Calloway's Nursery Announces Results for Second Quarter Ended June 30, 2011

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Aug 10, 2011, 09:00 ET

FORT WORTH, Texas, Aug. 10, 2011 /PRNewswire/ -- Calloway's Nursery, Inc. (Pink Sheet: CLWY) today reported revenues and operating results for the second quarter ended June 30, 2011.

Results for the Second Quarter

Revenue was $18.7 million for 2011, compared to revenue of $20.5 million for 2010. That was also the same-store revenue comparison since all nineteen retail stores have been open for more than twelve months at the start of the current year.
Net income was $1.6 million for 2011, compared to net income of $2.3 million for 2010.
Diluted net income per common share was $.21 for 2011, compared to diluted net income per common share of $.32 for 2010.

Results for the Six Month Period

Revenue was $31.1 million for 2011, compared to revenue of $28.7 million for 2010. That was also the same-store revenue comparison since all nineteen retail stores have been open for more than twelve months at the start of the current year.
Net income was $2.4 million for 2011, compared to net income of $2.3 million for 2010. The 2010 period included a $246,000 extraordinary gain.
Diluted net income per common share was $.31 for 2011, compared to diluted net income per common share of $.32 for 2010. The 2010 period included a $.03 per-share extraordinary gain.

Founded in 1986, Calloway's Nursery, Inc. is a 19-store garden center chain serving the Dallas - Fort Worth (as Calloway's Nursery) and Houston (as Cornelius Nursery) markets. The company strives to make gardening fun, easy and successful for customers by offering expert advice from Texas Certified Nursery Professionals; store environments that are educational and easy to shop; weekly gardening clinics that serve both novice and expert gardeners; displays and instructions to aid gardeners with design and color development in their yards; and a product selection of the best plant varieties available.

CALLOWAY'S NURSERY, INC. CONDENSED CONSOLIDATED INCOME STATEMENTS (UNAUDITED) (Amounts in thousands, except per share amounts)
	Three-Months Ended		Six-Months Ended
	June 30,		June 30,
	2011	2010	2011		2010

Net sales	$18,709	$20,456	$31,147		$28,733
Cost of goods sold	9,853	10,446	15,844		14,445
Gross profit	8,856	10,010	15,303		14,288

Operating expenses	4,715	4,846	8,449		7,931
Advertising expenses	434	410	812		708
Occupancy expenses	844	822	1,703		1,654
Depreciation and amortization	149	152	297		292
Net interest expense	206	252	406		579
Total expenses	6,348	6,482	11,667		11,164
Income before provision for income taxes and extraordinary gain	2,508	3,528	3,636		3,124
Income tax expense	875	1,208	1,249		1,074
Net income before extraordinary gain	1,633	2,320	2,387		2,050
Extraordinary gain, net of income tax expense	--	--	--		246
Net income	$ 1,633	$ 2,320	$ 2,387		$ 2,296

Weighted average number of common shares outstanding – basic and diluted	7,757	7,277		7,660	7,232

Income before extraordinary gain per common share – basic and diluted	$0.21	$0.32		$0.31	$0.29

Extraordinary gain, net of tax, per common share - basic and diluted	--	--		--	0.03

Net income per common share - basic and diluted	$0.21	$0.32		$0.31	$0.32

CALLOWAY'S NURSERY, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Amounts in thousands)
ASSETS

	June 30,	June 30,
	2011	2010

Cash and cash equivalents	$ 6,121	$ 4,248
Accounts receivable	133	498
Inventories	2,895	2,141
Prepaids and other assets	35	35
Deferred income taxes	547	241
Assets held for sale	--	568
Total current assets	9,731	7,731

Property and equipment, net	17,223	17,750
Deferred income taxes	--	609
Other assets	305	296
Total assets	$27,259	$26,386

LIABILITIES AND SHAREHOLDERS' EQUITY

Accounts payable and accrued expenses	$ 7,674	$ 7,251
Current portion of long-term debt	790	3,388
Total current liabilities	8,464	10,639

Deferred rent payable	2	25
Long-term debt, net of current portion	11,403	9,432
Deferred income taxes	51	--
Total liabilities	19,920	20,096
Shareholders' equity:
Common stock	81	76
Additional paid-in capital	10,672	10,402
Accumulated deficit	(2,006)	(2,780)
	8,747	7,698
Less: Treasury stock, at cost	(1,408)	(1,408)
Total shareholders' equity	7,339	6,290
Total liabilities and shareholders' equity	$27,259	$26,386

CALLOWAY'S NURSERY, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (Amounts in thousands)
	Six-Months Ended
	June 30,

	2011	2010
Cash flows from operating activities:
Net income	$2,387	$2,297
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	297	292
Gain on involuntary conversion of assets, net of tax	--	(372)
Net change in operating assets and liabilities	1,177	294
Net cash provided by operating activities	3,861	2,511

Cash flows from investing activities:
Additions to property and equipment	(71)	(577)
Proceeds from involuntary conversion of assets	--	606
Net cash provided by (used for) investing activities	(71)	29

Cash flows from financing activities:
Proceeds from issuance of debt	56	--
Repayments of debt	(378)	(785)
Proceeds from issuance of common stock	188	84
Net cash used for financing activities	(134)	(701)
Net increase in cash and cash equivalents	3,656	1,839
Cash and cash equivalents at beginning of period	2,465	2,409

Cash and cash equivalents at end of period	$6,121	$4,248