Exhibit 99.1
Linens 'n Things Announces Third Quarter 2005 Results
CLIFTON, N.J.--(BUSINESS WIRE)--Oct. 19, 2005--Linens 'n Things,
Inc. (NYSE: LIN), today announced that total net sales decreased
approximately 3.8% to $629.3 million for the third quarter ended
October 1, 2005, down from $654.2 million for the same period last
year. Comparable net sales for the third quarter of 2005 declined
approximately 10.2%. Net earnings for the third quarter ended October
1, 2005 were approximately $1.0 million or $0.02 per share on a fully
diluted basis.
"On September 22nd, we updated our outlook for the third quarter
and today we reported results in line with that update," commented
Norman Axelrod, Chairman and Chief Executive Officer. "We experienced
significant traffic declines throughout the third quarter as the
initiatives we had undertaken to emphasize fashion and better price
points in our merchandise assortment resulted in a weaker value
perception to our guests. Looking to the rest of the year, we have
taken what we believe are the appropriate steps to ensure that our
value message is clear and consistent in our stores and in our
marketing. The launch of the Nate Berkus Collection offered
exclusively at Linens 'n Things has been well-received and we are
excited about the fresh appeal this brand has and the potential it
brings to drive traffic to our stores."
Net sales for the thirty-nine week period ended October 1, 2005
decreased 0.7% to $1,773.5 million, down from $1,785.7 million for the
same period last year. Comparable net sales for the thirty-nine week
period ended October 1, 2005 decreased approximately 7.7%.
Net loss for the thirty-nine week period ended October 1, 2005 was
approximately $9.0 million or $0.20 per share on a fully diluted
basis. For the same period last year, the Company had net earnings of
$16.2 million or $0.35 per fully diluted share.
During the third quarter, the Company opened fourteen new stores
and closed three stores, increasing its total square footage to 17.6
million as compared with opening eight stores and closing two stores
during the same period last year. The Company currently expects to
open approximately 55 new stores in the United States and Canada in
2005, further expanding its presence as a leading retailer of home
furnishings.
The Company also announced that given the variability in its
results, they will not be providing fourth quarter 2005 guidance at
this time.
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 October 1, 2005, the Company was operating
527 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 holiday selling seasons, acceptance of
product offerings and fashions and our ability to anticipate and
successfully respond to changing consumer tastes and preferences, the
impact on consumer discretionary spending as a result of substantially
higher gasoline and home heating costs, higher interest rates,
inflation fears and other negative economic factors, a highly
promotional retail environment, 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, 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
--------------------------------
October 1, 2005 October 2, 2004*
--------------- ----------------
Net sales $629,268 $654,196
Cost of sales, including buying and
warehousing costs 370,953 385,090
--------------- ----------------
Gross profit 258,315 269,106
Selling, general and administrative
expenses 255,508 240,664
--------------- ----------------
Operating income 2,807 28,442
Interest expense, net 1,162 650
--------------- ----------------
Income before provision for income
taxes 1,645 27,792
Provision for income taxes 621 10,617
--------------- ----------------
Net income $1,024 $17,175
=============== ================
Per share of common stock:
Basic
- --------------------------------------
Net income per share $0.02 $0.38
Weighted average shares outstanding 45,309 45,122
Diluted
- --------------------------------------
Net income per share $0.02 $0.38
Weighted average shares outstanding 45,710 45,581
* 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 October 2, 2004, initially filed with the SEC on November
12, 2004. Form 10-Q/A was filed to reflect the restatement of the
Company's Condensed Consolidated Financial Statements for the
thirteen-week and thirty-nine week periods ended October 2, 2004 and
October 4, 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)
Thirty-Nine Weeks Ended
--------------------------------
October 1, 2005 October 2, 2004*
--------------- ----------------
Net sales $1,773,531 $1,785,745
Cost of sales, including buying and
warehousing costs 1,041,880 1,062,717
--------------- ----------------
Gross profit 731,651 723,028
Selling, general and administrative
expenses 743,364 694,427
--------------- ----------------
Operating (loss) income (11,713) 28,601
Interest expense, net 2,623 2,454
--------------- ----------------
(Loss) income before (benefit)
provision for income taxes (14,336) 26,147
(Benefit) provision for income taxes (5,354) 9,987
--------------- ----------------
Net (loss) income $(8,982) $16,160
=============== ================
Per share of common stock:
Basic
- --------------------------------------
Net (loss) income per share $(0.20) $0.36
Weighted average shares outstanding 45,264 45,036
Diluted
- --------------------------------------
Net (loss) income per share $(0.20) $0.35
Weighted average shares outstanding 45,668 45,920
* 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 October 2, 2004, initially filed with the SEC on November
12, 2004. Form 10-Q/A was filed to reflect the restatement of the
Company's Condensed Consolidated Financial Statements for the
thirteen-week and thirty-nine week periods ended October 2, 2004 and
October 4, 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)
October 1, 2005 October 2, 2004*
--------------------------------
Assets (unaudited)
Current assets:
Cash and cash equivalents $37,608 $54,460
Accounts receivable 50,369 26,494
Inventories 863,100 794,169
Prepaid expenses and other
current assets 44,613 34,615
Current deferred taxes 834 472
--------------- ----------------
Total current assets 996,524 910,210
Property and equipment, net 598,235 568,606
Other non-current assets, net 31,277 25,835
--------------- ----------------
Total assets $1,626,036 $1,504,651
=============== ================
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $279,411 $279,169
Accrued expenses and other
current liabilities 167,625 140,038
Short-term borrowings 30,000 560
Current deferred taxes 3,917 7,138
--------------- ----------------
Total current liabilities 480,953 426,905
Other long-term liabilities 340,631 315,539
--------------- ----------------
Total liabilities 821,584 742,444
Shareholders' equity 804,452 762,207
--------------- ----------------
Total liabilities and
shareholders' equity $1,626,036 $1,504,651
=============== ================
* 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 October 2, 2004, initially filed with the SEC on November
12, 2004. Form 10-Q/A was filed to reflect the restatement of the
Company's Condensed Consolidated Financial Statements for the
thirteen-week and thirty-nine week periods ended October 2, 2004 and
October 4, 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)
Thirty-Nine Weeks Ending
--------------------------------
October 1, 2005 October 2, 2004*
(unaudited)
--------------------------------
Cash Flows From Operating Activities
Net (loss) income $(8,982) $16,160
Depreciation and amortization 66,216 60,023
Change in working capital (171,129) (78,260)
--------------- ----------------
Net cash used in operating
activities (113,895) (2,077)
--------------- ----------------
Cash Flows From Investing Activities
Additions to property and
equipment (85,978) (86,916)
--------------- ----------------
Cash Flows From Financing Activities
Proceeds from common stock issued
under stock incentive plans 3,081 6,974
Increase in borrowings 30,000 532
Increase in treasury stock (130) (26)
--------------- ----------------
Net cash provided by financing
activities 32,951 7,480
--------------- ----------------
Effect of exchange rate changes on
cash and cash equivalents 521 (156)
--------------- ----------------
Net decrease in cash and cash
equivalents (166,401) (81,669)
Cash and cash equivalents at beginning
of period 204,009 136,129
--------------- ----------------
Cash and cash equivalents at end of
period $37,608 $54,460
=============== ================
* 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 October 2, 2004, initially filed with the SEC on November
12, 2004. Form 10-Q/A was filed to reflect the restatement of the
Company's Condensed Consolidated Financial Statements for the
thirteen-week and thirty-nine week periods ended October 2, 2004 and
October 4, 2003 related to its correction for the accounting for
leases and other immaterial adjustments and reclassifications.
CONTACT: Linens 'n Things
William T. Giles, 973-815-2929
www.lnt.com