FORT WORTH, Texas, Feb. 20 /PRNewswire-FirstCall/ -- Calloway's Nursery, Inc. (Pink Sheets: CLWY) today reported revenues and operating results for the fourth quarter and year ended December 31, 2007. Results for the Fourth Quarter -- Sales were $11.0 million for the 2007 quarter, compared to sales of $11.0 million for the 2006 quarter. Same-store sales were $11.0 million for the 2007 quarter, compared to same-store sales of $10.9 million for the 2006 quarter. -- Net loss was $80,000 for the 2007 quarter, compared to net income of $111,000 for the 2006 quarter. The 2007 quarter included $22,000 income tax benefit, compared to $663,000 income tax benefit for the 2006 quarter. -- Diluted net loss per common share was $.01 for the 2007 quarter, compared to diluted net income per common share of $.02 for the 2006 quarter. The 2007 quarter results included less than $.01 per-share income tax benefit, compared to $.10 per-share income tax benefit for the 2006 quarter. Results for the Year -- Sales were $46.4 million for 2007, compared to sales of $46.6 million for 2006. Same-store sales were $46.1 million for 2007, compared to same-store sales of $45.9 million for 2006. -- Net income was $0.4 million for 2007, compared to net income of $1.8 million for 2006. The 2007 results included $0.3 million income tax expense, compared to $0.7 million income tax benefit for 2006. -- Diluted net income per common share was $.05 for 2007, compared to diluted net income per common share of $.26 for 2006. The 2007 results included $.04 per-share income tax expense, compared to $.10 per-share income tax benefit for 2006. 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 INCOME STATEMENT (UNAUDITED) (amounts in thousands, except per share amounts) Year Ended Three-Months Ended December 31, December 31, 2007 2006 2007 2006 Net sales $46,426 $46,606 $10,975 $11,021 Cost of goods sold 25,275 24,536 6,333 6,450 Gross profit 21,151 22,070 4,642 4,571 Operating expenses 15,025 15,096 3,422 3,601 Advertising expenses 1,505 1,552 504 469 Occupancy expenses 3,040 3,448 635 861 Depreciation and amortization 384 340 94 82 Net interest expense 525 507 89 110 Total expenses 20,479 20,943 4,744 5,123 Income (loss) before provision for income taxes 672 1,127 (102) (552) Income tax expense (benefit) 296 (663) (22) (663) Net income (loss) $376 $1,790 ($80) $111 Weighted average number of common shares outstanding - basic and diluted 6,950 6,950 6,950 6,950 Net income (loss) per common share - basic and diluted $.05 $.26 ($.01) $.02 CALLOWAY'S NURSERY, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (In Thousands) ASSETS December 31, December 31, 2007 2006 Cash and cash equivalents $3,207 $3,967 Accounts receivable 148 109 Inventories 3,324 3,612 Prepaids and other assets 88 276 Deferred income taxes 259 149 Total current assets 7,026 8,113 Property and equipment, net 11,890 10,778 Deferred income taxes 387 585 Other assets 288 299 Total assets $19,591 $19,775 LIABILITIES AND SHAREHOLDERS' EQUITY Accounts payable and accrued expenses $4,355 $5,696 Current portion of long-term debt 577 555 Total current liabilities 4,932 6,251 Deferred rent payable 137 188 Long-term debt, net of current portion 9,497 8,687 Total liabilities 14,566 15,126 Shareholders' equity: Common stock 72 72 Additional paid-in capital 10,220 10,220 Accumulated deficit (3,859) (4,235) 6,433 6,057 Less: Treasury stock, at cost (1,408) (1,408) Total shareholders' equity 5,025 4,649 Total liabilities and shareholders' equity $19,591 $19,775 CALLOWAY'S NURSERY, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (In thousands) Year Ended December 31, 2007 2006 Cash flows from operating activities: Net income $376 $1,790 Adjustments to reconcile net income to net cash provided by (used for) operating activities: Depreciation and amortization 384 340 Net change in operating assets and liabilities (856) 13 Net cash provided by (used for) operating activities (96) 2,143 Cash flows from investing activities: Additions to property and equipment (2,246) (959) Proceeds from sale of property and equipment 750 -- Net cash used for investing activities (1,496) (959) Cash flows from financing activities: Proceeds from issuance of debt 3,098 -- Repayments of debt (2,266) (490) Retirement of preferred stock -- (1,789) Net cash provided by (used for) financing activities 832 (2,279) Net decrease in cash and cash equivalents from continuing operations (760) (1,095) Cash and cash equivalents at beginning of period 3,967 5,062 Cash and cash equivalents at end of period $3,207 $3,967 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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