<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
--------------------------------------------------------------------------------
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JULY 29, 2000
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 0-26732
GADZOOKS, INC.
--------------------------------------------------------------------------------
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
TEXAS 74-2261048
--------------------------------------------------------------------------------
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NUMBER)
INCORPORATION OR ORGANIZATION)
4121 INTERNATIONAL PARKWAY
CARROLLTON, TX 75007
--------------------------------------------------------------------------------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: 972-307-5555
---------------------
--------------------------------------------------------------------------------
(FORMER NAME, FORMER ADDRESS AND 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 [ ]
As of August 31, 2000, the number of shares outstanding of the
registrant's common stock is 8,950,563.
<PAGE> 2
GADZOOKS, INC.
FORM 10-Q
For the Quarter Ended July 29, 2000
INDEX
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
Condensed Consolidated Balance Sheets as of 3
July 29, 2000 and January 29, 2000
Condensed Consolidated Statements of Income 4
for the Second Quarter and Six Months Ended
July 29, 2000 and July 31, 1999
Condensed Consolidated Statements of Cash Flows for 5
the Six Months Ended July 29, 2000 and July 31, 1999
Notes to Consolidated Financial Statements 6-7
Item 2. Management's Discussion and Analysis 8-11
of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures 11
About Market Risk
PART II. OTHER INFORMATION 12
SIGNATURE PAGE 13
INDEX TO EXHIBITS 14-16
</TABLE>
2
<PAGE> 3
PART I - FINANCIAL INFORMATION
GADZOOKS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
JULY 29, JANUARY 29,
2000 2000
--------- -----------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 13,062 $ 18,643
Accounts receivable 3,023 1,217
Inventory 48,151 44,418
Other current assets 2,380 2,149
--------- -----------
66,616 66,427
--------- -----------
Leaseholds, fixtures and equipment, net 32,252 30,235
--------- -----------
$ 98,868 $ 96,662
========= ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 18,663 $ 20,395
Accrued expenses and other current liabilities 7,188 6,461
Income taxes payable -- 911
--------- -----------
25,851 27,767
--------- -----------
Accrued rent 2,832 2,750
--------- -----------
Shareholders' equity:
Common stock 89 89
Additional paid-in capital 42,645 42,282
Retained earnings 27,941 23,910
Treasury stock (490) (136)
--------- -----------
70,185 66,145
--------- -----------
$ 98,868 $ 96,662
========= ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE> 4
GADZOOKS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
SECOND QUARTER ENDED SIX MONTHS ENDED
----------------------- -----------------------
JULY 29, JULY 31, JULY 29, JULY 31,
2000 1999 2000 1999
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Net sales $ 64,223 $ 57,748 $ 127,178 $ 108,929
Cost of goods sold including buying,
distribution and occupancy costs 47,422 42,412 92,497 79,869
---------- ---------- ---------- ----------
Gross profit 16,801 15,336 34,681 29,060
Selling, general and administrative expenses 14,553 13,570 28,686 26,485
---------- ---------- ---------- ----------
Operating income 2,248 1,766 5,995 2,575
Interest income, net 211 115 456 259
---------- ---------- ---------- ----------
Income before income taxes 2,459 1,881 6,451 2,834
Provision for income taxes 922 696 2,419 1,049
---------- ---------- ---------- ----------
Net income $ 1,537 $ 1,185 $ 4,032 $ 1,785
========== ========== ========== ==========
Net income per share
Basic $ 0.17 $ 0.13 $ 0.45 $ 0.20
========== ========== ========== ==========
Diluted $ 0.17 $ 0.13 $ 0.43 $ 0.20
========== ========== ========== ==========
Average shares outstanding
Basic 8,915 8,906 8,921 8,900
========== ========== ========== ==========
Diluted 9,215 9,116 9,298 9,055
========== ========== ========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE> 5
GADZOOKS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
------------------------
JULY 29, JULY 31,
2000 1999
---------- ----------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 4,032 $ 1,785
Adjustments to reconcile net income to cash
used in operating activities:
Depreciation 3,241 2,763
Loss on sale of fixed assets 49 79
Changes in operating assets and liabilities (7,534) (6,097)
---------- ----------
Net cash used in operating activities (212) (1,470)
---------- ----------
Cash flows from investing activities:
Capital expenditures, net (5,378) (3,294)
Purchases of short-term investments -- (6,000)
---------- ----------
Net cash used in investing activities (5,378) (9,294)
---------- ----------
Cash flows from financing activities:
Issuance of common stock 259 66
Purchase of treasury stock (424) (73)
Sale of treasury stock under employee stock purchase plan 174 69
---------- ----------
Net cash provided by financing activities 9 62
---------- ----------
Net decrease in cash and cash equivalents (5,581) (10,702)
Cash and cash equivalents at beginning of period 18,643 16,353
---------- ----------
Cash and cash equivalents at end of period $ 13,062 $ 5,651
========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE> 6
GADZOOKS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The accompanying condensed consolidated financial statements contain
all adjustments (consisting of only normal recurring accruals)
necessary to present fairly the financial position as of July 29, 2000
and January 29, 2000, and the results of operations and cash flows for
the second quarter and six months ended July 29, 2000 and July 31,
1999. The results of operations for the second quarter and six months
then ended are not necessarily indicative of the results to be expected
for the full fiscal year. The condensed consolidated balance sheet as
of January 29, 2000 is derived from audited financial statements. The
condensed consolidated financial statements should be read in
conjunction with the financial statement disclosures contained in the
Company's Annual Report on Form 10-K for the fiscal year ended January
29, 2000.
Fiscal year: The Company's fiscal year is the 52- or 53-week period
that ends on the Saturday closest to the end of January. "Fiscal 2000"
is the 53-week period ending February 3, 2001.
Classification of Discounts on Employee Sales: The Company has
historically recorded discounts related to the sale of merchandise to
employees as a component of selling, general and administrative
expenses ("SG&A"). Beginning with the second quarter of fiscal 2000,
such discounts will be reported as a reduction of sales in all Company
financial statements. As a result, gross profit will be reduced by the
amount of the employee discounts each period, which will be totally
offset by a like reduction in SG&A expenses. In order to maintain
consistency and comparability between periods, employee discounts have
been retroactively reflected as a reduction of sales for the quarter
ended July 31, 1999 and six months ended July 29, 2000 and July 31,
1999. The reclassification represents a change in income statement
presentation only and has no impact on net income or earnings per
share. Employee discounts totaled $333,000 and $331,000 for the second
quarter ended July 29, 2000 and July 31,1999, and $637,000 and $614,000
for the six months ended July 29, 2000 and July 31, 1999, respectively.
Principles of Consolidation: In June 2000, the Company completed a
corporate restructuring. The consolidated financial statements include
the accounts of Gadzooks, Inc. and its wholly-owned affiliates,
Gadzooks Holding Company and Gadzooks Management, L.P. All significant
intercompany transactions have been eliminated in consolidation.
Reclassification: Certain prior year amounts have been reclassified to
conform to the current year's presentation.
2. LONG-TERM OBLIGATIONS
On June 1, 2000, the Company renewed and revised its existing credit
facility with Wells Fargo Bank. The revised facility provides an
unsecured revolving line of credit totaling $15 million. The total
amount available to borrow pursuant to the credit agreement is limited
to 150% of cash flow (as defined in the credit agreement) for the
trailing 12-month period. Amounts borrowed under the revolving line
bear interest at the lesser of either the bank's prime rate, or 195
basis points above LIBOR. The Company pays commitment fees of 0.33% on
the unused portion of the revolving line of credit. The credit
agreement also provides for the issuance of letters of credit that are
generally used in connection with international merchandise purchases.
Outstanding letters of credit issued by the bank reduce amounts
otherwise available for borrowing under the revolving line of credit.
The credit facility subjects the Company to various restrictions on the
incurrence of additional indebtedness, acquisitions, loans to officers
and stock repurchases. The covenants also require the Company to
maintain certain tangible net worth, working capital, debt to equity,
net income and fixed charge coverage minimums as well as certain other
ratios customary in such agreements. Amounts available
6
<PAGE> 7
GADZOOKS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
to borrow under the line of credit, as limited by the cash flow
multiple, totaled $14.2 million at July 29, 2000. No borrowings
(excluding letters of credit) were outstanding under the revolving line
at July 29, 2000. Any amount borrowed under the revolving line of
credit will become due on June 1, 2001, the date the credit agreement
matures.
3. PROVISION FOR STORE CLOSING COSTS
During fiscal 1999, the Company decided to close eight stores that had
been identified as under-performing and, as a result, recognized a $1.2
million pre-tax provision for costs related to closing the facilities
and reflecting long-lived assets located at these stores at their
respective estimated net realizable values. As of July 29, 2000, six of
the eight stores had been closed with the remaining two slated for
closure by the end of fiscal 2000. As of July 29, 2000, the costs
related to the six stores already closed had been incurred. An analysis
of the amounts charged against the accrual since January 29, 2000 is
outlined in the table below (in thousands).
<TABLE>
<CAPTION>
BALANCE AT CURRENT PERIOD BALANCE AT
JANUARY 29, 2000 ACTIVITY JULY 29, 2000
---------------- -------------- -------------
<S> <C> <C> <C>
Lease termination
costs and other $ 119 $ -- $ 119
---------------- -------------- -------------
Total $ 119 $ -- $ 119
================ ============== =============
</TABLE>
Sales of the stores closed or slated for closure were $219,860 and
$874,475, and operating losses were ($18,930) and ($206,414) for the
quarters ended July 29, 2000 and July 31, 1999, respectively. Sales of
the stores closed or slated for closure were $446,852 and $1,648,824,
and operating losses were ($54,894) and ($450,801) for the six months
ended July 29, 2000 and July 31, 1999, respectively.
4. EARNINGS PER SHARE
The following table outlines the Company's calculation of weighted
average shares outstanding (in thousands):
<TABLE>
<CAPTION>
QUARTER ENDED SIX MONTHS ENDED
----------------------- -----------------------
JULY 29, JULY 31 JULY 29, JULY 31,
2000 1999 2000 2000
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Weighted average common shares
outstanding (basic) 8,915 8,906 8,921 8,900
Effect of dilutive options 300 210 377 155
---------- ---------- ---------- ----------
Weighted average common and dilutive
potential shares outstanding (diluted) 9,215 9,116 9,298 9,055
========== ========== ========== ==========
</TABLE>
The treasury stock method is used to determine dilutive potential
common shares outstanding related to stock options. Options which,
based on their exercise price, would be antidilutive are not considered
in the treasury stock method calculation. Options excluded from the
earnings per share calculation due to their antidilutive nature totaled
139,795 and 32,015 for the quarters ended July 29, 2000 and July 31,
1999, and 83,235 and 335,390 for the six months ended July 29, 2000 and
July 31, 1999, respectively.
7
<PAGE> 8
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
GENERAL
Gadzooks is a mall-based specialty retailer of casual apparel and related
accessories for young men and women principally between the ages of 14 and 18.
As of July 29, 2000, the Company had opened 20 new stores and closed one store
since the beginning of the fiscal year, and operated 345 stores in 35 states.
The Company's business is subject to seasonal influences with higher sales
during the Christmas holiday, back-to-school and spring break seasons.
Management's discussion and analysis should be read in conjunction with the
Company's financial statements and the notes related thereto.
RESULTS OF OPERATIONS
The second quarter ended July 29, 2000 compared to the second quarter ended July
31, 1999
Net Sales
Net sales increased approximately $6.5 million, or 11.3 percent, to $64.2
million during the second quarter of fiscal 2000 from $57.7 million during the
comparable quarter of fiscal 1999. The total Company sales increase was equally
attributed to comparable store sales ($3.2 million) and to the 35 new stores not
yet included in the comparable store sales base ($3.3 million). Comparable store
sales increased 5.7 percent for the second quarter of fiscal 2000. The Company
experienced comparable store sales increases in its juniors, unisex (t-shirts)
and accessory categories, which more than offset decreases in its men's and
footwear categories. The comparable store sales increase is due to several
factors, including a greater concentration of brand-name merchandise,
enhancements to the stores' appearance and visual merchandising changes. The
overall increase in sales was due to an increase in unit sales, which was
slightly offset by a decrease in retail prices. A store becomes comparable after
it has been open for 14 full fiscal months.
Gross profit
Gross profit increased approximately $1.5 million to $16.8 million during the
second quarter of fiscal 2000 from $15.3 million during the comparable quarter
of fiscal 1999. As a percentage of net sales, gross profit decreased 40 basis
points to 26.2 percent from 26.6 percent for the comparable quarter of last
year. Merchandise margins as a percentage of sales were 10 basis points lower
than the prior year. This decrease is primarily attributable to a more
promotional retail environment during the second quarter this year. In addition
to the decrease in merchandise margins, the Company experienced a 28 basis point
increase in buying and distribution costs as a percentage of sales. Occupancy
costs, as a percentage of sales, were essentially flat to prior year. The
increase in buying and distribution costs (which are relatively fixed in
nature), as a percentage of sales, was primarily due to a distribution center
wage increase.
Selling, general and administrative expenses
Selling, general and administrative expenses increased approximately $1.0
million to $14.6 million during the second quarter of 2000 from $13.6 million
during the comparable quarter of fiscal 1999. The aggregate increase in SG&A is
primarily attributable to additional store expenses as a result of the Company's
expanded store base during the past year and an increase in administrative costs
to support the larger store chain. As a percentage of net sales, SG&A decreased
80 basis points to 22.7 percent during the second quarter of fiscal 2000 from
23.5 percent during the second quarter of last year. The decrease in the SG&A
percentage is due primarily to the Company's ability to leverage corporate
overhead and store costs as a result of the comparable store sales increase.
8
<PAGE> 9
Interest
The Company's net interest income increased $96,000 to $211,000 during the
second quarter of fiscal 2000 from $115,000 in the comparable period of last
year due primarily to higher average cash balances.
The six months ended July 29, 2000 compared to the six months ended July 31,
1999
Net Sales
Net sales increased approximately $18.3 million, or 16.8 percent, to $127.2
million during the first six months of fiscal 2000 from $108.9 million during
the comparable period of fiscal 1999. The total Company sales increase was
primarily attributed to comparable store sales ($11.8 million) and, to a lesser
extent the 35 new stores not yet included in the comparable store sales base
($6.5 million). Comparable store sales increased 11.1 percent for the first six
months of fiscal 2000. The Company experienced comparable store sales increases
in all of its major categories except for footwear. The comparable store sales
increase is due to several factors, including a greater concentration of
brand-name merchandise, enhancements to the stores' appearance and visual
merchandising changes. The overall increase in sales was due to an increase in
unit sales, which was slightly offset by a decrease in retail prices.
Gross profit
Gross profit increased approximately $5.6 million to $34.7 million during the
first six months of fiscal 2000 from $29.1 million during the comparable period
of fiscal 1999. As a percentage of net sales, gross profit increased 59 basis
points to 27.3 percent from 26.7 percent for the comparable six months of last
year. Merchandise margins as a percentage of sales were 32 basis points lower
than the prior year. This decrease is primarily attributable to a more
aggressive inventory management program, which resulted in an increase in
markdowns and, to a lesser extent, the product mix consisting of a higher
percentage of brand-name merchandise. The decrease in merchandise margins was
more than offset, however, by 87 basis point and 4 basis point decreases in
occupancy and buying and distribution costs as a percentage of sales,
respectively. The decreases in occupancy and buying and distribution costs
(which are relatively fixed in nature) as a percentage of sales were primarily
the result of comparable store sales increases.
Selling, general and administrative expenses
SG&A increased approximately $2.2 million to $28.7 million during the first six
months of 2000 from $26.5 million during the comparable six months of fiscal
1999. The aggregate increase in SG&A is primarily attributable to additional
store expenses as a result of the Company's expanded store base during the past
year and an increase in administrative costs to support the larger store chain.
As a percentage of net sales, SG&A decreased 170 basis points to 22.6 percent
during the first six months of fiscal 2000 from 24.3 percent during the
comparable six months of last year. The decrease in the SG&A percentage is due
primarily to the Company's ability to leverage corporate overhead and store
payroll costs as a result of the comparable store sales increase.
Interest
The Company's net interest income increased $197,000 to $456,000 during the
first six months of fiscal 2000 from $259,000 in the comparable period of last
year due primarily to higher average cash balances.
9
<PAGE> 10
LIQUIDITY AND CAPITAL RESOURCES
General
The Company's primary uses of cash are financing new store openings and
purchasing merchandise inventories. The Company is currently meeting its cash
requirements through cash flow from operations and cash and cash equivalents
on-hand.
Cash Flows
At July 29, 2000, cash and cash equivalents were $13.1 million, down $5.6
million since January 29, 2000. The Company's primary uses of cash so far this
year are as follows: increased inventory levels of $3.7 million, capital
expenditures of $5.4 million primarily for new or remodeled stores and
outfitting some stores with loss prevention systems, an increase in accounts
receivable of $1.8 million and a decrease in accounts payable of $1.7 million.
The Company opened 20 new stores during the first six months of 2000 as compared
with 12 new stores in the same period of the prior year.
Credit Facility
On June 1, 2000, the Company renewed and revised its existing credit facility
with Wells Fargo Bank. The revised facility provides an unsecured revolving line
of credit totaling $15 million. The total amount available to borrow pursuant to
the credit agreement is limited to 150% of cash flow (as defined in the credit
agreement) for the trailing 12-month period. Amounts borrowed under the
revolving line bear interest at the lesser of either the bank's prime rate, or
195 basis points above LIBOR. The Company pays commitment fees of 0.33% on the
unused portion of the revolving line of credit. The credit agreement also
provides for the issuance of letters of credit that are generally used in
connection with international merchandise purchases. Outstanding letters of
credit issued by the bank reduce amounts otherwise available for borrowing under
the revolving line of credit. The credit facility subjects the Company to
various restrictions on the incurrence of additional indebtedness, acquisitions,
loans to officers and stock repurchases. The covenants also require the Company
to maintain certain tangible net worth, working capital, debt to equity, net
income and fixed charge coverage minimums as well as certain other ratios
customary in such agreements. Amounts available to borrow under the line of
credit, as limited by the cash flow multiple, totaled $14.2 million at July 29,
2000. No borrowings (excluding letters of credit) were outstanding under the
revolving line at July 29, 2000. Any amount borrowed under the revolving line of
credit will become due on June 1, 2001, the date the credit agreement matures.
Capital Expenditures
The Company has opened 20 new stores so far this year, and anticipates opening
an additional 29 stores during the remainder of the year. Capital expenditures
for the remainder of the year are estimated to be approximately $4.5 million to
open the remaining stores, update or remodel existing stores and to purchase
and/or upgrade information systems.
Management believes that the Company's working capital, credit facility and cash
flows from operating activities will be sufficient to meet the Company's
operating and capital requirements through the end of fiscal 2000.
10
<PAGE> 11
NEW ACCOUNTING PRONOUNCEMENTS
Accounting for derivatives and hedging activities -- In June 1998, the Financial
Accounting Standards Board ("FASB") issued SFAS No. 133, "Accounting for
Derivatives and Hedging Activities." The provisions of SFAS No. 133 are
effective for all fiscal quarters of all fiscal years beginning after June 15,
2000. The Company does not believe that the adoption of SFAS. No. 133 will have
a significant impact on the Company's financial statements.
Revenue recognition - In December 1999, the Securities and Exchange Commission
("SEC") issued Staff Accounting Bulletin No. 101, Revenue Recognition in
Financial Statements ("SAB 101"). The SEC has extended the implementation date
of SAB 101 until no later than the fourth quarter of fiscal years beginning
after December 15, 1999. Based on management's review of SAB 101 to date, we do
not believe that the interpretations will materially affect the Company's
current revenue recognition policies, and thus will not have a significant
impact on its future results of operations or financial position.
Accounting for certain transactions involving stock compensation - In March
2000, the FASB issued FIN 44, "Accounting for Certain Transactions Involving
Stock Compensation (an interpretation of APB Opinion No. 25)". FIN 44 clarifies
the application of APB 25 for certain issues and was effective July 1, 2000. The
Company does not believe that the interpretation will have a significant impact
on the Company's financial statements.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company does not engage in trading market risk sensitive instruments and
does not purchase as investments, as hedges, or for purposes "other than
trading" instruments that are likely to expose the Company to market risk,
whether it be from interest rate, foreign currency exchange, commodity price or
equity price risk. The Company has issued no debt instruments, entered into no
forward or futures contracts, purchased no options and entered into no swaps.
The Company's primary market risk exposure is that of interest rate risk. A
change in LIBOR or the Prime Rate as set by Wells Fargo Bank would affect the
rate at which the Company could borrow funds under its revolving line of credit.
STATEMENT REGARDING FORWARD-LOOKING DISCLOSURES
Certain sections of this Quarterly Report on Form 10-Q, including the preceding
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," may contain various forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Exchange Act, which represent the Company's expectations or beliefs concerning
future events. These forward-looking statements involve risks and uncertainties,
and the Company cautions that these statements are further qualified by
important factors that could cause actual results to differ materially from
those in the forward-looking statements, including, without limitation, those
set forth in the "Risk Factors" section of the Company's Annual Report on Form
10-K for the fiscal year ended January 29, 2000.
11
<PAGE> 12
PART II - OTHER INFORMATION
Items 1-3 - None
Item 4 - Submission of Matters to a Vote of Security Holders
(a) The Annual Meeting of Shareholders of the Company was held on
June 15, 2000.
(b) Information regarding the Company's directors is contained in
the Company's Definitive Proxy Statement, which is attached
hereto as Exhibit 22.
(c) Gerald R. Szczepanski and Ron G. Stegall were elected to serve
as directors until the Company's 2003 annual meeting of
shareholders according to the following vote:
<TABLE>
<S> <C> <C> <C> <C>
Gerald R. Szczepanski For: 7,799,415 Against or Withheld: 521,697
Ron G. Stegall For: 7,795,035 Against or Withheld: 526,077
</TABLE>
The 1992 Incentive and Nonstatutory Stock Option Plan (the
"Plan") was amended to increase the aggregate number of shares
of Common Stock available for issuance under the Plan from
1,500,000 to 2,100,000.
<TABLE>
<S> <C> <C> <C>
For: 4,743,747 Against or Withheld: 2,213,526
Abstention: 6,010 Broker Non-votes: 1,357,829
</TABLE>
The Employee Stock Purchase Plan (the "Stock Purchase Plan")
was amended to (i) increase the number of monthly offerings to
60, (ii) increase the maximum aggregate number of shares
reserved for issuance under the Stock Purchase Plan from
60,000 to 110,000, (iii) extend the term of the Stock Purchase
Plan to March 31, 2003, (iv) remove the provision limiting
each offering to 2,500 shares, and (v) entitle the Company to
withhold any necessary employment taxes or other similar
amounts with respect to the purchase or sale of shares of
Common Stock under the Stock Purchase Plan.
<TABLE>
<S> <C> <C> <C>
For: 6,759,253 Against or Withheld 198,470
Abstention: 5,560 Broker Non-votes: 1,357,829
</TABLE>
The selection of PricewaterhouseCoopers LLP as the Company's
independent accountants for the fiscal year ending February 3,
2001 was ratified by the shareholders according to the
following vote:
<TABLE>
<S> <C> <C> <C>
For: 8,313,471 Against or Withheld: 6,530
Abstention: 1,111 Broker Non-votes: -0-
</TABLE>
(d) None.
Item 5 - None
Item 6 - Exhibits and Reports on Form 8-K
(a) See Index of Exhibits.
(b) None.
12
<PAGE> 13
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.
GADZOOKS, INC.
(Registrant)
DATE: September 12, 2000 By: /s/ JAMES A. MOTLEY
-----------------------------------------
James A. Motley
Vice President / Chief Financial Officer
(Chief Accounting Officer and
Duly Authorized Officer of the Registrant)
13
<PAGE> 14
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<S> <C>
3.1 -- Second Restated Articles of Incorporation of the Company (filed as
Exhibit 4.1 to the Company's Form S-8 (No. 33-98038) filed with
the Commission on October 12, 1995 and incorporated herein by
reference).
3.2 -- Amended and Restated Bylaws of the Company (filed as Exhibit
4.2 to the Company's Form S-8 (No. 33-98038) filed with the
Commission on October 12, 1995 and incorporated herein by
reference).
3.3 -- First Amendment to the Amended and Restated Bylaws of the
Company (filed as Exhibit 3.3 of the Company's Quarterly Report on
Form 10-Q for the quarter ended August 2, 1997 filed with the
Commission on September 16, 1997 and incorporated herein by
reference).
4.1 -- Specimen Certificate for shares of Common Stock, $.01 par
value, of the Company (filed as Exhibit 4.1 to the Company's
Amendment No. 2 to Form S-1 (No. 33-95090) filed with the
Commission on September 8, 1995 and incorporated herein by
reference).
4.2 -- Rights Agreement dated as of September 3, 1998, between the
Company and ChaseMellon Shareholder Services, L.L.C. (filed as
Exhibit 1 to the Company's Form 8-A filed with the Commission on
September 4, 1998 and incorporated herein by reference).
10.1 -- Purchase Agreement dated as of January 31, 1992 among the Company,
Gerald R. Szczepanski, Lawrence H. Titus, Jr. and the Investors
listed therein (filed as Exhibit 10.1 to the Company's Form S-1
(No. 33-95090) filed with the Commission on July 28, 1995 and
incorporated herein by reference).
10.2 -- Purchase Agreement dated as of May 26, 1994 among the Company,
Gerald R. Szczepanski, Lawrence H. Titus, Jr. and the Investors
listed therein (filed as Exhibit 10.2 to the Company's Form S-1
(No. 33-95090) filed with the Commission on July 28, 1995 and
incorporated herein by reference).
10.3 -- Credit Agreement dated as of January 30, 1997 between the
Company and Wells Fargo Bank (Texas), National Association (filed
as Exhibit 10.3 to the Company's 1996 Annual Report on Form 10-K
filed with the Commission on April 23, 1997 and incorporated
herein by reference).
10.4 -- Form of Indemnification Agreement with a schedule of director
signatories (filed as Exhibit 10.5 to the Company's Form S-1 (No.
33-95090) filed with the Commission on July 28, 1995 and
incorporated herein by reference).
10.5 -- Employment Agreement dated January 31, 1992 between the Company
and Gerald R. Szczepanski, as continued by letter agreement (filed
as Exhibit 10.6 to the Company's Form S-1 (No. 33-95090) filed
with the Commission on July 28, 1995 and incorporated herein by
reference).
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10.6 -- 1992 Incentive and Nonstatutory Stock Option Plan dated
February 26, 1992, and Amendments No. 1 through 3 thereto (filed
as Exhibit 10.8 to the Company's Form S-1 (No. 33-95090) filed
with the Commission on July 28, 1995 and incorporated herein by
reference).
10.7 -- 1994 Incentive and Nonstatutory Stock Option Plan for Key
Employees dated September 30, 1994 (filed as Exhibit 10.9 to the
Company's Form S-1 (No. 33-95090) filed with the Commission on
July 28, 1995 and incorporated herein by reference).
10.8 -- 1995 Non-Employee Director Stock Option Plan (filed as Exhibit
10.10 to the Company's Form S-1 (No.33-00196) filed with the
Commission on January 9, 1996 and incorporated herein by
reference).
10.9 -- Gadzooks, Inc. Employees' Savings Plan, as amended and revised
(filed as Exhibit 4.5 to the Company's Form S-8 (No. 333-68205)
filed with the Commission on December 1, 1998 and incorporated
herein by reference).
10.10 -- Severance Protection Agreement dated September 1, 1998 between
the Company and Gerald R. Szczepanski (filed as Exhibit 10.24 to
the Company's Quarterly Report on Form 10-Q filed with the
Commission on December 15, 1998 and incorporated herein by
reference).
10.11 -- Form of Severance Agreement with a schedule of executive
officer signatories (filed as Exhibit 10.11 to the Company's 1996
Annual Report on Form 10-K filed with the Commission on April 23,
1997 and incorporated herein by reference).
10.12 -- Amendment No. 4 to the Gadzooks, Inc. 1992 Incentive and
Nonstatutory Stock Option Plan (filed as Exhibit 10.14 to the
Company's Amendment No. 3 to Form S-1 (No. 33-95090) filed with
the Commission on September 27, 1995 and incorporated herein by
reference).
10.13 -- Amendment No. 5 to the Gadzooks, Inc. 1992 Incentive and
Nonstatutory Stock Option Plan dated September 12, 1996 (filed as
Exhibit 10.13 to the Company's 1996 Annual Report on Form 10-K
filed with the Commission on April 23, 1997 and incorporated
herein by reference).
10.14 -- Amendment No. 1 to the 1994 Incentive and Nonstatutory Stock
Option Plan for Key Employees dated September 12, 1996 (filed as
Exhibit 10.14 to the Company's 1996 Annual Report on Form 10-K
filed with the Commission on April 23, 1997 and incorporated
herein by reference).
10.15 -- Gadzooks, Inc. Employee Stock Purchase Plan (filed as Exhibit 4.5
to the Company's Form S-8 (No. 333-50639) filed with the
Commission on April 21, 1998 and incorporated herein by
reference).
10.16 -- Lease Agreement between Gadzooks, Inc. (Lessee) and CB Midway
International, LTD. (Lessor) dated August 23, 1996 (filed as
Exhibit 10.17 to the Company's 1997 Annual Report on Form 10-K
filed with the Commission on April 27, 1998 and incorporated
herein by reference).
10.17 -- Gadzooks, Inc. 401(k) Plan and Profit Sharing Plan Adoption
Agreement (filed as Exhibit 10.18 to the Company's Quarterly
Report on Form 10-Q filed with the Commission on June 9, 1998, and
incorporated herein by reference).
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10.18 -- Amendment No. 1 to the Credit Agreement between the Company and
Wells Fargo Bank (Texas), National Association, dated June 11,
1998 (filed as Exhibit 10.19 to the Company's Quarterly Report on
Form 10-Q filed with the Commission on September 15, 1998, and
incorporated herein by reference).
10.19 -- Amendment No. 2 to the Credit Agreement between the Company and
Wells Fargo Bank (Texas) National Association, dated May 14, 1999
(filed as Exhibit 10.20 to the Company's Quarterly Report on Form
10-Q filed with the Commission on June 15, 1999 and incorporated
herein by reference).
10.20 -- Amendment No. 6 to the Gadzooks, Inc. 1992 Incentive and
Non-Statutory Stock Option Plan dated June 18, 1998 (filed as
Exhibit 4.8 to the Company's Form S-8 (No. 333-60869) filed with
the Commission on August 7, 1998 and incorporated herein by
reference).
10.21 -- Amendment No. 1 to the Gadzooks, Inc. 1995 Non-Employee Director
Stock Option Plan dated June 18, 1998 (filed as Exhibit 4.10 to
the Company's Form S-8 (No. 333-60869) filed with the Commission
on August 7, 1998 and incorporated herein by reference).
10.22 -- Severance Protection Agreement dated January 5, 1998 between
the Company and James F. Wimpress (filed with the Commission on
April 26, 2000 and incorporated herein by reference).
10.23 -- Severance Protection Agreement dated January 11, 1999 between
the Company and Paula Y. Masters (filed with the Commission on
April 26, 2000 and incorporated herein by reference).
10.24 -- Amendment No. 3 to the Credit Agreement between the Company and
Wells Fargo Bank (Texas) National Association dated June 1, 2000
(filed with the Commission on June 13, 2000 and incorporated
herein by reference).
10.25* -- Management Services Agreement by and between Gadzooks Management,
L.P. and Gadzooks, Inc. dated June 28, 2000.
10.26* -- Lease and Occupancy Agreement between Gadzooks, Inc. and Gadzooks
Management, L.P. dated June 28, 2000.
22 -- Definitive Proxy statement pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (filed with the Commission on May
12, 2000 and incorporated herein by reference).
27* -- Financial Data Schedule.
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* Filed herewith (unless otherwise indicated, exhibits are previously filed).
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