-----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, SBQgCmmF0Fc+5sq3n6VytYOIpq1tJbhFjZ8/LL0QfVpIC8tmaLLDH2+QtDP+0Pex aP6G/Loc1FQDe8MrG21BfQ== 0001157523-03-005624.txt : 20031022 0001157523-03-005624.hdr.sgml : 20031022 20031021194534 ACCESSION NUMBER: 0001157523-03-005624 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20031021 ITEM INFORMATION: FILED AS OF DATE: 20031022 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: 0101 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-12381 FILM NUMBER: 03950580 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 8-K 1 a4498537.txt LINENS 'N THINGS, INC. 8-K SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------ FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of report (Date of earliest event reported) October 21, 2003 ------------------------ LINENS 'N THINGS, INC. - -------------------------------------------------------------------------------- (Exact Name of Registrant as Specified in Charter) Delaware 1-12381 22-3463939 - -------------------------------------------------------------------------------- (State or Other Jurisdiction (Commission (I.R.S. Employer of Incorporation) File Number) Identification No.) 6 Brighton Road, Clifton, New Jersey 07015 - -------------------------------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code (973) 778-1300 ------------------------ INFORMATION TO BE INCLUDED IN THE REPORT Item 12. Results of Operations and Financial Condition Attached and being furnished hereby as Exhibit 99.1 is a copy of a press release of Linens 'n Things, Inc. (the "Company") dated October 21, 2003, reporting Company's sales and earnings results for the third quarter of 2003. 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 hereunto duly authorized. LINENS 'N THINGS, INC. Dated: October 21, 2003 By: /s/William T. Giles ------------------- Name: William T. Giles Title: Executive Vice President, Chief Financial Officer EXHIBIT INDEX Exhibit No. Description - ----------- ----------- 99.1 Press Release of Linens 'n Things, Inc., dated October 21, 2003. EX-99 3 a4498537ex991.txt LINENS 'N THINGS, INC. PRESS RELEASE Exhibit 99.1 Linens 'n Things Reports 14.8% Increase in Net Income for the Third Quarter 2003 CLIFTON, N.J.--(BUSINESS WIRE)--Oct. 21, 2003--Linens 'n Things, Inc. (NYSE:LIN), one of the leading national large format retailers of home textiles, housewares and home accessories today announced net income for the third quarter ended October 4, 2003 increased approximately 14.8% to $21.0 million or $0.47 per share on a fully diluted basis, compared with $18.3 million or $0.41 per share for the same period last year. Net sales increased approximately 11.1% to $602.8 million for the third quarter ended October 4, 2003, up from $542.6 million for the same period last year. Comparable store net sales for the third quarter increased 1.8% compared with 1.8% for the same period last year. "We are encouraged by our results and believe the progress we have made on our initiatives positions us well for the fourth quarter", said Norman Axelrod, Chairman and Chief Executive Officer. Net income for the thirty-nine week period ended October 4, 2003 was $28.8 million, or $0.64 per share on a fully diluted basis, compared with $29.0 million, or $0.68 per share for the same period last year. Net sales increased approximately 10.0% to $1,607.0 million for the thirty-nine week period ended October 4, 2003, up from $1,461.4 million for the same period last year. Comparable store net sales for the thirty-nine week period ended October 4, 2003 declined 0.3%. During the third quarter, the Company opened twenty-one new stores, and closed one store, as compared with opening fourteen stores and closing one store during the same period last year. Year to date, the Company opened fifty-three stores and closed nine stores increasing its total square footage to 14.9 million, as compared with opening forty-two stores and closing five stores during the same period last year. The Company currently expects to open approximately fifty-eight stores in 2003, further expanding its presence as a leading retailer of home furnishings. For 2003, capital expenditures are expected to be approximately $80 to $85 million. 2003 Business Outlook Fiscal 2003 is a 52-week year with the fourth quarter being a 13-week period versus a 14-week period last year. For the fourth quarter of 2003, the Company is targeting sales to grow between 8% and 10% while comp sales are targeted to be in the low to mid single digits. Based on the Company achieving this sales plan, the Company is comfortable with the current range of analysts' estimates for diluted earnings per share of approximately $0.99 to $1.04 for the fourth quarter of 2003. Implementation of EITF 02-16 In January 2003, the Emerging Issues Task Force ("EITF") issued EITF 02-16, "Accounting by a Customer (Including a Reseller) for Certain Consideration Received from a Vendor," which states that cash consideration received from a vendor is presumed to be a reduction of the prices of the vendor's products or services and should, therefore, be characterized as a reduction of cost of merchandise sold. Under EITF 02-16, the presumption may be overcome when the consideration is either a reimbursement of specific, incremental and identifiable costs incurred to sell the vendor's products, or a payment for assets or services delivered to the vendor. EITF 02-16 is effective for contracts entered into or modified after December 31, 2002. Since the Company has entered into substantially all of its current vendor contracts prior to December 31, 2002 this issue will not have a material impact on the Company's fiscal 2003 consolidated financial statements. As vendor agreements are initiated or modified for fiscal 2004, the Company will apply the method of accounting for vendor allowances pursuant to EITF 02-16. In connection with the implementation of EITF 02-16, the Company expects to treat certain funds received from vendors as a reduction in the cost of inventory and as a result, these funds will be recognized as a reduction to cost of merchandise sold when the inventory is sold. Accordingly, certain funds received from vendors, which were historically reflected as a reduction of advertising expense in SG&A will be treated as a reduction of cost of inventory. Based on the Company's current evaluation, 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, which covers the period January 4, 2004 to January 1, 2005. The majority of this non-cash reduction in earnings per share will occur in the first two quarters of fiscal 2004. The Company expects SG&A on an annualized basis to increase by approximately 1.1% as a percent of sales as a result of this accounting change. This accounting change will have no impact on the Company's cash flows or the expected amount of funds to be received from vendors. In addition, following implementation of EITF 02-16, there will be no earnings impact in subsequent fiscal years other than for future net changes in such vendor allowances. The above outlook information is based on current expectations and assumptions 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 and assumptions will prove correct. The Company does not intend to update such outlook other than in connection with regularly scheduled earnings releases. Linens 'n Things, with 2002 sales of $2,184.7 million, is one of the leading, national large format retailers of home textiles, housewares and home accessories. As of October 4, 2003 the Company was operating 435 stores in 45 states and in 4 provinces across 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) Thirteen Weeks Ended Thirty-Nine Weeks Ended --------------------- ----------------------- October September October September 4, 2003 28, 2002 4, 2003 28, 2002 ---------- ---------- ----------- ----------- (unaudited) (unaudited) Net sales $602,816 $542,565 $1,606,959 $1,461,394 Cost of sales, including buying and warehousing costs 354,863 319,874 942,643 864,638 ---------- ---------- ----------- ----------- Gross profit 247,953 222,691 664,316 596,756 Selling, general and administrative expenses 213,769 192,710 617,174 547,990 ---------- ---------- ----------- ----------- Operating profit 34,184 29,981 47,142 48,766 Interest expense, net 236 414 600 1,842 ---------- ---------- ----------- ----------- Income before provision for income taxes 33,948 29,567 46,542 46,924 Provision for income taxes 12,968 11,287 17,780 17,918 ---------- ---------- ----------- ----------- Net income $20,980 $18,280 $28,762 $29,006 ========== ========== =========== =========== Per share of common stock: Basic - ----- Net income per share $0.47 $0.42 $0.65 $0.69 Weighted average shares outstanding 44,208 44,047 44,141 41,877 Diluted - ------- Net income per share $0.47 $0.41 $0.64 $0.68 Weighted average shares outstanding 45,027 44,691 44,699 42,904 LINENS 'N THINGS, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS (in thousands) October 4, September 28, 2003 2002 -------------- ------------- Assets (unaudited) Current assets: Cash and cash equivalents $22,731 $22,580 Inventories 746,310 679,056 Accounts Receivable 46,522 33,703 Prepaid expenses and other 33,236 15,095 Current deferred taxes -- 22,118 -------------- ------------- Total current assets 848,799 772,552 Property and equipment, net 380,415 345,429 Other non-current assets, net 28,836 29,706 -------------- ------------- Total assets $1,258,050 $1,147,687 ============== ============= Liabilities and Shareholders' Equity Current liabilities: Accounts payable $320,018 $297,283 Accrued expenses and other current liabilities 130,053 132,533 Current deferred taxes 7,152 -- Short-term borrowings 3,221 16,080 -------------- ------------- Total current liabilities 460,444 445,896 Other long-term liabilities 95,484 74,066 -------------- ------------- Total liabilities 555,928 519,962 Shareholders' equity 702,122 627,725 -------------- ------------- Total liabilities and shareholders' equity $1,258,050 $1,147,687 ============== ============= LINENS 'N THINGS, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (in thousands) Thirty-Nine Weeks Ended --------------------------- October 4, September 28, 2003 2002 ------------- ------------- (unaudited) Cash Flows From Operating Activities Net income $28,762 $29,006 Depreciation and amortization 40,421 32,967 Change in working capital (66,980) (75,203) ------------- ------------- Net cash provided by (used in) operating activities 2,203 (13,230) ------------- ------------- Cash Flows From Investing Activities Additions to property and equipment (70,306) (65,830) ------------- ------------- Cash Flows From Financing Activities Net proceeds from common stock issuance -- 95,833 Proceeds from common stock issued under stock incentive plans 2,651 3,970 Increase (decrease) in short-term borrowings 1,070 (13,840) Issuance of treasury stock 255 248 ------------- ------------- Net cash provided by financing activities 3,976 86,211 ------------- ------------- Effect of exchange rate changes on cash and cash equivalents 253 (8) Net (decrease) increase in cash and cash equivalents (63,874) 7,143 Cash and cash equivalents at beginning of period 86,605 15,437 ------------- ------------- Cash and cash equivalents at end of period $22,731 $22,580 ============= ============= Visit our Web Site at www.lnt.com for a webcast of our Third Quarter Sales and Earnings Conference Call scheduled for October 22, 2003 at 9AM (ET). CONTACT: Linens 'n Things, Inc. William T. Giles Chief Financial Officer 973-815-2929 -----END PRIVACY-ENHANCED MESSAGE-----