<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(MARK ONE):
[X} ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 [NO FEE REQUIRED]
For the fiscal year ended December 31, 1997
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 [NO FEE REQUIRED]
For the transition period from ____________ to ___________
Commission File Number: 000-26732
A. Full title of the plan and the address of the plan, if different from that
of the issuer named below: Gadzooks, Inc. Employees' Savings Plan.
B. Name of issuer of the securities held pursuant to the plan and the address
of its principal executive office: Gadzooks, Inc., 4121 International
Parkway, Carrollton, Texas 75007.
<PAGE> 2
GADZOOKS, INC. EMPLOYEES' SAVINGS PLAN
Index
<TABLE>
<CAPTION>
Page
---------
<S> <C>
Independent Auditors' Report 1
Financial Statements:
Statements of Net Assets Available for Benefits 2
Statements of Changes in Net Assets Available for Benefits 3
Notes to Financial Statements 4 - 15
Supplemental Schedules:
Schedule of Assets Held for Investment Purposes 16
Schedule of Reportable Transactions 17
</TABLE>
<PAGE> 3
[TRAVIS, WOLFF & COMPANY L.L.P. LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
Administrative Committee
Gadzooks, Inc. Employees' Savings Plan
Dallas, Texas
We have audited the accompanying statements of net assets available for benefits
of Gadzooks, Inc. Employees' Savings Plan (the "Plan") as of December 31, 1997
and 1996, and the related statements of changes in net assets available for
benefits for the years then ended. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
December 31, 1997 and 1996, and the changes in its net assets available for
benefits for the years then ended in conformity with generally accepted
accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets held
for investment purposes and reportable transactions are presented for the
purpose of additional analysis and are not a required part of the basic
financial statements, but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974. The supplemental schedules
have been subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, are fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
/s/ TRAVIS, WOLFF & COMPANY, L.L.P.
June 16, 1998
Dallas, Texas
<PAGE> 4
GADZOOKS, INC. EMPLOYEES' SAVINGS PLAN
Statements of Net Assets Available for Benefits
December 31, 1997 and 1996
<TABLE>
<CAPTION>
1997 1996
---------- ----------
<S> <C> <C>
Assets
Investments in marketable securities,
at fair value (Note 3) $1,337,041 $ 731,007
Liabilities
Excess contributions payable (Note 4)
to participating employees 10,960 33,172
---------- ----------
Net assets available for benefits $1,326,081 $ 697,835
========== ==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
-2-
<PAGE> 5
GADZOOKS, INC. EMPLOYEES' SAVINGS PLAN
Statements of Changes in Net Assets Available for Benefits
For the Years Ended December 31, 1997 and 1996
<TABLE>
<CAPTION>
1997 1996
----------- -----------
<S> <C> <C>
Investment income:
Net appreciation in fair value of investments (Note 2) $ 82,843 $ 34,574
Interest and dividends 129,342 46,378
----------- -----------
212,185 80,952
----------- -----------
Contributions (Notes 1 and 4):
Employer 96,815 82,201
Employee 396,059 297,152
----------- -----------
492,874 379,353
----------- -----------
Distributions to participants/beneficiaries (76,813) (23,682)
----------- -----------
Net increase 628,246 436,623
Net assets available for benefits:
Beginning of year 697,835 261,212
----------- -----------
End of year $ 1,326,081 $ 697,835
=========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
-3-
<PAGE> 6
GADZOOKS, INC. EMPLOYEES' SAVINGS PLAN
Notes to Financial Statements
December 31, 1997 and 1996
Note 1 - Description of Plan
The following description of the Gadzooks, Inc. Employees' Savings Plan (the
"Plan") provides only general information. Participants should refer to the Plan
agreement for a more complete description of the Plan's provisions.
General
Gadzooks, Inc. (the "Company") established the Plan effective January 1, 1995.
The Plan is a defined contribution plan covering all employees of the Company
who have one year of service (1000 hours) and are age twenty-one or older. The
Plan is intended to constitute a qualified cash or deferred profit sharing plan
within the meaning of Section 401(k) of the Internal Revenue Code of 1986. It is
subject to the provisions of the Employee Retirement Income Security Act of 1974
(ERISA).
Employer contributions
Prior to 1997, the Company has made regular matching contributions to the
account of each employee participating in the Plan in an amount equal to fifty
percent of the salary reduction contributed by the employee, limited to a
maximum elective contribution of 4% of the employee's annual salary. During
1997, the Board of Directors of the Company elected to increase the maximum
employer matching contribution to fifty percent of 5% of the annual salary
reduction contributed by the employee. If an employee should terminate from the
Company prior to being 100% vested, the non-vested portion of the employer
contribution would be forfeited. The forfeited portion of the contribution is
applied to reduce the Company's total matching portion. The total amount of
forfeitures for the years ended December 31, 1997 and 1996 are as follows:
<TABLE>
<CAPTION>
1997 1996
-------- --------
<S> <C> <C>
Balances of employees' accounts withdrawn
or forfeited $ 87,885 $ 28,015
Amounts disbursed 76,813 23,682
-------- --------
Balance applied to reduce Company's
matching portion $ 11,072 $ 4,333
======== ========
</TABLE>
-4-
<PAGE> 7
GADZOOKS, INC. EMPLOYEES' SAVINGS PLAN
Notes to Financial Statements
December 31, 1997 and 1996
Note 1 - Description of Plan (Continued)
Employee contributions
Participating employees may elect to contribute any amount not more than fifteen
percent (15%) of their compensation to the Plan, subject to a limit on calendar
year contributions set forth by the Internal Revenue Service (IRS). The limit
was $9,500 per individual in 1997 and 1996. Withdrawals of employee contribution
account balances are permitted only upon separation from service or in the case
of hardship.
Administrative Expenses
All administrative expenses are borne by the Company and, as such, have not been
included in the accompanying financial statements.
Participant accounts
Each participant's account is credited with the participant's contribution, the
Company's contribution, and allocated investment earnings and losses.
Vesting
Participants are immediately 100% vested in their voluntary contributions plus
actual earnings thereon. Vesting in the Company's matching portion of a
participant's account and the earnings thereon is based on years of service;
participants are 100% vested after five years of service with the Company.
Participant loans
Participants may borrow from their fund accounts a minimum of $1,000 to a
maximum equal to the lesser of $50,000 or 50 percent of their vested account
balance. Loan transactions are treated as a transfer to (from) the investment
funds from (to) the Loan Fund. Loan terms cannot exceed five years from the date
the note was executed, unless the loan is for the purchase of a primary
residence. Fees and expenses incurred in originating the loan will be paid by
the qualified applicant, out of the proceeds of the loan. The loans are secured
by the balance in the participant's account and bear interest at a reasonable
rate commensurate with local prevailing rates as determined by the loan
administrator. Principal and interest are paid ratably through biweekly payroll
deductions.
-5-
<PAGE> 8
Note 1 - Description of Plan (Continued)
Payment of benefits
Upon termination of service, a participant will receive a lump-sum amount equal
to the value of his account determined in accordance with the Plan vesting
procedures.
Plan termination
Although it has not expressed any intent to do so, the Company has the right
under the Plan to discontinue its contributions at any time and to terminate the
Plan subject to the provisions of ERISA. In the event of Plan termination,
participants will become 100% vested in their account balances.
Tax status
In October 1996, the Plan received a favorable determination that the Plan met
the qualifications of Internal Revenue Code Section 401(a).
Use of estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the financial statements at, and during the reporting periods. Actual
results could differ from these estimates.
Note 2 - Summary of Significant Accounting Policies
Basis of accounting
The accompanying financial statements have been prepared on the accrual basis of
accounting.
Investments
Participants may elect to invest in any of five mutual funds. The funds and
related investment objectives are as follows:
Fidelity Advisor Equity Growth Fund - This fund seeks aggressive
capital growth by investing primarily in common and preferred stock
and securities convertible into the common stock of companies with
above-average growth characteristics.
-6-
<PAGE> 9
GADZOOKS, INC. EMPLOYEES' SAVINGS PLAN
Notes to Financial Statements
December 31, 1997 and 1996
Note 2 - Summary of Significant Accounting Policies (Continued)
Investments (continued)
Stagecoach Balanced Fund - This fund invests in undervalued common
stocks and fixed income securities to provide the most favorable
combination of capital appreciation and current income.
Stagecoach Money Market Fund - This fund seeks to provide current
income while preserving principal by investing in high-quality money
market instruments.
Scudder Growth & Income Fund - This fund seeks growth of capital,
current income, and growth of income by investing in dividend-paying
common stocks, preferred stocks, and convertible securities with
growth potential.
Strong Government Securities Fund - This fund seeks current income by
investing in fixed income securities issued or guaranteed by the U.S.
government and its agencies or instrumentalities and in
investment-grade corporate securities.
The number of participants invested in each fund at December 31 is as follows:
<TABLE>
<CAPTION>
Number of Participants
-------------------------------
Name of Fund 1997 1996
------------------------------------------------- ------------- ------------
<S> <C> <C>
Fidelity Advisor Equity Growth Fund 117 98
Stagecoach Balanced Fund 83 73
Stagecoach Money Market Fund 69 52
Scudder Growth & Income Fund 109 87
Strong Government Securities Fund 67 53
</TABLE>
The investments of the Plan are stated at fair value and are based on quoted
market prices as of the last trading day of the Plan year. Investment income is
accrued as earned.
The realized gain or loss on sale of investments represents the difference
between the asset's fair value at the end of the previous reporting period or
acquisition cost, if the asset was acquired after the previous reporting, and
the net proceeds of sales. The average cost method is used in determining the
cost of securities sold. Realized gains by fund are as follows for the years
ended December 31, 1997 and 1996:
-7-
<PAGE> 10
GADZOOKS, INC. EMPLOYEES' SAVINGS PLAN
Notes to Financial Statements
December 31, 1997 and 1996
Note 2 - Summary of Significant Accounting Policies (Continued)
Investments (continued)
<TABLE>
<CAPTION>
1997
-----------------------------------
Aggregate Aggregate Realized
Fund Proceeds Cost Gain/Loss
--------- --------- ---------
<S> <C> <C> <C>
Fidelity Advisor Equity Growth $ 71,306 $ 63,176 $ 8,130
Stagecoach Balanced 23,304 22,239 1,065
Stagecoach Money Market 26,773 26,773 --
Scudder Growth & Income 41,393 35,704 5,689
Strong Government Securities 14,655 14,608 47
Loan 777 777 --
--------- --------- ---------
Realized gains $ 178,208 $ 163,277 $ 14,931
========= ========= =========
</TABLE>
<TABLE>
<CAPTION>
1996
-----------------------------------
Aggregate Aggregate Realized
Fund Proceeds Cost Gain/Loss
--------- --------- ---------
<S> <C> <C> <C>
Fidelity Advisor Equity Growth $ 25,757 $ 23,883 $ 1,874
Stagecoach Balanced 3,447 3,348 99
Stagecoach Money Market 22,758 22,758 --
Scudder Growth & Income 6,447 5,966 481
Strong Government Securities 2,261 2,358 (97)
Loan 148 148 --
--------- --------- ---------
Realized gains $ 60,818 $ 58,461 $ 2,357
========= ========= =========
</TABLE>
Unrealized appreciation or depreciation of investments represents the change in
aggregate quoted market values during the period, except to the extent of gains
or losses realized on investments sold during the period. Unrealized
appreciation by fund was as follows for the years ended December 31, 1997 and
1996:
-8-
<PAGE> 11
GADZOOKS, INC. EMPLOYEES' SAVINGS PLAN
Notes to Financial Statements
December 31, 1997 and 1996
Note 2 - Summary of Significant Accounting Policies (Continued)
Investments (continued)
<TABLE>
<CAPTION>
Fund 1997 1996
- ------------------------------ -------- --------
<S> <C> <C>
Fidelity Advisor Equity Growth $ 28,067 $ 18,509
Stagecoach Balanced (1,393) --
Stagecoach Money Market -- --
Scudder Growth & Income 37,686 14,406
Strong Government Securities 3,552 (698)
-------- --------
$ 67,912 $ 32,217
======== ========
</TABLE>
Reconciliation of Financial Statements to Form 5500
The following is a reconciliation of amounts from the financial statements to
Form 5500:
<TABLE>
<CAPTION>
1997 1996
-------- --------
<S> <C> <C>
Contributions per the financial statements $492,874 $379,353
Contributions receivable in the prior year -- 8,204
Excess contributions payable 10,960 33,172
-------- --------
Contributions per Form 5500 $503,834 $420,729
======== ========
Benefits paid to participants per the financial
statements $ 76,813 $ 23,682
Excess contributions payable in prior year 33,172 6,133
-------- --------
Benefits paid to participants per Form 5500 $109,985 $ 29,815
======== ========
</TABLE>
-9-
<PAGE> 12
GADZOOKS, INC. EMPLOYEES' SAVINGS PLAN
Notes to Financial Statements
December 31, 1997 and 1996
Note 3 - Information Certified to by the Trustee (Unaudited)
The following is a summary of unaudited information included in the Plan's
financial statements and supplemental schedules that were prepared by the Plan
trustee, Wells Fargo Bank (which acquired First Interstate Bank, former
trustee), and furnished to the plan administrator. The plan administrator has
received certification from the trustee that such information is complete and
accurate.
<TABLE>
<CAPTION>
December 31, 1997
--------------------------------------------
Number of Fair
Units Cost Value
---------- ---------- ----------
<S> <C> <C> <C>
Fidelity Advisor Equity Growth Fund 10,970 $ 460,256 $ 507,271
Stagecoach Balanced Fund 16,366 200,851 201,467
Stagecoach Money Market Fund 79,666 79,666 79,666
Scudder Growth & Income Fund 14,676 347,086 401,104
Strong Government Securities Fund 13,336 139,167 143,358
Loan Fund 4,175 4,175 4,175
---------- ----------
$1,231,201 $1,337,041
========== ==========
</TABLE>
<TABLE>
<CAPTION>
December 31, 1996
--------------------------------------------
Number of Fair
Units Cost Value
---------- ---------- ----------
<S> <C> <C> <C>
Fidelity Advisor Equity Growth Fund 6,707 $ 258,209 $ 281,775
Stagecoach Balanced Fund 10,486 124,658 126,876
Stagecoach Money Market Fund 56,634 56,634 56,634
Scudder Growth & Income Fund 8,075 169,377 187,601
Strong Government Securities Fund 7,335 76,117 76,869
Loan Fund 1,252 1,252 1,252
---------- ----------
$ 686,247 $ 731,007
========== ==========
</TABLE>
-10-
<PAGE> 13
GADZOOKS, INC. EMPLOYEES' SAVINGS PLAN
Notes to Financial Statements
December 31, 1997 and 1996
Note 4 - Excess Contributions Payable
Contributions received from participants for the years ended December 31, 1997
and 1996 are net of payments of $10,960 and $33,172, made in March 1998 and
1997, respectively, to certain active participants to return to them excess
deferral contributions as required to satisfy the relevant nondiscrimination
provisions of the Plan.
Note 5 - Subsequent Events
In November, 1997, the Board approved and adopted an individually-designed
restatement of the Plan effective April 1, 1998 and will submit the Plan to the
IRS as part of a request for a favorable determination letter during 1998. At
the same time, the Board approved a change in Plan trustees.
-11-
<PAGE> 14
GADZOOKS, INC. EMPLOYEES'
SAVINGS PLAN
Notes to Financial Statements
December 31, 1997 and 1996
Note 6 - Participant Directed Investments
The following is the statement of net assets available for benefits by
investment fund and the statement of changes in net assets available for
benefits by investment fund for the years ended as follows:
Statement of Net Assets Available for Benefits:
<TABLE>
<CAPTION>
12/31/97
Participant Directed Funds
- -----------------------------------------------------------------------------------------------------------------------------------
Fidelity Advisor Stagecoach Stagecoach Scudder Growth Strong Gov.
Equity Growth Balanced Money Market & Income Securities Loan
Fund Fund Fund Fund Fund Fund Total
---------------- ---------- ------------ -------------- ----------- ------ ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Assets
Investments at fair value $ 507,271 $201,467 $79,666 $401,104 $143,358 $4,175 $1,337,041
Receivables:
Employer's contribution -- -- -- -- -- -- --
Employees' contribution -- -- -- -- -- -- --
Total receivables -- -- -- -- -- -- --
---------- -------- ------- -------- -------- ------ ----------
Total assets 507,271 201,467 79,666 401,104 143,358 4,175 1,337,041
Liability
Excess contributions payable 5,426 1,370 88 3,857 219 -- 10,960
---------- -------- ------- -------- -------- ------ ----------
Net assets available for benefits $ 501,845 $200,097 $79,578 $397,247 $143,139 $4,175 $1,326,081
========== ======== ======= ======== ======== ====== ==========
</TABLE>
-12-
<PAGE> 15
GADZOOKS, INC. EMPLOYEES'
SAVINGS PLAN
Notes to Financial Statements
December 31, 1997 and 1996
Note 6 - Participant Directed Investments (continued)
Statement of Net Assets Available for Benefits:
<TABLE>
<CAPTION>
12/31/96
Participant Directed Funds
- ---------------------------------------------------------------------------------------------------------------------------------
Fidelity Advisor Stagecoach Stagecoach Scudder Growth Strong Gov.
Equity Growth Balanced Money Market & Income Securities Loan
Fund Fund Fund Fund Fund Fund Total
---------------- ---------- ------------ ------------ ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Assets
Investments at fair value $ 281,775 $ 126,876 $ 56,634 $ 187,601 $ 76,869 $ 1,252 $ 731,007
---------- ---------- ---------- ---------- ---------- ---------- ----------
Receivables:
Employer's contribution -- -- -- -- -- -- --
Employees' contribution -- -- -- -- -- -- --
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total receivables -- -- -- -- -- -- --
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total assets 281,775 126,876 56,634 187,601 76,869 1,252 731,007
Liability
Excess contributions payable 10,084 7,198 2,753 9,853 3,284 -- 33,172
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net assets available for benefits $ 271,691 $ 119,678 $ 53,881 $ 177,748 $ 73,585 $ 1,252 $ 697,835
========== ========== ========== ========== ========== ========== ==========
</TABLE>
-13-
<PAGE> 16
GADZOOKS, INC. EMPLOYEES'
SAVINGS PLAN
Notes to Financial Statements
December 31, 1997 and 1996
Note 6 - Participant Directed Investments (continued)
Statement of Changes in Net Assets Available for Benefits:
<TABLE>
<CAPTION>
12/31/97
Participant Directed Funds
- ----------------------------------------------------------------------------------------------------------------------------------
Fidelity Advisor Stagecoach Stagecoach Scudder Growth Strong Gov.
Equity Growth Balanced Money Market & Income Securities Loan
Fund Fund Fund Fund Fund Fund Total
---------------- ----------- ------------ ------------ ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Investment income:
Net appreciation in fair
value of investments $ 36,197 $ (327) $ -- $ 43,376 $ 3,597 $ -- $ 82,843
Interest and dividends 55,045 28,132 3,194 36,252 6,719 -- 129,342
----------- ----------- ----------- ----------- ----------- ----------- -----------
91,242 27,805 3,194 79,628 10,316 -- 212,185
----------- ----------- ----------- ----------- ----------- ----------- -----------
Contributions:
Employer 29,356 14,729 9,156 26,963 16,611 -- 96,815
Employee 158,780 52,851 25,620 108,859 49,949 -- 396,059
----------- ----------- ----------- ----------- ----------- ----------- -----------
188,136 67,580 34,776 135,822 66,560 -- 492,874
----------- ----------- ----------- ----------- ----------- ----------- -----------
Interfund transfers (19,542) (6,725) (2,304) 27,214 (1,566) 2,923 --
----------- ----------- ----------- ----------- ----------- ----------- -----------
Distributions:
Participants/beneficiaries (29,682) (8,241) (9,969) (23,165) (5,756) -- (76,813)
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net increase in net assets
available for benefits 230,154 80,419 25,697 219,499 69,554 2,923 628,246
Net assets available for benefits:
Beginning of year 271,691 119,678 53,881 177,748 73,585 1,252 697,835
----------- ----------- ----------- ----------- ----------- ----------- -----------
End of year $ 501,845 $ 200,097 $ 79,578 $ 397,247 $ 143,139 $ 4,175 $ 1,326,081
=========== =========== =========== =========== =========== =========== ===========
</TABLE>
-14-
<PAGE> 17
GADZOOKS, INC. EMPLOYEES'
SAVINGS PLAN
Notes to Financial Statements
December 31, 1997 and 1996
Note 6 - Participant Directed Investments (continued)
Statement of Changes in Net Assets Available for Benefits:
<TABLE>
<CAPTION>
12/31/96
Participant Directed Funds
- ----------------------------------------------------------------------------------------------------------------------------------
Fidelity Advisor Stagecoach Stagecoach Scudder Growth Strong Gov.
Equity Growth Balanced Money Market & Income Securities Loan
Fund Fund Fund Fund Fund Fund Total
---------------- ----------- ------------ ------------ ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Investment income:
Net appreciation in fair
value of investments $ 20,382 $ 100 $ -- $ 14,887 $ (795) $ -- $ 34,574
Interest and dividends 14,584 14,460 2,529 11,639 3,166 -- 46,378
----------- ----------- ----------- ----------- ----------- ----------- -----------
34,966 14,560 2,529 26,526 2,371 -- 80,952
----------- ----------- ----------- ----------- ----------- ----------- -----------
Contributions:
Employer 29,816 12,773 8,901 20,545 10,166 -- 82,201
Employee 116,617 47,321 24,581 78,252 30,381 -- 297,152
----------- ----------- ----------- ----------- ----------- ----------- -----------
146,433 60,094 33,482 98,797 40,547 -- 379,353
----------- ----------- ----------- ----------- ----------- ----------- -----------
Interfund transfers (1,176) (1,318) (3,099) 4,989 (648) 1,252 --
----------- ----------- ----------- ----------- ----------- ----------- -----------
Distributions:
Participants/beneficiaries (7,992) (1,340) (9,531) (3,884) (935) -- (23,682)
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net increase in net assets
available for benefits 172,231 71,996 23,381 126,428 41,335 1,252 436,623
Net assets available for benefits:
Beginning of year 99,460 47,682 30,500 51,320 32,250 -- 261,212
----------- ----------- ----------- ----------- ----------- ----------- -----------
End of year $ 271,691 $ 119,678 $ 53,881 $ 177,748 $ 73,585 $ 1,252 $ 697,835
=========== =========== =========== =========== =========== =========== ===========
</TABLE>
-15-
<PAGE> 18
GADZOOKS, INC. EMPLOYEES' SAVINGS PLAN
Form 5500 - Item 27(a)
Schedule of Assets Held for Investment Purposes
For the Year Ended December 31, 1997
EIN: 74-2261048 PN: 001
<TABLE>
<CAPTION>
(e)
(b) (c) (d) Current
(a) Identity of Issue Description of Investments Cost Value
- ------ ----------------------------- ------------------------------ ---------------- ----------------
<S> <C> <C> <C> <C>
Fidelity Advisor Equity Growth Fund $ 460,256 $ 507,271
Stagecoach Balanced Fund 200,851 201,467
Stagecoach Money Market Fund 79,666 79,666
Scudder Growth & Income Fund 347,086 401,104
Strong Government Securities Fund 139,167 143,358
Loan Fund 8 - 10% - 4,175
---------------- ----------------
Total $ 1,227,026 $ 1,337,041
================ ================
</TABLE>
-16-
<PAGE> 19
GADZOOKS, INC. EMPLOYEES' SAVINGS PLAN
Form 5500 - Item 27(d)
Schedule of Reportable Transactions
For the Year Ended December 31, 1997
EIN: 74-2261048 PN: 001
<TABLE>
<CAPTION>
(c) (d) (i)
(b) Purchase Selling Net Gain
(a) Description of Asset Price Price (Loss)
- --------- ------------------------------------------- --------------- ------------- --------------
<S> <C> <C> <C> <C>
Fidelity Advisor Equity Growth $ 58,559 $ 71,306 $ 12,747
Fidelity Advisor Equity Growth 260,605 - -
Stagecoach Balanced Fund 98,222 - -
Stagecoach Money Market Fund 49,805 - -
Scudder Growth & Income Fund 211,520 - -
Strong Government Securities Fund 77,545 - -
</TABLE>
-17-
<PAGE> 20
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the trustees (or other persons who administer the employee benefit plan) have
duly caused this annual report to be signed by the undersigned thereunto duly
authorized.
Gadzooks, Inc. Employees' Savings Plan
Date: December 1, 1998 By: /s/ GERALD R. SZCZEPANSKI
----------------------------------------
Gerald R. Szczepanski
Member of Administrative Committee
By: /s/ MONTY R. STANDIFER
---------------------------------------
Monty R. Standifer
Member of Administrative Committee
By:
---------------------------------------
Steve Puterbaugh
Member of Administrative Committee
<PAGE> 21
EXHIBIT 1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement (Form
S-8) pertaining to the Gadzooks, Inc. Employees' Savings Plan of our report,
dated June 16, 1998, with respect to the financial statements and schedules
of the Gadzooks, Inc. Employees' Savings Plan included in this Annual Report
(Form 11-K) for the year ended December 31, 1997.
/s/ TRAVIS, WOLFF & COMPANY, L.L.P.
---------------------------------------
TRAVIS, WOLFF & COMPANY, L.L.P.
Dallas, Texas
November 20, 1998
