Tumi Holdings, Inc. - FORM 10-Q

Attached files

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EX-32.2 - PRINCIPAL FINANCIAL OFFICER CERTIFICATION - Tumi Holdings, Inc.	tumi10qex322-q32015.htm
EX-31.2 - PRINCIPAL FINANCIAL OFFICER CERTIFICATION - Tumi Holdings, Inc.	tumi10qex312-q32015.htm
EX-31.1 - PRINCIPAL EXECUTIVE OFFICER CERTIFICATION - Tumi Holdings, Inc.	tumi10qex311-q32015.htm
EX-32.1 - PRINCIPAL EXECUTIVE OFFICER CERTIFICATION - Tumi Holdings, Inc.	tumi10qex321-q32015.htm

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_______________________________________________________

FORM 10-Q

_______________________________________________________



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

For the quarterly period ended September 27, 2015



¨	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: 001-35495

_______________________________________________________

Tumi Holdings, Inc.

(Exact name of registrant as specified in its charter)

_______________________________________________________



Delaware		04-3799139
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

1001 Durham Ave., South Plainfield, NJ		07080
(Address of principal executive offices)		(Zip Code)

(908) 756-4400

(Registrant’s telephone number, including area code)

______________________________________________________

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 ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ý No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.



Large accelerated filer	ý	Accelerated filer	¨
Non-accelerated filer	o	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No ý

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



Class		November 5, 2015
Common Stock, $0.01 Par Value		67,880,156 shares

Table of Contents

TUMI HOLDINGS, INC.

TABLE OF CONTENTS



		Page

	PART I – FINANCIAL INFORMATION

ITEM 1.	Financial Statements	2

	Condensed Consolidated Balance Sheets as of September 27, 2015 (unaudited) and December 31, 2014	2

	Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 27, 2015 (unaudited) and September 28, 2014 (unaudited)	4

	Condensed Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 27, 2015 (unaudited) and September 28, 2014 (unaudited)	5

	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 27, 2015 (unaudited) and September 28, 2014 (unaudited)	6

	Notes to the Condensed Consolidated Financial Statements (unaudited)	7

ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19

ITEM 3.	Quantitative and Qualitative Disclosures about Market Risk	35

ITEM 4.	Controls and Procedures	35

	PART II – OTHER INFORMATION

ITEM 1.	Legal Proceedings	36

ITEM 1A.	Risk Factors	36

ITEM 6.	Exhibits	36

SIGNATURE		37
EXHIBIT INDEX		38

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This document contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements reflect Tumi Holdings, Inc.’s (“Tumi”) current views with respect to, among other things, future events and performance. These statements may discuss, among other things, our 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 the heading “Risk Factors” in Tumi’s Annual Report on Form 10-K for the year ended December 31, 2014, filed with the SEC on February 27, 2015. For example, if general economic conditions and the availability of opportunities in the marketplace that complement our store strategy ultimately differ from those anticipated by management, the actual pace of our future store openings may differ materially from the pace contemplated by a forward-looking statement. 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, except as required by applicable securities laws and regulations.

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PART I – FINANCIAL INFORMATION


ITEM 1.	FINANCIAL STATEMENTS

TUMI HOLDINGS, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(In thousands, except share and per share data)



	September 27, 2015		December 31, 2014
	(unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	76,237	$	52,796
Accounts receivable, less allowance for doubtful accounts of approximately $556 and $580 at September 27, 2015 and December 31, 2014, respectively	29,773		31,890
Other receivables	3,622		3,003
Inventories, net	111,122		89,231
Prepaid expenses and other current assets	5,750		8,315
Prepaid income taxes	1,971		—
Deferred tax assets, current	8,411		7,298
Total current assets	236,886		192,533
Property, plant and equipment, net	81,980		79,067
Deferred tax assets, noncurrent	4,608		4,608
Joint venture investment	2,502		2,156
Goodwill	142,773		142,773
Intangible assets, net	130,400		130,414
Deferred financing costs, net of accumulated amortization of $3,211 and $3,087 at September 27, 2015 and December 31, 2014, respectively	248		372
Other assets	9,245		10,907
Total assets	$	608,642	$	562,830

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

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TUMI HOLDINGS, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets (continued)

(In thousands, except share and per share data)



	September 27, 2015			December 31, 2014
	(unaudited)
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable	$	42,322		$	33,898
Accrued expenses	34,238			34,786
Income taxes payable	—			2,334
Total current liabilities	76,560			71,018

Other long-term liabilities	12,757			11,407
Deferred tax liabilities	53,522			53,522
Total liabilities	142,839			135,947

Commitments and contingencies

STOCKHOLDERS’ EQUITY
Common stock—$0.01 par value; 350,000,000 shares authorized, 68,158,428 shares issued and 67,880,156 shares outstanding, each as of September 27, 2015; 68,146,673 issued and 67,868,867 outstanding, each as of December 31, 2014	681			681
Preferred stock—$0.01 par value; 75,000,000 shares authorized and no shares issued or outstanding as of September 27, 2015 and December 31, 2014	—			—
Additional paid-in capital	317,735			314,217
Treasury stock, at cost; 278,272 and 277,806 shares as of September 27, 2015 and December 31, 2014, respectively	(4,884		)	(4,874		)
Retained earnings	157,696			119,734
Accumulated other comprehensive loss	(5,425		)	(2,875		)
Total stockholders’ equity	465,803			426,883
Total liabilities and stockholders’ equity	$	608,642		$	562,830

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

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TUMI HOLDINGS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

(In thousands, except share and per share data)



	Three Months Ended						Nine Months Ended
	September 27, 2015			September 28, 2014			September 27, 2015			September 28, 2014
	(unaudited)
Net sales	$	131,013		$	130,195		$	379,994		$	363,379
Cost of sales	51,693			53,888			153,788			151,887
Gross margin	79,320			76,307			226,206			211,492
OPERATING EXPENSES
Selling	8,416			9,515			25,259			26,351
Marketing	3,641			3,643			11,348			12,546
Retail operations	32,450			29,051			94,542			83,589
General and administrative	11,691			10,831			37,092			32,502
Total operating expenses	56,198			53,040			168,241			154,988
Operating income	23,122			23,267			57,965			56,504
OTHER INCOME (EXPENSES)
Interest expense	(76		)	(117		)	(261		)	(359		)
Earnings from joint venture investment	271			153			573			307
Foreign exchange gains (losses)	(166		)	(154		)	505			(505		)
Other non-operating income (expenses)	33			34			(71		)	(38		)
Total other income (expenses)	62			(84		)	746			(595		)
Income before income taxes	23,184			23,183			58,711			55,909
Provision for income taxes	8,315			9,266			20,749			21,620
Net income	$	14,869		$	13,917		$	37,962		$	34,289
Weighted average common shares outstanding:
Basic	67,880,156			67,867,852			67,874,435			67,867,065
Diluted	67,883,410			67,876,522			67,907,201			67,872,474
Basic earnings per common share	$	0.22		$	0.21		$	0.56		$	0.51
Diluted earnings per common share	$	0.22		$	0.21		$	0.56		$	0.51

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

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TUMI HOLDINGS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Income

(In thousands)



	Three Months Ended						Nine Months Ended
	September 27, 2015			September 28, 2014			September 27, 2015			September 28, 2014
	(unaudited)
Net income	$	14,869		$	13,917		$	37,962		$	34,289
OTHER COMPREHENSIVE INCOME
Foreign currency translation adjustment, net of tax	(351		)	(2,782		)	(2,550		)	(2,543		)
Comprehensive income	$	14,518		$	11,135		$	35,412		$	31,746

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

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TUMI HOLDINGS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(In thousands)



	Nine Months Ended
	September 27, 2015			September 28, 2014
	(unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	37,962		$	34,289
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization	15,664			12,711
Share-based compensation expense	3,518			2,859
Amortization of deferred financing costs	124			123
Allowance for doubtful accounts	(24		)	(38		)
Earnings from joint venture	(573		)	(307		)
Loss on disposal of fixed assets	272			885
Impairment of long-lived assets	757			—
Other non-cash charges	446			988
Changes in operating assets and liabilities
Accounts receivable	3,180			(3,024		)
Other receivables	(702		)	(2,349		)
Inventories	(22,968		)	(26,645		)
Prepaid expenses and other current assets	2,478			1,724
Prepaid income taxes	(1,971		)	(2,534		)
Other assets	110			(6,050		)
Accounts payable	8,498			13,630
Accrued expenses	1,254			(869		)
Income taxes payable	(2,235		)	(4,684		)
Other liabilities	1,409			2,500
Total adjustments	9,237			(11,080		)
Net cash provided by operating activities	47,199			23,209
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures	(23,505		)	(27,281		)
Net cash used in investing activities	(23,505		)	(27,281		)
CASH FLOWS FROM FINANCING ACTIVITIES
Payments on revolving credit facility	$	—		$	(8,000	)
Options exercised	—			45
Repurchase of common stock	(10		)	—
Net cash used in financing activities	(10		)	(7,955		)
Effect of exchange rate changes on cash	(243		)	(552		)
Net increase (decrease) in cash and cash equivalents	23,441			(12,579		)
Cash and cash equivalents at beginning of period	52,796			37,613
Cash and cash equivalents at end of period	$	76,237		$	25,034

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

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TUMI HOLDINGS, INC. AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

(unaudited)


1.	BASIS OF PRESENTATION AND ORGANIZATION

Nature of Operations

Tumi Holdings, Inc. (together with its subsidiaries, the “Company”) is a leading designer, producer and marketer of a comprehensive line of travel and business products and accessories in multiple categories. The Company’s product offerings include travel bags, business cases, totes, handbags, business and travel accessories and small leather goods. The Company designs its products for, and markets its products to, sophisticated professionals, frequent travelers and brand-conscious individuals who enjoy the premium status and durability of Tumi products. The Company sells its products through a network of company-owned full-price stores and outlet stores, partner stores, concessions, shop-in-shops, specialty luggage shops, high-end department stores and e-commerce distribution channels. The Company has approximately 1,900 points of distribution in over 75 countries, and its global distribution network is enhanced by the use of its three logistics facilities located in the United States, Europe and Asia. The Company designs its products in its U.S. design studios and selectively collaborates with well-known, international, industrial and fashion designers for limited edition product lines. Production is sourced globally through a network of suppliers based in Asia, many of which are longtime suppliers, and the Caribbean.

The Company’s business is seasonal in nature and, as a result, net sales and working capital requirements fluctuate from quarter to quarter. The Company’s fourth quarter is a significant period with regard to the results of operations due to increased Direct-to-Consumer sales during the holiday season in North America and Europe. During the fourth quarter, the Company expects inventory levels, accounts payable and accrued expenses to increase commensurate with net sales.

Registered Secondary Offering of the Company’s Common Stock

In September 2014, the Company completed a secondary offering of common stock sold by certain of the Company’s stockholders. The selling stockholders, comprised of funds managed by or affiliated with Doughty Hanson, sold 8,000,000 shares of our common stock in the offering. The Company did not receive any proceeds from the sale of shares by the selling stockholders. The offering expenses incurred by the Company were approximately $196,000, which included legal and accounting costs and various other fees associated with the offering.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“US GAAP”) and applicable rules and regulations of the SEC regarding interim financial reporting. Certain information and note disclosures normally included in financial statements prepared in accordance with US GAAP have been condensed or omitted pursuant to such rules and regulations. Therefore, these condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014, filed with the SEC on February 27, 2015.

The condensed consolidated balance sheet as of December 31, 2014 included herein was derived from the audited financial statements as of that date.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the financial position, results of operations and cash flows for the interim periods, but are not necessarily indicative of the results of operations for the full year 2015 or any future period.

Reporting Periods

The reporting periods for the Company’s unaudited interim quarterly financial information are based on the first month of each fiscal quarter including five Sundays and the second and third months of each fiscal quarter including four Sundays, with the fourth quarter always ending on December 31. Accordingly, the three-month reporting periods for the unaudited interim condensed consolidated financial statements included herein commenced on June 29, 2015 and June 30, 2014, respectively and ended on September 27, 2015 and September 28, 2014, respectively. The nine-month reporting periods for the unaudited interim condensed consolidated financial statements included herein commenced on January 1, 2015 and 2014, respectively and ended on September 27, 2015 and September 28, 2014, respectively.

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TUMI HOLDINGS, INC. AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

(unaudited)

Estimates

The preparation of the Company’s condensed consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include valuation of goodwill and intangibles, allowance for doubtful accounts, adjustments for slow-moving and obsolete inventory, accrued warranties, realization of deferred tax assets, income tax uncertainties, the valuation of share-based compensation and related forfeiture rates and useful lives of assets. Actual results could differ materially from those estimates.

Reclassification

Certain prior period amounts have been reclassified to conform to the current year presentation.

Cash and Cash Equivalents

As of September 27, 2015, the total balance in U.S. bank accounts over the Federal Deposit Insurance Company limit then in effect was approximately $65,981,000. The total balance in international bank accounts at September 27, 2015, which is not covered under the FDIC, was approximately $9,030,000.

Fair Value Measurements

The Company applies the Financial Accounting Standards Board’s (the “FASB”) guidance for “Fair Value Measurements.” Under this standard, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the “exit price”) in an orderly transaction between market participants at the measurement date.

In determining fair value, the Company uses various valuation approaches. The hierarchy of those valuation approaches is broken down into three levels based on the reliability of inputs as follows:

Level 1—

Inputs that are quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. An active market for the asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. The valuation under this approach does not entail a significant degree of judgment.

Level 2—

Inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets or liabilities in active markets, inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates and yield curves observable at commonly quoted intervals or current market) and contractual prices for the underlying financial instrument, as well as other relevant economic measures.


Level 3—	Inputs that are unobservable for the asset or liability. Unobservable inputs are used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date.

The Company’s non-financial assets which are subject to nonrecurring fair value measurements include goodwill, intangible assets and property, plant and equipment. These assets are recorded at carrying value. However, whenever events or changes in circumstances indicate that their carrying value may not be fully recoverable (or at least annually for goodwill and indefinite-lived intangible assets), such assets are assessed for impairment and, if applicable, written down to and recorded at fair value. To measure fair value for such assets, the Company uses techniques including discounted expected future cash flows (“DCF”) (a Level 3 input). A DCF analysis calculates the fair value by estimating the after-tax cash flows attributable to a reporting unit or asset and then discounting the after-tax cash flows to a present value using a risk-adjusted discount rate. Assumptions used in a DCF analysis require the exercise of significant judgment, including judgment about appropriate discount rates and terminal values, growth rates and the amount and timing of expected future cash flows.

Due to their short term maturity, management believes the carrying amounts of cash and cash equivalents, accounts receivable and accounts payable were reasonable estimates of their fair value as of September 27, 2015.

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TUMI HOLDINGS, INC. AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

(unaudited)


2.	RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” which amended the existing accounting standards for revenue recognition. ASU 2014-09 establishes principles for recognizing revenue upon the transfer of promised goods or services to customers, in an amount that reflects the expected consideration received in exchange for those goods or services. The guidance was effective for fiscal years beginning after December 15, 2016 and for interim periods within those fiscal years. In recent re-deliberations, the FASB approved a one-year deferral of the effective date of this guidance, such that it will be effective on January 1, 2018. Early adoption is not permitted. The amendments may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of initial application. The Company is currently in the process of evaluating the impact of adoption of the ASU on its condensed consolidated financial statements, but does not expect the impact to be material.

In June 2014, the FASB issued ASU 2014-12, “Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved After the Requisite Service Period (Topic 718)”. ASU 2014-12 requires that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant-date fair value of the award. ASU 2014-12 is effective for annual reporting periods beginning after December 15, 2015, with early adoption permitted. The Company is evaluating the potential impacts of the new standard on its existing share-based compensation plans, but does not expect the impact to be material.

In August 2014, the FASB issued ASU 2014-15, “Presentation of Financial Statements - Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern”. ASU 2014-15 addresses management’s responsibility in evaluating whether there is substantial doubt about a company’s ability to continue as a going concern and to provide related footnote disclosures. Management’s evaluation should be based on relevant conditions and events that are known and reasonably knowable at the date that the financial statements are issued. This guidance is effective for fiscal years ending after December 15, 2016 and for interim periods within those fiscal years, with early adoption permitted. The Company is currently in the process of evaluating the impact of adoption of the ASU on its condensed consolidated financial statements, but does not expect the impact to be material.

In April 2015, the FASB issued ASU 2015-03, “Simplifying the Presentation of Debt Issuance Costs (Subtopic 835-30)” which requires debt issuance costs related to a recognized debt liability to be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts or premiums. ASU 2015-03 is effective for annual reporting periods beginning after December 15, 2015, with early adoption permitted. The Company is currently in the process of evaluating the impact of adoption of the ASU on its condensed consolidated financial statements, but does not expect the impact to be material.

In July 2015, the FASB issued ASU 2015-11, “Simplifying the Measurement of Inventory.” Under this ASU, inventory will be measured at the “lower of cost and net realizable value” and options that currently exist for “market value” will be eliminated. The ASU defines net realizable value as the “estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation.” No other changes were made to the current guidance on inventory measurement. ASU 2015-11 is effective for interim and annual periods beginning after December 15, 2016, with early adoption permitted. The Company is currently in the process of evaluating the impact of adoption of the ASU on its condensed consolidated financial statements, but does not expect the impact to be material.

In September 2015, the FASB issued ASU 2015-16, “Simplifying the Accounting for Measurement-Period Adjustments (Topic 805: Business Combinations)” which eliminates the requirement to retrospectively account for measurement-period adjustments as part of a business combination and in turn recognize them in the period in which the adjustment was determined. ASU 2015-16 is effective for interim and annual periods beginning after December 15, 2016, with early adoption permitted. The Company is currently in the process of evaluating the impact of adoption of the ASU on its condensed consolidated financial statements, but does not expect the impact to be material.

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TUMI HOLDINGS, INC. AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

(unaudited)


3.	STOCKHOLDERS’ EQUITY

Activity for the nine months ended September 27, 2015 in the accounts of Stockholders’ Equity is summarized below:



	Common Stock
	Shares	Par Value		Additional Paid- in Capital		Treasury Stock			Retained Earnings		Accumulated Other Comprehensive Loss			Total
	(In thousands, except share data)
Balance as of January 1, 2015	68,146,673	$	681	$	314,217	$	(4,874	)	$	119,734	$	(2,875	)	$	426,883
Net income	—	—		—		—			37,962		—			37,962
Share-based compensation	—	—		3,518		—			—		—			3,518
Service-based shares issued	11,755	—		—		—			—		—			—
Repurchase of common stock	—	—		—		(10		)	—		—			(10		)
Foreign currency translation adjustment, net of tax	—	—		—		—			—		(2,550		)	(2,550		)
Balance as of September 27, 2015	68,158,428	$	681	$	317,735	$	(4,884	)	$	157,696	$	(5,425	)	$	465,803

As of September 27, 2015 and December 31, 2014, the Company held 278,272 and 277,806 shares of common stock in treasury, respectively. During the nine months ended September 27, 2015, 466 shares of common stock were withheld by the Company in satisfaction of statutory minimum withholding taxes in connection with the vesting of awards under the Company’s 2012 Long-Term Incentive Plan. Shares withheld in satisfaction of tax obligations are accounted for as treasury stock at cost.

The balance in accumulated other comprehensive loss consists only of foreign currency translation adjustments, net of tax. During the year ended December 31, 2014, the Company deemed $36,500,000 of intercompany receivables from its German subsidiary to be permanently invested. Accordingly, these amounts have been reclassified to contributed capital, reflecting the permanent nature of the investment. Unrealized gains and losses on these transactions are recorded in other comprehensive income.

4. INVENTORIES, NET

Inventories, net consist of the following:



	September 27, 2015		December 31, 2014
	(In thousands)
Raw materials	$	354	$	318
Finished goods	110,768		88,913
Total inventories, net	$	111,122	$	89,231

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TUMI HOLDINGS, INC. AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

(unaudited)


5.	PROPERTY, PLANT AND EQUIPMENT, NET

Property, plant and equipment, net consists of the following:



		September 27, 2015			December 31, 2014
		(In thousands)
	Useful Life
Land	—	$	485		$	485
Buildings and improvements	25 years	5,404			5,395
Leasehold and store enhancements	1 to 10 years	111,362			102,168
Furniture, computers and equipment	3 to 5 years	19,563			18,673
Capitalized software	5 years	11,570			9,908
Fixtures, dies and autos	3 to 5 years	23,784			19,994
Construction in progress		5,371			5,590
		177,539			162,213
Less accumulated depreciation and amortization		(95,559		)	(83,146		)
		$	81,980		$	79,067

Depreciation and amortization expense on property, plant and equipment was $5,563,000 and $15,650,000 for the three and nine months ended September 27, 2015, respectively and $4,486,000 and $12,506,000 for the three and nine months ended September 28, 2014, respectively.

The Company recorded an impairment charge of $118,000 and $757,000 for the three and nine months ended September 27, 2015, respectively. The impairment related to one retail location in our Direct-to-Consumer International segment and is included in retail operations expense on the condensed consolidated statement of operations.


6.	JOINT VENTURE

Tumi Japan

In June 2003, the Company entered into a Joint Venture Agreement with ACE Co., Ltd. (“Ace”) and Itochu Corporation (“Itochu”) to form the Tumi Japan Joint Venture (“Tumi Japan”). The purpose of Tumi Japan is to sell, promote and distribute the Company’s products in Japan. This investment is accounted for under the equity method.

Sales to Itochu were $4,489,000 and $13,409,000 for the three and nine months ended September 27, 2015, respectively and $3,968,000 and $11,203,000 for the three and nine months ended September 28, 2014, respectively. The Company had accounts receivable due from Itochu of $2,788,000 and $1,870,000 as of September 27, 2015 and December 31, 2014, respectively.


7.	GOODWILL AND OTHER INTANGIBLE ASSETS

The balance of goodwill and the classification by segment has not changed from December 31, 2014. For the nine months ended September 27, 2015, there were no changes to intangible assets other than amortization expense recorded of $14,000.

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TUMI HOLDINGS, INC. AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

(unaudited)


8.	ACCRUED WARRANTIES

The Company provides its customers with a product warranty subsequent to the sale of its products. Our warranty policy provides for one year of worry-free service as well as an additional warranty against manufacturers’ defects or flaws in construction for between two and five years, depending on the product line. The Company recognizes estimated costs associated with the limited warranty at the time of sale of its products. The warranty reserve, which is included in accrued expenses, is based on historical experience. The activity in the warranty reserve account was as follows:



	Nine Months Ended
	September 27, 2015			September 28, 2014
	(In thousands)
Liability, beginning of period	$	8,033		$	7,339
Provision for warranties	3,421			2,780
Warranty claims	(2,542		)	(2,351		)
Liability, end of period	$	8,912		$	7,768


9.	CREDIT FACILITY

Amended and Restated Credit Facility

On April 4, 2012, Tumi, Inc. and Tumi Stores, Inc., each a direct or indirect wholly-owned subsidiary of the Company (the “Borrowers”), entered into an amended and restated credit facility (the “Amended Credit Facility”), with Wells Fargo Bank National Association (“Wells Fargo”) as lender and collateral agent.

The Amended Credit Facility consolidated the term loan facility and the revolving credit facility previously provided in the Company’s former credit facility into a single $70,000,000 senior secured revolving credit facility, with Wells Fargo as the sole lender, and extended the maturity of the facility until April 4, 2017. The Amended Credit Facility included a letter of credit sublimit not to exceed the undrawn amount of the revolving commitments.

On August 29, 2013, the Amended Credit Facility was amended to reduce the letter of credit sublimit to $5,000,000.

Borrowings under the Amended Credit Facility bear interest at a per annum rate equal to, at the Borrowers’ option, the one, two, three or six month (or such other period as Wells Fargo may agree) LIBOR rate plus a margin of 1.00% or 1.25%, or a base rate (the greater of (i) Wells Fargo’s prime rate in effect on such day and (ii) the federal funds rate plus 1/2 of 1.00%) plus a margin of zero or 0.25%. The Borrowers are required to pay an undrawn commitment fee equal to 0.15% or 0.20% of the undrawn portion of the commitments under the Amended Credit Facility, as well as customary letter of credit fees. The margin added to the LIBOR, or base rate, as well as the amount of the commitment fee, depends on the Company’s leverage at the time. Interest is payable monthly, bi-monthly or quarterly on LIBOR rate loans depending on the interest period for each LIBOR rate loan, or quarterly on base rate loans.

As of September 27, 2015 and December 31, 2014, the Company had no balance outstanding under the Amended Credit Facility. Letters of credit outstanding totaled $384,000 and $286,000 at September 27, 2015 and December 31, 2014, respectively and, accordingly, the unused portion of the Amended Credit Facility was $69,616,000 and $69,714,000, at September 27, 2015 and December 31, 2014, respectively. The fee for the unused portion of the Amended Credit Facility was $26,000 and $78,000 for the three and nine months ended September 27, 2015, respectively and $26,000 and $77,000 for the three and nine months ended September 28, 2014, respectively.

All obligations under the Amended Credit Facility are required to be guaranteed by each of the Borrowers’ material domestic subsidiaries, subject to certain exclusions. The obligations under the Amended Credit Facility are secured by substantially all of the Borrowers’ assets and, if applicable, those of the Borrowers’ subsidiary guarantors. Currently, the Borrowers do not have any subsidiary guarantors.

The Amended Credit Facility contains customary events of default, including, but not limited to, payment defaults, breaches of representations and warranties, covenant defaults, cross-defaults under material debt, certain events of bankruptcy and insolvency, defaults based on certain judgments, failure of any material provision of any loan document to be in full force and effect, change of control, and certain ERISA defaults. If an event of default were to occur and continue, amounts due under

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TUMI HOLDINGS, INC. AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

(unaudited)

the Amended Credit Facility would be accelerated and the commitments to extend credit thereunder terminated, and the rights and remedies of Wells Fargo under the Amended Credit Facility available under the applicable loan documents could be exercised, including rights with respect to the collateral securing the obligations under the Amended Credit Facility.

Debt Covenants

The Amended Credit Facility contains customary covenants, including, but not limited to, limitations on the ability of the Borrowers and their subsidiaries to incur additional debt and liens, dispose of assets, and make certain investments and restricted payments, including the prepayment of certain debt and cash dividends. In addition, the Amended Credit Facility contains financial covenants requiring that the Borrowers maintain (a) a minimum ratio of consolidated adjusted EBITDA to consolidated cash interest expense (as such terms are defined in the Amended Credit Facility) of not less than 4.00 to 1.00 and (b) a maximum ratio of consolidated total debt to consolidated adjusted EBITDA of no greater than 2.25 to 1.00. The Company was in compliance with all such covenants as of September 27, 2015.


10.	COMMITMENTS AND CONTINGENCIES

Litigation

From time to time, we may be subject to legal proceedings and claims in the ordinary course of business, including proceedings to protect our intellectual property rights. The Company is not currently a party to any legal proceedings, the adverse outcome of which, in management’s opinion, would have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows.

Leases

The Company leases certain office, distribution and retail facilities. The lease agreements, which expire at various dates through 2027, are subject, in some cases, to renewal options and provide for the payment of taxes, insurance and maintenance. Certain leases contain escalation clauses resulting from the pass-through of increases in operating costs, property taxes and the effect on costs from changes in consumer price indices. Certain rentals are also contingent upon factors such as sales. Rent-free periods and scheduled rent increases are recorded as components of rent expense on a straight-line basis over the related terms of such leases. Contingent rentals are recognized when the achievement of the target (i.e., sales levels) which triggers the related payment is considered probable. Such expenses were not material for the three and nine months ended September 27, 2015 and September 28, 2014, respectively.


11.	INCOME TAXES

Income tax expense for the three months ended September 27, 2015 is recognized based on the Company’s estimated annual effective tax rate, which is based upon the tax rate expected for the full calendar year applied to the pre-tax income of the interim period. The Company’s consolidated effective tax rate was 35.9% and 35.3% for the three and nine months ended September 27, 2015, respectively, and 40.0% and 38.7% for the three and nine months ended September 28, 2014, respectively.

The change in the effective tax rate was primarily driven by the Company’s Asian sourcing operations. As of January 1, 2015, the Company has considered earnings from its Asian sourcing operations to be invested indefinitely. As such, U.S. taxes will not be provided for with respect to approximately $6.5 million of anticipated earnings in 2015. These earnings would become subject to income tax if they were to be remitted as dividends to the U.S.. Determination of the amount of unrecognized deferred U.S. income tax liability on these unremitted earnings is not practicable because of the complexities associated with this hypothetical calculation.

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TUMI HOLDINGS, INC. AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

(unaudited)


12.	EARNINGS PER SHARE

The following table summarizes the calculation of basic and diluted earnings per common share for the three and nine months ended September 27, 2015 and September 28, 2014:



	Three Months Ended				Nine Months Ended
	September 27, 2015		September 28, 2014		September 27, 2015		September 28, 2014
	(In thousands, except share and per share data)
Basic earnings per common share:
Numerator:
Net income	$	14,869	$	13,917	$	37,962	$	34,289
Denominator:
Basic weighted average common shares outstanding	67,880,156		67,867,852		67,874,435		67,867,065
Basic earnings per common share	$	0.22	$	0.21	$	0.56	$	0.51

Diluted earnings per common share:
Numerator:
Net income	$	14,869	$	13,917	$	37,962	$	34,289
Denominator:
Number of shares used in basic calculation	67,880,156		67,867,852		67,874,435		67,867,065
Weighted average dilutive effect of employee stock options and restricted stock units	3,254		8,670		32,766		5,409
Diluted weighted average common shares outstanding	67,883,410		67,876,522		67,907,201		67,872,474
Diluted earnings per common share	$	0.22	$	0.21	$	0.56	$	0.51

The Company excluded 1,331,033 and 693,749 outstanding weighted average stock options for the three and nine months ended September 27, 2015, respectively, and 357,983 and 288,731 for the three and nine months ended September 28, 2014, respectively, from the calculation of diluted earnings per common share because the exercise prices of these stock options were greater than or equal to the average market price of the common shares. These options could be included in the calculation in the future if the average market value of the common shares increases and is greater than the exercise price of these options. The Company included all outstanding weighted average stock options with exercise prices less than the average market price of the common shares in the calculation of the weighted average dilutive effect of employee stock options, but a weighted average of 23,081 and 6,482 of these stock options for the three and nine months ended September 27, 2015, respectively, and 43,639 and 5,299 for the three and nine months ended September 28, 2014, respectively, did not have any impact on the dilutive effect of employee stock options in the preceding table, as they were determined to be antidilutive when the treasury stock method was applied. In addition, as of September 27, 2015 and September 28, 2014, there were 164,799 and 139,384 performance-based restricted stock units, respectively, that were excluded from the computation of diluted earnings per share because these units have not yet been earned in accordance with the vesting conditions of the plan.


13.	SEGMENT INFORMATION

Segment Results

The Company sells its products globally to consumers through both direct and indirect channels and manages its business through four operating segments: Direct-to-Consumer North America, Direct-to-Consumer International, Indirect-to-Consumer North America and Indirect-to-Consumer International. Although the Company’s products fall into three major categories: travel, business cases and accessories, the Company’s classification of individual product codes into these categories is fluid and dynamic; while the Company collects gross sales data, the Company does not collect financial information to derive net sales (including discounts and allowances) and markdowns by product category in sufficient detail to report such data in its financial statements in the aggregate or by segment.

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TUMI HOLDINGS, INC. AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

(unaudited)

The table below presents information for net sales, operating income and depreciation and amortization by segment for the three and nine months ended September 27, 2015 and September 28, 2014:



	Direct-to- Consumer North America		Direct-to- Consumer International		Indirect-to- Consumer North America		Indirect-to- Consumer International		Non-Allocated Corporate Expenses			Consolidated Totals
	(In thousands)
Three Months Ended September 27, 2015
Net sales	$	61,928	$	9,012	$	25,677	$	34,396	$	—		$	131,013
Operating income (loss)	$	16,218	$	1,544	$	10,651	$	10,951	$	(16,242	)	$	23,122
Depreciation and amortization	$	2,918	$	445	$	404	$	1,188	$	608		$	5,563
Three Months Ended September 28, 2014
Net sales	$	55,506	$	8,385	$	26,707	$	39,597	$	—		$	130,195
Operating income (loss)	$	14,746	$	1,299	$	10,576	$	13,158	$	(16,512	)	$	23,267
Depreciation and amortization	$	2,039	$	412	$	424	$	1,011	$	668		$	4,554
Nine Months Ended September 27, 2015
Net sales	$	179,329	$	22,908	$	73,447	$	104,310	$	—		$	379,994
Operating income (loss)	$	45,388	$	2,130	$	29,223	$	34,028	$	(52,804	)	$	57,965
Depreciation and amortization	$	8,203	$	1,309	$	1,309	$	3,033	$	1,810		$	15,664
Nine Months Ended September 28, 2014
Net sales	$	162,907	$	19,694	$	76,844	$	103,934	$	—		$	363,379
Operating income (loss)	$	43,359	$	1,175	$	29,619	$	31,625	$	(49,274	)	$	56,504
Depreciation and amortization	$	5,949	$	1,020	$	1,276	$	2,717	$	1,749		$	12,711


14.	CONCENTRATION OF RISK

Credit Risk

The Company’s accounts receivable include large balances due from a small number of major customers, principally distribution partners in the Asia-Pacific region and large department and specialty luggage stores dispersed throughout the United States. Failure of one major customer to pay its balance could have a significant impact on the financial position, results of operations and cash flows of the Company. Five of the Company’s largest customers in the aggregate accounted for 24.9% and 26.2% of consolidated trade accounts receivable at September 27, 2015 and December 31, 2014, respectively. These five customers accounted for 12.4% and 12.0% of consolidated net sales for the three and nine months ended September 27, 2015, respectively and 12.9% and 12.6% for the three and nine months ended September 28, 2014, respectively.

Supplier Risk

The Company’s product offerings are enhanced by custom raw materials that have specific technical requirements. The Company has selected a limited number of key suppliers with the capability to support these manufacturing requirements and manufactures the majority of its products in Asia. Although alternatives in the supply chain exist, a change in suppliers could cause a delay in manufacturing and have a short-term adverse effect on operating results. Additionally, purchases from these key suppliers are denominated in U.S. dollars. Five of the Company’s largest suppliers accounted for 51.4% and 47.2% of accounts payable at September 27, 2015 and December 31, 2014, respectively. These five suppliers accounted for 78.5% and 76.4% of total product purchases for the three and nine months ended September 27, 2015, respectively and 85.1% and 79.8% for the three and nine months ended September 28, 2014, respectively.

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TUMI HOLDINGS, INC. AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

(unaudited)


15.	SHARE-BASED COMPENSATION PLANS AND AWARDS

2012 Long-Term Incentive Plan

The Company adopted the 2012 Long-Term Incentive Plan (the “2012 Plan”) effective April 18, 2012, which has a term of 10 years. The Company’s compensation committee will generally designate those individuals eligible to participate in the 2012 Plan. Subject to adjustment in the event of a merger, recapitalization, stock split, reorganization or similar transaction, 6,786,667 shares, or the share limit, are reserved for issuance in connection with awards granted under the 2012 Plan. Any unexercised, unconverted or undistributed portion of any award that is not paid in connection with the settlement of an award or is forfeited without the issuance of shares shall again be available for grant under the 2012 Plan. Options and stock appreciation rights under the 2012 Plan have a maximum term of 10 years.

The 2012 Plan provides for the grant of stock options (including nonqualified stock options and incentive stock options), restricted stock, restricted stock units, performance awards (which include, but are not limited to, cash bonuses), dividend equivalents, stock payment awards, stock appreciation rights, and other incentive awards. The exercise price of an option or stock appreciation price must be equal to or greater than the fair market value of the Company’s common stock on the date of grant.

The following table shows the total compensation cost charged against income for share-based compensation plans and the related potential future tax benefits recognized in the income statement for the periods indicated:



	Three Months Ended				Nine Months Ended
	September 27, 2015		September 28, 2014		September 27, 2015		September 28, 2014
	(In thousands)
Share-based compensation expense	$	992	$	1,236	$	3,518	$	2,859
Income tax benefit related to share-based compensation	$	367	$	494	$	1,302	$	1,106

Stock Options

The fair value of each option award is estimated on the date of grant using the Black-Scholes option valuation model. Due to the limited trading history of the Company’s common stock, the volatility assumption used was based on the weighted average historical stock prices of a peer group which is representative of the Company’s size and industry. The Company considers estimates for employee termination and the period of time the options are expected to be outstanding for the option term assumption within the valuation model. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of the grant.

The following table presents the weighted average assumptions used to estimate the fair value of the options granted during the periods presented:



	Nine Months Ended
	September 27, 2015		September 28, 2014
Weighted average volatility	43.01	%	44.78	%
Expected dividend yield	—	%	—	%
Expected term (in years)	6		6
Risk-free rate	1.74	%	1.79	%

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TUMI HOLDINGS, INC. AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

(unaudited)

A summary of option activity under the 2012 Plan as of September 27, 2015 and changes during the nine months then ended is presented below:



	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
Outstanding - December 31, 2014	969,718		$	21.35
Granted	429,800		$	22.55
Exercised	—		$	—
Forfeited or expired	(99,309	)	$	21.63
Outstanding - September 27, 2015	1,300,209		$	21.72	8.30	$	499
Options vested and expected to vest as of September 27, 2015	1,253,467		$	21.71	8.28	$	499
Options vested and exercisable as of September 27, 2015	458,271		$	21.23	7.68	$	499

The weighted average grant-date fair value of options granted during the nine months ended September 27, 2015 and September 28, 2014 was $9.77 and $10.05, respectively.

As of September 27, 2015, there was $5,102,000 of total unrecognized compensation cost related to nonvested stock options. Such cost is expected to be recognized over a weighted average period of 2.16 years. The total fair value of options vested during the nine months ended September 27, 2015 was $2,236,000.

Performance-Based Restricted Stock Units

In 2014, the Company began granting performance-based restricted stock units (“RSUs”) to key executives, as well as certain of its other employees. Performance-based RSUs are awards denominated in units that are settled in shares of the Company’s common stock upon vesting. The vesting of these units is subject to the employee’s continuing employment and the Company’s achievement of certain performance goals during the three-year performance period. The fair value of performance-based RSUs is based on the fair value of the Company’s common stock on the date of grant. Expense for performance-based RSUs is recognized over the employees’ requisite service period when the attainment of the performance goal is deemed probable.

A summary of the status of performance-based RSUs as of September 27, 2015 and changes during the nine months then ended is presented below:



	Number of Units		Weighted Average Grant-Date Fair Value
Nonvested - December 31, 2014	130,113		$	22.73
Granted	68,009		$	23.15
Vested	—		$	—
Forfeited	(33,323	)	$	22.49
Nonvested - September 27, 2015	164,799		$	22.95

As of September 27, 2015, there was $2,038,000 of total unrecognized compensation cost related to nonvested performance-based RSUs. Such cost is expected to be recognized over a weighted average period of 1.83 years.

Service-Based Restricted Stock Units

In 2014, the Company began granting service-based RSUs to certain non-employee directors. These service-based RSUs generally vest over a one-year period, subject to the director’s continuing service. In 2015, the Company began granting service-based RSUs to key executives, as well as certain of its other employees. These service-based RSUs generally vest over a three-year period, subject to the employee’s continuing service.The fair value of service-based RSUs is based on the fair value of the Company’s common stock on the date of grant.

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TUMI HOLDINGS, INC. AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

(unaudited)

A summary of the status of service-based RSUs as of September 27, 2015 and changes during the nine months then ended is presented below:



	Number of Units		Weighted Average Grant-Date Fair Value
Nonvested - December 31, 2014	10,680		$	18.72
Granted	81,665		$	23.20
Vested	(11,755	)	$	19.13
Forfeited	(4,622	)	$	23.25
Nonvested - September 27, 2015	75,968		$	23.20

As of September 27, 2015, there was $1,123,000 of total unrecognized compensation cost related to nonvested service-based RSUs. Such cost is expected to be recognized over a weighted average period of 2.11 years.


16.	SUBSEQUENT EVENTS

Share Repurchase Program

On November 4, 2015, the Company announced that its Board of Directors had authorized the repurchase of up to $150 million of the Company’s common stock over the next twelve months. Under the program, the Company may purchase its shares from time to time in the open market or in privately negotiated transactions. The Company expects that purchases will be funded through existing cash on hand, cash from operations, borrowings or a combination of the foregoing. The amount and timing of the purchases will depend on a number of factors including the price and availability of the Company’s shares, trading volume and general market conditions. Repurchases may also be made under a Rule 10b5-1 plan, which would permit shares to be repurchased when the Company might otherwise be precluded from doing so under insider trading laws. The share repurchase program may be suspended or discontinued at any time.

Agreement to Acquire Japanese Joint Venture

On November 4, 2015, the Company announced that it has entered into an agreement to acquire the remaining 50% stake in its Japanese joint venture, Tumi Japan, from its partners, for a purchase price of 521 million yen (approximately $4.3 million at current exchange rates). Tumi Japan operates a network of 13 Tumi stores, an e-commerce website, and distributes Tumi product across an additional 150 points of sale in Japan. The transaction is expected to close in the first quarter of 2016, subject to the satisfaction of customary closing conditions.

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ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with Tumi Holdings, Inc.’s (together with its subsidiaries, “Tumi”, the “Company”, “we”, “us”, and “our”) condensed consolidated financial statements and notes thereto included elsewhere in this report. In addition to historical information, this discussion contains forward-looking statements that involve risks, uncertainties and assumptions that could cause actual results to differ materially from management’s expectations. See “Cautionary Note Regarding Forward-Looking Statements” for further information regarding forward-looking statements. We generally identify 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. Factors that can cause actual results to differ materially from those reflected in the forward-looking statements include, among others, those discussed in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2014, filed with the SEC on February 27, 2015. We urge you not to place undue reliance on these forward-looking statements, which reflect management’s analysis, judgment, belief or expectation only as of the date hereof. We expressly disclaim any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by applicable securities laws and regulations. Historical results are not necessarily indicative of the results expected for any future period.

The reporting periods for our unaudited quarterly financial information are based on the first month of each fiscal quarter including five Sundays and the second and third months of each fiscal quarter including four Sundays, with the fourth fiscal quarter always ending on December 31. Accordingly, the three-month reporting periods for the unaudited interim condensed consolidated financial statements included herein commenced on June 29, 2015 and June 30, 2014, respectively and ended on September 27, 2015 and September 28, 2014, respectively. The nine-month reporting periods for the unaudited interim condensed consolidated financial statements included herein commenced on January 1, 2015 and 2014, respectively and ended on September 27, 2015 and September 28, 2014, respectively.

Executive Overview

We are a leading, growing, global, premium lifestyle brand whose products offer superior quality, durability and innovative design. We offer a comprehensive line of travel and business products and accessories in multiple categories. We design our products for, and market our products to, sophisticated professionals, frequent travelers and brand-conscious individuals who enjoy the premium status of Tumi products. We sell our products through a network of company-owned full-price stores and outlet stores, partner stores, concessions, shop-in-shops, specialty luggage shops, high-end department stores and e-commerce distribution channels. We have approximately 1,900 points of distribution in over 75 countries, and our global distribution network is enhanced by the use of our three logistics facilities located in the United States, Europe and Asia. We design our products in our U.S. design studios and selectively collaborate with well-known, international, industrial and fashion designers for limited edition product lines. Production is sourced globally through a network of suppliers based in Asia, many of which are longtime suppliers, and the Caribbean.

We have expanded our global presence by successfully implementing our growth strategies, which have included opening additional company-owned stores and increasing wholesale points of distribution. Our net sales increased from $130.2 million and $363.4 million in the three and nine months ended September 28, 2014, respectively, to $131.0 million and $380.0 million in the three and nine months ended September 27, 2015, respectively. The increase in net sales was due principally to an increase in volume resulting from new store openings since the third quarter of 2014, as well as expanded wholesale distribution in the Asia-Pacific region. Our ability to expand our points of distribution and to grow our net sales in existing stores has been driven by increasing demand for our products, as well as growing recognition of the Tumi brand. We have also increased our focus on our women’s line and on our online presence.

In recent years, the travel products industry has seen a trend in consumer preferences towards lighter weight luggage and travel accessories, as well as merchandise that makes mobile computing and communication more convenient. In light of these trends, we have developed products that fulfill those identified needs, such as our Vapor and Tegra-Lite lines, as well as a variety of mobile electronic accessories designed for frequent travelers. We have seen an increase in the relative percentage of our net sales derived from our accessories line, our premium product line and updates of our core product line, and a decrease in the relative percentage of our new sales derived from our legacy core product line in recent years.

We believe there is a significant opportunity to continue to expand our store base globally, and we plan to add new company-owned and partner stores in upscale malls and prestigious street venues. We had 9 and 21 new company-owned store openings in the three and nine months ended September 27, 2015, respectively. We currently expect to continue to open company-owned stores in the foreseeable future, with the majority being full-price stores, while also expanding our online presence.

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We generally expect the payback of our investment in a new company-owned store to occur in less than two and a half years. Over the long-term, we also believe we can increase our average net sales per square foot by continuing to improve store efficiency and increase our overall net sales by capitalizing on our flexible distribution model. We will continue to look for ways to improve our capital efficiency in both current and new markets in the future.

We believe we have the capacity to increase our Indirect-to-Consumer net sales, both in North America and internationally. We plan to continue to grow in key Asian markets, particularly China. We also plan to increase the number of wholesale doors in key European markets, including Germany, France and the United Kingdom, and to expand wholesale distribution in Central and South America, while also expanding our product portfolio offered in existing wholesale doors. We believe there is also significant opportunity to open additional points of distribution in airport locations in many of these regions. In North America, we expect to grow net sales by increasing our wholesale door presence, expanding our accessories business in department stores, and increasing penetration of the Canadian market through department stores, specialty stores, e-commerce sales and new distribution partners.

Growth Strategy

The key elements of our growth strategy are:

•

Expand our store base. We believe there continues to be significant opportunity for us to expand our company-owned retail store network in North America and internationally. We plan to add new stores in upscale mall market locations and prestigious street venues where we are currently underrepresented as well as open our own travel retail stores. In addition, we selectively target the affluent and business markets in small and mid-sized cities where there is demonstrated foot traffic and an established Tumi consumer base that is not being sufficiently served by multi-brand travel goods and accessories retailers. We also believe there is further opportunity to develop company-owned outlet stores in premium outlet malls where we currently do not have a presence. Our store-opening strategy focuses on opening profitable company-owned retail locations, as well as retail locations that enhance our brand image. We have opened 101 company-owned stores since January 1, 2010 (8 stores in 2010, 11 stores in 2011, 19 stores in 2012, 17 stores in 2013, 25 stores in 2014 and 21 stores in the nine months ended September 27, 2015), bringing our total to 172 company-owned stores as of September 27, 2015. While we may be unable to successfully open new company-owned stores according to plan, we have identified several locations for new company-owned stores and believe we have a market opportunity to continue to expand our company-owned store base over the long term. Additionally, we are evaluating the potential of pursuing a more direct sales model in Asia.

•

Expand wholesale distribution globally. We currently sell products in approximately 1,800 wholesale doors in over 75 countries. We plan to continue expanding wholesale distribution globally, with a focus on key markets in Asia (including mainland China, India, Japan and South Korea), Eastern Europe and Central and South America. As part of this strategy, we will continue to develop relationships with wholesale distributors in these attractive geographies (in both new and existing markets) and increase wholesale and distribution opportunities as well as expand into additional airport locations worldwide. We expect this distribution expansion will take several forms as appropriate for the specific market opportunity, including Tumi shop-in-shops, Tumi-defined corners within existing wholesale accounts or concession and consignment arrangements.

•

Continue to increase our brand awareness. We seek to increase our brand awareness among our targeted consumer base through retail and wholesale distribution expansion, select marketing initiatives, new product lines and selective licensing in brand extensions. In the wholesale distribution channel, we target distribution expansion by increasing the number of our partner stores where we can control the consumer experience. We will continue to focus on in-store marketing and we plan to effectively utilize our website, social networking sites and other online forms of communication to build consumer knowledge of the Tumi brand. We believe increasing brand awareness will lead to greater foot traffic in our current locations, enable us to continue expanding our loyal consumer base and ultimately contribute to enhanced growth and profitability.

•

Broaden the appeal of our products through new product introductions. We seek to design products that are innovative, functional and stylish. We have been introducing new products in lighter weight and durable materials, colors which are designed to appeal to women and men, premium products with a classic or contemporary design, and stylish and durable products at more accessible price points for our younger consumer. We also plan to continue to introduce new products to our successful brand extension lines, including eyewear, belts, outerwear, electronics and other accessories.


•	Improve our store operations. We continue to focus on improving store efficiency, primarily through our retail performance maximization program (the “RPM program”) which was implemented in 2009. The RPM program emphasizes training and staff development programs and the effective use of visual merchandising and fixtures. Our long-

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term goal is to increase net sales per store by increasing conversion rates and units and dollars per transaction, while enhancing the consumer experience.

•

Expand our e-business. Our e-commerce business consists of our websites and certain of our wholesale customers’ e-commerce websites. This online presence is an extension of our brand and points of distribution, serving both as an informational resource and a complementary sales channel for our consumers. We expect sales from this channel to grow as consumers become more aware of our e-commerce capabilities and we continue to expand our online presence into new markets. In addition, we transitioned our North American web store to a more insourced model during the fourth quarter of 2014 and our international web stores to a more insourced model during the first quarter of 2015. We believe this will improve our websites’ functionality and efficiency in the future.

Key Performance Indicator and Non-GAAP Measures

A key performance indicator that we use to manage our business and evaluate our financial results and operating performance is average net sales per square foot. Average net sales per square foot, which relates to company-owned stores only, provides us with a measure to evaluate our store sales trends and to assess the operational performance of our stores. This measure is supplemented by a number of non-financial operating metrics related to store performance, which provide benchmarks against which to evaluate store efficiencies but are not considered by management to be reliable financial metrics. Undue reliance should not be placed on this measure as our only measure of operating performance.

Average net sales per square foot is calculated using net sales for the last twelve months for all stores open for the full twelve months. Average net sales per square foot decreased by approximately $45, or 4%, to $1,037 as of September 27, 2015 from $1,082 as of December 31, 2014. This decrease was primarily due to negative overall comparable store sales in the nine months ended September 27, 2015, as well as the addition of several large but less mature stores to the square footage base during the first nine months of 2015.

In addition, during the third quarter of 2015, management began using the non-GAAP financial measures “operating income adjusted for the cost reduction program and on a constant currency basis” and “net income adjusted for the cost reduction program and on a constant currency basis” to measure our financial performance and evaluate our profitability. Operating income adjusted for the cost reduction program and on a constant currency basis is defined as operating income plus the costs associated with the cost reduction program and the impact of currency fluctuations. Net income adjusted for the cost reduction program and on a constant currency basis is defined as net income plus the costs associated with the cost reduction program and the impact of currency fluctuations. Operating income adjusted for the cost reduction program and on a constant currency basis and net income adjusted for the cost reduction program and on a constant currency basis are not measures of operating income or operating performance presented in accordance with U.S. GAAP.

Operating income adjusted for the cost reduction program and on a constant currency basis and net income adjusted for the cost reduction program and on a constant currency basis are important supplemental measures of our internal reporting, including for our board of directors and management, and are key measures we use to evaluate profitability and operating performance. Additionally, operating income adjusted for the cost reduction program and on a constant currency basis and net income adjusted for the cost reduction program and on a constant currency basis, when viewed in conjunction with our condensed consolidated financial statements, provide investors and other users of our financial information consistency and comparability with our past financial performance, facilitate period-to-period comparisons of operating performance and facilitate comparisons with other companies. We use these metrics in conjunction with U.S. GAAP operating performance measures as part of our overall assessment of our performance. U.S. GAAP measures of performance remain our primary means of assessing our overall financial results.

In addition, the Company also refers to certain financial metrics on a “constant currency” basis so that the business results can be viewed without the impact of translating foreign currencies into U.S. dollars and the impact of currency rate changes on foreign currency denominated transactions, thereby facilitating period-to-period comparisons of the Company’s business performance. Generally, when the dollar either strengthens or weakens against other currencies, metrics at constant currency rates or adjusting for currency will be higher or lower than results reported at actual exchange rates. “Constant currency” performance measures are not measures presented in accordance with U.S. GAAP.

Undue reliance should not be placed on these measures as our only measures of operating performance. Operating income adjusted for the cost reduction program and on a constant currency basis, net income adjusted for the cost reduction program and on a constant currency basis, and constant currency metrics have limitations as analytical tools. When assessing our operating performance, investors should not consider operating income adjusted for the cost reduction program and on a

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constant currency basis, net income adjusted for the cost reduction program and on a constant currency basis and constant currency metrics in isolation or as substitutes for operating income, net income or net sales, respectively.

A reconciliation of net income to net income adjusted for the cost reduction program and on a constant currency basis, of operating income to operating income adjusted for the cost reduction program and of constant currency financial measures is presented below:



Reconciliation of Operating Income to Operating Income Adjusted for the Cost Reduction Program and on a Constant Currency Basis
(In millions)
	Nine Months Ended
	September 27, 2015		September 28, 2014
Operating income	$	58.0	$	56.5
Operating expenses in conjunction with the cost reduction program	2.5		—
Impact of foreign currency	2.7		—
Operating income adjusted for the cost reduction program and on a constant currency basis¹	$	63.1	$	56.5

__________________________________________

¹The totals in the table may not foot due to rounding.



Reconciliation of Net Income to Net Income Adjusted for the Cost Reduction Program and on a Constant Currency Basis
(In millions, except per share data)
	Nine Months Ended
	September 27, 2015		September 28, 2014
Net income	$	38.0	$	34.3
Operating expenses in conjunction with the cost reduction program (after tax)	1.6		—
Impact of foreign currency	1.5		—
Net income adjusted for the cost reduction program and on a constant currency basis²	$	41.1	$	34.3
Diluted earnings per share adjusted for the cost reduction program and on a constant currency basis¹	$	0.61	$	0.51

_________________________________________________________________

¹Diluted EPS calculated using 67.9 million shares for both YTD 2015 and YTD 2014.

²The totals in the table may not foot due to rounding.



Reconciliation of Constant Currency Financial Measures
(In thousands, except per share data)
	Three Months Ended
	September 27, 2015						September 28, 2014			% Change
	As Reported			Constant Currency			As Reported			As Reported		Constant Currency
Net sales	$	131,013		$	135,970		$	130,195		0.6	%	4.4	%
Operating income	$	23,122		$	25,477		$	23,267		(0.6	)%	9.4	%
Operating income margin	17.6		%	18.7		%	17.9		%
Net income	$	14,869		$	16,222		$	13,917		6.8	%	16.6	%
Diluted earnings per share	$	0.22		$	0.24		$	0.21		6.8	%	16.5	%

_________________________________________________________________

Constant currency amounts exclude both the impact of translating foreign currencies into U.S. dollars and the impact of currency rate changes on foreign currency denominated transactions.

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Reconciliation of Constant Currency Financial Measures
(In thousands, except per share data)
	Nine Months Ended
	September 27, 2015						September 28, 2014			% Change
	As Reported			Constant Currency			As Reported			As Reported		Constant Currency
Net sales	$	379,994		$	391,444		$	363,379		4.6	%	7.7	%
Operating income	$	57,965		$	60,627		$	56,504		2.6	%	7.3	%
Operating income margin	15.3		%	15.5		%	15.5		%
Net income	$	37,962		$	39,472		$	34,289		10.7	%	15.1	%
Diluted earnings per share	$	0.56		$	0.58		$	0.51		10.7	%	15.1	%

_________________________________________________________________

Constant currency amounts exclude both the impact of translating foreign currencies into U.S. dollars and the impact of currency rate changes on foreign currency denominated transactions.

Results of Operations

The following tables set forth condensed consolidated operating results and other operating data for the periods indicated:

Operating results



	Three Months Ended						Nine Months Ended
	September 27, 2015			September 28, 2014			September 27, 2015			September 28, 2014
	(In thousands)
Net sales	$	131,013		$	130,195		$	379,994		$	363,379
Cost of sales	51,693			53,888			153,788			151,887
Gross margin	79,320			76,307			226,206			211,492
OPERATING EXPENSES
Selling	8,416			9,515			25,259			26,351
Marketing	3,641			3,643			11,348			12,546
Retail operations	32,450			29,051			94,542			83,589
General and administrative	11,691			10,831			37,092			32,502
Total operating expenses	56,198			53,040			168,241			154,988
Operating income	23,122			23,267			57,965			56,504
OTHER INCOME (EXPENSES)
Interest expense	(76		)	(117		)	(261		)	(359		)
Earnings from joint venture investment	271			153			573			307
Foreign exchange gains (losses)	(166		)	(154		)	505			(505		)
Other non-operating income (expenses)	33			34			(71		)	(38		)
Total other income (expenses)	62			(84		)	746			(595		)
Income before income taxes	23,184			23,183			58,711			55,909
Provision for income taxes	8,315			9,266			20,749			21,620
Net income	$	14,869		$	13,917		$	37,962		$	34,289

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Percentage of Net Sales*



	Three Months Ended				Nine Months Ended
	September 27, 2015		September 28, 2014		September 27, 2015		September 28, 2014
Net sales	100	%	100	%	100	%	100	%
Cost of sales	39	%	41	%	40	%	42	%
Gross margin	61	%	59	%	60	%	58	%
OPERATING EXPENSES
Selling	6	%	7	%	7	%	7	%
Marketing	3	%	3	%	3	%	3	%
Retail operations	25	%	22	%	25	%	23	%
General and administrative	9	%	8	%	10	%	9	%
Total operating expenses	43	%	41	%	44	%	43	%
Operating income	18	%	18	%	15	%	16	%
OTHER INCOME (EXPENSES)
Interest expense	—	%	—	%	—	%	—	%
Earnings from joint venture investment	—	%	—	%	—	%	—	%
Foreign exchange gains (losses)	—	%	—	%	—	%	—	%
Other non-operating income (expenses)	—	%	—	%	—	%	—	%
Total other income (expenses)	—	%	—	%	—	%	—	%
Income before income taxes	18	%	18	%	15	%	15	%
Provision for income taxes	6	%	7	%	5	%	6	%
Net income	11	%	11	%	10	%	9	%

___________________________________________________

*The percentages in the table may not foot due to rounding.

The following tables summarize the number of company-owned stores open at the beginning and end of the nine months ended September 27, 2015:



Direct-to-Consumer North America
	Nine Months Ended
	September 27, 2015
Number of stores open at beginning of period	133
Stores opened	19
Stores closed	(1	)
Number of stores open at end of period	151



Direct-to-Consumer International
	Nine Months Ended
	September 27, 2015
Number of stores open at beginning of period	19
Stores opened	2
Stores closed	—
Number of stores open at end of period	21

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Three months ended September 27, 2015 compared with the three months ended September 28, 2014

Net Sales

The following table presents net sales by operating segment for the three months ended September 27, 2015 compared with the three months ended September 28, 2014:



	Three Months Ended September 27, 2015		Three Months Ended September 28, 2014		% Change
	(In thousands)
Direct-to-Consumer North America	$	61,928	$	55,506	12	%
Direct-to-Consumer International	9,012		8,385		7	%
Indirect-to-Consumer North America	25,677		26,707		(4	)%
Indirect-to-Consumer International	34,396		39,597		(13	)%
Total	$	131,013	$	130,195	1	%

Net sales increased $0.8 million, or 1%, to $131.0 million for the three months ended September 27, 2015 from $130.2 million for the three months ended September 28, 2014. On a constant currency basis, net sales increased 4%. The overall increase in net sales was due principally to an increase in volume resulting from new store openings in our Direct-to-Consumer segments. There have been 31 new stores opened since the third quarter of 2014, which contributed to over 100% of the overall sales growth experienced from the three months ended September 28, 2014 to the three months ended September 27, 2015, partially offset by weaker traffic trends in our Direct-to-Consumer North America segment. There continued to be positive response to our Alpha Bravo collection, which re-launched during the second quarter of 2015, and the roll out of our Voyageur collection, which re-launched during the fourth quarter of 2014. We also saw growth in sales in our women’s and accessories categories, as well as our premium product collection. There were no significant price increases during the quarter. This increase in net sales was partially offset by the impact of the strengthening U.S. dollar on our Europe, Middle East and Africa (“EMEA”) wholesale and retail businesses. Additionally, we believe sales in our Asia-Pacific region were negatively impacted by the MERS virus outbreak, as well as the slow down of the Chinese economy and Chinese luxury spend. During the three months ended September 27, 2015, there were 9 new company-owned store openings, 1 store relocation, 1 store renovation and 1 store closure.

Net sales attributable to the Direct-to-Consumer North America segment experienced a 12% increase for the three months ended September 27, 2015 as compared with the three months ended September 28, 2014. Of the 31 new stores opened since the third quarter of 2014, 28 were in North America and comprised approximately 74% of the net sales growth experienced in the Direct-to-Consumer North America segment from the three months ended September 28, 2014 to the three months ended September 27, 2015. Overall, North America comparable store sales decreased 1.9% for the period. North America full-price comparable store sales increased 1.3%, North America outlet comparable store sales decreased 3.8% and our North America e-commerce sales decreased 8.2%. Comparable store sales are calculated based on our company-owned stores that have been open for at least a full calendar year as of the end of our annual reporting period. For example, a store opened in October 2014 will not impact the comparable store comparison until January 1, 2016. Additionally, temporary store closings, store expansions and store relocations are excluded from the comparable store base under most circumstances.

Net sales attributable to the Direct-to-Consumer International segment experienced a 7% increase for the three months ended September 27, 2015 as compared with the three months ended September 28, 2014. Of the 31 new stores opened since the third quarter of 2014, 3 were in Europe and comprised over 100% of the net sales growth experienced in the Direct-to-Consumer International segment from the three months ended September 28, 2014 to the three months ended September 27, 2015. This increase was partially offset by a decrease in comparable store sales during the quarter ended September 27, 2015, which was due to the translation effect the strengthening of the U.S. dollar had on our sales denominated in Euros. Overall, our international comparable store sales decreased 9.3% (increased 8.9% in Euros) for the period. Our international full-price comparable store sales were down 12.1% (up 5.5% in Euros) and outlet comparable store sales were down 9.4% (up 8.7% in Euros). Our international e-commerce sales increased 4.6% (increased 25.4% in Euros).

Overall, comparable store sales for all Direct-to-Consumer channels decreased 2.8% globally for the three months ended September 27, 2015 as compared with the three months ended September 28, 2014. On a constant currency basis, comparable store sales decreased 0.7%.

Net sales attributable to the Indirect-to-Consumer North America segment decreased 4% for the three months ended September 27, 2015 as compared with the three months ended September 28, 2014. Our Indirect-to-Consumer North America net sales have been negatively impacted by our decision to limit our special markets business in an effort to reduce the incidences of product diversion and trans-shipping abuses that have become a more common occurrence in Asia, particularly in

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Japan and Korea, where the Tumi brand is becoming increasingly popular. Certain special markets customers have been a source of unauthorized product diversion in the past. While difficult to assess the financial impact of trans-shipping, we believe that it is damaging to the brand image in these emerging markets. In addition, we experienced a decline in sales to our specialty stores due to a decline in the number of our specialty store accounts as well as the discontinuation of our T-Tech line in 2014. We also experienced weaker sales within our Canadian wholesale business where we believe the strengthening U.S. dollar has had a dampening effect on the replenishment of our wholesalers’ orders.

Net sales attributable to the Indirect-to-Consumer International segment decreased 13% for the three months ended September 27, 2015 as compared with the three months ended September 28, 2014. In our EMEA region, net sales have been negatively impacted by the adverse effect the strengthening U.S. dollar has had on our wholesale business. In our Asia-Pacific region, we believe sales in South Korea were negatively impacted by the MERS virus outbreak. In addition, we believe sales in mainland China and Hong Kong were negatively impacted by the slow down of the Chinese economy.

Cost of sales

Cost of sales decreased by $2.2 million, or 4.1%, to $51.7 million for the three months ended September 27, 2015 as compared to $53.9 million for the three months ended September 28, 2014. In addition, gross margin increased by $3.0 million, or 3.9%, to $79.3 million for the three months ended September 27, 2015 as compared to $76.3 million for the three months ended September 28, 2014. The decrease in cost of sales was largely driven by a shift in channel mix from wholesale to retail, as well as a change in product mix during the quarter ended September 27, 2015.

Gross margin as a percentage of net sales is dependent upon a variety of factors including changes in relative sales mix among distribution channels, changes in the mix of product sold, the timing and level of promotional activities, fluctuations in foreign currency exchange rates, and fluctuations in material costs. These factors, among others, may cause gross margin as a percentage of net sales to fluctuate from quarter to quarter. Gross margin as a percentage of net sales was 60.5% for the three months ended September 27, 2015 and 58.6% for the three months ended September 28, 2014. The increase was primarily attributable to our decision to be less promotional during the three months ended September 27, 2015. In addition, we saw a shift in channel mix from wholesale to retail, as retail sales represented approximately 54.1% of total sales in the third quarter of 2015 compared to 49.1% in the third quarter of 2014, as well as a shift in product mix. We continue to expand our retail footprint as part of our long-term growth strategy and we have opened 31 new stores since the third quarter of 2014. We typically realize higher gross margins in our retail business as compared to our wholesale business.

Selling expense

Selling expense decreased by $1.1 million, or 11.6%, to $8.4 million for the three months ended September 27, 2015 as compared to $9.5 million for the three months ended September 28, 2014. This decrease was primarily driven by $0.2 million in savings from the cost reduction actions taken in the first quarter of 2015 as well as savings in other personnel related costs such as travel expenses and commissions of $0.2 million. In addition, included within the three months ended September 28, 2014 were $0.1 million for fixture disposals.

Marketing expense

Marketing expense remained consistent at $3.6 million for the both the three months ended September 27, 2015 and September 28, 2014.

Retail Operations expense

Retail operations expense increased by $3.4 million, or 11.7%, to $32.5 million for the three months ended September 27, 2015 as compared to $29.1 million for the three months ended September 28, 2014. The increase in retail operations expense was driven primarily by the opening of 31 new stores since the third quarter of 2014. In addition, we recorded an impairment charge of $0.1 million related to one of our retail locations in Europe during the three months ended September 27, 2015.

General and administrative expense

General and administrative expense increased by $0.9 million, or 7.9%, to $11.7 million for the three months ended September 27, 2015 as compared to $10.8 million for the three months ended September 28, 2014. This increase was primarily driven by an increase of approximately $0.5 million for our after sales service expense.

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Operating income

The following table presents operating income (loss) by segment for the three months ended September 27, 2015 as compared with the three months ended September 28, 2014:



	Three Months Ended September 27, 2015			Three Months Ended September 28, 2014			% Change
	(In thousands)
Direct-to-Consumer North America	$	16,218		$	14,746		10	%
Direct-to-Consumer International	1,544			1,299			19	%
Indirect-to-Consumer North America	10,651			10,576			1	%
Indirect-to-Consumer International	10,951			13,158			(17	)%
Non-allocated corporate expenses	(16,242		)	(16,512		)	2	%
Total	$	23,122		$	23,267		(1	)%

Operating income decreased $0.1 million, or 1%, to $23.1 million for the three months ended September 27, 2015 from $23.3 million for the three months ended September 28, 2014. This decrease was primarily due to a decrease in sales in the EMEA and Asia-Pacific regions, partially due to the adverse effect the strengthening U.S. dollar has had on our wholesale business in these regions. On a constant currency basis, operating income increased 9%. Our operating segments have benefited from store openings in the Direct-to-Consumer segments as well as stronger overall margins, partially offset by higher retail operations expenses related to the cost of new store openings in 2015 and the wrap effect (expenses for opened stores for which there were limited or no expenses in the comparable prior period) of stores opened since the third quarter of 2014. Historically, company-owned store operating margins generally strengthen after their first year of operation.

Operating income attributable to the Direct-to-Consumer North America segment experienced a 10% increase for the three months ended September 27, 2015 as compared with the three months ended September 28, 2014. This was primarily due to growth from 28 new stores opened since the third quarter of 2014, partially offset by negative comparable store sales.

Operating income attributable to the Direct-to-Consumer International segment experienced a 19% increase for the three months ended September 27, 2015 as compared with the three months ended September 28, 2014. This was primarily due to the sales growth from 3 new stores opened since the third quarter of 2014, partially offset by a decline in comparable store sales, which was due to the translation effect the strengthening of the U.S. dollar had on our sales denominated in Euros, as well as an impairment charge of $0.1 million related to one of our retail locations in Europe.

Operating income attributable to the Indirect-to-Consumer North America segment experienced an increase of 1% for the three months ended September 27, 2015 as compared with the three months ended September 28, 2014. This increase was driven by higher gross margins due to less promotional activity during the three months ended September 27, 2015, largely offset by a decrease in sales to specialty stores and our special markets business.

Operating income attributable to the Indirect-to-Consumer International segment experienced a 17% decrease for the three months ended September 27, 2015 as compared with the three months ended September 28, 2014. This decrease was primarily due to a decrease in sales in the EMEA and Asia-Pacific regions, partially due to the adverse effect the strengthening U.S. dollar has had on our wholesale business in these regions.

Non-allocated corporate expenses represent expenses not attributable to a particular operating segment, and consist of core corporate expenses such as corporate marketing, design, general and administrative expenses, after sales service costs, warehousing costs, human resources related to corporate overhead, finance, legal and professional fees and other costs. As we expand our business, we believe general and administrative expenses will increase in dollar amount in future periods, although we expect to leverage these expenses against sales as the business grows. Non-allocated corporate expenses decreased 2% for the three months ended September 27, 2015 as compared with the three months ended September 28, 2014. This decrease was primarily driven by approximately $0.6 million in savings from the cost reduction actions taken in the first quarter of 2015, offset by an increase of approximately $0.5 million in our after sales service expense.

Operating margin was 18% for both the three months ended September 27, 2015 and September 28, 2014, as we continue to leverage fixed costs against sales. On a constant currency basis, operating margin would have been 19% for the three months ended September 27, 2015. The previously mentioned retail operations expenses for new stores and the wrap effect of stores opened since the third quarter of 2014 offset some of our fixed cost leverage. In addition, the cost reduction actions during the first quarter of 2015 resulted in approximately $0.7 million of overall savings during the quarter ended September 27, 2015.

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Other income and expenses

Other income and expenses, net increased $0.2 million to income of $0.1 million for the three months ended September 27, 2015 from expense of $0.1 million for the three months ended September 28, 2014. This was mainly driven by an increase in earnings from our joint venture during the three months ended September 27, 2015.

Income tax expense

Provision for income taxes decreased $1.0 million, or 10%, to $8.3 million in the three months ended September 27, 2015 from $9.3 million in the three months ended September 28, 2014, due primarily to a lower effective tax rate for the quarter ended September 27, 2015. The change in the effective tax rate was largely driven by the Company’s tax planning relating to its Asian sourcing operations.

Net income

Net income increased $1.0 million, or 7%, to $14.9 million for the three months ended September 27, 2015 from $13.9 million for the three months ended September 28, 2014. On a constant currency basis, net income increased 17% .This increase was primarily driven by the increase in gross margin dollars realized as well as a lower effective tax rate, partially offset by the aforementioned increase in retail operations expense for new stores and the wrap effect of stores opened since the third quarter of 2014.

Basic and diluted weighted average shares outstanding were 67.9 million shares for the three months ended September 27, 2015 and September 28, 2014. Basic and diluted EPS was $0.22 per common share for the three months ended September 27, 2015 versus $0.21 per common share for the three months ended September 28, 2014. Diluted EPS on a constant currency basis would have been $0.24 for the three months ended September 27, 2015.

Nine months ended September 27, 2015 compared with the nine months ended September 28, 2014

Net Sales

The following table presents net sales by operating segment for the nine months ended September 27, 2015 compared with the nine months ended September 28, 2014:



	Nine Months Ended September 27, 2015		Nine Months Ended September 28, 2014		% Change
	(In thousands)
Direct-to-Consumer North America	$	179,329	$	162,907	10	%
Direct-to-Consumer International	22,908		19,694		16	%
Indirect-to-Consumer North America	73,447		76,844		(4	)%
Indirect-to-Consumer International	104,310		103,934		—	%
Total	$	379,994	$	363,379	5	%

Net sales increased $16.6 million, or 5%, to $380.0 million for the nine months ended September 27, 2015 from $363.4 million for the nine months ended September 28, 2014. On a constant currency basis, net sales increased 8%. The increase in net sales was due principally to an increase in volume resulting from new store openings since the third quarter of 2014 and increased sales growth from our wholesale customers in the Asia-Pacific region. There continued to be positive response to our Alpha Bravo collection, which re-launched during the second quarter of 2015, and the roll out of our Voyageur collection, which re-launched during the fourth quarter of 2014. We also saw growth in sales in our women’s and accessories categories as well as our premium product collection. Additionally, there were 21 new company-owned store openings, 2 store relocations, 1 store renovation and 1 store closure during the nine months ended September 27, 2015. There have been 31 new stores opened since the third quarter of 2014, which contributed to approximately 65% of the overall sales growth experienced from the nine months ended September 28, 2014 to the nine months ended September 27, 2015. This increase was partially offset by negative comparable store sales in the nine months ended September 27, 2015. Additionally, net sales were negatively impacted during the period as we did not anniversary our legacy Alpha promotion and concurrent introduction of our re-launched Alpha Travel Collection (Alpha 2), both which benefited sales during 2014. Weaker traffic trends in our Direct-to-Consumer North America segment and the impact of the strengthening U.S. dollar on our EMEA wholesale and retail businesses also had a negative effect on sales.

Net sales attributable to the Direct-to-Consumer North America segment experienced a 10% increase for the nine months ended September 27, 2015 as compared with the nine months ended September 28, 2014. Of the 31 new stores opened since the third quarter of 2014, 28 were in the North America segment and comprised approximately 56% of the net sales growth

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experienced in the Direct-to-Consumer North America segment from the nine months ended September 28, 2014 to the nine months ended September 27, 2015. This increase was largely offset by a decrease in comparable store sales due in part to a decline in our overall traffic patterns. During the nine months ended September 28, 2014, we re-launched our Alpha 2 collection while liquidating our legacy Alpha products, which drove traffic to our full-price stores as well as conversion on our e-commerce platform. Overall, North America comparable store sales decreased 1.3% for the period. North America full-price comparable store sales decreased 0.1%, North America outlet comparable store sales decreased 0.6% and our North America e-commerce sales decreased 6.4%.

Net sales attributable to the Direct-to-Consumer International segment experienced a 16% increase for the nine months ended September 27, 2015 as compared with the nine months ended September 28, 2014. Of the 31 new stores opened since the third quarter of 2014, 3 were in Europe and comprised approximately 53% of the net sales growth experienced in the Direct-to-Consumer International segment from the nine months ended September 28, 2014 to the nine months ended September 27, 2015. This increase was partially offset by a decrease in comparable store sales during the nine months ended September 27, 2015, which was due to the translation effect the strengthening of the U.S. dollar had on our sales denominated in Euros. Overall, our international comparable store sales decreased 4.8% (increased 15.8% in Euros) for the period. Our international full-price comparable store sales were down 7.6% (up 12.4% in Euros) and outlet comparable store sales were down 3.4% (up 17.5% in Euros). Our international e-commerce sales decreased 0.3% (increased 21.2% in Euros).

Overall, comparable store sales for all Direct-to-Consumer channels decreased 1.7% globally for the nine months ended September 27, 2015 as compared with the nine months ended September 28, 2014. On a constant currency basis, comparable store sales increased 0.2%.

Net sales attributable to the Indirect-to-Consumer North America segment decreased 4% for the nine months ended September 27, 2015 as compared with the nine months ended September 28, 2014. Our Indirect-to-Consumer North America net sales have been negatively impacted by our decision to limit our special markets business in an effort to reduce the incidences of product diversion and trans-shipping abuses that have become a more common occurrence in Asia, particularly in Japan and Korea, where the Tumi brand is becoming increasingly popular. Certain special markets customers have been a source of unauthorized product diversion in the past. While difficult to assess the financial impact of trans-shipping, we believe that it is damaging to the brand image in these emerging markets. In addition, we experienced a decline in sales to our specialty stores due to a decline in the number of our specialty store accounts as well as the discontinuation of our T-Tech line in 2014. We also experience weaker sales within our Canadian wholesale business where we believe the strengthening U.S. dollar has had a dampening effect on the replenishment of our wholesalers’ orders during the nine months ended September 27, 2015.

Net sales attributable to the Indirect-to-Consumer International segment increased less than 1% for the nine months ended September 27, 2015 as compared with the nine months ended September 28, 2014. In our EMEA region, net sales have been negatively impacted by the adverse effect the strengthening U.S. dollar has had on our wholesale business. In our Asia-Pacific region, while we continue to see a positive response to the re-launch of our Alpha Bravo collection, sales in South Korea were negatively impacted by the MERS virus outbreak. In addition, sales in mainland China and Hong Kong were negatively impacted by the the slow down of the Chinese economy.

Cost of sales

Cost of sales increased by $1.9 million, or 1.3%, to $153.8 million for the nine months ended September 27, 2015 as compared to $151.9 million for the nine months ended September 28, 2014. In addition, gross margin increased by $14.7 million, or 7.0%, to $226.2 million for the nine months ended September 27, 2015 as compared to $211.5 million for the nine months ended September 28, 2014. The increase in cost of sales and gross margin dollars was primarily driven by the 4.6% increase in net sales.

Gross margin as a percentage of net sales was 59.5% for the nine months ended September 27, 2015 and 58.2% for the nine months ended September 28, 2014. The increase was primarily attributable to our decision to be less promotional during the nine months ended September 27, 2015. In addition, we saw a shift in channel mix from wholesale to retail, as retail sales represented approximately 53.2% of total sales in the nine months ended September 27, 2015, compared to 50.3% in the nine months ended September 28, 2014, as well as a shift in product mix. We continue to expand our retail footprint as part of our long-term growth strategy and we have opened 31 new stores since the third quarter of 2014. We typically realize higher gross margins in our retail business as compared to our wholesale business. As retail becomes a relatively greater percentage of our sales we would expect that shift in our sales mix to have a positive impact on gross margin.

Selling expense

Selling expense decreased $1.1 million, or 4.1%, to $25.3 million for the nine months ended September 27, 2015 as compared to $26.4 million for the nine months ended September 28, 2014. This decrease was primarily driven by $0.5 million in savings from the cost reduction actions taken in the first quarter of 2015 as well as other personnel related costs such as

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travel expenses and commissions of $0.3 million. In addition, included within the nine months ended September 28, 2014 were $0.1 million for fixture disposals.

Marketing expense

Marketing expense decreased by $1.2 million, or 9.5%, to $11.3 million for the nine months ended September 27, 2015 as compared to $12.5 million for the nine months ended September 28, 2014. The decrease in marketing expense was primarily due to prior year promotional activity in the form of media and events surrounding store openings and new product introductions which were not repeated in 2015.

Retail Operations expense

Retail operations expense increased by $11.0 million, or 13.1%, to $94.5 million for the nine months ended September 27, 2015 as compared to $83.6 million for the nine months ended September 28, 2014. The increase in retail operations expense was driven primarily by the opening of 31 new stores since the third quarter of 2014. In addition, we recorded an impairment charge of $0.8 million related to one of our retail locations in Europe during the nine months ended September 27, 2015.

General and administrative expense

General and administrative expense increased by $4.6 million, or 14.1%, to $37.1 million for the nine months ended September 27, 2015 as compared to $32.5 million for the nine months ended September 28, 2014. The increase in general and administrative expense was primarily driven by the additional costs resulting from our decision to eliminate redundancies, streamline processes, and leverage fixed costs within certain selling, general and administrative functions. Of these severance and termination costs, approximately $1.0 million were included in general and administrative expenses in the nine months ended September 27, 2015. We also increased our after sales service expense by approximately $1.1 million and incurred costs of approximately $0.6 million relating to tax planning for our Asian sourcing operations.

Operating income

The following table presents operating income (loss) by segment for the nine months ended September 27, 2015 as compared with the nine months ended September 28, 2014:



	Nine Months Ended September 27, 2015			Nine Months Ended September 28, 2014			% Change
	(In thousands)
Direct-to-Consumer North America	$	45,388		$	43,359		5	%
Direct-to-Consumer International	2,130			1,175			81	%
Indirect-to-Consumer North America	29,223			29,619			(1	)%
Indirect-to-Consumer International	34,028			31,625			8	%
Non-allocated corporate expenses	(52,804		)	(49,274		)	(7	)%
Total	$	57,965		$	56,504		3	%

Operating income increased $1.5 million, or 3%, to $58.0 million for the nine months ended September 27, 2015 from $56.5 million for the nine months ended September 28, 2014. On a constant currency basis, operating income increased 7%. Our operating segments have benefited from continued growth in most segments, principally volume related, store openings in the Direct-to-Consumer segments, and strong performance in our Asia-Pacific region, partially offset by negative comparable store performance as well as higher retail operations expenses related to the cost of new store openings in 2015 and the wrap effect of stores opened since the third quarter of 2014. Historically, company-owned store operating margins generally strengthen after their first year of operation. Additionally, our higher operating expenses for the nine months ended September 27, 2015 include additional costs resulting from our decision to eliminate redundancies, streamline processes, and leverage fixed costs within certain selling, general and administrative functions. In this regard, the Company reduced headcount and incurred related severance and termination costs in the amount of approximately $2.5 million during the first half of 2015.

Operating income attributable to the Direct-to-Consumer North America segment experienced a 5% increase for the nine months ended September 27, 2015 as compared with the nine months ended September 28, 2014. This was primarily due to growth from 28 new stores opened since the third quarter of 2014, partially offset by a decline in comparable store sales, as well as the aforementioned increase in retail operations expenses related to the cost of new stores opened since the third quarter of 2014.

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Operating income attributable to the Direct-to-Consumer International segment experienced an increase of 81% for the nine months ended September 27, 2015 as compared with the nine months ended September 28, 2014. This was primarily due to the sales growth from 3 new stores opened since the third quarter of 2014, partially offset by a decline in comparable store sales, which was due to the translation effect the strengthening of the U.S. dollar had on our sales denominated in Euros, as well as an impairment charge of $0.8 million related to one of our retail locations in Europe.

Operating income attributable to the Indirect-to-Consumer North America segment experienced a decrease of 1% for the nine months ended September 27, 2015 as compared with the nine months ended September 28, 2014. This was primarily driven by the decrease in sales in this segment, particularly impacted by a decrease in sales to specialty stores and our special markets business as well as our Canadian wholesale business.

Operating income attributable to the Indirect-to-Consumer International segment experienced an 8% increase for the nine months ended September 27, 2015 as compared with the nine months ended September 28, 2014. This increase was primarily due to an increase in gross margin dollars realized during the nine months ended September 27, 2015, particularly in our Asia-Pacific region. In addition, there was a decrease in marketing expense of approximately $0.3 million primarily driven by a reduction in spending against certain marketing initiatives.

Non-allocated corporate expenses increased 7% for the nine months ended September 27, 2015 as compared with the nine months ended September 28, 2014. This increase was primarily due to our decision to eliminate redundancies, streamline processes, and leverage fixed costs within certain selling, general and administrative functions. Of the aforementioned severance and termination costs, approximately $1.9 million were included in non-allocated corporate expenses in the nine months ended September 27, 2015. We also increased our after sales service expense by approximately $1.1 million and incurred costs of approximately $0.6 million relating to tax planning for our Asian sourcing operations.

Operating margin was 15% for the nine months ended September 27, 2015 compared to 16% for the nine months ended September 28, 2014, as the previously mentioned severance and termination costs related to our cost reduction program, as well as retail operations expense for new stores and the wrap effect of stores opened since the third quarter of 2014, offset some of our fixed cost leverage. Operating margin was positively impacted by an increase in gross margin dollars realized due primarily to our decision to be less promotional, a shift in channel mix from wholesale to retail and a shift in product mix during the nine months ended September 27, 2015.

Operating income adjusted for the cost reduction program and on a constant currency basis would have been $63.1 million and, on this basis, non-GAAP operating income margin would have been 16% for the nine months ended September 27, 2015.

Other income and expenses

Other income and expenses, net increased $1.3 million to income of $0.7 million for the nine months ended September 27, 2015 from expense of $0.6 million for the nine months ended September 28, 2014. This was mainly driven by foreign exchange gains during the nine months ended September 27, 2015.

Income tax expense

Provision for income taxes decreased $0.9 million, or 4%, for the nine months ended September 27, 2015 as compared with the nine months ended September 28, 2014, due primarily to a lower effective tax rate for the nine months ended September 27, 2015. The change in the effective tax rate was largely driven by the Company’s tax planning relating to its Asian sourcing operations.

Net income

Net income increased $3.7 million, or 11%, to $38.0 million for the nine months ended September 27, 2015 from $34.3 million for the nine months ended September 28, 2014. This increase was due mainly to the increase in net sales and gross margin dollars, partially offset by the aforementioned severance and termination costs related to our cost reduction program, as well as retail operations expense for stores opened since the third quarter of 2014.

Basic and diluted weighted average shares outstanding were 67.9 million shares for the nine months ended September 27, 2015 and September 28, 2014. Basic and diluted EPS was $0.56 per common share for the nine months ended September 27, 2015 versus $0.51 per common share for the nine months ended September 28, 2014.

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Net income adjusted for the cost reduction program and on a constant currency basis would have been $41.1 million and, on this basis, non-GAAP basic and diluted EPS would have been $0.61 per common share for the nine months ended September 27, 2015.

Seasonality

Our business is seasonal in nature and, as a result, our net sales and working capital requirements fluctuate from quarter to quarter. Our fourth quarter is a significant period for our results of operations due to increased Direct-to-Consumer sales during the holiday season in North America and Europe. In 2014, fourth quarter net sales represented approximately 31% of our total annual net sales. Operating income in the same period represented 40% of our total annual operating income. During the fourth quarter, the Company expects inventory levels, accounts payable and accrued expenses to increase commensurate with net sales.

Liquidity and Capital Resources

Historically, our primary source of liquidity has been cash flows from operations. Our long-term credit facility has not historically been used to finance our capital requirements, but instead was used to refinance acquisition indebtedness originally incurred when Doughty Hanson and certain members of management at that time acquired the Company in 2004. We have from time to time drawn down on our revolving line of credit as short-term liquidity needs arise. We use our cash flows from operations to fund our store development activities.

Inflationary factors such as increases in the cost of sales, including raw materials costs and transportation costs, may adversely affect our operating results. Although we do not believe that inflation has had a material impact on our financial position to date, a high rate of inflation in the future may have an adverse effect on our ability to maintain our gross margin levels and our current levels of selling expenses and general and administrative expenses as a percentage of net sales if the sale prices of our products do not increase with any increase in cost of sales.

We believe we have sufficient working capital and liquidity to support our operations for at least the next twelve months.

Cash and cash equivalents

As of September 27, 2015, we had cash and cash equivalents of $76.2 million. A summary of our cash flows provided by and used in operating, investing and financing activities is presented below.

Cash flows from operating activities

Cash flows from operating activities consisted primarily of net income adjusted for certain non-cash items, including depreciation and amortization, share-based compensation expense, loss on disposal of fixed assets and other non-cash charges. Our cash flows from operations are largely dependent on sales to consumers and wholesale customers, which are in turn dependent on consumer confidence, store traffic, conversion, business travel and general economic conditions. We believe we have the ability to conserve liquidity when economic conditions become less favorable through any number of strategies including curtailment of store expansion plans and cutting discretionary spending.

We generated cash flows from operations of $47.2 million during the nine months ended September 27, 2015, compared to $23.2 million during the nine months ended September 28, 2014. The principal reason for this increase was an improvement in working capital during the nine months ended September 27, 2015 as well as higher net income in the period.

Investing activities

Cash flows used for investing activities consisted of capital expenditures for store expansion plans, store renovations, store openings, store relocations, information technology infrastructure, distribution infrastructure and product tooling costs.

Cash used for capital expenditures was $23.5 million and $27.3 million for the nine months ended September 27, 2015 and September 28, 2014, respectively. Capital expenditures for the year ended December 31, 2015 are expected to be in the range of $30.0 million to $35.0 million.

Financing activities

Cash used for financing activities was less than $0.1 million during the nine months ended September 27, 2015. For the nine months ended September 28, 2014, we used $8.0 million for the repayment of bank debt. During the second quarter of 2014, the balance outstanding on our bank debt was paid in full.

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Share Repurchase Program

Agreement to Acquire Japanese Joint Venture

Amended and restated credit facility

On April 4, 2012, Tumi, Inc. and Tumi Stores, Inc., the Borrowers, entered into the Amended Credit Facility, with Wells Fargo as lender and collateral agent.

On April 4, 2012, we had $60,000,000 outstanding on our then-current term loan facility and no balance outstanding on our revolving credit facility for which the total capacity was $10,000,000. We had, however, utilized $250,000 under the revolving facility for letters of credit. Based on our calculated leverage ratio at the time, the facility bore interest at either the market LIBOR rate plus 175 basis points or the prime rate plus 75 basis points.

The Amended Credit Facility consolidated the term loan facility and the revolving credit facility previously provided in our former credit facility into a single $70,000,000 senior secured revolving credit facility, with Wells Fargo as the sole lender, and extended the maturity of the facility until April 4, 2017. The Amended Credit Facility included a letter of credit sublimit not to exceed the undrawn amount of the revolving commitments.

On August 29, 2013, the Amended Credit Facility was amended to reduce the letter of credit sublimit to $5,000,000.

Borrowings under the Amended Credit Facility bear interest at a per annum rate equal to, at the Borrowers’ option, the one, two, three or six month (or such other period as Wells Fargo may agree) LIBOR rate plus a margin of 1.00% or 1.25%, or a base rate (the greater of (i) Wells Fargo’s prime rate in effect on such day and (ii) the federal funds rate plus 1/2 of 1.00%) plus a margin of zero or 0.25%. The Borrowers are required to pay an undrawn commitment fee equal to 0.15% or 0.20% of the undrawn portion of the commitments under the Amended Credit Facility, as well as customary letter of credit fees. The margin added to LIBOR, or the base rate, as well as the amount of the commitment fee, depends on Tumi, Inc.’s leverage at the time. Interest is payable monthly, bi-monthly or quarterly on LIBOR rate loans depending on the interest period for each LIBOR rate loan, or quarterly on base rate loans.

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consolidated cash interest expense (as such terms are defined in the Amended Credit Facility) of not less than 4.00 to 1.00 and (b) a maximum ratio of consolidated total debt to consolidated adjusted EBITDA of no greater than 2.25 to 1.00. The Borrowers were in compliance with all such covenants as of September 27, 2015.

The Amended Credit Facility also contains customary events of default, including, but not limited to, payment defaults, breaches of representations and warranties, covenant defaults, cross-defaults under material debt, certain events of bankruptcy and insolvency, defaults based on certain judgments, failure of any material provision of any loan document to be in full force and effect, change of control, and certain ERISA defaults. If an event of default were to occur and continue, amounts due under the Amended Credit Facility could be accelerated and the commitments to extend credit thereunder terminated, and the rights and remedies of Wells Fargo under the Amended Credit Facility available under the applicable loan documents could be exercised, including rights with respect to the collateral securing the obligations under the Amended Credit Facility.

The foregoing summaries of certain provisions of the Amended Credit Facility do not purport to be complete and are qualified in their entirety by reference to the full text of the Amended Credit Facility, which is incorporated by reference as exhibit 10.3b to Amendment No. 5 to our Registration Statement on Form S-1 (File No. 333-178466), filed with the SEC on April 9, 2012.

Contractual Obligations

There have been no material changes to the contractual obligations table included in our Annual Report on Form 10-K for the year ended December 31, 2014, filed with the SEC on February 27, 2015.

Off-Balance Sheet Arrangements

We have not entered into any off-balance sheet arrangements.

Critical Accounting Policies and Estimates

There have been no material changes to the description of our critical accounting policies and estimates included in our Annual Report on Form 10-K for the year ended December 31, 2014 as filed with the SEC on February 27, 2015.

Recently Issued Accounting Pronouncements

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The Company is currently in the process of evaluating the impact of adoption of the ASU on its condensed consolidated financial statements, but does not expect the impact to be material.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The quantitative and qualitative disclosures about market risk required by this item have not changed materially from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2014, filed with the SEC on February 27, 2015. For a discussion of our exposure to market risk, refer to Part II, Item 7A, “Quantitative and Qualitative Disclosures About Market Risk,” contained in our Annual Report on Form 10-K for the year ended December 31, 2014, filed with the SEC on February 27, 2015.


ITEM 4.	CONTROLS AND PROCEDURES

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of such date, our disclosure controls and procedures were effective.

There were no changes in our internal control over financial reporting identified in management’s evaluation pursuant to Rules 13a-15(d) or 15d-15(d) of the Exchange Act during the period covered by this Quarterly Report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II – OTHER INFORMATION


ITEM 1.	LEGAL PROCEEDINGS


ITEM 1A.	RISK FACTORS

There have been no material changes in the risk factors set forth in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2014, filed with the SEC on February 27, 2015.


ITEM 6.	EXHIBITS

The list of exhibits is set forth under “Exhibit Index” at the end of this Quarterly Report on Form 10-Q and is incorporated herein by reference.

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SIGNATURE

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.



		TUMI HOLDINGS, INC.

November 5, 2015		/s/ Michael J. Mardy
Date		Michael J. Mardy
		Chief Financial Officer and Executive Vice President
		(Principal Financial Officer)

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EXHIBIT INDEX



Exhibit Number		Description

31.1		Principal Executive Officer Certification Pursuant to Securities Exchange Act Rules 13a-14 and 15d-14 as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2		Principal Financial Officer Certification Pursuant to Securities Exchange Act Rules 13a-14 and 15d-14 as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1		Principal Executive Officer Certification Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2		Principal Financial Officer Certification Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS		XBRL Instance Document
101.SCH		XBRL Taxonomy Extension Schema Document
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		XBRL Taxonomy Extension Label Linkbase Document
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

Tumi Holdings, Inc. - FORM 10-Q - November 5, 2015

Attached files

Tumi Holdings, Inc. Reports