Tumi Holdings Announces Financial Results For The First Quarter Of 2012

Forward-Looking Statements

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

TUMI HOLDINGS, INC., SUBSIDIARIES AND CONTROLLED AFFILIATE
Consolidated Statements of Operations
(In thousands, except share and per share data)
			Three Months Ended
			March 25, 2012					March 27, 2011
			(unaudited)
Net sales			$	80,021				$	65,917
Cost of sales				34,616					28,779
Gross margin				45,405					37,138
Operating expenses
Selling				4,988					4,322
Marketing				2,740					2,973
Retail operations				17,149					14,454
General and administrative				7,252					6,006
Total operating expenses				32,129					27,755
Operating income				13,276					9,383
Other (expenses) income
Interest expense				(517	)				(781	)
Dividend expense on mandatorily redeemable preferred stock and preferred equity interests				(6,286	)				(5,714	)
Earnings from joint venture investment				264					27
Foreign exchange (losses) gains				(11	)				366
Other non-operating income				172					14
Total other expenses				(6,378	)				(6,088	)
Income before income taxes				6,898					3,295
Provision for income taxes				4,001					3,378
Net income (loss)			$	2,897				$	(83	)
Weighted average common shares outstanding: Basic and diluted				52,536,224					52,536,224
Basic and diluted earnings (loss) per common share			$	0.06				$	(0.00	)

TUMI HOLDINGS, INC., SUBSIDIARIES AND CONTROLLED AFFILIATE
Condensed Consolidated Balance Sheets
(In thousands, except share and per share data)
			At
			March 25, 2012					December 31, 2011
			(unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents			$	30,544				$	32,735
Accounts receivable, less allowance for doubtful accounts of approximately $473 and $462 at March 25, 2012 and December 31, 2011, respectively				22,224					22,833
Other receivables				1,841					1,724
Inventories				63,061					60,456
Prepaid expenses and other current assets				3,744					3,056
Deferred offering costs				3,422					1,996
Deferred tax assets, current				2,218					2,218
Total current assets				127,054					125,018
Property, plant and equipment, net				36,799					36,500
Deferred tax asset, noncurrent				2,046					2,046
Joint venture investment				2,386					2,122
Goodwill				142,773					142,773
Intangible assets, net				131,151					131,219
Deferred financing costs, net of accumulated amortization of $2,633 and $2,539 at March 25, 2012 and December 31, 2011, respectively				826					920
Other assets				5,290					5,743
Total assets			$	448,325				$	446,341
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable			$	23,982				$	27,308
Accrued expenses				23,464					26,683
Current portion of long-term debt				16,000					12,000
Income taxes payable				2,800					4,324
Total current liabilities				66,246					70,315
Long-term debt				48,000					52,000
Other long-term liabilities				6,582					6,257
Mandatorily redeemable preferred stock and preferred equity interests				257,715					251,429
Deferred tax liabilities				47,623					47,623
Total liabilities				426,166					427,624
STOCKHOLDERS' EQUITY
Common stock - $0.01 par value; 52,536,252 shares authorized and issued; 52,536,224 shares outstanding				525					525
Additional paid-in capital				48,968					48,968
Treasury stock, at cost				(174	)				(174	)
Accumulated deficit				(26,720	)				(29,617	)
Accumulated other comprehensive loss				(440	)				(985	)
Total stockholders' equity				22,159					18,717
Total liabilities and stockholders' equity			$	448,325				$	446,341

TUMI HOLDINGS, INC., SUBSIDIARIES AND CONTROLLED AFFILIATE
Segment Results
(In thousands)
				Three Months Ended
				March 25, 2012					March 27, 2011
				(unaudited)
Net sales
Direct-to-Consumer North America				$	34,388				$	26,126
Direct-to-Consumer International					3,229					3,383
Indirect-to-Consumer North America					17,056					16,733
Indirect-to-Consumer International					25,348					19,675
Total				$	80,021				$	65,917
Operating income
Direct-to-Consumer North America				$	9,255				$	6,445
Direct-to-Consumer International					(290	)				120
Indirect-to-Consumer North America					6,492					6,051
Indirect-to-Consumer International					8,094					5,943
Non-allocated corporate expenses					(10,275	)				(9,176	)
Total				$	13,276				$	9,383

TUMI HOLDINGS, INC., SUBSIDIARIES AND CONTROLLED AFFILIATE
Reconciliation of Net Income to Net Income (Loss) Before Preferred Dividend Expense (Non-Cash)
(In millions)
				Q1 2012				Q1 2011
Net income (loss) 1				2.9				(0.1)
Dividend expense on mandatorily redeemable preferred stock and preferred equity interests				6.3				5.7
Net income (loss) before preferred dividend expense (non-cash) 1				9.2				5.6
Notes
1 Tax of 30% on pretax income before dividend expense; 58% on pretax income after dividend expense

Non-GAAP Financial Measure

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

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