8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  July  21, 2005

Tuesday Morning Corporation

(Exact name of registrant as specified in its charter)

Delaware	0-19658	75-2398532
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)
6250 LBJ Freeway Dallas, Texas		75240
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code:  (972) 387-3562

Not applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition.

On July 21, 2005, Tuesday Morning Corporation, a Delaware corporation, issued a press release announcing net income, earnings per share and final net sales for the second quarter and six-months ended June 30, 2005.  The press release is attached to this Form 8-K as Exhibit 99.1 and incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits.

(c)           Exhibits

Exhibit Number	Exhibit Title
99.1	Press release dated July 21, 2005

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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
Date: July 21, 2005	By:	/s/ LOREN K. JENSEN
		Loren K. Jensen
		Executive Vice President and Chief
		Financial Officer

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EXHIBIT INDEX

Exhibit Number	Exhibit Title
99.1	Press release dated July 21, 2005

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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 5.2% INCREASE IN NET INCOME FOR THE SECOND QUARTER

DALLAS, TX – July 21, 2005 — Tuesday Morning Corporation (NASDAQ: TUES) today reported that net income for the second quarter ended June 30, 2005 increased 5.2 % to $10.5 million or $0.25 per diluted share, compared to $10.0 million or $0.24 for the second quarter of 2004.  For the six-months ended June 30, 2005, net income decreased 5.5% to $17.2 million or $0.41 per diluted share, compared to $18.2 million or $0.44 per share in the same prior year period.  Net income and diluted earnings per share for the current six-month period, excluding the after-tax lease adjustment recorded in the first quarter of 2005, were $19.6 million and $0.47, representing a 7.9% and 6.8% increase over the six-months ended June 30, 2004, respectively.

As previously reported, net sales for the second quarter of 2005 increased 3.8% to $218.8 million, from $210.7 million for the second quarter last year.  Comparable store sales for the second quarter of 2005 decreased 4.7%, compared to the second quarter of 2004.  On a year-to-date basis, sales are up 6.6% to $404.4 million, with a comparable store sales decrease of 2.7%, compared to the first six months of 2004.

“We are pleased that we achieved increased earnings per share for the fifteenth consecutive quarter,” said Kathleen Mason, President and Chief Executive Officer.   “Traffic in the current quarter was equivalent to last year’s strong second quarter.  The combination of clean, controlled inventories and an exciting array of incoming merchandise positions us well for the remainder of the year.”

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Tuesday Morning management will review second quarter financial results in a teleconference call on July 21, 2005 at 10:00 a.m. Eastern Time.

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 692 stores in 45 states during periodic “sale events.” Tuesday Morning is nationally known for bringing its more than 7.5 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 period ending December 31, 2004.

# # #

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Tuesday Morning Corporation

Consolidated Statement of Income

(In thousands, except per share data)

	Three Months Ended June 30,						Six-Months Ended June 30,
	2005			2004			2005			2004
	unaudited						unaudited
Net Sales	$	218,756		$	210,697		$	404,350		$	379,294
Cost of sales	137,338			134,307			250,374			236,892
Gross profit	81,418			76,390			153,976			142,402
Selling, general and administrative expenses	64,672			59,837			126,794			112,368
Operating income	16,746			16,553			27,182			30,034
Other income (expense):
Interest expense	(164		)	(472		)	(370		)	(883		)
Interest income	64			3			98			7
Other income (expense), net	239			206			432			447
Other income (expense)	139			(263		)	160			(429		)
Income before income taxes	16,885			16,290			27,342			29,605
Income tax expense	6,355			6,281			10,146			11,407
Net income	$	10,530		$	10,009		$	17,196		$	18,198
Earnings Per Share:
Net income per common share:
Basic	$	0.26		$	0.24		$	0.42		$	0.44
Diluted	$	0.25		$	0.24		$	0.41		$	0.44
Weighted average number of common shares:
Basic	41,204			41,047			41,167			41,013
Diluted	41,743			41,716			41,714			41,764

Consolidated Balance Sheets

(in thousands)

	June 30,				Dec 31,
	2005		2004		2004
	unaudited
Assets
Current assets:
Cash and cash equivalents	$	5,486	$	7,746	$	45,067
Inventories	207,742		204,532		189,132
Prepaid expenses and other assets	5,932		4,767		5,169
Deferred income taxes	5,991		5,106		5,991
Total current assets	225,151		222,151		245,359
Property and Equipment, net	87,940		81,304		86,332
Other long-term assets:
Deferred financing costs	770		1,042		877
Other assets	3,948		2,146		3,552
Total Assets	$	317,809	$	306,643	$	336,120
Liabilities and Stockholders’ Equity
Current liabilities:
Revolving credit facility, current portion	$	—	$	24,500	$	—
Accounts payable	69,419		66,985		72,722
Accrued liabilities	33,361		33,492		39,714
Income taxes payable	8,583		5,477		17,483
Total current liabilities	111,363		130,454		129,919
Revolving credit facility, excl. current portion	3,500		20,000		—
Deferred rent	4,304		—		—
Deferred income taxes	9,051		5,641		9,051
Total Liabilities	128,218		156,095		138,970
Stockholders’ equity	189,591		150,548		197,150
Total Liabilities and Stockholders’ Equity	$	317,809	$	306,643	$	336,120

Consolidated Statement of Cash Flows

(in thousands)

	Six-Months Ended June 30,
	2005			2004
	unaudited
Net cash flows from operating activities:
Net income	$	17,196		$	18,198
Adjustments to reconcile net income to net cash (used in) operating activities:
Depreciation and amortization	6,978			5,429
Amortization of financing fees	86			202
Cumulative effect of lease accounting adj.	3,898			—
Other non-cash charges	(62		)	43
Net change in operating assets and liabilities	(37,898		)	(72,357		)
Net cash used in operating activities	(9,802		)	(48,485		)
Net cash flows from investing activities:
Capital expenditures	(8,586		)	(11,858		)
Other	—			—
Net cash used in investing activities	(8,586		)	(11,858		)
Net cash flows from financing activities:
Net borrowings-revolving credit facility	3,500			44,500
Payment of cash dividend	(26,854		)	—
Other	2,161			53
Net cash provided by (used in) financing act.	(21,193		)	44,553
Net decrease in cash and cash equivalents	(39,581		)	(15,790		)
Cash and cash equivalents, beginning of period	45,067			23,536
Cash and cash equivalents, end of period	$	5,486		$	7,746