<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended October 27, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File Number 0-6672
MAC FRUGAL'S BARGAINS o CLOSE-OUTS INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 95-2745285
- -------------------------------- -------------------------------
(State or other jurisdiction of (I.R.S. employer identification
incorporation or organization) number)
Mailing and
Street Address: 2430 East Del Amo Boulevard, Dominguez, California 90220-6306
- -------------------------------------------------------------------------------
(Address of principal executive offices)
Registrant's telephone number, including area code: (310) 537-9220
----------------------------------------------------------------------
- --------------------------------------------------------------------------------
Former name, if changed since last report.
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
[X] Yes [ ] No
Indicate the number of shares outstanding of each of the issuer's classes of
Common Stock, as of the latest practicable date.
Common Shares Outstanding at November 24, 1996 26,128,663
<PAGE> 2
MAC FRUGAL'S BARGAINS o CLOSE-OUTS INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(Amounts in thousands except par value)
<TABLE>
<CAPTION>
October 27, January 28,
1996 1996
---------- ---------
<S> <C> <C>
Assets
Current Assets :
Cash and cash equivalents $ 41,448 $ 7,285
Merchandise inventories 224,222 200,616
Current deferred income tax asset 13,003 13,003
Insurance receivable 8,160 -
Other current assets 8,396 9,965
--------- ---------
Total current assets 295,229 230,869
Property, Equipment and Improvements :
Land 35,224 35,195
Buildings and improvements 85,329 84,054
Automobiles and trucks 3,019 3,040
Furniture, fixtures and equipment 99,073 99,966
Leasehold improvements 85,867 84,127
Construction in progress 1,756 635
--------- ---------
310,268 307,017
Less: Accumulated depreciation
and amortization (132,790) (121,106)
--------- ---------
177,478 185,911
--------- --------
Deferred Income Tax Asset 604 604
Deferred Financing Costs and Other Assets 1,679 1,688
--------- ---------
Total Assets $ 474,990 $ 419,072
========= =========
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE> 3
<TABLE>
<CAPTION>
October 27, January 28,
1996 1996
------------ ----------
<S> <C> <C>
Liabilities and Stockholders' Equity
Current Liabilities :
Checks outstanding $ 15,438 $ 16,704
Loan payable to bank 22,000 -
Current portion of long-term debt - 69
Accounts payable 25,441 14,781
Accrued expenses 40,869 40,605
Income taxes payable 5,900 4,664
Sales tax payable 7,067 9,527
-------- --------
Total current liabilities 116,715 86,350
-------- --------
Long-Term Debt 113,263 96,435
Deferred Income Taxes 5,888 5,888
Stockholders' Equity :
Preferred stock, $1 par value;
authorized, 500 shares; issued, none
Common stock, $.02778 par value;
authorized, 100,000 shares;
issued 26,070 shares (October 27, 1996)
and 25,582 shares (January 28, 1996) 724 711
Additional paid-in capital 5,873 512
Retained earnings 242,383 230,749
-------- --------
248,980 231,972
Less: Treasury stock, at cost, 615 shares
(October 27, 1996) and 119 shares (January
28,1996) (9,856) (1,573)
Total Stockholders' Equity 239,124 230,399
-------- --------
Total Liabilities and Stockholders' Equity $474,990 $419,072
======== ========
</TABLE>
_____________
See Notes to Consolidated Financial Statements.
<PAGE> 4
MAC FRUGAL'S BARGAINS o CLOSE-OUTS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS (LOSSES)
(UNAUDITED)
(Amounts in thousands except per share amounts)
<TABLE>
<CAPTION>
For the three months ended For the nine months ended
---------------------------- ---------------------------
October 27, October 29, October 27, October 29,
1996 1995 1996 1995
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
NET SALES $174,488 $152,353 $491,572 $453,357
COST OF SALES 99,528 114,741 280,779 276,557
-------- -------- -------- --------
GROSS PROFIT 74,960 37,612 210,793 176,800
-------- -------- -------- --------
Store expenses 52,315 46,895 146,573 139,523
Warehouse and administrative
expenses 12,569 13,469 40,315 43,494
-------- -------- -------- --------
TOTAL OPERATING EXPENSES 64,884 60,364 186,888 183,017
OPERATING INCOME (LOSS) 10,076 (22,752) 23,905 (6,217)
INTEREST EXPENSE, NET 1,836 3,699 5,141 9,317
-------- -------- -------- --------
EARNINGS(LOSS) BEFORE INCOME TAXES 8,240 (26,451) 18,764 (15,534)
INCOME TAX EXPENSE (BENEFIT) 3,131 (10,448) 7,130 (6,136)
-------- -------- -------- --------
NET EARNINGS (LOSS) $ 5,109 ($16,003) $ 11,634 ($9,398)
======== ======== ======== ========
EARNINGS(LOSS) PER COMMON SHARE $0.20 ($0.62) $0.45 ($0.36)
======== ======== ======== ========
AVERAGE SHARES OUTSTANDING 26,069 25,798 25,856 25,785
======== ======== ======== ========
</TABLE>
_____________
See Notes to Consolidated Financial Statements.
<PAGE> 5
MAC FRUGAL'S BARGAINS o CLOSE-OUTS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(Amounts in thousands)
<TABLE>
<CAPTION>
For the nine months ended
------------------------------
October 27, October 29,
1996 1995
----------- -----------
<S> <C> <C>
INCREASE IN CASH AND CASH EQUIVALENTS
Cash flows from operating activities:
Cash received from customers $ 491,572 $ 453,357
Cash paid to suppliers and employees (477,081) (503,549)
Income taxes paid (5,894) (18,920)
Interest paid (net of amount capitalized) (5,860) (8,309)
Interest received 212 112
--------- ---------
Net cash provided by (used in) operating activities 2,949 (77,309)
Cash flows from investing activities:
Capital expenditures (8,574) (20,279)
Insurance receivable related to property, equipment and improvements 2,474 -
Proceeds from sale of fixed assets 1,525 156
--------- ---------
Net cash used in investing activities (4,575) (20,123)
Cash flows from financing activities:
Net borrowings of long-term debt 28,715 114,854
Net borrowings (repayments) under line of credit agreements 9,200 (7,400)
Repurchase of treasury stock (8,283) -
Proceeds from sale of stock options 5,313 309
Other (net) 844 945
--------- ---------
Net cash provided by financing activities 35,789 108,708
--------- ---------
Increase in cash and cash equivalents 34,163 11,276
Cash and cash equivalents, beginning of period 7,285 6,674
--------- ---------
Cash and cash equivalents, end of period $ 41,448 $ 17,950
========= =========
</TABLE>
________________
See Notes to Consolidated Financial Statements.
<PAGE> 6
MAC FRUGAL'S BARGAINS o CLOSE-OUTS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(Amounts in thousands)
(continued)
<TABLE>
<CAPTION>
For the nine months ended
-----------------------------------
October 27, October 29,
1996 1995
----------- -----------
<S> <C> <C>
Reconciliation of Net Income (Loss) to Net Cash Provided
By (Used in) Operating Activities:
------------------------------------------------------------
Net income (loss) $ 11,634 ($9,398)
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Depreciation and amortization 13,810 13,487
Gain on sale of fixed assets (802) (34)
Non-cash compensation expense 61 64
Increase in net deferred income tax assets - (13,828)
Changes in assets and liabilities:
Increase in inventory (23,606) (62,845)
Increase in insurance receivable (8,160) -
Decrease in other assets 1,578 517
Increase in checks outstanding, accounts payable,
accrued expenses and sales tax payable 7,198 5,956
Increase (decrease) in federal and state income taxes 1,236 (11,228)
Total adjustments (8,685) (67,911)
-------- --------
Net cash provided by (used in) operating activities $ 2,949 ($77,309)
======== ========
</TABLE>
_______________
See Notes to Consolidated Financial Statements.
<PAGE> 7
MAC FRUGAL'S BARGAINS o CLOSE-OUTS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(UNAUDITED)
(Amounts in thousands)
<TABLE>
<CAPTION>
Common Stock Treasury Stock
------------------- Additional -----------------------
Paid-in Retained
Shares Amount Capital Earnings Shares Amount Total
-------- -------- ---------- ---------- -------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, January 28, 1996 25,582 $711 $ 512 $230,749 119 ($1,573) $230,399
Exercise of stock options 488 13 5,300 5,313
Non-cash compensation
expense 61 61
Purchase of Treasury stock, at cost 496 (8,283) (8,283)
Net income for nine months 11,634 11,634
------ ---- ------ -------- --- ------- --------
Balance, October 27, 1996 26,070 $724 $5,873 $242,383 615 ($9,856) $239,124
====== ==== ====== ======== === ======= ========
</TABLE>
____________
See Notes to Consolidated Financial Statements.
<PAGE> 8
MAC FRUGAL'S BARGAINS o CLOSE-OUTS INC. AND SUBSIDIARIES
PART I - ITEM I - FINANCIAL STATEMENTS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLAR AMOUNTS IN THOUSANDS)
Note 1 The condensed consolidated financial statements have been prepared in
accordance with generally accepted accounting principles, by Mac
Frugal's Bargains o Close-outs Inc., "the Company" without audit.
Pursuant to the rules and regulations of the Securities and Exchange
Commission, certain information and footnote disclosures normally
included in consolidated financial statements prepared in accordance
with generally accepted accounting principles have been omitted or
condensed. It is management's belief that the disclosures made are
adequate to make the information presented not misleading and reflect
all adjustments (consisting only of normal recurring adjustments)
necessary for a fair presentation of financial position and results of
operations for the periods presented. The results of operations of the
periods presented should not be considered as necessarily indicative of
operations for the full year. It is recommended that these condensed
consolidated financial statements be read in conjunction with the
consolidated financial statements for the year ended January 28, 1996
and the notes thereto included in the Company's 10-K.
Note 2 Earnings (loss) per Common Share is based on the weighted average
number of Common Shares outstanding, adjusted for dilutive effects of
stock options, if applicable.
Note 3 The Company's effective tax rate for fiscal 1995 and the first three
quarters of fiscal 1996 was 38.0%. For interim reporting purposes the
entire provision for income tax expense was classified as current.
Deferred income taxes reflect the net tax effects of temporary
differences between the carrying amount of assets and liabilities for
financial reporting purposes and the amounts used for income tax
purposes. The Company had a net deferred tax asset of $7,719 at
October 27, 1996 and January 28, 1996.
The Company provided no valuation allowance against its deferred tax
assets recorded as of October 27, 1996 and January 28, 1996 because
management believes it is more likely than not that the deferred
income tax asset will be realized.
Note 4 At October 27, 1996, the Company classified the portion of its
revolving debt as long-term that is not required to be repaid at
its next annual clean-down date of September 30, 1997.
Note 5 On March 21, 1996, the Company's distribution center in New Orleans,
Louisiana ("NODC") and its contents were destroyed by fire. Since
then, all of the Company's stores have been serviced by the Company's
distribution center in Rancho Cucamonga, California.
<PAGE> 9
The Company received an initial payment for the destruction of
inventory from its insurance carriers of approximately $25.6 million
during the second quarter ended July 28, 1996. Subsequent to the end of
the third quarter, the Company's insurance carriers paid an additional
$2.4 million in full settlement of the inventory destroyed in the fire.
The insurance receivable at October 27, 1996 represents, in part, the
insurance proceeds received subsequent to quarter end related to the
inventory. Additionally, the net book value of the property, plant and
equipment destroyed by the fire and certain other related business
interruption expenses are included in this insurance receivable.
The Company's lease of the distribution center with an unrelated third
party landlord obligates the Company to rebuild. However, the Company
reached an agreement with the landlord that enables the Company to
terminate such lease at its option in exchange for a cash settlement of
$30 million to the landlord and the purchase of the underlying land and
land improvements from its owner, the City of New Orleans. This
agreement is subject to certain conditions being satisfied by the
Company. Subsequent to the end of the third quarter, these conditions
were satisfied and the Company anticipates making the cash payment to
the landlord of $30 million in the fourth quarter ending February 2,
1997.
Additionally, in separate agreements, the Company has reached a
comprehensive settlement with its insurance carriers relating to their
obligation contained in their business interruption and building
replacement insurance policies. The Company estimates that during the
fourth quarter ending February 2, 1997, the Company will receive
insurance proceeds totaling approximately $62.5 million. These proceeds
will be used to offset certain business interruption and other fire
related expenses incurred since the date of the casualty in addition to
settling the distribution center lease with the landlord for $30
million and the purchase of the land and underlying land improvements
from the City of New Orleans. The Company has not yet finalized the net
income statement effect of this settlement due to some uncertainties
as of the date of this filing. However, the Company estimates that it
will finalize and realize a gain to be recognized in the fourth quarter
ending February 2, 1997.
<PAGE> 10
PART I - ITEM II - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITIONS AND INTERIM RESULTS OF OPERATIONS
(DOLLAR AMOUNTS IN THOUSANDS)
EXCEPT FOR THE HISTORICAL INFORMATION CONTAINED HEREIN, THE MATTERS DISCUSSED IN
THIS REPORT ON FORM 10-Q ARE FORWARD-LOOKING STATEMENTS WHICH INVOLVE RISKS AND
UNCERTAINTIES, INCLUDING BUT NOT LIMITED TO ECONOMIC, COMPETITIVE, GOVERNMENTAL
AND TECHNOLOGICAL FACTORS AFFECTING THE COMPANY'S OPERATIONS, MARKETS, PRODUCTS,
SERVICES AND PRICES, AND OTHER FACTORS DISCUSSED IN THE COMPANY'S FILINGS WITH
SECURITIES AND EXCHANGE COMMISSION.
RESULTS OF OPERATIONS
THIRTEEN WEEK PERIOD ENDED OCTOBER 27, 1996 ("THIRD QUARTER 1996") COMPARED
WITH THIRTEEN WEEK PERIOD ENDED OCTOBER 29, 1995 ("THIRD QUARTER 1995").
Total sales and comparable store sales increased 14.5% and 11.1%, respectively,
for the Third Quarter 1996 compared to the Third Quarter 1995. The total sales
increase was a result of opening 14 net new stores since October 29, 1995,
combined with the comparable store sales increase noted above. The comparable
sales increase was driven by increases in customer traffic, and increases in
sales of food, health and beauty aids and hardlines. At October 27, 1996,
317 stores were in operation compared to 303 stores at October 29, 1995.
Sales from the 165 California stores open at October 27, 1996, were
approximately 59% of the Company's total sales for the Third Quarter 1996 as
compared to 60% in the Third Quarter 1995. California stores experienced a
comparable store sales increase for the Third Quarter 1996, similar to that of
the Company-wide trend.
The Company is continuing to execute the components of its new strategic
direction which was announced in November 1995. It is anticipated that this
plan will continue to be implemented throughout fiscal 1996.
The Third Quarter 1996 gross profit margin was 43.0%. The Third Quarter 1995
gross profit margin was 24.7% which included a $35 million non-cash charge to
hasten the liquidation of aged inventory. Excluding this charge, the gross
profit margin was 47.7%. The decrease in the gross profit margin for the Third
Quarter 1996 versus the Third Quarter 1995 (excluding the $35 million non-cash
charge) is due to more competitive pricing of merchandise and a change in
merchandise mix as part of the implementation of the Company's new strategic
plan.
Operating expenses were 37.2% of sales for the Third Quarter of 1996 compared
to 39.6% for the Third Quarter 1995. The improvement in operating expenses was
the result of decreases in all areas: warehouse, administration and stores as
discussed below.
General cost containment and controls resulted in store expenses of 30.0% of
sales for the Third Quarter 1996 compared to 30.8% of sales for the Third
Quarter 1995. Reduced expenses in almost every expense category were only
partially offset by an increase in advertising for additional markets and a
fall promotion inviting customers to see the strategic initiatives which were
implemented in the stores.
Warehouse and administrative expenses were 7.2% and 8.8% of sales for the Third
Quarter 1996 and the Third Quarter 1995, respectively. Expense controls in the
administrative area resulted
<PAGE> 11
in lower expenses as a percent of sales for the Third Quarter 1996 compared to
the Third Quarter 1995. Continued expense containment also provided lower
expenses in the warehouse in both dollars and as a percent of sales for the
Third Quarter 1996 compared to the Third Quarter 1995.
The $1,863 decrease in interest expense for the Third Quarter 1996 compared to
the Third Quarter 1995 resulted from both a decrease in the average amount of
debt outstanding and lower interest rates. The decrease in the average amount
of debt outstanding is the combined result of a decrease in inventories and
capital expenditures during the Third Quarter 1996 compared to the Third
Quarter 1995.
The income tax rate for the Third Quarter 1996 was 38.0%, and for interim
purposes, the entire provision for income taxes is classified as current. The
current rate of 38.0% is consistent with the fiscal 1995 rate. Income taxes
were provided at a rate of 39.5% in the Third Quarter 1995.
The Company had a net deferred tax asset of $7,719 at October 27, 1996 and
January 28, 1996.
THIRTY-NINE WEEK PERIOD ENDED OCTOBER 27, 1996 ("YEAR-TO-DATE 1996") COMPARED
WITH THIRTY-NINE WEEK PERIOD ENDED OCTOBER 29, 1995 ("YEAR-TO- DATE 1995").
Total sales increased 8.4% and comparable store sales increased 3.5% for the
Year-to-Date 1996 compared to the Year-to-Date 1995. The total sales increase
was a result of opening 14 net new stores since October 29, 1995, coupled with
the comparable store increased noted above. The comparable sales increase was
due to increases in customer traffic, and increases in sales of food, health
and beauty aids and hardlines, partially offset by a decrease in apparel sales
due to the change in merchandise mix compared to last year and business
interruption caused by the fire at NODC.
Sales from the 165 California stores open at October 27, 1996, were
approximately 59% of the Company's total sales for the Year-to-Date 1996 as
compared to 62% for the Year-to-Date 1995. California stores experienced a
comparable store sale increase for the Year-to-Date 1996, similar to that of
the Company-wide trend.
The Year-to-Date 1996 gross profit margin was 42.9%. The Year-to-Date 1995
gross profit margin was 39.0% including the $35 million non-cash charge and
46.7% excluding the charge. The decrease in the gross profit margin for the
Year-to-Date 1996 versus the Year-to-Date 1995 (excluding the $35 million
charge) is primarily due to more competitive pricing of merchandise and a
change in merchandise mix as part of the implementation of the Company's new
strategic plan. The gross profit margin for the Year-to-Date 1996 was further
reduced by margin changes resulting from the business interruption and inventory
imbalances caused by the destruction of inventory at NODC.
<PAGE> 12
Operating expenses were 38.0% of sales for the Year-to-Date 1996 compared to
40.4% for the Year-to-Date 1995. The improvement in operating expenses was the
result of decreases in all areas: warehouse, administration and stores.
General cost containment resulted in store expenses of 29.8% of sales for the
Year-to-Date 1996 compared to 30.8% of sales for the Year-to-Date 1995.
Reduced expenses in payroll and workers' compensation were only partially
offset by increases in occupancy cost, depreciation expense and advertising
expense. Increases in occupancy, depreciation and advertising expenses are
primarily the result of opening new stores.
Warehouse and administrative expenses were 8.2% and 9.6% of sales for the
Year-to-Date 1996 and the Year-to-Date 1995, respectively. Expense controls in
the warehouse and administrative areas resulted in lower expenses in both
dollars and as a percent of sales for the Year-to-Date 1996 compared to the
Year-to-Date 1995.
The $4,176 decrease in interest expense for the Year-to-Date 1996 compared to
the Year-to-Date 1995 resulted from both a decrease in the average amount of
debt outstanding and lower interest rates. The decrease in the average amount
of debt outstanding is the combined result of a decrease in inventories and
capital expenditures during the Year-to-Date 1996 compared to the Year-to-Date
1995.
The income tax rate for the Year-to-Date 1996 was 38.0%, and for interim
purposes, the entire provision for income taxes is classified as current. The
current rate of 38.0% is consistent with the fiscal 1995 rate. Income taxes
were provided at a rate of 39.5% for the Year-to- Date 1995.
LIQUIDITY AND CAPITAL RESOURCES
Cash and cash equivalents increased $34,163 in the first three quarters of 1996
compared to an increase of $11,276 in the first three quarters of 1995. The
increase in cash and cash equivalents in the first three quarters of 1996
compared to the same period last year related primarily to the establishment of
a $30,000 cash escrow account in anticipation of settling and terminating
the NODC lease with its landlord as discussed in Note 5 of the Financial
Statements. The escrow account was established by borrowing from the Company's
existing credit facility. The cash to be disbursed from the escrow account will
be reimbursed to the Company from the insurance proceeds of approximately
$62,500. Reduced inventory purchases and associated debt, and lower income tax
payments and capital expenditures, partially offset by the repurchase of 496
shares for $8,283 in the first three quarters of 1996 also contributed to the
increase in cash and cash equivalents over the same period last year.
As of October 27, 1996, the Company's long-term debt was 47.4% of equity and
its total debt was 56.6% of equity compared to 57.9% and 93.1%, respectively,
at October 29, 1995. At January 28, 1996, long-term debt and total debt were
both 41.9% of equity. The decrease in the level of debt at October 27, 1996
compared to October 29, 1995 reflects the Company's strategic direction to
reduce inventory levels and the borrowings necessary to finance them, and the
planned reduction in capital expenditures, offset in part by the borrowing to
establish the escrow account noted above and by the stock repurchase program in
fiscal 1995 and the first nine months of 1996. The increase in the level of
debt at October 27, 1996 compared to January 28, 1996 also reflects the
Company's normal trend of increasing inventory levels in preparation for
seasonal needs during this period of the year, offset in large, by the
Company's direction of reducing inventory levels in the stores and warehouse.
<PAGE> 13
The Company believes its present lines of credit are adequate to meet any
seasonal or temporary liquidity needs that cannot be met with cash flow from
operating activities. At October 27, 1996, the Company had $132,000 of
outstanding revolving debt. Of this outstanding debt, $107,000 was borrowed
under the Company's $200,000 committed credit line and $25,000 was borrowed
under the Company's uncommitted credit lines.
The Company's current ratio as of October 27, 1996 was 2.53 versus 2.67 at
fiscal year end 1996 and 1.99 at October 29, 1995. The improvement in the
Company's current ratio compared to October 29, 1995 is due primarily to
reduced inventory levels and the reduction in the current portion of debt.
For the nine months ended October 27, 1996, inventory turnover improved to 1.38
from 1.15 for the nine months ended October 29, 1995. This improvement in
inventory turnover reflects the Company's sales strength and its commitment to
reduce inventory levels and streamline the merchandise flow process from its
vendors to its stores.
<PAGE> 14
PART II - OTHER INFORMATION
Item 6 Exhibits and Reports on Form 8-K
(a) Exhibit 27 -- Financial Data Schedule.
(b) Reports on Form 8-K - No reports on Form 8-K have
been filed during the quarter
ended October 27, 1996.
<PAGE> 15
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MAC FRUGAL'S BARGAINS o CLOSE-OUTS INC.
/s/ Philip L. Carter
------------------------------------
Philip L. Carter
Director, President and Chief
Executive Officer
/s/ Neil T. Watanabe
------------------------------------
Neil T. Watanabe
Senior Vice President and Chief
Financial Officer
DATE: December 11, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> FEB-02-1997
<PERIOD-START> JAN-29-1996
<PERIOD-END> OCT-27-1996
<CASH> 41,448
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 224,222
<CURRENT-ASSETS> 295,229
<PP&E> 310,268
<DEPRECIATION> 132,790
<TOTAL-ASSETS> 474,990
<CURRENT-LIABILITIES> 116,715
<BONDS> 0
0
0
<COMMON> 724
<OTHER-SE> 238,400
<TOTAL-LIABILITY-AND-EQUITY> 474,990
<SALES> 491,572
<TOTAL-REVENUES> 491,572
<CGS> 280,779
<TOTAL-COSTS> 280,779
<OTHER-EXPENSES> 186,888
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5,141
<INCOME-PRETAX> 18,764
<INCOME-TAX> 7,130
<INCOME-CONTINUING> 11,634
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 11,634
<EPS-PRIMARY> .45
<EPS-DILUTED> 0
</TABLE>
