FORT WORTH, Texas, Nov. 9 /PRNewswire-FirstCall/ -- Calloway's Nursery, Inc. (OTC Pink Sheets: CLWY) today reported revenues and operating results for the three-month and twelve-month periods ended September 30, 2005. Results for the Three-Month Period * Sales were $6.2 million for 2005 compared to $8.2 million for 2004. * Same-store sales were $5.9 million for 2005 compared to $7.1 million for 2004. * Net loss was $1.8 million for 2005 compared to $1.2 million for 2004. * Diluted net loss per common share was $.26 for 2005 compared to $.17 for 2004. Results for the Twelve-Month Period * Sales were $46.3 million for 2005 compared to $48.2 million for 2004. * Same-store sales were $44.7 million for 2005 compared to $43.6 million for 2004. * Net income was $1.0 million for 2005 compared to $0.1 million for 2004. * Diluted net income per common share was $.14 for 2005 compared to $.02 for 2004. The company also announced that it has adopted a standard calendar year ending December 31st. Its next results announcement will cover the three-month and twelve-month periods ending December 31, 2005 compared to the three-month and twelve-month periods ended December 31, 2004. Founded in 1986, Calloway's Nursery, Inc. operates 23 retail garden centers in the three largest metropolitan areas in Texas: Dallas - Fort Worth, San Antonio and Houston, reaching a combined population of over 11.5 million. CALLOWAY'S NURSERY, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (amounts in thousands, except per share amounts) Twelve-Month Three-Month Period Ended Period Ended September 30, September 30, 2005 2004 2005 2004 Net sales $46,301 $48,228 $6,160 $8,239 Cost of goods sold 24,512 25,648 3,518 4,481 Gross profit 21,789 22,580 2,642 3,758 Operating expenses 14,997 15,690 3,109 3,430 Occupancy expenses 3,354 3,419 810 853 Advertising expenses 1,479 1,770 223 354 Depreciation and amortization 395 467 93 111 Interest expense (net) 585 1,028 177 187 Total expenses 20,810 22,374 4,412 4,935 Income (loss) from continuing operations before income taxes 979 206 (1,770) (1,177) Income tax expense --- 66 --- --- Income (loss) from continuing operations 979 140 (1,770) (1,177) Loss from discontinued operations --- (27) --- --- Net income (loss) $979 $113 ($1,770) ($1,177) Weighted average number of common shares outstanding - Basic and diluted 6,950 6,956 6,950 6,950 Net income (loss) per common share - basic and diluted $.14 $.02 ($.26) ($.17) CALLOWAY'S NURSERY, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (In Thousands) ASSETS September 30, September 30, 2005 2004 Cash and cash equivalents $3,714 $1,745 Accounts receivable 164 214 Inventories 4,692 5,215 Prepaids and other assets 136 154 Total current assets 8,706 7,328 Property and equipment, net 10,231 10,452 Other assets 314 153 Total assets $19,251 $17,933 LIABILITIES AND SHAREHOLDERS' EQUITY Accounts payable and accrued expenses $4,255 $5,479 Current portion of long-term debt 469 510 Preferred stock classified as liability 1,789 3,245 Total current liabilities 6,513 9,234 Deferred rent payable 306 425 Long-term debt, net of current portion 9,382 6,203 Total liabilities 16,201 15,862 Commitments and contingencies Shareholders' equity: Common stock 72 72 Additional paid-in capital 10,220 10,220 Accumulated deficit (5,834) (6,813) 4,458 3,479 Less: Treasury stock, at cost (1,408) (1,408) Total shareholders' equity 3,050 2,071 Total liabilities and shareholders' equity $19,251 $17,933 CALLOWAY'S NURSERY, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (In thousands) Twelve-Month Period Ended September 30, 2005 2004 Cash flows from operating activities: Net income $979 $113 Adjustments to reconcile net income to net cash provided by operating activities: Loss from discontinued operations --- 27 Depreciation and amortization 395 467 Accretion of preferred stock included in interest expense --- 471 Net change in operating assets and liabilities (913) (525) Net cash flows provided by operating activities 461 553 Cash flows from investing activities - Additions to property and equipment (174) (78) Cash flows from financing activities: Net proceeds from issuance/retirement of common stock --- 7 Retirement of preferred stock (1,456) (175) Net proceeds from issuance/repayments of long-term debt 3,138 (456) Net cash provided by (used for) financing activities 1,682 (624) Net increase (decrease) in cash and cash equivalents from continuing operations 1,969 (149) Net decrease in cash and cash equivalents from discontinued operations --- (27) Net increase (decrease) in cash and cash equivalents 1,969 (176) Cash and cash equivalents at beginning of period 1,745 1,921 Cash and cash equivalents at end of period $3,714 $1,745 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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