878726--8/28/2009--TUESDAY_MORNING

related topics

{stock, price, operating}

{personnel, key, retain}

{cost, operation, labor}

{customer, product, revenue}

{stock, price, share}

{provision, law, control}

{product, market, service}

{cost, regulation, environmental}

{condition, economic, financial}

{operation, natural, condition}

{competitive, industry, competition}

{debt, indebtedness, cash}

Risks Related to Our Business We face a number of risks in opening new stores and relocating or expanding existing stores. Poor economic conditions affect consumer spending and may significantly harm our business. Our business is intensely competitive and increased or new competition could have a material adverse effect on us. We must continuously attract buying opportunities for closeout merchandise and anticipate consumer demand as closeout merchandise becomes available. The loss of, or disruption in the operations of, our centralized distribution center would have a material adverse effect on our business and operations. Our freight costs and thus our cost of goods sold are impacted by changes in fuel prices. The loss or departure of one or more members of our senior management could have a material adverse effect on our business. If we are not able to generate strong cash flows from our operations, we will not be able to support capital expansion, operations and debt repayment. An increase in the cost or a disruption in the flow of our imported products may significantly decrease our sales and profits. Our success depends upon our marketing, advertising and promotional efforts. If we are unable to implement them successfully, or if our competitors are more effective than we are, our revenue may be adversely affected. If we do not attract and retain quality sales, distribution center and other associates in large numbers, as well as, experienced buying and management personnel, our performance could be adversely affected. Our results of operations are subject to seasonal and quarterly fluctuations, which could have a material adverse effect on our operating results or the market price of our common stock. A failure to grow or maintain our comparable store sales may adversely affect our results of operations. Risks Related to Our Common Stock Our certificate of incorporation, and bylaws and Delaware law contain provisions that could make it more difficult for a third party to acquire us without the consent of our board of directors. Our largest stockholder has significant influence over us, which may affect the rights of other stockholders. Sales of our common stock by our largest stockholder could depress our stock price. Because we do not presently have plans to pay dividends on our common stock, stockholders must look solely to appreciation of our common stock to realize a gain on their investment. The price of our common stock has fluctuated substantially over the past several years and may continue to fluctuate substantially in the future.

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878726--8/28/2009--TUESDAY_MORNING_CORP/DE