<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended November 30, 1994
-----------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION
13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File Number: 0-8966
--------------------------
RHODES, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Georgia 58-0536190
------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
4370 Peachtree Road, N.E.
Atlanta, Georgia 30319
-----------------------------------------------------
(Address of principal executive offices)
(Zip Code)
(404) 264-4600
-----------------------------------------------------
(Registrant's telephone number, including area code)
NONE
-----------------------------------------------------
(Former name, former address and former fiscal year,
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. Yes X No
--- ---
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date: 9,778,933 shares of
common stock without par value at January 10, 1995.
<PAGE> 2
RHODES, INC.
INDEX
Part I. Financial Information
Background
Item 1. Financial Statements
Condensed Consolidated Balance Sheets - -
November 30, 1994 and February 28, 1994
Condensed Consolidated Statements of Operations
for the Three and Nine Months Ended November 30, 1994
and November 30, 1993
Condensed Consolidated Statements of Cash Flows
for the Nine Months Ended November 30, 1994
and November 30, 1993
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
i
<PAGE> 3
RHODES, INC.
PART I
FINANCIAL INFORMATION
BACKGROUND
An important event, the Recapitalization (defined below), occurred
during Rhodes, Inc.'s ("Rhodes" or the "Company") year ended February 28, 1994
which affects the comparison of this year's financial statements with the nine
month period ended November 30, 1993. The results of operations for the nine
months ended November 30, 1994 are best analyzed by comparison with the pro
forma results of operations for the same prior year period which have been
adjusted to reflect the Recapitalization, in addition to comparison with the
historical financial statements presented herein.
RECAPITALIZATION
In June 1993, the Company completed a recapitalization plan (the
"Recapitalization"), whereby $120.2 million of indebtedness and $14.7 million
of preferred stock was retired through the issuance of 8.2 million shares of
common stock and $40.0 million of senior secured notes. The Recapitalization
significantly reduced the Company's indebtedness and interest expense and
provided additional resources and financial flexibility.
1
<PAGE> 4
RHODES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
(UNAUDITED)
ASSETS
<TABLE>
<CAPTION>
NOVEMBER 30, FEBRUARY 20,
1994 1994
------------ ------------
<S> <C> <C>
CURRENT ASSETS:
Cash $ 3,378 $ 235
Accounts receivable 4,943 2,073
Inventories at LIFO cost 52,627 48,187
Prepaid expenses and other 4,763 4,375
Deferred tax assets 2,941 2,941
-------- --------
Total Current Assets 68,652 57,811
-------- --------
PROPERTY AND EQUIPMENT, at cost, less accumulated
depreciation and amortization of
$32,573 at November 30, 1994 and
$29,805 at February 28, 1994 52,469 48,027
-------- --------
CAPITALIZED REAL ESTATE LEASES, at
cost, less accumulated amortization
of $4,693 at November 30, 1994 and
$4,125 at February 28, 1994 7,251 7,819
-------- --------
INTANGIBLE ASSETS, net
Goodwill 60,768 62,116
Favorable leases 4,058 4,797
Other intangibles 2,478 2,638
-------- --------
Total Intangible Assets 67,304 69,551
-------- --------
OTHER ASSETS 2,399 2,396
-------- --------
TOTAL ASSETS $198,075 $185,604
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes and loans payable $ -- $ 2,471
Current maturities of long-term
debt and capital lease obligations 807 1,308
Accounts payable 29,266 27,753
Accrued liabilities 18,454 15,862
Accrued Interest 1,721 759
Deferred income 10,192 8,732
Current income taxes payable 3,045 --
Current portion deferred gain-sale/
leasebacks 318 318
-------- --------
Total Current Liabilities 63,803 57,203
-------- --------
DEFERRED INCOME TAXES 8,294 8,415
-------- --------
LONG-TERM DEBT, less current maturities 40,141 42,046
-------- --------
OBLIGATIONS UNDER CAPITAL LEASES 14,422 15,006
-------- --------
DEFERRED GAIN-SALE/LEASEBACKS 2,787 3,025
-------- --------
COMMITMENTS AND CONTINGENCIES -- --
SHAREHOLDERS' EQUITY:
Common stock, no par value, 20,000
shares authorized and 9,779 shares
issued and outstanding at November
30, and February 28, 1994 -- --
Paid-in-Capital 106,863 107,107
Accumulated deficit (38,235) (47,198)
-------- --------
Total Shareholders' Equity 68,628 59,909
-------- --------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $198,075 $185,604
======== ========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
balance sheets.
2
<PAGE> 5
RHODES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS THREE MONTHS NINE MONTHS NINE MONTHS
ENDED ENDED ENDED ENDED
NOVEMBER 30, 1994 NOVEMBER 30, 1993 NOVEMBER 30, 1994 NOVEMBER 30, 1993
----------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C>
NET SALES $ 95,785 $ 86,179 $ 267,459 $ 239,187
COST OF GOODS SOLD 49,984 44,259 137,251 123,750
------------- ------------- ------------- -------------
GROSS PROFIT 45,801 41,920 130,208 115,437
------------- ------------- ------------- -------------
FINANCE CHARGES and
INSURANCE COMMISSIONS 1,322 1,140 3,826 3,658
------------- ------------- ------------- -------------
OPERATING EXPENSES:
Selling 13,877 13,709 43,578 38,073
General and administrative 23,181 21,204 68,218 61,877
Amortization of intangibles 767 787 2,301 2,338
Provision for credit losses 32 37 84 116
Other (income) expenses, net (75) (94) (158) (1)
------------- ------------- ------------- -------------
37,782 35,643 114,023 102,403
------------- ------------- ------------- -------------
INCOME BEFORE INTEREST EXPENSE, INCOME
TAXES AND EXTRAORDINARY ITEM 9,341 7,417 20,011 16,692
Interest expense - net 1,559 1,734 4,819 9,947
------------- ------------- ------------- -------------
INCOME BEFORE INCOME TAXES AND
EXTRAORDINARY ITEM 7,782 5,683 15,192 6,745
PROVISION FOR INCOME TAXES 3,191 2,239 6,229 2,972
------------- ------------- ------------- -------------
NET INCOME BEFORE EXTRAORDINARY ITEM 4,591 3,444 8,963 3,773
EXTRAORDINARY ITEM - EARLY RETIREMENT
OF DEBT, NET OF INCOME TAXES EFFECT -- -- -- (2,727)
------------- ------------- ------------- -------------
NET INCOME 4,591 3,444 8,963 1,046
============= ============= ============= =============
NET INCOME PER WEIGHTED AVERAGE SHARE
OUTSTANDING BEFORE EXTRAORDINARY ITEM $ 0.47 $ 0.35 $ 0.92 $ 0.59
EXTRAORDINARY ITEM PER SHARE -- -- -- (0.43)
------------- ------------- ------------- -------------
NET INCOME PER WEIGHTED AVERAGE
SHARE OUTSTANDING $ 0.47 $ 0.35 $ 0.92 $ 0.16
============= ============= ============= =============
WEIGHTED AVERAGE NUMBER OF SHARES OF
COMMON STOCK OUTSTANDING 9,779 9,838 9,779 6,365
============= ============= ============= =============
PRO FORMA NET INCOME PER
COMMON SHARE (NOTE 1) $ 0.70
=============
PRO FORMA WEIGHTED AVERAGE SHARES 9,813
=============
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
statements.
3
<PAGE> 6
RHODES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS NINE MONTHS
ENDED ENDED
NOVEMBER 30, 1994 NOVEMBER 30, 1993
----------------- -----------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 8,963 $ 1,046
Adjustments to reconcile net income to net cash
provided by operating activities:
Extraordinary item - early retirement of debt -- 3,527
Depreciation and amortization 5,052 4,741
Change in deferred income taxes (121) (1,320)
Amortization of intangibles 2,301 2,338
Non-cash interest expense -- 2,626
Amortization of gain-sale/leasebacks (238) (238)
Write-off of intangible assets 19 --
Changes in current assets and liabilities:
Receivables, net (2,870) (100)
Inventories (4,440) (8,251)
Prepaid expenses and other (388) (2,700)
Accounts payable and accrued liabilities 8,112 11,755
Deferred income on warranties, undelivered
sales and credit commissions 1,460 2,062
------- --------
Net cash provided by operating activities $17,850 $ 15,486
------- --------
CASH FLOWS FROM (USED BY) INVESTING ACTIVITIES:
Retirements of property and equipment, net 1,080 55
Additions to property and equipment (9,962) (5,135)
Additions to intangible assets (73) (1,261)
Increase in other assets, net (47) (165)
Increase (decrease) in obligations under capital leases (584) 192
------- --------
Net cash used in investing activities $(9,586) $ (6,314)
------- --------
CASH FLOWS FROM (USED BY) FINANCING ACTIVITIES:
Prepayment penalty for early retirement of debt -- (2,624)
Proceeds from the Senior Secured Financing -- 40,000
Expenses incurred in stock registration (262) --
Repayment of long-term debt (2,406) (88,235)
Proceeds from the sale of stock -- 45,499
Repayment of short-term debt, net (2,471) (4,135)
Exercise of stock options 18 295
------- --------
Net cash used in financing activities $(5,121) $ (9,200)
------- --------
INCREASE (DECREASE) IN CASH 3,143 (28)
CASH AT BEGINNING OF PERIOD 235 158
------- --------
CASH AT END OF PERIOD $ 3,378 $ 130
======= ========
SUPPLEMENTAL DISCLOSURE:
CASH PAYMENTS FOR:
Interest $ 4,819 $ 7,321
======= ========
Income taxes $ 3,037 $ 1,246
======= ========
Exchange of long-term debt for Common Stock $ -- $ 34,309
======= ========
Exchange of preferred stock and accumulated dividends for
Common Stock $ -- $ 14,660
======= ========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
statements.
4
<PAGE> 7
RHODES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOVEMBER 30, 1994
1. BASIS OF PRESENTATION
The financial statements included herein have been prepared by the
Company pursuant to the rules and regulations of the Securities and
Exchange Commission. This information reflects all adjustments
(consisting of normal recurring adjustments) which are, in the
opinion of management, necessary to a fair statement of the
financial position of the Company as of November 30, 1994 and
February 28, 1994, the results of operations for the three and nine
months ended November 30, 1994 and November 30, 1993, and cash
flows for the nine months ended November 30, 1994 and November 30,
1993. Certain information and footnote disclosures normally included
in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations, although the Company
believes that the disclosures are adequate to make the information
presented not misleading. Certain reclassifications of prior year's
amounts have been made to conform with fiscal 1995 amounts. Because
of the Recapitalization consummated on June 24, 1993, earnings per
share for the nine month period ended November 30, 1993 are
presented on a pro forma basis assuming the Recapitalization had
taken place at the beginning of that period. The three and nine
month periods ended November 30, 1994 and the three month period
ended November 30, 1993 have no pro forma adjustments. These
financial statements should be read in conjunction with the
historical financial statements and the notes thereto included in
the Company's latest annual report on Form 10-K.
2. INTERIM LIFO PROVISIONS
The actual valuation of inventory under the LIFO method can be made
only at the end of each year based on inventory levels, price
indices and costs at that time. Therefore, the interim provisions
must be considered as estimates subject to a final year-end LIFO
inventory calculation.
5
<PAGE> 8
3. EXTRAORDINARY ITEM
In the nine months ended November 30, 1993 the Company expensed
certain charges incurred principally in connection with the
Recapitalization. These extraordinary items represent non-recurring
prepayment penalties of $2,624,000 for early retirement of debt and
write-off of $903,000 in related deferred loan costs, less income
tax benefit of $800,000.
6
<PAGE> 9
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
GENERAL
The following table sets forth the results of operations for the
three and nine month periods ended November 30, 1994 compared with the
unaudited pro forma results of operations adjusted as if the Recapitalization
had been completed as of the beginning of the nine month period ended November
30, 1993. The three and nine month periods ended November 30, 1994 and the
three month period ended November 30, 1993 have no pro forma adjustments.
Management believes that these pro forma results present the most meaningful
comparison of historical operating performance as a basis for understanding
future operations.
The pro forma financial information does not purport to represent
what the Company's results of operations would actually have been if such
transactions had occurred on such date or project the Company's results of
operations for future periods. The pro forma adjustments are based upon
currently available information and upon certain assumptions that management of
the Company believes are reasonable under the circumstances.
7
<PAGE> 10
Unaudited Pro Forma Statements of Operations
(In Thousands)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
NOVEMBER 30, 1994 NOVEMBER 30, 1993 NOVEMBER 30, 1994 NOVEMBER 30,1993
ACTUAL ACTUAL ACTUAL PRO FORMA
------------------ ----------------- ----------------- ------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NET SALES $95,785 100.0% $ 86,179 100.0% $267,459 100.0% $239,187 100.0%
COST OF GOODS 49,984 52.2 44,259 51.4 137,251 51.3 123,750 51.7
------- ----- -------- ---- ------- ---- ------- -----
GROSS PROFIT 45,801 47.8 41,920 48.6 130,208 48.7 115,437 48.3
------- ----- -------- ---- ------- ---- ------- -----
FINANCE CHARGES &
INSURANCE
COMMISSION 1,322 1.4 1,140 1.3 3,826 1.4 3,658 1.5
------- ----- -------- ---- ------- ---- ------- -----
OPERATING EXPENSES:
Selling 13,877 14.5 13,709 15.9 43,578 16.3 38,073 15.9
General &
administrative 23,181 24.2 21,204 24.6 68,218 25.5 61,758 25.8
Amortization of
intangibles 767 .8 787 .9 2,301 .9 2,324 1.0
Provision for
credit losses 32 .0 37 .0 84 .0 116 .0
Other (income)
expense, net (75) (.1) (94) (.1) (158) (.1) (1) (.0)
------- ----- ------- ---- ------- ---- ------- -----
37,782 39.4 35,643 41.4 114,023 42.6 102,270 42.8
------- ----- ------- ---- ------- ---- ------- -----
OPERATING INCOME 9,341 9.8 7,417 8.6 20,011 7.5 16,825 7.0
Interest-net 1,559 1.6 1,734 2.0 4,819 1.8 5,434 2.3
------- ----- ------- ---- ------- ---- ------- -----
INCOME BEFORE
INCOME TAXES 7,782 8.1 5,683 6.6 15,192 5.7 11,391 4.8
PROVISION FOR
INCOME TAXES 3,191 3.3 2,239 2.6 6,229 2.3 4,560 1.9
------- ----- ------- ---- ------- ---- ------- -----
NET INCOME $ 4,591 4.8% $ 3,444 4.0% $ 8,963 3.4% $ 6,831 2.9%
======= ===== ======= ==== ======= ==== ======= =====
</TABLE>
OPERATING RESULTS
THREE MONTHS (ACTUAL BASIS) AND NINE MONTHS (PRO FORMA BASIS) ENDED NOVEMBER
30, 1994 AND 1993 COMPARED
Net sales increased 11.1% to $95,785,000 from $86,179,000 for the
three months ended November 30, 1994 compared with the same period last year
and increased 11.8% to $267,459,000 from $239,187,000 for the nine months
compared with last year. Comparable store sales growth was 8.6% and 7.6% for
the three and nine months ended November 30, 1994, respectively. Comparable
store sales represent furniture and services sold and delivered by stores open
for the same months in each comparative period. Net income for the third
quarter ended November 30, 1994 increased 33.3% to $4,591,000, or $.47 per
share, compared with $3,444,000, or $.35 per share for the same quarter last
year. Net income for the nine months ended November 30, 1994 increased 31.2% to
8
<PAGE> 11
$8,963,000, or $.92 per share, compared with $6,831,000, or $.70 per share on a
pro forma basis for the nine months last year.
During the quarter Rhodes opened one new store in Atlanta, Georgia and
lost one store to a fire in Jacksonville, Florida, bringing the total stores to
78 at November 30, 1994, the same number in operation at November 30, 1993. The
Company's fifth store in the Birmingham, Alabama market was opened after the
end of the quarter bringing the total stores in operation to 79 at January 10,
1995. One more store is scheduled to open before the end of this fiscal year
in St. Louis, Missouri, for a total of five stores in that market. Also, one of
the two Columbia, South Carolina stores was relocated in January, 1995. The
Company has leases signed on five additional stores expected to open in the
next fiscal year and is in final lease negotiations for three more new stores,
all of which are expected to open in the next fiscal year. Three of these eight
stores will be located in Atlanta, Georgia, two in Charlotte, North Carolina,
two in Memphis, Tennessee (a new market) and one in Jacksonville, Florida.
There were no stores in construction under the remodeling program during the
third quarter in order to avoid any sales disruption. The Company historically
has its strongest sales during the third quarter.
Gross profit as a percentage of net sales for the three months ended
November 30, 1994, decreased to 47.8%, down from 48.6%, compared with the same
period last year and for the nine months ended November 30, 1994 increased to
48.7% from 48.3%, compared with the same period last year. The slight decline
in the gross profit percentage for the quarter is due for the most part to a
larger deferral of gross profit on undelivered sales than last year. The gross
profit improvement for the nine months ended November 30, 1994 is partially
attributable to improved sales penetration of extended warranties which have a
higher gross profit. Also, the credit promotions discussed below permitted
less discounting of selling prices, contributing to the higher gross profit
percentage for the nine month period.
Finance charge and insurance commission income derives from
commissions earned from BNB under the Merchant Agreement and from commissions
on credit insurance on credit customer balances. For the three month and nine
month periods ended November 30, 1994, income increased due to additional
insurance commissions earned on customers' accounts.
9
<PAGE> 12
Selling expense for the three months ended November 30, 1994 decreased
as a percentage of net sales to 14.5% compared with 15.9% last year due to
lower net costs on credit promotion charges. Selling expense varies as a
percentage of sales due to a number of factors including the level of
advertising, credit promotions and the opening of new stores. For the nine
months ended November 30, 1994, selling expense increased as a percentage of
net sales to 16.3% compared with 15.9% for the same period last year primarily
as a result of more extensive use of credit promotions in the first six months
of this year. The increased expense this year for interest free and deferred
payment credit promotions was off-set by improved gross profit on sales.
General and administrative expenses for the quarter ended November 30,
1994 increased to $23,181,000 (24.2% of net sales) from $21,204,000 (24.6% of
net sales) for the three months last year, and for the nine months ended
November 30, 1994 increased to $68,218,000 (25.5% of net sales) from
$61,758,000 (25.8% of net sales) for the same period last year. The increased
expense for the three and nine month periods ended November 30, 1994 is due to
having five new stores this year, less the three Miami stores sold in the
second quarter plus increases in employee expenses. The improvement in the
percentage of net sales compared to the prior year is due principally to the
increased sales volume.
Interest expense on the Company's indebtedness is generally fixed and
is expected to decline slightly in future periods as such debt is reduced from
internal cash flow.
NINE MONTHS ENDED NOVEMBER 30, 1994 AND 1993 COMPARED - - HISTORICAL BASIS
On a historical basis, the nine months ended November 30, 1994 are not
comparable with the prior year due to the Recapitalization which took place on
June 24, 1993. As a result of the Recapitalization, interest expense has been
substantially reduced. The following information describes results of
operations on a historical basis to the extent that the historical information
differs significantly from the pro forma information set forth under "Three
Months (Actual Basis) and Nine Months (Pro Forma Basis) ended November 30, 1994
and 1993 Compared.
Interest expense for the nine months ended November 30, 1994 decreased
to $4,819,000 compared with $9,947,000 for the same period last year as a
result of the Recapitalization and the related reduction in the Companys'
indebtedness.
10
<PAGE> 13
INCOME TAXES
The Company adopted Statement of Financial Accounting Standards
("SFAS") No. 109 during fiscal 1992 and recorded the effect of the adoption
retroactive to March 1, 1991, in a manner similar to the cumulative effect of a
change in accounting principle. SFAS No. 109 requires the determination of
deferred income taxes using the liability method under which deferred tax
assets and liabilities are determined based on the differences between the
financial accounting and tax basis of assets and liabilities. Deferred tax
assets or liabilities at the end of each period are determined using the
currently enacted tax rate expected to apply to taxable income in the periods
in which the deferred tax asset or liability is expected to be settled or
realized. Accordingly, the Company recorded a provision for income taxes for
the nine months ended November 30, 1994 in the amount of $6,229,000 compared
with a provision of $2,972,000 for income taxes recorded for the nine months
ended November 30, 1993.
LIQUIDITY AND CAPITAL RESOURCES
Currently, the Company's principal sources of liquidity are cash flow
from operations and additional borrowing capacity under its revolving credit
agreement described below. The Company had net cash provided by operating
activities of approximately $17.9 million for the nine months ended November
30, 1994 compared with approximately $15.5 million for the same period last
year.
The Company's principal uses of cash are capital expenditures,
working capital needs and debt service obligations. The Company's capital
expenditures for equipment and expansion and remodeling or refurbishing of
stores are estimated at $12.0 million for fiscal 1995 compared with $6.9
million for fiscal 1994. The increase reflects the cost of the Company's plan
to remodel or refurbish 16 stores, open seven new stores and make an addition
to the Powder Spring Regional Distribution Center during fiscal 1995. The
Company plans to make capital expenditures of approximately $13.0 million in
fiscal 1996 to fund the remodeling or refurbishing of approximately 16 stores
and the opening of approximately 10 new stores.
Inventory turnover on a FIFO basis was 3.7x for the quarter and 3.6x
for the nine months ended November 30, 1994 compared with 3.9x for the quarter
and the nine months last year. Inventories were approximately $7.1 million
higher at November 30, 1994 than last year due to management's anticipation of
an
11
<PAGE> 14
improved economic climate and the addition of approximately $4.0 million in
accessory inventory to enhance the appearance of the furniture in the stores,
which management believes has stimulated both furniture and accessory sales.
The Company expects that inventory turns will continue at the lower levels due
to the additional accessory inventory and its intention to maintain a higher
level of in-stock items.
The Company maintains a revolving credit agreement for up to $30.0
million or 50% of eligible inventory with Wachovia National Bank. The agreement
is secured by substantially all of the inventory of the Company. As of January
10, 1994, there was no balance outstanding under the revolving loan agreement
and approximately $19.6 million remained available under the agreement.
On January 6, 1995 the Company announced that it had been authorized
to repurchase up to an aggregate of $5 million of its common stock. The
Company intends to make such purchases from time to time in the open market or
in private transactions through an agent. The Company expects to finance the
stock repurchases principally from cash generated from operations, although it
may utilize borrowings under its revolving credit facility as needed.
12
<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.
RHODES, INC.
------------------------
(Registrant)
DATE: January 13, 1995 By: /s/ Joel H. Dugan
---------------- ----------------------
Joel H. Dugan
Senior Vice President--
Finance and Administration
13
<PAGE> 16
Exhibit Index
-------------
Exhibit
Index Description
- ------- -----------
27 Financial Data Schedule (for SEC use only)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENT OF RHODES, INC. FOR THE QUARTER ENDED NOVEMBER 30, 1994, AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER>1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> FEB-28-1994
<PERIOD-START> MAR-1-1994
<PERIOD-END> NOV-30-1994
<CASH> 3,378
<SECURITIES> 0
<RECEIVABLES> 4,943
<ALLOWANCES> 0
<INVENTORY> 52,627
<CURRENT-ASSETS> 68,652
<PP&E> 85,042
<DEPRECIATION> 32,573
<TOTAL-ASSETS> 198,075
<CURRENT-LIABILITIES> 63,803
<BONDS> 40,000
<COMMON> 0
0
0
<OTHER-SE> 68,628
<TOTAL-LIABILITY-AND-EQUITY> 198,075
<SALES> 267,459
<TOTAL-REVENUES> 267,459
<CGS> 137,251
<TOTAL-COSTS> 137,251
<OTHER-EXPENSES> 113,939
<LOSS-PROVISION> 84
<INTEREST-EXPENSE> 4,819
<INCOME-PRETAX> 15,192
<INCOME-TAX> 6,229
<INCOME-CONTINUING> 8,963
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 8,963
<EPS-PRIMARY> 0.92
<EPS-DILUTED> 0.92
</TABLE>
