Exhibit 99.1
Linens 'n Things Announces Second Quarter 2005 Results in-Line with Current
Guidance
CLIFTON, N.J.--(BUSINESS WIRE)--July 20, 2005--Linens 'n Things, Inc.
(NYSE:LIN), today announced that total net sales decreased approximately 0.9% to
$573.3 million for the second quarter ended July 2, 2005, down from $578.7
million for the same period last year. Comparable net sales for the second
quarter of 2005 declined 6.8%. Net loss for the second quarter ended July 2,
2005 was approximately $5.9 million or $0.13 per share on a fully diluted basis.
"On June 10th, we updated our second quarter guidance and today we reported
results in line with that guidance," commented Norman Axelrod, Chairman and
Chief Executive Officer. "Traffic remained weak throughout the second quarter,
impacted by the magnitude and timing of the unusually high amount of product
transitions we were undergoing. Looking to the rest of the year, our
Back-to-School assortments are well positioned and we are also excited about the
upcoming launch of the Nate Berkus Collection offered exclusively at Linens 'n
Things, which presents us with an opportunity to generate excitement in our
stores around an important new updated brand for our company."
Net sales increased 1.1% to $1,144.3 million for the twenty-six week period
ended July 2, 2005, up from $1,131.5 million for the same period last year.
Comparable net sales for the twenty-six week period ended July 2, 2005 decreased
approximately 6.1%.
Net loss for the twenty-six week period ended July 2, 2005 was
approximately $10.0 million or $0.22 per share on a fully diluted basis. For the
same period last year, the Company had a net loss of $1.0 million or $0.02 per
fully diluted share.
During the second quarter, the Company opened seventeen new stores,
increasing its total square footage to 17.3 million as compared with opening
twelve 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.
"Based on the changes we are making and continued volatility in
performance, it has been increasingly difficult to forecast financial targets,"
noted William Giles, Executive Vice President and Chief Financial Officer.
"Therefore, today we are providing estimates for the back half of the year
2005."
For the back half of 2005, sales are expected to grow approximately 6% to
8%. Fully diluted earnings per share for the back half of the year are currently
targeted to be in the range of $1.25 to $1.50. Comparable net sales are expected
to be negative in the third quarter and positive in the fourth quarter.
Capital expenditures are 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 July 2, 2005, the Company was operating 516 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
---------------------------
July 2, 2005 July 3,2004(a)
------------ --------------
Net sales $ 573,317 $ 578,749
Cost of sales, including buying and
warehousing costs 336,374 346,073
------------ --------------
Gross profit 236,943 232,676
Selling, general and administrative
expenses 245,702 231,475
------------ --------------
Operating (loss) income (8,759) 1,201
Interest expense, net 738 1,045
------------ --------------
(Loss) income before (benefit) provision
for income taxes (9,497) 156
(Benefit) provision for income taxes (3,565) 59
------------ --------------
Net (loss) income $ (5,932) $ 97
============ ==============
Per share of common stock:
Basic
- -----
Net loss per share $ (0.13) $ --
Weighted average shares outstanding 45,265 45,089
Diluted
- -------
Net loss per share $ (0.13) $ --
Weighted average shares outstanding 45,585 46,071
(a) On July 1, 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 July 3, 2004, initially filed with the SEC on August 6,
2004. Form 10-Q/A was filed to reflect the restatement of the
Company's Condensed Consolidated Financial Statements for the
thirteen-week and twenty-six week periods ended July 3, 2004 and
July 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 OPERATIONS
(in thousands, except per share data)
(unaudited)
Twenty-six Weeks Ended
-----------------------------
July 2, 2005 July 3, 2004(a)
------------- ---------------
Net sales $ 1,144,263 $ 1,131,549
Cost of sales, including buying and
warehousing costs 670,927 677,627
------------- ---------------
Gross profit 473,336 453,922
Selling, general and administrative
expenses 487,856 453,763
------------- ---------------
Operating (loss) income (14,520) 159
Interest expense, net 1,461 1,804
------------- ---------------
Loss before benefit for income taxes (15,981) (1,645)
Benefit for income taxes (5,975) (630)
------------- ---------------
Net loss $ (10,006) $ (1,015)
============= ===============
Per share of common stock:
Basic
- -----
Net loss per share $ (0.22) $ (0.02)
Weighted average shares outstanding 45,242 44,993
Diluted
- -------
Net loss per share $ (0.22) $ (0.02)
Weighted average shares outstanding 45,647 46,089
(a) On July 1, 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 July 3, 2004, initially filed with the SEC on August 6,
2004. Form 10-Q/A was filed to reflect the restatement of the
Company's Condensed Consolidated Financial Statements for the
thirteen-week and twenty-six week periods ended July 3, 2004 and
July 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)
July 2, 2005 July 3, 2004(a)
Assets (unaudited)
Current assets: -----------------------------
Cash and cash equivalents $ 22,193 $ 18,990
Accounts receivable 34,250 27,490
Inventories 799,077 763,514
Prepaid expenses and other current
assets 41,287 33,146
Current deferred taxes 1,620 404
------------- ---------------
Total current assets 898,427 843,544
Property and equipment, net 584,346 559,676
Other non-current assets, net 31,138 26,042
------------- ---------------
Total assets $ 1,513,911 $ 1,429,262
============= ===============
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 244,842 $ 238,142
Accrued expenses and other current
liabilities 137,506 122,905
Short-term borrowings -- 6,045
Current deferred taxes -- 11,282
------------- ---------------
Total current liabilities 382,348 378,374
Other long-term liabilities 330,974 306,685
------------- ---------------
Total liabilities 713,322 685,059
Shareholders' equity 800,589 744,203
------------- ---------------
Total liabilities and shareholders'
equity $ 1,513,911 $ 1,429,262
============= ===============
(a) On July 1, 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 July 3, 2004, initially filed with the SEC on August 6,
2004. Form 10-Q/A was filed to reflect the restatement of the
Company's Condensed Consolidated Financial Statements for the
thirteen-week and twenty-six week periods ended July 3, 2004 and
July 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)
Twenty-six Weeks Ending
-----------------------------
July 2, 2005 July 3, 2004(a)
(unaudited)
-----------------------------
Cash Flows From Operating Activities
Net loss $ (10,006) $ (1,015)
Depreciation and amortization 43,675 38,989
Change in working capital (166,162) (110,386)
------------- ---------------
Net cash used in operating activities (132,493) (72,412)
------------- ---------------
Cash Flows From Investing Activities
Additions to property and equipment (50,454) (57,437)
------------- ---------------
Cash Flows From Financing Activities
Proceeds from common stock issued under
stock incentive plans 1,769 6,762
Increase in short-term borrowings -- 6,011
(Increase) decrease in treasury stock (97) 102
------------- ---------------
Net cash provided by financing
activities 1,672 12,875
------------- ---------------
Effect of exchange rate changes on cash
and cash equivalents (541) (165)
------------- ---------------
Net decrease in cash and cash equivalents (181,816) (117,139)
Cash and cash equivalents at beginning of
period 204,009 136,129
------------- ---------------
Cash and cash equivalents at end of
period $ 22,193 $ 18,990
============= ===============
(a) On July 1, 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 July 3, 2004, initially filed with the SEC on August 6,
2004. Form 10-Q/A was filed to reflect the restatement of the
Company's Condensed Consolidated Financial Statements for the
thirteen-week and twenty-six week periods ended July 3, 2004 and July
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
www.lnt.com