Q2 fiscal 2022 comparable store sales increased 1.0% versus Q2 fiscal 2020
First six months of fiscal 2022 comparable store sales increased 1.9% versus first six months of fiscal 2020
Comparability to prior periods is difficult due to the Company’s reorganization under Chapter 11, Covid-19, and the elimination of promotional activity. For comparable store sales and inventory specifically, the second quarter and first six months of fiscal 2020 are the most applicable comparisons due to significant impacts from Covid-19 that occurred in the first six months of fiscal 2021. The other financial statement line items are compared to the respective periods in fiscal 2021 as our store count and associated operational costs have changed significantly since fiscal 2020.
Second Quarter Fiscal 2022 Results
- As of the end of the second quarter fiscal 2022, the Company operated 492 stores compared to 705 stores at the end of the second quarter fiscal 2020 and 490 stores at the end of the second quarter of fiscal 2021.
- Comparable store sales increased 1.0% for the 486 stores that were open in the second quarter of fiscal 2022 and the second quarter of fiscal 2020, despite store inventory ending down 26% compared to the second quarter of fiscal 2020, which included 14 promotional events.
- Net sales were
$251.4 million in the second quarter of fiscal 2022 as compared to$198.6 million for the second quarter of fiscal 2021. - Gross margin was
$71.5 million and gross margin rate was 28.5% for the second quarter of fiscal 2022. Gross margin was$60.1 million and gross margin rate was 30.2% for the second quarter of fiscal 2021. - SG&A was
$67.7 million in the second quarter of fiscal 2022. As a percentage of net sales, SG&A was 26.9% for the second quarter of fiscal 2022. In the second quarter of fiscal 2021, SG&A was$63.3 million , and as a percentage of sales SG&A was 31.9% for the period. - Operating income for the second quarter of fiscal 2022 was
$3.4 million compared to an operating loss of$4.3 million in the second quarter of fiscal 2021. - The Company reported net earnings of
$1.9 million , or$0.02 per share, for the second quarter of fiscal 2022. Net earnings for the second quarter of fiscal 2021 was$40.3 million , or$0.88 per share, including reorganization gains of$48.1 million . - EBITDA, a non-GAAP measure, was
$7.2 million for the second quarter of fiscal 2022. EBITDA was$47.6 million for the second quarter of 2021. Adjusted EBITDA, a non-GAAP measure, was$9.3 million for the second quarter of fiscal 2022. Adjusted EBITDA was$0.8 million for the second quarter of 2021. A reconciliation of GAAP and non-GAAP measures is provided below.
First Six Months Fiscal 2022 Results
- Comparable store sales increased 1.9% for the stores that were open in the first six months of fiscal 2022 and the first six months of fiscal 2020, despite average comparable store inventory being down 39% compared to the first six months of fiscal 2020, which included 23 promotional events.
- Net sales were
$428.3 million in the first six months of fiscal 2022 as compared to$360.2 million for the prior year period. - Gross margin was
$122.6 million and gross margin rate was 28.6% for the first six months of fiscal 2022. Gross margin was$111.1 million and gross margin rate was 30.9% for the first six months of fiscal 2021. - SG&A was
$127.9 million in first six months of fiscal 2022. As a percentage of net sales, SG&A was 29.9% for the first six months of fiscal 2022. In the first six months of fiscal 2021, SG&A was$125.4 million , and as a percentage of sales SG&A was 34.8% for the period. - Operating loss for the first six months of fiscal 2022 was
$8.2 million compared to an operating loss of$20.8 million in the prior year period. - The Company reported a net loss of
$12.7 million , or$(0.15) per share, for the first six months of fiscal 2022. Net earnings for the first six months of fiscal 2021 was$59.0 million , or$1.29 per share, including reorganization gains of$85.8 million . - EBITDA, a non-GAAP measure, was a loss of
$2.4 million for the first six months of fiscal 2022. EBITDA was$73.1 million for the first six months of 2021. Adjusted EBITDA, a non-GAAP measure, was$3.6 million for the first six months of fiscal 2022. Adjusted EBITDA was a loss of$5.2 million for the first six months of fiscal 2021. A reconciliation of GAAP and non-GAAP measures is provided below.
The Company ended the second quarter of fiscal 2022 with
Outlook
The Company expects its third quarter fiscal 2022 comparable store sales to increase in the mid-single digits when compared to the third quarter of fiscal 2021. Comparable stores sales growth for the second half of fiscal 2022 is expected to be in the low to mid-single digits when compared to the second half of fiscal 2021.
Gross margin for the second half of the fiscal year is expected to decline as compared to the first half due to higher supply chain costs.
The Company continues to expect to report an Adjusted EBITDA loss for fiscal 2022, slightly improved from fiscal 2021.
The Company also continues to expect to maintain sufficient liquidity to cover its obligations and operating plans for the fiscal year.
About Tuesday Morning
Tuesday Morning Corporation is one of the original off-price retailers specializing in name-brand, high-quality products for the home, including upscale home textiles, home furnishings, housewares, gourmet food, toys and seasonal décor, at prices generally below those found in boutique, specialty and department stores, catalogs and on-line retailers. Based in
Conference Call Information
Tuesday Morning Corporation’s management will hold a conference call to review second quarter fiscal 2022 financial results on
Cautionary Statement Regarding Forward-Looking Statements
This press release contains forward-looking statements, 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. Forward-looking statements include statements regarding management’s plans and strategies and projections with respect to Adjusted EBITDA, cash flow and liquidity. The forward-looking statements in this press release are subject to risks and uncertainties that could cause actual results to differ materially from those reflected in the forward-looking statements.
Reference is hereby made to the Company’s filings with the
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, the Company disclaims obligations to update any 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. Investors are cautioned not to place undue reliance on any forward-looking statements.
INVESTOR RELATIONS:
ICR
203-682-8200
Caitlin.Churchill@icrinc.com
MEDIA:
TuesdayMorning@edelman.com
Tuesday Morning Corporation | |||||||||||
Condensed Consolidated Balance Sheet | |||||||||||
(In thousands) | |||||||||||
(unaudited) | (audited) | (unaudited) | |||||||||
Cash and cash equivalents | $ | 4,321 | $ | 6,534 | $ | 26,244 | |||||
Restricted cash | - | 22,321 | 100,490 | ||||||||
Inventories | 157,067 | 145,075 | 114,424 | ||||||||
Prepaid expenses and other | 10,468 | 8,871 | 15,803 | ||||||||
Current assets | 171,856 | 182,801 | 256,961 | ||||||||
Property and equipment, net | 32,131 | 37,784 | 41,838 | ||||||||
Operating lease right-of-use assets | 178,794 | 193,244 | 216,871 | ||||||||
Other | 3,654 | 4,055 | 6,299 | ||||||||
Total Assets | $ | 386,435 | $ | 417,884 | $ | 521,969 | |||||
Accounts payable | $ | 36,579 | $ | 45,930 | $ | 31,971 | |||||
Accrued liabilities | 45,194 | 46,454 | 48,773 | ||||||||
Operating lease liabilities | 57,838 | 54,632 | 53,155 | ||||||||
Total current liabilities | 139,611 | 147,016 | 133,899 | ||||||||
Operating lease liabilities-non-current | 136,181 | 156,240 | 183,117 | ||||||||
Borrowings under revolving credit facility | 17,860 | 12,000 | — | ||||||||
Long term debt | 28,448 | 26,374 | 24,439 | ||||||||
Other non-current liabilities | 719 | 3,432 | 2,859 | ||||||||
Asset retirement obligation - non-current | 1,085 | 1,021 | 971 | ||||||||
Liabilities subject to compromise | — | — | 110,043 | ||||||||
Total Liabilities | 323,904 | 346,083 | 455,328 | ||||||||
Stockholders' Equity | 62,531 | 71,801 | 66,641 | ||||||||
Total Liabilities and Equity | $ | 386,435 | $ | 417,884 | $ | 521,969 | |||||
Tuesday Morning Corporation | |||||||||||||||
Condensed Consolidated Statement of Operations | |||||||||||||||
(In thousands, except per share data) | |||||||||||||||
unaudited | |||||||||||||||
For the Three Months Ended | For the Six Months Ended | ||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||
Net sales | $ | 251,382 | $ | 198,625 | $ | 428,254 | $ | 360,171 | |||||||
Cost of sales | 179,838 | 138,571 | 305,696 | 249,047 | |||||||||||
Gross margin | 71,544 | 60,054 | 122,558 | 111,124 | |||||||||||
Selling, general and administrative expenses | 67,662 | 63,348 | 127,939 | 125,418 | |||||||||||
Restructuring, impairment, and abandonment charges | 436 | 1,018 | 2,866 | 6,507 | |||||||||||
Operating earnings/(loss) before interest, reorganization and other income/(expense) | 3,446 | (4,312 | ) | (8,247 | ) | (20,801 | ) | ||||||||
Other income/(expense): | |||||||||||||||
Interest expense | (1,885 | ) | (2,514 | ) | (3,601 | ) | (5,267 | ) | |||||||
Reorganization items, net | 241 | 48,142 | (1,051 | ) | 85,766 | ||||||||||
Other income, net | 83 | (198 | ) | 132 | (192 | ) | |||||||||
Earnings/(loss) before income taxes | 1,885 | 41,118 | (12,767 | ) | 59,506 | ||||||||||
Income tax expense/(benefit) | (9 | ) | 779 | (58 | ) | 543 | |||||||||
Net earnings/(loss) | $ | 1,894 | $ | 40,339 | $ | (12,709 | ) | $ | 58,963 | ||||||
Earnings Per Share | |||||||||||||||
Net earnings/(loss) per common share: | |||||||||||||||
Basic | $ | 0.02 | $ | 0.88 | $ | (0.15 | ) | $ | 1.29 | ||||||
Diluted | $ | 0.02 | $ | 0.88 | $ | (0.15 | ) | $ | 1.29 | ||||||
Weighted average number of common shares: | |||||||||||||||
Basic | 84,677 | 45,511 | 84,494 | 45,460 | |||||||||||
Diluted | 89,398 | 45,511 | 84,494 | 45,460 | |||||||||||
Tuesday Morning Corporation | |||||||
Condensed Consolidated Statement of Cash Flows | |||||||
(In thousands) | |||||||
unaudited | |||||||
For the Six Months Ended | |||||||
2021 | 2020 | ||||||
Cash flows from operating activities | |||||||
Net earnings/(loss) | $ | (12,709 | ) | $ | 58,963 | ||
Adjustments to reconcile net earnings/(loss) to net cash provided by/(used) in operating activities: | |||||||
Depreciation and amortization | 6,806 | 8,306 | |||||
Loss on impairment and abandonment of assets | 2,126 | 5,638 | |||||
Amortization of financing costs and interest expense | 2,565 | 4,747 | |||||
(Gain)/loss on disposal of assets | 69 | (1,429 | ) | ||||
Gain on sale-leaseback | — | (49,639 | ) | ||||
Share-based compensation | 3,045 | 964 | |||||
Gain on lease terminations | — | (93,264 | ) | ||||
Deferred income taxes | (118 | ) | — | ||||
Construction allowances from landlords | 449 | 120 | |||||
Change in operating assets and liabilities | (29,446 | ) | 54,976 | ||||
Net cash used in operating activities | (27,213 | ) | (10,618 | ) | |||
Cash flows from investing activities | |||||||
Capital expenditures | (3,536 | ) | (1,392 | ) | |||
Proceeds from sale-leaseback | — | 68,566 | |||||
Proceeds from sales of assets | — | 1,896 | |||||
Net cash provided by/(used in) investing activities | (3,536 | ) | 69,070 | ||||
Cash flows from financing activities | |||||||
Proceeds from borrowings under revolving credit facility | 471,990 | 424,659 | |||||
Repayments of borrowings under revolving credit facility | (466,130 | ) | (424,759 | ) | |||
Proceeds from term loan | — | 25,000 | |||||
Proceeds from the exercise of employee stock options | 467 | — | |||||
Tax payments related to vested stock awards | (12 | ) | — | ||||
Payments on finance leases | (100 | ) | (120 | ) | |||
Payments of financing fees | — | (3,174 | ) | ||||
Net cash provided by financing activities | 6,215 | 21,606 | |||||
Net increase (decrease) in cash, cash equivalents and restricted cash | (24,534 | ) | 80,058 | ||||
Cash, cash equivalents and restricted cash at beginning of period | 28,855 | 46,676 | |||||
Cash, cash equivalents and restricted cash at end of period | $ | 4,321 | $ | 126,734 | |||
Tuesday Morning Corporation
Non-GAAP Financial Measures
Unaudited
Non-GAAP Financial Measures
We define EBITDA as net earnings or net loss before interest, income taxes, depreciation, and amortization. Adjusted EBITDA reflects further adjustments to EBITDA to eliminate the impact of certain items, including certain non-cash items and other items that we believe are not representative of our core operating performance. These measures are not presentations made in accordance with GAAP. EBITDA and Adjusted EBITDA should not be considered as alternatives to net earnings or loss as a measure of operating performance. In addition, EBITDA and Adjusted EBITDA are not presented as a measure of liquidity. EBITDA and Adjusted EBITDA should not be considered in isolation, or as substitutes for analysis of our results as reported under GAAP and Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by such adjustments. We believe it is useful for investors to see these EBITDA and Adjusted EBITDA measures that management uses to evaluate our operating performance. These non-GAAP financial measures are included to supplement our financial information presented in accordance with GAAP and because we use these measures to monitor and evaluate the performance of our business as a supplement to GAAP measures and we believe the presentation of these non-GAAP measures enhances investors’ ability to analyze trends in our business and evaluate our performance. EBITDA and Adjusted EBITDA are also frequently used by analysts, investors and other interested parties to evaluate companies in our industry. The non-GAAP measures presented may not be comparable to similarly titled measures used by other companies.
Tuesday Morning Corporation | ||||||||||||||||
Adjusted EBITDA | ||||||||||||||||
(In thousands) | ||||||||||||||||
unaudited | ||||||||||||||||
For the Three Months Ended | For the Six Months Ended | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
Net earnings/(loss) | $ | 1,894 | $ | 40,339 | $ | (12,709 | ) | $ | 58,963 | |||||||
Depreciation and amortization | 3,409 | 3,922 | 6,806 | 8,306 | ||||||||||||
Interest expense, net | 1,885 | 2,514 | 3,601 | 5,267 | ||||||||||||
Income tax provision/(benefits) | (9 | ) | 779 | (58 | ) | 543 | ||||||||||
EBITDA (non-GAAP) | $ | 7,179 | $ | 47,554 | $ | (2,360 | ) | $ | 73,079 | |||||||
Share-based compensation expense (1) | $ | 1,872 | $ | 382 | $ | 3,045 | $ | 964 | ||||||||
Restructure, impairment and abandonment charges (2) | 436 | 1,018 | 2,866 | 6,507 | ||||||||||||
Re-organization items, net (3) | (241 | ) | (48,142 | ) | 1,051 | (85,766 | ) | |||||||||
Other (4) | 63 | - | (954 | ) | - | |||||||||||
Adjusted EBITDA (non-GAAP) | $ | 9,309 | $ | 812 | $ | 3,648 | $ | (5,216 | ) | |||||||
(1) Adjustment includes charges related to share-based compensation programs, which vary from period to period depending on volume, timing and vesting of awards. We adjust for these charges to facilitate comparisons from period to period. | ||||||||||||||||
(2) For the three months ended | ||||||||||||||||
(3)For the three and six months ended | ||||||||||||||||
(4) For the three and six months ended | ||||||||||||||||
Source:
2022 GlobeNewswire, Inc., source