Exhibit 99.1
Linens 'n Things Announces Fourth Quarter and Full Year 2003 Results
CLIFTON, N.J.--(BUSINESS WIRE)--Feb. 4, 2004--
Comparable Net Sales Increase 4.7% and Net Income Increases 14.5%
for the Fourth Quarter 2003;
Fourth Quarter Eps Exceeds Consensus Estimate
Linens 'n Things, Inc. (NYSE: LIN) today announced net income
increased to $46.1 million or $1.02 per share on a fully diluted basis
for the thirteen-week period ended January 3, 2004 from $40.2 million
or $0.90 per diluted share for the fourteen-week period ended January
4, 2003. Total net sales increased approximately 9.0% to $788.3
million for the fourth quarter of fiscal 2003 up from $723.3 million
for the fourth quarter of fiscal 2002. Comparable net sales increased
approximately 4.7%.
Net income increased to $74.8 million or $1.67 per share on a
fully diluted basis for the 52-week period ended January 3, 2004 from
$69.2 million or $1.60 per diluted share for the 53-week period ended
January 4, 2003. Total net sales increased approximately 9.6% to $2.4
billion for the fiscal year ended January 3, 2004 up from $2.2 billion
for the fiscal year ended January 4, 2003. Comparable net sales
increased 1.3%.
"Overall, we are pleased with our results for the quarter,"
commented Norman Axelrod, Chairman and Chief Executive Officer. "The
comparable net sales increase of 4.7% for the fourth quarter of 2003
represents our best quarterly comparable net sales performance in two
years. A key indicator of our performance in the fourth quarter is
that sales were generated from both an increase in guest traffic, as
well as an increase in average transaction. As we enter 2004, we
believe we have the initiatives and resources in place to deliver our
financial targets," concluded Mr. Axelrod.
During the fourth quarter, the Company opened five new stores. For
the fiscal year ended January 3, 2004, the Company opened 58 new
stores and closed nine stores compared with opening 55 new stores and
closing seven stores during fiscal year 2002. Total square footage in
2003 increased 11.0% over last year to 15.1 million. The Company
currently expects to open approximately 45 to 50 new stores in the
U.S. and Canada in 2004, further expanding its presence as a leading
retailer of home furnishings.
2004 Business Outlook
This outlook is based on current expectations 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 will prove
correct.
The current estimates for the full year of 2004 are as follows:
Sales are targeted to grow by approximately 11% to 14% with square
footage increasing approximately 10%. Diluted earnings per share
including the impact of EITF 02-16, "Accounting by a Customer
(Including a Reseller) for Certain Consideration Received from a
Vendor," are currently targeted to be in the range of $1.66 to $1.71.
Based on the Company's current evaluations, the estimated impact from
the implementation of EITF 02-16 is expected to reduce diluted
earnings per share on a non-cash basis by approximately $0.25 for
fiscal 2004. Therefore, excluding the impact of EITF 02-16, diluted
earnings per share are targeted in the range of $1.91 to $1.96. These
plans assume comparable net sales to be in the low to mid single
digits. Capital expenditures are expected to be approximately $80
million.
For the first quarter of 2004, sales are targeted to grow between
13% and 15% and comparable net sales are targeted to be in the range
of 3% to 5%. Diluted earnings per share including the impact of EITF
02-16 are currently targeted to be in the range of a loss of $0.02 to
$0.03. Based on the Company's current evaluations, the estimated
impact from the implementation of EITF 02-16 is expected to reduce
diluted earnings per share on a non-cash basis by approximately $0.12
for the first quarter of 2004. Therefore, excluding the impact of EITF
02-16, the Company is comfortable with a range of estimates of
approximately $0.09 to $0.10 for diluted earnings per share for the
first quarter of 2004.
Linens 'n Things, with 2003 sales of $2.4 billion, is one of the
leading, national large format retailers of home textiles, housewares
and home accessories. At the end of the 2003 fiscal year, the Company
was operating 440 stores in 45 states and four provinces across the
United States and 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," "intend,"
"plan," "target", "outlook", "comfortable with" and similar 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, seasonal concepts, and new brands, 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)
Quarter Ended Year Ended
--------------------- ----------------------
(unaudited)
--------------------- ----------------------
January 3, January 4, January 3, January 4,
2004 2003 2004 2003
---------- --------- ---------- -----------
Net sales $788,313 $723,322 $2,395,272 $2,184,716
Cost of sales, including
buying and warehousing
costs 471,950 432,963 1,430,422 1,311,370
--------- --------- ----------- -----------
Gross profit 316,363 290,359 964,850 873,346
Selling, general and
administrative expenses 241,552 224,856 842,897 759,077
--------- --------- ----------- -----------
Operating profit 74,811 65,503 121,953 114,269
Interest expense, net 276 408 876 2,250
--------- --------- ----------- -----------
Income before provision for
income taxes 74,535 65,095 121,077 112,019
Provision for income taxes 28,472 24,855 46,252 42,773
--------- --------- ----------- -----------
Net income $46,063 $40,240 $74,825 $69,246
========= ========= =========== ===========
Per share of common stock:
Net income per share:
- ---------------------
Basic $1.03 $0.91 $1.69 $1.63
Diluted $1.02 $0.90 $1.67 $1.60
Shares outstanding:
- ---------------------
Basic 44,520 44,078 44,247 42,428
Diluted 45,336 44,543 44,869 43,314
LINENS 'N THINGS, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(in thousands)
January 3, January 4,
2004 2003
----------- -----------
Assets
Current assets:
Cash and cash equivalents $136,129 $86,605
Inventories 701,928 615,256
Accounts Receivable 55,786 41,168
Prepaid expenses and other 33,982 27,279
Current deferred taxes 1,295 2,671
----------- -----------
Total current assets 929,120 772,979
Property and equipment, net 377,244 348,445
Other non-current assets 28,909 29,057
----------- -----------
Total assets $1,335,273 $1,150,481
=========== ===========
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $276,397 $233,877
Accrued expenses and other current
liabilities 189,761 163,783
Short-term borrowings -- 1,831
----------- -----------
Total current liabilities 466,158 399,491
Other long-term liabilities 107,396 82,269
----------- -----------
Total liabilities 573,554 481,760
Shareholders' equity 761,719 668,721
----------- -----------
Total liabilities and shareholders'
equity $1,335,273 $1,150,481
=========== ===========
LINENS 'N THINGS, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(in thousands)
Year Ended
-------------------------
January 3, January 4,
2004 2003
---------- -------------
Cash Flows From Operating Activities
Net income $74,825 $69,246
Depreciation and amortization 54,404 45,914
Change in working capital (10,427) (34,401)
--------- --------
Net cash provided by operating activities 118,802 80,759
--------- --------
Cash Flows From Investing Activities
Additions to property and equipment (81,494) (82,187)
--------- --------
Cash Flows From Financing Activities
Proceeds from stock options exercised
under stock incentive plans 13,623 4,594
Net proceeds from common stock issuance -- 95,833
Decrease in short-term borrowings (2,119) (27,930)
Issuance of treasury stock 159 177
--------- --------
Net cash provided by financing activities 11,663 72,674
--------- --------
Effect of exchange rate changes on cash and
cash equivalents 553 (78)
Net increase in cash and cash equivalents 49,524 71,168
Cash and cash equivalents at beginning of year 86,605 15,437
--------- --------
Cash and cash equivalents at end of year $136,129 $86,605
========= ========
CONTACT: Linens 'n Things, Inc.
William T. Giles, 973-815-2929