Exhibit 99.1

 

FOR IMMEDIATE RELEASE

 

 

 

 

Contact:

 

Francis M. Rowan

 

 

Linens ‘n Things

 

 

(973) 815-2929

 

 

frowan@lnt.com

 

Linens ‘n Things Reports Fourth Quarter and Full Year 2007 Financial Performance

 

Clifton, NJ — March 20, 2008

— Linens Holding Co. (“LNT” or the “Company”), a leading home furnishings specialty retailer known as “Linens ‘n Things,” today reported its financial results for the fourth quarter and fiscal year ended December 29, 2007.

 

As previously announced, the Company reported total net sales of $962.9 million for the quarter, a 0.6% increase over the same quarter in 2006.  This increase in net sales resulted from the opening of new stores, partially offset by a comparable store sales decline of (1.0)% for the quarter.  For the prior year period, the Company reported a comparable store sales decrease of (0.2)%.  During the holiday shopping season between November 23, 2007 (i.e., Black Friday) and December 29, 2007, the Company generated comparable store sales growth of 0.9%.  For the quarter, comparable store sales performance among product categories was more balanced than in previous quarters.  However, consistent with prior trends, the housewares category outperformed textiles and home décor during the period.

 

The Company defines EBITDA as earnings before interest, income taxes, depreciation and amortization.  As part of its reporting, it also presents Adjusted EBITDA, which excludes the impact of transaction expenses from the February 2006 acquisition of Linens ‘n Things, Inc., and other non-recurring or non-cash expenses, and normalizes occupancy costs for certain purchase accounting and rent-related adjustments.  For the quarter, the Company generated Adjusted EBITDA of $15.3 million compared to Adjusted EBITDA of $58.1 million in the fourth quarter of 2006. The decrease in year-over-year fourth quarter Adjusted EBITDA was primarily the result of a decrease in gross margin reflecting the highly promotional environment during the quarter that we referenced in our previous announcement as well as an increase in selling, general and administrative expenses due to increased marketing spend.

 

“We recognize the challenges that the current macroeconomic environment presents, especially while we are engaged in turning around a complex operation in a highly leveraged situation,” said Robert DiNicola, Chairman and Chief Executive Officer.  “Consequently, we are taking what we consider to be prudent steps to ensure that we realize the benefits of all of our efforts over the past two years to rebuild this business.”

 

In light of the current external market environment in the U.S., and the economic headwinds against the Company’s efforts to improve its comparable store sales growth, management has undertaken a series of cost reduction initiatives designed to bring its cost structure in line with its sales productivity.  These initiatives include areas of opportunity to reduce costs such as store staffing costs, corporate overhead expense and other non-selling or non-essential expenses without impacting store and guest service levels, as well as fine-tuning our marketing expenditures and reducing inventory purchases commensurate with the level of ongoing sales.  The Company will also continue to perform strategic reviews of its store base to capitalize on opportunities to reduce its occupancy costs and potentially close or sublease select store locations.

 

The Company generated a net loss for the fourth quarter of 2007 of $(62.0) million compared with a net loss of $(22.5) million in the fourth quarter of 2006.  The net loss in the fourth quarter of 2006 is after $(31.1) million in impairment charges.

 

The Company ended the quarter with an asset-based revolver balance of $205.9 million, cash on hand of $16.1 million and excess availability under its revolving credit facility of $302.9 million.  For the fourth quarter, the Company generated cash from operating activities of $137.9 million.  Generation of cash in the fourth quarter primarily reflects the customary sell-through of inventories during the holiday selling season.  For the fourth quarter of 2007, the Company had capital expenditures of $5.8 million compared with $17.5 million during the prior year period.

 

During the fourth quarter of 2007, the Company opened four stores and closed zero stores as compared with opening ten stores and closing zero stores during the fourth quarter of 2006.  Store square footage increased 2.6% to 19.4 million at December 29, 2007 compared with 18.9 million at December 30, 2006.

 

1


The following information was filed by Linens N Things Inc on Thursday, March 20, 2008 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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