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
<PAGE>
<TABLE>
<CAPTION>
INDEX
Part I. Financial Information Page No.
<S> <C>
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
</TABLE>
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
<CAPTION>
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)
<S> <C> <C>
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
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
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)
<S> <C> <C> <C>
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
================== ================== ===================
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
LINENS 'N THINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
<TABLE>
<CAPTION>
First Quarter Ended
-----------------------------------------
April 3, March 28,
1999 1998
------------------- ------------------
(Unaudited)
<S> <C> <C>
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
=================== ==================
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
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.
<PAGE>
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
<PAGE>
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.
<PAGE>
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
<PAGE>
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.
<PAGE>
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.
<PAGE>
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.
- --------------------------------------------------------------------------------
<PAGE>
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
LINENS 'N THINGS, INC. AND SUBSIDIARIES
COMPUTATION OF NET INCOME PER COMMON SHARE
(in thousands, except share amounts)
<TABLE>
<CAPTION>
For the First Quarter Ended
-------------------------------------
April 3, March 28,
1999 1998
--------------- -----------------
(Unaudited)
<S> <C> <C>
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
=============== ==================
</TABLE>
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
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
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)
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> APR-03-1999
<CASH> 22,047
<SECURITIES> 0
<RECEIVABLES> 24,164
<ALLOWANCES> 0
<INVENTORY> 288,317
<CURRENT-ASSETS> 352,829
<PP&E> 259,578
<DEPRECIATION> 72,302
<TOTAL-ASSETS> 565,713
<CURRENT-LIABILITIES> 193,553
<BONDS> 0
0
0
<COMMON> 394
<OTHER-SE> 332,370
<TOTAL-LIABILITY-AND-EQUITY> 565,713
<SALES> 273,540
<TOTAL-REVENUES> 273,540
<CGS> 166,848
<TOTAL-COSTS> 101,043
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (198)
<INCOME-PRETAX> 5,847
<INCOME-TAX> 2,252
<INCOME-CONTINUING> 3,595
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,595
<EPS-PRIMARY> 0.09
<EPS-DILUTED> 0.09
</TABLE>
