EXHIBIT 99.1
FOR IMMEDIATE RELEASE
CONTACT: ALAN MINKER
Interim Chief Operating Officer
Sr. Vice President/Chief Financial Officer
(248) 712-7007
FRANK'S NURSERY & CRAFTS, INC. ANNOUNCES 2003 YEAR END RESULTS
TROY, MICHIGAN, April 23, 2003 -- Frank's Nursery & Crafts, Inc. (OTC: FNCN)
today reported financial results for fiscal year 2003 which ended January 25,
2004. Net sales for the 2003 fiscal year were $316.9 million versus $315.1
million in the 2002 fiscal year, an increase of 0.5%. Fiscal year 2003
comparable store sales, or sales in stores open at least a year, were up 0.6%
compared to fiscal year 2002.
Franks had a net loss before income taxes and reorganization items for the 2003
fiscal year of $23.8 million compared to a net loss before income taxes and
reorganization items of $43.3 million for the 2002 fiscal year.
With spring upon us, Franks' associates are working diligently to prepare for
the busy spring lawn and garden season. They are carefully stocking high quality
live goods and other lawn and garden supplies. In addition, all Franks' stores
now have the new and improved custom silk floral area, patio furniture sets and
grills. Franks is proud to offer customers everything beautiful for their
patios, decks, lawns and gardens.
Franks Nursery is the nation's largest lawn and garden specialty retailer and
operates 169 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. Franks was recently named "Michigan's Best
Nursery/Garden Center" in 2004 by the Detroit News readers.
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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STATEMENTS OF OPERATIONS
The fiscal year ended January 25, 2004 ("2003"), the Thirty-six weeks ended
January 26, 2003, the Sixteen weeks ended May 19, 2002, and the fiscal
year ended January 27, 2002 ("2001")
(in thousands, except per share data)
Thirty-six Sixteen Weeks
Weeks Ended Ended
January 26, May 19,
2003 2003 2002 2001
----------------- ------------- ---------------- ---------------
(Successor) (Successor) (Predecessor) (Predecessor)
Restated Restated
NET SALES $ 316,870 $ 204,156 $ 110,992 $ 371,417
OPERATING COSTS AND EXPENSES:
Cost of goods sold, including
buying and occupancy 238,640 153,953 80,756 297,850
Selling, general, and administrative 90,026 61,898 31,490 109,404
Restructuring charges 2,875 1,127 21,839 40,887
Early extinguishment of debt - - - 4,230
Amortization of goodwill - - - 1,631
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Total operating costs and expenses 331,541 216,978 134,085 454,002
LOSS FROM OPERATIONS (14,671) (12,822) (23,093) (82,585)
OTHER (EXPENSES) INCOME:
Interest expense (contractual interest of $6,210 for (9,107) (5,034) (2,583) (10,632)
the sixteen weeks ended May 19, 2002) and
amortization of debt costs
Sundry (expense) income (19) 171 109 1,221
--------- --------- --------- ---------
Total other expenses (9,126) (4,863) (2,474) (9,411)
--------- --------- --------- ---------
LOSS BEFORE REORGANIZATION ITEMS (23,797) (17,685) (25,567) (91,996)
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 $ (23,797) $ (17,685) $ 158,272 $ (91,996)
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LOSS PER SHARE - BASIC $ (1.19) $ (0.88)
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LOSS PER SHARE - DILUTED $ (1.19) $ (0.88)
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WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC 20,000 20,000
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WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED 20,000 20,000
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FRANK'S NURSERY & CRAFTS, INC.
Balance Sheets
(Dollars in thousands, except for par value)
January 25, January 26,
2004 2003
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Restated
ASSETS
Current assets:
Cash and cash equivalents $ 1,026 $ 3,068
Accounts receivable, net 2,258 1,218
Merchandise inventory, net 42,283 39,050
Assets to be disposed of - 200
Prepaid expenses and other current assets 3,758 4,173
--------- ---------
Total current assets 49,325 47,709
Property, equipment and leasehold improvements, net 54,934 56,102
Other assets and deferred charges 4,262 3,616
--------- ---------
Total assets $ 108,521 $ 107,427
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LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY
Current liabilities:
Accounts payable $ 19,978 $ 18,009
Accrued expenses 19,157 16,402
Accrued expenses payable pre-petition 217 1,902
Revolving credit facility 7,738 -
Revolving credit facility - related party 28,000 15,250
Current portion of long-term debt 1,255 1,685
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Total current liabilities 76,345 53,248
Long-term debt:
Senior debt, less current portion 23,460 24,730
Term Loan - related party, net of unamortized discount 17,909 16,323
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Total long-term debt 41,369 41,053
Other liabilities 4,773 3,334
Shareholders' (deficit) equity:
Successor common stock $.001 par value, 20 20
50,000,000 shares authorized, 17,217,241 shares
issued and outstanding and 2,782,759 shares to be issued
Additional paid-in-capital 27,496 27,457
Accumulated deficit (41,482) (17,685)
--------- ---------
Total shareholders' (deficit) equity (13,966) 9,792
--------- ---------
Total liabilities and shareholders' (deficit) equity $ 108,521 $ 107,427
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