<PAGE>
As filed with the Securities and Exchange Commission on July 16, 1996
_____________________________________________________________________________
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 period ended June 1, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission File Number 0-24904
STROUDS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 95-4107241
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
780 SOUTH NOGALES STREET
CITY OF INDUSTRY, CA 91748
(Address of principle executive offices)
(818) 912-2866
(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
---- ----
Number of shares of common stock outstanding at July 16, 1996: 8,522,817
<PAGE>
STROUDS, INC.
INDEX
Page No.
--------
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS:
Condensed Balance Sheets as of March 2, 1996
and June 1, 1996 3
Condensed Statements of Income for the Thirteen
Weeks Ended June 1, 1996 and May 27, 1995 4
Condensed Statements of Cash Flows for the Thirteen
Weeks Ended June 1, 1996 and May 27, 1995 5
Notes to Condensed Financial Statements 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 8
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 11
SIGNATURES 13
2
<PAGE>
PART I. FINANCIAL INFORMATION
- ---------------------------------
ITEM 1. FINANCIAL STATEMENTS
STROUDS, INC.
CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
JUNE 1, MARCH 2,
(in thousands, except share data) 1996 1996
- --------------------------------- -------- --------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash $ 498 $ 210
Accounts receivable, less allowance for doubtful
accounts of $25 and $25, respectively 2,080 1,835
Merchandise inventory 60,496 60,167
Other 2,764 4,245
-------- --------
Total current assets 65,838 66,457
Property and equipment - at cost, net of accumulated
depreciation and amortization 20,806 18,206
Excess of cost over net assets acquired, net of
accumulated amortization 7,983 8,047
Other assets 889 1,297
-------- --------
Total assets $ 95,516 $ 94,007
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt $ 157 $ 237
Accounts payable 13,764 14,367
Accrued expenses 9,593 8,974
-------- --------
Total current liabilities 23,514 23,578
Long-term debt 14,684 12,446
Other noncurrent liabilities 2,527 2,514
-------- --------
Total liabilities 40,725 38,538
Stockholders' equity:
Preferred stock, $0.0001 par value; authorized
750,000 shares; no shares issued or outstanding -- --
Preferred stock, Series B, $0.0001 par value;
authorized 250,000 shares; no shares issued or
outstanding -- --
Common stock, $0.0001 par value; authorized 25,000,000
shares; issued and outstanding June 1, 1996 and
March 2, 1996, 8,512,059 shares 1 1
Additional paid-in capital 38,946 38,946
Retained earnings 15,844 16,522
-------- --------
Total stockholders' equity 54,791 55,469
-------- --------
Total liabilities and stockholders' equity $ 95,516 $ 94,007
======== ========
</TABLE>
See accompanying notes to condensed financial statements.
3
<PAGE>
STROUDS, INC.
CONDENSED STATEMENTS OF INCOME
(in thousands, except share data)
(Unaudited)
<TABLE>
<CAPTION>
13 WEEKS ENDED
----------------------
JUNE 1, MAY 27,
1996 1995
--------- ---------
<S> <C> <C>
Net sales $ 46,436 $ 42,973
Costs and expenses:
Cost of sales, buying and occupancy 32,760 29,504
Selling and administrative expenses 14,749 12,806
Amortization of excess of cost over
net assets acquired 65 65
--------- ---------
47,574 42,375
--------- ---------
Operating income (loss) (1,138) 598
Other income 93 59
Interest expense, net (276) (190)
--------- ---------
Income (loss) before income taxes (1,321) 467
Income tax (expense) benefit 643 (192)
--------- ---------
Net income (loss) $ (678) $ 275
========= =========
Net income (loss) per share $ (0.08) $ 0.03
========= =========
Weighted average common and common
equivalent shares outstanding 8,512 8,609
========= =========
</TABLE>
See accompanying notes to condensed financial statements.
4
<PAGE>
STROUDS, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
<TABLE>
<CAPTION>
13 WEEKS ENDED
----------------------
JUNE 1, MAY 27,
1996 1995
--------- ---------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ (678) $ 275
Adjustments to reconcile net income (loss) to net
cash provided by (used in) operating activities:
Depreciation and amortization of property
and equipment 1,004 992
Amortization of excess of cost over net
assets acquired 65 65
(Increase) decrease in assets:
Accounts receivable (245) (714)
Merchandise inventory (329) 1,743
Increase (decrease) in accounts payable and
accrued expenses 1,567 (6,801)
Other 1,902 751
--------- ---------
Net cash provided by (used in) operating
activities 3,286 (3,689)
--------- ---------
Cash flows from investing activities:
Capital expenditures (3,604) (2,387)
--------- ---------
Net cash used in investing activities (3,604) (2,387)
--------- ---------
Cash flows from financing activities:
Borrowings under long-term debt 9,650 13,130
Repayment of long-term debt (7,400) (6,668)
Principal payments under capital lease obligations (92) (119)
Decrease in overdraft (1,552) (308)
Other equity transactions -- 55
--------- ---------
Net cash provided by financing activities 606 6,090
--------- ---------
Net increase in cash 288 14
Cash at beginning of period 210 179
--------- ---------
Cash at end of period $ 498 $ 193
========= =========
Supplemental disclosure of cash flow information:
Cash paid during the year for:
Interest $ 263 $ 185
Income taxes 191 --
========= =========
</TABLE>
See accompanying notes to condensed financial statements.
5
<PAGE>
STROUDS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(1) INTERIM FINANCIAL STATEMENTS
The accompanying Condensed Balance Sheet as of June 1, 1996 and the related
Condensed Statements of Income and Condensed Statements of Cash Flows for the
13 weeks ended June 1, 1996 and May 27, 1995 are unaudited. The unaudited
operating results reflect all adjustments (consisting only of normal recurring
adjustments) which are, in the opinion of management, necessary for a fair
presentation of the financial position and operating results for the interim
periods. Information pertaining to the year ended March 2, 1996 is derived
from the audited financial statements included in the Company's 1995 Annual
Report on Form 10-K. This information should be read in conjunction with the
consolidated financial statements and notes thereto, together with management's
discussion and analysis of financial condition and results of operations,
contained in the Company's 1995 Annual Report filed with the Securities and
Exchange Commission on Form 10-K. The results of operations for the 13 weeks
ended June 1, 1996 may not be indicative of the results to be expected for the
entire fiscal year.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Income Taxes
Income tax (expense) benefit is based upon the estimated effective tax rate for
the entire fiscal year. The effective rate is subject to ongoing review and
evaluation by management.
Net Income (Loss) per Share
Net income (loss) per share is based on the weighted average number of common
and common equivalent shares outstanding. Common stock equivalents, as
determined by the treasury stock method, represent shares which would be issued
assuming the exercise of common stock options and warrants reduced by the
number of shares which could be purchased with the proceeds from the exercise
of those options and warrants. Common stock equivalents are not included in
the calculation of net income per share if their inclusion would be anti-
dilutive.
Fully diluted net income per share is not presented since the amounts do not
differ significantly from the primary net income per share presented.
Reclassifications
Certain reclassifications have been made to the May 27, 1995 amounts to conform
to the June 1, 1996 presentation.
6
<PAGE>
STROUDS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(3) PROPERTY AND EQUIPMENT
<TABLE>
<CAPTION>
Property and equipment is summarized as follows:
JUNE 1, MARCH 2,
(in thousands) 1996 1996
- -------------- --------- ---------
<S> <C> <C>
Furniture, fixtures and equipment $ 34,594 $ 30,915
Equipment held under capital leases 2,595 2,596
Leasehold improvements 5,613 5,687
--------- ---------
42,802 39,198
Less accumulated depreciation and amortization (21,996) (20,992)
--------- ---------
$ 20,806 $ 18,206
========= =========
</TABLE>
(4) LONG-TERM DEBT
At June 1, 1996, the Company had outstanding borrowings of $14,650,000 under
its $30,000,000 revolving credit facility. Included in the revolving credit
facility is a $7,000,000 letter of credit sub-facility. As of June 1, 1996,
the Company had outstanding letters of credit amounting to $2,112,000 for
purchase commitments to foreign suppliers under this sub-facility.
Effective June 1, 1996, the Company and its bank have agreed to amend certain
terms and conditions of its Revolving Credit Facility. Under the amended terms
and conditions the Revolving Credit Facility is extended to August 31, 1998 and
the Company may increase its Revolving Credit Facility up to $40 million.
Increases to the Revolving Credit Facility are graduated and subject to
achieving specified debt coverage and inventory turnover ratios. Financial
covenants have been modified to provide for a lower initial debt coverage ratio
subject to quarterly increases thereafter and a minimum inventory turnover
ratio during the term of the agreement. In addition, interest is payable at
the provider's prime rate or LIBOR plus a spread ranging from 1.25% to 2.00%.
The applicable LIBOR interest spread is based on the debt coverage ratio
achieved and determined on a quarterly basis.
7
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
13 WEEKS ENDED JUNE 1, 1996 COMPARED TO THE 13 WEEKS ENDED MAY 27, 1995
- -----------------------------------------------------------------------
Net sales for the thirteen weeks ended June 1, 1996 increased $3.4 million, or
8.1%, to $46.4 million versus $43.0 million in the same period last year.
Comparable store sales increased $0.2 million, or 0.6%, for the period. Sales
from new stores and expanded or replacement stores increased by $3.2 million.
Management believes the increase in comparable store sales is volume related
and primarily attributable to a smaller negative impact related to competitive
openings for the first quarter of 1996 versus the same period a year ago.
Approximately 10% of the comparable stores were affected by new competitive
openings for the first quarter of 1996 compared to approximately 30% for the
same period last year. To a lesser extent, comparable store sales were
positively impacted due to an increase in advertising frequency versus a year
ago.
Cost of sales, buying and occupancy for the 13 weeks ended June 1, 1996 was
$32.8 million versus $29.5 million for the same period a year ago, a $3.3
million increase. As a percent of sales, cost of sales, buying and occupancy
increased to 70.5% from 68.7% for the same period a year ago. The increase in
cost of sales, buying and occupancy percentage was due to higher occupancy
costs associated with new and expanded stores where average store sales were
lower and slightly higher freight and distribution costs versus the same period
a year ago.
Selling and administrative expenses for the 13 weeks ended June 1, 1996
increased $1.9 million to $14.7 million versus $12.8 million for the same
period in fiscal 1995 and increased as a percentage of net sales from 29.8% to
31.8%. The increase as a percent of sales was primarily due to higher
advertising costs as scheduled events were shifted into the first quarter this
year versus the second quarter last year and the additional cost of advertising
to further develop the Company's presence in its new Midwest markets. General
and administrative expense as a percent of sales was 6.6% versus 6.8% a year
ago. The slight decline as a percent of sales was the result of a reduction in
general and administrative expense in conjunction with the sales increase over
the same period a year ago.
Operating loss for the 13 weeks ended June 1, 1996 was $1.1 million versus
operating income of $0.6 million for the same period a year ago, a $1.7 million
decrease. The operating loss resulted in a margin deficit of 2.5% for the 13
weeks ended June 1, 1996 versus an operating income margin of 1.4% for the same
period a year ago. Operating income margin declined due to the reasons
discussed above.
Interest expense net, increased $0.1 million to $0.3 million for the 13 weeks
ended June 1, 1996 versus $0.2 million for the same period in fiscal 1995.
Interest expense grew as a result of increased borrowings to finance the
development of five new superstores, one new outlet and two store remodels done
since June 1995.
The pretax loss for the 13 week period ended June 1, 1996 resulted in a tax
benefit of $0.6 million versus income tax expense of $0.2 million for the
8
<PAGE>
same 13 week period a year ago. The Company's effective tax rate increased as
a result of certain non-deductible expenses for tax purposes becoming more
significant in relation to the Company's pretax earnings. The estimated
effective tax rate is subject to continuing evaluation and modification by
management.
LIQUIDITY AND CAPITAL RESOURCES
The Company's cash needs are primarily to support its inventory requirements
and for store expansion. The Company has historically financed its operations
primarily with internally generated funds and its credit facilities. At June
1, 1996 the Company's working capital was $42.3 million, while advances from
its revolving credit facility were $14.7 million. At June 1, 1996 the Company
had $13.2 million available for borrowings under its credit facility.
Effective June 1, 1996, the Company and its bank have agreed to amend certain
terms and conditions of its Revolving Credit Facility. Under the amended terms
and conditions the Revolving Credit Facility is extended to August 31, 1998 and
the Company may increase its Revolving Credit Facility up to $40 million.
Increases to the Revolving Credit Facility are graduated and subject to
achieving specified debt coverage and inventory turnover ratios. Financial
covenants have been modified to provide for a lower initial debt coverage ratio
subject to quarterly increases thereafter and a minimum inventory turnover
ratio during the term of the agreement. In addition, interest is payable at
the provider's prime rate or LIBOR plus a spread ranging from 1.25% to 2.00%.
The applicable LIBOR interest spread is based on the debt coverage ratio
achieved and determined on a quarterly basis.
Cash provided by (used in) operating activities for the 13 weeks ended June 1,
1996 and May 27, 1995 was $3.3 million and ($3.7) million, respectively.
During the 13 week period ended June 1, 1996, inventory increased $0.3 million
and accounts payable and accrued expenses increased $1.6 million as a result of
the Company's expansion program.
Net cash used in investing activities for the 13 weeks ended June 1, 1996 and
May 27, 1995 was $3.6 million and $2.4 million, respectively. These funds were
used for capital expenditures supporting the Company's store expansion program.
In the first quarter of fiscal 1996, the Company opened one new superstore and
has four other superstores under development.
Cash provided by financing activities for the 13 weeks ended June 1, 1996 and
May 27, 1995 was $0.6 million and $6.1 million, respectively. The Company
borrowed $2.3 million primarily to fund expansion and to meet working capital
needs for the 13 weeks ended June 1, 1996.
The Company anticipates capital expenditures to approximate $11.4 million for
the remainder of its fiscal year which will relate primarily to the Company's
expansion program, conversion of original format stores to superstores,
enlarging existing superstores and continued improvement of the Company's
management information systems. Currently, the Company plans to open five to
seven new superstores during the remainder of fiscal 1996.
9
<PAGE>
SEASONALITY AND QUARTERLY RESULTS
The Company's business is subject to seasonal and quarterly fluctuations.
Historically, the Company has realized a higher portion of its net sales and an
even greater proportion of its profits in the months of November, December and
January. Additionally, the timing of promotional events may affect the
Company's results in different fiscal quarters from period to period.
CAUTIONARY STATEMENT FOR PURPOSES OF "SAFE HARBOR PROVISIONS" OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995
Certain statements contained in this Management's Discussion and Analysis of
Financial Condition and Results of Operations that are not related to
historical results are forward looking statements. Actual results may differ
materially from those projected or implied in the forward looking statements.
Further, certain forward looking statements are based upon assumptions of
future events which may not prove to be accurate. These forward looking
statements involve risks and uncertainties which are more fully described in
Item 1, Part I of the Company's Annual Report on Form 10-K for the Fiscal Year
Ended March 2, 1996.
10
<PAGE>
PART II. OTHER INFORMATION
- -----------------------------
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits:
The exhibits on the accompanying Index to Exhibits are filed as part of,
or incorporated by reference into, this report.
EXHIBIT NO. DESCRIPTION
- ----------- -----------
3.1 Form of Restated Certificate of Incorporation of the
Company.
Incorporated herein by reference to Amendment No. 1 to
the Company's Form S-1, Registration No. 33-82090, as
filed with the Commission on September 13, 1994.
3.2 Restated By-laws of the Company.
Incorporated herein by reference to Amendment No. 1 to
the Company's Form S-1, Registration No. 33-82090, as
filed with the Commission on September 13, 1994.
4 Rights Agreement, dated as of November 17, 1995, between
Strouds, Inc. and American Stock Transfer & Trust Company.
Incorporated herein by reference to the Company's Form
8-K, as filed with the Commission on December 1, 1995.
10.1 Stock Option Plan for Executive and Key Employees of the
Company, including the form of the individual option
agreement thereunder.
Incorporated herein by reference to the Company's Form
S-1, Registration No. 33-82090, as filed with the
Commission on July 29, 1994.
10.2 Form of Amendment to Stock Option Plan for Executive and Key
Employees of the Company, including the form of the
amendment to the individual option agreement thereunder.
Incorporated herein by reference to Amendment No. 1 to
the Company's Form S-1, Registration No. 33-82090, as
filed with the Commission on September 13, 1994.
10.3 Amended and Restated 1994 Equity Participation Plan of the
Company, including the forms of the individual option
agreements thereunder.
Incorporated herein by reference to Amendment No. 1 to
the Company's Form S-1, Registration No. 33-82090, as
filed with the Commission on September 13, 1994.
10.4 Form of the Company's Employee Qualified Stock Purchase Plan.
Incorporated herein by reference to Amendment No. 1 to
the Company's Form S-1, Registration No. 33-82090, as
filed with the Commission on September 13, 1994.
10.5 Amendment to the Strouds, Inc. Employee Qualified Stock
Purchase Plan, January 5, 1995.
Incorporated herein by reference to the Company's Form
10-K for the fiscal year ended February 25, 1995, as
filed with the Commission on May 25, 1995.
10.6 Warrant Agreement (Warrant 1), dated as of November 20, 1992,
between the Company and BT Capital.
Incorporated herein by reference to the Company's Form
S-1, as filed with the Commission on July 29, 1994.
11
<PAGE>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
10.7 Warrant Agreement (Warrant 2), dated as of November 20, 1992,
between the Company and BT Capital.
Incorporated herein by reference to the Company's Form
S-1, Registration No. 33-82090, as filed with the
Commission on July 29, 1994.
10.8 Credit Agreement between Bank of America National Trust and
Savings Association and Strouds, Inc., dated September 22,
1995.
Incorporated herein by reference to the Company's Form
10-Q for the period ended August 22, 1995, as filed
with the Commission on September 26, 1995.
10.9 International Swap Dealers Association, Inc. Master Agreement
between Bank of America National Trust and Savings
Association and Strouds, Inc., dated March 6, 1996.
Incorporated herein by reference to the Company's Form
10-K for the period ended March 2, 1996, as filed
with the Commission on May 24, 1996.
10.10 Registration Rights Agreement dated as of January 2, 1996 by
and between the Company and BT Capital.
Incorporated herein by reference to the Company's Form
10-K for the period ended March 2, 1996, as filed
with the Commission on May 24, 1996.
* 11 Statement re: Computation of Per Share Earnings.
* 27 Financial Data Schedule
__________________________________
* Filed herewith electronically
b) Reports on Form 8-K:
No reports on Form 8-K were filed by the Company during the quarter ended
June 1, 1996.
12
<PAGE>
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.
Dated: July 15, 1996
STROUDS, INC.
(Registrant)
/s/ Wayne P. Selness
--------------------
Wayne P. Selness
President and Chief Executive Officer
(Principal Executive Officer)
/s/ Jonathan W. Spatz
---------------------
Jonathan W. Spatz
Senior Vice President and Chief
Financial Officer
(Principal Financial Officer)
13
<PAGE>
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
- ----------- -----------
3.1 Form of Restated Certificate of Incorporation of the
Company.
Incorporated herein by reference to Amendment No. 1 to
the Company's Form S-1, Registration No. 33-82090, as
filed with the Commission on September 13, 1994.
3.2 Restated By-laws of the Company.
Incorporated herein by reference to Amendment No. 1 to
the Company's Form S-1, Registration No. 33-82090, as
filed with the Commission on September 13, 1994.
4 Rights Agreement, dated as of November 17, 1995, between
Strouds, Inc. and American Stock Transfer & Trust Company.
Incorporated herein by reference to the Company's Form
8-K, as filed with the Commission on December 1, 1995.
10.1 Stock Option Plan for Executive and Key Employees of the
Company, including the form of the individual option
agreement thereunder.
Incorporated herein by reference to the Company's Form
S-1, Registration No. 33-82090, as filed with the
Commission on July 29, 1994.
10.2 Form of Amendment to Stock Option Plan for Executive and Key
Employees of the Company, including the form of the
amendment to the individual option agreement thereunder.
Incorporated herein by reference to Amendment No. 1 to
the Company's Form S-1, Registration No. 33-82090, as
filed with the Commission on September 13, 1994.
10.3 Amended and Restated 1994 Equity Participation Plan of the
Company, including the forms of the individual option
agreements thereunder.
Incorporated herein by reference to Amendment No. 1 to
the Company's Form S-1, Registration No. 33-82090, as
filed with the Commission on September 13, 1994.
10.4 Form of the Company's Employee Qualified Stock Purchase Plan.
Incorporated herein by reference to Amendment No. 1 to
the Company's Form S-1, Registration No. 33-82090, as
filed with the Commission on September 13, 1994.
10.5 Amendment to the Strouds, Inc. Employee Qualified Stock
Purchase Plan, January 5, 1995.
Incorporated herein by reference to the Company's Form
10-K for the fiscal year ended February 25, 1995, as
filed with the Commission on May 25, 1995.
10.6 Warrant Agreement (Warrant 1), dated as of November 20, 1992,
between the Company and BT Capital.
Incorporated herein by reference to the Company's Form
S-1, as filed with the Commission on July 29, 1994.
10.7 Warrant Agreement (Warrant 2), dated as of November 20, 1992,
between the Company and BT Capital.
Incorporated herein by reference to the Company's Form
S-1, Registration No. 33-82090, as filed with the
Commission on July 29, 1994.
10.8 Credit Agreement between Bank of America National Trust and
Savings Association and Strouds, Inc., dated September 22,
1995.
Incorporated herein by reference to the Company's Form
10-Q for the period ended August 22, 1995, as filed
with the Commission on September 26, 1995.
<PAGE>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
10.9 International Swap Dealers Association, Inc. Master Agreement
between Bank of America National Trust and Savings
Association and Strouds, Inc., dated March 6, 1996.
Incorporated herein by reference to the Company's Form
10-K for the period ended March 2, 1996, as filed
with the Commission on May 24, 1996.
10.10 Registration Rights Agreement dated as of January 2, 1996 by
and between the Company and BT Capital.
Incorporated herein by reference to the Company's Form
10-K for the period ended March 2, 1996, as filed
with the Commission on May 24, 1996.
* 11 Statement re: Computation of Per Share Earnings.
* 27 Financial Data Schedule
__________________________________
* Filed herewith electronically
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED BALANCE SHEETS AND STATEMENTS OF INCOME FOUND ON PAGES 3 AND 4 OF THE
COMPANY'S FORM 10-Q FOR THE YEAR-TO-DATE, AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-01-1997
<PERIOD-START> MAR-03-1996
<PERIOD-END> JUN-01-1996
<CASH> 498
<SECURITIES> 0
<RECEIVABLES> 2,105
<ALLOWANCES> 25
<INVENTORY> 60,496
<CURRENT-ASSETS> 65,838
<PP&E> 42,802
<DEPRECIATION> 21,996
<TOTAL-ASSETS> 95,516
<CURRENT-LIABILITIES> 157
<BONDS> 0
0
0
<COMMON> 1
<OTHER-SE> 54,790
<TOTAL-LIABILITY-AND-EQUITY> 95,516
<SALES> 46,436
<TOTAL-REVENUES> 46,436
<CGS> 32,760
<TOTAL-COSTS> 32,760
<OTHER-EXPENSES> 14,814
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 276
<INCOME-PRETAX> (1,321)
<INCOME-TAX> (643)
<INCOME-CONTINUING> (678)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (678)
<EPS-PRIMARY> (0.08)
<EPS-DILUTED> (0.08)
</TABLE>
<PAGE>
EXHIBIT 11
STROUDS, INC.
COMPUTATION OF PER SHARE EARNINGS
<TABLE>
<CAPTION>
13 WEEKS ENDED
----------------------
JUNE 1, MAY 27,
1996 1995
(in thousands, except share data) --------- ---------
- ---------------------------------
<S> <C> <C>
Weighted average number of common shares
outstanding 8,512 8,327
Common Stock equivalents:
Shares applicable to Warrants based on
average market for period -- 213
Shares applicable to Stock Options based
on average market for period -- 69
--------- ---------
Weighted average number of common and
common equivalent shares outstanding,
assuming full dilution 8,512 8,609
========= =========
Net income (loss) $ (678) $ 275
========= =========
Net income (loss) per common and common
equivalent shares $ (0.08) $ 0.03
========= =========
</TABLE>
Fully diluted net income (loss) per share is not presented since the amounts do
not differ significantly from the primary net income per share presented.
