<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For The Quarterly Period Ended May 3, 1997
Commission File Number 000-24328
RICHMAN GORDMAN 1/2 PRICE STORES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 47-0771211
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)
12100 WEST CENTER ROAD, OMAHA, NEBRASKA 68144
(Address of principal executive offices) (zip code)
(402) 691-4000
(Registrant's telephone number, including area code)
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 ________
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13, or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. 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:
Class of Common Stock Outstanding at May 3, 1997
--------------------- --------------------------
Common Stock:
Series A 19,260,000 shares
Series B Option 10,200,000 shares
Page 1 of 18
Exhibit Index Appears At Page 16
<PAGE> 2
RICHMAN GORDMAN 1/2 PRICE STORES, INC. AND SUBSIDIARY
-----------------------------------------------------
PAGE
----
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements (Unaudited)
Consolidated Balance Sheets as of
May 3, 1997 and February 1, 1997 3
Consolidated Statements of Operations -
Three Months Ended May 3, 1997
and May 4, 1996 4
Consolidated Statements of Cash Flows -
Three Months Ended May 3, 1997
and May 4, 1996 5 - 6
Notes to Consolidated Financial Statements 7 - 8
Item 2 - Management's Discussion and Analysis of 9 - 12
Financial Condition and Results of
Operations
PART II - OTHER INFORMATION
Items 1-4- None 13
Item 5 - Other Information 13
Item 6 - Exhibits and Reports on Form 8-K 14
Signatures 15
Exhibit Index 16
Page 2 of 18
<PAGE> 3
PART I - FINANCIAL INFORMATION
------------------------------
ITEM I - FINANCIAL STATEMENTS
-------------------------------
RICHMAN GORDMAN 1/2 PRICE STORES, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
May 3, 1997 February 1, 1997
ASSETS -------------- ----------------
CURRENT ASSETS:
<S> <C> <C>
Cash $ 476,194 $ 388,267
Accounts receivable, less allowance for doubtful
accounts of $513,436 and $587,150 1,029,104 782,312
Merchandise inventories 27,524,189 25,314,919
Prepaid expenses and other current assets 1,802,414 1,883,490
-------------- -------------
Total current assets 30,831,901 28,368,988
PROPERTY, BUILDINGS AND EQUIPMENT, net 13,735,184 14,267,207
OTHER ASSETS 200,404 212,904
-------------- -------------
$ 44,767,489 $ 42,849,099
============== =============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Line of credit borrowings $ 14,216,805 $ 7,281,732
Accounts payable 7,006,565 7,038,664
Accrued expenses 4,193,766 5,145,863
Taxes accrued and withheld 2,196,554 1,979,500
Income taxes payable 205,781 206,105
Current portion of long-term debt 4,397,179 4,537,056
Current maturites of capital lease obligations 1,335,379 1,335,379
------------- -------------
Total current liabilities 33,552,029 27,524,299
LONG-TERM DEBT, net of current portion 0 0
CAPITAL LEASE OBLIGATIONS, net of current portion 8,940,444 9,258,949
OTHER LONG-TERM LIABILITIES 176,767 180,328
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock
Series A common stock: $.01 par value; 19,800,000
shares authorized; 19,260,000 shares issued 192,600 192,600
Series B option common stock: $.01 par value; 10,200,000
shares authorized, issued and outstanding 102,000 102,000
Paid-in capital 4,562,886 4,562,886
Retained earnings (deficit) (2,533,517) 1,253,757
Less: Treasury Stock, at cost, 2,565,000 shares (225,720) (225,720)
------------- -------------
Total stockholders' equity 2,098,249 5,885,523
------------- -------------
$ 44,767,489 $ 42,849,099
============= =============
</TABLE>
See notes to consolidated financial statements.
<PAGE> 4
RICHMAN GORDMAN 1/2 PRICE STORES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
May 3, 1997 May 4 ,1996
----------- -----------
<S> <C> <C>
NET SALES $ 36,602,742 $ 41,694,873
COST OF SALES 23,954,362 27,209,155
--------------- --------------
Gross Profit 12,648,380 14,485,718
OPERATING AND
ADMINISTRATIVE EXPENSES 15,690,704 16,785,590
--------------- --------------
Loss from operations (3,042,324) (2,299,872)
OTHER INCOME (EXPENSE):
Interest expense (745,815) (821,053)
Interest income 863 893
--------------- --------------
(744,952) (820,160)
--------------- --------------
LOSS BEFORE PROVISION FOR
INCOME TAX (3,787,276) (3,120,032)
PROVISION FOR INCOME TAXES - -
--------------- --------------
NET LOSS (3,787,276) (3,120,032)
=============== ==============
LOSS PER COMMON SHARE $ (0.14) $ (0.10)
=============== ==============
WEIGHTED AVERAGE
SHARES OUTSTANDING 27,435,000.00 30,000,000.00
=============== ==============
</TABLE>
Page 4 of 18
<PAGE> 5
RICHMAN GORDMAN 1/2 PRICE STORES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
May 3, 1997 May 4, 1996
------------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from customers $ 36,339,681 $ 41,424,690
Merchandise purchases (26,233,616) (33,329,381)
Cash paid for operating and administrative expenses (15,604,942) (15,764,544)
Interest paid on capital leases (323,118) (359,517)
Interest paid on other debt obligations (323,668) (367,406)
------------- ---------------
Net cash used in operating activities (6,145,663) (8,396,157)
------------- ---------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property, buildings and equipment (180,766) (247,436)
------------- ---------------
Net cash used in investing activities (180,766) (247,436)
------------- ---------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from line of credit borrowing 6,935,073 9,293,077
Payments on obligations under capitalized leases (318,504) (321,333)
Payments on secured term note (194,607) (201,000)
Payments made under plan of reorganization (7,606) -
------------- ---------------
Net cash provided by financing activitie 6,414,356 8,770,744
------------- ---------------
NET INCREASE IN CASH 87,927 127,151
CASH, Beginning of period 388,267 488,012
------------- ---------------
CASH, End of period $ 476,194 $ 615,163
============= ===============
</TABLE>
See notes to consolidated financial statements.
Page 5 of 18
<PAGE> 6
RICHMOND GORDMAN 1/2 PRICE STORES, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
May 3, 1997 May 4, 1996
----------- -----------
RECONCILIATION OF NET LOSS TO NET CASH
USED IN OPERATING ACTIVITIES:
<S> <C> <C>
Net loss $ (3,787,276) $ (3,120,032)
Adjustments to reconcile net loss to
net cash used by operating activities:
Depreciation and amortization 725,288 776,091
Net changes in assets and liabilities:
Accounts receivable (246,792) (412,696)
Merchandise inventory (2,209,270) (4,316,295)
Prepaid expenses and other current assets 81,076 78,160
Other assets - (97,464)
Accounts payable (32,099) (1,436,029)
Other accrued expenses (676,590) 132,108
-------------- ----------------
Net cash used in operating activities $ (6,145,663) $ (8,396,157)
============== ================
</TABLE>
Page 6 of 18
<PAGE> 7
RICHMAN GORDMAN 1/2 PRICE STORES, INC. AND SUBSIDIARY
-----------------------------------------------------
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------
(Unaudited)
1. MANAGEMENT REPRESENTATION
-------------------------
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for
interim financial information. In the opinion of management, all
adjustments necessary for a fair presentation of the results of operations
for the interim periods have been included. All such adjustments are of a
normal recurring nature. Because of the seasonal nature of the business,
results for interim periods are not necessarily indicative of a full year's
operations. The accounting policies followed by Richman Gordman 1/2 Price
Stores, Inc. and subsidiary (the "Company") and additional footnotes are
reflected in the audited consolidated financial statements contained in the
Annual Report on Form 10-K of the Company for the fiscal year ended
February 1, 1997.
2. DESCRIPTION OF BUSINESS
-----------------------
On October 20, 1993, the Company emerged from Chapter 11 of the United
States Bankruptcy Code pursuant to a confirmed Plan of Reorganization (the
"Plan"). The Company operated 32 1/2 Price Stores as of May 3, 1997 and
May 4, 1996. The 1/2 Price primary concept is to offer first quality, name
brand merchandise at half of the conventional department store regular
prices or at half of manufacturers' suggested retail prices.
3. MERCHANDISE INVENTORIES
-----------------------
Merchandise inventories are stated at the lower of cost (on a last-in,
first-out, or LIFO basis) or market. Total inventories would have been
higher at May 3, 1997 and February 1, 1997, by approximately $7,987,749 and
$7,862,748, respectively, had the FIFO (first-in, first-out) method been
used to determine the cost of all inventories. Quarterly LIFO inventory
determinations reflect assumptions regarding fiscal year-end inventory
levels and the estimated impact of annual inflation.
4. INCOME TAXES
------------
As of February 1, 1997 (the Company's most recent tax year-end), the
Company had net operating loss carryforwards of approximately $27,800,000,
which expire through 2011. A valuation allowance has been provided against
this net operating loss benefit until realization of these benefits becomes
more likely than not. No income tax benefit was recorded for the first
quarter of fiscal 1997 and 1996 because of the uncertainty of the
realization of such benefits in the future resulting from recent losses.
Page 7 of 18
<PAGE> 8
5. STOCKHOLDERS' EQUITY
--------------------
Should the Company fulfill its minimum obligation to the unsecured
creditors under the Plan, the Company and the former preferred
shareholder's designee have the option to purchase all or a portion of the
10,200,000 shares of Series B Option Common Stock issued to the unsecured
creditors at a price equal to the fair value of the stock on February 2,
1998, less the amount of any Excess Cash Balance paid to the unsecured
creditors during the term of the Plan. As of May 3, 1997 there is no
Excess Cash Balance paid to the unsecured creditors.
6. EARNINGS PER SHARE
------------------
Earnings per common share were calculated using weighted average common
shares outstanding for all periods presented. For purposes of the weighted
average shares outstanding, all shares to be issued to certain members of
management or to the unsecured creditors during the term of the Plan are
considered outstanding. At May 3, 1997, 540,000 of such shares had not yet
been issued.
7. EXECUTIVE SEVERANCE PAYMENTS
----------------------------
On May 15, 1996, the Company's chief executive officer resigned. In
connection with this resignation, the executive received severance related
payments totaling approximately $373,000, which were expensed in the second
quarter of fiscal 1996. The severance benefits included the vesting of
1,080,000 shares of the Company's Series A Common Stock which were to be
issued in 1997 and 1998 if certain cash flow goals were achieved. In
addition, approximately $806,000 of prepaid compensation to the executive
paid during fiscal 1995 will not have to be repaid to the Company and was
also expensed in the second quarter of fiscal 1996.
8. ACCOUNTING PRONOUNCEMENT
------------------------
In February 1997, the Financial Accounting Standards Board issued SFAS No.
128, Earnings Per Share which specifies the computation, presentation and
disclosure requirements for earnings per share. The objective of the
statement is to simplify the computation of earnings per share. The
Company does not expect this pronouncement to have a material impact on its
earnings per share. SFAS No. 128 is applicable for the Company beginning
in the fourth quarter of fiscal 1997.
Page 8 of 18
<PAGE> 9
PART I - FINANCIAL INFORMATION
------------------------------
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS
---------------------------------------------
OF FINANCIAL CONDITION
----------------------
AND RESULTS OF OPERATIONS
-------------------------
RESULTS OF OPERATIONS
- ---------------------
The following table sets forth an analysis of various components of the
Consolidated Statements of Operations as a percentage of sales:
THREE MONTHS ENDED
MAY 3, 1997 MAY 4, 1996
----------- -----------
Net Sales 100.0% 100.0%
Cost of Sales 65.4 65.3
----------- -----------
Gross Profit 34.6 34.7
Operating and Administrative Expenses 42.9 40.3
----------- -----------
Loss From Operations (8.3) (5.5)
Interest Expense - Net (2.0) (2.0)
----------- -----------
Loss Before Provision For Taxes (10.3) (7.5)
Provision For Income Taxes - -
----------- -----------
Net Loss (10.3)% (7.5)%
=========== ===========
Net Sales for the first quarter of fiscal 1997 decreased approximately
$5,092,000, or 12.2%, compared to the first quarter of fiscal 1996. Comparable
store sales decreased 11.8%. The decrease in net sales was, to a large extent,
an anticipated result of the Company's strategic shift to offering desirable
brand name merchandise at every day prices well below department and specialty
stores. Previously (including the first quarter of fiscal 1996) the Company
was driving sales through a promotional and advertising plan that offered
discounts off every day prices. Net sales were 4.5% below plan for the
quarter. Management expects sales to increase in the second half of fiscal
1997 as a result of this shift in strategic direction.
Page 9 of 18
<PAGE> 10
Gross Profit decreased by approximately $1,837,000 or 12.7% for the
first quarter of fiscal 1997 compared to the first quarter of fiscal 1996. As
a percentage of net sales, gross margins were 34.6%, 0.1% lower in the first
quarter of fiscal 1997 compared to the first quarter of fiscal 1996. Reported
gross margins are margins after provisions for LIFO and inventory markdown
reserves. The gross margins realized on merchandise sold (margin before
provisions for LIFO and inventory markdown reserves) were 35.6% in fiscal 1997
versus 33.2% in fiscal 1996. Adjustments to inventory markdown reserves, which
the Company records quarterly, reduced reported margins by 1% in the first
quarter of fiscal 1997. Similar adjustments increased margins by 1.4% in the
first quarter of fiscal 1996.
Operating and Administrative Expenses decreased approximately
$1,095,000, or 6.5%, for the first quarter of fiscal 1997 compared to the first
quarter of fiscal 1996. The Company has reduced payroll costs by reducing its
headcount by 114 people, or 5% at May 3, 1997, as compared to May 4, 1996. As
a percentage of net sales, operating and administrative expenses increased by
2.6%. The increase in operating and administrative expenses as a percentage to
sales was due to the lower sales base.
Interest Expense (Net) decreased by approximately $75,000 for the first quarter
of fiscal 1997 compared to the first quarter of fiscal 1996. The decrease was
due to a decrease in interest associated with the line of credit and interest
on capital leases.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
The Company's liquidity, as defined by line of credit borrowings and
excess availability on the line, has strengthened considerably at May 3, 1997,
as compared to May 4, 1996, as manifested by the following:
o The Company used cash in operations of $6.1 million in the first quarter
of 1997 compared to $8.4 million in the first quarter of 1996, an
improvement of $2.3 million.
o The Company's average borrowings for the first quarter of fiscal 1997 were
$11.6 million, a decrease of 17.6% versus the same time frame in the
previous year.
o The Company's average excess borrowing capacity for the first quarter of
fiscal 1997 was $8,241,000 an increase of 58.9% compared to the same
period in 1996.
These results are primarily attributable to the following developments:
1. Over the last several months, the Company negotiated amendments to
the existing financing agreement with its primary lender, Congress
Financial Corporation (Central), which increased cash availability by
approximately $6.0 million. The loan agreement was also extended by
two years to October 1999, and the size of the line of credit was
increased from $25.0 million to $27.5 million, and the interest rate
was reduced.
Page 10 of 18
<PAGE> 11
2. In January 1997, the Unsecured Creditors' Committee agreed to defer
for up to one year the $1.9 million payment due for 1996 under the
Joint Plan of Reorganization, even though the Company has sufficient
cash available to make this payment. The deferral provides us with
additional flexibility to continue to implement our new merchandising
and marketing plan. The Company has paid Creditors over $21.0 million
since its emergence from Chapter 11 in late 1993, and currently has
less than $4.0 million in remaining payments.
3. Inventory turnover has improved dramatically. In the first
quarter of fiscal 1997, average inventories were almost 20% less than
during the first quarter of fiscal 1996. This improvement was achieved
by taking markdowns on a more timely basis and better correlating
receipt flow to sales. As of May 3, 1997, merchandise inventories are
21.5% lower than last year.
The Company's primary ongoing cash requirements are for operating expenses,
inventory and the minimum payments to the Company's creditors (pursuant to the
Plan). The Company's primary sources of funds for its business activities are
cash from operations and borrowings under its revolving credit facility with
Congress Financial Corporation (Central). In addition, short term trade credit
(normally for 30-day periods) represents a significant source of interim
financing for merchandise inventories. Trade creditors, representing
approximately two thirds of all merchandise purchases, are extending normal
credit terms. During the first quarter of fiscal 1997 approximately 33% of the
Company's purchases, primarily from those vendors that factor their invoices,
had to be prepaid because the factor would not extend normal credit terms to
the Company. Management believes the percentage of prepayments will not
increase over the next few months.
Inventories at May 3, 1997, decreased approximately $7,578,000 or 21.5%
as compared to inventories at May 4, 1996, as a result of management's efforts
to improve the content and productivity of this asset. As a result, the gross
margin return on inventory improved 11.2% compared to the first quarter of
1996. During the same time period, trade payable increased by 7%.
The Company has a financing agreement with a financial institution which
provides for revolving credit borrowings and letters of credit of up to $27.5
million (subject to a borrowing base limitation) with a maturity date in
October 1999. The rate of interest on borrowings is prime plus 1.0% payable
monthly in arrears. A non-use fee of .5% per annum is payable monthly in
arrears on the unused portion of the facility. The agreement contains certain
restrictions and a covenant limiting annual cumulative capital expenditures.
At the end of the first quarter of fiscal 1997, the Company was in compliance
with all such restrictions and the covenant.
As of May 3, 1997, the Company had approximately $14,217,000
outstanding under the credit facility, as compared with approximately
$7,282,000 at February 1, 1997, and $16,984,000 at May 4, 1996.
During the first quarters of fiscal 1997 and 1996, capital expenditures were
approximately $181,000 and $247,000, respectively. The following table sets
forth the major categories of capital expenditures for both periods.
Page 11 of 18
<PAGE> 12
<TABLE>
<CAPTION>
TOTAL CAPITAL EXPENDITURES
(IN THOUSANDS)
--------------
FISCAL FIRST QUARTER
---------------------------
1997 1996
----- -----
<S> <C> <C>
Stores $ 126 $ 119
Distribution Center - 62
Computer Operations 55 66
----- -----
TOTAL $ 181 $ 247
===== =====
</TABLE>
The Company plans to spend approximately $1.1 million for capital expenditures
in fiscal year 1997, an amount within the Company's cumulative capital
expenditure covenant under the Company's financing agreement. Of this amount,
$0.5 million has been allocated for acquisition of lease renewals with the
balance relating to existing stores, the Distribution Center and the computer
operations.
The Company had long-term debt and obligations under capital leases of
approximately $8,940,000 at May 3, 1997, and $9,259,000 at February 1, 1997.
The Company recognizes that it has a high level of indebtedness, primarily in
the form of line of credit borrowings, creditor debt and capital lease
obligations. Its projections take this fact into account, and the Company
believes that future cash flows will be sufficient to cover this level of
indebtedness. Management is closely monitoring liquidity in light of the
decrease in comparable store sales. Sales, inventory purchases, expenses and
other items impacting liquidity are being closely managed to assure that
adequate liquidity for operations is maintained.
Management believes that with its present operating plan and continued focus on
liquidity, cash flow from operations and the expanded credit facility will be
sufficient to fund capital expenditures, working capital requirements
(including prepayments to vendors not extending terms), creditor and long-term
debt payments.
SEASONALITY AND INFLATION
- -------------------------
The company's business is seasonal, with the back-to-school season (July and
August) historically contributing approximately 17% of annual sales and the
Christmas season (November and December) accounting for approximately 28% of
annual sales. Sales and income are also affected by the timing of new store
openings. Although the Company's operations are influenced by general economic
conditions and inflationary pressures, the Company does not believe that
inflation has had a material effect on operations during the past 3 - 5 years.
FORWARD-LOOKING STATEMENTS
- --------------------------
In this section of this Report on Form 10-Q, the Company and persons acting on
its behalf have made certain forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995 (the "1995 Act"). These
forward-looking statements are indentified as including terms such as "may,"
"will," "should," "anticipates," "expects," "plans," "intends," or similar
language. Such statements are made in good faith by the Company and such
persons pursuant to the safe-harbor provisions of the 1995 Act. In connection
with these safe-harbor provisions, the Company has identified in its Annual
Report to Shareholders for the fiscal year ended February 1, 1997 (the "Annual
Report"), important factors which could cause actual results to differ
materially from those contained in any forward-looking statement made by or on
behalf of the Company. The Company further cautions that the factors identified
in the Annual Report are not exhaustive or exclusive. The Company does not
undertake to update any forward-looking statement which may be made from time
to time by or on behalf of the Company.
Page 12 of 18
<PAGE> 13
PART II - OTHER INFORMATION
-----------------------------------
Items 1 - 4.
There are no items to report.
Item 5. - Other Information
The Series B Option Common Stock is subject to an option to purchase
exercisable by the Company or the Trustee of the R.G. Stock Trust in 1998
(the "Option"). The Option is noted upon the face of the Series B Option
Common Stock certificates. If the Option is exercised, the holder or
holders of shares must sell them for a price equal to the fair value of
the shares, as determined by an independent appraisal on February 2,
1998, less any payments of Excess Cash Balance (as defined in the Plan)
that have been made to creditors entitled to payment under the Plan
("Creditors"). Holders of the Series B Option Common Stock will not
have any rights of appraisal similar to dissenters' rights if they
dispute the market value as determined by the independent appraisal.
Payments of Excess Cash Balance would result in shareholders having to
sell their shares for less than fair market value. Holders of Series B
Option Common Stock should note that the Excess Cash Balance paid to the
Creditors, if any, shall be credited against, and shall reduce the
exercise price for, the option whether or not the holder of any shares of
Series B Option Common Stock with respect to which the option is
exercised received such Excess Cash Balance.
Although with respect to the Company's Fiscal Years ended January 29,
1994, and January 28, 1995, the Company made Excess Cash Balance payments
of $1,444,613 and $1,832,611, respectively, to Creditors, the Company's
cash position during Fiscal Year 1995 was such that all of the prior
Excess Cash Balance payments were utilized to make a portion of the $5.5
million minimum payment to creditors required for the Fiscal Year ended
February 3, 1996. Therefore, if the Option were exercised at this date,
the Excess Cash Balance payments would result in no reduction from fair
market value in the Option exercise price. Additional payments of Excess
Cash Balance may be created in the future which may reduce the Option
exercise price. For any given Fiscal Year, the Excess Cash Balance is
the excess of the Company's actual year-end cash balance over the
Cumulative Plan Cash Balance for that year. The cumulative total of the
Excess Cash Balance will be reported in the Company's annual and
quarterly financial reports.
Page 13 of 18
<PAGE> 14
PART II - OTHER INFORMATION (CONTINUED)
-----------------------------------------------
Item 6 - Exhibits and Reports on Form 8-K.
(a) Exhibits
(27) Financial Data Schedule
(b) Reports on Form 8-K
There are no items to report.
Page 14 of 18
<PAGE> 15
PART II - OTHER INFORMATION
-----------------------------------
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.
RICHMAN GORDMAN 1/2 PRICE
STORES, INC.
Date: June 18, 1997 By: /s/ Jeffrey J. Gordman
----------------------- -----------------------------
Jeffrey J. Gordman, President and
Chief Executive Officer
Date: June 18, 1997 By: /s/ Michael A. Mallaro
----------------------- -----------------------------
Michael A. Mallaro, Vice President of
Finance and Chief Financial Officer
Page 15 of 18
<PAGE> 16
EXHIBIT INDEX
Exhibit Description Page
- ------- ----------- ----
(27) Financial Data Schedule 16 - 17
Page 16 of 18
<PAGE> 17
EXHIBIT (27)
Financial Data Schedule
Page 17 of 18
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> FEB-01-1997
<PERIOD-START> FEB-02-1997
<PERIOD-END> MAY-03-1997
<CASH> 476,194
<SECURITIES> 0
<RECEIVABLES> 3,344,954
<ALLOWANCES> 513,436
<INVENTORY> 27,524,189
<CURRENT-ASSETS> 30,831,901
<PP&E> 13,735,184
<DEPRECIATION> 0
<TOTAL-ASSETS> 44,767,489
<CURRENT-LIABILITIES> 33,552,029
<BONDS> 10,697,211
0
0
<COMMON> 294,600
<OTHER-SE> 1,803,649
<TOTAL-LIABILITY-AND-EQUITY> 44,767,489
<SALES> 36,602,742
<TOTAL-REVENUES> 36,602,742
<CGS> 23,954,362
<TOTAL-COSTS> 23,954,362
<OTHER-EXPENSES> 15,690,704
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 744,952
<INCOME-PRETAX> (3,787,276)
<INCOME-TAX> 0
<INCOME-CONTINUING> (3,787,276)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,787,276)
<EPS-PRIMARY> (0.14)
<EPS-DILUTED> (0.14)
</TABLE>
