Brookstone Announces First-Quarter 2005 Earnings

Brookstone Announces First-Quarter 2005 Earnings 


MERRIMACK, N.H., May 18  /PRNewswire-FirstCall/ -- Product development company
and specialty retailer Brookstone, Inc. (NASDAQ:BKST) today announced earnings
for the first quarter of 2005.

For the 13-week period ended April 30, 2005, Brookstone reported a net loss of
$6.8 million, or $0.33 per diluted share, compared to a net loss of $4.6
million, or $0.23 per diluted share in the first quarter of 2004.

Total sales for the first quarter rose 3.7 percent to $80.3 million, while
same-store sales decreased 3.9 percent. This compares to last year's first-
quarter same-store sales increase of 20.1 percent.  Direct-Marketing sales rose
12.3 percent to $13.2 million.

Because of the seasonal nature of specialty retailing, Brookstone generally
carries a loss over the first three quarters and makes its profit for the year
in the fourth quarter.

Brookstone Chairman, President and Chief Executive Officer Michael Anthony
said: "In the second quarter we expect our same-store sales to decrease in the
mid-single digits. This compares to last year's same-store sales increase of
13.3 percent. We expect our second-quarter net loss will be between $0.11 and
$0.13 per diluted share, compared to a second-quarter net loss last year of
$0.02 per diluted share."

Mr. Anthony concluded:  "As we progress through the second quarter and Father's
Day, the visibility on full-year earnings will become clearer. As such, we will
provide full-year guidance at the end of the second quarter."

As announced on April 15, 2005, Brookstone has signed a definitive merger
agreement to be acquired by a consortium led by OSIM International Ltd., J.W.
Childs Associates L.P. and Temasek Capital (Private) Limited. Under the terms
of the agreement, following approval by Brookstone's shareholders and the
satisfaction or waiver of other customary conditions including the receipt of
regulatory approvals at the effective time of the merger, each outstanding
share of Brookstone's common stock will be converted into the right to receive
$20.50 in cash.

Brookstone, Inc. is a specialty retailer that operates 288 Brookstone Brand
stores nationwide and in Puerto Rico. Typically located in high-traffic
regional shopping malls and airports, the stores feature unique and innovative
consumer products. The Company also operates five stores under the Gardeners
Eden Brand, and a direct marketing business that consists of three catalogs
titles -- Brookstone, Hard-to-Find Tools and Gardeners Eden -- as well as e-
commerce web sites at http://www.brookstone.com/ and
http://www.gardenerseden.com/.

Statements in this filing (and the exhibits hereto) which are not historical
facts, including statements about the Company's confidence or expectations,
earnings, anticipated operations of its e-commerce sites and those of
third-party service providers, and other statements about the Company's
operational outlook, are forward-looking statements subject to risks and
uncertainties that could cause actual results to differ materially from those
set forth in such forward-looking statements.  Such risks and uncertainties
include, without limitation, risks of changing market conditions in the overall
economy and the retail industry, consumer demand, the effectiveness of
e-commerce technology and marketing efforts, availability of products,
availability of adequate transportation of such products, and other factors
detailed from time to time in the Company's annual and other reports filed with
the Securities and Exchange Commission ("SEC").  Words such as "estimate",
"project", "plan", "believe", "feel", "anticipate", "assume", "may", "will",
"should" and similar words and phrases may identify forward- looking
statements.  Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date thereof. The
Company undertakes no obligations to publicly release any revisions to these
forward-looking statements or reflect events or circumstances after the date
hereof.

Statements about the expected timing, completion and effects of the proposed
merger and all other statements in this release other than historical facts,
constitute forward-looking statements within the meaning of the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995. Readers are
cautioned not to place undue reliance on these forward-looking statements and
any such forward-looking statements are qualified in their entirety by
reference to the following cautionary statements.  All forward- looking
statements speak only as of the date hereof and are based on current
expectations and involve a number of assumptions, risks and uncertainties that
could cause the actual results to differ materially from such forward-looking
statements.  The Company may not be able to complete the proposed merger on the
terms described herein or other acceptable terms or at all because of a number
of factors, including the failure to obtain shareholder approval, the failure
of financing or the failure to satisfy the other closing conditions. These
factors, and other factors that may affect the business or financial results of
the Company are described in the Company's filings with the SEC.

                             Brookstone, Inc.
                   Consolidated Statement of Operations
                             ($ in thousands)


                                                        (Unaudited)
                                                   Thirteen Weeks Ended
                                            April 30, 2005    May 1, 2004

  Net sales                                        $80,284        $77,451
  Cost of sales                                     57,253         54,364

  Gross profit                                      23,031         23,087

  Selling, general and administrative expenses      33,865         30,240

  Loss from operations                            (10,834)        (7,153)

  Interest (income) expense, net                      (16)            236

  Loss before taxes and other party
   interests in consolidated entities             (10,818)        (7,389)

  Other party interests in consolidated entities       259            162

  Loss before taxes                               (11,077)        (7,551)

  Income tax benefit                               (4,298)        (2,907)

  Net loss                                        $(6,779)       $(4,644)

  Net loss per share - basic/diluted               $(0.33)        $(0.23)

  Weighted average shares outstanding basic/diluted 20,363         20,020



                             Brookstone, Inc.
                   Condensed Consolidated Balance Sheet
                             ($ in thousands)

                                       Unaudited
                           April 30, 2005     May 1, 2004 January 29, 2005
  Current Assets:
   Cash and cash equivalents     $ 49,257        $ 37,409      $ 86,205
   Receivables, net                 9,348           7,505         9,859
   Merchandise inventories         81,162          69,978        75,585
   Deferred income taxes, net       8,314           7,778         3,917
   Prepaid expenses                 6,953           7,485         6,045

     Total current assets         155,034         130,155       181,611

   Deferred income taxes, net       5,240           4,738         5,256
   Property, plant and equipment,
    net                            73,214          58,058        74,019
   Intangible assets, net           3,785           4,056         3,853
   Other assets                     2,853           4,237         1,741

     Total assets                $240,126        $201,244      $266,480

  Liabilities and Shareholders' Equity
  Current Liabilities:
   Accounts payable               $13,972         $15,249       $17,402
   Other current liabilities       29,576          26,684        46,500

     Total current liabilities     43,548          41,933        63,902

  Other long term liabilities      22,396          15,581        22,432
  Long term debt                    8,534           1,975         8,760

  Commitments and Contingencies

  Other party interests
   in consolidated entities         1,349           1,068         1,100

     Total shareholders' equity   164,299         140,687       170,286

  Total liabilities and
   shareholders' equity          $240,126        $201,244      $266,480



   CONTACT:
   Philip Roizin
   EVP of Finance and
   Administration
   [phone]

   Robert Fusco
   Investor Relations
    [phone]


DATASOURCE: Brookstone, Inc.



CONTACT:  Philip Roizin, EVP of Finance and, Administration,

[phone], or Robert Fusco, Investor Relations, [phone], both of

Brookstone, Inc.



Web site:  http://www.brookstone.com/

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