Tumi Holdings Announces Financial Results For The Fourth Quarter And Full Year 2012

Tumi Holdings, Inc. (NYSE: TUMI), the leading global brand of premium travel, business and lifestyle products and accessories, today announced its financial results for the fourth quarter and full year ended December 31, 2012.

For the fourth quarter of 2012:
  • Net sales increased 18.6% to $126.8 million from $107.0 million in the fourth quarter ended December 31, 2011. There were two extra sales days in the fourth quarter of 2012 compared to 2011.
  • For total Direct-to-Consumer channels, comparable store sales, including company-owned websites, increased 14.6%, following an increase of 14.8% in the fourth quarter of 2011.
  • Direct-to-Consumer North America comparable store sales (including e-commerce sales) increased 14.2%, following an increase of 15.4% in the fourth quarter of 2011. Excluding e-commerce sales, Direct-to-Consumer North America comparable store sales increased 9.4%, following an increase of 14.6% in the fourth quarter of 2011.
  • Direct-to-Consumer International comparable store sales (including e-commerce sales) increased 24.6% in local currency, following an increase of 8.3% in the fourth quarter of 2011. Excluding e-commerce sales, Direct-to-Consumer International comparable store sales increased 23.9% in local currency, following an increase of 2.9% in the fourth quarter of 2011. In U.S. dollars, Direct-to-Consumer International comparable store sales (including e-commerce sales) increased 19.2%, following an increase of 8.3% in the fourth quarter of 2011. Excluding e-commerce sales, Direct-to-Consumer International comparable stores sales increased 18.6% in U.S. dollars, following an increase of 2.9% in 2011.
  • Gross profit increased 15.6% to $73.2 million from $63.3 million in the fourth quarter of 2011. Gross margin was 57.7% compared to 59.2% in the fourth quarter of 2011.
  • Operating income increased 14.9% to $29.1 million from $25.3 million in the fourth quarter of 2011. Operating income margin was 23.0% compared to 23.7% in the fourth quarter of 2011. In the fourth quarter of 2012, the company incurred approximately $0.6 million in operating expenses in conjunction with the secondary common stock offering completed in November 2012. Excluding this one-time expense, operating income increased 17.4% to $29.7 million, and operating income margin was 23.5% in the fourth quarter of 2012.
  • Net income was $16.9 million, or $0.25 per diluted share based on 67.9 million diluted weighted average common shares outstanding, compared to $12.8 million, or $0.24 per diluted share, based on 52.5 million diluted weighted average common shares outstanding in the fourth quarter of 2011. Excluding the aforementioned one-time expense incurred in conjunction with the secondary common stock offering completed in November 2012 ($0.4 million after-tax), net income in the fourth quarter of 2012 was $17.3 million, or $0.25 per diluted share.
  • During the fourth quarter of 2012, Tumi opened three new stores.
  • At December 31, 2012, Tumi operated 114 company-owned stores.

Jerome Griffith, Chief Executive Officer, President and Director, commented, “We are very pleased with the strong finish to 2012, and the great momentum that we have built going into 2013. Importantly, we continue to leverage our market position as an iconic global premium lifestyle brand, broadening our product offering beyond travel-related merchandise and expanding into international markets where we are achieving exceptional growth despite difficult market conditions. During the quarter, we saw positive consumer reaction to our new product introductions, continued brand extensions and three new store openings in North America. We also saw improved retail performance and continued strength in our wholesale business in the EMEA zone, as well as continued growth in the Asia-Pacific region. Based on our recent successes, we continue to believe that significant long-term growth opportunities lie ahead for Tumi.”

For the year ended December 31, 2012:

  • Net sales increased 20.8% to $398.6 million from $330.0 million in the year ended December 31, 2011.
  • Gross profit increased 20.9% to $228.5 million, or 57.3% as a percentage of net sales, from $189.0 million, or 57.3% as a percentage of net sales, in 2011.
  • Operating income increased 18.6% to $71.7 million from $60.4 million in 2011. Excluding a one-time special bonus of $5.5 million to Tumi’s Chief Executive Officer, President and Director in connection with Tumi’s April 2012 initial public offering and the aforementioned one-time expense incurred in conjunction with the secondary common stock offering completed in November 2012 of $0.6 million, operating income increased 28.8% to $77.8 million, or 19.5% as a percentage of net sales, compared to $60.4 million, or 18.3% as a percentage of net sales, in 2011.
  • Net income was $36.8 million, or $0.58 per diluted share based on 63.3 million diluted weighted average common shares outstanding, compared to $16.6 million, or $0.32 per diluted share, based on 52.5 million diluted weighted average common shares outstanding in 2011.
  • Net income before preferred dividend expense (non-cash) and one-time costs, a non-GAAP financial measure, was $48.2 million, or $0.76 per diluted share. In 2012, this measure excluded $7.9 million of non-cash dividend expense on mandatorily redeemable preferred stock and preferred equity interests, the aforementioned one-time special bonus expense of $3.1 million (after-tax) and the aforementioned one-time expense in conjunction with the secondary common stock offering completed in November 2012 of $0.4 million (after-tax). In 2011, net income before preferred dividend expense (non-cash) and one-time costs was $39.4 million, or $0.75 per diluted share, which excluded $22.9 million of non-cash dividend expense on mandatorily redeemable preferred stock and preferred equity interests.
  • Capital expenditures were $20.9 million, compared to $14.5 million in 2011.

Balance Sheet Highlights as of December 31, 2012:

Cash and cash equivalents were $36.7 million as of December 31, 2012, compared with $32.7 million as of December 31, 2011. Inventories were $70.9 million, compared with $60.5 million as of December 31, 2011. The increase in inventory was primarily due to increased production to support new product introductions and sales and store growth.

Outlook

For fiscal 2013, net sales are expected to increase between 18% and 20%. This estimate assumes a comparable store sales growth for the Direct-to-Consumer North America segment in the mid- to high-single digit range and comparable store sales growth for the Direct-to-Consumer International segment in the mid-single digit range. Net income in 2013 is expected to increase between 53% and 59%. Diluted earnings per share are expected to be in the range of $0.82 to $0.86 per diluted share. This estimate assumes diluted weighted-average common shares outstanding of approximately 68.4 million.

Capital expenditures for fiscal 2013 are expected to be in the range of $21.0 million to $26.0 million.

Conference Call

Tumi Holdings, Inc. will host a conference call to discuss fourth quarter results today, March 20, 2013, at 4:30 p.m. ET. The general public can access the call by dialing 1-866-314-5232 (domestic) or 1-617-213-8052 (international). The passcode is 41154856. Please dial in 5 minutes before the start of the call. The conference call will also be webcast live in the Investor Relations section of www.tumi.com. A telephone replay of the call will be available through March 27, 2013; to access the replay, dial 1-888-286-8010 for domestic callers or 1-617-801-6888 for international callers and enter access code 90602965. The webcast will be accessible on the website for approximately 90 days after the call.

About Tumi

Tumi is the leading global brand of premium travel, business and lifestyle products and accessories. The brand is sold in approximately 200 stores from New York to Paris to London and Tokyo, as well as in the world’s top department, specialty and travel retail stores in over 75 countries.

Forward-Looking Statements

This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements reflect Tumi’s current views with respect to, among other things, future events and performance and Tumi’s preliminary estimates for the full year of fiscal 2013. 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 or assumptions prove to be incorrect, actual results may differ materially from those contemplated by a forward-looking statement. These risks and uncertainties include those set forth under “Risk Factors” in Tumi’s filings with the Securities and Exchange Commission, including its Quarterly Report on Form 10-Q for the quarter ended March 25, 2012, filed with the SEC on May 23, 2012. Forward-looking statements speak only as of the date on which they are made. Tumi expressly disclaims any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
 

TUMI HOLDINGS, INC. AND SUBSIDIARIES

Unaudited Selected Quarterly Financial Data
 
    For the three months ended
December 31,     December 31,
2012     2011
(In thousands, except per share data)
Net sales $ 126,847 $ 106,981
Year over year growth %(1) 19 % 19 %
Gross margin 73,186 63,330
Selling, general and administrative expenses 44,070 37,994
Operating income 29,116 25,336
Net income 16,937 12,784
Basic weighted average common shares outstanding(2) 67,866,667 52,536,224
Diluted weighted average common shares outstanding(2) 67,866,991 52,536,224
Basic earnings per common share(2) $ 0.25 $ 0.24
Diluted earnings per common share(2) $ 0.25 $ 0.24
Dividend expense on mandatorily redeemable preferred stock and preferred equity interests $ $ 5,714
 

(1) Year-over-year growth % compares net sales for a particular period with net sales for the comparable prior year interim period.

(2) Gives effect to the 1-to-2,000 reverse common stock split effected in March 2010, the 101.200929-for-1 common stock split effected on April 4, 2012 and the 1.037857-for-1 common stock split effective April 19, 2012.

   

TUMI HOLDINGS, INC. AND SUBSIDIARIES

Consolidated Statements of Operations

(In thousands, except share and per share data)
 
For the Years Ended December 31,
2012     2011     2010
Net sales $ 398,551     $ 329,968 $ 252,803
Cost of sales 170,092   140,954   106,533  
Gross margin 228,459   189,014   146,270  
OPERATING EXPENSES
Selling 24,929 21,957 16,865
Marketing 13,713 13,377 7,779
Retail operations 81,379 67,465 57,526
General and administrative 36,762   25,782   23,474  
Total operating expenses 156,783   128,581   105,644  
Operating income 71,676   60,433   40,626  
OTHER INCOME (EXPENSES)
Interest expense (1,392 ) (2,423 ) (4,753 )
Dividend expense on mandatorily redeemable preferred stock and preferred equity interests (7,892 ) (22,857 ) (20,779 )
Earnings from joint venture investment 845 587 529
Foreign exchange losses (287 ) (61 ) (975 )
Other non-operating income (expenses) 554   267   (167 )
Total other expenses (8,172 ) (24,487 ) (26,145 )
Income before income taxes 63,504 35,946 14,481
Provision for income taxes 26,721   19,354   14,377  
Net income $ 36,783   $ 16,592   $ 104  
Weighted average common shares outstanding:
Basic 63,304,838   52,536,224   52,536,224  
Diluted 63,304,948   52,536,224   52,536,224  
Basic earnings per common share $ 0.58   $ 0.32   $  
Diluted earnings per common share $ 0.58   $ 0.32   $  
 
   

TUMI HOLDINGS, INC. AND SUBSIDIARIES

 

Consolidated Balance Sheets

(In thousands, except share and per share data)
 
At December 31,
2012     2011
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 36,737 $ 32,735
Accounts receivable, less allowance for doubtful accounts of approximately $340 and $462 at December 31, 2012 and 2011, respectively 21,405 22,833
Other receivables 1,666 1,724
Inventories 70,866 60,456
Prepaid expenses and other current assets 3,233 3,056
Prepaid income taxes 384
Deferred offering costs 1,996
Deferred tax assets, current 3,851   2,218
Total current assets 138,142   125,018
Property, plant and equipment, net 47,004 36,500
Deferred tax assets, noncurrent 2,158 2,046
Joint venture investment 2,718 2,122
Goodwill 142,773 142,773
Intangible assets, net 130,946 131,219
Deferred financing costs, net of accumulated amortization of $2,758 and $2,539 at December 31, 2012 and 2011, respectively 701 920
Other assets 4,799   5,743
Total assets $ 469,241   $ 446,341
 
   

TUMI HOLDINGS, INC. AND SUBSIDIARIES

 

Consolidated Balance Sheets (continued)

(In thousands, except share and per share data)
 
At December 31,
2012     2011
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable $ 27,366 $ 27,308
Accrued expenses 29,503 26,683
Current portion of long-term debt 12,000
Income taxes payable   4,324  
Total current liabilities 56,869   70,315  
 
Revolving credit facility 45,000
Long-term debt 52,000
Other long-term liabilities 7,271 6,257
Mandatorily redeemable preferred stock and preferred equity interests 251,429
Deferred tax liabilities 49,016   47,623  
Total liabilities 158,156   427,624  
Commitments and contingencies
STOCKHOLDERS’ EQUITY
Common stock—$0.01 par value; 350,000,000 shares authorized, 68,144,473 issued and 67,866,667 shares outstanding as of December 31, 2012; 52,536,252 authorized and issued and 52,536,224 shares outstanding as of December 31, 2011 681 525
Preferred stock—$0.01 par value; 75,000,000 shares authorized and no shares issued or outstanding as of December 31, 2012; no shares authorized, issued or outstanding as of December 31, 2011
Additional paid-in capital 308,545 48,968
Treasury stock, at cost (4,874 ) (174 )
Retained earnings (accumulated deficit) 7,166 (29,617 )
Accumulated other comprehensive loss (433 ) (985 )
Total stockholders’ equity 311,085   18,717  
Total liabilities and stockholders’ equity $ 469,241   $ 446,341  
 
                       

TUMI HOLDINGS, INC. AND SUBSIDIARIES

 

Segment Results
 
Direct-to-

Consumer

North

America
    Direct-to-

Consumer

International
    Indirect-to-

Consumer

North

America
    Indirect-to-

Consumer

International
    Unallocated

Amounts
    Consolidated

Totals
(In thousands)
Year ended December 31, 2012
Net sales $ 180,291 $ 17,879 $ 95,934 $ 104,447 $ $ 398,551
Operating income $ 57,208 $ 964 $ 36,328 $ 30,368 $ (53,192 ) $ 71,676
Depreciation and amortization $ 5,889 $ 940 $ 832 $ 2,403 $ 1,440 $ 11,504
Year Ended December 31, 2011
Net sales $ 143,809 $ 16,198 $ 79,036 $ 90,925 $ $ 329,968
Operating income $ 44,650 $ 973 $ 29,195 $ 26,037 $ (40,422 ) $ 60,433
Depreciation and amortization $ 5,318 $ 1,154 $ 518 $ 1,890 $ 1,209 $ 10,089
Year Ended December 31, 2010
Net sales $ 106,942 $ 13,102 $ 62,866 $ 69,893 $ $ 252,803
Operating income $ 27,610 $ 613 $ 23,576 $ 21,874 $ (33,047 ) $ 40,626
Depreciation and amortization $ 5,323 $ 1,232 $ 398 $ 1,645 $ 1,190 $ 9,788
 
               

TUMI HOLDINGS, INC. AND SUBSIDIARIES

 

Unaudited Reconciliation of Net Income to

Net Income Before Preferred Dividend Expense (Non-Cash) and One-Time Costs

(In millions)
 
Three Months Ended     Year Ended
 
Dec 31, 2012     Dec 31, 2011     Dec 31, 2012     Dec 31, 2011
 
Net income 16.9 12.8 36.8 16.6
 
Dividend expense on mandatorily redeemable preferred stock and preferred equity interests 5.7 7.9 22.9
One-time special bonus to Tumi’s Chief Executive Officer, President and Director in connection with Tumi’s April 2012 initial public offering (after-tax)

3.1
One-time operating expenses in conjunction with secondary common stock offerings (after-tax) 0.4         0.4    
 
Net income before preferred dividend expense (non-cash) and one-time costs 1 17.3     18.5     48.2     39.4

Note

1 Totals may not foot due to rounding
                       
 

Non-GAAP Financial Measure

Net income before preferred dividend expense (non-cash) and one-time costs is a non-GAAP financial measure and is defined as net income plus dividend expense on mandatorily redeemable preferred stock and preferred equity interests and other one-time costs, such as the one-time special bonus to Tumi’s Chief Executive Officer, President and Director in connection with Tumi’s April 2012 initial public offering of $3.1 million (after-tax), and the one-time operating expenses incurred in conjunction with the secondary common stock offering of $0.4 million (after-tax). Net income before preferred dividend expense (non-cash) and one-time costs 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) and one-time costs 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) and one-time costs should not be viewed as a substitute for net income.

Comparable Store Sales Growth

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

Copyright Business Wire 2010

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