326) - (1,269)
Senior preferred accretion - (2) - (10)
Premium on redemption of senior
preferred stock - (4,395) - (4,395)
---------- --------- ---------- ---------
Income (loss) available to common shareholders $ 4,497 $ (3,074) $ 6,806 $ (5,497)
Extraordinary item related to debt
extinguishment (net of tax) - (3,048) - (3,048)
---------- --------- ---------- ---------
Net income (loss) available to common shareholders $ 4,497 $ (6,122) $ 6,806 $ (8,545)
========== ========= ========== =========
Net Income (loss) per Common Share - Basic
Income (loss) available to common shareholders $ 0.12 $ (0.09) $ 0.17 $ (0.18)
Extraordinary item related to debt
extinguishment (net of tax) - (0.09) - (0.10)
---------- --------- ---------- ---------
Net income (loss) available to common shareholders $ 0.12 $ (0.18) $ 0.17 $ (0.28)
========== ========= ========== =========
Net Income (loss) per Common Share - Diluted
Income (loss) available to common shareholders $ 0.11 $ (0.09) $ 0.17 $ (0.18)
Extraordinary item related to debt
extinguishment (net of tax) - (0.09) - (0.10)
---------- --------- ---------- ---------
Net income (loss) available to common shareholders $ 0.11 $ (0.18) $ 0.17 $ (0.28)
========== ========= ========== =========
Effect of dilutive securities:
Weighted average common equivalent shares from
stock options 1,437 - (1) 1,462 - (1)
Weighted average common shares outstanding 39,028 35,239 39,028 31,042
---------- --------- ---------- ---------
Weighted average common shares and common
stock equivalents outstanding 40,465 35,239 40.490 31,042
========== ========= ========== =========
</TABLE>
(1) Not included in calculation, because of anti-dilutive effect
9
<PAGE>
<TABLE>
<CAPTION>
Three Months Ended Year to Date
June 30 June 30
2000 1999 2000 1999
--------- -------- -------- --------
<S> <C> <C> <C> <C>
Pro forma Income Per Common Share
Net Income before extraordinary item $ 4,497 $ 2,211 $ 6,806 $ 2,646
Add: Reduction from interest expense from
$31million notes payment, net of tax $ - $ 275 $ - $ 852
--------- -------- -------- --------
Net income available to common shareholders $ 4,497 $ 2,486 $ 6,806 $ 3,428
========= ======== ======== ========
Net income per Common Share
Basic $ 0.12 $ 0.06 $ 0.17 $ 0.09
--------- -------- -------- --------
Diluted $ 0.11 $ 0.06 $ 0.17 $ 0.09
========= ======== ======== ========
Weighted average number of common shares
And common share equivalents outstanding
Basic 39,095 38,146 39,062 38,146
Diluted 40,465 39,978 40,470 39,949
</TABLE>
Quantitative and Qualitative Disclosures about Market Risk
The market risk of the Company's financial instruments as of June 30, 2000 has
not materially changed since December 31, 1999. The market risk profile on
December 31, 1999 is disclosed in the Company's annual report on Form 10-K for
the year ended December 31, 1999.
The Company is including the following cautionary statements in this document to
make applicable and take advantage of the "safe harbor" provision of the Private
Securities Litigation Reform Act of 1995 for any forward-looking statements made
in this 10-Q report. Investors are cautioned that actual results may differ
substantially from such forward-looking statements. Forward-looking statements
include statements concerning plans, objectives, goals, strategies, future
events or performance and underlying assumptions and other statement which are
not statement of historical facts, and they may be identified by the use of
works such as "anticipates", "estimates", "expects", "intends", "plans",
"predicts", "projects", and similar expressions. Forward-looking statements
involve risks and uncertainties that could cause actual results or outcomes to
differ materially from those expressed in the forward-looking statements. We
express our expectations, beliefs and projections in good faith and believe them
to have a reasonable basis, however, we make no assurance that they will be
achieved or accomplished. The fulfillment of our expectations, beliefs and
projections is subject to a variety of important factors, including, but not
limited to, continued acceptance of the Company's products in the marketplace,
competitive factors, the availability of closeout merchandise, consumer spending
patterns, general economic trends, the availability of new store locations, and
other risks detailed in the Company's Annual Report on Form 10-K for the year
ended December 31, 1999, and other periodic reports filed with the Securities
and Exchange Commission. The foregoing factors may be in addition to other
factors discussed in other parts of this 10-Q report.
PART II - OTHER INFORMATION
Not applicable.
10
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
TUESDAY MORNING CORPORATION
(Registrant)
DATE: August 11, 2000 /s/ Mark E. Jarvis
---------------
Mark E. Jarvis, Senior Vice President
11
