FORT WORTH, Texas, April 27 /PRNewswire-FirstCall/ -- Calloway's Nursery, Inc. (Pink Sheets: CLWY) today reported revenues and operating results for the first quarter ended March 31, 2007. Results for the First Quarter -- Sales were $10.3 million for 2007, compared to sales of $8.6 million for 2006. Also, same-store sales were $10.3 million for 2007, compared to same-store sales of $8.6 million for 2006. -- Net loss was $11,000 for 2007, compared to net loss of $833,000 for 2006. -- Diluted result per common share was break-even for 2007, compared to diluted net loss per common share of $.12 for 2006. 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) Quarter Ended March 31, 2007 2006 Net sales $10,292 $8,627 Cost of goods sold 5,115 4,464 Gross profit 5,177 4,163 Operating expenses 3,824 3,509 Advertising expenses 266 372 Occupancy expenses 839 850 Depreciation and amortization 110 88 Interest expense (net) 154 177 Total expenses 5,193 4,996 Loss before provision for income taxes (16) (833) Provision for income taxes - benefit 5 - Net loss ($11) ($833) Weighted average number of common shares outstanding- basic and diluted 6,950 6,950 Net loss per common share - basic and diluted ($.--) ($.12) CALLOWAY'S NURSERY, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (In Thousands) ASSETS March 31, December 31, March 31, 2007 2006 2006 Cash and cash equivalents $4,327 $3,967 $3,137 Accounts receivable 907 109 453 Inventories 6,461 3,612 4,722 Prepaids and other assets 113 276 98 Deferred income taxes 154 149 -- Total current assets 11,962 8,113 8,410 Property and equipment, net 11,381 10,778 10,122 Deferred income taxes 585 585 - Other assets 306 299 302 Total assets $24,234 $19,775 $18,834 LIABILITIES AND SHAREHOLDERS' EQUITY Accounts payable and accrued expenses $9,439 $5,696 $6,956 Current portion of long-term debt 555 555 522 Total current liabilities 9,994 6,251 7,478 Deferred rent payable 172 188 254 Long-term debt, net of current portion 9,430 8,687 9,076 Total liabilities 19,596 15,126 16,808 Commitments and contingencies Shareholders' equity: Common stock 72 72 72 Additional paid-in capital 10,220 10,220 10,220 Accumulated deficit (4,246) (4,235) (6,858) 6,046 6,057 3,434 Less: Treasury stock, at cost (1,408) (1,408) (1,408) Total shareholders' equity 4,638 4,649 2,026 Total liabilities and shareholders' equity $24,234 $19,775 $18,834 CALLOWAY'S NURSERY, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (In thousands) Quarter Ended March 31, 2007 2006 Cash flows from operating activities: Net loss ($11) ($833) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 110 88 Net change in operating assets and liabilities 231 794 Net cash flows provided by operating activities 330 49 Cash flows from investing activities: Additions to property and equipment (1,406) (51) Proceeds from sale of property and equipment 693 -- Net cash flows used for investing activities (713) (51) Cash flows from financing activities: Proceeds from issuance of debt 867 -- Repayments of debt (124) (134) Retirement of preferred stock -- (1,789) Net cash flows provided by (used for) financing activities 743 (1,923) Net increase (decrease) in cash and cash equivalents from continuing operations 360 (1,925) Cash and cash equivalents at beginning of period 3,967 5,062 Cash and cash equivalents at end of period $4,327 $3,137 DATASOURCE: Calloway's Nursery, Inc. CONTACT: Dan Reynolds, +1-817-222-1122, for Calloway's Nursery, Inc. Web site: http://www.calloways.com/

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