Founder, BWS Financial Inc

Hamed Khorsand

Founder

Independent Stock Specific Research

BWS Financial Inc

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Equity Bottom-Up

<ul>
<li>TUEM disclosed a new financing round underscoring the financial distress the business has been under since reporting March quarter financials.</li>
<li>TUEM is raising $35 million in convertible debt financing. The debt is convertible at a material discount to TUEM’s closing price prior to the news</li>
<li>TUEM requested a financial viability exception from NASDAQ to bypass a shareholder vote asserts the turmoil the business has been under in recent months</li>
</ul>


TUEM disclosed a new financing round underscoring the financial distress the business has been under since reporting March quarter financials.
TUEM is raising $35 million in convertible debt financing. The debt is convertible at a material discount to TUEM’s closing price prior to the news
TUEM requested a financial viability exception from NASDAQ to bypass a shareholder vote asserts the turmoil the business has been under in recent months


<ul>
<li>TUEM reported fiscal third quarter (March) results depicting how its business model looks when sales slowdown.</li>
<li>The softness in sales was combined with TUEM getting full order placement from vendors when completion rates were running less than 70 percent in prior quarters</li>
<li>TUEM announced a credit facility of $110 million, providing ample liquidity and flexibility heading into the holiday shopping season. It also removes one of the biggest overhangs on the stock</li>
</ul>


TUEM reported fiscal third quarter (March) results depicting how its business model looks when sales slowdown.
The softness in sales was combined with TUEM getting full order placement from vendors when completion rates were running less than 70 percent in prior quarters
TUEM announced a credit facility of $110 million, providing ample liquidity and flexibility heading into the holiday shopping season. It also removes one of the biggest overhangs on the stock


<ul>
<li>TUEM reported fiscal second quarter (December) results surpassing our expectations as the Company maintained a steady flow of inventory at its stores during the holiday shopping season</li>
<li>TUEM’s inventory is the underscoring importance in the performance. Consumers responded to the improved merchandise quality and without TUEM having to undertake any promotions</li>
<li>COVID-19 slowed the momentum towards the end of the quarter, but this should prove temporary heading into the warmer months of 2022</li>
</ul>


TUEM reported fiscal second quarter (December) results surpassing our expectations as the Company maintained a steady flow of inventory at its stores during the holiday shopping season
TUEM’s inventory is the underscoring importance in the performance. Consumers responded to the improved merchandise quality and without TUEM having to undertake any promotions
COVID-19 slowed the momentum towards the end of the quarter, but this should prove temporary heading into the warmer months of 2022


<ul>
<li>TUEM is scheduled to report fiscal second quarter (December) results on February 3, 2022 in what could become a binary event for the stock price</li>
<li>TUEM built up inventory levels heading into the holiday shopping season. Expectations are TUEM would have been able to capitalize on having well stocked stores while other retailers were struggling.</li>
<li>The wrench in the quarter was the effects the Omicron variant had on shoppers going to stores. TUEM relies on foot traffic to generate sales</li>
</ul>


TUEM is scheduled to report fiscal second quarter (December) results on February 3, 2022 in what could become a binary event for the stock price
TUEM built up inventory levels heading into the holiday shopping season. Expectations are TUEM would have been able to capitalize on having well stocked stores while other retailers were struggling.
The wrench in the quarter was the effects the Omicron variant had on shoppers going to stores. TUEM relies on foot traffic to generate sales


<ul type="disc"><li>The turnaround at Tuesday Morning (TUEM) remains a work in progress after the Company reported fiscal first quarter (September) results showing comparable sales increased by 3.2 percent, though earnings missed our estimate.</li></ul> <ul type="disc"><li>Fiscal first quarter was not expected to have stellar results from TUEM. Instead, our expectation was for modest improvement in operating structure from the June quarter.</li></ul> <ul type="disc"><li>TUEM reported sales of $176.9 million compared to our estimate of $183.6 million. The biggest change in the quarter was TUEM closing one store in July because of a lease expiration.</li></ul> <ul type="disc"><li>Fiscal first quarter served more as an update on the turnaround the current management team is undertaking. TUEM was building inventory and realigning the in-store experience. The investment story in owning shares of TUEM is based on what these changes could create in subsequent quarters.</li></ul>

The turnaround at Tuesday Morning (TUEM) remains a work in progress after the Company reported fiscal first quarter (September) results showing comparable sales increased by 3.2 percent, though earnings missed our estimate. Fiscal first quarter was not expected to have stellar results from TUEM. Instead, our expectation was for modest improvement in operating structure from the June quarter. TUEM reported sales of $176.9 million compared to our estimate of $183.6 million. The biggest change in the quarter was TUEM closing one store in July because of a lease expiration. Fiscal first quarter served more as an update on the turnaround the current management team is undertaking. TUEM was building inventory and realigning the in-store experience. The investment story in owning shares of TUEM is based on what these changes could create in subsequent quarters.

United States

Tuesday Morning Corporation retails home furnishing, gifts, and related items. The Company offers bath and body, bed, craft, dining, kitchen, furniture, fashion accessories and products. Tuesday Morning serves customers in the United States.

Tuesday Morning (TUEM US)

TUEM: The Morning After…Dilution

TUEM entered into a debt financing agreement where the conversion price of the debt to equity would dilute current shareholders to less than 20...

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TUEM: Macro Driven Morning

TUEM experienced a decline in sales in the month of March driving down gross margin and widening the net loss of the quarter. A $110M credit line...

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TUEM: Inventory Leading Turnaround

Merchandise refresh has provided some momentum to sales with consumers responding to the new inventory without TUEM needing to undertake promotions.

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TUEM: Preview of the Holiday Quarter

The recent wave of COVID-19 could have impacted sales towards the end of quarter. TUEM having stocked shelves ahead of the holiday season could...

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TUEM: Rebuilding a Business

TUEM built up inventory ahead of the holiday season, which could work in TUEM's favor with many retailers suffering from lack of merchandise this...

BWS Financial Inc