FORT WORTH, Texas, Aug. 13 /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, 2008. Results for the second quarter -- Sales were $20.0 million for 2008, compared to sales of $18.1 million for 2007. Same-store (17 stores) sales were $16.3 million for 2008, compared to same-store sales of $15.3 million for 2007. -- Net income was $1.9 million for 2008, compared to net income of $1.3 million for 2007. -- Diluted net income per common share was $.28 for 2008, compared to diluted net income per common share of $.18 for 2007. Results for the six months -- Sales were $30.0 million for 2008, compared to sales of $28.4 million for 2007. Same-store (17 stores) sales were $24.3 million for 2008, compared to same-store sales of $23.9 million for 2007. -- Net income was $1.8 million for 2008, compared to net income of $1.2 million for 2007. -- Diluted net income per common share was $.26 for 2008, compared to diluted net income per common share of $.18 for 2007. Founded in 1986, Calloway's Nursery, Inc. operates 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) Three-Months Ended Six-Months Ended June 30, June 30, 2008 2007 2008 2007 Net sales $20,274 $18,109 $30,042 $28,401 Cost of goods sold 10,642 10,144 15,620 15,259 Gross profit 9,632 7,965 14,422 13,142 Operating expenses 4,869 4,429 8,412 8,253 Advertising expenses 668 519 1,100 785 Occupancy expenses 909 815 1,668 1,654 Depreciation and amortization 97 83 187 193 Net interest expense 141 125 295 279 Total expenses 6,684 5,971 11,662 11,164 Income before provision for income taxes 2,948 1,994 2,760 1,978 Income tax expense 1,027 737 963 732 Net income 1,921 1,257 1,797 1,246 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 $.28 $.18 $.26 $.18 CALLOWAY'S NURSERY, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (in thousands) ASSETS June 30, June 30, 2008 2007 Cash and cash equivalents $4,803 $4,225 Accounts receivable 437 278 Inventories 3,556 4,434 Prepaids and other assets 273 179 Total current assets 9,069 9,116 Property and equipment, net 16,827 11,413 Deferred income taxes 387 585 Other assets 316 286 Total assets $26,599 $21,400 LIABILITIES AND SHAREHOLDERS' EQUITY Accounts payable and accrued expenses $6,290 $5,485 Current portion of long-term debt 541 540 Total current liabilities 6,831 6,025 Deferred rent payable 114 158 Long-term debt, net of current portion 12,832 9,322 Total liabilities 19,777 19,505 Shareholders' equity: Common stock 72 72 Additional paid-in capital 10,220 10,220 Accumulated deficit (2,062) (2,989) 8,230 7,303 Less: Treasury stock, at cost (1,408) (1,408) Total shareholders' equity 6,822 5,895 Total liabilities and shareholders' equity $26,599 $21,400 CALLOWAY'S NURSERY, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (in thousands) Six-Months Ended June 30, 2008 2007 Cash flows from operating activities: Net income $1,797 $1,246 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 187 193 Net change in operating assets and liabilities 1,437 (973) Net cash provided by operating activities 3,421 466 Cash flows from investing activities: Additions to property and equipment (5,124) (1,578) Proceeds from sale of property and equipment -- 750 Net cash used for investing activities (5,124) (828) Cash flows from financing activities: Proceeds from issuance of debt 3,652 867 Repayments of debt (353) (247) Net cash provided by financing activities 3,299 620 Net increase in cash and cash equivalents 1,596 258 Cash and cash equivalents at beginning of period 3,207 3,967 Cash and cash equivalents at end of period $4,803 $4,225 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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