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Dan Reynolds
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CALLOWAY'S NURSERY AND CORNELIUS NURSERIES FINALIZE MERGER

FORT WORTH, Texas - September 21, 1999 - Jim Estill, president and chief executive officer of Calloway's Nursery (Nasdaq: CLWY), and Sterling Cornelius, president and chief executive officer of Cornelius Nurseries, jointly announced today that an agreement has been signed stating Houston-based Cornelius will merge with Calloway's effective immediately.
According to the agreement, the Houston stores will retain the Cornelius name, and as president of Cornelius Nurseries, Sterling Cornelius will continue to oversee the south Texas market, which includes four retail garden centers in Houston, two wholesale distribution centers (one in Houston and one in Austin), as well as Turkey Creek Farms, a 160-acre growing facility in Humble, Texas.
"Today's announcement brings together two strong Texas nurseries with complementary philosophies," Estill said. "The merger solidifies our position as the leading specialty retailer of lawn and garden products in the state."
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The new company expects total annual sales to exceed $50 million. Together the companies will employ more than 550 associates, and will have 20 stores located throughout the top three retail markets in Texas - Dallas, Fort Worth and Houston. Company headquarters will be in Fort Worth.
An additional benefit of the transaction is the geographical difference between north Texas and south Texas. The varying climates will help moderate the company's seasonal selling peaks.
"This merger creates a more diversified operation with extraordinary opportunities for growth," Cornelius said. "By sharing business values and techniques, the combined companies will benefit from an expanded product line, an additional growing facility and extended selling seasons."
The merger was finalized with the completion of due diligence, financing, approval from Calloway's board of directors and other conditions.
In 1937, family-owned Cornelius Nurseries was established in Houston. Today, the company operates facilities in Houston and Austin, with annual sales exceeding $20 million.
Calloway's Nursery, Inc. is a leading specialty retailer of lawn and garden products, with headquarters in Fort Worth, Texas. Founded in 1986, Calloway's currently owns and operates 16 stores in the Dallas/Fort Worth Metroplex, as well as a nursery growing division near Tyler, Texas. More than half of Calloway's full-time employees are either Texas Certified Nursery Professionals or Texas Master Certified Nursery Professionals.