-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QQJFPRlJVdWnLwpGSO2luJ76edKAr3PQrA4OypC1ngTliHg1MdwSs2bJlzY70GXL LOkURJVw09axILIcVcYdrQ== 0000927796-99-000149.txt : 19990518 0000927796-99-000149.hdr.sgml : 19990518 ACCESSION NUMBER: 0000927796-99-000149 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19990403 FILED AS OF DATE: 19990517 FILER: COMPANY DATA: COMPANY CONFORMED NAME: LINENS N THINGS INC CENTRAL INDEX KEY: 0001023052 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-HOME FURNITURE, FURNISHINGS & EQUIPMENT STORES [5700] IRS NUMBER: 223463939 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-12381 FILM NUMBER: 99628600 BUSINESS ADDRESS: STREET 1: 6 BRIGHTON RD CITY: CLIFTON STATE: NJ ZIP: 07015 BUSINESS PHONE: 9737781300 MAIL ADDRESS: STREET 1: 6 BRIGHTON RD CITY: CLIFTON STATE: NJ ZIP: 07015 10-Q 1 QUARTERLY REPORT SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended April 3, 1999 Commission File Number 1-12381 Linens 'n Things, Inc. ---------------------- (Exact name of Registrant as specified in its charter) Delaware 22-3463939 -------- ---------- (State or other jurisdiction of (I.R.S. Employer Identification Number) incorporation or organization) 6 Brighton Road, Clifton, New Jersey 07015 - ---------------------------------------- ---------- (Address of principal executive offices) (Zip Code) (973) 778-1300 -------------- (Registrant's telephone number, including area code) Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No Number of shares outstanding of the issuer's Common Stock: Class Outstanding at May 12, 1999 ----- --------------------------- Common Stock, $0.01 par value 39,342,402
INDEX Part I. Financial Information Page No. Item 1. Financial Statements Consolidated Statements of Operations for the First Quarter Ended April 3, 1999 and March 28, 1998 3 Consolidated Balance Sheets as of April 3, 1999, December 31, 1998 and March 28, 1998 4 Consolidated Statements of Cash Flows for the First Quarter Ended April 3, 1999 and March 28, 1998 5 Notes to Consolidated Financial Statements 6 Independent Auditors' Review Report 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 8-11 Item 3. Quantitative and Qualitative Disclosures about Market Risk 11 Part II. Other Information Item 6. Exhibits and Reports on Form 8-K 12 (a) Exhibit Index 12 (b) Reports on Form 8-K 12
PART I - FINANCIAL INFORMATION Item 1. Financial Statements
LINENS 'N THINGS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except share amounts) First Quarter Ended -------------------------------------- April 3, March 28, 1999 1998 ----------------- ----------------- (Unaudited) Net sales $273,540 $218,037 Cost of sales, including buying and warehousing costs 166,848 134,707 ----------------- ----------------- Gross profit 106,692 83,330 Selling, general and administrative expenses 101,043 81,133 ----------------- ----------------- Operating profit 5,649 2,197 Interest income, net 198 203 ----------------- ----------------- Income before provision for income taxes 5,847 2,400 Provision for income taxes 2,252 925 ----------------- ----------------- Net income $ 3,595 $ 1,475 ================= ================ Per share of common stock: Basic Net income per share $ 0.09 $ 0.04 Weighted average shares outstanding 39,156 38,763 Diluted Net income per share $ 0.09 $ 0.04 Weighted average shares outstanding 40,862 40,206
See accompanying notes to consolidated financial statements.
LINENS 'N THINGS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands, except share amounts) April 3, December 31, March 28, 1999 1998 1998 ------------------ ------------------ ------------------- (Unaudited) (Unaudited) Assets Current assets: Cash and cash equivalents $22,047 $42,638 $26,118 Accounts receivable, net 24,164 22,814 13,076 Inventories 288,317 271,389 233,245 Prepaid expenses and other current assets 18,301 18,567 11,260 ------------------ ------------------ ------------------- Total current assets 352,829 355,408 283,699 Property and equipment, net 187,276 179,439 154,424 Goodwill, net 20,464 20,676 21,313 Deferred charges and other noncurrent assets, net 5,144 5,321 6,032 ------------------ ------------------ ------------------- Total assets $565,713 $560,844 $465,468 ================== ================== =================== Liabilities and Shareholders' Equity Current liabilities: Accounts payable $130,345 $115,754 $102,678 Accrued expenses and other current liabilities 63,208 84,761 52,255 ------------------ ------------------ ------------------- Total current liabilities 193,553 200,515 154,933 Deferred income taxes and other long-term liabilities 39,396 36,753 26,025 Shareholders' equity: Preferred stock, $0.01 par value; 1,000,000 shares authorized; none issued and outstanding -- -- -- Common stock, $0.01 par value; 60,000,000 shares authorized; 39,379,985 issued and 39,326,652 outstanding at April 3, 1999, 39,091,281 issued and 39,037,948 outstanding at December 31, 1998 and 38,862,808 issued and outstanding at March 28, 1998 394 391 388 Additional paid-in capital 216,968 211,378 207,512 Retained earnings 116,792 113,197 76,610 Treasury stock, at cost, 53,333 shares at April 3, 1999 and December 31, 1998 (1,390) (1,390) -- ------------------ ------------------ ------------------- Total shareholders' equity 332,764 323,576 284,510 Total liabilities and shareholders' equity $565,713 $560,844 $465,468 ================== ================== ===================
See accompanying notes to consolidated financial statements. LINENS 'N THINGS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)
First Quarter Ended ----------------------------------------- April 3, March 28, 1999 1998 ------------------- ------------------ (Unaudited) Cash flows from operating activities: Net income $ 3,595 $ 1,475 Adjustments to reconcile net income to net cash used in operating activities: Depreciation and amortization 6,260 5,004 Deferred income taxes 1,096 215 Loss on disposal of assets 83 214 Changes in assets and liabilities: (Increase) decrease in accounts receivable (1,350) 688 Increase in inventories (16,928) (10,057) Decrease in prepaid expenses and other current assets 692 1,592 Increase (decrease) in accounts payable 16,124 (4,965) Decrease in accrued expenses and other liabilities (18,176) (7,624) ------------------- ------------------ Net cash used in operating activities (8,604) (13,458) ------------------- ------------------ Cash flows from investing activities: Additions to property and equipment (13,519) (4,780) ------------------- ------------------ Cash flows from financing activities: Proceeds from common stock exercised under stock incentive plans 5,593 3,000 (Decrease) increase in book overdrafts (4,061) 1,474 ------------------- ------------------ Net cash provided by financing activities 1,532 4,474 ------------------- ------------------ Net decrease in cash and cash equivalents (20,591) (13,764) Cash and cash equivalents at beginning of year 42,638 39,882 ------------------- ------------------ Cash and cash equivalents at end of period $ 22,047 $ 26,118 =================== ==================
See accompanying notes to consolidated financial statements. LINENS 'N THINGS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. Basis of Presentation The accompanying consolidated financial statements, except for the December 31, 1998 consolidated balance sheet, are unaudited. In the opinion of management, the accompanying consolidated financial statements contain all adjustments (consisting of only normal recurring accruals) necessary to present fairly the financial position of the Company as of April 3, 1999 and March 28, 1998 and the results of operations and cash flows for the respective first quarter then ended. Because of the seasonality of the specialty retailing business, operating results of the Company on a quarterly basis may not be indicative of operating results for the full year. These consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements for the year ended December 31, 1998, included in the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission. All significant intercompany accounts and transactions have been eliminated. The December 31, 1998 consolidated balance sheet amounts have been derived from the Company's audited consolidated balance sheet amounts. 2. Short-Term Borrowing Arrangements The Company has available a three-year, $90 million senior revolving credit facility agreement (the "Credit Agreement") with third party institutional lenders expiring March 31, 2001. The amount of borrowings can be increased up to $125 million provided certain terms and conditions contained in the Credit Agreement are met. The Credit Agreement contains certain financial covenants, including those relating to the maintenance of a minimum tangible net worth, a minimum fixed charge coverage ratio, and a maximum leverage ratio, as defined in the Credit Agreement. As of April 3, 1999, the Company was in compliance with the terms and conditions of the Credit Agreement. The Credit Agreement also allows for up to $25 million in borrowings from uncommitted lines of credit outside of the Credit Agreement. As of April 3, 1999, the Company had no borrowings under the Credit Agreement or against the uncommitted lines of credit. 3. Recent Accounting Pronouncement Effective December 31, 1997, the Company adopted Statement of Financial Accounting Standards ("SFAS") No. 128, "Earnings per Share" which requires a dual presentation of earnings per share--basic and diluted. Basic earnings per share has been computed by dividing net income by the weighted average number of shares outstanding of 39,156,362 and 38,763,054 for the first quarter ended April 3, 1999 and March 28, 1998, respectively. Diluted earnings per share has been computed by dividing net income by the weighted-average number of shares outstanding including the dilutive effects of stock options and deferred stock grants. The weighted-average shares outstanding for the diluted earnings per share calculation were 40,861,848 and 40,206,136 for the first quarter ended April 3, 1999 and March 28, 1998, respectively. 4. Deferred Compensation Plan The Company has a deferred compensation plan (the "Plan") established to enable key employees of the Company, as designated by the Company, to defer compensation, including stock and stock denominated awards. Participation is voluntary and participants can elect to make contributions to the Plan. Participants are 100% vested in their own deferrals to the Plan at all times. At April 3, 1999, the liability under the Plan, which is reflected in other long-term liabilities, was $5.4 million. Independent Auditors' Review Report The Board of Directors and Shareholders Linens 'n Things, Inc.: We have reviewed the consolidated balance sheets of Linens 'n Things, Inc. and Subsidiaries as of April 3, 1999 and March 28, 1998, and the related consolidated statements of operations and cash flows for the three month period then ended. These consolidated financial statements are the responsibility of the Company's management. We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical review procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the consolidated financial statements referred to above for them to be in conformity with generally accepted accounting principles. We have previously audited, in accordance with generally accepted auditing standards, the consolidated balance sheet of Linens 'n Things, Inc. and Subsidiaries as of December 31, 1998 and the related consolidated statements of operations, shareholders' equity, and cash flows for the year then ended (not presented herein); and in our report dated February 3, 1999, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet as of December 31, 1998, is fairly presented, in all material respects, in relation to the consolidated balance sheet from which it has been derived. KPMG LLP New York, New York April 19, 1999 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations LINENS 'N THINGS, INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis should be read in conjunction with the consolidated financial statements of the Company and the notes thereto appearing elsewhere in this document. Results of Operations First Quarter Ended April 3, 1999 Compared with First Quarter Ended March 28, 1998 Net sales increased 25.5% to $273.5 million for the first quarter ended April 3, 1999, up from $218.0 million for the same period in 1998, primarily as a result of new store openings since March 28, 1998. The first quarter ended April 3, 1999 contained six more selling days compared with the first quarter ended March 28, 1998. Comparable store net sales for the first quarter ended April 3, 1999 increased 6.3% as compared with an increase of 7.5% for the same period last year. Comparable store net sales as a whole continued to remain strong across most major geographic regions. During the first quarter ended April 3, 1999, the Company opened three stores and closed three stores, compared with opening three stores and closing five stores during the same period last year. At April 3, 1999, the Company operated 196 stores, of which 185 were superstores, compared with 174 stores, of which 156 were superstores, at March 28, 1998. Store square footage increased approximately 17.9% to 6,543,000 at April 3, 1999 compared with 5,552,000 at March 28, 1998. For the first quarter ended April 3, 1999, net sales of "things" merchandise increased approximately 30% over the same period in 1998, while net sales of "linens" merchandise increased approximately 20% over the same period in 1998. This is consistent with the Company's strategy to increase the penetration of "things" merchandise. The increase in net sales of "things" merchandise is the result of the continued maturation of this business as well as the overall expansion of the product categories in new and existing stores. Gross profit for the first quarter ended April 3, 1999 was $106.7 million, or 39.0% of net sales, compared with $83.3 million, or 38.2% of net sales, for the same period last year. The increase in gross profit was due primarily to improvements in the selling mix which included a higher penetration of seasonal merchandise, as well as lower markdowns. Selling, general and administrative expenses for the first quarter ended April 3, 1999 were $101.0 million, or 36.9% of net sales, compared with $81.1 million, or 37.2% of net sales, for the same period last year. This decrease as a percentage of net sales is primarily a function of increased leverage through strong comparable store net sales coupled with fewer store closings than in the same period last year. However, these savings were partially offset by additional selling expense as the Company continues to improve guest service levels through increased payroll. Management believes the improvement in guest service has contributed to the strong comparable store net sales performance. Operating profit for the first quarter ended April 3, 1999 increased to $5.6 million, or 2.1% of net sales, compared with $2.2 million, or 1.0% of net sales, for the same period last year. The Company earned net interest income of approximately $198,000 (net of commitment fees in connection with the Company's $90 million credit agreement) for the first quarter ended April 3, 1999, compared with approximately $203,000 for the same period in 1998. The Company's income tax expense for the first quarter ended April 3, 1999 was $2.3 million as compared with $0.9 million for the same period last year. The Company's effective tax rate was 38.5% for the first quarters ending April 3, 1999 and March 28, 1998. LINENS 'N THINGS, INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Net income for the first quarter ended April 3, 1999 increased to $3.6 million, or $0.09 per share, compared with $1.5 million, or $0.04 per share, for the same period last year. Liquidity and Capital Resources The Company's capital requirements are primarily investments in new stores, new store inventory purchases and seasonal working capital, as well as a second distribution center that is currently planned to open in June 1999. These requirements are funded through a combination of internally generated cash from operations, credit extended by suppliers and short-term borrowings. The Company has available a $90 million three year revolving credit facility expiring March 31, 2001, which can be increased up to $125 million provided certain terms and conditions contained in the credit agreement are met. This agreement allows for up to $25 million in borrowings from uncommitted lines of credit. Management currently believes that the Company's cash flows from operations, credit extended by suppliers, the revolving credit facility and the uncommitted lines of credit will be sufficient to fund anticipated capital expenditures and working capital requirements in the foreseeable future. Net cash used in operating activities for the first quarter ended April 3, 1999 was $8.6 million compared with $13.5 million for the same period last year. The decrease in net cash used in operating activities was due to an increase in net income as well as improved working capital management. Accounts payable increased over last year due to increased inventory levels and the timing of vendor payments. The increase in inventory primarily reflects the opening of new stores since the same period last year. Net cash used in investing activities during the first quarter ended April 3, 1999 was $13.5 million compared with $4.8 million for the same period last year. The increase is associated with the timing and number of the Company's new store openings as well as capital expenditures for the second distribution center in southern New Jersey. Net cash provided by financing activities during the first quarter ended April 3, 1999 was $1.5 million compared with $4.5 million for the same period last year. Net cash provided during the first quarter ended April 3, 1999 was primarily the result of proceeds received from common stock exercised under stock incentive plans, offset by the timing and settlement of vendor payments. Year 2000 The Company has conducted a comprehensive review of its computer systems to identify material systems that could be affected by the "Year 2000" issue and has developed an implementation plan intended to address this issue. The Company has adopted a five-phase Year 2000 program, the principal components of which are: Phase I: Identification and ranking of those internal Company systems, technology and equipment considered critical or substantially important to the flow of its operations; and communication with certain significant suppliers and vendors to the Company concerning their Year 2000 readiness Phase II: Assessment of items identified in Phase I Phase III: Remediation or replacement of non-compliant identified internal systems and components and determination of solutions for non- compliant suppliers and vendors Phase IV: Testing of systems and components LINENS `N THINGS, INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Phase V: Developing a contingency plan to address the most reasonably likely worst case scenarios with respect to Year 2000 The identification and assessment phases of the Year 2000 program with respect to the Company's systems and equipment have been substantially completed for the Company's mission critical and other major information technology systems and hardware ("IT Systems") and for the Company's non-information technology equipment known to the Company to have microchips or other embedded technology and considered critical or substantially important to the flow of its operations ("non-IT Company Equipment"). The Company has also substantially completed the remediation phase for its IT Systems and its non-IT Company Equipment and substantially completed testing for its mission critical IT Systems. The Company currently expects to complete the testing phase for its IT Systems and non-IT Company Equipment, including installation and testing of Year 2000 versions, by approximately the end of the second quarter of 1999. The Company will continue periodic testing during fiscal 1999 for new installations, versions or changes. Virtually all the compliance has been performed and is currently expected to be performed using internal resources. In addition to Year 2000 implementation for the Company's internal systems and equipment, the Company continues to be in the process of communicating with major business suppliers and vendors in order to endeavor to determine their state of readiness with respect to Year 2000. Assessment of significant third party Year 2000 readiness is expected to be substantially completed in mid-1999. Failure of suppliers, vendors or other third parties to timely address and remedy Year 2000 problems or to develop and effect appropriate contingency plans could have a material adverse effect on the Company's business and operations. The Company believes that the geographically disbursed nature of its business and its large supplier and vendor base should tend to minimize such potential adverse effects. The Company presently believes that with modifications to existing software and conversions to new software for certain applications, the Year 2000 problem will not cause a significant disruption of its operations. However, the Year 2000 problem is unique and the Company's Year 2000 compliance program is based on various assumptions and expectations that cannot be assured. Potential risks include loss of electric power or certain communication links, failure of one or more of the Company's internal systems which disrupt its normal sales or other operations, failure of suppliers or vendors (or of entities which supply products, services or materials to them) to be Year 2000 ready, other disruptions to its business such as delayed deliveries from suppliers, as well as disruptions to the distribution channels, including ports, transportation services and the Company's own distribution centers. The Company is in the process of developing a contingency plan for certain mission critical systems, which is expected to be completed by approximately the third quarter of 1999 and will be based on its continuing assessment of potential risks. The Company does not expect the costs associated with this Year 2000 project (including internal personnel costs) to be material to the Company's financial condition or results of operations. Costs incurred to date have been expensed and were budgeted costs funded through operating cash flows. The costs associated with the completion of Year 2000 will be expensed as incurred and are not currently expected to have a material adverse impact on the Company's financial position or results of operations. The Company's cost estimates do not include costs associated with addressing and resolving issues as a result of the failure of third parties to be Year 2000 compliant or for implementing any contingency plans. LINENS `N THINGS, INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Inflation The Company does not believe that its operating results have been materially affected by inflation during the preceding three years. There can be no assurance, however, that the Company's operating results will not be affected by inflation in the future. Seasonality The Company's business is subject to substantial seasonal variations. Historically, the Company has realized a significant portion of its net sales and net income for the year during the third and fourth quarters. The Company's quarterly results of operations may also fluctuate significantly as a result of a variety of other factors, including the timing of new store openings. The Company believes this is the general pattern associated with its segment of the retail industry and expects this pattern will continue in the future. Consequently, comparisons between quarters are not necessarily meaningful and the results for any quarter are not necessarily indicative of future results. Forward-Looking Statements The Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995. The statements are made a number of times throughout the document and may be identified by forward-looking terminology as "expect," "believe," "may," "will," "intend" or similar statements or variations of such terms. Such forward-looking statements involve certain risks and uncertainties including levels of sales, store traffic, acceptance of product offerings and fashions, competitive pressures from other home furnishings retailers availability of suitable future store locations and schedule of store expansion plans any potential disruptions to the Company's operations caused by any Year 2000 failures related to the Company's systems, equipment or third parties. These and other important factors that may cause actual results to differ materially from such forward-looking statements are included in the "Risk Factors" section of the Company's Registration Statement on Form S-1 as filed with the Securities and Exchange Commission on May 29, 1997, and may be contained in subsequent reports filed with the Securities and Exchange Commission. You are urged to consider such factors. The Company assumes no obligation for updating any such forward-looking statements. Item 3. Quantitative and Qualitative Disclosures about Market Risk. Not Applicable. PART II - OTHER INFORMATION Item 6 - Exhibits and Reports on Form 8-K (a) EXHIBIT INDEX Exhibit Number Description ------ ----------- 3.1 Certificate of Incorporation 1 3.2 Amended and Restated Certificate of Incorporation 1,6 3.3 By-Laws 1 4 Specimen Certificate of Common Stock 1 10.1 Transitional Services Agreement between the Registrant and CVS Corporation 1 10.2 Stockholder Agreement between the Registrant and CVS Corporation 1 10.3 Tax Disaffiliation Agreement between the Registrant and CVS Corporation 1 10.4 Subordinated Note between Registrant and CVS 1 10.5 Credit Facility 5 10.6 Employment Agreement with Norman Axelrod *1 10.8 Employment Agreement with Steven B. Silverstein *1 10.9 Employment Agreement with Hugh J. Scullin *1 10.10 1996 Incentive Compensation Plan *1 10.11 1996 Non-Employee Director Stock Plan *1 11 Computation of Ratio of Earnings to Fixed Charges 4 13 Annual Report to Shareholders for 1998 fiscal year **4 15 Letter re unaudited interim financial information 2 21 List of Subsidiaries 3 27 Financial Data Schedule (filed electronically with SEC only) 2 - -------------------------------------------------------------------------------- 1 Incorporated by reference to the Exhibits filed with the Company's Registration Statement on Form S-1 (No. 333-12267), which Registration Statement became effective on November 26, 1996. 2 Filed with this Form 10-Q. 3 Incorporated by reference to Exhibit 21 to the Company's 1996 Annual Report on Form 10-K. 4 Incorporated by reference to Exhibit 11 to the Company's 1998 Annual Report on Form 10-K. 5 Incorporated by reference to Current Report on Form 8-K dated March 31, 1998. 6 Incorporated by reference to Current Report on Form 8-K dated May 5, 1999. * Management contract or compensatory plan or arrangement. ** With the exception of the information incorporated by reference to the Annual Report to Shareholders in Items 6, 7, and 8 of Part II and Item 14 of Part IV of the 1998 Form 10-K, the Annual Report to Shareholders is not deemed filed as part of the 1998 Form 10-K. - -------------------------------------------------------------------------------- b) Reports on Form 8-K: No Current Reports on Form 8-K were filed by the Company during the first quarter ended April 3, 1999. The Company filed a Current Report on Form 8-K dated May 5, 1999 setting forth a copy of the Certificate of Amendment to the Company's Amended and Restated Certificate of Incorporation increasing the number of authorized shares of Common Stock from 60 million shares to 135 million shares. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. LINENS 'N THINGS, INC. (Registrant) WILLIAM T. GILES By:------------------------------- William T. Giles Vice President, Chief Financial Officer (Duly authorized officer and principal financial officer) Date: May 17, 1999 EX-11 2 EX.11 - COMPUTATION OF NET INCOME PER COMMON SHARE LINENS 'N THINGS, INC. AND SUBSIDIARIES COMPUTATION OF NET INCOME PER COMMON SHARE (in thousands, except share amounts)
For the First Quarter Ended ------------------------------------- April 3, March 28, 1999 1998 --------------- ----------------- (Unaudited) Basic Weighted-average number of shares outstanding 39,156 38,763 =============== ================== Net income applicable to common shares $3,595 $1,475 =============== ================== Per share amounts Net income per share $ 0.09 $ 0.04 =============== ================== Diluted Weighted-average number of shares outstanding 40,862 40,206 =============== ================== Net income applicable to common shares $3,595 $1,475 =============== ================== Per share amounts Net income per share $ 0.09 $ 0.04 =============== ==================
EX-15 3 EX. 15 - KPMG LLP ACCOUNTANTS' ACKNOWLEDGMENT Accountants' Acknowledgment Linens 'n Things, Inc. Clifton, New Jersey Board of Directors: Re: Registration Statements Numbers 333-26819, 333-26827, 333-55803 and 333-71903 on Form S-8 With respect to the subject registration statements, we acknowledge our awareness of the use therein of our report dated April 19, 1999 related to our review of interim financial information. Pursuant to Rule 436(c) under the Securities Act of 1933, such report is not considered a part of a registration statement prepared or certified by an accountant or a report prepared or certified by an accountant within the meaning of sections 7 and 11 of the Act. KPMG LLP New York, New York May 17, 1999 EX-27 4 FDS -- ARTICLE 5
5 Appendix A to item 601(c) of Regulation S-K Commercial and Industrial Companies Article 5 of Regulation S-X (in thousands, except per share data) 3-MOS DEC-31-1999 APR-03-1999 22,047 0 24,164 0 288,317 352,829 259,578 72,302 565,713 193,553 0 0 0 394 332,370 565,713 273,540 273,540 166,848 101,043 0 0 (198) 5,847 2,252 3,595 0 0 0 3,595 0.09 0.09
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