<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended July 31, 1996
____ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________________ to __________________
Commission File Number: 0-24614
BABY SUPERSTORE, INC.
(Exact Name of Registrant as Specified in Charter)
<TABLE>
<CAPTION>
<S> <C>
South Carolina 57-0527831
(State or Other Jurisdiction of Incorporation or Organization) (I.R.S. Employer Identification Number)
1201 Woods Chapel Road 29334
Duncan, South Carolina (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code: (864)968-9292
</TABLE>
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
At September 9, 1996, there were 19,235,533 shares of Common Stock, no par
value, outstanding.
Page 1 of 16
Exhibits Begin on Page 16
<PAGE>
BABY SUPERSTORE, INC.
FORM 10-Q FOR THE QUARTER ENDED JULY 31, 1996
INDEX
<TABLE>
<CAPTION>
Page
<S> <C>
Part I. Financial Information
Item 1. Financial Statements (Unaudited):
a. Condensed consolidated balance sheets as of July 31, 1996 3-4
and January 31, 1996
b. Condensed consolidated statements of operations for the thirteen and
twenty-six weeks ended July 31, 1996 and July 26, 1995 5
c. Condensed consolidated statements of cash flows for the twenty-six
weeks ended July 31, 1996 and July 26, 1995 6
d. Notes to unaudited condensed consolidated financial statements - 7-8
July 31, 1996
e. Independent accountant's report on review of interim financial
information 13
Item 2. Management's Discussion and Analysis of Financial 9-12
Condition and Results of Operations
Part II. Other Information
Item 1. Legal Proceedings 14
Item 2. Change in Securities 14
Item 3. Defaults in Senior Securities 14
Item 4. Other Information 14
Item 5. Exhibits and Reports on Form 8-K 14
Signatures 15
</TABLE>
2
<PAGE>
Part 1 - Financial Information
Item 1. Financial Statements
BABY SUPERSTORE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
<TABLE>
<CAPTION>
July 31, January 31,
1996 1996
(Unaudited) (1)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 40,697 $ 72,353
Marketable securities 54,108 35,292
Receivables 5,594 5,441
Merchandise inventories 87,291 101,402
Prepaid income taxes 9,024 695
Other current assets 138 396
--------- ---------
Total current assets 196,852 215,579
--------- ---------
PROPERTY AND EQUIPMENT, NET 61,709 52,046
--------- ---------
OTHER ASSETS:
Deferred debt issuance costs 3,034 3,350
Deferred income taxes 1,136 444
Utility deposits 289 226
--------- ---------
TOTAL ASSETS $ 263,020 $ 271,645
========= =========
</TABLE>
(1) Derived from audited financial statements.
See notes to unaudited condensed consolidated financial statements.
3
<PAGE>
BABY SUPERSTORE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (continued)
(In thousands, except share data)
<TABLE>
<CAPTION>
July 31, January 31,
1996 1996
(Unaudited) (1)
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 45,249 $ 47,400
Accrued expenses 7,910 5,979
Accrued interest 1,791 1,760
Income taxes payable --- 272
-------------- -------------
Total current liabilities 54,950 55,411
OTHER DEFERRED CREDITS 2,423 2,381
4 7/8% CONVERTIBLE SUBORDINATED
NOTES DUE 2000 115,000 115,000
----------- -----------
TOTAL LIABILITIES 172,373 172,792
----------- -----------
SHAREHOLDERS' EQUITY:
Common Stock; no par value, 50,000,000 shares authorized, 19,235,533 (July
31, 1996) and 19,223,184 (January 31, 1996)
shares issued and outstanding 71,307 71,108
Retained earnings 19,340 27,745
----------- -----------
Total shareholders' equity 90,647 98,853
----------- -----------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 263,020 $ 271,645
========== ==========
</TABLE>
(1) Derived from audited financial statements.
See notes to unaudited condensed consolidated financial statements.
4
<PAGE>
BABY SUPERSTORE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(In thousands, except per share data)
<TABLE>
<CAPTION>
Thirteen Weeks Ended Twenty-six Weeks Ended
July 31, July 26, July 31, July 26,
1996 1995 1996 1995
--------- --------- --------- -------
<S> <C> <C> <C> <C>
Net sales $ 102,554 $ 64,532 $ 209,334 $ 131,826
Cost of sales 92.910 46,045 170,000 93,862
--------- --------- --------- ---------
Gross profit 9,644 18,487 39,334 37,964
Selling, general and administrative 28,021 14,047 51,727 28,414
--------- --------- --------- ---------
costs
Income (Loss) from operations (18,377) 4,440 (12,393) 9,550
Other expense 2 3 8 176
Interest expense 1,561 --- 3,119 ---
Interest income 1,088 432 2,224 666
---------- ---------- --------- ----------
Income (Loss) before income taxes and
cumulative effect of change in
accounting principle (18,852) 4,869 (13,296) 10,040
Income tax provision (benefit) (7,164) 1,860 (5,134) 3,835
----------- --------- ---------- ---------
Income (Loss) before cumulative effect
in accounting principle (11,688) 3,009 (8,162) 6,205
Cumulative effect of change in accounting
principle (adoption of SFAS 121) net
of income taxes of $141,000 --- --- (245) ---
-------------- ------------- ----------- -------------
Net income (loss) $(11,688) $ 3,009 $ (8,407) $ 6,205
========== ========= ========= =========
Net income (loss) per common share
before cumulative effect of accounting
principle change $ (0.61) $ 0.15 $ (0.43) $ 0.32
Cumulative effect of change in
accounting principle per share --- --- $ (0.01) ---
-------------- ------------- ---------- -------------
Net income (loss) per share $ (0.61) $ 0.15 $ (0.44) $ 0.32
========== ========= ========== =========
Weighted average common
shares outstanding 19,235 19,716 19,230 19,449
========== ========= ========= ========
</TABLE>
See notes to unaudited condensed consolidated financial statements.
5
<PAGE>
BABY SUPERSTORE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In thousands)
<TABLE>
<CAPTION>
Twenty-six Weeks Ended
July 31, July 26,
1996 1995
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss) $ (8,407) $ 6,205
Adjustments to reconcile net income (loss) to net cash provided by
(used in) operating activities:
Cumulative effect of change in accounting principle, net 245 ---
Depreciation 4,230 2,258
Amortization of debt issuance costs 316 ---
Writedown and loss on disposition of property 92 174
Deferred income taxes (551) 51
Changes in assets and liabilities that provided (used) cash:
Receivables (153) (1,010)
Merchandise inventories 14,111 (14,499)
Prepaid income taxes (8,329) ---
Prepaid and other assets 182 (4)
Accounts payable (2,151) 4,503
Accrued expenses 1,931 934
Accrued interest 31 ---
Income taxes payable (272) 655
Other deferred credits 42 98
------------ ------------
Net cash provided by (used in) operating activities 1,317 (635)
---------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions (14,358) (11,433)
Purchase of marketable securities (18,816) ---
--------- ------------
Net cash used in investing activities (33,174) (11,433)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Public offering of Common Stock, net of offering expenses --- 28,566
Proceeds from issuance of Common Stock 201 520
Payments to redeem Common Stock --- (2)
------------- --------------
Net cash provided by financing activities 201 29,084
----------- ---------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (31,656) 17,016
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 72,353 13,682
--------- ---------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 40,697 $ 30,698
======== ========
SUPPLEMENTAL CASH FLOW INFORMATION:
Income taxes paid $ 3,946 $ 3,235
Interest paid $ 2,772 $ ---
</TABLE>
See notes to unaudited condensed consolidated financial statements.
6
<PAGE>
BABY SUPERSTORE, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
July 31, 1996
1. Basis of presentation:
The accompanying condensed financial statements are unaudited. These
financial statements have been prepared in accordance with generally accepted
accounting principles for interim financial information and the instructions of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements, and should be read in conjunction with the annual report.
In the opinion of management, all adjustments necessary for a fair presentation
of such financial statements have been included. Interim results are not
necessarily indicative of results that may be expected for a full year.
2. Effect of new accounting pronouncement:
The Company was required to adopt Statement of Financial Accounting
Standards (SFAS No. 121) "Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to be Disposed Of" as of February 1, 1996. This statement
requires that when the Company commits to closing specific stores, the fixed
assets for such stores (primarily leasehold improvements) be written down to
fair market value. The cumulative effect of the adoption of SFAS No. 121
resulted in a charge of approximately $245,000 (net of an income tax benefit of
$141,000) in the May 1, 1996 income statement.
3. Inventories:
Inventories are valued at the lower of cost, as determined using the
retail method applied on the average cost basis, or market.
4. Long-term debt and credit facility:
On September 27, 1995, the Company sold $115 million of 4 7/8%
convertible subordinated notes due 2000. The notes are convertible, at the
security holder's option, into Common Stock at any time on or before October 1,
2000, unless previously redeemed by the Company, at a conversion price of
$53.875 per share. Interest is payable semi-annually on April 1st and October
1st.
Previously NationsBank, National Association (Carolinas), provided the
Company with a commitment for a one-year $25 million unsecured revolving line
of credit. The line of credit had never been finalized and NationsBank declared
the commitment expired for lack of use in August, 1996. On September 13, 1996,
the Company received a replacement commitment from NationsBank on substantially
the same terms and conditions as the prior commitment.
7
<PAGE>
5. Income taxes:
Income taxes are provided based upon management's estimate of the
annual effective tax rate.
6. Stock split:
The Company effected a three-for-two stock split in the form of a stock
dividend in February 1995. All common share and per share data reflect this
stock split.
7. Stock options and stock purchase plan:
During the quarter ended July 31, 1996, stock options for the purchase
of 7,000 shares of Common Stock were granted at fair market value under the
Stock Incentive Plan and 20,000 shares of Common Stock were granted at fair
market value under the Outside Director Plan.
8. Net income (loss) per common share:
Net income (loss) per common share is computed based upon the weighted
average number of common and common equivalent shares outstanding. Common
equivalent shares are represented by shares under option or warrant.
The 4 7/8% convertible subordinated notes were determined not to be
Common Stock equivalents at the issuance date based on the yield to maturity and
are anti-dilutive under the "if converted" method. Therefore, the common
equivalent shares represented by the 4 7/8% convertible subordinated notes are
excluded from both the primary and fully diluted net income (loss) per share
calculations.
9. Inventory adjustment:
Recently the Company determined to take the steps to strengthen its
internal contols and position the Company for the future growth. Among other
things, the Company has undertaken a comprehensive review of its inventory
control system and has initiated implementation of a new system that the Company
believes will enable it to better manage inventory. During the transition to the
new inventory control system, the Company will conduct full physical chain-wide
inventory counts on a quarterly basis until reliability of the system is
assured. The first of these chain-wide counts was completed at the end of July
1996, and resulted in an inventory reduction of approximately $12 million
pre-tax. The Company has recorded the entire adjustment in its second quarter.
8
<PAGE>
BABY SUPERSTORE, INC.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Thirteen Weeks (Second Quarter) Ended July 31, 1996 Compared to Thirteen Weeks
(Second Quarter) Ended July 26, 1995:
During the thirteen weeks ended July 31, 1996, the Company opened four
stores, one of which was a relocation of an existing store, as compared to two
store openings, one of which was a relocation, in the comparable period of 1995.
At the end of the thirteen weeks ended July 31, 1996, the Company operated 68
stores, as compared to 46 stores at July 26, 1995. During the thirteen weeks
ended July 31, 1996, sales increased 59% to $102.6 million, as compared to $64.5
million in the same period of the previous fiscal year. This increase reflects a
0.4% increase in comparable store sales, as well as sales from the 25 new stores
opened and 4 stores expanded during the fifty-two week period ending July 31,
1996. Comparable store sales were below the Company's objectives, and management
expects sales weakness to continue in the near term. The Company considers
stores that have not expanded and are older than twelve months as comparable,
and there were 37 such stores at July 31, 1996. Comparable store sales were
negatively impacted by opening new stores in existing markets and by efforts to
reduce inventory levels.
Gross profit was $9.6 million, or 9.4% of sales for the thirteen weeks
ended July 31, 1996 compared to $18.5 million, or 28.6% of sales for the same
period of the previous fiscal year. In order to transition to a new inventory
control system, the Company conducted a full chain-wide physical inventory count
at the end of the second quarter of 1996. An inventory adjustment arising from
the chain-wide physical inventory count totaled approximately $12 million at
cost. The reduction related to a variety of circumstances including, among
others, markdowns and inventory shrinkage. In addition, the Company incurred
markdowns at cost during the second quarter of approximately $9 million, far
in excess of any historical quarterly levels. These markdowns were primarily
related to price reductions in national and private label apparel and shoes as
well as SKU reduction initiatives.
Selling, general and administrative costs for the thirteen weeks ended
July 31, 1996 were $28.0 million, or 27.3% of sales, as compared to $14.0
million, or 21.8% of sales for the same period of the previous fiscal year. The
increase in selling, general and administrative costs as a percentage of sales
was primarily attributable to necessary increases in infrastructure in such
areas as operations, loss prevention, accounting, inventory control and
merchandising. In addition, selling, general, and administrative costs were
adversely impacted by the lower than anticipated comparable store sales.
As a result of the above factors, the loss from operations for the
thirteen weeks ended July 31, 1996 was $18.4 million, or (17.9%) of sales,
compared to net income of $4.4 million, or 6.9% of sales, for the same period of
the previous fiscal year.
Net interest expense for the quarter was $473,000, compared to net
interest income of $432,000 in the second quarter of 1995. The increase in
interest expense is due to the $115 million convertible subordinated notes,
issued September 27, 1995 which bear an interest rate of 4 7/8%.
9
<PAGE>
The Company's effective income tax rate for the thirteen weeks ended
July 31, 1996 was 38.0% compared to 38.2% in the comparable period in 1995.
As a result of the factors described above, the net loss for the
thirteen weeks ended July 31, 1996 was $11.7 million, or ($0.61) per share and
(11.4%) of sales, compared to net income of $3.0 million, or $0.15 per share and
4.7% of sales for the same period in 1995.
Twenty-six Weeks Ended July 31, 1996 Compared to Twenty-six Weeks Ended July 26,
1995
During the twenty-six weeks ended July 31, 1996, the Company opened
eight stores, one of which was a relocation of an existing store, as compared to
three store openings, including two relocations, in the comparable period of
1995. The Company closed one store in the second quarter of 1995 (at lease
expiration). During the twenty-six weeks ended July 31, 1996, sales increased
59% to $209.3 million, as compared to $131.8 million in the same period of the
previous fiscal year. This increase reflects a 4% increase in comparable store
sales, as well as sales from the 25 new stores opened and 4 stores expanded
during the fifty-two week period ended July 31, 1996. There were 37 stores
included in the comparable store calculation at July 31, 1996.
Gross profit was for the twenty-six weeks ended July 31, 1996 was $39.3
million, or 18.8% of sales, compared to $38.0 million, or 28.8% of sales for the
same period of the previous fiscal year. In addition to the second quarter
inventory reduction previously discussed, the Company incurred year-to-date
markdowns far in excess of historical levels. These markdowns were primarily
related to price reductions in national and private label apparel and shoes as
well as SKU reduction initiatives.
Selling, general and administrative costs for the twenty-six weeks
ended July 31, 1996 were $51.7 million, or 24.7% of sales, as compared to $28.4
million, of 21.6% of sales for the same period of the previous fiscal year. In
addition to infrastructure additions in operations and home office support
personnel the Company incurred expenses related to eight new store openings in
the twenty-six weeks ended July 31, 1996 compared to three new store openings in
the same period of the previous year.
As a result of the above factors, the loss from operations for the
twenty-six weeks ended July 31, 1996 was $12.4 million, or 5.9% of sales, as
compared to $9.6 million, or 7.2% of sales, for the same period of the previous
fiscal year.
Net interest expense for the twenty-six weeks ended July 31, 1996 was
$895,000 compared to net interest income of $666,000 for the same period of the
previous fiscal year. This was primarily attributable to interest expense
associated with the Company's 4 7/8%, $115 million convertible subordinated
notes issued on September 27, 1995. The unexpended proceeds are currently
invested principally in cash equivalents or marketable securities with
maturities of one year or less.
The Company was required to adopt Statement of Financial Accounting
Standards (SFAS No. 121) "Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to be Disposed Of "as of February 1, 1996. This statement
requires that when the Company commits to closing specific stores, the fixed
assets for such stores (primarily leasehold improvements) be written down to
fair market value. The cumulative effect of the adoption of SFAS No. 121
resulted in a charge of approximately $245,000 (net of an income tax benefit of
$141,000) in the May 1, 1996 income statement.
10
<PAGE>
As a result of the factors described above, the net loss for the
twenty-six weeks ended July 31, 1996 was $8.4 million or ($0.44) per share and
(4.0%) of sales, compared to $6.2 million net income, or $0.32 per share and
4.7% of sales for the same period of the previous fiscal year.
LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operating activities was $1.3 million during the
twenty-six weeks ended July 31, 1996, compared to net cash used of $635,000 in
the same period of 1995. Such increase was due primarily to decreased inventory
levels and increased non-cash charges.
Net cash flows used in investing activities totalled $33.2 million for
the twenty-six weeks ended July 31, 1996, compared to $11.4 million for the same
period of the previous fiscal year. This decrease was primarily due to the
purchase of $18.9 million of marketable securities during the twenty-six week
period ended July 31, 1996. Capital expenditures in 1996 related primarily to
costs associated with eight new store openings while capital expenditures for
the comparable 1995 period included costs to complete the Company's distribution
and home office facility in Duncan, SC, the purchase of the Company's warehouse
in Simpsonville, SC and costs associated with three new store openings.
Net cash flows provided by financing activities were $201,000 during
the twenty-six weeks ended July 31, 1996, compared to net cash provided of $29.1
million in the same period of the previous fiscal year. The Company received
$28.6 million from a public offering of Common Stock in March 1995.
Cash, cash equivalents and marketable securities totaled $94.8 million
at July 31, 1996. Such amounts were invested principally in Federal agency
discount notes and municipal and corporate debt securities with terms to
maturity of one year or less when purchased.
The Company estimates that capital expenditures for fiscal 1996 will
approximate $30 to $40 million. During the remainder of fiscal 1996, the Company
plans to open approximately 14 additional stores, an estimated four of which are
expected to be relocations of existing stores. The Company anticipates that cash
generated from operations, together with its existing cash resources and the
available line credit, will be sufficient to satisfy the Company's cash needs
for the next 12-18 months.
Baby Superstore has never paid cash dividends on its Common Stock and
has no intention of paying cash dividends in the foreseeable future.
11
<PAGE>
IMPACT OF INFLATION:
The Company does not believe inflation has had or is likely to have a
material adverse effect on its results of operations.
IMPACT OF RECENT ACCOUNTING PRONOUNCEMENT:
In October 1995, Statement of Financial Accounting Standards (SFAS) No.
123, "Accounting for Stock-Based Compensation," was issued and is effective for
the Company on February 1, 1996. As permited by SFAS No. 123, the Company will
continue to apply APB Opinion No. 25, which recognizes compensation cost based
on the intrinsic value of the equity instrument awarded to its stock based
compensation awards to employees and will disclose the required proforma effect
on net income and earnings per share.
12
<PAGE>
INDEPENDENT ACCOUNTANTS' REVIEW REPORT
Baby Superstore, Inc.
We have reviewed the accompanying condensed consolidated balance sheets
of Baby Superstore, Inc. and subsidiaries (the "Company") as of July 31, 1996
and the related condensed consolidated statements of operations and of cash
flows for the twenty-six (26) week periods then ended. These financial
statements are the responsibility of the Company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with generally accepted auditing standards, the objective of which is
the expression of an opinion regarding the financial statements taken as a
whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications
that should be made to such condensed consolidated financial statements for them
to be in conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted
auditing standards, the consolidated balance sheet of Baby Superstore, Inc. and
subsidiaries as of January 31, 1996, and the related consolidated statements of
income and cash flows for the year then ended (not presented herein); and in our
report dated March 29, 1996, we expressed an unqualified opinion on those
consolidated financial statements. In our opinion, the information set forth in
the accompanying condensed consolidated balance sheet as of January 31, 1996 is
fairly stated, in all material respects, in relation to the consolidated balance
sheet from which it has been derived.
As discussed in Note 9 to the financial statements, the Company
recorded an adjustment to inventory balances in the second quarter of fiscal
1996.
Deloitte & Touche LLP
August 27, 1996
13
<PAGE>
BABY SUPERSTORE, INC.
Part II - Other Information
Item 1. LEGAL PROCEEDINGS:
None.
Item 2. CHANGES IN SECURITIES:
None.
Item 3. DEFAULTS UPON SENIOR SECURITIES:
None.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS:
None.
Item 5. OTHER INFORMATION:
None.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K:
a. Exhibits:
11.1 Computation of net income(loss) per common share
b. Reports on Form 8-K:
None.
14
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Form 10-Q to be signed on its behalf by the
undersigned, thereunto duly authorized.
BABY SUPERSTORE, INC.
Registrant)
Date: September 13, 1996 /s/ Jack P. Tate
---------------------- -------------------------
Jack P. Tate
Chairman of the Board and Chief Executive Officer
(Principal executive officer of the Registrant)
Date: September 13, 1996 /s/ Jodi L. Taylor
---------------------- ---------------------------
Jodi L. Taylor
Chief Financial Officer
(Principal financial officer of the Registrant)
15
<PAGE>
BABY SUPERSTORE INC.
COMPUTATION OF NET INCOME (LOSS) PER COMMON SHARE
<TABLE>
<CAPTION>
Thirteen Weeks Ended Twenty-six Weeks Ended
July 31, July 26, July 31, July 26,
1996 1995 1996 1995
------------ ----------- ----------- ----------
<S> <C> <C> <C> <C>
Net Income (Loss) $(11,688,000) $ 3,009,000 $ (8,407,000) $ 6,205,000
============= ============= ============= ==============
Weighted average shares outstanding
during the period:
Common Stock 19,234,702 19,174,407 19,230,462 18,907,977
Net effect of dilutive stock options
and warrants - based on the treasury
stock meathod using the average
market price --- 541,816 --- 541,261
--------------------- --------------- ------------------- --------------
Weighted average common and common
equivalents shares outstanding 19,234,702 19,716,223 19,230,462 19,449,238
============== ============= ============ ============
PRIMARY NET INCOME (LOSS)
PER COMMON SHARE $ (0.61) $ (0.15) $ (0.44) $ 0.32
================== ============== ================ ================
Weighted average shares outstanding
during the period:
Common Stock 19,234,702 19,174,407 19,230,462 18,907,977
Net effect of dilutive stock options
and warrants - based on the treasury
stock method using the greater of
ending or average market price --- 552,751 --- 557,738
--------------------- --------------- -------------------- ---------------
Weighted average common and common
equivalent shares outstanding 19,234,702 19,727,158 19,230,462 19,465,715
============== ============ ============= ============
FULLY DILUTED NET INCOME
(LOSS) PER COMMON SHARE $ (0.61) $ 0.15 $ (0.44) $ 0.32
================= ================ ================ ================
</TABLE>
16
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
Form 10-Q for quarterly period ended July 31, 1996 and is qualified in
its entirety by reference to such financial statements.
</LEGEND>
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 6-MOS
<FISCAL-YEAR-END> JAN-29-1997 JAN-29-1997
<PERIOD-END> JUL-31-1996 JUL-31-1996
<CASH> 40,697 0
<SECURITIES> 54,108 0
<RECEIVABLES> 5,594 0
<ALLOWANCES> 0 0
<INVENTORY> 87,291 0
<CURRENT-ASSETS> 196,852 0
<PP&E> 77,916 0
<DEPRECIATION> (16,207) 0
<TOTAL-ASSETS> 263,020 0
<CURRENT-LIABILITIES> 54,950 0
<BONDS> 115,000 0
0 0
0 0
<COMMON> 71,307 0
<OTHER-SE> 19,340 0
<TOTAL-LIABILITY-AND-EQUITY> 263,020 0
<SALES> 102,554 209,334
<TOTAL-REVENUES> 102,554 209,334
<CGS> 92,910 170,000
<TOTAL-COSTS> 28,021 51,727
<OTHER-EXPENSES> 2 8
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 1,561 3,119
<INCOME-PRETAX> (18,852) (13,296)
<INCOME-TAX> (7,164) (5,134)
<INCOME-CONTINUING> (11,688) (8,162)
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 (245)
<NET-INCOME> (11,688) (8,407)
<EPS-PRIMARY> (0.61) (0.44)
<EPS-DILUTED> 0 0
</TABLE>
