Exhibit 99.1
Linens 'n Things Announces First Quarter 2005 Results In-Line with Current
Guidance
CLIFTON, N.J.--(BUSINESS WIRE)--April 20, 2005--Linens 'n Things, Inc.
(NYSE: LIN), one of the leading, national large format retailers of home
textiles, housewares and home accessories, today announced that total net sales
increased approximately 3.3% to $570.9 million for the first quarter ended April
2, 2005, up from $552.8 million for the same period last year. Comparable net
sales for the first quarter of 2005 declined 5.4%. Net loss for the first
quarter ended April 2, 2005 was approximately $4.1 million or $0.09 per share on
a fully diluted basis.
"On March 10th we updated our first quarter guidance and today we reported
results in line with that guidance. Although the external environment was
challenging, we are still disappointed in our first quarter sales performance.
However, we still have the majority of our sales and earnings opportunities
ahead of us as the first quarter represents the smallest portion of our annual
sales and earnings. Looking forward, we believe that our initiatives will enable
us to accelerate more newness in our assortments, improve our productivity and
profitability and continue to enhance the guest shopping experience," commented
Norman Axelrod, Chairman and Chief Executive Officer.
During the first quarter, the Company opened eight new stores and closed
one store, increasing its total square footage to 16.9 million as compared with
opening twenty-one stores during the same period last year. The Company
currently expects to open approximately 50 new stores in the United States and
Canada in 2005, further expanding its presence as a leading retailer of home
furnishings.
2005 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.
For the second quarter of fiscal 2005, sales are currently targeted to grow
by approximately 3% to 7%. Fully diluted earnings per share are currently
targeted to be in the range of $0.03 to $0.09 for the second quarter. Comparable
net sales for the second quarter are expected to be slightly down.
For the full year 2005, sales are currently being targeted to grow by
approximately 6% to 9%. The Company is comfortable with the current consensus
estimate of $1.61 for fully diluted earnings per share for the full year. Given
the recent announcement on the delay of the expensing of stock options, the
Company currently expects to expense stock options beginning with fiscal 2006.
As the Company now classifies landlord allowances as deferred rent credit
on the balance sheet rather than as a reduction in capital expenditures, capital
expenditures are now expected to be approximately $125 million for the full
year.
Linens 'n Things, with 2004 sales of $2.7 billion is one of the leading,
national large format retailers of home textiles, housewares and home
accessories. As of April 2, 2005, the Company was operating 499 stores in 45
states and five provinces across the United States and Canada. More information
about Linens 'n Things can be found online at www.lnt.com.
This press release 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 condition,
impact, results and 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 the levels of sales, store traffic, the
results and success of our back-to-school and holiday selling seasons,
acceptance of product offerings and fashions and our ability to anticipate and
successfully respond to changing consumer tastes and preferences, our ability to
anticipate and control our operating and selling expenses, the success of our
new business concepts, seasonal concepts and new brands, the performance of our
new stores, substantial 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.
If these or other risks or uncertainties materialize, or if our estimates
or underlying assumptions prove inaccurate, actual results could differ
materially from any future results, express or implied by our 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 are contained
in our reports filed with the Securities and Exchange Commission, including our
Annual Report on Form 10-K and our Quarterly Reports on Form 10-Q. You are urged
to consider all such factors. In light of the substantial 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, even if such results or changes make
it clear that any projected results will not be realized.
Our outlook and other forward-looking statements are as of the date of this
release only.
LINENS 'N THINGS, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
Thirteen Weeks Ended
----------------------
April 2, April 3,
2005 2004*
----------- ----------
Net sales $570,946 $552,800
Cost of sales, including buying and warehousing
costs 334,553 331,554
----------- ----------
Gross profit 236,393 221,246
Selling, general and administrative expenses 242,154 222,288
----------- ----------
Operating loss (5,761) (1,042)
Interest expense, net 723 759
----------- ----------
Loss before provision for income taxes (6,484) (1,801)
Provision for income taxes (2,410) (689)
----------- ----------
Net loss $(4,074) $(1,112)
=========== ==========
Per share of common stock:
Basic
- -----
Net income per share $(0.09) $(0.02)
Weighted average shares outstanding 45,194 44,897
Diluted
- -------
Net income per share $(0.09) $(0.02)
Weighted average shares outstanding 45,685 46,108
* On April 19, 2005, the Company filed Amendment No. 1 on Form 10-Q/A
("Form 10-Q/A") to its Quarterly Report on Form 10-Q for the quarterly period
ended April 3, 2004, initially filed with the SEC on May 7, 2004. Form 10-Q/A
was filed to reflect the restatement of the Company's Condensed Consolidated
Financial Statements for the thirteen-week periods ended April 3, 2004 and April
5, 2003 related to its correction for the accounting for leases and other
immaterial adjustments and reclassifications.
LINENS 'N THINGS, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(in thousands)
April 2, April 3,
2005 2004*
Assets (unaudited)
Current assets:
-----------------------
Cash and cash equivalents $75,271 $67,754
Accounts receivable 30,186 20,818
Inventories 765,929 760,548
Prepaid expenses and other current assets 39,364 34,178
Current deferred taxes 800 292
----------- -----------
Total current assets 911,550 883,590
Property and equipment, net 569,329 553,302
Other non-current assets, net 28,977 25,859
----------- -----------
Total assets $1,509,856 $1,462,751
=========== ===========
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $238,598 $284,013
Accrued expenses and other current
liabilities 133,200 123,015
Short-term borrowings -- 3,544
Current deferred taxes 5,722 11,073
----------- -----------
Total current liabilities 377,520 421,645
Other long-term liabilities 326,324 298,316
----------- -----------
Total liabilities 703,844 719,961
Shareholders' equity 806,012 742,790
----------- -----------
Total liabilities and shareholders'
equity $1,509,856 $1,462,751
=========== ===========
* On April 19, 2005, the Company filed Amendment No. 1 on Form 10-Q/A
("Form 10-Q/A") to its Quarterly Report on Form 10-Q for the quarterly period
ended April 3, 2004, initially filed with the SEC on May 7, 2004. Form 10-Q/A
was filed to reflect the restatement of the Company's Condensed Consolidated
Financial Statements for the thirteen-week periods ended April 3, 2004 and April
5, 2003 related to its correction for the accounting for leases and other
immaterial adjustments and reclassifications.
LINENS 'N THINGS, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(in thousands)
Thirteen Weeks Ending
----------------------
April 2, April 3,
2005 2004*
(unaudited)
----------------------
Cash Flows From Operating Activities
Net loss $(4,074) $(1,112)
Depreciation and amortization 21,176 18,960
Change in working capital (134,389) (65,075)
----------- ----------
Net cash used in operating activities (117,287) (47,227)
----------- ----------
Cash Flows From Investing Activities
Additions to property and equipment (12,027) (30,259)
----------- ----------
Cash Flows From Financing Activities
Proceeds from common stock issued under stock
incentive plans 904 5,542
Increase in short-term borrowings -- 3,546
(Increase) decrease in treasury stock (122) 139
----------- ----------
Net cash provided by financing activities 782 9,227
----------- ----------
Effect of exchange rate changes on cash and
cash equivalents (206) (116)
----------- ----------
Net decrease in cash and cash equivalents (128,738) (68,375)
Cash and cash equivalents at beginning of period 204,009 136,129
----------- ----------
Cash and cash equivalents at end of period $75,271 $67,754
=========== ==========
* On April 19, 2005, the Company filed Amendment No. 1 on Form 10-Q/A
("Form 10-Q/A") to its Quarterly Report on Form 10-Q for the quarterly period
ended April 3, 2004, initially filed with the SEC on May 7, 2004. Form 10-Q/A
was filed to reflect the restatement of the Company's Condensed Consolidated
Financial Statements for the thirteen-week periods ended April 3, 2004 and April
5, 2003 related to its correction for the accounting for leases and other
immaterial adjustments and reclassifications.
CONTACT: Linens 'n Things, Inc.
William T. Giles, 973-815-2929
or
www.lnt.com