UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
F O R M 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
for the quarterly period ended August 3, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
for the transition period from_______to_________
Commission file number 0-00167
-------
THE VILLAGE GREEN BOOKSTORE, INC.
---------------------------------------------------------------
(Exact name of Small Business Issuer as specified in its charter)
New York 16-1181167
------------------------------ ------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) I.D. number)
1357 Monroe Avenue
Rochester, New York 14618
--------------------------------------
(Address of principal executive offices)
(716) 442-1151
----------------------------------------------
(Issuer's telephone number, including area code)
Check whether the Issuer: (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the past 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.
Yes X No
--- ---
APPLICABLE ONLY TO CORPORATE ISSUERS
The number of shares of common stock outstanding as of August 13, 1997 was
3,741,355.
<PAGE>
THE VILLAGE GREEN BOOKSTORE, INC.
---------------------------------
INDEX
-----
PART I. FINANCIAL INFORMATION
Page
----
Item 1. Financial Statements
Consolidated Statement of Operations
for the three and six months ended
August 3, 1997 and July 28, 1996.........................1
Consolidated Balance Sheets as of
August 3, 1997 and February 2, 1997......................2
Consolidated Statement of Cash Flows for the
quarters ended August 3, 1997 and
July 28, 1996 ...........................................4
Notes to Financial Statements............................5
Item 2. Management's Discussion and Analysis of
Financial Conditions and Results of Operations...........7
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.......................................10
Item 6. Exhibits and Reports on Form 8-K........................13
Exhibit 11..............................................14
Exhibit 27..............................................15
<PAGE>
ITEM 1. FINANCIAL STATEMENTS.
THE VILLAGE GREEN BOOKSTORE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED
AUGUST 3, 1997 AND JULY 28, 1996
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
August 3, July 28, August 3, July 28,
1997 1996 1997 1996
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net Sales $ 1,100,184 $ 1,960,478 $ 2,277,085 $ 4,557,948
Cost of Goods Sold 732,722 1,239,139 1,489,716 2,901,128
----------- ----------- ----------- -----------
Gross Profit $ 367,462 $ 721,339 787,369 $ 1,656,820
Selling, General, and
Administrative Expenses 648,208 1,018,740 1,343,670 2,374,985
----------- ----------- ----------- -----------
Loss from Operations $ (280,746) $ (297,401) $ (556,301) $ (718,165)
Other Income (Expense)
Interest Expense (26,993) (27,000) (54,978) (48,000)
Amortization of Offering Costs 0 0 0 (23,781)
Other Income 1,153 2,641 2,380 8,146
Restructuring Costs (74,023) (342,760) (95,988) (342,760)
----------- ----------- ----------- -----------
Total Other Income (Expense) $ (99,863) $ (367,119) $ (148,586) $ (406,395)
----------- ----------- ----------- -----------
Loss before Income taxes $ (380,609) $ (664,520) $ (704,887) $(1,124,560)
Income Tax 0 (507) 0 (507)
----------- ----------- ----------- -----------
Net Loss $ (380,609) $ (665,027) $ (704,887) $(1,125,067)
=========== =========== =========== ===========
Per Share Amounts Net Loss $ (0.10) $ (0.18) $ (0.19) $ (0.30)
=========== =========== =========== ===========
</TABLE>
See Notes to Consolidated Financial Statements
1
<PAGE>
THE VILLAGE GREEN BOOKSTORE, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AUGUST 3, 1997 AND FEBRUARY 2, 1997
Assets
Current Assets May 4, 1997 February 2, 1997
- ----------------------------- ---------------------- ---------------------
Cash and Cash Equivalents $ 22,304 $ 140,417
Receivables 59,964 80,725
Merchandise Inventories 2,281,123 2,784,531
Prepaid Expenses 73,308 95,594
---------------------- ---------------------
Total Current Assets $ 2,436,699 $ 3,101,267
Property & Equipment, net of
Accumulated Depreciation 1,077,462 1,331,313
Other Assets 57,469 57,802
---------------------- ---------------------
Total Assets $ 3,571,630 $ 4,490,382
====================== =====================
See Notes to Consolidated Financial Statements
2
<PAGE>
THE VILLAGE GREEN BOOKSTORE, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AUGUST 3, 1997 AND FEBRUARY 2, 1997
Liabilities and Stockholders' Equity
Current Liabilities August 3, 1997 February 2, 1997
- ----------------------------------- ------------------ --------------------
Accounts Payable $ 1,548,555 $ 1,746,379
Current Portion of Debt 1,014,352 1,001,519
Accrued Payroll Expense 27,539 47,577
Accrued Taxes Payable 27,874 57,534
Other Current Liabilities 238,254 189,015
------------------ --------------------
Total Current Liabilities $ 2,856,574 $ 3,042,024
Long-Term Debt 248,375 277,090
Stockholders' Equity
- -----------------------------------
Common Stock, $.001 par
Authorized 10,000,000 shares
Issued and Outstanding
3,741,355 shares at
August 3, 1997 and February 2,
1997, respectively 3,741 3,741
Additional Paid-In Capital 8,117,454 8,117,154
Retained Deficit (7,654,514) (6,949,627)
------------------ --------------------
Total Stockholders' Equity $ 466,681 $ 1,171,268
------------------ --------------------
Total Liabilities and Stockholders'
Equity $ 3,571,630 $ 4,490,382
================== ====================
See Notes to Consolidated Financial Statements
3
<PAGE>
THE VILLAGE GREEN BOOKSTORE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
QUARTERS ENDED AUGUST 3, 1997 and JULY 28, 1996
Six Months Ended
Operating Activities August 3, 1997 July 28, 1996
-------------- -------------
Net Loss $ (704,887) $(1,125,067)
Adjustments to reconcile Net Loss to Net
Cash Used in Operating Activities:
Depreciation 157,863 194,980
Amortized Debt Offering Costs 0 23,781
Restructuring Costs 95,988 342,760
Changes in Operating Assets and Liabilities:
Accounts Receivables 20,761 (1,871)
Inventory and Prepaid Expenses 525,694 1,870,043
Accounts Payable and Accrued Expenses (198,283) (1,572,161)
----------- -----------
Net Cash Used in Operating Activities $ (102,864) $ (267,535)
Investing Activities:
Purchase of Property and Equipment 0 (62,124)
Security Deposits 333 (6,302)
----------- -----------
Net Cash Used in Investing Activities $ (102,531) $ (68,426)
Financing Activities:
Payments on Credit Lines, Long-Term Debt and
Capital Lease Obligations (15,882) (24,022)
Proceeds from Issuance of Common Stock 300 300
----------- -----------
Net Cash Provided by (Used In)
Financing Activities $ (15,582) $ (23,722)
----------- -----------
Net Change in Cash (118,113) (359,683)
Balance at Beginning of Year 140,417 383,918
----------- -----------
Cash Balance at End of Period $ 22,304 $ 24,235
=========== ===========
See Notes to Consolidated Financial Statements
4
<PAGE>
THE VILLAGE GREEN BOOKSTORE, INC.
NOTES TO FINANCIAL STATEMENTS
Note 1. The consolidated balance sheet as of August 3, 1997 and the
consolidated statements of income for the three and six months ended
August 3, 1997 and July 28, 1996, the consolidated statements of cash
flows for the six months ended August 3, 1997 and July 28, 1996 have
been prepared by the Company without audit. In the opinion of
management, all adjustments (which include only normal adjustments)
necessary to present fairly the financial position, results of
operations and changes in financial position at those dates have been
made. The operating results for the quarter ended August 3, 1997 are
not necessarily indicative of the results that may be expected for the
fiscal period ending February 1, 1998 as the Company's sales volume is
seasonal.
Note 2. On April 28, 1994, the Company consummated a private placement of
convertible Debentures with an aggregate value of $1.2 million (which
in previous years had been referred to as 7% Convertible Senior
Subordinated Debentures). These Debentures are convertible into
240,000 shares of the Company's Common Stock at a conversion price of
$5.00 per share. The Debentures had an original maturity date of April
1996. During fiscal 1997 and 1996, the Debentures were not converted
or redeemed, in whole or in part. The Company was unable to pay its
obligation for the Debentures which was due in April 1996. In May
1996, the Debenture holders entered into an agreement with the Company
whereby the interest rate on the Debentures was increased from 7% to
9%. In accordance with the Credit Agreement cited below, a principal
payment of $300,000 was made to the Debenture holders on September 26,
1996.
The Debentures are subordinated in right of payment to any future
bank or institutional indebtedness up to $1 million and are expressly
senior in right of payment to all other Company obligations (but
subordinated to the payment of any future bank or institutional
indebtedness up to $1 million). The Debentures are redeemable, in
whole only, from time to time at the option of the Company at a
redemption price equal to 100% of the principal amount thereof plus
accrued interest, provided that the Debentures may not be redeemed
prior to maturity unless, during any period of 20 consecutive trading
days ending within 30 days prior to the giving of the notice of
redemption, the market price for the Common Stock is at least 125% of
the conversion price.
On October 11, 1996, the Company and VGBS Acquisition Corporation
("VGBS") consummated a Credit Agreement dated as of September 25,
1996, whereby VGBS agreed to loan up to $1.2 million to the Company
pursuant to a Senior Secured Promissory Grid Note dated September 25,
1996 (the "Note"). Advances of $300,000 were scheduled to be made
quarterly, contingent upon the Company complying with certain
representations, warranties and covenants contained in the Credit
Agreement. The first $300,000 was advanced on September 26, 1996. As
of September 19, 1997, no subsequent amounts have been advanced under
5
<PAGE>
the Credit Agreement. The Note bears interest at the rate of 9% per
annum with principal and interest payable in equal quarterly
installments commencing June 30, 1997 through June 2000. No principal
or interest payments on the Note have been made by the Company.
Pursuant to the Credit Agreement, the Company has agreed that all
amounts advanced by VGBS pursuant to the Note will be used by the
Company solely to repay principal amounts owed by the Company to the
holders of the Company's Convertible Debentures (the "Debentures") as
cited below.
The Company has also entered into a Security Agreement with VGBS
pursuant to which the Company has granted VGBS a security interest in
all assets of the Company to secure the indebtedness incurred by the
Company pursuant to the Credit Agreement and Note. The Security
Agreement is senior in right of payment and in collateral except for
up to $500,000 for the financing of merchandise inventories. VGBS has
agreed to subordinate its security interest under the Security
Agreement to the holders of the Debentures in the event VGBS breaches
its obligation to fund any installment due the Company under the
Credit Agreement and Note.
6
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
OVERVIEW
- --------
The Company competes with a diverse group of national book retailers,
including WaldenBooks, Borders Bookshop, Barnes & Noble, B. Dalton, Crown Books,
Encore Books and Books-A-Million. In recent years, many competing national
chains have expanded in size and number of outlets, and have developed and
opened superstores within the Company's existing markets. As a result of these
competitive conditions, the Company has historically experienced cash shortfalls
and operating deficits, which has caused the Company's auditors to express doubt
as to the Company's ability to continue as a going concern. The Company is in
the process of holding an inventory reduction sale at its underperforming
Elmwood Avenue, Buffalo, NY and Wegman's Plaza, Perinton, NY stores. The Company
plans to close both stores upon conclusion of the sale. The Company hopes to use
the proceeds from the sale to strengthen its cash flow and to pay-down a portion
of its debt.
FINANCIAL POSITION
- ------------------
Cash and cash equivalents amounted to $22,304 at August 3, 1997 as compared
to $140,417 at February 2, 1997. Cash decreased as a result of reduction in
accounts payable of $197,824, due to payments made primarily to vendors, and
increased operating costs. Inventories decreased by $503,408 from $2,784,531 at
February 2, 1997 to $2,281,123 at August 3, 1997. Prepaid expenses decreased by
$22,286. Other current liabilities, accrued payroll and accrued sales taxes
payable decreased, in the aggregate, by $459 from $294,126 at February 2, 1997
to $293,667 at August 3, 1997.
7
<PAGE>
RESULTS OF OPERATIONS
- ---------------------
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
August 3 July 28 August 3 July 28
Statement of Operations Data 1997 1996 1997 1996
- ---------------------------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net Sales $ 1,100,184 $ 1,960,478 $ 2,277,085 $ 4,557,948
------------ ------------ ------------ ------------
As a Percentage of Net Sales: % % % %
Same Stores 99.5 73.3 98.6 68.1
Closed Stores 0.5 22.7 1.4 31.9
------------ ------------ ------------ ------------
Total Net Sales 100.0 100.0 100.0 100.0
Cost of Sales 66.0 63.2 65.4 63.7
------------ ------------ ------------ ------------
Gross Profit 33.4 36.8 34.6 36.3
Selling, General and
Administrative Expenses 58.9 52.0 59.0 52.1
------------ ------------ ------------ ------------
Loss from Operations (25.5) (15.2) (24.4) (15.8)
Net Loss (34.6) (33.9) (31.0) (24.7)
============ ============ ============ ============
</TABLE>
Net sales for the three months ended August 3, 1997 were $1,100,184 as
compared with $1,960,478 for the three months ended July 28, 1996, a decrease of
43.9%. For the six months ended August 3, 1997, net sales were $2,277,085, as
compared with $4,557,948 for the six months ended July 28, 1996, a decrease of
50% Comparable store sales decreased by 26.6% for the six months ended August 3,
1997.
Gross profit margin for the three months ending August 3, 1997 was 33.4% as
compared to 36.8% for the same period last year. For the six months ended August
3, 1997, gross profit margin was 34.6% as compared to 36.3% for the six months
ended July 28, 1996. In absolute dollars, gross profit decreased from $721,339
for the three months ended July 28, 1996 to $367,462 for the three months ended
August 3, 1997. For the six months ended August 3, 1997, absolute gross profit
dollars decreased to $787,369 from $1,656,820 for the six months ended July 28,
1996. The decrease in absolute gross profit dollars of $353,877 and $869,451 for
the three and six month periods resulted from net sales decreases in comparable
stores and reduction in sales associated with store closings.
Selling, general, and administrative expenses for the three months ended
August 3, 1997 decreased by $370,532 or 36.4%. The decrease resulted primarily
from reduction in staff as a result of store closings. For the six months ended
August 3, 1997, selling, general and administrative expenses decreased by
$1,031,315 or 43.4%. The increase in selling, general and administrative
expenses for the six months is attributable to the closing of stores.
Through August 3, 1997, the Company expensed against earnings a
restructuring charge of $95,988 as against a similar charge of $342,760 for the
six months ended July 28, 1996. The restructuring charge represents provisions
for lease settlement and leasehold improvements in connection with the early
termination of leases which occurred during this period.
8
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
Working capital was ($419,875) at August 3, 1997, as compared to $59,243 as
of February 2, 1997. The Company's auditors have stated that there is
substantial doubt about the Company's ability to continue as a going concern.
Competitive conditions have adversely affected the Company's liquidity.
9
<PAGE>
PART II -- OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
STAR VIDEO ENTERTAINMENT LP V. THE VILLAGE GREEN BOOKSTORE, INC. The
Company has been named a defendant in an action commenced in Rochester City
Court on January 3, 1997 by Star Video Entertainment LP. The complaint seeks
judgment based upon unpaid invoices in the amount of $2,885.04 plus interest,
litigation costs and attorney's fees. Plaintiff filed a motion for summary
judgment seeking $1,073.71 plus interest, costs and attorney's fees. This matter
was settled by the parties subsequent to August 3, 1997.
SHURMAN FINE PAPERS, INC. V. THE VILLAGE GREEN BOOKSTORE, INC. The Company
has been named a defendant in an action commenced in Supreme Court of the State
of New York for Monroe County on January 24, 1997 by Shurman Fine Papers, Inc.,
a supplier of greeting cards. Plaintiff seeks judgment for unpaid invoices in
the total amount of $59,143.42 plus interest and costs, which amount the Company
contends is greatly overstated. In addition, the Company intends to return
seasonal cards, which will further reduce the total amount owed to approximately
$35,000. Settlement negotiations have begun in an attempt first to agree upon
the amount of the liability, and then to agree upon a payment plan. At this
time, the outcome of this matter cannot be assessed with certainty.
SUNRISE PUBLICATIONS, INC. V. THE VILLAGE GREEN BOOKSTORE, INC. The Company
has been named a defendant in an action commenced in Supreme Court of the State
of New York for Monroe County on February 4, 1997 by Sunrise Publications, Inc.,
a greeting card supplier. Plaintiff seeks judgment for unpaid invoices in the
total amount of $28,468.88 plus interest and litigation costs. The Company
contends that the amount owed has been overstated by plaintiff. The Company also
intends to return seasonal cards, which will further reduce the total amount
owed to approximately $18,000. Settlement negotiations have begun in an attempt
first to agree upon the amount of the liability, and then to agree upon a
payment plan. At this time, the outcome of this matter cannot be assessed with
certainty.
EMPIRE STATE NEWS CORP. V. THE VILLAGE GREEN BOOKSTORE, INC. A default
judgment in the amount of $14,343.84 recently was obtained in an action
commenced in Buffalo City Court on or about March 6, 1997 by Empire State News
Corp. Plaintiff has accepted a settlement proposal and the Company is currently
making payments.
ANDREWS & MCMEEL V. THE VILLAGE GREEN BOOKSTORE, INC. The Company has been
named a defendant in a suit commenced on or about April 3, 1997 in Rochester
City Court. Plaintiff seeks judgment based upon unpaid invoices in the amount of
$14,187.76 plus interest and costs. The Company contends that the amount owed is
$7,500.15. This matter has been settled.
INTERNATIONAL PLAYTHINGS, INC. V. THE VILLAGE GREEN BOOKSTORE, INC. The
Company has been named a defendant in a suit commenced in Rochester City Court
on or about March 21, 1997. Plaintiff seeks judgment based upon unpaid invoices
10
<PAGE>
in the total amount of $3,656.47. The amount owed in this case is not in
dispute, and counsel have spoken concerning payment terms. At this time, the
outcome of this matter cannot be assessed with certainty.
INTERNATIONAL PERIODICAL DISTRIBUTORS, INC. V. THE VILLAGE GREEN BOOKSTORE,
INC. The Company has been named a defendant in an action commenced in Supreme
Court for the State of New York in Erie County by a magazine distributor.
Plaintiff seeks judgment based upon unpaid invoices in the total amount of
$51,972.24 plus interest and costs. The Company contends that the amount owed is
$45,679.18. At this time, the outcome of this matter cannot be assessed with
certainty.
GLEN EAGLE CENTER V. THE VILLAGE GREEN BOOKSTORE, INC. During the first
quarter of fiscal 1997, the Company received a Complaint from Glen Eagle Center
in connection with the closing of its stores. Glen Eagle is claiming $20,000 in
lost rents and consequential damages. The Company has counterclaimed for breach
of the Lease by Glen Eagle and intends to vigorously defend such claims. At this
time, the outcome of this matter cannot be assessed with certainty.
BENDERSON 85-1 TRUST V. THE VILLAGE GREEN BOOKSTORE, INC. The Company has
been named a defendant in an action commenced on August 24, 1994 in the Supreme
Court of the State of New York for Erie County involving a dispute on a lease in
the amount of $42,392.07. The plaintiff, Benderson 85-1 Trust, is the landlord
of the Company's former Tonawanda, New York store, which the Company closed in
January 1994. The Tonawanda store was operated by the Company's subsidiary,
Niagara Books, Inc., which was the party named on the lease. The Company
believes it has meritorious defenses and intends to vigorously defend this
action.
WILLIAM W. SHUSTER, JR. V. THE VILLAGE GREEN BOOKSTORE, INC. The Company
has been named a defendant in an action commenced on August 3, 1994 in the
Supreme Court of the State of New York for Monroe County by William W. Shuster,
Jr., as plaintiff, involving a "slip and fall" on the Company's property for
damages in the amount of $2 million. The Company carries $1 million worth of
liability insurance which the Company believes should be sufficient to cover any
possible award of damages to the plaintiff. Further, the Company believes it has
meritorious defenses and intends to vigorously defend this action.
STAR VIDEO ENTERTAINMENT LP V. THE VILLAGE GREEN BOOKSTORE, INC. The
Company has been named a defendant in an action commenced in Rochester City
Court on January 3, 1997 by Star Video Entertainment LP. The complaint seeks
judgment based upon unpaid invoices in the amount of $2,885.04 plus interest,
litigation costs and attorney's fees. Plaintiff recently filed a motion for
summary judgment seeking $1,073.71 plus interest, costs and attorney's fees. The
Company contends that no amount is owed to plaintiff and intends to vigorously
defend this action. At this time, the outcome of this matter cannot be assessed
with certainty.
EASTERN NEWS DISTRIBUTORS, INC. V. THE VILLAGE GREEN BOOKSTORE, INC. The
Company has been named a defendant in an action commenced in Supreme Court of
the State of New York for Monroe County on June 20, 1997 by Eastern News
11
<PAGE>
Distributors, Inc., a periodical distributor. Plaintiff seeks judgment for
unpaid invoices in the total amount of $25,572.92, plus interest and costs. The
Company contends that the amount owed has been over stated by Plaintiff. At this
time, the outcome of this matter cannot be assessed with certainty.
CARLTON CARDS, A DIVISION OF AMERICAN GREETINGS CORPORATION V. THE VILLAGE
GREEN BOOKSTORE, INC. The Company has been named a defendant in an action
commenced in Supreme Court of the State of New York for Monroe County on July
28, 1997 by Carlton Cards, a Division of American Greetings Corporation.
Plaintiff seeks judgment in the amount of $84,344.35, plus interest and costs.
The Company contends that the amount owed is greatly over stated. The Company
also contends that Plaintiff owes the Company credits for merchandise removed
from the Company's stores by Plaintiff when Plaintiff reset Plaintiff's displays
located in the Company's stores. At this time, the outcome of this matter cannot
be asserted with certainty.
PUBLISHERS CONSORTIUM, INC., DOING BUSINESS AS LPC GROUPS V. THE VILLAGE
GREEN BOOKSTORE, INC. The Company has been named a defendant in an action
commenced in Rochester City Court on June 24, 1997 by Publishers Consortium,
Inc., a book publisher. Plaintiff seeks judgement in the amount of $10,116.21,
plus interest and costs. The Company contends that the amount owed is greatly
overstated. At this time, the outcome of this matter cannot be asserted with
certainty.
POMEGRANATE PUBLICATIONS V. THE VILLAGE GREEN BOOKSTORE, INC. The Company
has been named a defendant in an action commenced in Rochester City Court on
July 7, 1997 by Pomegranate Publications, a stationary distributor. Plaintiff
seeks judgment in the amount of $3,653.40, plus interest and costs. The Company
contends that this amount is over stated as a result of the Company's partial
payment to Plaintiff. At this time, the outcome of the matter cannot be asserted
with certainty.
12
<PAGE>
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
--------
Exhibit 11 - Computation of Earnings per Common Share
Exhibit 27 - Financial Data Schedule
(b) Reports on Form 8-K.
A Form 8-K current report pursuant to Section 13 or 15(d) of the
Exchange Act dated August 12, 1997 was filed with the Securities
and Exchange commission on August 20, 1997. The purpose of the
8-K was to report on Item 5 the press release relating to the
Company's inventory reduction sale at its Perinton, New York and
Buffalo, New York stores.
13
Exhibit 11
THE VILLAGE GREEN BOOKSTORE, INC.
COMPUTATION OF EARNINGS PER COMMON SHARE
Three Months Ended Six Months Ended
August 3, 1997 August 3, 1997
---------------------- ---------------------
Primary Earnings Per Share (1)
- ------------------------------
Net Loss After Taxes $ (380,609) $ (704,887)
Weighted Average
Common Shares
Outstanding 3,741,355 3,741,355
Primary Loss Per Share $ (0.10) $ (0.19)
(1) Warrants and options, which are potentially dilutive, were not considered in
the calculations because these items were anti-dilutive due to the net losses
incurred during the reporting period.
14
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF THE VILLAGE GREEN BOOKSTORE, INC. FOR THE SIX MONTHS
ENDED AUGUST 3, 1997, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> FEB-01-1998
<PERIOD-START> FEB-03-1997
<PERIOD-END> AUG-03-1997
<CASH> 22,304
<SECURITIES> 0
<RECEIVABLES> 59,964
<ALLOWANCES> 0
<INVENTORY> 2,281,123
<CURRENT-ASSETS> 2,436,699
<PP&E> 2,393,806
<DEPRECIATION> 1,316,344
<TOTAL-ASSETS> 3,571,630
<CURRENT-LIABILITIES> 2,856,574
<BONDS> 248,375
0
0
<COMMON> 3,741
<OTHER-SE> 462,940
<TOTAL-LIABILITY-AND-EQUITY> 3,571,630
<SALES> 2,277,085
<TOTAL-REVENUES> 2,277,085
<CGS> 1,489,716
<TOTAL-COSTS> 1,489,716
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 52,598
<INCOME-PRETAX> (608,899)
<INCOME-TAX> 0
<INCOME-CONTINUING> (608,899)
<DISCONTINUED> (95,988)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (704,887)
<EPS-PRIMARY> (.19)
<EPS-DILUTED> (.19)
</TABLE>
