Tuesday Morning Corp New · OTC:TUEMQ
Tuesday Morning Corp New — Tuesday Morning — Investor Presentation (November 2020)
32 slides from Tuesday Morning Corp New's investor presentation, Nov 13, 2020
Slide 1: Post-Restructuring Investment Opportunity
Post - Restructuring Investment Opportunity October 2020 CONFIDENTIAL
Slide 2: Information Regarding Disclosures
2 CONFIDENTIAL Information Regarding Disclosures Tuesday Morning Corporation (“ TUESQ ” or the “Company”) is offering equity securities (collectively, the “Securities”) in a proposed private placement (the “Offering”). The Securities have not and will not be registered under the Securities Act of 19
Slide 3: Table of Contents
I. Executive Summary II. Key Investment Highlights III. Pro Forma Business Plan Table of Contents
Slide 4: I. Executive Summary
I. Executive Summary
Slide 5: Tuesday Morning at a Glance
5 CONFIDENTIAL Tuesday Morning at a Glance Note: Fiscal Year ends June 30. (1) Store footprint pro forma for 197 net store closings. (2) Includes add - back of approximately $3.4M in one - time restructuring fees. (3) Free cash flow calculated as Adj. EBITDA – Capex. Free cash flow conversion calcul
Slide 6: II. Key Investment Highlights
6 CONFIDENTIAL II. Key Investment Highlights
Slide 7: Tuesday Morning Key Investment Highlights
7 CONFIDENTIAL Tuesday Morning Key Investment Highlights 2 3 4 5 6 7 8 Broad Assortment of High - Quality Home and Lifestyle Products Provides customers with highly recognizable brands at affordable prices, positioned to benefit from closing of specialty and department stores 1 Compelling Competitiv
Slide 8: Compelling Competitive Position
8 CONFIDENTIAL Compelling Competitive Position PREMIUM QUALITY MASS QUALITY FACE VALUE GREAT DEALS Off - price retailer
Slide 9: Highly Attractive Off-price Business Model
9 CONFIDENTIAL Highly Attractive Off - price Business Model Off - price is an industry leading brick and mortar retail model and is well - positioned for the current environment • Unique and sustainable sourcing model, purchasing merchandise at exceptionally low prices and passing savings onto custo
Slide 10: High-Quality Home and Lifestyle Products
10 CONFIDENTIAL High - Quality Home and Lifestyle Products (1) Fiscal year ended June 30, 2020. (2) Seasonal category includes holiday - related textiles, home décor/furniture , etc. (3) Other category includes Baby, Accessories, Gift Wrap, Party, Bath & Body, Luggage and Stationary. The Company pro
Slide 11: Refreshed Merchandising Team and Strategy
11 CONFIDENTIAL Refreshed Merchandising Team and Strategy Tuesday Morning rebuilt and restructured its merchandising organization under the leadership of Paul Metcalf to successfully execute its off - price business model • Over the last 18 months, the Company re - aligned its merchandising, plannin
Slide 12: Current Rationalized Real Estate Footprint
12 CONFIDENTIAL Current Rationalized Real Estate Footprint Tuesday Morning has a pro forma national footprint of 490 stores in 40 states and 94 markets (DMA) with a meaningful presence in growth geographies such as Texas, California, Florida and the Southeastern (Sun Belt) United States CT VT NH ME
Slide 13: Flexible Vendor Base with Minimal Concentration
13 CONFIDENTIAL FY2019 Vendor Concentration Flexible Vendor Base with Minimal Concentration • Product assortment is sourced from over 1,800 vendors across multiple channels including direct from manufacturer, closeout sellers and other retailers • Tuesday Morning has minimal vendor concentration, wi
Slide 14: Simple, No-Frills Stores Provide a Treasure Hunt Destination
14 CONFIDENTIAL Simple , No - Frills Stores Provide a “Treasure Hunt” Destination The Company’s merchandising, store layout and co - tenancy strategy reflect its position as a premier destination for finding deals • Tuesday Morning is a unique destination shopping experience that appeals to customer
Slide 15: Loyal Customers Who Are Passionate About the Deal
15 CONFIDENTIAL Loyal Customers Who Are Passionate About the Deal Customers are s hopping a ficionados w ho a ppreciate the Company’s “treasure hunt” experience for premium products and great value Average Age : 53 Years Old (1) Household Income : 51% $75K+ Marital Status : 75 % Married Children Age
Slide 16: Highly Experienced Management Team
16 CONFIDENTIAL Since 2015, Tuesday Morning’s management has been further strengthened across all functions Highly Experienced Management Team Position Prior Management Experience Experience at Years Retail Experience EVP & CFO 27+ 4 + Stacie Shirley EVP, Store Operations & Real Estate 42+ 6+ Philip
Slide 17: III. Pro Forma Business Plan
17 CONFIDENTIAL III. Pro Forma Business Plan
Slide 18: Summary Actions Taken During Chapter 11 Proceeding
18 CONFIDENTIAL Renegotiated favorable lease terms with pro forma store landlords on 386 stores (1) 3 Summary Actions Taken During Chapter 11 Proceeding The Company has taken numerous actions to be well positioned to compete in the off - price / home goods retailer market following its emergence fro
Slide 19: Key Elements of Plan and Anticipated Pro Forma Savings
19 CONFIDENTIAL Key Elements of Plan and Anticipated Pro Forma Savings Effectuated through Bankruptcy • Tuesday Morning identified and executed 199 store closures based on several factors, including historical financial performance, future profitability given rent obligations, customer base and geog
Slide 20: Growth Opportunities
20 CONFIDENTIAL Growth Opportunities 2 3 4 Avenues for Organic Growth through Merchandise Strategy Strength of the business and merchandise strategy under new merchandise leadership allows the Company to continue executing off - price playbook 1 Reconfigured Competitive Landscape Exit of a significa
Slide 21: Pro Forma Financial Summary
21 CONFIDENTIAL Pro Forma Financial Summary ($MM) 1) Presented without UNICAP re - allocations. 2) CY21 includes nonrecurring restructuring fees of $3.4 million in January 2021. 3) No income tax has been factored. The NOL balance as of June 30, 2020 was approximately $140 million. 4) Adjusted EBITDA
Slide 22: Appendix
22 CONFIDENTIAL Appendix
Slide 23: Comp Sales Trend
23 CONFIDENTIAL Comp Sales Trend FY17 FY18 FY20 (1) Annual COMP 2.2% Annual COMP 3.9% Annual COMP 0.4% Two-Year STACKED 10.0% Two-Year STACKED 6.1% Two-Year STACKED 4.3% (1) FY20 Q3 and Q4 not included due to non-comparability as a result of COVID-19 and store closures. Note all amounts shown have n
Slide 24: Comp Sales Trend – Go Forward Stores
24 CONFIDENTIAL Comp Sales Trend – 490 Go Forward Stores FY17 FY18 FY20 (1) Annual COMP 3.2% Annual COMP 5.0% Annual COMP 1.7% Two-Year STACKED 12.2% Two-Year STACKED 8.2% Two-Year STACKED 6.7% (1) FY20 Q3 and Q4 not included due to non-comparability as a result of COVID-19 and store closures. Refle
Slide 25: Store Activity
25 CONFIDENTIAL Store Activity FY16A FY17A FY18A FY19A FY20F FY21F 1 Beginning Store Count 769 751 731 726 714 685 New 16 21 15 11 1 2 Closed (34) (41) (20) (23) (30) (197) Ending Store Count 751 731 726 714 685 490 Relocations 46 52 45 8 5 - Expansions 7 13 8 1 - - 1 Store activity through Q1 FY21
Slide 26: 13-Week Cash Flow Receipts and Disbursements
October November December January Receipts Store Receipts $ 11,279 $ 11,458 $ 12,445 $ 16,912 $ 16,037 $ 17,502 $ 15,467 $ 24,006 $ 23,682 $ 25,575 $ 15,594 $ 9,858 $ 10,600 $ 210,415 Sales Taxes Collected 819 832 904 1,228 1,164 1,271 1,123 1,743 1,719 1,857 1,132 716 770 15,276 Total Cash Receipts
Slide 27: Liquidity
CF Wk 1 CF Wk 2 CF Wk 3 CF Wk 4 CF Wk 5 CF Wk 6 CF Wk 7 CF Wk 8 CF Wk 9 CF Wk 10 CF Wk 11 CF Wk 12 CF Wk 13 Oct-24 Oct-31 Nov-07 Nov-14 Nov-21 Nov-28 Dec-05 Dec-12 Dec-19 Dec-26 Jan-02 Jan-09 Jan-16 II. Liquidity Pre-Petition ABL Opening ABL Balance 100 100 100 100 100 100 100 100 100 100 100 100 10
Slide 28: Ongoing Chain Q2 Performance
joing Chain Q2 Performance Ongoing Chain Q2 Merchandise Sales vs Forecast/LY (through 11-5-20) B/W) ‘Variance to Ly (Open Lv (Open Lv (Open z Act/Fest___Forecast__Stores) _| Forecast__Stores)_| Forecast Stores) october $91,927,480 $91,343,642 $64,554,265 $583,838 (S12,626,785)] 1% (20%) INovembermTo
Slide 29: Sales and Inventory vs LY – Ongoing Stores
CONFIDENTIAL Sales and Inventory vs LY – Ongoing Stores Note: Fiscal year ends June 30 . • Tuesday Morning experienced strong sales growth after reopening despite lower inventory levels • Sales hit an inflection point at the end of June as the inventory position continued to decline • Inventory leve
Slide 30: Comp Chain Store List: Sales, Transactions, and UPT
Comp Chain 490 Store List Sales, Transactions, and UPT FY21 Q1** Comp Metrics Sales (18.4%) $139,037,208 ‘Transactions (21.7%) 3,956,039, ur (9.7%) 38 Fy20 Comp Metrics Sales (12.6%) $657,689,969 ‘Transactions (11.6%) 18,854,463, UPT 4.1% 4s Fy19 Comp Metrics Sales 1.7% $745,063,734 ‘Transactions 2.
Slide 31: Information Presentation September 2020
Confidential Information Presentation September 2020 CONFIDENTIAL
Slide 32: FY2019 to FY2022E Margin Enhancement
3 CONFIDENTIAL 1.9% 6.7% ( 0.4% ) 0.7% 2.4% 1.4% 0.6% 1.2% (1.2%) 0.2% - 3.0% 6.0% 9.0% 12.0% FY2019 Adj. EBITDA Margin Product Cost Employee Costs Rent Advertising Other Store Expenses Distribution Center Expenses Corporate Expenses Other FY2022E Adj. EBITDA Margin FY2019 to FY2022E Margin Enhancem
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