-----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, PBTGxAfUbRfHPX/VCll6sarPIw4V/AVzjVi7lFHs8Ircxl78hc8Aq7pfpAIig+eQ lJ5vHtUQ9qJIDYCbXVt3Sg== 0001157523-04-003411.txt : 20040420 0001157523-04-003411.hdr.sgml : 20040420 20040420080101 ACCESSION NUMBER: 0001157523-04-003411 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040420 ITEM INFORMATION: FILED AS OF DATE: 20040420 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: 04741691 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 a4618982.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) April 20, 2004 -------------------------------- 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 April 20, 2004, reporting Company's sales and earnings results for the first quarter of 2004. The discussion of the Company's 2004 first quarter results and its commentary regarding expected future results include and, where indicated, exclude the expected impact of EITF 02-16. The expected impact of EITF 02-16 is further detailed in, and reconciled to generally accepted accounting principles (GAAP), as part of the press release. Such information is supplemental to information presented in accordance with GAAP, is not intended to represent a presentation in accordance with GAAP and should not be considered as a substitute for, or superior to, measures of financial performance prepared and presented in accordance with GAAP. In discussing its historical and expected future results and financial condition, the Company believes it is meaningful for investors to be made aware of and to be assisted in a better understanding of, on a period-to-period comparative basis, the impact of EITF 02-16 on operating results and financial condition. In addition, management internally uses these non-GAAP financial performance measures to evaluate performance on a comparative period-to-period basis in terms of absolute performance and trend performance. 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: April 20, 2004 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 April 20, 2004. EX-99 3 a4618982ex991.txt LINENS 'N THINGS, INC. EXHIBIT 99.1 Exhibit 99.1 Linens 'n Things Announces First Quarter 2004 Results; First Quarter EPS Exceeds Consensus Estimate CLIFTON, N.J.--(BUSINESS WIRE)--April 20, 2004--Linens 'n Things, Inc. (NYSE:LIN), one of the leading, national large format retailers of home textiles, housewares and home accessories, today announced total net sales increased approximately 15.0% to $552.8 million for the first quarter ended April 3, 2004, up from $480.5 million for the same period last year. Comparable store net sales for the first quarter of 2004 increased 4.7%. Net income for the first quarter ended April 3, 2004 was approximately $30,000 or zero cents per share on a fully diluted basis. Results for the first quarter ended April 3, 2004 include the impact of the provisions of EITF 02-16 "Accounting by a Customer (Including a Reseller) for Certain Consideration Received from a Vendor" (EITF 02-16). The provisions of EITF 02-16 impacted the Company's first quarter 2004 results by approximately $4.9 million, net of tax, or $0.11 per share. Excluding the impact of EITF 02-16, net income for the first quarter of fiscal 2004 would have been $4.9 million and earnings per share on a fully diluted basis would have been $0.11, compared to net income of $2.1 million or $0.05 per share for the same period last year. EITF 02-16 had no impact on the Company's cash flows. "Overall, we are encouraged by our current performance and by the increased traffic coming into our stores, which we believe stem from the steady progress we are making on our initiatives," commented Norman Axelrod, Chairman and Chief Executive Officer. During the first quarter, the Company opened twenty-one new stores, increasing its total square footage to 15.8 million as compared with opening sixteen stores during the same period last year. The Company currently expects to open approximately 45 to 50 new stores in the United States and Canada in 2004, further expanding its presence as a leading retailer of home furnishings. 2004 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 2004, the Company is comfortable with the estimate for fully diluted earnings per share of $0.08 to $0.09. This estimate includes the impact of EITF 02-16, which is expected to reduce diluted earnings per share by approximately $0.07 for the second quarter of fiscal 2004. Therefore, excluding the impact of EITF 02-16, fully diluted earnings per share for the second quarter of fiscal 2004 is targeted to be $0.15 to $0.16. For the full year 2004, sales are currently being targeted to grow by approximately 11% to 14%. Diluted earnings per share including the impact of EITF 02-16 are currently targeted to be in the range of $1.67 to $1.72. Based on the Company's current evaluations, 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 $0.24 for fiscal 2004. Therefore, excluding the impact of EITF 02-16, diluted earnings per share are targeted in the range of $1.91 to $1.96. Capital expenditures are expected to be approximately $80 million. The above outlook assumes comparable net sales to be in the low to mid single digits for both the second quarter and the full year of fiscal 2004. Linens 'n Things, with 2003 sales of $2.4 billion is one of the leading, national large format retailers of home textiles, housewares and home accessories. As of April 3, 2004, the Company was operating 461 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 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, 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, the actual impact in fiscal 2004 of EITF 02-16 as discussed in this release, 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 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) (unaudited) First Quarter Ended ------------------------------------------- April 3, 2004 Excluding April 3, impact April 5, 2004 of 2003 As EITF 02-16 EITF 02- As reported* Adjustment* 16* reported -------------------------------- ---------- Net sales $552,800 $-- $552,800 $480,471 Cost of sales, including buying and warehousing costs 332,346 (141) 332,205 287,630 -------------------------------- ---------- Gross profit 220,454 141 220,595 192,841 Selling, general and administrative expenses 220,390 (7,780) 212,610 189,401 -------------------------------- ---------- Operating profit 64 7,921 7,985 3,440 Interest expense, net 16 -- 16 76 -------------------------------- ---------- Income before provision for income taxes 48 7,921 7,969 3,364 Provision for income taxes 18 3,026 3,044 1,286 -------------------------------- ---------- Net income $30 $4,895 $4,925 $2,078 ================================ ========== Per share of common stock: Basic - ----- Net income per share $0.00 $0.11 $0.11 $0.05 Weighted average shares outstanding 44,920 44,920 44,098 Diluted - ------- Net income per share $0.00 $0.11 $0.11 $0.05 Weighted average shares outstanding 46,131 46,131 44,524 * The Company commenced implementation of EITF 02-16 "Accounting by a Customer (Including a Reseller) for Certain Consideration Received from a Vendor" (EITF 02-16) during the first quarter of fiscal 2004. As previously announced, EITF 02-16 is effective for vendor contracts initiated or modified in fiscal 2004 or thereafter. Following the initial implementation impact, subsequent fiscal years will reflect vendor allowances on a consistent basis other than for any net changes in such vendor allowances. The Company provides this information in order to allow investors to have better insight into the Company's comparative period-to-period operating performance, and it is intended to supplement, not replace GAAP presentation. The EITF 02-16 pre-tax adjustment of $7.9 million represents those allowances reflected as a reduction of the cost of inventory, which historically would have been treated as a reduction of cost of sales or selling, general and administrative expenses ("SG&A"). Beginning in fiscal 2004, due to the Company's changes to its vendor agreements and the requirements of EITF 02-16 the Company no longer records advertising allowances as a reduction to SG&A. For purposes of the above non-GAAP disclosure, the Company has allocated the EITF 02-16 pre-tax adjustment to SG&A based on the previous year ratio of vendor advertising allowances recorded within SG&A to sales. The remaining portion of the total EITF 02-16 pre-tax adjustment was allocated to cost of sales. LINENS 'N THINGS, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS (in thousands) April 03, April 5, 2004 2003* ----------- ----------- Assets (unaudited) Current assets: Cash and cash equivalents $67,754 $58,445 Accounts receivable 20,818 24,299 Inventories 762,021 685,911 Prepaid expenses and other current assets 34,768 28,782 Current deferred taxes 292 -- ----------- ----------- Total current assets 885,653 797,437 Property and equipment, net 386,502 362,332 Other non-current assets, net 30,234 28,821 ----------- ----------- Total assets $1,302,389 $1,188,590 =========== =========== Liabilities and Shareholders' Equity Current liabilities: Accounts payable $284,013 $295,139 Accrued expenses and other current liabilities 120,837 128,525 Short-term borrowings 3,544 2,244 Current deferred taxes 11,073 6,850 ----------- ----------- Total current liabilities 419,467 432,758 Other long-term liabilities 114,787 84,237 ----------- ----------- Total liabilities 534,254 516,995 Shareholders' equity 768,135 671,595 ----------- ----------- Total liabilities and shareholders' equity $1,302,389 $1,188,590 =========== =========== * Certain prior year vendor accounts receivable balances have been reclassified and netted against accounts payable to conform with the current year presentation. LINENS 'N THINGS, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (in thousands) First Quarter Ended ----------------- April 3, April 5, 2004 2003 -------- -------- (unaudited) Cash Flows From Operating Activities Net income $30 $2,078 Depreciation and amortization 14,343 12,842 Change in working capital (68,007) (18,135) -------- -------- Net cash used in operating activities (53,634) (3,215) -------- -------- Cash Flows From Investing Activities Additions to property and equipment (23,713) (25,666) -------- -------- Cash Flows From Financing Activities Proceeds from common stock issued under stock incentive plans 5,542 282 Increase in short-term borrowings 3,546 303 Purchase of treasury stock -- (16) -------- -------- Net cash provided by financing activities 9,088 569 -------- -------- Effect of exchange rate changes on cash and cash equivalents (116) 152 Net decrease in cash and cash equivalents (68,375) (28,160) Cash and cash equivalents at beginning of period 136,129 86,605 -------- -------- Cash and cash equivalents at end of period $67,754 $58,445 ======== ======== CONTACT: Linens 'n Things, Inc. William T. Giles, 973-815-2929 www.lnt.com -----END PRIVACY-ENHANCED MESSAGE-----