FORT WORTH, Texas, Feb. 19 /PRNewswire-FirstCall/ -- Calloway's Nursery, Inc. (Pink Sheets: CLWY) today reported revenues and operating results for the fourth quarter and year ended December 31, 2008. Results for the Fourth Quarter -- Sales were $8.6 million for 2008, compared to sales of $11.0 million for 2007. Same-store (16 stores) sales were $7.8 million for 2008, compared to same-store sales of $7.7 million for 2007. -- Net loss was $320,000 for 2008, compared to net loss of $80,000 for 2007. The 2008 quarter included a $268,000 extraordinary gain on the involuntary conversion of assets. -- Diluted net loss per common share was $.05 for 2008, compared to diluted net loss per common share of $.01 for 2007. The 2008 quarter included $.04 per-share extraordinary gain on the involuntary conversion of assets. Results for the Year -- Sales were $44.3 million for 2008, compared to sales of $46.4 million for 2007. Same-store (16 stores) sales were $35.2 million for 2008, compared to same-store sales of $35.0 million for 2007. -- Net income was $627,000 for 2008, compared to net income of $376,000 for 2007. The 2008 year included a $408,000 extraordinary gain on the involuntary conversion of assets. -- Diluted net income per common share was $.09 for 2008, compared to diluted net income per common share of $.05 for 2007. The 2008 period included $.06 per-share extraordinary gain on the involuntary conversion of assets. Founded in 1986, Calloway's Nursery, Inc. operates 18 retail garden centers in Texas: Calloway's Nursery in Dallas-Fort Worth and Cornelius Nursery in Houston. CALLOWAY'S NURSERY, INC. CONDENSED CONSOLIDATED INCOME STATEMENT (UNAUDITED) (amounts in thousands, except per share amounts) Year Ended Quarter Ended December 31, December 31, ------------ ------------ 2008 2007 2008 2007 ---- ---- ---- ---- Net sales $44,318 $46,426 $8,564 $10,975 Cost of goods sold 24,014 25,275 5,344 6,333 Gross profit 20,304 21,151 3,220 4,642 Operating expenses 14,352 15,025 2,806 3,422 Advertising expenses 1,625 1,505 358 504 Occupancy expenses 2,965 3,040 724 635 Depreciation and amortization 409 384 124 94 Net interest expense 586 525 117 89 Total expenses 19,937 20,479 4,129 4,744 Income (loss) before provision for income taxes and extraordinary gain 367 672 (909) (102) Income tax expense (benefit) 148 296 (321) (22) Net income (loss) before extraordinary gain 219 376 (588) (80) Extraordinary gain, net of income tax expense of $210, $--, $138 and $-- 408 -- 268 -- Net income (loss) $627 $376 $(320) $(80) Weighted average number of common shares outstanding - basic and diluted 6,950 6,950 6,950 6,950 Income (loss) before extraordinary gain per common share - basic and diluted $0.03 $0.05 $(0.09) $(0.01) Extraordinary gain, net of tax, per common share - basic and diluted 0.06 -- 0.04 -- Net income (loss) per common share - basic and diluted $0.09 $0.05 $(0.05) $(0.01) CALLOWAY'S NURSERY, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (in thousands) ASSETS December 31, December 31, 2008 2007 ---- ---- Cash and cash equivalents $1,931 $3,207 Accounts receivable - trade 36 148 Accounts receivable - insurance 1,077 -- Inventories 2,392 3,324 Prepaids and other assets 88 88 Deferred income taxes -- 259 Total current assets 5,524 7,026 Property and equipment, net 15,749 11,890 Deferred income taxes 616 387 Other assets 287 288 Total assets $22,176 $19,591 LIABILITIES AND SHAREHOLDERS' EQUITY Accounts payable and accrued expenses $4,116 $4,355 Current portion of long-term debt 585 577 Total current liabilities 4,701 4,932 Deferred rent payable 91 137 Long-term debt, net of current portion 11,732 9,497 Total liabilities 16,524 14,566 Shareholders' equity: Common stock 72 72 Additional paid-in capital 10,220 10,220 Accumulated deficit (3,232) (3,859) 7,060 6,433 Less: Treasury stock, at cost (1,408) (1,408) Total shareholders' equity 5,652 5,025 Total liabilities and shareholders' equity $22,176 $19,591 CALLOWAY'S NURSERY, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (in thousands) Year Ended December 31, ------------ 2008 2007 ---- ---- Cash flows from operating activities: Net income $627 $376 Adjustments to reconcile net income to net cash provided by (used for) operating activities: Depreciation and amortization 409 384 Net change in operating assets and liabilities (287) (856) Net cash provided by (used for) operating activities 749 (96) Cash flows from investing activities: Additions to property and equipment (10,512) (1,379) Proceeds from involuntary conversion of property and equipment 618 -- Proceeds from sale of property and equipment 5,626 750 Net cash used for investing activities (4,268) (629) Cash flows from financing activities: Proceeds from issuance of debt 7,080 2,231 Repayments of debt (4,837) (2,266) Net cash provided by (used for) financing activities 2,243 (35) Net decrease in cash and cash equivalents (1,276) (760) Cash and cash equivalents at beginning of period 3,207 3,967 Cash and cash equivalents at end of period $1,931 $3,207 DATASOURCE: Calloway's Nursery, Inc. CONTACT: Dan Reynolds of Calloway's Nursery, Inc., +1-817-222-1122 Web Site: http://www.calloways.com/

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