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CORRECTING and REPLACING Tumi Holdings Announces Financial Results for the Third Quarter of 2012

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SOUTH PLAINFIELD, N.J.--(BUSINESS WIRE)--

Please replace the release with the following corrected version due to multiple revisions.

The corrected release reads:

TUMI HOLDINGS ANNOUNCES FINANCIAL RESULTS FOR THE THIRD QUARTER OF 2012

Tumi Holdings, Inc. (NYSE: TUMI), the leading global brand of premium travel, business and lifestyle products and accessories, today announced its financial results for the third quarter ended September 23, 2012.

For the third quarter of 2012:

  • Net sales increased 22.3% to $95.9 million from $78.4 million in the third quarter ended September 25, 2011.
  • For all Direct-to-Consumer channels, comparable store sales increased 10.9%, following an increase of 23.9% in the third quarter of 2011.
  • Direct-to-Consumer North America comparable store sales (including e-commerce sales) increased 10.7%, following an increase of 24.7% in the third quarter of 2011. Excluding e-commerce sales, Direct-to-Consumer North America comparable store sales increased 8.0%, following an increase of 21.4% in the third quarter of 2011.
  • Direct-to-Consumer International comparable store sales in local currency increased 21.8% excluding e-commerce sales, and 27.0% including e-commerce sales. In U.S. dollars, Direct-to-Consumer International comparable store sales increased 7.7% excluding e-commerce sales and 12.4% including e-commerce sales.
  • Gross profit increased by 22.7% to $55.2 million from $45.0 million in the third quarter of 2011. Gross margin was 57.6% compared to 57.4% in the third quarter of 2011.
  • Operating income increased by 42.2% to $17.3 million from $12.1 million in the third quarter of 2011. Operating income margin was 18.0% compared to 15.5% in the third quarter of 2011.
  • Net income was $10.5 million, or $0.15 per diluted share based on 67.9 million diluted weighted average common shares outstanding, as compared to $1.6 million, or $0.03 per diluted share based on 52.5 million diluted weighted average common shares outstanding in the third quarter of 2011.
  • During the third quarter of 2012, Tumi opened 5 new stores.
  • At September 23, 2012, Tumi operated 111 company-owned stores.

Jerome Griffith, Chief Executive Officer, President and Director, commented, “We were extremely pleased with the continued momentum in our business during the third quarter. Our results reflected our ability to capitalize on our market position as an iconic global premium lifestyle brand to broaden our product offering beyond travel related merchandise and to expand into international markets where we are achieving exceptional growth despite difficult market conditions. Our recent successes have increased our conviction that significant long-term opportunities lie ahead.”

For the first nine months ended September 23, 2012:

  • Net sales for the first nine months of 2012 increased 21.8% to $271.7 million from $223.0 million in the same period of 2011.
  • Gross profit for the first nine months of 2012 increased 23.5% to $155.3 million, or 57.1% as a percentage of net sales, from $125.7 million, or 56.4% as a percentage of net sales in the same period of 2011.
  • Operating income increased 21.3% to $42.6 million from $35.1 million in the first nine months of 2011. Excluding the one-time special bonus of $5.5 million, operating income grew 37.0% to $48.1 million, or 17.7% of net sales, compared to $35.1 million, or 15.7% of net sales, in the first nine months of 2011.
  • Net income for the first nine months of 2012 was $19.8 million, or $0.32 per diluted share based on 61.6 million diluted weighted average common shares outstanding, as compared to $3.8 million, or $0.07 per diluted share based on 52.5 million diluted weighted average common shares outstanding for the first nine months of 2011.
  • Net income before preferred dividend expense (non-cash), a non-GAAP financial measure, which excluded non-cash dividend expense on mandatorily redeemable preferred stock and preferred equity interests of $7.9 million, was $27.7 million or $0.45 per diluted share for the first nine months of 2012. Excluding the aforementioned one-time special bonus expense of $3.1 million after tax, net income before preferred dividend expense (non-cash) was $30.8 million, or $0.50 per diluted share for the first nine months of 2012. In the first nine months of 2011, net income before preferred dividend expense (non-cash) was $21.0 million, or $0.40 per diluted share, which excluded $17.1 million of non-cash dividend expense on mandatorily redeemable preferred stock and preferred equity interests.

Balance Sheet Highlights as of September 23, 2012:

Cash and cash equivalents were $16.4 million compared with $22.0 million as of September 25, 2011. Inventories were $79.3 million compared with $60.9 million as of September 25, 2011. The increase in inventory was primarily due to increased production to support new product introductions and store growth.

Outlook

For fiscal 2012, net sales are expected to be in the range of $395 million to $400 million. This estimate assumes a comparable store sales growth in the mid to high single digit range. Net income is expected to be in the range of $35.0 million to $37.0 million. Diluted earnings per share are expected to be in the range of $0.53 to $0.56 per diluted share. This estimate assumes diluted weighted average common shares outstanding of approximately 63.3 million. Net income before preferred dividend expense (non-cash), a non-GAAP financial measure, which excludes non-cash dividend expense on mandatorily redeemable preferred stock and preferred equity interests, and assuming a normalized 39% tax rate, is expected to be in the range of $42.0 million to $44.0 million. On a diluted earnings per share basis, this represents a range of $0.66 to $0.69 per share. Excluding the aforementioned one-time special bonus expense of $3.1 million after tax, net income before preferred dividend expense (non-cash) is expected to be in the range of $45.0 million to $47.0 million. On a diluted earnings per share basis, this represents a range of $0.70 to $0.73 per share.

Capital expenditures for fiscal 2012 are expected to be in the range of $17.0 million to $20.0 million.

Conference Call

The conference call previously scheduled for 4:30 p.m. ET on Monday, October 29, 2012 has been cancelled due to technical difficulties related to Tropical Storm Sandy. Management's prepared conference call remarks regarding Tumi's third quarter 2012 earnings results will be furnished on Current Report on Form 8-K with the SEC and will be available in the investor relations section of Tumi's website www.tumi.com.

About Tumi

Tumi is the leading global brand of premium travel, business and lifestyle products and accessories. The brand is sold in approximately 200 stores from New York to Paris to London and Tokyo, as well as in the world's top department, specialty, and travel retail stores in over 70 countries.

Forward-Looking Statements

This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements reflect Tumi's current views with respect to, among other things, future events and performance. These statements may discuss net sales, gross margin, operating expenses, operating income, net income, cash flow, financial condition, impairments, expenditures, growth, strategies, plans, achievements, dividends, capital structure, organizational structure, future store openings, market opportunities and general market and industry conditions. Tumi generally identifies forward-looking statements by words such as “anticipate,” “estimate,” “expect,” “intend,” “project,” “plan,” “predict,” “believe,” “seek,” “continue,” “outlook,” “may,” “might,” “will,” “should,” “can have,” “likely” or the negative version of these words or comparable words. Forward-looking statements are based on beliefs and assumptions made by management using currently available information. These statements are only predictions and are not guarantees of future performance, actions or events. Forward-looking statements are subject to risks and uncertainties. If one or more of these risks or uncertainties materialize, or if management's underlying beliefs and assumptions prove to be incorrect, actual results may differ materially from those contemplated by a forward-looking statement. These risks and uncertainties include those set forth under “Risk Factors” in Tumi's filings with the Securities and Exchange Commission, including its Quarterly Report on Form 10-Q for the quarter ended March 25, 2012, filed with the SEC on May 23, 2012. Forward-looking statements speak only as of the date on which they are made. Tumi expressly disclaims any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

 

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 23,
2012

 

September 25,
2011

September 23,
2012

 

September 25,
2011

(unaudited) (unaudited)
Net sales $ 95,860   $ 78,394 $ 271,704   $ 222,987
Cost of sales 40,685   33,410   116,431   97,303  
Gross margin 55,175   44,984   155,273   125,684  
OPERATING EXPENSES
Selling 6,517 5,876 17,597 15,182
Marketing 3,191 3,480 9,505 9,203
Retail operations 20,781 17,127 57,117 47,587
General and administrative 7,436   6,371   28,494   18,615  
Total operating expenses 37,925   32,854   112,713   90,587  
Operating income 17,250   12,130   42,560   35,097  
OTHER INCOME (EXPENSES)
Interest expense (284 ) (639 ) (1,151 ) (2,155 )
Dividend expense on mandatorily redeemable preferred stock and preferred equity interests (5,714 ) (7,892 ) (17,143 )
Earnings from joint venture investment 161 399 832 681
Foreign exchange gains (losses) 432 (105 ) (263 ) 106
Other non-operating income 34   34   261   133  
Total other income (expenses) 343   (6,025 ) (8,213 ) (18,378 )
Income before income taxes 17,593 6,105 34,347 16,719
Provision for income taxes 7,129   4,514   14,501   12,911  
Net income $ 10,464   $ 1,591   $ 19,846   $ 3,808  
Weighted average common shares outstanding:
Basic 67,866,667   52,536,224   61,613,373   52,536,224  
Diluted 67,866,667   52,536,224   61,613,403   52,536,224  
Basic earnings per common share $ 0.15   $ 0.03   $ 0.32   $ 0.07  
Diluted earnings per common share $ 0.15   $ 0.03   $ 0.32   $ 0.07  
 
 

TUMI HOLDINGS, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(In thousands, except share and per share data)

 
 

September 23,
2012

 

December 31,
2011

(unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 16,396 $ 32,735
Accounts receivable, less allowance for doubtful accounts of approximately $475 and $462 at September 23, 2012 and December 31, 2011, respectively 23,820 22,833
Other receivables 1,838 1,724
Inventories 79,335 60,456
Prepaid expenses and other current assets 3,825 3,056
Prepaid income taxes 4,888
Deferred offering costs 1,996
Deferred tax assets, current 2,218   2,218
Total current assets 132,320   125,018
Property, plant and equipment, net 42,641 36,500
Deferred tax assets, noncurrent 2,046 2,046
Joint venture investment 2,842 2,122
Goodwill 142,773 142,773
Intangible assets, net 131,014 131,219
Deferred financing costs, net of accumulated amortization of $2,717 and $2,539 at September 23, 2012 and December 31, 2011, respectively 742 920
Other assets 4,892   5,743
Total assets $ 459,270   $ 446,341
 
 

TUMI HOLDINGS, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets (continued)

(In thousands, except share and per share data)

 
 

September 23,
2012

 

December 31,
2011

(unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 32,330 $ 27,308
Accrued expenses 25,946 26,683
Current portion of long-term debt 12,000
Income taxes payable   4,324  
Total current liabilities 58,276   70,315  
Revolving credit facility 52,000
Long-term debt 52,000
Other long-term liabilities 7,101 6,257
Mandatorily redeemable preferred stock and preferred equity interests 251,429
Deferred tax liabilities 47,623   47,623  
Total liabilities 165,000   427,624  
Commitments and contingencies
STOCKHOLDERS' EQUITY
Common stock—$0.01 par value; 350,000,000 shares authorized, 68,144,473 issued and 67,866,667 shares outstanding as of September 23, 2012; 52,536,252 authorized and issued and 52,536,224 shares outstanding as of December 31, 2011 681 525
Preferred stock—$0.01 par value; 75,000,000 shares authorized and no shares issued or outstanding as of September 23, 2012; no shares authorized, issued or outstanding as of December 31, 2011
Additional paid-in capital 308,520 48,968
Treasury stock, at cost (4,874 ) (174 )
Accumulated deficit (9,771 ) (29,617 )
Accumulated other comprehensive loss (286 ) (985 )
Total stockholders' equity 294,270   18,717  
Total liabilities and stockholders' equity $ 459,270   $ 446,341  
 
 

TUMI HOLDINGS, INC. AND SUBSIDIARIES

Segment Results

(In thousands)

 
 

Direct-to-
Consumer
North
America


 

Direct-to-
Consumer
International

 

Indirect-to-
Consumer
North
America


 

Indirect-to-
Consumer
International

 

Non-
Allocated
Corporate
Expenses


 

Consolidated
Totals

 
Three Months Ended September 23, 2012
Net sales $ 40,486 $ 4,829 $ 24,963 $ 25,582 $ $ 95,860
Operating income (loss) $ 11,771 $ 249 $ 9,588 $ 7,529 $ (11,887 ) $ 17,250
Depreciation and amortization $ 1,504 $ 243 $ 223 $ 578 $ 393 $ 2,941
Three Months Ended September 25, 2011
Net sales $ 33,234 $ 4,230 $ 16,166 $ 24,764 $ $ 78,394
Operating income (loss) $ 9,165 $ 501 $ 5,695 $ 7,462 $ (10,693 ) $ 12,130
Depreciation and amortization $ 1,319 $ 305 $ 143 $ 566 $ 283 $ 2,616
 
 

Direct-to-
Consumer
North
America


Direct-to-
Consumer
International

Indirect-to-
Consumer
North
America


Indirect-to-
Consumer
International

Non-
Allocated
Corporate
Expenses


Consolidated
Totals

 
Nine Months Ended September 23, 2012
Net sales $ 116,788 $ 11,954 $ 65,658 $ 77,304 $ $ 271,704
Operating income (loss) $ 34,582 $ (148 ) $ 24,706 $ 23,853 $ (40,433 ) $ 42,560
Depreciation and amortization $ 4,288 $ 662 $ 604 $ 1,654 $ 1,029 $ 8,237
Nine Months Ended September 25, 2011
Net sales $ 93,317 $ 11,475 $ 52,065 $ 66,130 $ $ 222,987
Operating income (loss) $ 25,755 $ 897 $ 18,057 $ 19,754 $ (29,366 ) $ 35,097
Depreciation and amortization $ 3,963 $ 911 $ 375 $ 1,469 $ 882 $ 7,600
 
 

TUMI HOLDINGS, INC. AND SUBSIDIARIES

Reconciliation of Net Income to Net Income Before Preferred Dividend Expense (Non-Cash)

(In millions)

 
  Three Months Ended   Nine Months Ended
   
Sept. 23, 2012 Sept. 25, 2011 Sept. 23, 2012 Sept. 25, 2011
 
Net income 10.5 1.6 19.8 3.8
 
Dividend expense on mandatorily redeemable preferred stock and preferred equity interests 5.7 7.9 17.1
 
Net income before preferred dividend expense (non-cash) 10.5   7.3   27.7   20.9
                 

Non-GAAP Financial Measure

Net income before preferred dividend expense (non-cash) is a non-GAAP financial measure and is defined as net income plus dividend expense on mandatorily redeemable preferred stock and preferred equity interests. Net income before preferred dividend expense (non-cash) is an important supplemental measure for Tumi's internal reporting, including for its board of directors and management, and is a key measure used to evaluate profitability and operating performance. Net income before preferred dividend expense (non-cash) provides investors and other users of Tumi's financial information, when viewed in conjunction with its condensed consolidated financial statements, consistency and comparability with Tumi's past financial performance, facilitates period-to-period comparisons of operating performance and facilitates comparisons with other companies. Tumi uses this metric in conjunction with GAAP operating performance measures as part of its overall assessment of its performance. Undue reliance should not be placed on this measure as Tumi's only measure of operating performance. Net income before preferred dividend expense (non-cash) should not be viewed as a substitute for net income.

Comparable Store Sales Growth

Comparable store sales are calculated based on Tumi's company-owned stores that have been open for at least a full calendar year as of the end of Tumi's annual reporting period. For example, a store opened in October 2011 will not impact the comparable store comparison until January 1, 2013.

Investor Relations:
ICR, Inc.
Jean Fontana / Joseph Teklits, 203-682-8200
jean.fontana@icrinc.com
or
Media Relations:
ICR, Inc.
Alecia Pulman, 203-682-8224
alecia.pulman@icrinc.com







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