Document

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 June 26, 2016



¨	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		July 29, 2016
Common Stock, $0.01 Par Value		67,661,362 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 June 26, 2016 (unaudited) and December 31, 2015	2

	Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 26, 2016 (unaudited) and June 28, 2015 (unaudited)	4

	Condensed Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 26, 2016 (unaudited) and June 28, 2015 (unaudited)	5

	Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 26, 2016 (unaudited) and June 28, 2015 (unaudited)	6

	Notes to the Condensed Consolidated Financial Statements (unaudited)	8

ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22

ITEM 3.	Quantitative and Qualitative Disclosures about Market Risk	38

ITEM 4.	Controls and Procedures	38

	PART II – OTHER INFORMATION

ITEM 1.	Legal Proceedings	39

ITEM 1A.	Risk Factors	39

ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	39

ITEM 6.	Exhibits	40

SIGNATURE

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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, 2015, filed with the SEC on February 25, 2016 and in Part II, Item 1A, “Risk Factors” in our Quarterly Report on Form 10-Q for the quarter ended March 27, 2016, filed with the SEC on May 5, 2016. 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)



	June 26, 2016		December 31, 2015
	(unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	113,082	$	94,632
Accounts receivable, less allowance for doubtful accounts of approximately $918 and $877 at June 26, 2016 and December 31, 2015, respectively	34,710		32,434
Other receivables	1,861		3,543
Inventories, net	113,907		99,688
Prepaid expenses and other current assets	7,524		12,096
Prepaid income taxes	6,763		996
Total current assets	277,847		243,389
Property, plant and equipment, net	88,409		83,501
Deferred tax assets, noncurrent	—		771
Joint venture investment	—		1,840
Goodwill	145,178		142,773
Intangible assets, net	130,925		130,400
Other assets	11,101		9,270
Total assets	$	653,460	$	611,944

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)



	June 26, 2016			December 31, 2015
	(unaudited)
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable	$	38,969		$	35,844
Notes payable	2,204			—
Accrued expenses	37,539			39,130
Income taxes payable	571			615
Short-term debt	4,407			—
Total current liabilities	83,690			75,589

Other long-term liabilities	15,507			12,775
Deferred tax liabilities	43,310			42,734
Total liabilities	142,507			131,098

Commitments and contingencies

STOCKHOLDERS’ EQUITY
Common stock—$0.01 par value; 350,000,000 shares authorized, 68,427,321 shares issued and 67,661,362 shares outstanding as of June 26, 2016; 68,158,428 shares issued and 67,394,756 shares outstanding as of December 31, 2015	684			681
Preferred stock—$0.01 par value; 75,000,000 shares authorized and no shares issued or outstanding as of June 26, 2016 and December 31, 2015	—			—
Additional paid-in capital	324,633			317,140
Treasury stock, at cost; 765,959 and 763,672 shares as of June 26, 2016 and December 31, 2015, respectively	(13,398		)	(13,338		)
Retained earnings	203,850			182,747
Accumulated other comprehensive loss	(4,816		)	(6,384		)
Total stockholders’ equity	510,953			480,846
Total liabilities and stockholders’ equity	$	653,460		$	611,944

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						Six Months Ended
	June 26, 2016			June 28, 2015			June 26, 2016			June 28, 2015
	(unaudited)
Net sales	$	147,517		$	138,520		$	265,859		$	248,981
Cost of sales	61,339			56,905			110,331			102,095
Gross margin	86,178			81,615			155,528			146,886
OPERATING EXPENSES
Selling	9,373			8,207			18,768			16,843
Marketing	4,437			4,472			9,214			8,759
Retail operations	37,200			31,782			70,752			61,040
General and administrative	14,399			11,874			28,264			25,401
Total operating expenses	65,409			56,335			126,998			112,043
Operating income	20,769			25,280			28,530			34,843
OTHER INCOME (EXPENSES)
Interest income (expense)	41			(80		)	13			(185		)
Gain on existing joint venture investment	—			—			3,480			—
Earnings from joint venture investment	—			90			—			302
Foreign exchange gains (losses)	(246		)	353			(687		)	671
Other non-operating income (expenses)	(28		)	78			(39		)	(104		)
Total other income (expense)	(233		)	441			2,767			684
Income before income taxes	20,536			25,721			31,297			35,527
Provision for income taxes	7,336			9,002			10,194			12,434
Net income	$	13,200		$	16,719		$	21,103		$	23,093
Weighted average common shares outstanding:
Basic	67,649,322			67,874,098			67,548,236			67,871,526
Diluted	67,884,203			67,920,124			67,688,883			67,919,295
Basic earnings per common share	$	0.20		$	0.25		$	0.31		$	0.34
Diluted earnings per common share	$	0.19		$	0.25		$	0.31		$	0.34

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				Six Months Ended
	June 26, 2016		June 28, 2015		June 26, 2016		June 28, 2015
	(unaudited)
Net income	$	13,200	$	16,719	$	21,103	$	23,093
OTHER COMPREHENSIVE INCOME
Foreign currency translation adjustment, net of tax	413		666		1,568		(2,199		)
Comprehensive income	$	13,613	$	17,385	$	22,671	$	20,894

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)



	Six Months Ended
	June 26, 2016			June 28, 2015
	(unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	21,103		$	23,093
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization	11,938			10,101
Share-based compensation expense	2,471			2,526
Amortization of deferred financing costs	82			83
Allowance for doubtful accounts	(41		)	(4		)
Gain on existing joint venture investment	(3,480		)	—
Earnings from joint venture	—			(302		)
Loss on disposal of fixed assets	224			260
Impairment of long lived assets	—			639
Other non-cash charges	739			886
Changes in operating assets and liabilities
Accounts receivable	1,761			1,111
Other receivables	1,702			230
Inventories	(1,509		)	(7,764		)
Prepaid expenses and other current assets	955			2,041
Prepaid income taxes	(5,767		)	(1,887		)
Other assets	60			(185		)
Accounts payable	(1,910		)	4,954
Accrued expenses	(1,963		)	1,103
Income taxes payable	(394		)	(2,231		)
Other liabilities	2,097			547
Total adjustments	6,965			12,108
Net cash provided by operating activities	28,068			35,201
CASH FLOWS FROM INVESTING ACTIVITIES
Cash acquired from business combination, Tumi Japan acquisition	2,414			—
Capital expenditures	(14,748		)	(15,006		)
Net cash used in investing activities	(12,334		)	(15,006		)

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 (continued)

(In thousands)



	Six Months Ended
	June 26, 2016			June 28, 2015
	(unaudited)
CASH FLOWS FROM FINANCING ACTIVITIES
Borrowings from short-term debt	$	15,903		$	—
Payments on short-term debt	(13,222		)	—
Borrowings on notes payable	9,054			—
Payments on notes payable	(14,484		)	—
Options exercise	5,025			—
Repurchases of common stock, including shares withheld in satisfaction of tax obligations	(60		)	(10		)
Net cash provided by financing activities	2,216			(10		)
Effect of exchange rate changes on cash	500			(249		)
Net increase in cash and cash equivalents	18,450			19,936
Cash and cash equivalents at beginning of period	94,632			52,796
Cash and cash equivalents at end of period	$	113,082		$	72,732

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 2,200 points of distribution in over 75 countries, and its global distribution network is enhanced by the use of its four 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 in 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.

Merger Agreement with Samsonite

On March 3, 2016, Tumi Holdings, Inc. (the “Company”) entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Samsonite International S.A., a public limited liability company (société anonyme) incorporated and governed by the laws of the Grand-Duchy of Luxembourg (“Samsonite”), and PTL Acquisition Inc., a Delaware corporation and an indirect wholly owned subsidiary of Samsonite (“Merger Sub”).

The Merger Agreement provides that, among other things and in accordance with the terms and subject to the conditions thereof, Merger Sub will be merged with and into the Company (the “Merger”) with the Company continuing as the surviving corporation in the Merger, and, at the effective time of the Merger (the “Effective Time”), each outstanding share of common stock of the Company, par value $0.01 per share (“Company Common Stock”) (other than shares owned by the Company or any of its subsidiaries or Samsonite or any of its subsidiaries (including Merger Sub), which shall be cancelled, and any Dissenting Shares (as defined in the Merger Agreement)), will automatically be cancelled and converted into the right to receive $26.75 in cash, without interest (the “Merger Consideration”).

The Board of Directors of the Company unanimously (1) determined that the Merger Agreement and the Merger are fair to and in the best interests of the Company and its stockholders, (2) approved the execution, delivery and performance of the Merger Agreement and (3) resolved to recommend adoption of the Merger Agreement by the stockholders of the Company.

The closing of the Merger is subject to the adoption of the Merger Agreement by the affirmative vote of the holders of at least a majority of all outstanding shares of Company Common Stock entitled to vote thereon and the approval of the Merger Agreement and the transactions contemplated thereby, including the Merger, by an ordinary resolution of the shareholders of Samsonite.

On July 12, 2016, at a special meeting, the Company’s stockholders voted to adopt the Merger Agreement. On July 26, 2016, Samsonite’s shareholders approved the Merger Agreement and the transactions contemplated thereby. The closing of the Merger is also subject to customary closing conditions, including the absence of a Company Material Adverse Effect (as defined in the Merger Agreement) after the date of the Merger Agreement. Consummation of the Merger is not subject to a financing condition. Subject to the satisfaction or waiver of the remaining conditions, it is currently expected that closing will occur in early August 2016.

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, 2015, filed with the SEC on February 25, 2016.

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TUMI HOLDINGS, INC. AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

(unaudited)

The condensed consolidated balance sheet as of December 31, 2015 included herein was derived from the audited financial statements as of that date.

The Company has historically accounted for its Japanese joint venture (“Tumi Japan”) under the equity method of accounting. During the first quarter of 2016, the Company acquired the remaining interest in its joint venture from its partners. As such, beginning with the first quarter of 2016, the Company now consolidates Tumi Japan into its operations. See Note 6 for additional information.

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 2016 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 March 28, 2016 and March 30, 2015 and ended on June 26, 2016 and June 28, 2015, respectively.

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 June 26, 2016, the total balance in U.S. bank accounts over the Federal Deposit Insurance Company limit then in effect was approximately $100,580,000. The total balance in international bank accounts at June 26, 2016, which is not covered under the FDIC, was approximately $23,987,000.

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.

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TUMI HOLDINGS, INC. AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

(unaudited)


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”). These measures of fair value, and related inputs, are considered level 2 measures under the fair value hierarchy.

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 June 26, 2016.


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. In March 2016, the FASB issued final amendments (ASU No. 2016-08 and ASU No. 2016-10) to clarify the implementation guidance for principal versus agent considerations, identifying performance obligations and the accounting for licenses of intellectual property. The amendments can be applied retrospectively to each prior reporting period or retrospectively with the cumulative effect of initially applying this update recognized at the date of initial application. Early application is permitted but not before the original public entity effective date, i.e., annual periods beginning after December 15, 2016. 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 adopted the amended guidance effective January 1, 2016 and it did not have a material effect on its condensed consolidated financial statements.

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 adopted the guidance effective January 1, 2016 and it did not have a material effect on its condensed consolidated financial statements.

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 adopted the amended guidance effective January 1, 2016 and it did not have a material effect on its condensed consolidated financial statements.

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

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TUMI HOLDINGS, INC. AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

(unaudited)

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.

In February 2016, the FASB issued ASU No. 2016-02 “Leases (Topic 842).” ASU 2016-02 establishes a right of use model that requires a lessee to record a right of use asset and a lease liability for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. For lessors, the guidance modifies the classification criteria and the accounting for sales-type and direct financing leases. A lease will be treated as sale if it transfers all of the risks and rewards, as well as control of the underlying asset, to the lessee. If risks and rewards are conveyed without the transfer of control, the lease is treated as a financing. If the lessor doesn’t convey risks and rewards or control, an operating lease results. The amendments are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years for public business entities. Entities are required to use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements, with certain practical expedients available. Early adoption is permitted. The Company is currently in the process of evaluating the impact of ASU 2016-02 on its condensed consolidated financial statements.

In March 2016, the FASB issued ASU No. 2016-09, “Compensation - Stock Compensation (Topic 718) - Improvements to Employee Share-Based Payment Accounting.” ASU 2016-09 requires all income tax effects of awards to be recognized in the income statement when the awards vest or are settled. It also allows an employer to repurchase more of an employee’s shares than it can today for tax withholding purposes without triggering liability accounting and to make a policy election for forfeitures as they occur. ASU 2016-09 is effective for fiscal years beginning after December 15, 2016, and interim periods within those years, with early adoption is 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.


3.	STOCKHOLDERS’ EQUITY

Activity for the six months ended June 26, 2016 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, 2016	68,158,428	$	681	$	317,140	$	(13,338	)	$	182,747	$	(6,384	)	$	480,846
Net income	—	—		—		—			21,103		—			21,103
Share-based compensation	—	—		2,471		—			—		—			2,471
Stock options exercised	235,190	3		5,022		—			—		—			5,025
Service-based shares issued	33,703	—		—		—			—		—			—
Repurchase of common stock	—	—		—		(60		)	—		—			(60		)
Foreign currency translation adjustment, net of tax	—	—		—		—			—		1,568			1,568
Balance as of June 26, 2016	68,427,321	$	684	$	324,633	$	(13,398	)	$	203,850	$	(4,816	)	$	510,953

As of June 26, 2016 and December 31, 2015, the Company held 765,959 and 763,672 shares of common stock in treasury, respectively. During the six months ended June 26, 2016, 2,287 shares of common stock were withheld by the

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Notes to the Condensed Consolidated Financial Statements

(unaudited)

Company in satisfaction of 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.

Share Repurchase Program

On November 4, 2015, the Company announced that its Board of Directors authorized the repurchase of up to $150 million of the Company’s common stock over the following 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 in the future 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.

There were no repurchases made during the first half of 2016. As of June 26, 2016, the remaining availability under the Company’s share repurchase program was approximately $141,546,000. All repurchased shares of common stock have been accounted for as treasury stock at cost.

As part of the Merger Agreement with Samsonite, the Company agreed that during the executory period beginning on March 3, 2016, the date of the Merger Agreement, and ending on the earlier of the termination of the Merger Agreement, per its terms, and the effective time of the merger, it would not repurchase any shares of its capital stock.

4. INVENTORIES, NET

Inventories, net consist of the following:



	June 26, 2016		December 31, 2015
	(In thousands)
Raw materials	$	172	$	246
Finished goods	113,735		99,442
Total inventories, net	$	113,907	$	99,688


5.	PROPERTY, PLANT AND EQUIPMENT, NET

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



		June 26, 2016			December 31, 2015
		(In thousands)
	Useful Life
Land	—	$	485		$	485
Buildings and improvements	25 years	5,404			5,404
Leasehold and store enhancements	1 to 10 years	122,469			112,861
Furniture, computers and equipment	3 to 5 years	22,412			19,829
Capitalized software	5 years	13,146			12,573
Fixtures, dies and autos	3 to 5 years	27,796			25,809
Construction in progress		5,728			5,570
		197,440			182,531
Less accumulated depreciation and amortization		(109,031		)	(99,030		)
		$	88,409		$	83,501

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Notes to the Condensed Consolidated Financial Statements

(unaudited)

Depreciation and amortization expense on property, plant and equipment was $6,115,000 and $11,863,000 for the three and six months ended June 26, 2016, respectively, and $5,067,000 and $10,087,000 for the three and six months ended June 28, 2015, respectively.


6.	ACQUISITION OF JOINT VENTURE INVESTMENT

Tumi Japan

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

Sales to Itochu were $5,643,000 and $8,920,000 for the three and six months ended June 28, 2015. The Company had accounts receivable due from Itochu of $1,480,000 as of December 31, 2015.

On January 4, 2016, the Company acquired the remaining interest in Tumi Japan, from its partners, for a purchase price of 521 million yen (approximately $4.2 million). As a result of acquiring the remaining interest in Tumi Japan, the Company began consolidating Tumi Japan into its operations during the first quarter of 2016. In 2016, Tumi Japan’s retail business is included in the Company’s Direct-to-Consumer International segment and its wholesale business is included in the Company’s Indirect-to-Consumer International segment. The acquisition provides the Company with direct control over its operations in Japan and will allow it to better manage opportunities in the region.

The purchase price allocation for these assets and liabilities is substantially complete, however it may be subject to change as additional information is obtained during the acquisition measurement period. The following table summarizes the fair value of the assets acquired and liabilities assumed as of the acquisition date:



	Fair Value
Assets Acquired and Liabilities Assumed	(In thousands)
Current assets	$	16,607
Property, plant and equipment	2,771
Goodwill	2,405
Intangible assets	600
Other non-current assets	1,985
Current liabilities	(14,068		)
Non-current liabilities	(921		)
Net assets acquired	$	9,379

In connection with this acquisition, the Company recorded non-deductible goodwill of approximately $2,405,000, of which $1,358,000 and $1,047,000 was assigned to the Company’s Direct-to-Consumer International and Indirect-to-Consumer International segments, respectively. The customer relationship intangible asset is being amortized over 4 years.

The acquisition-date fair value of the previously held equity interest in Tumi Japan was $5,050,000. The Company used the income approach to measure the fair value. The amount recorded in the Company’s condensed consolidated statement of operations in connection with the remeasurement of its previously held interest in Tumi Japan was a gain of approximately $3,480,000.


7.	GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill

The following table provides the change in the carrying amount of the Company’s goodwill (in thousands):



Balance at December 31, 2015	$	142,773
Acquisition of joint venture investment	2,405
Balance as of June 26, 2016	$	145,178

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Notes to the Condensed Consolidated Financial Statements

(unaudited)

Other Intangible Assets

The following table provides the gross carrying value and accumulated amortization for each major class of intangible asset:



		June 26, 2016							December 31, 2015
		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
		(In thousands)							(In thousands)
Amortized intangible assets:
	Customer relationships	$	1,700	$	(1,175	)	$	525	$	1,100	$	(1,100	)	$	—
	Lease value	1,359		(1,359		)	—		1,359		(1,359		)	—
Total		$	3,059	$	(2,534	)	$	525	$	2,459	$	(2,459	)	$	—
Unamortized intangible assets:
	Brand/trade name	$	130,400	$	—		$	130,400	$	130,400	$	—		$	130,400
Total intangible assets		$	133,459	$	(2,534	)	$	130,925	$	132,859	$	(2,459	)	$	130,400

Amortization expense was $37,000 and $75,000 for the three and six months ended June 26, 2016, respectively and $14,000 for both the three and six months ended June 28, 2015.


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:



	Six Months Ended
	June 26, 2016			June 28, 2015
	(In thousands)
Liability, beginning of period	$	9,001		$	8,033
Provision for warranties	2,555			3,804
Warranty claims	(2,926		)	(3,309		)
Liability, end of period	$	8,630		$	8,528


9.	DEBT OBLIGATIONS

Amended Credit Facility

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 includes a letter of credit sublimit of $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

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Notes to the Condensed Consolidated Financial Statements

(unaudited)

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 June 26, 2016 and December 31, 2015, the Company had no balance outstanding under the Amended Credit Facility. Letters of credit outstanding at June 26, 2016 and December 31, 2015 totaled $384,000 under the Amended Credit Facility and, accordingly, the unused portion of the Amended Credit Facility was $69,616,000. The fee for the unused portion of the Amended Credit Facility was $26,000 and $51,000 for the three and six months ended June 26, 2016, respectively and $26,000 and $52,000 for the three and six months ended June 28, 2015.

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 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 financial covenants as of June 26, 2016.

Tumi Japan Credit Facilities

Tumi Japan has uncommitted credit facilities with regional branches of Bank of Tokyo-Misubishi UFJ and Resona Bank, Ltd. (the “Tumi Japan Credit Facilities.”) These credit facilities are subject to annual renewal and may be used to fund the general working capital and corporate needs of Tumi Japan. Borrowings under the Tumi Japan Credit Facilities are granted at the sole discretion of the Banks, subject to availability of the Banks’ funds and satisfaction of certain regulatory requirements. The Tumi Japan Credit Facilities do not contain any financial covenants. Details of the Tumi Japan Credit Facilities are as follows:


•	Bank of Tokyo-Mitsubishi UFJ Credit Facility - provides a revolving line of credit of up to 100,000,000 yen. Borrowings under the Credit Facility bear interest at a per annum rate equal to the Japanese interest rate plus a margin of 0.850%.


•	Resona Bank Ltd. Credit Facility - provides a revolving line of credit of up to 500,000,000 yen. Borrowings under the Credit Facility bear interest at a per annum rate equal to the Japanese interest rate plus a margin of 1.00%.

As of June 26, 2016 the Company had $4,407,000 outstanding under the Tumi Japan Credit Facilities. This is recorded as short-term debt on the Company’s condensed consolidated balance sheet.

Notes Payable

Tumi Japan enters into promissory note arrangements with its banks. The notes are non-interest bearing and are generally contractually due three months after the issuance date. There were no guarantees or collateral held against the notes.

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Notes to the Condensed Consolidated Financial Statements

(unaudited)


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.

On March 3, 2016, Tumi entered into a merger agreement with Samsonite International S.A. (“Samsonite”) and PTL Acquisition Inc., pursuant to which Samsonite will acquire Tumi. Thereafter, on March 15, 2016, a putative stockholder class action challenging the merger was filed in New Jersey Superior Court and was captioned Sun v. Tumi Holdings, Inc., et al., No. C-32-16 (N.J. Super.) (the “Sun State Court Action”). The Sun State Court Action alleged that the members of Tumi’s board breached their fiduciary duties by, among other things, entering into the merger agreement with Samsonite at an inadequate price, failing to engage in an auction process, and failing to disclose all material information to Tumi’s stockholders. The Sun State Court Action also alleged that Tumi and Samsonite aided and abetted these alleged breaches of fiduciary duties. On April 14, 2016, plaintiff voluntarily dismissed the Sun State Court Action.

On April 19, 2016, the same plaintiff who filed the Sun State Court Action, filed an action in the District of New Jersey, captioned Sun v. Tumi Holdings, Inc., et al., No. 2:16-cv-02184-JMV-JBC (D. NJ.) (the “Sun Federal Court Action”). The Sun Federal Court Action makes only disclosure claims, alleging an individual claim for violation of Section 14(a) of the Securities Exchange Act of 1934, as amended to date (“1934 Act”) against Tumi and the members of its board, as well as an individual claim for violation of Section 20(a) of the 1934 Act against Samsonite and the members of Tumi’s board. Tumi and the board believes these claims are wholly without merit. Regardless, on May 13, 2016, Tumi filed a revised Preliminary Proxy Statement that mooted all of the claims in the Sun Federal Court Action. Accordingly, on July 19, 2016, plaintiff, Tumi, and the other defendants in the Sun Federal Court Action filed with the court a Stipulation of Dismissal and Proposed Order (the "Stipulation") informing the court that plaintiff believes his claims have been mooted and requesting that the court dismiss the action with prejudice. The Stipulation also states that plaintiff intends to submit an application to the court for an award of attorneys’ fees in connection with the mooted claims.

Leases

The Company leases certain office, distribution and retail facilities. The lease agreements, which expire at various dates through 2028, 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 six months ended June 26, 2016 and June 28, 2015, respectively.


11.	INCOME TAXES

Income tax expense has been 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, as well as for the impact of discrete events that have taken place during the current reporting period. The Company’s consolidated effective tax rate was 35.7% and 32.6% for the three and six months ended June 26, 2016 and 35.0% for both the three and six months ended June 28, 2015. The change in the effective tax rate is primarily related to the benefit from the pre-tax gain on the existing joint venture investment recorded in connection with the Tumi Japan acquisition, which is non-taxable. The benefit of approximately $1.0 million has been accounted for as a discrete item in the Company’s tax provision for the first quarter of 2016.

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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 six months ended June 26, 2016 and June 28, 2015:



	Three Months Ended				Six Months Ended
	June 26, 2016		June 28, 2015		June 26, 2016		June 28, 2015
	(In thousands, except share and per share data)
Basic earnings per common share:
Numerator:
Net income	$	13,200	$	16,719	$	21,103	$	23,093
Denominator:
Basic weighted average common shares outstanding	67,649,322		67,874,098		67,548,236		67,871,526
Basic earnings per common share	$	0.20	$	0.25	$	0.31	$	0.34

Diluted earnings per common share:
Numerator:
Net income	$	13,200	$	16,719	$	21,103	$	23,093
Denominator:
Number of shares used in basic calculation	67,649,322		67,874,098		67,548,236		67,871,526
Weighted average dilutive effect of employee stock options and restricted stock units	234,881		46,026		140,647		47,769
Diluted weighted average common shares outstanding	67,884,203		67,920,124		67,688,883		67,919,295
Diluted earnings per common share	$	0.19	$	0.25	$	0.31	$	0.34

The Company excluded 18,939 and 19,101 weighted average stock options and restricted stock units for the three and six months ended June 26, 2016, respectively, and 778,889 and 644,203 for the three and six months ended June 28, 2015, respectively, from the calculation of diluted earnings per common share because they were determined to be antidilutive. In addition, as of June 26, 2016 and June 28, 2015, there were 280,161 and 173,909 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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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 six months ended June 26, 2016 and June 28, 2015:



	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 June 26, 2016
Net sales	$	68,023	$	14,988	$	25,732	$	38,774	$	—		$	147,517
Operating income (loss)	$	17,366	$	1,701	$	10,712	$	10,997	$	(20,007	)	$	20,769
Depreciation and amortization	$	3,332	$	666	$	576	$	953	$	625		$	6,152
Three Months Ended June 28, 2015
Net sales	$	65,399	$	7,397	$	25,534	$	40,190	$	—		$	138,520
Operating income (loss)	$	18,336	$	441	$	9,927	$	14,144	$	(17,568	)	$	25,280
Depreciation and amortization	$	2,716	$	423	$	442	$	889	$	597		$	5,067
Six Months Ended June 26, 2016
Net sales	$	125,191	$	27,738	$	44,604	$	68,326	$	—		$	265,859
Operating income (loss)	$	29,147	$	2,491	$	18,010	$	18,117	$	(39,235	)	$	28,530
Depreciation and amortization	$	6,416	$	1,247	$	1,053	$	2,017	$	1,205		$	11,938
Six Months Ended June 28, 2015
Net sales	$	117,401	$	13,896	$	47,770	$	69,914	$	—		$	248,981
Operating income (loss)	$	29,170	$	586	$	18,572	$	23,077	$	(36,562	)	$	34,843
Depreciation and amortization	$	5,285	$	864	$	905	$	1,845	$	1,202		$	10,101


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 12.5% and 23.8% of consolidated trade accounts receivable at June 26, 2016 and December 31, 2015, respectively. These five customers accounted for 9.0% and 9.4% of consolidated net sales for the three and six months ended June 26, 2016, respectively and 13.0% and 12.5% for the three and six months ended June 28, 2015, 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. Foreign currency risk associated with these supply arrangements is shared with these suppliers. Five of the Company’s largest suppliers accounted for 47.0% and 41.2% of accounts payable at June 26, 2016 and December 31, 2015, respectively. These five suppliers accounted for 76.8% and 75.0% of total product purchases for the three and six months ended June 26, 2016, respectively, and 84.8% and 84.1% for the three and six months ended June 28, 2015, respectively.

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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				Six Months Ended
	June 26, 2016		June 28, 2015		June 26, 2016		June 28, 2015
	(In thousands)
Share-based compensation expense	$	1,149	$	1,172	$	2,471	$	2,526
Income tax benefit related to share-based compensation	$	425	$	434	$	914	$	935

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:



	Six Months Ended
	June 26, 2016		June 28, 2015
Weighted average volatility	40.07	%	43.53	%
Expected dividend yield	—	%	—	%
Expected term (in years)	6		6
Risk-free rate	1.32	%	1.73	%

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Notes to the Condensed Consolidated Financial Statements

(unaudited)

A summary of option activity under the 2012 Plan as of June 26, 2016 and changes during the six months then ended is presented below:



	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
Outstanding - December 31, 2015	1,281,933		$	21.69
Granted	18,939		$	19.75
Exercised	(235,190	)	$	21.36
Forfeited or expired	(33,855	)	$	22.34
Outstanding - June 26, 2016	1,031,827		$	21.70	7.70	$	5,116,497
Options vested and expected to vest as of June 26, 2016	1,006,342		$	21.70	7.69	$	4,989,524
Options vested and exercisable as of June 26, 2016	483,775		$	21.70	7.32	$	2,397,894

The weighted average grant-date fair value of options granted during the six months ended June 26, 2016 and June 28, 2015 was $7.92 and $10.12, respectively.

The total intrinsic value of options exercised during the six months ended June 26, 2016 was $1,151,000. The total cash received from option exercises was $5,508,000 during the six months ended June 26, 2016, and the cash tax benefit realized for the tax deductions from these option exercises was approximately $596,000.

As of June 26, 2016, there was $3,282,000 of total unrecognized compensation cost related to nonvested stock options. Such cost is expected to be recognized over a weighted average period of 1.49 years. The total fair value of options vested during the six months ended June 26, 2016 was $2,516,000.

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 applicable vesting 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 June 26, 2016 and changes during the six months then ended is presented below:



	Number of Units		Weighted Average Grant-Date Fair Value
Nonvested - December 31, 2015	157,754		$	22.94
Granted	130,624		$	19.75
Vested	—		$	—
Forfeited	(8,217	)	$	23.08
Nonvested - June 26, 2016	280,161		$	21.45

As of June 26, 2016, there was $2,005,000 of total unrecognized compensation cost related to nonvested performance-based RSUs. Such cost is expected to be recognized over a weighted average period of 1.82 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

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TUMI HOLDINGS, INC. AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

(unaudited)

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.

A summary of the status of service-based RSUs as of June 26, 2016 and changes during the six months then ended is presented below:



	Number of Units		Weighted Average Grant-Date Fair Value
Nonvested - December 31, 2015	73,280		$	23.19
Granted	201,795		$	19.75
Vested	(33,703	)	$	23.26
Forfeited	(2,688	)	$	23.25
Nonvested - June 26, 2016	238,684		$	20.27

The weighted-average grant-date fair value of service-based RSUs granted during the six months ended June 26, 2016 and June 28, 2015 was $19.75 and $23.20, respectively.

As of June 26, 2016, there was $3,094,000 of total unrecognized compensation cost related to nonvested service-based RSUs. Such cost is expected to be recognized over a weighted average period of 2.53 years. The total fair value of service-based RSUs vested during the six months ended June 26, 2016 was $784,000.

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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, 2015, filed with the SEC on February 25, 2016 and in Part II, Item 1A, “Risk Factors” in our Quarterly Report on Form 10-Q for the quarter ended March 27, 2016, filed with the SEC on May 5, 2016. 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 March 28, 2016 and March 30, 2015 and ended on June 26, 2016 and June 28, 2015, 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 2,200 points of distribution in over 75 countries, and our global distribution network is enhanced by the use of our four 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 principally in Asia, many of which are longtime suppliers, and in 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 $138.5 million and $249.0 million in the three and six months ended June 28, 2015, respectively, to $147.5 million and $265.9 million in the three and six months ended June 26, 2016, respectively. The increase was primarily driven by incremental revenue from consolidating Tumi Japan which was acquired during the first quarter of 2016. 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 increasing our overall 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-Lite and Tegra-Lite lines, as well as a variety of mobile electronic accessories designed for frequent travelers. Additionally, we have seen an increase in the relative percentage of our net sales derived from our premium product line and updates of our core product line, and a decrease in the relative percentage of our net 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 7 and 10 new company-owned store openings in the three and six months ended June 26, 2016, respectively. We currently expect to continue to open company-owned stores, both in North America and internationally, in the foreseeable future. Most of the locations we have identified for

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new company-owned stores are for full-price stores, while the remaining locations are for outlet stores. We also believe there are opportunities to open additional stores in airport locations as well as luxury casinos.

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, targeting the assortment of products available to third party e-commerce providers and increasing penetration of the Canadian market through department stores, specialty stores, e-commerce sales and new distribution partners.

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.

Merger Agreement with Samsonite

Tumi Japan Acquisition

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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 109 company-owned stores since January 1, 2011 (11 stores in 2011, 19 stores in 2012, 17 stores in 2013, 25 stores in 2014, 27 stores in 2015 and 10 stores in the six months ended June 26, 2016), and, as part of our Tumi Japan acquisition, we added 13 additional stores in the first quarter of 2016, bringing our total to 199 company-owned stores as of June 26, 2016. 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.

•

Expand wholesale distribution globally. We currently sell products in approximately 2,000 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 anticipate introducing new products in lighter weight and durable materials, colors which appeal to women and men, premium products with a classic or contemporary design, as well as 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 goal is to continue 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 transactional presence into new markets. We transitioned our North America 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.

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Key Performance Indicators

Key performance indicators that we use to manage our business and evaluate our financial results and operating performance are average net sales per square foot and “constant currency” performance measures.

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. 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. 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.

While average net sales per square foot have increased over time, in the current period average net sales per square foot decreased by approximately $37, or 4%, to $969 as of June 26, 2016 from $1,006 as of December 31, 2015. This decrease was primarily due to negative North America full-price comparable store sales.

We also refer 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 our 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. Constant currency performance measures have limitations as analytical tools. When assessing our operating performance, investors should not use constant currency performance measures in isolation or as substitutes for operating income, net income or net sales.



Reconciliation of Constant Currency Financial Measures
(In thousands, except per share data)
	Three months ended
	June 26, 2016						June 28, 2015			% Change
	As Reported			Constant Currency			As Reported			As Reported		Constant Currency
Net sales	$	147,517		$	147,530		$	138,520		6.5	%	6.5	%
Operating income	$	20,769		$	21,612		$	25,280		(17.8	)%	(14.5	)%
Operating income margin	14.1		%	14.6		%	18.3		%
Net income	$	13,200		$	13,754		$	16,719		(21.0	)%	(17.7	)%
Diluted earnings per share	$	0.19		$	0.20		$	0.25		(21.0	)%	(17.7	)%

________________________________________

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)
	Six months ended
	June 26, 2016						June 28, 2015			% Change
	As Reported			Constant Currency			As Reported			As Reported		Constant Currency
Net sales	$	265,859		$	266,592		$	248,981		6.8	%	7.1	%
Operating income	$	28,530		$	29,740		$	34,843		(18.1	)%	(14.6	)%
Operating income margin	10.7		%	11.2		%	14.0		%
Net income	$	21,103		$	21,876		$	23,093		(8.6	)%	(5.3	)%
Diluted earnings per share	$	0.31		$	0.32		$	0.34		(8.3	)%	(4.9	)%

________________________________________

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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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						Six Months Ended
	June 26, 2016			June 28, 2015			June 26, 2016			June 28, 2015
	(In thousands)
Net sales	$	147,517		$	138,520		$	265,859		$	248,981
Cost of sales	61,339			56,905			110,331			102,095
Gross margin	86,178			81,615			155,528			146,886
OPERATING EXPENSES
Selling	9,373			8,207			18,768			16,843
Marketing	4,437			4,472			9,214			8,759
Retail operations	37,200			31,782			70,752			61,040
General and administrative	14,399			11,874			28,264			25,401
Total operating expenses	65,409			56,335			126,998			112,043
Operating income	20,769			25,280			28,530			34,843
OTHER INCOME (EXPENSES)
Interest income (expense)	41			(80		)	13			(185		)
Gain on existing joint venture investment	—			—			3,480			—
Earnings from joint venture investment	—			90			—			302
Foreign exchange gains (losses)	(246		)	353			(687		)	671
Other non-operating income (expenses)	(28		)	78			(39		)	(104		)
Total other income (expense)	(233		)	441			2,767			684
Income before income taxes	20,536			25,721			31,297			35,527
Provision for income taxes	7,336			9,002			10,194			12,434
Net income	$	13,200		$	16,719		$	21,103		$	23,093

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Percentage of Net Sales*



	Three Months Ended				Six Months Ended
	June 26, 2016		June 28, 2015		June 26, 2016		June 28, 2015
Net sales	100	%	100	%	100	%	100	%
Cost of sales	42	%	41	%	41	%	41	%
Gross margin	58	%	59	%	59	%	59	%
OPERATING EXPENSES
Selling	6	%	6	%	7	%	7	%
Marketing	3	%	3	%	3	%	4	%
Retail operations	25	%	23	%	27	%	25	%
General and administrative	10	%	9	%	11	%	10	%
Total operating expenses	44	%	41	%	48	%	45	%
Operating income	14	%	18	%	11	%	14	%
OTHER INCOME (EXPENSES)
Interest income (expense)	—	%	—	%	—	%	—	%
Gain on existing joint venture investment	—	%	—	%	1	%	—	%
Earnings from joint venture investment	—	%	—	%	—	%	—	%
Foreign exchange gains (losses)	—	%	—	%	—	%	—	%
Other non-operating income (expenses)	—	%	—	%	—	%	—	%
Total other income (expense)	—	%	—	%	1	%	—	%
Income before income taxes	14	%	19	%	12	%	14	%
Provision for income taxes	5	%	6	%	4	%	5	%
Net income	9	%	12	%	8	%	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 the end of the periods indicated:



Direct-to-Consumer North America
	June 26, 2016	June 28, 2015
Number of stores open at beginning of period	154	133
Stores opened	6	10
Stores closed	—	—
Number of stores open at end of period	160	143



Direct-to-Consumer International
	June 26, 2016		June 28, 2015
Number of stores open at beginning of period	23		19
Stores opened	4		2
Stores added from Tumi Japan acquisition	13		—
Stores closed	(1	)	—
Number of stores open at end of period	39		21

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Three months ended June 26, 2016 compared with the three months ended June 28, 2015

Net Sales

The following table presents net sales by operating segment for the three months ended June 26, 2016 compared with the three months ended June 28, 2015:



	Three Months Ended June 26, 2016		Three Months Ended June 28, 2015		% Change
	(In thousands)
Direct-to-Consumer North America	$	68,023	$	65,399	4	%
Direct-to-Consumer International	14,988		7,397		103	%
Indirect-to-Consumer North America	25,732		25,534		1	%
Indirect-to-Consumer International	38,774		40,190		(4	)%
Total	$	147,517	$	138,520	6	%

Net sales increased $9.0 million, or 6%, to $147.5 million for the three months ended June 26, 2016 from $138.5 million for the three months ended June 28, 2015. The increase in net sales was primarily driven by incremental revenue from consolidating Tumi Japan during the three months ended June 26, 2016. In addition, there were 25 new stores opened since the second quarter of 2015 (not including stores added from the Tumi Japan acquisition), which contributed to approximately 58% of the overall sales growth experienced from the three months ended June 28, 2015 to the three months ended June 26, 2016. There were 7 new company-owned store openings and 2 store relocations during the three months ended June 26, 2016. Consumer response to several new product initiatives also contributed to our growth, and we saw growth in sales in our women’s collection. Additionally, net sales were negatively impacted during the period by softer sales in our department store business, as well as our Asia-Pacific wholesale business.

Net sales attributable to the Direct-to-Consumer North America segment experienced a 4% increase for the three months ended June 26, 2016 as compared with the three months ended June 28, 2015. Of the 25 new stores opened since the second quarter of 2015, 18 were in the North America segment and contributed to over 100% of the net sales growth experienced in the Direct-to-Consumer North America segment from the three months ended June 28, 2015 to the three months ended June 26, 2016. 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 2015 will not impact the comparable store comparison until January 1, 2017. Additionally, temporary store closings, store expansions and store relocations are excluded from the comparable store base under most circumstances. Overall, North America comparable store sales decreased 3.0% for the period. North America full-price comparable store sales decreased 2.7%, North America outlet comparable store sales increased 1.8% and our North America e-commerce sales decreased 13.9%.

Net sales attributable to the Direct-to-Consumer International segment experienced a 103% increase for the three months ended June 26, 2016 as compared with the three months ended June 28, 2015. This increase in net sales was primarily driven by incremental revenue from consolidating Tumi Japan during the three months ended June 26, 2016. Additionally, of the 25 new stores opened since the second quarter of 2015, 7 were in our International segment and comprised approximately 16% of the net sales growth experienced in the Direct-to-Consumer International segment from the three months ended June 28, 2015 to the three months ended June 26, 2016. Overall, our international comparable store sales increased 10.5% (7.1% in Euros) for the period. Our international full-price comparable store sales increased 1.0% (decreased 1.0% in Euros) and outlet comparable store sales were up 11.3% (6.8% in Euros). Our international e-commerce sales increased 87.7% (81.3% in Euros).

Overall, comparable store sales for all Direct-to-Consumer channels decreased 1.6% globally for the three months ended June 26, 2016 as compared with the three months ended June 28, 2015.

Net sales attributable to the Indirect-to-Consumer North America segment increased 1% for the three months ended June 26, 2016 as compared with the three months ended June 28, 2015. The increase in our Indirect-to-Consumer North America net sales was primarily driven by strong sales in our special markets business during the three months ended June 26, 2016. This increase was largely offset by softness in our department store business largely due to weaker traffic trends in these locations.

Net sales attributable to the Indirect-to-Consumer International segment decreased 4% for the three months ended June 26, 2016 as compared with the three months ended June 28, 2015. In our Asia-Pacific region, net sales were negatively impacted during the three months ended June 26, 2016 as we did not anniversary our Alpha Bravo re-launch, which benefited sales during the second quarter of 2015.

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Cost of sales

Cost of sales increased by $4.4 million, or 7.8%, to $61.3 million for the three months ended June 26, 2016 as compared to $56.9 million for the three months ended June 28, 2015. In addition, gross margin increased by $4.6 million, or 5.6%, to $86.2 million for the three months ended June 26, 2016 as compared to $81.6 million for the three months ended June 28, 2015. The increase in cost of sales and gross margin dollars was primarily driven by the 6.5% increase in net sales.

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 year to year. Gross margin as a percentage of net sales was 58.4% for the three months ended June 26, 2016 and 58.9% for the three months ended June 28, 2015. The decrease was primarily attributable to lower margins from Tumi Japan during the three months ended June 26, 2016. This decrease was partially offset by a shift in channel mix from wholesale to retail, as retail sales represented approximately 56.3% of total sales for the three months ended June 26, 2016 compared to 52.6% in the three months ended June 28, 2015. We continue to expand our retail footprint as part of our long-term growth strategy and we have opened 25 new stores since the second quarter of 2015. We typically realize higher gross margins in our retail business as compared to our wholesale business.

Selling expense

Selling expense increased by $1.2 million, or 14.2%, to $9.4 million for the three months ended June 26, 2016 as compared to $8.2 million for the three months ended June 28, 2015. This was primarily due to an increase of approximately $1.3 million attributable to consolidating Tumi Japan.

Marketing expense

Marketing expense remained flat at $4.4 million for the three months ended June 26, 2016 as compared to $4.5 million for the three months ended June 28, 2015.

Retail Operations expense

Retail operations expense increased by $5.4 million, or 17.0%, to $37.2 million for the three months ended June 26, 2016 as compared to $31.8 million for the three months ended June 28, 2015. The increase in retail operations expense was primarily driven by the opening of 25 new stores since the second quarter of 2015, as well as an increase of approximately $2.2 million attributable to consolidating Tumi Japan.

General and administrative expense

General and administrative expense increased by $2.5 million, or 21.3%, to $14.4 million for the three months ended June 26, 2016 as compared to $11.9 million for the three months ended June 28, 2015. This increase was primarily attributable to consolidating Tumi Japan, as well as $1.5 million of expenses related to the merger agreement with Samsonite. This increase was partially offset by lower after sales service expenses in the three months ended June 26, 2016.

Operating income

The following table presents operating income (loss) by segment for the three months ended June 26, 2016 as compared with the three months ended June 28, 2015:



	Three Months Ended June 26, 2016			Three Months Ended June 28, 2015			% Change
	(In thousands)
Direct-to-Consumer North America	$	17,366		$	18,336		(5	)%
Direct-to-Consumer International	1,701			441			286	%
Indirect-to-Consumer North America	10,712			9,927			8	%
Indirect-to-Consumer International	10,997			14,144			(22	)%
Non-allocated corporate expenses	(20,007		)	(17,568		)	(14	)%
Total	$	20,769		$	25,280		(18	)%

Operating income decreased $4.5 million, or 18%, to $20.8 million for the three months ended June 26, 2016 from $25.3 million for the three months ended June 28, 2015. Our decrease in operating income reflects a decrease of approximately $3.0 million attributable to consolidating Tumi Japan. We also saw a decrease in operating income from our Direct-to-Consumer North America segment, primarily due to negative comparable store sales in our full price stores, as well as a decline in sales in

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our North America e-commerce business during the three months ended June 26, 2016. In addition, we incurred approximately $1.5 million of expenses related to the merger agreement with Samsonite during the three months ended June 26, 2016.

Operating income attributable to the Direct-to-Consumer North America segment experienced a 5% decrease for the three months ended June 26, 2016 as compared with the three months ended June 28, 2015. This was primarily due to negative full price comparable store sales as well as a decline in sales in our North America e-commerce business during the three months ended June 26, 2016.

Operating income attributable to the Direct-to-Consumer International segment increased 286% for the three months ended June 26, 2016 as compared with the three months ended June 28, 2015. This was primarily due to an increase in operating income of approximately $0.4 million attributable to consolidating Tumi Japan, as well as strong overall comparable store sales and growth from our international e-commerce websites.

Operating income attributable to the Indirect-to-Consumer North America segment experienced an increase of 8% for the three months ended June 26, 2016 as compared with the three months ended June 28, 2015. This was largely due to higher gross margins realized in our special markets business during the three months ended June 26, 2016.

Operating income attributable to the Indirect-to-Consumer International segment experienced a 22% decrease for the three months ended June 26, 2016 as compared with the three months ended June 28, 2015. This was primarily due to consolidating Tumi Japan, with Tumi Japan Direct-to-Consumer sales now included in our Direct-to-Consumer International segment, as well as softer sales in our Asia-Pacific region.

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, shipping and warehousing, 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 increased 14% for the three months ended June 26, 2016 as compared with the three months ended June 28, 2015. This increase was primarily attributable to consolidating Tumi Japan, as well as expenses of $1.5 million related to the merger agreement with Samsonite.

Operating margin was 14% for the three months ended June 26, 2016 as compared to 18% for the three months ended June 28, 2015, as the previously mentioned impact of consolidating Tumi Japan, expenses related to the merger agreement with Samsonite, as well as retail operations expense for new stores and the wrap effect (expenses for stores for which there were little or no expenses in the comparable prior period) of stores opened since the second quarter of 2015, offset some of our fixed cost leverage.

Other income and expenses

Other income and expenses, net, decreased $0.7 million to a loss of $0.2 million for the three months ended June 26, 2016 from income of $0.4 million for the three months ended June 28, 2015. This decrease was primarily driven by foreign exchange losses during the three months ended June 26, 2016.

Income tax expense

Provision for income taxes decreased $1.7 million, or 19%, to $7.3 million in the three months ended June 26, 2016 from $9.0 million in the three months ended June 28, 2015. This was primarily due to lower income before taxes for the three months ended June 26, 2016.

Net income

Net income decreased $3.5 million to $13.2 million for the three months ended June 26, 2016 from $16.7 million for the three months ended June 28, 2015. This decrease was primarily driven by higher operating expenses due to the aforementioned impact of consolidating Tumi Japan, expenses of $1.5 million related to the merger agreement with Samsonite, as well as retail operations expense for new stores and the wrap effect of stores opened since the second quarter of 2015.

Basic weighted average shares outstanding were 67.6 million and 67.9 million shares for the three months ended June 26, 2016 and June 28, 2015, respectively. Diluted weighted average shares outstanding were 67.9 million shares for both the three months ended June 26, 2016 and June 28, 2015. Basic EPS was $0.20 per common share for the three months ended June 26, 2016 versus $0.25 per common share for the three months ended June 28, 2015. Diluted EPS was $0.19 per common share for the three months ended June 26, 2016 versus $0.25 per common share for the three months ended June 28, 2015.

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Six Months Ended June 26, 2016 compared with the six months ended June 28, 2015

Net Sales

The following table presents net sales by operating segment for the six months ended June 26, 2016 compared with the six months ended June 28, 2015:



	Six Months Ended June 26, 2016		Six Months Ended June 28, 2015		% Change
	(In thousands)
Direct-to-Consumer North America	$	125,191	$	117,401	7	%
Direct-to-Consumer International	27,738		13,896		100	%
Indirect-to-Consumer North America	44,604		47,770		(7	)%
Indirect-to-Consumer International	68,326		69,914		(2	)%
Total	$	265,859	$	248,981	7	%

Net sales increased $16.9 million, or 7%, to $265.9 million for the six months ended June 26, 2016 from $249.0 million for the six months ended June 28, 2015. The increase in net sales was primarily driven by incremental revenue from consolidating Tumi Japan during the six months ended June 26, 2016. In addition, there were 25 new stores opened since the second quarter of 2015 (not including stores added from the Tumi Japan acquisition), which contributed to approximately 51% of the overall sales growth experienced from the six months ended June 28, 2015 to the six months ended June 26, 2016. There were 10 new company-owned store openings, 3 store relocations, 2 store renovations and 1 store closure during the six months ended June 26, 2016. Consumer response to several new product initiatives also contributed to our growth, and we saw growth in sales in our women’s category as well as our premium product collections. Additionally, net sales were negatively impacted during the period by softer sales in our specialty store and department store businesses as well as our Asia-Pacific wholesale business.

Net sales attributable to the Direct-to-Consumer North America segment experienced a 7% increase for the six months ended June 26, 2016 as compared with the six months ended June 28, 2015. Of the 25 new stores opened since the second quarter of 2015, 18 were in the North America segment and comprised approximately 85% of the net sales growth experienced in the Direct-to-Consumer North America segment from the six months ended June 28, 2015 to the six months ended June 26, 2016. Overall, North America comparable store sales decreased 1.6% for the period. North America full-price comparable store sales decreased 3.0%, North America outlet comparable store sales increased 3.5% and our North America e-commerce sales decreased 6.5%.

Net sales attributable to the Direct-to-Consumer International segment experienced a 100% increase for the six months ended June 26, 2016 as compared with the six months ended June 28, 2015. This increase in net sales was primarily driven by incremental revenue from consolidating Tumi Japan during the first half of 2016. Additionally, of the 25 new stores opened since the second quarter of 2015, 7 were in our International segment and comprised approximately 15% of the net sales growth experienced in the Direct-to-Consumer International segment from the six months ended June 28, 2015 to the six months ended June 26, 2016. Overall, our international comparable store sales increased 8.7% (8.7% in Euros) for the period. Our international full-price comparable store sales increased 1.3% (1.3% in Euros) and outlet comparable store sales were up 7.7% (7.7% in Euros). Our international e-commerce sales increased 53.2% (53.2% in Euros).

Overall, comparable store sales for all Direct-to-Consumer channels decreased 0.6% globally for the six months ended June 26, 2016 as compared with the six months ended June 28, 2015.

Net sales attributable to the Indirect-to-Consumer North America segment decreased 7% for the six months ended June 26, 2016 as compared with the six months ended June 28, 2015. Our Indirect-to-Consumer North America net sales have been negatively impacted by a decline in sales in our specialty store business, due primarily to a decline in the number of our specialty store accounts, as well as softness in our department store business largely due to weaker traffic trends in these locations.

Net sales attributable to the Indirect-to-Consumer International segment decreased 2% for the six months ended June 26, 2016 as compared with the six months ended June 28, 2015. In our Asia-Pacific region, net sales were negatively impacted during the six months ended June 26, 2016 as we did not anniversary our Tegra-lite launch and our Alpha Bravo re-launch, both which benefited sales during the first half of 2015.

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Cost of sales

Cost of sales increased by $8.2 million, or 8.1%, to $110.3 million for the six months ended June 26, 2016 as compared to $102.1 million for the six months ended June 28, 2015. In addition, gross margin increased by $8.6 million, or 5.9%, to $155.5 million for the six months ended June 26, 2016 as compared to $146.9 million for the six months ended June 28, 2015. The increase in cost of sales and gross margin dollars was primarily driven by the 6.8% increase in net sales.

Gross margin as a percentage of net sales was 58.5% for the six months ended June 26, 2016 and 59.0% for the six months ended June 28, 2015. The decrease was primarily attributable to lower margins from Tumi Japan during the six months ended June 26, 2016. This decrease was partially offset by a shift in channel mix from wholesale to retail, as retail sales represented approximately 57.5% of total sales for the six months ended June 26, 2016 compared to 52.7% in the six months ended June 28, 2015. We continue to expand our retail footprint as part of our long-term growth strategy and we have opened 25 new stores since the second quarter of 2015. We typically realize higher gross margins in our retail business as compared to our wholesale business.

Selling expense

Selling expense increased by $1.9 million, or 11.4%, to $18.8 million for the six months ended June 26, 2016 as compared to $16.8 million for the six months ended June 28, 2015. This was primarily due to an increase of approximately $2.9 million attributable to consolidating Tumi Japan. Additionally, included in the six months ended June 28, 2015 was $0.7 million in severance costs compared to $0.1 million in the six months ended June 26, 2016.

Marketing expense

Marketing expense increased by $0.5 million, or 5.2%, to $9.2 million for the six months ended June 26, 2016 as compared to $8.8 million for the six months ended June 28, 2015. The increase in marketing expense was primarily due to additional expenses from consolidating Tumi Japan of approximately $0.7 million.

Retail Operations expense

Retail operations expense increased by $9.7 million, or 15.9%, to $70.8 million for the six months ended June 26, 2016 as compared to $61.0 million for the six months ended June 28, 2015. The increase in retail operations expense was primarily driven by the opening of 25 new stores since the second quarter of 2015, as well as an increase of approximately $4.1 million attributable to consolidating Tumi Japan.

General and administrative expense

General and administrative expense increased by $2.9 million, or 11.3%, to $28.3 million for the six months ended June 26, 2016 as compared to $25.4 million for the six months ended June 28, 2015. This increase was primarily attributable to consolidating Tumi Japan, as well as expenses of $2.4 million related to the merger agreement with Samsonite. This increase was partially offset by lower severance costs during the six months ended June 26, 2016. During both the six months ended June 26, 2016 and the six months ended June 28, 2015 we incurred 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 $0.5 million and $1.0 million during the first half of 2016 and 2015, respectively.

Operating income

The following table presents operating income (loss) by segment for the six months ended June 26, 2016 as compared with the six months ended June 28, 2015:



	Six Months Ended June 26, 2016			Six Months Ended June 28, 2015			% Change
	(In thousands)
Direct-to-Consumer North America	$	29,147		$	29,170		<1%
Direct-to-Consumer International	2,491			586			325	%
Indirect-to-Consumer North America	18,010			18,572			(3	)%
Indirect-to-Consumer International	18,117			23,077			(21	)%
Non-allocated corporate expenses	(39,235		)	(36,562		)	(7	)%
Total	$	28,530		$	34,843		(18	)%

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Operating income decreased $6.3 million, or 18.1%, to $28.5 million for the six months ended June 26, 2016 from $34.8 million for the six months ended June 28, 2015. Our decrease in operating income reflects a decrease of approximately $4.8 million attributable to consolidating Tumi Japan. We also saw a decrease in operating income from our Indirect-to-Consumer North America segment, primarily due to the decline in sales and gross margin dollars in this segment which were particularly impacted by softer sales in our specialty store and department store businesses. In addition, we incurred approximately $2.4 million of expenses related to the merger agreement with Samsonite during the six months ended June 26, 2016.

Operating income attributable to the Direct-to-Consumer North America segment was flat for the six months ended June 26, 2016 as compared with the six months ended June 28, 2015. This was primarily due to negative full price comparable store sales as well as a decline in sales in our North America e-commerce business, partially offset by growth from our outlet stores during the six months ended June 26, 2016.

Operating income attributable to the Direct-to-Consumer International segment increased 325% for the six months ended June 26, 2016 as compared with the six months ended June 28, 2015. This was primarily due to an increase in operating income of approximately $0.9 million attributable to consolidating Tumi Japan, as well as growth from our international e-commerce websites.

Operating income attributable to the Indirect-to-Consumer North America segment experienced a decrease of 3% for the six months ended June 26, 2016 as compared with the six months ended June 28, 2015. This was largely due to the decline in sales and gross margin dollars in this segment which were particularly impacted by softer sales in our specialty store and department store businesses, as well as our Canadian wholesale business.

Operating income attributable to the Indirect-to-Consumer International segment experienced a 21% decrease for the six months ended June 26, 2016 as compared with the six months ended June 28, 2015. This was primarily due to consolidating Tumi Japan, with Tumi Japan Direct-to-Consumer sales now included in our Direct-to-Consumer International segment, as well as softer sales in our Asia-Pacific region.

Non-allocated corporate expenses increased 7% for the six months ended June 26, 2016 as compared with the six months ended June 28, 2015. This increase was primarily attributable to consolidating Tumi Japan, as well as expenses of $2.4 million related to the merger agreement with Samsonite, partially offset by the aforementioned lower severance costs during the six months ended June 26, 2016.

Operating margin was 11% for the six months ended June 26, 2016 as compared to 14% for the six months ended June 28, 2015, as the previously mentioned impact of consolidating Tumi Japan, expenses related to the merger agreement with Samsonite, as well as retail operations expense for new stores and the wrap effect of stores opened since the second quarter of 2015, offset some of our fixed cost leverage.

Other income and expenses

Other income and expenses, net increased $2.1 million to $2.8 million for the six months ended June 26, 2016 from $0.7 million for the six months ended June 28, 2015. This increase was primarily driven by the gain on our existing joint venture investment recorded in connection with the Tumi Japan acquisition, during the first quarter of 2016.

Income tax expense

Provision for income taxes decreased $2.2 million, or 18%, to $10.2 million in the six months ended June 26, 2016 from $12.4 million in the six months ended June 28, 2015. This was primarily due to the benefit from the pre-tax gain on our existing joint venture investment recorded in connection with our Tumi Japan acquisition, which is non-taxable. This benefit has been recorded as a discrete item for the six months ended June 26, 2016.

Net income

Net income decreased $2.0 million to $21.1 million for the six months ended June 26, 2016 from $23.1 million for the six months ended June 28, 2015. This decrease was primarily driven by higher operating expenses due to the aforementioned impact of consolidating Tumi Japan, expenses of $2.4 million related to the merger agreement with Samsonite, as well as retail operations expense for new stores and the wrap effect of stores opened since the second quarter of 2015.

Basic weighted average shares outstanding were 67.5 million and 67.9 million shares for the six months ended June 26, 2016 and June 28, 2015, respectively. Diluted weighted average shares outstanding were 67.7 million and 67.9 million shares for the six months ended June 26, 2016 and June 28, 2015, respectively. Basic and diluted EPS was $0.31 per common share for the six months ended June 26, 2016 versus $0.34 per common share for the six months ended June 28, 2015.

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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 2015, 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.

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 and overall growth activities. In addition, we funded the Tumi Japan acquisition through cash on-hand.

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 June 26, 2016, we had cash and cash equivalents of $113.1 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, gain on acquisition of joint venture investment, 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 $28.1 million during the six months ended June 26, 2016, compared to $35.2 million during the six months ended June 28, 2015. The decrease was primarily driven by a decrease in accounts payable and accrued expenses as of June 26, 2016, largely related to the timing of vendor payments, as well as the prepayment of income taxes during the six months ended June 26, 2016.

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, as well as the Tumi Japan acquisition.

Cash used for investing activities was $12.3 million and $15.0 million for the six months ended June 26, 2016 and June 28, 2015, respectively. Capital expenditures for the year ended December 31, 2016 are expected to be in the range of $23.0 million to $28.0 million.

Financing activities

Cash flows provided by financing activities was $2.2 million for the six months ended June 26, 2016. Financing activities during the six months ended June 26, 2016 consisted primarily of borrowings and payments under the Tumi Japan Credit Facilities and notes payable, as well as proceeds received from options exercised during the first half of 2016.

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Amended and restated credit facility

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.

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 Borrowers were in compliance with all such covenants as of June 26, 2016.

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 our Annual Report on Form 10-K for the year ended December 31, 2015, filed with the SEC on February 25, 2016.

Tumi Japan Credit Facilities


•	Bank of Tokyo-Mitsubishi UFJ Credit Facility - provides a revolving line of credit of up to 100,000,000 yen. Borrowings under the Credit Facility bear interest at a per annum rate equal to the Japanese interest rate plus a margin of 0.850%.

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•	Resona Bank Ltd. Credit Facility - provides a revolving line of credit of up to 500,000,000 yen. Borrowings under the Credit Facility bear interest at a per annum rate equal to the Japanese interest rate plus a margin of 1.00%.

As of June 26, 2016 the Company had $4,407,000 outstanding under the Tumi Japan Credit Facilities. This is recorded as short-term debt on the Company’s condensed consolidated balance sheet.

Notes Payable

Share Repurchase Program

On November 4, 2015, the Company announced that its Board of Directors authorized the repurchase of up to $150 million of the Company’s common stock over the following 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.

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, 2015, filed with the SEC on February 25, 2016.

Off-Balance Sheet Arrangements

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

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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, 2015 as filed with the SEC on February 25, 2016.

Recently Issued Accounting Pronouncements

Except as discussed in Note 2—Recently Issued Accounting Pronouncements to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q, we have considered all new accounting pronouncements and have concluded that there are no new pronouncements that we expect to have a material impact on our results of operations, financial condition, or cash flows, based on current information.

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, 2015, filed with the SEC on February 25, 2016. 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, 2015, filed with the SEC on February 25, 2016.


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, 2015, filed with the SEC on February 25, 2016 as updated by Part II, Item 1A, “Risk Factors” in our Quarterly Report on Form 10-Q for the quarter ended March 27, 2016, filed with the SEC on May 5, 2016.


ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table sets forth the repurchases of shares of the Company’s common stock during the quarter ended June 26, 2016:



Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares That May Yet be Purchased Under the Plans or Programs
March 28, 2016 - May 1, 2016	—	—		—	—
May 2, 2016 - May 29, 2016	273¹	$	26.62	—	—
May 30, 2016 - June 26, 2016	—	—		—	—
Total	273	$	26.62	—	—

______________

¹ Represents shares withheld by the Company in satisfaction of withholding taxes in connection with the vesting of awards issued under the 2012 Long-Term Incentive Plan.

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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.

July 29, 2016		/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



/s/ Jerome S. Griffith
Jerome S. Griffith
Chief Executive Officer and President
(Principal Executive Officer)



	By:	/s/ Jerome S. Griffith
	Name:	Jerome S. Griffith
	Title:	Chief Executive Officer and President
		(Principal Executive Officer)

Document and Entity Information - shares	6 Months Ended
Document and Entity Information - shares	Jun. 26, 2016	Jul. 29, 2016
Document and Entity Information [Abstract]
Entity Registrant Name	Tumi Holdings, Inc.
Entity Central Index Key	0001535031
Document Type	10-Q
Document Period End Date	Jun. 26, 2016
Amendment Flag	false
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q2
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		67,661,362

Condensed Consolidated Balance Sheets (Parenthetical) (Unaudited) - USD ($) $ in Thousands	Jun. 26, 2016	Dec. 31, 2015
Statement of Financial Position [Abstract]
Accounts receivable, allowance for doubtful accounts	$ 877	$ 906
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	350,000,000	350,000,000
Common stock, shares issued	68,399,455	68,158,428
Common stock, shares outstanding	67,633,769	67,394,756
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized	75,000,000	75,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Treasury Stock, shares	765,686	763,672

Recently Issued Accounting Pronouncements	6 Months Ended
Recently Issued Accounting Pronouncements	Jun. 26, 2016
New Accounting Pronouncements and Changes in Accounting Principles [Abstract]
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS	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. In March 2016, the FASB issued final amendments (ASU No. 2016-08 and ASU No. 2016-10) to clarify the implementation guidance for principal versus agent considerations, identifying performance obligations and the accounting for licenses of intellectual property. The amendments can be applied retrospectively to each prior reporting period or retrospectively with the cumulative effect of initially applying this update recognized at the date of initial application. Early application is permitted but not before the original public entity effective date, i.e., annual periods beginning after December 15, 2016. 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 adopted the amended guidance effective January 1, 2016 and it did not have a material effect on its condensed consolidated financial statements. 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 adopted the guidance effective January 1, 2016 and it did not have a material effect on its condensed consolidated financial statements. 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 adopted the amended guidance effective January 1, 2016 and it did not have a material effect on its condensed consolidated financial statements. 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. In February 2016, the FASB issued ASU No. 2016-02 “Leases (Topic 842).” ASU 2016-02 establishes a right of use model that requires a lessee to record a right of use asset and a lease liability for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. For lessors, the guidance modifies the classification criteria and the accounting for sales-type and direct financing leases. A lease will be treated as sale if it transfers all of the risks and rewards, as well as control of the underlying asset, to the lessee. If risks and rewards are conveyed without the transfer of control, the lease is treated as a financing. If the lessor doesn’t convey risks and rewards or control, an operating lease results. The amendments are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years for public business entities. Entities are required to use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements, with certain practical expedients available. Early adoption is permitted. The Company is currently in the process of evaluating the impact of ASU 2016-02 on its condensed consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, “Compensation - Stock Compensation (Topic 718) - Improvements to Employee Share-Based Payment Accounting.” ASU 2016-09 requires all income tax effects of awards to be recognized in the income statement when the awards vest or are settled. It also allows an employer to repurchase more of an employee’s shares than it can today for tax withholding purposes without triggering liability accounting and to make a policy election for forfeitures as they occur. ASU 2016-09 is effective for fiscal years beginning after December 15, 2016, and interim periods within those years, with early adoption is 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.

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Jun. 26, 2016	Dec. 31, 2015
CURRENT ASSETS
Cash and cash equivalents	$ 113,082	$ 94,632
Accounts receivable, less allowance for doubtful accounts of approximately $918 and $877 at June 26, 2016 and December 31, 2015, respectively	34,710	32,434
Other receivables	1,861	3,543
Inventories, net	113,907	99,688
Prepaid expenses and other current assets	7,524	12,096
Prepaid income taxes	6,763	996
Total current assets	277,847	243,389
Property, plant and equipment, net	88,409	83,501
Deferred tax assets, noncurrent	0	771
Joint venture investment	0	1,840
Goodwill	145,178	142,773
Intangible assets, net	130,925	130,400
Other assets	11,101	9,270
Total assets	653,460	611,944
CURRENT LIABILITIES
Accounts payable	38,969	35,844
Notes payable	2,204	0
Accrued expenses	37,539	39,130
Income taxes payable	571	615
Short-term debt	4,407	0
Total current liabilities	83,690	75,589
Other long-term liabilities	15,507	12,775
Deferred tax liabilities	43,310	42,734
Total liabilities	142,507	131,098
Commitments and contingencies
STOCKHOLDERS’ EQUITY
Common stock—$0.01 par value; 350,000,000 shares authorized, 68,427,321 shares issued and 67,661,362 shares outstanding as of June 26, 2016; 68,158,428 shares issued and 67,394,756 shares outstanding as of December 31, 2015	684	681
Preferred stock—$0.01 par value; 75,000,000 shares authorized and no shares issued or outstanding as of June 26, 2016 and December 31, 2015	0	0
Additional paid-in capital	324,633	317,140
Treasury stock, at cost; 765,959 and 763,672 shares as of June 26, 2016 and December 31, 2015, respectively	(13,398)	(13,338)
Retained earnings	203,850	182,747
Accumulated other comprehensive loss	(4,816)	(6,384)
Total stockholders’ equity	510,953	480,846
Total liabilities and stockholders’ equity	$ 653,460	$ 611,944

Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 26, 2016	Jun. 28, 2015	Jun. 26, 2016	Jun. 28, 2015
Income Statement [Abstract]
Net sales	$ 147,517	$ 138,520	$ 265,859	$ 248,981
Cost of sales	61,339	56,905	110,331	102,095
Gross margin	86,178	81,615	155,528	146,886
OPERATING EXPENSES
Selling	9,373	8,207	18,768	16,843
Marketing	4,437	4,472	9,214	8,759
Retail operations	37,200	31,782	70,752	61,040
General and administrative	14,399	11,874	28,264	25,401
Total operating expenses	65,409	56,335	126,998	112,043
Operating income	20,769	25,280	28,530	34,843
OTHER INCOME (EXPENSES)
Interest expense	41	(80)	13	(185)
Gain on existing joint venture investment	0	0	3,480	0
Earnings from joint venture investment	0	90	0	302
Foreign exchange gains (losses)	(246)	353	(687)	671
Other non-operating expenses	(28)	78	(39)	(104)
Total other income	(233)	441	2,767	684
Income before income taxes	20,536	25,721	31,297	35,527
Provision for income taxes	7,336	9,002	10,194	12,434
Net income	$ 13,200	$ 16,719	$ 21,103	$ 23,093
Weighted average common shares outstanding:
Basic (in shares)	67,649,322	67,874,098	67,548,236	67,871,526
Diluted (in shares)	67,884,203	67,920,124	67,688,883	67,919,295
Basic earnings per common share (in dollars per share)	$ 0.20	$ 0.25	$ 0.31	$ 0.34
Diluted earnings per common share (in dollars per share)	$ 0.19	$ 0.25	$ 0.31	$ 0.34

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 26, 2016	Jun. 28, 2015
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$ 21,103	$ 23,093
Net income
Depreciation and amortization	11,938	10,101
Share-based compensation expense	2,471	2,526
Amortization of deferred financing costs	82	83
Allowance for doubtful accounts	(41)	(4)
Gain on existing joint venture investment	(3,480)	0
Earnings from joint venture	0	(302)
Loss on disposal of fixed assets	224	260
Impairment of long lived assets	0	639
Other non-cash charges	739	886
Changes in operating assets and liabilities
Accounts receivable	1,761	1,111
Other receivables	1,702	230
Inventories	(1,509)	(7,764)
Prepaid expenses and other current assets	955	2,041
Prepaid income taxes	(5,767)	(1,887)
Other assets	60	(185)
Accounts payable	(1,910)	4,954
Accrued expenses	(1,963)	1,103
Income taxes payable	(394)	(2,231)
Other liabilities	2,097	547
Total adjustments	6,965	12,108
Net cash provided by operating activities	28,068	35,201
CASH FLOWS FROM INVESTING ACTIVITIES
Cash acquired from business combination, Tumi Japan acquisition	2,414	0
Capital expenditures	(14,748)	(15,006)
Net cash used in investing activities	(12,334)	(15,006)
CASH FLOWS FROM FINANCING ACTIVITIES
Borrowings from short-term debt	15,903	0
Payments on short-term debt	(13,222)	0
Borrowings on notes payable	9,054	0
Payments on notes payable	(14,484)	0
Options exercise	5,025	0
Repurchases of common stock, including shares withheld in satisfaction of tax obligations	(60)	(10)
Net cash provided by financing activities	2,216	(10)
Effect of exchange rate changes on cash	500	(249)
Net increase in cash and cash equivalents	18,450	19,936
Cash and cash equivalents at beginning of period	94,632	52,796
Cash and cash equivalents at end of period	$ 113,082	$ 72,732

Commitments And Contingencies	6 Months Ended
Commitments And Contingencies	Jun. 26, 2016
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	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. On March 3, 2016, Tumi entered into a merger agreement with Samsonite International S.A. (“Samsonite”) and PTL Acquisition Inc., pursuant to which Samsonite will acquire Tumi. Thereafter, on March 15, 2016, a putative stockholder class action challenging the merger was filed in New Jersey Superior Court and was captioned Sun v. Tumi Holdings, Inc., et al., No. C-32-16 (N.J. Super.) (the “Sun State Court Action”). The Sun State Court Action alleged that the members of Tumi’s board breached their fiduciary duties by, among other things, entering into the merger agreement with Samsonite at an inadequate price, failing to engage in an auction process, and failing to disclose all material information to Tumi’s stockholders. The Sun State Court Action also alleged that Tumi and Samsonite aided and abetted these alleged breaches of fiduciary duties. On April 14, 2016, plaintiff voluntarily dismissed the Sun State Court Action. On April 19, 2016, the same plaintiff who filed the Sun State Court Action, filed an action in the District of New Jersey, captioned Sun v. Tumi Holdings, Inc., et al., No. 2:16-cv-02184-JMV-JBC (D. NJ.) (the “Sun Federal Court Action”). The Sun Federal Court Action makes only disclosure claims, alleging an individual claim for violation of Section 14(a) of the Securities Exchange Act of 1934, as amended to date (“1934 Act”) against Tumi and the members of its board, as well as an individual claim for violation of Section 20(a) of the 1934 Act against Samsonite and the members of Tumi’s board. Tumi and the board believes these claims are wholly without merit. Regardless, on May 13, 2016, Tumi filed a revised Preliminary Proxy Statement that mooted all of the claims in the Sun Federal Court Action. Accordingly, on July 19, 2016, plaintiff, Tumi, and the other defendants in the Sun Federal Court Action filed with the court a Stipulation of Dismissal and Proposed Order (the "Stipulation") informing the court that plaintiff believes his claims have been mooted and requesting that the court dismiss the action with prejudice. The Stipulation also states that plaintiff intends to submit an application to the court for an award of attorneys’ fees in connection with the mooted claims. Leases The Company leases certain office, distribution and retail facilities. The lease agreements, which expire at various dates through 2028, 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 six months ended June 26, 2016 and June 28, 2015, respectively.

Income Taxes	6 Months Ended
Income Taxes	Jun. 26, 2016
Income Tax Disclosure [Abstract]
INCOME TAXES	INCOME TAXES Income tax expense has been 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, as well as for the impact of discrete events that have taken place during the current reporting period. The Company’s consolidated effective tax rate was 35.7% and 32.6% for the three and six months ended June 26, 2016 and 35.0% for both the three and six months ended June 28, 2015. The change in the effective tax rate is primarily related to the benefit from the pre-tax gain on the existing joint venture investment recorded in connection with the Tumi Japan acquisition, which is non-taxable. The benefit of approximately $1.0 million has been accounted for as a discrete item in the Company’s tax provision for the first quarter of 2016.

Concentration of Risk	6 Months Ended
Concentration of Risk	Jun. 26, 2016
Risks and Uncertainties [Abstract]
CONCENTRATION OF RISK	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 12.5% and 23.8% of consolidated trade accounts receivable at June 26, 2016 and December 31, 2015, respectively. These five customers accounted for 9.0% and 9.4% of consolidated net sales for the three and six months ended June 26, 2016, respectively and 13.0% and 12.5% for the three and six months ended June 28, 2015, 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. Foreign currency risk associated with these supply arrangements is shared with these suppliers. Five of the Company’s largest suppliers accounted for 47.0% and 41.2% of accounts payable at June 26, 2016 and December 31, 2015, respectively. These five suppliers accounted for 76.8% and 75.0% of total product purchases for the three and six months ended June 26, 2016, respectively, and 84.8% and 84.1% for the three and six months ended June 28, 2015, respectively.

Basis of Presentation and Organization (Details) $ / shares in Units, $ in Thousands	Mar. 03, 2016 $ / shares	Jun. 26, 2016 USD ($) Countries DistributionPoints Logistics_Facilities $ / shares	Dec. 31, 2015 $ / shares
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of points of distribution worldwide \| DistributionPoints		2,200
Number of countries in which entity operates \| Countries		75
Number of logistics facilities \| Logistics_Facilities		4
Common stock, par value (in dollars per share) \| $ / shares	$ 0.01	$ 0.01	$ 0.01
Merger consideration per dissenting share \| $ / shares	$ 26.75
Total cash and cash equivalents in U.S. bank accounts over the FDIC limit \| $		$ 100,580
Total cash and cash equivalents in international bank accounts \| $		$ 23,987

Stockholders' Equity (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
Stockholders' Equity (Details) - USD ($) $ in Thousands	Jun. 26, 2016	Jun. 28, 2015	Jun. 26, 2016	Jun. 28, 2015
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Balance as of January 1, 2016			$ 480,846
Balance as of January 1, 2016, Shares			68,158,428
Net income	$ 13,200	$ 16,719	$ 21,103	$ 23,093
Share-based compensation			2,471
Stock options exercised			$ 5,025
Stock options exercised, Shares			235,190
Repurchase of common stock			$ (60)
Foreign currency translation adjustment, net of tax	413	$ 666	1,568	$ (2,199)
Balance as of June 26, 2016	$ 510,953		$ 510,953
Balance as of March 27, 2016, Shares	68,399,455		68,399,455
Common Stock [Member]
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Balance as of January 1, 2016			$ 681
Balance as of January 1, 2016, Shares			68,158,428
Stock options exercised			$ 3
Stock options exercised, Shares			235,190
Service-based shares issued			33,703
Balance as of June 26, 2016	$ 684		$ 684
Balance as of March 27, 2016, Shares	68,427,321		68,427,321
Additional Paid-in Capital [Member]
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Balance as of January 1, 2016			$ 317,140
Share-based compensation			2,471
Stock options exercised			5,022
Balance as of June 26, 2016	$ 324,633		324,633
Treasury Stock [Member]
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Balance as of January 1, 2016			(13,338)
Repurchase of common stock			(60)
Balance as of June 26, 2016	(13,398)		(13,398)
Retained Earnings [Member]
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Balance as of January 1, 2016			182,747
Net income			21,103
Balance as of June 26, 2016	203,850		203,850
Accumulated Other Comprehensive Loss [Member]
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Balance as of January 1, 2016			(6,384)
Foreign currency translation adjustment, net of tax			1,568
Balance as of June 26, 2016	$ (4,816)		$ (4,816)

Stockholders' Equity (Narratives) (Details) - USD ($)	6 Months Ended
Stockholders' Equity (Narratives) (Details) - USD ($)	Jun. 26, 2016	Dec. 31, 2015	Nov. 04, 2015
Stockholders' Equity Note [Abstract]
Shares of common stock in treasury	765,959	763,672
Shares withheld for satisfaction of taxes due on share based compensation	2,287
Share repurchase program authorized purchase amount			$ 150,000,000
Share repurchase program remaining authorized purchase amount	$ 141,546,000

Inventories, Net (Details) - USD ($) $ in Thousands	Jun. 26, 2016	Dec. 31, 2015
Inventory Disclosure [Abstract]
Raw materials	$ 172	$ 246
Finished goods	113,735	99,442
Total inventories, net	$ 113,907	$ 99,688

Acquisition of Joint Venture Investment (Details) ¥ in Millions			3 Months Ended	6 Months Ended
	Jan. 04, 2016 JPY (¥)	Jan. 04, 2016 USD ($)	Jun. 28, 2015 USD ($)	Jun. 28, 2015 USD ($)	Jun. 26, 2016 USD ($)	Dec. 31, 2015 USD ($)
Related Party Transaction [Line Items]
Goodwill					$ 145,178,000	$ 142,773,000
Tumi Japan [Member]
Related Party Transaction [Line Items]
Business Combination, Consideration Transferred	¥ 521	$ 4,200,000
Current assets		16,607,000
Property, plant and equipment		2,771,000
Goodwill		2,405,000
Intangible assets		600,000
Other non-current assets		1,985,000
Current liabilities		(14,068,000)
Non-current liabilities		(921,000)
Net assets acquired		9,379,000
Non-deductible goodwill recognized		2,405,000
Business Combination, Step Acquisition, Equity Interest in Acquiree, Fair Value		5,050,000
Business Combination, Step Acquisition, Equity Interest in Acquiree, Remeasurement Gain		$ 3,480,000
Tumi Japan [Member] \| Customer relationships [Member]
Related Party Transaction [Line Items]
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	4 years	4 years
Tumi Japan [Member] \| Direct to Consumer International [Member]
Related Party Transaction [Line Items]
Non-deductible goodwill recognized		$ 1,358,000
Tumi Japan [Member] \| Indirect to consumer International [Member]
Related Party Transaction [Line Items]
Non-deductible goodwill recognized		$ 1,047,000
Itochu [Member]
Related Party Transaction [Line Items]
Sales to Itochu			$ 5,643,000	$ 8,920,000
AR due from Itochu						$ 1,480,000

Accrued Warranties (Details) - USD ($) $ in Thousands	6 Months Ended
Accrued Warranties (Details) - USD ($) $ in Thousands	Jun. 26, 2016	Jun. 28, 2015
Product Warranty Schedule [Line Items]
Service warranty period	1 year
Activity in Warranty Reserve Account [Roll Forward]
Liability, beginning of period	$ 9,001	$ 8,033
Provision for warranties	2,555	3,804
Warranty claims	(2,926)	(3,309)
Liability, end of period	$ 8,630	$ 8,528
Minimum [Member]
Product Warranty Schedule [Line Items]
Manufacturers' defect warranty period	2 years
Maximum [Member]
Product Warranty Schedule [Line Items]
Manufacturers' defect warranty period	5 years

Credit Facility (Details)	3 Months Ended		6 Months Ended		12 Months Ended
Credit Facility (Details)	Jun. 26, 2016 USD ($)	Jun. 28, 2015 USD ($)	Jun. 26, 2016 USD ($)	Jun. 28, 2015 USD ($)	Dec. 31, 2015 USD ($)	Jun. 26, 2016 JPY (¥)	Jun. 26, 2016 USD ($)	Aug. 29, 2013 USD ($)	Apr. 04, 2012 USD ($)
Line of Credit Facility [Line Items]
Debt outstanding					$ 0		$ 4,407,000
Revolving Credit Facility [Member] \| Wells Fargo [Member]
Line of Credit Facility [Line Items]
Maximum borrowing capacity									$ 70,000,000
Amount Outstanding Under Senior Secured Revolving Credit Facility							0
Letters of Credit Outstanding					$ 286,000		384,000
Senior Secured Revolving Credit Facility, Unused Portion							69,616,000
Unused borrowing capacity fee	$ 26,000	$ 26,000	$ 51,000	$ 52,000
Revolving Credit Facility [Member] \| Wells Fargo [Member] \| Minimum [Member]
Line of Credit Facility [Line Items]
Commitment Fee Percentage of Unused Capacity	0.15%
Minimum ratio of consolidated adjusted EBITDA to consolidated cash interest expense (as such terms are defined in the Amended Credit Facility)			4.00
Revolving Credit Facility [Member] \| Wells Fargo [Member] \| Maximum [Member]
Line of Credit Facility [Line Items]
Commitment Fee Percentage of Unused Capacity	0.20%
Maximum ratio of consolidated total debt to consolidated adjusted EBITDA			2.25
Revolving Credit Facility [Member] \| LIBOR [Member] \| Wells Fargo [Member]
Line of Credit Facility [Line Items]
Variable rate (percent)					1.00%
Revolving Credit Facility [Member] \| LIBOR [Member] \| Wells Fargo [Member] \| Minimum [Member]
Line of Credit Facility [Line Items]
Variable rate (percent)			1.00%
Revolving Credit Facility [Member] \| LIBOR [Member] \| Wells Fargo [Member] \| Maximum [Member]
Line of Credit Facility [Line Items]
Variable rate (percent)			1.25%
Revolving Credit Facility [Member] \| Federal Funds Rate [Member] \| Wells Fargo [Member]
Line of Credit Facility [Line Items]
Variable rate (percent)			0.50%
Revolving Credit Facility [Member] \| Greater of Wells Fargo’s Prime Rate and the Federal Funds Rate Plus Half Percent [Member] \| Wells Fargo [Member] \| Minimum [Member]
Line of Credit Facility [Line Items]
Variable rate (percent)			0.00%
Revolving Credit Facility [Member] \| Greater of Wells Fargo’s Prime Rate and the Federal Funds Rate Plus Half Percent [Member] \| Wells Fargo [Member] \| Maximum [Member]
Line of Credit Facility [Line Items]
Variable rate (percent)			0.25%
Letter of Credit [Member] \| Wells Fargo [Member]
Line of Credit Facility [Line Items]
Maximum borrowing capacity								$ 5,000,000
Tumi Japan Credit Facilities [Member]
Line of Credit Facility [Line Items]
Debt outstanding							$ 4,407,000
Tumi Japan Credit Facilities [Member] \| Revolving Credit Facility [Member] \| Bank of Tokyo [Member]
Line of Credit Facility [Line Items]
Maximum borrowing capacity \| ¥						¥ 100,000,000
Variable rate (percent)			0.85%
Tumi Japan Credit Facilities [Member] \| Revolving Credit Facility [Member] \| Resona Bank Ltd. [Member]
Line of Credit Facility [Line Items]
Maximum borrowing capacity \| ¥						¥ 500,000,000
Variable rate (percent)			1.00%

Income Taxes (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
Income Taxes (Details) - USD ($) $ in Millions	Jun. 26, 2016	Jun. 28, 2015	Jun. 26, 2016	Jun. 28, 2015
Income Tax Disclosure [Abstract]
Consolidated Effective Tax Rate in Respect of Continuing Operations	35.70%	35.00%	32.60%	35.00%
Effective Income Tax Rate Reconciliation, Amount, Gain on Investments			$ 1.0

Segment Information (Details) $ in Thousands	3 Months Ended		6 Months Ended
Segment Information (Details) $ in Thousands	Jun. 26, 2016 USD ($)	Jun. 28, 2015 USD ($)	Jun. 26, 2016 USD ($) segment product_category	Jun. 28, 2015 USD ($)
Segment Reporting Information [Line Items]
Number of operating segments \| segment			4
Number of product categories \| product_category			3
Net sales	$ 147,517	$ 138,520	$ 265,859	$ 248,981
Operating income (loss)	20,769	25,280	28,530	34,843
Depreciation and amortization	6,152	5,067	11,938	10,101
Direct-to-Consumer North America [Member]
Segment Reporting Information [Line Items]
Net sales	68,023	65,399	125,191	117,401
Operating income (loss)	17,366	18,336	29,147	29,170
Depreciation and amortization	3,332	2,716	6,416	5,285
Direct to Consumer International [Member]
Segment Reporting Information [Line Items]
Net sales	14,988	7,397	27,738	13,896
Operating income (loss)	1,701	441	2,491	586
Depreciation and amortization	666	423	1,247	864
Indirect-to-Consumer North America [Member]
Segment Reporting Information [Line Items]
Net sales	25,732	25,534	44,604	47,770
Operating income (loss)	10,712	9,927	18,010	18,572
Depreciation and amortization	576	442	1,053	905
Indirect to consumer International [Member]
Segment Reporting Information [Line Items]
Net sales	38,774	40,190	68,326	69,914
Operating income (loss)	10,997	14,144	18,117	23,077
Depreciation and amortization	953	889	2,017	1,845
Non-Allocated CorporateExpenses [Member]
Segment Reporting Information [Line Items]
Net sales	0	0	0	0
Operating income (loss)	(20,007)	(17,568)	(39,235)	(36,562)
Depreciation and amortization	$ 625	$ 597	$ 1,205	$ 1,202

Concentration of Risk (Details)	3 Months Ended		6 Months Ended		12 Months Ended
Concentration of Risk (Details)	Jun. 26, 2016	Jun. 28, 2015	Jun. 26, 2016	Jun. 28, 2015	Dec. 31, 2015
Five Largest Suppliers [Member] \| Accounts Payable [Member] \| Supplier Risk [Member]
Concentration Risk [Line Items]
Concentration Risk, Percentage			47.00%		41.20%
Five Largest Suppliers [Member] \| Finished Goods [Member] \| Supplier Risk [Member]
Concentration Risk [Line Items]
Concentration Risk, Percentage	76.80%	84.80%	75.00%	84.10%
Five Largest Customers [Member] \| Accounts Receivable [Member] \| Credit Risk [Member]
Concentration Risk [Line Items]
Concentration Risk, Percentage			12.50%		23.80%
Five Largest Customers [Member] \| Sales Revenue, Goods, Net [Member] \| Credit Risk [Member]
Concentration Risk [Line Items]
Concentration Risk, Percentage	9.00%	13.00%	9.40%	12.50%

Share-based Compensation Plans and Awards (Option Activity) (Details)	6 Months Ended
	Jun. 26, 2016 USD ($) $ / shares shares
Number of Shares
Outstanding - Beginning Balance (shares) \| shares	1,281,933
Granted (shares) \| shares	18,939
Exercised (shares) \| shares	(235,190)
Forfeited or Expired (shares) \| shares	(33,855)
Outstanding - Ending Balance (shares) \| shares	1,031,827
Weighted Average Exercise Price
Weighted Average Exercise Price - Beginning Balance (usd per share) \| $ / shares	$ 21.69
Weighted Average Exercise Price, Granted (usd per share) \| $ / shares	19.75
Weighted Average Exercise Price, Exercised (usd per share) \| $ / shares	21.36
Weighted Average Exercise Price, Forfeited or Expired (usd per share) \| $ / shares	22.34
Weighted Average Exercise Price - Ending Balance (usd per share) \| $ / shares	$ 21.70
Weighted Average Remaining Contractual Term - Outstanding balance	7 years 8 months 12 days
Aggregate Intrinsic Value - Outstanding balance \| $	$ 5,116,497
Options vested and expected to vest [Abstract]
Options Vested and Expected to Vest (shares) \| shares	1,006,342
Weighted Average Exercise Price, Options Vested and Expected to Vest (usd per share) \| $ / shares	$ 21.70
Weighted Average Remaining Contractual Term, Options Vested and Expected to Vest	7 years 8 months 8 days
Aggregate Intrinsic Value, Options vested and expected to vest \| $	$ 4,989,524
Options vested and exercisable [Abstract]
Options Vested and Exercisable (shares) \| shares	483,775
Weighted Average Exercise Price, Options Vested and Exercisable (usd per share) \| $ / shares	$ 21.70
Weighted Average Remaining Contractual Term, Options Exercisable	7 years 3 months 24 days
Aggregate Intrinsic Value, Options Exercisable \| $	$ 2,397,894

Share-based Compensation Plans and Awards (Status of Nonvested Shares) (Details) - USD ($)	6 Months Ended
	Jun. 26, 2016	Jun. 28, 2015
Number of Units
Granted (shares)	18,939
Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted, Weighted Average Grant Date Fair Value (usd per share)	$ 7.92	$ 10.12
Aggregate intrinsic value of options exercised in period	$ 1,151,000
Cash received from exercise of stock options	5,508,000
Tax benefit realized from exercise of stock options	596,000
Total compensation cost not yet recognized, options	$ 3,282,000
Total compensation cost not yet recognized, period for recognition	1 year 5 months 25 days
Fair value of options vested during period	$ 2,516,000
Weighted Average Grant-Date Fair Value
Granted, Weighted Average Grant Date Fair Value (usd per share)	$ 7.92	10.12
RSUs [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted, Weighted Average Grant Date Fair Value (usd per share)	$ 19.75
Total compensation cost not yet recognized, period for recognition	1 year 9 months 26 days
Total compensation cost not yet recognized, RSUs	$ 2,005,000
Number of Units
Nonvested, Beginning Balance (shares)	157,754
Granted (shares)	130,624
Vested (shares)	0
Forfeited (shares)	(8,217)
Nonvested, Ending Balance (shares)	280,161
Weighted Average Grant-Date Fair Value
Nonvested, Weighted Average Grant Date Fair Value - Beginning Balance (usd per share)	$ 22.94
Granted, Weighted Average Grant Date Fair Value (usd per share)	19.75
Vested, Weighted Average Grant Date Fair Value (usd per share)	0.00
Forfeited, Weighted Average Grant Date Fair Value (usd per share)	23.08
Nonvested, Weighted Average Grant Date Fair Value - Ending Balance (usd per share)	21.45
Service-Based Restricted Stock Units [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted, Weighted Average Grant Date Fair Value (usd per share)	$ 19.75	23.20
Total compensation cost not yet recognized, period for recognition	2 years 6 months 12 days
Fair value of options vested during period	$ 784,000
Share-based compensation, vesting period	1 year
Total compensation cost not yet recognized, RSUs	$ 3,094,000
Number of Units
Nonvested, Beginning Balance (shares)	73,280
Granted (shares)	201,795
Vested (shares)	(33,703)
Forfeited (shares)	(2,688)
Nonvested, Ending Balance (shares)	238,684
Weighted Average Grant-Date Fair Value
Nonvested, Weighted Average Grant Date Fair Value - Beginning Balance (usd per share)	$ 23.19
Granted, Weighted Average Grant Date Fair Value (usd per share)	19.75	$ 23.20
Vested, Weighted Average Grant Date Fair Value (usd per share)	23.26
Forfeited, Weighted Average Grant Date Fair Value (usd per share)	23.25
Nonvested, Weighted Average Grant Date Fair Value - Ending Balance (usd per share)	$ 20.27