Exhibit 99.1
Linens 'n Things Announces Second Quarter 2003 Results
CLIFTON, N.J.--(BUSINESS WIRE)--July 23, 2003--Linens 'n Things,
Inc. (NYSE: LIN) one of the leading national large format retailers of
home textiles, housewares and home accessories today announced net
income for the second quarter ended July 5, 2003 of $5.7 million or
$0.13 per share on a fully diluted basis, compared with $5.6 million
or $0.13 per share for the same period last year. Net sales increased
13.4% to $523.7 million for the second quarter ended July 5, 2003, up
from $461.9 million for the same period last year. Comparable store
net sales for the second quarter increased approximately 0.1%.
"We are pleased to see an improvement in the trend in our
business. We feel we are delivering a better shopping experience for
our guests and we believe that our initiatives are the driving force
behind much of the improvements," said Norman Axelrod, Chairman and
Chief Executive Officer.
Net income for the 26-week period ended July 5, 2003 was $7.8
million, or $0.17 per share on a fully diluted basis, compared with
$10.7 million, or $0.26 per share for the same period last year. Net
sales increased 9.3% to $1,004.1 million for the 26-week period ended
July 5, 2003, up from $918.8 million for the same period last year.
Comparable store net sales for the 26-week period ended July 5, 2003
decreased approximately 1.5%.
During the second quarter, the Company opened 16 new stores, and
closed 1 store, as compared with opening 21 stores and closing 2
stores during the same period last year. Year to date, the Company
opened 32 stores and closed 8 stores increasing its total square
footage to 14.3 million, as compared with opening 28 stores and
closing 4 stores during the same period last year. The Company
currently expects to open approximately 55 stores in 2003, further
expanding its presence as a leading retailer of home furnishings. For
2003, capital expenditures are expected to be approximately $80 to $85
million.
2003 Business Outlook
For the third quarter of 2003, sales are targeted to grow between
9% and 12% and comp sales are targeted to be flat to low single
digits. Based on the Company achieving this sales plan, the Company is
comfortable with a current range of estimates of approximately $0.44
to $0.49 for diluted earnings per share for the third quarter of 2003.
Fiscal 2003 is a 52-week year with the fourth quarter being a
13-week period versus a 14-week period last year. For the fourth
quarter of 2003, the Company is targeting sales to grow between 8% and
10% while comp sales are targeted to be in the low to mid single
digits. Based on the Company achieving this sales plan, the Company is
comfortable with a range of estimates of approximately $0.98 to $1.04
for the fourth quarter of 2003.
This outlook is based on current expectations and assumptions and
includes "forward looking statements" within the meaning of Section
27A of the Securities Act and Section 21E of the Securities Exchange
Act. The Company can give no assurances that such expectations and
assumptions will prove correct. The Company does not intend to update
such outlook other than in connection with regularly scheduled
earnings releases.
Linens 'n Things, with 2002 sales of $2,184.7 million, is one of
the leading, national large format retailers of home textiles,
housewares and home accessories. As of July 5, 2003 the Company was
operating 415 stores in 45 states and in 4 provinces across Canada.
More information about Linens 'n Things can be found online at
www.lnt.com.
The foregoing contains forward-looking statements within the
meaning of The Private Securities Litigation Reform Act of 1995. The
statements are made a number of times and may be identified by such
forward-looking terminology as "expect," "believe," "may," "will,"
"could", "intend," "plan," "target" and terms or variations of such
terms. All of our information and statements regarding our outlook for
the future including future revenues, comparable sales performance,
earnings and other future financial and stores' performance,
constitutes forward-looking statements. All our forward-looking
statements are based on our current expectations, assumptions,
estimates and projections about our Company and involve certain
significant risks and uncertainties, including levels of sales, store
traffic, acceptance of product offerings and fashions and our ability
to anticipate and successfully respond to changing consumer tastes and
preferences, the success of our new business concepts and seasonal
concepts, the performance of our new stores, competitive pressures
from other home furnishings retailers, the success of the Canadian
expansion, availability of suitable future store locations, schedule
of store expansion and of planned closings, the impact of the
bankruptcies and consolidations in our industry, unusual weather
patterns, the impact on consumer spending as a result of the slower
consumer economy, a highly promotional retail environment, any
significant variations between actual amounts and the amounts
estimated for those matters identified as our critical accounting
estimates as well as other significant accounting estimates made in
the preparation of our financial statements and our ability to
successfully implement our strategic initiatives. Actual results may
differ materially from such forward-looking statements. These and
other important risk factors are included in the "Risk Factors"
section of the Company's Registration Statement on Form S-3 as filed
with the Securities and Exchange Commission on June 18, 2002, and in
our most recent Annual Report on Form 10-K and subsequent reports
filed with the Securities and Exchange Commission. You are urged to
consider all such factors. In light of the uncertainty inherent in
such forward-looking statements, you should not consider their
inclusion to be a representation that such forward-looking matters
will be achieved. The Company assumes no obligation for updating any
such forward-looking statements to reflect actual results, changes in
assumptions or changes in other factors affecting such forward-looking
statements.
LINENS 'N THINGS, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
Thirteen-Weeks Twenty-Six Weeks
Ended Ended
------------------- ---------------------
July 5, June 29, July 5, June 29,
2003 2002 2003 2002
--------- --------- --------- ---------
(unaudited) (unaudited)
Net sales $523,672 $461,918 $1,004,143 $918,829
Cost of sales, including
buying and
warehousing costs 304,974 269,052 587,780 544,764
--------- --------- ----------- ---------
Gross profit 218,698 192,866 416,363 374,065
Selling, general and
administrative expenses 209,180 183,076 403,405 355,280
--------- --------- ----------- ---------
Operating profit 9,518 9,790 12,958 18,785
Interest expense, net 288 753 364 1,428
--------- --------- ----------- ---------
Income before provision for
income taxes 9,230 9,037 12,594 17,357
Provision for income taxes 3,526 3,451 4,812 6,631
--------- --------- ----------- ---------
Net income $5,704 $5,586 $7,782 $10,726
========= ========= =========== =========
Per share of common stock:
Basic
- -----
Net income per share $0.13 $0.14 $0.18 $0.26
Weighted average shares
outstanding 44,118 40,940 44,108 40,792
Diluted
- -------
Net income per share $0.13 $0.13 $0.17 $0.26
Weighted average shares
outstanding 44,545 42,320 44,534 42,011
LINENS 'N THINGS, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(in thousands)
July 5, June 29,
2003 2002
----------- -----------
Assets (unaudited)
Current assets:
Cash and cash equivalents $9,446 $20,069
Inventories 715,644 624,431
Accounts receivable 39,027 32,054
Prepaid expenses and other 29,940 11,547
Current deferred taxes -- 21,268
----------- -----------
Total current assets 794,057 709,369
Property and equipment, net 376,006 342,318
Other non-current assets, net 28,891 30,412
----------- -----------
Total assets $1,198,954 $1,082,099
=========== ===========
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $279,607 $253,896
Accrued expenses and other current
liabilities 125,303 130,990
Short-term borrowings 16,874 15,884
Current deferred taxes 8,676 --
----------- -----------
Total current liabilities 430,460 400,770
Other long-term liabilities 89,144 71,784
----------- -----------
Total liabilities 519,604 472,554
Shareholders' equity 679,350 609,545
----------- -----------
Total liabilities and shareholders'
equity $1,198,954 $1,082,099
=========== ===========
LINENS 'N THINGS, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(in thousands)
Twenty-Six Weeks
Ended
-----------------
July 5, June 29,
2003 2002
-------- --------
(unaudited)
Cash Flows From Operating Activities
Net income $7,782 $10,726
Depreciation and amortization 26,346 21,499
Change in working capital (75,816) (62,022)
-------- --------
Net cash used in operating activities (41,688) (29,797)
-------- --------
Cash Flows From Investing Activities
Additions to property and equipment (51,965) (50,979)
-------- --------
Cash Flows From Financing Activities
Net proceeds from common stock issuance -- 95,814
Proceeds from common stock issued under stock
incentive plans 1,305 3,890
Increase (decrease) in short-term borrowings 14,690 (14,578)
Issuance of treasury stock 255 268
-------- --------
Net cash provided by financing activities 16,250 85,394
-------- --------
Effect of exchange rate changes on cash and cash
equivalents 244 14
Net (decrease) increase in cash and cash equivalents (77,159) 4,632
Cash and cash equivalents at beginning of period 86,605 15,437
-------- --------
Cash and cash equivalents at end of period $9,446 $20,069
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CONTACT: Linens 'n Things, Inc.
For additional information:
Chief Financial Officer
William T. Giles, 973-815-2929
Visit our Web Site at www.lnt.com