EXHIBIT 99.1
FOR IMMEDIATE RELEASE
CONTACT: ALAN MINKER
Sr. Vice President/Chief Financial Officer
(248) 712-7007
FRANKS NURSERY ANNOUNCES THIRD QUARTER RESULTS
TROY, MICHIGAN, December 11, 2003 -- Frank's Nursery & Crafts, Inc. (OTC: FNCN)
today reported a net loss of $14.5 million for the twelve weeks ended November
2, 2003 compared to a net loss of $16.0 million for the twelve weeks ended
November 3, 2002. The Company reported a net loss before reorganization items
and income taxes of $10.5 million for the forty weeks ended November 2, 2003
compared to a net loss before reorganization items and income taxes of $38.8
million for the forty weeks ended November 3, 2002.
Net sales for the twelve weeks ended November 2, 2003 were $40.3 million
compared to $39.6 million for the corresponding period in 2002, a comparable
store increase of 1.7%
Net sales for the forty weeks ended November 2, 2003 were $248.3 million
compared to $239.7 million for the corresponding period in 2002, a comparable
store increase of 3.6%.
Additionally, Franks Nursery and Congress Financial have entered into an
amendment to the current revolving credit facility which will eliminate the
accounts payable to inventory ratio covenant through the rest of this fiscal
year. The amendment also provides for the accounts payable to inventory ratio
covenant to be reset for the accounting periods in the fiscal year ended January
30, 2005.
Franks Nursery is the nation's largest lawn and garden specialty retailer and
operates 170 stores in 14 states. Franks Nursery is also a leading retailer of
indoor garden products and accessories, including silk floral arrangements, as
well as Christmas decor merchandise.
This press release contains forward-looking statements, which reflect
management's current views of future events and financial performance. These
forward-looking statements are based on many assumptions and factors detailed in
the Company's filings with the Securities and Exchange Commission, including the
effects of currency fluctuations, customer demand, fashion trends, competitive
market forces, uncertainties related to the effect of competitive products and
pricing, customer acceptance of the Company's merchandise mix and retail
locations, unseasonable weather, risks associated with foreign global sourcing,
including political instability and changes in import regulations, economic
conditions worldwide, and the ability of the Company to execute its business
plans effectively. Any changes in such assumptions or factors could produce
significantly different results. The Company undertakes no obligations to update
forward-looking statements, whether as a result of new information, future
events, or otherwise.
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FRANK'S NURSERY & CRAFTS, INC.
BALANCE SHEETS
(in thousands, except for par value)
November 2, November 3, January 26,
2003 2002 2003
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ASSETS (Unaudited) (Unaudited)
Restated Restated
Current assets:
Cash and cash equivalents $ 2,099 $ 2,570 $ 3,068
Accounts receivable, net 1,235 2,199 1,218
Merchandise inventory 70,452 62,096 39,050
Assets to be disposed of - 2,131 200
Prepaid expenses and other current assets 4,556 5,917 4,173
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Total current assets 78,342 74,913 47,709
Property, plant and equipment, net 56,754 54,561 56,102
Other assets and deferred charges 3,738 4,225 3,616
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Total assets $ 138,834 $ 133,699 $ 107,427
========= ========= =========
LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY
Current liabilities:
Accounts payable $ 30,661 $ 33,289 $ 18,009
Accrued expenses 19,138 19,671 16,402
Accrued expense payables pre-petition 1,100 2,520 1,902
Revolving credit facility 21,559 16,298 -
Revolving credit facility - related party 20,000 - 15,250
Current portion of long term debt 1,569 1,806 1,685
--------- --------- ---------
Total current liabilities 94,027 73,584 53,248
Long-term debt:
Senior debt, less current portion 24,066 26,389 24,730
Term Loan - related party, net of unamortized discount 17,543 17,360 16,323
--------- --------- ---------
Total long-term debt 41,609 43,749 41,053
Other liabilities 3,914 3,452 3,334
Shareholders' (deficit) equity:
Preferred stock $.001 par value, - - -
10,000,000 shares authorized, none issued
Common stock $.001 par value, 20 20 20
50,000,000 shares authorized, 16,926,957 shares
issued and outstanding and 3,073,043 shares
to be issued
Additional paid-in-capital 27,457 26,100 27,457
Accumulated deficit (28,193) (13,206) (17,685)
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Total shareholders' (deficit) equity (716) 12,914 9,792
--------- --------- ---------
Total liabilities and shareholders' (deficit) equity $ 138,834 $ 133,699 $ 107,427
========= ========= =========
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FRANK'S NURSERY & CRAFTS, INC.
STATEMENTS OF OPERATIONS (UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
Twelve Weeks Twelve Weeks
Ended Ended
November 2, November 3,
2003 2002
-------- --------
Restated
NET SALES $ 40,284 $ 39,612
OPERATING COSTS AND EXPENSES:
Cost of goods sold, including buying and occupancy 34,532 34,575
Selling, general, and administrative 17,850 17,278
Restructuring charges - 2,000
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Total operating costs and expenses 52,382 53,853
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LOSS FROM OPERATIONS (12,098) (14,241)
OTHER INCOME (EXPENSE):
Interest expense and amortization of debt costs (2,258) (1,811)
Sundry (expense) income (98) 93
-------- --------
Total other expense (2,356) (1,718)
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LOSS BEFORE INCOME TAXES (14,454) (15,959)
-------- --------
NET LOSS $(14,454) $(15,959)
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LOSS PER SHARE -- BASIC $ (0.72) $ (0.80)
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LOSS PER SHARE -- DILUTED $ (0.72) $ (0.80)
======== ========
WEIGHTED AVERAGE SHARES OUTSTANDING -- BASIC 20,000 20,000
======== ========
WEIGHTED AVERAGE SHARES OUTSTANDING -- DILUTED 20,000 20,000
======== ========
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FRANK'S NURSERY & CRAFTS, INC.
STATEMENTS OF OPERATIONS (UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
Forty Weeks Twenty-four Sixteen Weeks
Ended Weeks Ended Ended
November 2, November 3, May 19,
2003 2002 2002
----------- ----------- -------------
(Successor) (Successor) (Predecessor)
Restated Restated (1)
NET SALES $ 248,324 $ 128,682 $ 110,992
OPERATING COSTS AND EXPENSES:
Cost of goods sold, including buying and occupancy 181,486 99,221 80,756
Selling, general, and administrative 69,704 38,031 31,490
Restructuring charges 893 1,397 21,839
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Total operating costs and expenses 252,083 138,649 134,085
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LOSS FROM OPERATIONS (3,759) (9,967) (23,093)
OTHER INCOME (EXPENSES):
Interest expense (contractual interest of $6,210 for the sixteen weeks (6,881) (3,397) (2,583)
ended May 19, 2002) and amortization of debt costs
Sundry income 132 158 109
--------- --------- ---------
Total other expenses (6,749) (3,239) (2,474)
--------- --------- ---------
LOSS BEFORE REORGANIZATION ITEMS AND INCOME TAXES (10,508) (13,206) (25,567)
REORGANIZATION ITEMS:
Gain on cancellation of pre-petition liabilities - - 184,954
Fresh start adjustments - - 324
Extinguishment of debt - - (1,439)
--------- --------- ---------
Total reorganization items - - 183,839
--------- --------- ---------
NET (LOSS) EARNINGS $ (10,508) $ (13,206) $ 158,272
========= ========= =========
LOSS PER SHARE -- BASIC $ (0.53) $ (0.66)
========= =========
LOSS PER SHARE -- DILUTED $ (0.53) $ (0.66)
========= =========
WEIGHTED AVERAGE SHARES OUTSTANDING -- BASIC 20,000 20,000
========= =========
WEIGHTED AVERAGE SHARES OUTSTANDING -- DILUTED 20,000 20,000
========= =========
(1) The sixteen weeks ended May 19, 2002 have been restated to reflect a
reorganization item for extinguishment of debt of $1,439 belonging to the
Predecessor.
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