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| 8-K - FORM 8-K - Tumi Holdings, Inc. | d390026d8k.htm |
Exhibit 99.1
Tumi Holdings Announces Financial Results for the Second Quarter of 2012
South Plainfield, NJ – August 6, 2012 – Tumi Holdings, Inc. (NYSE: TUMI), the leading global brand of premium travel, business and lifestyle products and accessories, today announced its financial results for the second quarter ended June 24, 2012.
For the second quarter of 2012:
| • | Net sales increased 21.8% to $95.8 million from $78.7 million in the second quarter ended June 26, 2011. |
| • | Direct-to-Consumer North America comparable store sales (including e-commerce sales) increased 8.4%, following an increase of 32.1% in the second quarter of 2011. Excluding e-commerce sales, Direct-to-Consumer North America comparable store sales increased 7.2%, following an increase of 29.1% in the second quarter of 2011. |
| • | Direct-to-Consumer International comparable store sales in local currency increased 12.5% excluding e-commerce sales, and 16.2% including e-commerce sales. In U.S. dollars, Direct-to-Consumer International comparable store sales increased 1.3% excluding e-commerce sales and 4.5% including e-commerce sales. |
| • | Gross profit increased by 25.6% to $54.7 million from $43.6 million in the second quarter of 2011. Gross margin was 57.1% compared to 55.4% in the second quarter of 2011. |
| • | Operating income was $12.0 million compared to $13.6 million in the second quarter of 2011. Tumi paid a $5.5 million ($3.1 million after tax) one-time special bonus to its Chief Executive Officer, President and Director in connection with the successful completion of its IPO in the second quarter of 2012. Excluding this one-time special bonus expense, operating income increased 29.2% to $17.5 million, or 18.3% of net sales, compared to $13.6 million, or 17.3% of net sales, in the second quarter of 2011. |
| • | Net income was $6.5 million, or $0.10 per diluted share based on 63.8 million diluted weighted average common shares outstanding, as compared to $2.3 million, or $0.04 per diluted share, based on 52.5 million diluted weighted average common shares outstanding in the second quarter of 2011. |
| • | Net income before preferred dividend expense (non-cash), a non-GAAP financial measure, which excluded a $1.6 million non-cash dividend expense on mandatorily redeemable preferred stock and preferred equity interests, was $8.1 million, or $0.13 per diluted share. Excluding the aforementioned one-time special bonus expense of $3.1 million after tax, net income before preferred dividend expense (non-cash) was $11.2 million or $0.18 per diluted share in the second quarter of 2012. In the second quarter of 2011, net income before preferred dividend expense (non-cash), which excluded $5.7 million of non-cash dividend expense on mandatorily redeemable preferred stock and preferred equity interests, was $8.0 million, or $0.15 per diluted share. |
| • | During the second quarter of 2012, Tumi opened 7 new stores. |
| • | At June 24, 2012, Tumi operated 106 company-owned stores. |
Jerome Griffith, Chief Executive Officer, President and Director, commented, “We were extremely pleased with the continued momentum in our business during the second quarter. Our results reflect our ability to capitalize on our market position as an iconic global premium
lifestyle brand to broaden our product offering beyond travel related merchandise and to expand into international markets where we are achieving exceptional growth despite difficult market conditions. Our recent successes have increased our conviction that significant long-term opportunities lie ahead.”
For the first six months ended June 24, 2012:
| • | Net sales for the first six months of 2012 increased 21.6% to $175.8 million from $144.6 million in the same period of 2011. |
| • | Gross profit for the first six months of 2012 increased 24.0% to $100.1 million, or 56.9% as a percentage of net sales, from $80.7 million, or 55.8% as a percentage of net sales in the same period of 2011. |
| • | Operating income increased 10.2% to $25.3 million from $23.0 million in the first six months of 2012. Excluding the aforementioned one-time special bonus of $5.5 million, operating income grew 34.2% to $30.8 million, or 17.5% of net sales, compared to $23.0 million, or 15.9% of net sales, in the first six months of 2011. |
| • | Net income in the first six months of 2012 was $9.4 million, or $0.16 per diluted share as compared to $2.2 million, or $0.04 per diluted share for the first six months of 2011. |
| • | Net income before preferred dividend expense (non-cash), a non-GAAP financial measure, which excluded non-cash dividend expense on mandatorily redeemable preferred stock and preferred equity interests of $7.9 million, was $17.3 million or $0.30 per diluted share for the first six months of 2012. Excluding the aforementioned one-time special bonus expense of $3.1 million after tax, net income before preferred dividend expense (non-cash) was $20.4 million, or $0.35 per diluted share for the first six months of 2012. In the first six months of 2011, net income before preferred dividend expense (non-cash) was $13.6 million, or $0.26 per diluted share, which excluded $11.4 million of non-cash dividend expense on mandatorily redeemable preferred stock and preferred equity interests. |
Balance Sheet Highlights as of June 24, 2012:
Cash and cash equivalents were $20.8 million compared with $22.2 million as of June 26, 2011. Inventories were $71.4 million compared with $51.2 million as of June 26, 2011. The increase in inventory was primarily due to increased production to support new product introductions and store growth.
Outlook
For fiscal 2012, net sales are expected to be in the range of $390 million to $395 million. This estimate assumes a comparable store sales growth in the mid to high single digit range. Net income is expected to be in the range of $33.0 million to $35.0 million. Diluted earnings per share are expected to be in the range of $0.50 to $0.53 per diluted share. This estimate assumes diluted weighted average common shares outstanding of approximately 63.3 million. Net income
before preferred dividend expense (non-cash), a non-GAAP measure, which excludes non-cash dividend expense on mandatorily redeemable preferred stock and preferred equity interests, and assuming a normalized 39% tax rate, is expected to be in the range of $40.0 million to $42.0 million. On a diluted earnings per share basis, this represents a range of $0.63 to $0.66 per share. Excluding the aforementioned one-time special bonus expense of $3.1 million after tax, net income before preferred dividend expense (non-cash) is expected to be in the range of $43.0 million to $45.0 million. On a diluted earnings per share basis, this represents a range of $0.67 to $0.70 per share.
Capital expenditures for fiscal 2012 are expected to be in the range of $17.0 million to $20.0 million.
Conference Call Information
Tumi Holdings, Inc. will host a conference call to discuss second quarter results today, August 6, 2012, at 4:30 p.m. ET. The general public can access the call by dialing 1-866-804-6927 (domestic) or 1-857-350-1673 (international). The passcode is 42470557. Please dial in 5 minutes before the start of the call. The conference call will also be webcast live in the Investor Relations section of www.tumi.com. A replay of the call will be available through August 13, 2012; to access the replay, dial 1-888-286-8010 for domestic callers or 1-617-801-6888 for international callers and enter access code 91043570. The webcast will be accessible on the website for approximately 90 days after the call.
About Tumi
Tumi is the leading global brand of premium travel, business and lifestyle products and accessories. The brand is sold in approximately 200 stores from New York to Paris to London and Tokyo, as well as in the world’s top department, specialty, and travel retail stores in over 70 countries.
Forward-Looking Statements
This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements reflect Tumi’s current views with respect to, among other things, future events and performance. These statements may discuss net sales, gross margin, operating expenses, operating income, net income, cash flow, financial condition, impairments, expenditures, growth, strategies, plans, achievements, dividends, capital structure, organizational structure, future store openings, market opportunities and general market and industry conditions. Tumi generally identifies forward-looking statements by words such as “anticipate,” “estimate,” “expect,” “intend,” “project,” “plan,” “predict,” “believe,” “seek,” “continue,” “outlook,” “may,” “might,” “will,” “should,” “can have,” “likely” or the negative version of these words or comparable words. Forward-looking statements are based on beliefs and assumptions made by management using currently available information. These statements are only predictions and are not guarantees of future performance, actions or events. Forward-looking statements are subject to risks and uncertainties. If one or more of these risks or uncertainties materialize, or if management’s underlying beliefs and assumptions prove to be incorrect, actual results may differ materially from those contemplated by a forward-looking statement. These risks and uncertainties include those set forth under “Risk Factors” in Tumi’s filings with the Securities and Exchange Commission, including its Quarterly Report on Form 10-Q for the quarter ended March 25, 2012, filed with the SEC on May 23, 2012. Forward-looking statements speak only as of the date on which they are made. Tumi expressly disclaims any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
Contact:
Investor Relations:
ICR, Inc.
Jean Fontana / Joseph Teklits
203-682-8200
jean.fontana@icrinc.com
Media Relations:
ICR, Inc.
Alecia Pulman
203-682-8224
alecia.pulman@icrinc.com
TUMI HOLDINGS, INC., SUBSIDIARIES AND CONTROLLED AFFILIATE
Consolidated Statements of Operations
(In thousands, except share and per share data)
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 24, 2012 |
June 26, 2011 |
June 24, 2012 |
June 26, 2011 |
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| (unaudited) | (unaudited) | |||||||||||||||
| Net sales |
$ | 95,823 | $ | 78,676 | $ | 175,844 | $ | 144,593 | ||||||||
| Cost of sales |
41,130 | 35,114 | 75,746 | 63,893 | ||||||||||||
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| Gross margin |
54,693 | 43,562 | 100,098 | 80,700 | ||||||||||||
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| OPERATING EXPENSES |
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| Selling |
6,092 | 4,985 | 11,080 | 9,306 | ||||||||||||
| Marketing |
3,574 | 2,749 | 6,314 | 5,723 | ||||||||||||
| Retail operations |
19,187 | 16,006 | 36,336 | 30,460 | ||||||||||||
| General and administrative |
13,806 | 6,238 | 21,058 | 12,244 | ||||||||||||
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| Total operating expenses |
42,659 | 29,978 | 74,788 | 57,733 | ||||||||||||
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| Operating income |
12,034 | 13,584 | 25,310 | 22,967 | ||||||||||||
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| OTHER (EXPENSES) INCOME |
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| Interest expense |
(350 | ) | (735 | ) | (867 | ) | (1,516 | ) | ||||||||
| Dividend expense on mandatorily redeemable preferred stock and preferred equity interests |
(1,606 | ) | (5,715 | ) | (7,892 | ) | (11,429 | ) | ||||||||
| Earnings from joint venture investment |
407 | 255 | 671 | 282 | ||||||||||||
| Foreign exchange (losses) gains |
(684 | ) | (155 | ) | (695 | ) | 211 | |||||||||
| Other non-operating income |
55 | 85 | 227 | 99 | ||||||||||||
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| Total other expenses |
(2,178 | ) | (6,265 | ) | (8,556 | ) | (12,353 | ) | ||||||||
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| Income before income taxes |
9,856 | 7,319 | 16,754 | 10,614 | ||||||||||||
| Provision for income taxes |
3,371 | 5,019 | 7,372 | 8,397 | ||||||||||||
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| Net income |
$ | 6,485 | $ | 2,300 | $ | 9,382 | $ | 2,217 | ||||||||
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| Weighted average common shares outstanding: |
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| Basic |
63,838,736 | 52,536,224 | 58,380,136 | 52,536,224 | ||||||||||||
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| Diluted |
63,838,825 | 52,536,224 | 58,380,182 | 52,536,224 | ||||||||||||
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| Basic earnings per common share |
$ | 0.10 | $ | 0.04 | $ | 0.16 | $ | 0.04 | ||||||||
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| Diluted earnings per common share |
$ | 0.10 | $ | 0.04 | $ | 0.16 | $ | 0.04 | ||||||||
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TUMI HOLDINGS, INC., SUBSIDIARIES AND CONTROLLED AFFILIATE
Condensed Consolidated Balance Sheets
(In thousands, except share and per share data)
| June 24, 2012 |
December 31, 2011 |
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| (unaudited) | ||||||||
| ASSETS |
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| CURRENT ASSETS |
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| Cash and cash equivalents |
$ | 20,822 | $ | 32,735 | ||||
| Accounts receivable, less allowance for doubtful accounts of approximately $492 and $462 at June 24, 2012 and December 31, 2011, respectively |
25,840 | 22,833 | ||||||
| Other receivables |
1,793 | 1,724 | ||||||
| Inventories |
71,428 | 60,456 | ||||||
| Prepaid expenses and other current assets |
3,835 | 3,056 | ||||||
| Prepaid income taxes |
5,693 | — | ||||||
| Deferred offering costs |
— | 1,996 | ||||||
| Deferred tax assets, current |
2,218 | 2,218 | ||||||
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| Total current assets |
131,629 | 125,018 | ||||||
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| Property, plant and equipment, net |
39,718 | 36,500 | ||||||
| Deferred tax assets, noncurrent |
2,046 | 2,046 | ||||||
| Joint venture investment |
2,793 | 2,122 | ||||||
| Goodwill |
142,773 | 142,773 | ||||||
| Intangible assets, net |
131,082 | 131,219 | ||||||
| Deferred financing costs, net of accumulated amortization of $2,676 and $2,539 at June 24, 2012 and December 31, 2011, respectively |
784 | 920 | ||||||
| Other assets |
4,840 | 5,743 | ||||||
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| Total assets |
$ | 455,665 | $ | 446,341 | ||||
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TUMI HOLDINGS, INC., SUBSIDIARIES AND CONTROLLED AFFILIATE
Condensed Consolidated Balance Sheets (cont’d)
(In thousands, except share and per share data)
| June 24, 2012 |
December 31, 2011 |
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| (unaudited) | ||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
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| CURRENT LIABILITIES |
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| Accounts payable |
$ | 36,231 | $ | 27,308 | ||||
| Accrued expenses |
23,499 | 26,683 | ||||||
| Current portion of long-term debt |
— | 12,000 | ||||||
| Income taxes payable |
— | 4,324 | ||||||
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| Total current liabilities |
59,730 | 70,315 | ||||||
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| Revolver |
58,000 | — | ||||||
| Long-term debt |
— | 52,000 | ||||||
| Other long-term liabilities |
6,684 | 6,257 | ||||||
| Mandatorily redeemable preferred stock and preferred equity interests |
— | 251,429 | ||||||
| Deferred tax liabilities |
47,623 | 47,623 | ||||||
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| Total liabilities |
172,037 | 427,624 | ||||||
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| Commitments and contingencies |
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| STOCKHOLDERS’ EQUITY |
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| Common stock—$0.01 par value; 350,000,000 shares authorized, 68,144,473 issued and 67,866,667 shares outstanding as of June 24, 2012; 52,536,252 authorized and issued and 52,536,224 shares outstanding as of December 31, 2011 |
681 | 525 | ||||||
| Preferred stock—$0.01 par value; 75,000,000 shares authorized and no shares issued or outstanding as of June 24, 2012; no shares authorized, issued or outstanding as of December 31, 2011 |
— | — | ||||||
| Additional paid-in capital |
308,667 | 48,968 | ||||||
| Treasury stock, at cost |
(4,874 | ) | (174 | ) | ||||
| Accumulated deficit |
(20,235 | ) | (29,617 | ) | ||||
| Accumulated other comprehensive loss |
(611 | ) | (985 | ) | ||||
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| Total stockholders’ equity |
283,628 | 18,717 | ||||||
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| Total liabilities and stockholders’ equity |
$ | 455,665 | $ | 446,341 | ||||
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TUMI HOLDINGS, INC., SUBSIDIARIES AND CONTROLLED AFFILIATE
Segment Results
(In thousands)
| Direct-to- Consumer North America |
Direct-to- Consumer International |
Indirect-to- Consumer North America |
Indirect-to- Consumer International |
Non- Allocated Corporate Expenses |
Consolidated Totals |
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| Three Months Ended June 24, 2012 |
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| Net sales |
$ | 41,914 | $ | 3,896 | $ | 23,639 | $ | 26,374 | $ | — | $ | 95,823 | ||||||||||||
| Operating income (loss) |
13,556 | (107 | ) | 8,626 | 8,230 | (18,271 | ) | 12,034 | ||||||||||||||||
| Three Months Ended June 26, 2011 |
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| Net sales |
$ | 33,957 | $ | 3,862 | $ | 19,166 | $ | 21,691 | $ | — | $ | 78,676 | ||||||||||||
| Operating income (loss) |
10,145 | 276 | 6,311 | 6,349 | (9,497 | ) | 13,584 | |||||||||||||||||
| Direct-to- Consumer North America |
Direct-to- Consumer International |
Indirect-to- Consumer North America |
Indirect-to- Consumer International |
Non- Allocated Corporate Expenses |
Consolidated Totals |
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| Six Months Ended June 24, 2012 |
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| Net sales |
$ | 76,302 | $ | 7,125 | $ | 40,695 | $ | 51,722 | $ | — | $ | 175,844 | ||||||||||||
| Operating income (loss) |
22,811 | (397 | ) | 15,118 | 16,324 | (28,546 | ) | 25,310 | ||||||||||||||||
| Six Months Ended June 26, 2011 |
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| Net sales |
$ | 60,083 | $ | 7,245 | $ | 35,899 | $ | 41,366 | $ | — | $ | 144,593 | ||||||||||||
| Operating income (loss) |
16,590 | 396 | 12,362 | 12,292 | (18,673 | ) | 22,967 | |||||||||||||||||
TUMI HOLDINGS, INC., SUBSIDIARIES AND CONTROLLED AFFILIATE
Reconciliation of Net Income to Net Income Before Preferred Dividend Expense (Non-Cash)
(In millions)
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 24, 2012 | June 26, 2011 | June 24, 2012 | June 26, 2011 | |||||||||||||
| Net income |
6.5 | 2.3 | 9.4 | 2.2 | ||||||||||||
| Dividend expense on mandatorily redeemable preferred stock and preferred equity interests |
1.6 | 5.7 | 7.9 | 11.4 | ||||||||||||
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| Net income before preferred dividend expense (non-cash) |
8.1 | 8.0 | 17.3 | 13.6 | ||||||||||||
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Non-GAAP Financial Measure
Net income before preferred dividend expense (non-cash) is a non-GAAP financial measure and is defined as net income plus dividend expense on mandatorily redeemable preferred stock and preferred equity interests. Net income before preferred dividend expense (non-cash) is an important supplemental measure for Tumi’s internal reporting, including for its board of directors and management, and is a key measure used to evaluate profitability and operating performance. Net income before preferred dividend expense (non-cash) provides investors and other users of Tumi’s financial information, when viewed in conjunction with its condensed consolidated financial statements, consistency and comparability with Tumi’s past financial performance, facilitates period-to-period comparisons of operating performance and facilitates comparisons with other companies. Tumi uses this metric in conjunction with GAAP operating performance measures as part of its overall assessment of its performance. Undue reliance should not be placed on this measure as Tumi’s only measure of operating performance. Net income before preferred dividend expense (non-cash) should not be viewed as a substitute for net income.
Comparable Store Sales Growth
Comparable store sales are calculated based on Tumi’s company-owned stores that have been open for at least a full calendar year as of the end of Tumi’s annual reporting period. For example, a store opened in October 2011 will not impact the comparable store comparison until January 1, 2013.