8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 12 OR 14(D)
OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported):

July 24, 2003

Tuesday Morning Corporation

(Exact name of registrant as specified in its charter)

Commission File Number 0-19658

Delaware	75-2398532
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification Number)

6250 LBJ Freeway

Dallas, Texas 75240

(972) 387-3562

www.tuesdaymorning.com

(Address, zip code and telephone number, including area code,
of registrant’s principal executive offices)

Not applicable

(Former name or former address,

if changed since last report)

ITEM 7.  FINANCIAL STATEMENTS AND EXHIBITS.

(a)Financial Statements of business acquired.

(None)

(b)Pro Forma Financial Information.

(None)

(c)Exhibits.

The following exhibit is filed herewith:

EXHIBIT NUMBER	EXHIBIT
99.1	Press release dated July 24, 2003 entitled: “Tuesday Morning Corporation Announces 40% Increase in Net Income for the Second Quarter”

ITEM 9.  REGULATION FD DISCLOSURE.

On July 24, 2003, Tuesday Morning Corporation, a Delaware corporation, issued a press release announcing second quarter and first six months net income and earnings per diluted share for the period ending June 30, 2003.  The press release is attached to this Form 8-K as Exhibit 99.1 and incorporated herein by reference.

[SIGNATURE PAGE FOLLOWS]

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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 hereunto duly authorized.

	TUESDAY MORNING CORPORATION
	/s/ Loren K. Jensen
	By:	Loren K. Jensen
	Its:	Executive Vice President and Chief Financial Officer
Date:  July 24, 2003

3

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

CONTACT:	Loren K. Jensen
	Chief Financial Officer
	TUESDAY MORNING CORPORATION
	972/934-7299
	Laurey Peat
	LAUREY PEAT + ASSOCIATES
	214/871-8787

TUESDAY MORNING CORPORATION

ANNOUNCES 40% INCREASE IN NET INCOME FOR THE SECOND QUARTER

DALLAS, TX – July 24, 2003 – Tuesday Morning Corporation (NASDAQ: TUES) today reported net income for the second quarter ending June 30, 2003. Net income increased 40% to $6.3 million, or $0.15 per diluted share, compared to $4.5 million, or $0.11 per diluted share, for the second quarter last year. For the six-month period ended June 30, 2003, net income increased 35% to $12.4 million, or $0.30 per diluted share, compared to $9.2 million, or $0.22 per diluted share for the same prior year period.

Tuesday Morning earlier reported that net sales increased 9.9% to $177.4 million for the second quarter of 2003 compared to $161.4 million for the same period in 2002. For the six-month period, sales are up 11.3% to $327.8 million compared to $294.4 million at mid-year 2002. Comparable store sales increased 1.5% for the quarter, bringing them to 2.8% for the full six months.

Kathleen Mason, President and CEO, stated, “I’m pleased to report these increases in net income, net sales, and comparable store sales, particularly in the current consumer environment. With increasingly efficient operations and an excellent inventory position, we are confident that we

will achieve our annual comparable store sales increase guidance of 2% to 4% as well as our previously issued earnings estimates for the full year.”

About Tuesday Morning

Tuesday Morning is the leading closeout retailer of upscale, decorative home accessories and famous-maker gifts in the United States. The company opened its first store in 1974 and currently operates 543 stores in 43 states during periodic “sale events.” Tuesday Morning is nationally known for bringing its more than 6.7 million loyal customers a treasure hunt of high-end, first quality, brand name merchandise at prices 50% to 80% below department and specialty stores and catalogues.

This press release contains forward-looking statements, within the meaning of the federal securities laws and the Private Securities Litigation Reform Act of 1995, which are based on management’s current expectations, estimates and projections.  Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “estimates,” variations of such words and similar expressions are intended to identify such forward-looking statements.  Forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ materially from those projected or implied in the forward-looking statements.  Such risks and uncertainties include: the success of new store openings, competitive factors, access to merchandise and unanticipated changes in consumer demand and economic trends, as well as other risks detailed in the company’s filings with the Securities and Exchange Commission, including the Company’s Annual Report on Form 10-K for the year ending December 31, 2002.

# # #

Tuesday Morning Corporation and Subsidiaries

Consolidated Statement of Operations

(In thousands, except per share data)

	Three Months Ended June 30,								Six-Months Ended June 30,
	2003			2002			% Change		2003			2002			% Change
	unaudited								unaudited
Net Sales	$	177,413		$	161,438		+10	%	$	327,767		$	294,362		+11	%
Cost of sales	115,436			107,085			+8	%	208,538			189,513			+10	%
Gross profit	61,977			54,353			+14	%	119,229			104,849			+14	%
Selling, general and administrative expenses	49,719			43,903			+13	%	94,914			83,633			+13	%
Operating income	12,258			10,450			+17	%	24,315			21,216			+15	%
Other income (expense):
Interest expense	(2,299		)	(3,152		)	-27	%	(4,702		)	(6,777		)	-31	%
Interest income	28			56			-50	%	57			185			-69	%
Other income (expense), net	237			78			+204	%	456			411			+11	%
Other income (expense)	(2,034		)	(3,018		)	-33	%	(4,189		)	(6,181		)	-32	%
Income before income taxes	10,224			7,432			+38	%	20,126			15,035			+34	%
Income taxes provision	3,932			2,933			+34	%	7,751			5,858			+32	%
Net income	$	6,292		$	4,499		+40	%	$	12,375		$	9,177		+35	%
Earnings Per Share:
Net income per common share:
Basic	$	0.16		$	0.11				$	0.31		$	0.23
Diluted	$	0.15		$	0.11				$	0.30		$	0.22
Weighted average number of common shares:
Basic	40,399			40,017					40,337			39,916
Diluted	41,451			41,341					41,330			41,182

Consolidated Balance Sheets

(in thousands)

	June 30,						Dec 31, 2002
	2003			2002
	unaudited
Assets
Current assets:
Cash and cash equivalents	$	9,180		$	25,255		$	31,929
Inventories	163,468			158,177			134,947
Prepaid expenses and other assets	4,822			4,291			4,265
Deferred income taxes	2,934			8			2,934
Total current assets	180,404			187,731			174,075
Property and Equipment, net	128,541			109,540			124,366
Less accumulated depreciation	(58,266		)	(52,837		)	(56,870		)
Net property and equipment	70,275			56,703			67,496
Other long-term assets:
Due from officers	—			103			—
Deferred financing costs	2,526			2,975			2,879
Other assets	1,014			455			844
Total Assets	$	254,219		$	247,967		$	245,294
Liabilities and Stockholders’ Equity
Current liabilities:
Current portion, long-term debt	$	—		$	5,686		$	650
Accounts payable	62,631			63,915			59,075
Accrued liabilities	26,000			19,562			25,790
Income taxes payable	—			—			13,365
Total current liabilities	88,631			89,163			98,880
Long-term debt, excluding current portion	69,000			123,674			72,574
Revolving credit facility, excl. current portion	10,000			—			—
Deferred taxes	4,665			2,995			4,665
Total Liabilities	172,296			215,832			176,119
Stockholders’ equity	81,923			32,135			69,175
	$	254,219		$	247,967		$	245,294

Consolidated Statement of Cash Flows

(in thousands)

	Six-Months Ended June 30,
	2003			2002
	unaudited
Net cash flows from operating activities:
Net income	$	12,375		$	9,177
Adjustments to reconcile net income to net cash (used in) operating activities:
Depreciation and amortization	4,690			3,558
Amortization of financing fees	354			930
Other non-cash charges	42			342
Net change in operating assets and liabilities	(38,849		)	(17,489		)
Net cash used in operating activities	(21,388		)	(3,482		)
Net cash flows from investing activities:
Capital expenditures	(7,458		)	(19,323		)
Other	—			72
Net cash used in investing activities	(7,458		)	(19,251		)
Net cash flows from financing activities:
Proceeds from revolving credit facility	10,000			—
Repayment of long-term debt	(4,224		)	(36,845		)
Other	321			2,563
Net cash provided by (used in) financing act.	6,097			(34,282		)
Net decrease in cash and cash equivalents	(22,749		)	(57,015		)
Cash and cash equivalents, beginning of period	31,929			82,270
Cash and cash equivalents, end of period	$	9,180		$	25,255