FORT WORTH, Texas, Aug. 14 /PRNewswire-FirstCall/ -- Calloway's Nursery, Inc. (Pink Sheets: CLWY) today reported revenues and operating results for the second quarter and six-month periods ended June 30, 2007. Results for the Second Quarter -- Sales were $18.1 million for the second quarter of 2007, compared to sales of $20.0 million for the June 2006 quarter. Same-store sales were $17.9 million for the June 2007 quarter, compared to same-store sales of $19.7 for the June 2006 quarter. -- Net income was $1.3 million for the second quarter of 2007, compared to net income of $3.9 million for the June 2006 quarter. The June 2007 quarter results included $0.7 million income tax expense, compared to no income tax expense for the June 2006 quarter. -- Diluted net income per common share was $.18 for the second quarter of 2007, compared to diluted net income per common share of $.56 for the June 2006 quarter. The June 2007 quarter results included $.10 per-share income tax expense, compared to no income tax expense for the June 2006 quarter. Results for the Six-Month Period -- Sales were $28.4 million for 2007, compared to sales of $28.6 million for 2006. Same-store sales were $28.1 million for the June 2007 period, compared to same-store sales of $28.2 for the June 2006 period. -- Net income was $1.2 million for 2007, compared to net income of $3.1 million for 2006. The June 2007 period results included $0.7 million income tax expense, compared to no income tax expense for the June 2006 period. -- Diluted net income per common share was $.18 for 2007, compared to diluted net income per common share of $.44 for 2006. The June 2007 period results included $.10 per-share income tax expense, compared to no income tax expense for the June 2006 period. Founded in 1986, Calloway's Nursery, Inc. operates 22 retail garden centers in the three largest metropolitan areas in Texas: Dallas - Fort Worth, San Antonio and Houston, reaching a combined population over 11.5 million. CALLOWAY'S NURSERY, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (amounts in thousands, except per share amounts) Six-Months Ended Three-Months Ended June 30, June 30, 2007 2006 2007 2006 Net sales $28,401 $28,649 $18,109 $20,022 Cost of goods sold 15,259 14,275 10,144 9,811 Gross profit 13,142 14,374 7,965 10,211 Operating expenses 8,253 8,265 4,429 4,756 Advertising expenses 785 886 519 514 Occupancy expenses 1,654 1,727 815 877 Depreciation and amortization 193 177 83 89 Net interest expense 279 260 125 83 Total expenses 11,164 11,315 5,971 6,319 Income before provision for income taxes 1,978 3,059 1,994 3,892 Provision for income taxes 732 -- 737 -- Net income $1,246 $3,059 $1,257 $3,892 Weighted average number of common shares outstanding -- basic and diluted 6,950 6,950 6,950 6,950 Net income per common share -- basic and diluted $0.18 $0.44 $0.18 $0.56 CALLOWAY'S NURSERY, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (In Thousands) ASSETS June 30, December 31, June 30, 2007 2006 2006 Cash and cash equivalents $4,225 $3,967 $6,222 Accounts receivable 278 109 217 Inventories 4,434 3,612 3,989 Prepaids and other assets 179 276 156 Deferred income taxes -- 149 -- Total current assets 9,116 8,113 10,584 Property and equipment, net 11,413 10,778 10,050 Deferred income taxes 585 585 -- Other assets 286 299 358 Total assets $21,400 $19,775 $20,992 LIABILITIES AND SHAREHOLDERS' EQUITY Accounts payable and accrued expenses $5,485 $5,696 $5,358 Current portion of long-term debt 540 555 522 Total current liabilities 6,025 6,251 5,880 Deferred rent payable 158 188 231 Long-term debt, net of current portion 9,322 8,687 8,963 Total liabilities 15,505 15,126 15,074 Shareholders' equity: Common stock 72 72 72 Additional paid-in capital 10,220 10,220 10,220 Accumulated deficit (2,989) (4,235) (2,966) 7,303 6,057 7,326 Less: Treasury stock, at cost (1,408) (1,408) (1,408) Total shareholders' equity 5,895 4,649 5,918 Total liabilities and shareholders' equity $21,400 $19,775 $20,992 CALLOWAY'S NURSERY, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (In thousands) Six-Months Ended June 30, 2007 2006 Cash flows from operating activities: Net income $1,246 $3,059 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 193 177 Net change in operating assets and liabilities (973) 28 Net cash provided by operating activities 466 3,264 Cash flows from investing activities: Additions to property and equipment (1,521) (68) Proceeds from sale of property and equipment 693 -- Net cash used for investing activities (828) (68) Cash flows from financing activities: Proceeds from issuance of debt 867 -- Repayments of debt (247) (247) Retirement of preferred stock -- (1,789) Net cash provided by (used for) financing activities 620 (2,036) Net increase in cash and cash equivalents from continuing operations 258 1,160 Cash and cash equivalents at beginning of period 3,967 5,062 Cash and cash equivalents at end of period $4,225 $6,222 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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