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                                  UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549


                                    FORM 10-K

         [ X ]     ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                   For the fiscal year ended December 31, 1996

         [   ]    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                         Commission File Number 0-22702


                                  ROBERDS, INC.

An Ohio Corporation                                    31-0801335
                                          (IRS Employer Identification Number)

                            1100 East Central Avenue
                             Dayton, Ohio 45449-1888
                                 (937) 859-5127


        Securities registered pursuant to Section 12(b) of the Act: None

           Securities registered pursuant to Section 12(g) of the Act:
                        Common Shares, without par value


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 requirements
for the past 90 days. Yes [ X] No [   ]   

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ X ]

At the close of trading on January 31, 1997, 5,964,830 common shares, without
par value, were outstanding. Of these, 1,812,789 common shares, having an
aggregate market value (based upon the average of the high and low trading
prices on that date) of approximately $14,955,509, were held by non-affiliates
of the Registrant. Common shares held by each executive officer and director,
and by each person who owned five percent or more of the outstanding common
shares, were excluded, in that such persons may be deemed to be affiliates.
However, such calculation does not constitute an admission or determination that
any such officer or director or holder of more than five percent of the
outstanding common shares is in fact an affiliate of the Registrant.

                       DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Registrant's Proxy Statement for its 1997 annual meeting of
shareholders are incorporated into Part III herein by reference.

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                                     PART I



ITEM 1.  BUSINESS


GENERAL

Roberds, Inc.1 is a leading retailer of a broad range of home furnishing
products, including furniture, bedding, major appliances, and consumer
electronics, in the greater Dayton, Ohio, Atlanta, Georgia, Tampa, Florida, and
Cincinnati, Ohio markets. At December 31, 1996, the Company operated 25
large-format stores, with six stores in the Dayton market, ten in the Atlanta
market, eight in the Tampa market, and one megastore in the Cincinnati, Ohio
market. The Company offers a product mix that includes high quality, name-brand
furniture, bedding, major appliances, and consumer electronics products, at
prices guaranteed to be lower than those of its competitors.

In November 1993, the Company completed an initial public offering of 2.7
million of its common shares, without par value. The Company's common shares
trade on the Nasdaq National Market tier of The Nasdaq Stock Market, under the
symbol "RBDS."

The Company was incorporated in 1971 under the laws of the State of Ohio. Its
executive offices are located at 1100 East Central Avenue, Dayton, Ohio
45449-1888, and its telephone number is (937) 859-5127.


FORWARD-LOOKING STATEMENTS

In the interest of providing the Company's shareholders and potential investors
with information concerning management's assessment of the outlook for the
Company, this report contains certain "forward-looking" statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. Readers should bear in
mind that statements relating to the Company's business prospects, as distinct
from historical facts, are forward-looking statements which, by their very
nature, involve numerous risks and uncertainties. For discussion of certain of
such risks and uncertainties, see "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Forward-Looking Statements."


OPERATING STRATEGY

The Company's objective is to be the leading retailer of furniture, bedding,
major appliances, and consumer electronics products in each of its markets. Key
elements of the Company's operating strategy include the following:

DISTINCTIVE PRODUCT MIX The Company's product mix is a key element of its
operating strategy. Roberds' product mix is distinctive within the retailing
industry, and management believes it provides Roberds with several competitive
advantages over retailers offering only one or two of the Company's product
categories. The Company's major appliance and consumer electronics product lines
generate significant store traffic, sales volume, and gross profit dollars,
enabling Roberds(R) to price its furniture products more aggressively than
competing furniture retailers. The Company's higher-margin furniture and bedding
products enable it to offer its appliance and consumer electronics products at
prices generally below retailers of those products. The Company believes that
its mix of products provides a significant strategic advantage over its
competitors, particularly those selling only electronics and appliance products.

-------- 

1    Roberds, Inc. is also referred to herein as "the Company," "Registrant,"
     and "Roberds."

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Management believes that the Company's product mix generates significant
operating efficiencies. Such efficiencies result from the higher level of sales
per store generated by the Company's diverse product mix, providing Roberds with
significant leverage of its fixed costs, including distribution, warehousing,
store facilities, advertising, and general and administrative expenses. The
Company's product mix enables Roberds to offer complementary products in a
single package in a way in which many of its competitors cannot, and offers
cross-selling opportunities that do not exist for many of the Company's
competitors.

GUARANTEED LOWEST PRICES. The Company's pricing strategy is to offer its
merchandise at prices guaranteed to be lower than those of its competitors
throughout the year. Roberds shops its competition regularly and believes that
it sets its prices below those of its competitors. To reinforce its reputation
for value, it is the Company's advertised policy to offer the lowest competing
price in the market. The policy is backed up by the Company's DOUBLE THE
DIFFERENCETM price guarantee, which is prominently featured in its advertising.

At the time of sale, and for 30 days thereafter, the Company guarantees to its
customers that its prices are lower than those of its competitors. If a customer
demonstrates prior to a purchase that the same product can be purchased within
the market area for a price below that offered by the Company, it will offer
that item to the customer at a price lower than that of the competitor. If a
customer has purchased a product from the Company and within 30 days thereafter
(seven days on computer products) demonstrates that the same product can be
purchased within the market area at a lower price, the Company will refund
double the difference to the consumer.

BROAD SELECTION OF NAME-BRAND MERCHANDISE. The Company sells only name-brand
products generally recognized by consumers, including many higher quality
brands. The Company's stores, which average approximately 60,000 square feet in
size (excluding the Cincinnati megastore), are larger than the stores of many of
its competitors. This enables the Company to attractively display a wide variety
of products that appeal to a broad range of consumer tastes, incomes, and age
groups. As a result, Roberds can offer its customers "one-stop" shopping for
almost every home furnishing product, thereby facilitating the purchasing
process and reducing the need for comparison shopping. In 1996, the Company
opened Roberds GrandTM, in Cincinnati, Ohio. Roberds Grand features a single
250,000 square foot showroom, with an even larger selection than is offered in
the Company's other stores.

STORE CONCENTRATION AND EFFICIENCIES. Roberds operates in metropolitan areas of
at least one million people. In its Dayton, Atlanta, and Tampa markets, the
Company has concentrated multiple stores in each geographic market in order to
enhance name recognition, achieve market penetration, and gain economies of
scale in distribution, advertising, and management costs. The Company advertises
in newspapers, on television, and through direct mail, and is able to benefit
from the advertising efficiencies of locating multiple stores within those three
marketing areas. The Company's "hub and spoke" warehouse and delivery functions
also create operating leverage by serving multiple stores from a regional
facility. For its entry into the Cincinnati market, which is discussed more
fully below, the Company utilized a single 250,000 square foot "megastore"
concept.

CORPORATE COMMITMENT TO CUSTOMER SERVICE. The Company operates under the
philosophy that it will do "whatever it takes" to satisfy the customer. The
Company gives managers and sales associates full authority to respond to
customer issues. Unlike many of its competitors, Roberds employs full-time,
commissioned, trained, professional, sales associates, who are knowledgeable
about the products they sell. On in-stock merchandise, the Company offers
delivery within two days, for a reasonable charge, seven days per week. Roberds
guarantees next-day delivery service on selected merchandise. Roberds offers
delivery on all merchandise sold, and has a competitive policy on replacements
and returns. Roberds also removes the customer's old merchandise free of charge.
In addition, Roberds offers service contracts that provide additional warranty
coverage beyond that which is provided by the manufacturer.


EXPANSION STRATEGY

As part of the initial public offering of its common shares in November 1993,
the Company embarked on a plan to add stores in its existing market areas,
particularly in Atlanta and Tampa; to remodel two of its highest volume stores;
to

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relocate its flagship store in the Tampa market; and to develop a fourth market
area. The Company developed this strategy in order to attempt to gain market
share in the large and growing Atlanta and Tampa markets, which the Company
believed offered significant expansion opportunities. Since the initial public
offering, the Company has increased its store count in Dayton from five to six,
in Atlanta from five to ten, in Tampa from five to eight, and in total from 15
to 24 in its three original market areas. The store renovation and relocation
projects launched in 1993 have been completed.

ENTRY INTO NEW MARKETS. In July 1996, the Company entered the Cincinnati, Ohio
market with a single 250,000 square foot megastore known as Roberds Grand. With
the development of the Roberds GrandTM format, the Company has two formats with
which it can enter new markets--multiple 60,000 square foot stores within a
market or a single 250,000 square foot megastore. It is the Company's plan to
utilize the single 250,000 square foot model in all new markets; however, it can
utilize the multiple-store model where the Company believes it is appropriate.
The determination of whether to utilize a single store or multiples stores in
new markets depends on a variety of factors, including but not limited to retail
shopping patterns, traffic patterns, accessibility, and the availability of
sites.

Going forward, the Company will focus the majority of its resources on new
market areas. Criteria for expansion into new markets include the potential for
achieving a significant share of the market in each of the Company's product
categories, and the opportunity to achieve operating efficiencies in regional
advertising, warehousing, and administrative costs.

The Company has identified Columbus, Ohio as its next market area, utilizing the
Roberds Grand megastore approach. However, the Company does not intend to enter
the Columbus market, or any other new market, and take on the additional debt
obligations required to enter a new market, without additional equity. Thus, the
Company's further expansion into new markets is dependent on its ability to
raise additional equity capital prior to, or as part of, such new market
expansions. Although the Company currently expects to continue its expansion
beyond the Columbus, Ohio market, there can be no assurance that it will be able
to do so.

ADDITIONAL STORES IN EXISTING MARKETS. During 1996, the Company purchased a
former retail facility in the Buckhead area of Atlanta, Georgia, renovated the
facility into a Roberds store, and opened the store in November 1996.

The Company had previously announced plans to enter the Lakeland, Florida
market, which is part of the greater Tampa, Florida market. However, in June
1996, the Company terminated its contract to purchase the site in Lakeland due
to issues that arose in the due diligence process. The Company continues to have
an interest in the Lakeland, Florida market, but is not actively pursuing a site
in that market.

NEW DISTRIBUTION CENTER. As part of the plan to enter the Cincinnati, Ohio
market, the Company opened a 480,000 square foot warehouse facility in the
Dayton suburb of Fairborn, Ohio, in January 1996. The Fairborn warehouse will
also service the Company's announced expansion into the Columbus, Ohio market.

STORE RENOVATIONS. In August 1996, the Company expanded its Vandalia, Ohio store
into former warehouse space in that facility that was abandoned following the
opening of the new warehouse in Fairborn, Ohio. The expanded Vandalia facility
includes a 69,000 square-foot traditional Roberds store, and an area that serves
as a clearance center for the Dayton market.

The Company is expanding its West Carrollton, Ohio store into former warehouse
space that was abandoned following the opening of the new warehouse in Fairborn,
Ohio, in order to expand its product offerings in the West Carrollton store. The
expansion will enable the Company to sell some of the products it currently
displays and inventories for the Cincinnati market, in Dayton. As part of the
expansion, there will be some minor renovation of the existing West Carrollton
store. The project is expected to be completed in March 1997.

GENERAL. The Company's planned growth depends, in part, on its ability to expand
into new markets and, to a lesser extent, its ability to open new stores within
its existing market areas. There is no assurance that the Company will be

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able to locate favorable store sites and arrange favorable leases for new
stores; open new stores in a timely manner; or hire, train, and integrate
employees and managers in those new stores; or that the Company will have access
to sufficient financial resources to permit further expansion. Similarly, there
can be no assurance that the Company can enter new markets successfully.


MERCHANDISING AND PRODUCT LINES

DISTINCTIVE FORMAT. Roberds' merchandising format, combining furniture, bedding,
major appliances, and consumer electronics products in the same store, is an
important aspect of the Company's operations and a point of significant
differentiation from its competitors. The Company's traditional stores are
larger than the stores of most of its competitors, averaging approximately
60,000 square feet in size. These larger stores allow the Company to
attractively display a wide selection of products and allow flexibility in
expanding and contracting merchandise categories to meet changing consumer
tastes and to introduce new products. The Company's Roberds Grand facility, in
Cincinnati, Ohio, is one of the largest home furnishings stores in North
America. Roberds' stores are organized into specialized departments, each
offering a wide selection of merchandise. The breadth of merchandise within each
product line is designed to provide customers with a varied selection and to
reduce the need for customers to comparison shop.

Roberds' furniture merchandise is priced to achieve gross margins that are
attractive for the Company, but below those of other furniture retailers.
Because it sells higher-margin furniture products, the Company can offer its
appliance and consumer electronics products at prices lower than can many of its
competitors in those categories. The Company's appliance and consumer
electronics businesses have lower margins, higher turnover, and tend to be
somewhat more seasonal and cyclical than furniture sales. However, the
competitively priced appliance and consumer electronics products generate
customer traffic for the higher margin furniture items and allow the Company to
spread its operating expenses over a larger base of sales. In addition,
management believes the Company's major appliance and consumer electronics
product offerings increase the frequency of customer visits and create consumer
loyalty, which leads customers to shop for furniture at Roberds.

FURNITURE PRODUCTS. Roberds carries a broad selection of name-brand furniture
products. In addition, the Company offers a broad range of special-order
products. Unlike many other retailers, Roberds uses the same pricing formula for
special-order merchandise as it does for in-stock merchandise. As a result,
Roberds enjoys a significant special-order business. Furniture sold by the
Company includes traditional, American country, eighteenth century, and
contemporary styles, and includes living room, dining room, and bedroom
furniture, tables, lamps, dinettes, reclining furniture, sleep sofas, desks, and
chairs. The Company offers extensive selections of both upholstered and leather
furniture, as well as casegoods. Roberds also sells furniture accessory items
including pictures, mirrors, vases, mantle pieces, wall hangings, figurines, and
related goods. Furniture brands carried by Roberds represent the middle to
upper-middle range of price, and include Action by Lane, Broyhill, Chromcraft,
Flexsteel, Kincaid, Natuzzi, and Pennsylvania House, among others. In the
Roberds Grand format, the Company offers an even broader and deeper selection of
furniture products, including many higher-end products such as Henredon, and the
Arnold Palmer and Alexander Julian Collections.

BEDDING PRODUCTS. The Company offers products from Sealy, Serta, and Simmons,
the three largest manufacturers of bedding sold in the United States, as well as
Stearns & Foster. Bedding products include wooden and brass bed frames,
mattresses, box springs, and water beds. The brand names sold by the Company
cover the full range of bedding quality, except that the Company does not
compete at the very lowest end of the bedding quality range or in the
private-label segment.

MAJOR APPLIANCE PRODUCTS. Roberds' major appliance products include
refrigerators, freezers, ranges, washers, dryers, dishwashers, trash compactors,
disposals, room air conditioners, microwave ovens, dehumidifiers, and vacuum
cleaners. The Company also sells some specialty appliance products such as
under-counter refrigerators, built-in appliances, and cooktops. Roberds carries
the major appliance brands sold in the United States, ranging in price from
moderately low to very high. In its Roberds Grand facility, Roberds sells
small-dollar appliances such as coffee makers, toasters, and

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food processors. Major appliance brands carried by the Company include Amana,
Frigidaire, General Electric, JennAir, KitchenAid, Maytag, SubZero, and
Whirlpool, among others.

CONSUMER ELECTRONICS PRODUCTS. Consumer electronics products sold by the Company
include portable, console, and big screen televisions; VCRs; camcorders; stereo
systems and audio components; and satellite systems. The Company offers personal
computers and related home-office products in its Dayton and Cincinnati markets,
but withdrew those products from its Atlanta and Tampa markets during 1996, due
to low volumes and profitability. The Company offers products from most of the
major consumer electronics manufacturers, ranging in price from lower-middle to
high. Consumer electronics brands carried by the Company include Bose, Canon,
Compaq, Hitachi, IBM, JVC, Mitsubishi, Packard Bell, Pioneer, RCA, Sony,
Toshiba, and Zenith, among others.

Roberds has dedicated "home theater" departments in its stores. This
merchandising concept blends stereo televisions with supplemental audio
equipment, to give the consumer a movie viewing experience comparable to that
enjoyed in theaters. Because of its ability to offer these products together
with complementary furniture products, particularly recliners and other "motion"
furniture, Roberds believes that it is well positioned to capitalize on the home
theater merchandising concept.

OTHER. Selected floor-covering products are offered in the Dayton and Cincinnati
stores. The Company does not sell draperies, wallpaper, or tabletop merchandise.


ADVERTISING AND PROMOTION

Roberds uses a mixed media approach in its advertising programs, employing a
combination of newspaper, broadcast, and direct mail advertisements. Roberds is
reimbursed by its suppliers for a significant portion of the costs associated
with advertising their products.

Newspaper advertisements typically account for the majority of gross advertising
expenditures, with broadcast, direct mail, and other forms of advertising
constituting the balance. The Company uses a combination of newspaper "run of
press" advertising, contained in the body of the newspaper, and "preprint"
advertising, which is "stuffed" into the newspaper. The Company advertises
continuously during the year, but most heavily during peak retailing seasons
such as Thanksgiving and Christmas and for other special promotional programs.
Roberds utilizes broadcast advertising primarily Thursday through Sunday, in
newspapers primarily Friday through Sunday, and runs direct mail programs
periodically. Roberds runs a variety of promotional programs that range in
duration from one to fourteen days. A sales promotion is in progress virtually
every day of the year.

The Company has an in-house advertising department for the planning,
preparation, and production of advertising, and for coordinating advertising
with the Company's merchandising policies and programs. The Company employs an
advertising agency for the production of broadcast advertising and for
assistance in developing its overall advertising strategy. Advertising for all
market areas is developed around common themes and promotions, but product
prices are varied by market to meet each market's needs and to maintain Roberds'
guaranteed-lowest-price commitment.


CUSTOMER PROFILE

Roberds targets consumers who are 25 to 54 years of age, have annual household
incomes greater than $30,000, are married, and have owned their own homes for
less than five years. The Company believes such customers are typically
interested in purchasing high-quality merchandise at prices that provide good
value. Management also believes that Roberds has a high proportion of repeat
shoppers.



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CUSTOMER SERVICE AND CONVENIENCE

The Company stresses superior customer service and encourages every employee to
do "whatever it takes" to satisfy a customer. Store managers and assistant
managers have broad discretion to meet customers' needs. Roberds' stores are
open 362 days each year. The stores are open from 10:00 a.m. to 9:00 p.m.,
Monday through Saturday, and 11:00 a.m. to 7:00 p.m., Sundays, providing ample
opportunity for customers, including two-income families, to shop. Store hours
are extended during peak selling seasons. Roberds employs full-time,
commissioned, trained, professional sales associates who are knowledgeable about
the products they sell.

When a customer is interested in an item of merchandise that is carried in
stock, sales associates determine the item's availability from real-time
computer terminals located throughout the selling area. Similarly, if a customer
special-orders merchandise, the Company's computer system allows the customer to
know at any time the status of the order and the expected delivery date.
Customer inquiries after the sale are generally referred first to the
salesperson who made the sale, so as to maintain a friendly customer
relationship and encourage customer satisfaction and loyalty.

For furniture, major appliances, and consumer electronics products, Roberds
offers its own service contracts that provide additional warranty coverage
beyond that which is provided by the manufacturer. The terms of the extended
warranty contracts range from nine months to ten years. Roberds provides service
for everything it sells. Roberds performs its own furniture and bedding repair
service in all four markets. Appliance and electronics repair services are
provided with a combination of in-house staff and outside providers with whom
Roberds has working relationships.


HOME DELIVERY SYSTEM

Roberds believes that its system for delivery of merchandise to its customers is
convenient for the customer and a significant strategic advantage. At the time
of purchase, customers can elect to take in-stock merchandise with them or
schedule it for delivery. Over 80 percent of the merchandise sold is delivered.
If the customer wants to arrange a delivery, it is scheduled at the time of
sale, on the sales floor, when the customer specifies a date for delivery. Full
delivery service is available 362 days during the year, including Sundays, to
provide maximum convenience for the customer. Typically, the customer can
schedule deliveries of in-stock merchandise within two days after the sale;
however, the Company guarantees next-day delivery on in-stock refrigeration
equipment, big-screen televisions, and bedding products.

Roberds operates a delivery fleet with distinctive trucks displaying the Roberds
logo. All delivery crews are Roberds employees wearing Company uniforms.
Delivery teams operate on a commissioned pay system. Management believes that,
as a result of the commission system, the Company's delivery personnel are
highly motivated to complete the delivery successfully on the first attempt and
to satisfy the customer.


PURCHASING AND VENDOR RELATIONS

Roberds' buying operations are organized along its four major merchandise lines.
The Company has a Vice President of merchandising over each of its four major
product lines. Each Vice President is assisted by buyers in each of the
Company's geographic market areas; however, the Company's Dayton buyers also
serve the Cincinnati market. The buyers review inventory and sales reports on a
daily basis and place orders based on analysis of past sales and existing
inventory levels in their geographic market areas. The buyers also adjust
product pricing and advertising to meet competitive needs in their respective
market areas.

Virtually all furniture and major appliances are purchased from North American
manufacturers. Consumer electronics products are purchased either from domestic
manufacturers or domestic suppliers representing European or Asian
manufacturers. Roberds is a member of NATM Buying Corp., the largest national
buying group in the United States, organized to purchase consumer electronics
and major appliances. Roberds believes its membership in NATM enables

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it to obtain better product pricing, larger volume discounts, and more
advertising rebates than it could obtain independently.

Vendors provide the Company with substantial incentives in the form of cash
discounts, volume rebates, and cooperative advertising funds. The aggregate
amount of these incentives was approximately $18.5 million in 1996, $15.3
million in 1995, and $11.7 million in 1994. The increase in such incentives in
1996 over 1995 was primarily due to increased purchases of products in order to
support higher levels of sales and the entry into the Cincinnati market and, to
a lesser extent, increased purchases from manufacturers providing incentives.
The increase in such incentives in 1995 over 1994 was principally due to
increases in volume and, to a lesser extent, increased purchases from
manufacturers providing incentives. There can be no assurance that such vendor
incentives will continue at such levels. A reduction in, discontinuance of, or
delay in receiving these vendor incentives could have a material adverse effect
on the Company.

Access to certain vendors and brand names is important to the Company's
continued success. The loss of a significant or well-known vendor, such as
General Electric or Broyhill, could have a material adverse effect on the
Company.


DISTRIBUTION

In January 1996, the Company consolidated its two Dayton warehouses into a new
480,000 square foot facility, which it constructed in the Dayton suburb of
Fairborn, Ohio. The new Fairborn facility services the Dayton and Cincinnati
markets, and will also service the Company's intended entry into the Columbus,
Ohio market. The Atlanta and Tampa markets each operate from single warehouse
facilities.

All merchandise is initially received into, and controlled in, a central
warehouse in each market. Smaller merchandise items, such as small televisions
and VCRs, which can be picked up by the customer, are then redistributed to the
stores for customer pick-up. Each store maintains warehouse space to facilitate
such customer pick-ups. Management believes this "hub and spoke" arrangement
allows for prompt product delivery and efficient distribution.

The Company tags and barcodes all merchandise at the time of arrival in its
warehouse centers. The movement of merchandise through the warehouse is tracked
by the Company's barcode process. The Company cycle-counts inventory on a
scheduled basis and performs physical inventories periodically.


MANAGEMENT INFORMATION SYSTEMS

Roberds utilizes a fully integrated management information system for inventory,
merchandising, and certain accounting functions. The system was purchased from,
and is maintained by, the largest software provider to the furniture retailing
industry. The Company believes that the current system is adequate to support
its growth plans, by making hardware and software upgrades to accommodate
additional volume.

Each store is equipped with a system allowing Company sales personnel and buyers
to track merchandise inventories on a real-time basis. In addition, the
merchandising systems are designed to integrate fully the key retailing
functions of merchandise planning, purchase order management, merchandise
distribution, receiving, order entry, and inventory control.

Sales data is captured at the time of sale by the Company's sales personnel,
using point-of-sale terminals on the showroom floor, and is transmitted to the
Company's regional processing centers, where it is compiled to produce daily and
weekly management reports. The data is organized by department class, item,
style, and store, and enables management to regularly monitor the sales
performance of all products within each store and market. The system also
captures data regarding the customer, and maintains an on-line customer data
base with addresses and purchasing history for each customer.


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CUSTOMER CREDIT PROGRAMS

The Company offers qualified customers a private-label charge card administered
by Banc One Private Label Credit Services ("Banc One"). According to Banc One,
at December 31, 1996, the Company had over 328,000 private-label charge card
accounts that generated sales of approximately $156 million in 1996. Such sales
represent approximately 46 percent of the Company's net sales and service
revenues for 1996. The credit approval and servicing process is administered by
Banc One, which issues customer account cards embossed with the Roberds logo.
Roberds receives income from such accounts, based on the difference between: (i)
the interest rate charged to the customer, and (ii) Banc One's cost of funds
plus an administrative charge. As part of its arrangement with Banc One, Roberds
funds a reserve account designed to cover a portion of the bad debt losses
incurred by Banc One. All credit losses in excess of the reserve account are the
responsibility of Banc One. As a result of this arrangement, Roberds holds no
significant consumer receivables and bears no credit risk beyond the fixed
amount contributed to Banc One's bad debt reserve. Because a significant portion
of the Company's sales are financed by consumers, the lack of availability of
consumer credit programs, or a significant increase in the cost of such
programs, could have a material adverse effect on the Company.

The Company also arranges financing through several other sources for customers
not qualifying for credit under the Banc One program. Under some of these
programs, the Company pays a fee to the providers for the use of the program;
under others, it earns a participation fee. However, under all of these other
programs, there is no recourse to Roberds for bad debts.

The Company utilizes several sources for extended financing programs; however,
the majority of such financing is provided by Banc One. The Company generally
pays a fee to the financing source for these programs. To the extent the Company
utilizes Banc One for programs other than its standard "90-days same-as-cash"
program, the Company pays a fee to Banc One for such programs. All extended
financing programs are without recourse to the Company.

Roberd Insurance Agency, Inc., a wholly owned subsidiary of the Company, is
qualified as an insurance agency under Ohio law. It earns a commission on credit
insurance sold by the Company to its customers.


COMPETITION

The retail sale of furniture, bedding, major appliances, and consumer
electronics products in the United States is highly competitive and highly
fragmented. There are large numbers of local, regional, and national chains of
department stores, specialty retailers, and mass and catalog merchandisers, as
well as mail-order merchandisers, competing in each of the Company's product
categories and within its geographic markets. Many of these competitors are
publicly held and have financial and other resources substantially greater than
those of the Company. Further, many of the Company's competitors, particularly
in the appliance and electronics product categories, have suffered severe
financial problems. From time to time, this has caused the Company to have to
compete against retailers that are liquidating merchandise or operating under
the protection of the bankruptcy laws. In the major appliance and consumer
electronics categories, there has been significant expansion into the Company's
markets by publicly held national "superstore" chains, which has greatly
increased the competitive environment in those product categories. In general,
these competitive conditions have led to heavy advertising, severe price
competition, and extensive use of "same-as-cash" programs. The Company expects
such competition to continue. As a result of these highly competitive
conditions, during 1996, the Company withdrew from the personal computer and
home-office categories in its Atlanta and Tampa markets.

One national retailer of appliance and electronics products is entering the
Dayton market in 1997, and another is entering the Tampa market in 1997. A major
furniture retailer located in the Tampa market entered the Atlanta market late
in 1995, and has announced plans for further expansion in greater Atlanta.
Several national department store chains are experimenting with freestanding
furniture, appliance, and electronics formats, and some of those retailers have
entered the Company's markets. These competitors may generate additional
competition in the furniture segment.


                                        9

<PAGE>   10



The industry competes on the basis of price, merchandise selection and
availability, and service. The Company competes on price by constantly shopping
its competition within its geographic markets and maintaining a guaranteed-
lowest-price approach. Because of its distinctive product mix, Roberds can price
its merchandise on the sales floor below the competition every day of the year.
The Company believes it competes favorably on merchandise selection because, at
an average of 60,000 square feet of showroom size in its traditional stores, its
stores are larger than those of many of its competitors, thus enabling Roberds
to attractively display a broader range of merchandise in each of its four
product categories. Management believes Roberds' product availability is good
because of its strong vendor relations and its regional distribution facilities,
which are located near its stores. The Company believes that it provides
superior customer service through its full-time, commissioned sales staff,
effective delivery of merchandise, and effective handling of special orders.


SEASONALITY

The Company typically experiences an increase in its overall sales and
profitability in the fourth quarter. This increase is driven by an increase in
the sales of consumer electronics and furniture products associated with the
holiday season. At the same time, major appliance sales typically decline in the
fourth quarter. Operating results for the full year are highly dependent upon
the success of the Company's operations in the fourth quarter.


CYCLICALITY

The market for furniture, bedding, major appliances, and consumer electronics
products has historically been cyclical, fluctuating significantly with general
economic cycles. During economic downturns, these product lines tend to
experience longer periods of recession and greater declines than the general
economy. The Company believes that the industry is significantly influenced by
economic conditions generally and particularly by the level of housing activity,
interest rates, consumer confidence, personal discretionary spending, and credit
availability. There can be no assurance that a prolonged economic downturn would
not have a material adverse effect on the Company.


BACKLOG

The Company's backlog of sales (sales orders written but not yet delivered) was
approximately $8.3 million at December 31, 1996 as compared to $9.9 million at
December 31, 1995.


EMPLOYEES

At January 31, 1997, the Company had approximately 2,300 employees,
substantially all of whom were full time, including approximately 830 in sales
and sales management, 830 in office and administrative capacities, and 640 in
warehouse and delivery functions. The Company has never experienced a work
stoppage due to labor difficulties and is not a party to any collective
bargaining arrangements. The Company considers its relations with its employees
to be good.


                                       10

<PAGE>   11



MERGERS; SUBSIDIARIES

As part of the Company's initial public offering in November 1993, two of the
Company's Initial Shareholders2 contributed all of their shares in Roberd
Insurance Agency, Inc. and Roberds Service Company to the Company. In August
1994, Roberds Service Company was merged into Roberds, Inc. Roberd Insurance
Agency, Inc. is a licensed insurance agency under Ohio law and earns a
commission on credit insurance sold by the Company.


TRADEMARKS AND LICENSES

The trademarks ROBERDS(R), AMERICA'S NAME BRAND HEADQUARTERS(R), THE BIG ONE(R),
EMPLOYEE PRICE SALE(R), and BACK DOOR SALE(R) are registered by the Company with
the United States Patent and Trademark Office. Roberds has applications pending
with the United States Patent and Trademark Office for the trademarks ROBERDS
GRAND FURNITURE APPLIANCES ELECTRONICSTM, BOTTOM LINE . . . IT COSTS LESS AT
ROBERDSTM, and DOUBLE THE DIFFERENCETM. Roberds does not license any
intellectual property to other parties. Roberds does not license any
intellectual property from others, except for computer software, principally for
use in the Company's management information system described elsewhere in this
Report, and the trademarks of certain of its vendors that permit Roberds to
utilize their trademarks in connection with the promotion and sale of the
vendors' products.


--------

     2The Company's Initial Shareholders are Messrs. Kenneth W. Fletcher, Donald
C. Wright, and Howard W. Smith, who held all of the Company's outstanding common
shares immediately prior to the initial public offering in November 1993. See
also Item 12 of this Report, Security Ownership of Certain Beneficial Owners and
Management.

                                       11

<PAGE>   12



ITEM 2.  PROPERTIES


Roberds' facilities are all located on major thoroughfares and many are near
interstate highways. Many stores are free-standing facilities, and all have
ample parking. The stores are of modern construction, resulting in relatively
low maintenance costs. The following table sets forth information regarding the
Company's stores and warehouses in each of its markets, at December 31, 1996:
<TABLE>
<CAPTION>

                                                                      SHOWROOM      WAREHOUSE
                                                                       SIZE IN       SIZE IN         OWNED/
REGION/LOCATION                           DATE OPENED                  SQ. FT.       SQ. FT.         LEASED

DAYTON, OHIO
<S>                  <C>                    <C>                         <C>             <C>               <C>
West Carrollton, Ohio(1)               June 1971                        80,000          10,000      Leased(2)
West Carrollton, Ohio(1)(6)            June 1974                                        20,000      Leased(2)
Piqua, Ohio(3)                         March 1983                       56,000           4,000      Leased(2)
Springfield, Ohio                      May 1985                         50,000          16,000      Leased(2)
Richmond, Indiana                      March 1988                       55,000           4,000      Leased(2)
Vandalia, Ohio(7)                      July 1989                       139,000          20,000      Owned
Beavercreek, Ohio                      April 1995                       63,000           5,000      Owned
Fairborn, Ohio                         January 1996                                    480,000      Owned

ATLANTA, GEORGIA
Norcross, Georgia(4)                   March 1979                       60,000          28,000      Leased
Marietta, Georgia (8)                  July 1984                        59,000           4,000      Leased(2)
Forest Park, Georgia(8)                October 1987                     57,000           4,000      Leased(2)
Decatur, Georgia(9)                    October 1989                     67,000          16,000      Leased
Roswell, Georgia                       September 1990                   56,000           4,000      Leased
Doraville, Georgia                     January 1994                                    217,000      Leased
Gainesville, Georgia                   September 1994                   71,000          10,000      Leased
Douglasville, Georgia(10)              November 1994                    59,000          10,000      Owned
Athens, Georgia                        August 1995                      62,000           4,000      Owned
Fayetteville, Georgia                  September 1995                   62,000           4,000      Owned
Atlanta (Buckhead), Georgia            November 1996                    70,000           6,000      Owned

TAMPA, FLORIDA
Tampa, Florida(5)                      March 1985                       73,000           9,000      Owned
Bradenton, Florida                     June 1986                        53,000           4,000      Leased
Clearwater, Florida                    September 1986                   52,000           4,000      Leased
North Tampa, Florida                   March 1990                       50,000           5,000      Owned
Brandon, Florida                       November 1990                    49,000           5,000      Leased
Seminole, Florida                      November 1993                    81,000           6,000      Leased
Brandon, Florida                       May 1994                                        159,000      Leased
Sarasota, Florida                      July 1994                        50,000           5,000      Leased
Port Richey, Florida                   March 1995                       60,000           6,000      Owned

CINCINNATI, OHIO
Springdale, Ohio                       July 1996                       250,000          64,000      Leased

         Total                                                       1,784,000       1,133,000

</TABLE>


                                       12

<PAGE>   13



(1)  Original store was relocated to a 60,000 square foot showroom/warehouse in
     1974 and was relocated again to the current facility in 1978, which was
     remodeled and expanded in 1994.
(2)  Facilities leased from entities controlled by one or more of the Initial
     Shareholders. See Item 13 of this Report, Certain Relationships and Related
     Transactions.
(3)  Original 18,000 square foot store opened in 1983, and was relocated and
     expanded to the present facility in 1988.
(4)  Remodeled and expanded in 1994.
(5)  Relocated and expanded in February 1995.
(6)  Approximately 20,000 square feet in the former West Carrollton, Ohio
     showroom/warehouse is used as a warehouse for the carpet division, and the
     remaining 40,000 square feet for general corporate offices.
(7)  Expanded in August 1996.
(8)  The Marietta and Forest Park, Georgia facilities include approximately
     14,000 and 60,000 square feet, respectively, not included in the table
     above, portions of which are currently leased to third party commercial and
     retail tenants, and other portions of which are available for lease to
     third parties.
(9)  The Decatur, Georgia facility includes approximately 25,000 square feet not
     included in the table above and subleased to a national retail chain. Such
     retailer has closed the store that is sub-leased from the Company and,
     although the Company continues to receive rent from the retailer under the
     sub-lease, the Company expects the retailer to abandon the space and the
     sub-lease when it expires in November 1997.
(10) The Douglasville, Georgia store includes approximately 17,000 square feet
     not included in the table above, which is leased to third parties.


In February 1995, the Company's original store on Gandy Boulevard, Tampa,
Florida, was relocated to a new, larger facility across the street, which is
owned by the Company. The Company's lease on the former store location expired
March 31, 1996.

In January 1996, the Company opened a 480,000 square foot warehouse in the
Dayton, Ohio suburb of Fairborn, and consolidated its two Dayton-area warehouses
into the new Fairborn facility, which it owns.

In July 1996, the Company entered the Cincinnati, Ohio market with a 250,000
square foot showroom known as Roberds GrandTM.

In August 1996, the Company expanded its Vandalia, Ohio showroom into the former
warehouse space that was abandoned following the opening of the new Fairborn,
Ohio warehouse facility. The expanded Vandalia showroom space serves as the
clearance center for the Dayton, Ohio market area.

In November 1996, the Company opened a new showroom in the Buckhead area of
Atlanta, Georgia.

The stores leased from unaffiliated third parties generally involve a base lease
term of ten to fifteen years, followed by a series of options to extend. While
most of these leased stores have rent escalation clauses, the majority have no
percentage-rent clauses.

As indicated in the table above, the Company leases seven of its properties from
the Initial Shareholders or entities controlled by one or more of them. These
properties include many of the Company's highest volume stores. The leases on
these properties expire in the years 2004 through 2017. Upon the expiration of
these leases, there can be no assurance that the Company can reach agreement
with the Initial Shareholders on the terms for the renewal of the leases or that
the Initial Shareholders will be willing to renew the leases.


                                       13

<PAGE>   14





ITEM 3.  LEGAL PROCEEDINGS


GENERAL

On February 28, 1994, the Company announced its earnings for the fourth quarter
and year ended December 31, 1993. Following that announcement, the Company's
stock price declined substantially. In March and April 1994, four lawsuits were
filed against the Company, certain of its directors, certain of its officers,
and its co-managing underwriters, in U.S. District Court for the Southern
District of Ohio, case numbers C-3-94-86, 99, 100, and 127. The suits were
consolidated into a single suit, In re Roberds Securities Litigation.

In December 1996, the Company reached an agreement in principle to settle the
class-action securities litigation. Based on such agreement, the Company entered
into a settlement stipulation with the named plaintiffs and filed such
stipulation with the court in February 1997. The settlement involves the payment
of $1.6 million into an escrow account to be used to satisfy the plaintiffs'
legal expenses and claims for damages to the class. In February 1997, Roberds
paid $342,500 into escrow as its share of the settlement, and the insurance
carrier for its officers and directors paid $1,257,500. Subject to approval by
the court, the Company expects the plaintiffs to give notice to the class,
validate claims, and then begin disbursement of funds in the latter part of
1997. No portion of the funds paid into escrow can revert to the Company.


The Ohio Bureau of Workers' Compensation Fund has issued an assessment against
the Company for approximately $871,000 in connection with an audit of the
Company's workers' compensation tax returns. In the fourth quarter of 1996, the
Company accrued $2.6 million to cover its estimated liability resulting from the
State's assessment. Such assessment is discussed more fully in the Notes to the
Consolidated Financial Statements, which are included elsewhere in this Report.

In August 1995, a former employee of the Company brought suit against the
Company and one of its managers alleging, among other things, wrongful
termination of the employee and sexual harassment of the employee's wife. The
suit, Laudermilk et al. vs. Roberds, Inc. et al., was filed in the Court of
Common Pleas, Montgomery County, Ohio, case number 95-2766, and sought $100,000
in compensatory damages and $1.0 million in punitive damages. Without admitting
liability, the Company settled the suit in June 1996 by paying the plaintiff an
amount which the parties have agreed not to disclose, but which management of
the Company believes is not material to the Company.

In April 1996, a former employee of the Company filed suit in the Court of
Commons Pleas for Montgomery County, Ohio, Rouch, et. al. vs. Roberds Furniture
& Appliances, et. al., case number 96-1512. The complaint alleged that the
Company permitted certain unsafe conditions to exist in one of its Ohio
warehouses, which allegedly led to certain personal injuries sustained by the
plaintiff. The suit sought $825,000 in compensatory damages and $800,000 in
punitive damages from the Company. The Company referred the matter to its
insurance carriers. In January 1997, the plaintiffs voluntarily dismissed the
complaint, without explanation. Although the plaintiffs have the right to
re-file the complaint, they have not done so.

In the ordinary course of its business, the Company is from time to time a party
in certain legal proceedings. In the opinion of management, the Company is not
party to any litigation, other than those described in this Item 3, that would
have a material adverse effect on its operations or financial condition if the
proceeding was determined adversely to the Company.

ENVIRONMENTAL

In 1985, a partnership consisting of Kenneth W. Fletcher and Donald C. Wright
(two of the Company's Initial Shareholders), acquired a 21-acre parcel of land
in Springfield, Ohio (the "Parcel") from an unaffiliated party. The

                                       14

<PAGE>   15



Parcel included a building and parking area previously operated by an
unaffiliated party as a retail store. In 1985, the Company remodeled the
building and leased the Parcel from the partnership as the location of its
Springfield, Ohio store.

In 1990, the partnership was informed by the United States Environmental
Protection Agency ("EPA") that the Parcel had been operated by a previous owner
as an industrial landfill and that the EPA intended to investigate the Parcel.
In 1990, a contractor for the EPA examined the Parcel and took surface and
shallow soil samples but, contrary to the work plan that had been prepared by
EPA, did not take groundwater samples. Testing of the soil samples revealed
elevated concentrations of certain semi-volatile organic compounds. The Ohio EPA
subsequently criticized the contractor's soil testing methods and its failure to
take groundwater samples.

In October 1993, the Company and the partnership engaged an environmental
consultant to conduct certain tests of the Parcel to attempt to determine the
location of the landfill, its proximity to the Company's store, and certain
other information. The consultant issued its report in April 1994. Among other
things, it concluded that the building in which the store operates is not
located on, or immediately adjacent to, the site of the former landfill.

In November 1994, Messrs. Fletcher and Wright withdrew the Springfield property
from the Fletcher-Wright partnership and contributed it to Springfield
Properties, Inc., an Ohio corporation owned by Messrs. Fletcher and Wright. The
lease between Roberds, Inc. and Fletcher-Wright was assigned to, and assumed by,
Springfield Properties, Inc.

In February 1995, Springfield Properties, Inc. was contacted by a consultant to
the EPA and informed that the consultant had been engaged by the EPA to
"re-score" the Parcel for purposes of determining its priority for potential
clean-up. In February 1996, the Company obtained a copy of the consultant's
report. That report summarized the history of the Parcel and the work of the
various environmental consultants to date. It concluded that the Parcel poses
certain risks of contamination, but did not recommend any further action with
respect to the Parcel. The Company has not yet obtained the new "score" for the
Parcel.

It is not possible to predict whether the EPA will take further action, whether
remediation will be required, or the costs of remediation if required. The EPA
takes the position that a tenant can be liable for remediation costs, even if
the tenant did not contribute to the contamination of a site. However, the
Company is not aware of any circumstances in which a court has found a tenant
liable for remediation costs when the tenant did not contribute to the
contamination or fail to report contamination known to the tenant. At this
point, neither the Company, the partnership, nor Springfield Properties, Inc.
plans to take any further action with respect to the environmental issues
associated with the Parcel, unless the EPA initiates additional activity.

Certain other properties leased by the Company may contain, or have contained,
asbestos materials or petroleum underground storage tanks, but the Company does
not believe that any such circumstances are likely to have a material adverse
effect on the Company, and there are no active EPA investigations of these
facilities. The Company has removed asbestos and underground storage tanks in
connection with its acquisition and renovation of certain of its properties. To
the best of the Company's knowledge, such work has been done in compliance with
applicable environmental regulations and protocols.


ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS


No matters were submitted to a vote of security holders during the fourth
quarter of the fiscal year ended December 31, 1996.



                                       15

<PAGE>   16



                        EXECUTIVE OFFICERS OF REGISTRANT



The following information concerning executive officers of the Company is
provided pursuant to Instruction 3(b) of item 401 of Regulation S-K. The
following table sets forth certain information regarding the Company's executive
officers at January 31, 1997. The Company is not aware of any family
relationship between any executive officers or directors of the Company.
Executive officers serve at the discretion of the Board of Directors.

<TABLE>
<CAPTION>

NAME                                        AGE      POSITION
<S>                                         <C>                                                                   
Kenneth W. Fletcher                         64       Chairman of the Board, Chief Executive Officer, and President

Donald C. Wright                            60       Vice Chairman of the Board and Assistant Secretary

Brent D. Scharff                            53       President-Dayton Market

Robert M. (Mickey) James                    39       President-Atlanta Market

Michael E. Ray                              36       President-Tampa Market

James H. Scott                              37       President-Cincinnati Market

Arthur C. Lanciers                          42       Vice President-Furniture

Michael Van Autreve                         49       Vice President-Bedding

Charles H. Palko                            45       Vice President-Appliances

William A. Webber                           38       Vice President-Electronics

Dean P. Marcarelli                          35       Vice President-Advertising

Robert M. Wilson                            44       Executive Vice President, Chief Financial Officer, General
                                                     Counsel, Assistant Treasurer, Secretary, and Director

Michael A. Bruns                            34       Vice President, Controller, and Chief Accounting Officer

Wayne B. Hawkins                            43       Treasurer

</TABLE>

KENNETH W. FLETCHER is co-founder of the Company. In June 1993, he was elected
to the offices of Chairman of the Board and Chief Executive Officer. He has
served as President and a director of the Company since its founding in 1971.

DONALD C. WRIGHT is co-founder of the Company. He was elected Vice Chairman of
the Board and Assistant Secretary in June 1993, prior to which time he had
served as Treasurer and Secretary since 1971. He has served as a director of the
Company since 1971. He owns and operates Don Wright Realty, Dayton, Ohio, a firm
providing real estate brokerage services to the public.


                                       16

<PAGE>   17



BRENT D. SCHARFF was elected President-Dayton Market in April 1996. Prior
thereto, he managed the Company's Beavercreek, Ohio store from April 1995
through April 1996. Prior thereto, he managed the Company's Richmond, Indiana
store from 1989 through April 1995. Prior thereto, he served in sales and
management positions since joining the Company in 1987.

ROBERT M. (MICKEY) JAMES has served as President-Atlanta Market since July 1995,
except for a period of approximately two weeks in November 1996, when he served
as Vice President-Operations, Atlanta Market. From April 1995 through March
1996, Mr. James was Vice President-Appliances. From September 1992 through April
1995, he was the appliance buyer for the Atlanta Market. From April through
September 1992, he was the electronics buyer for the Atlanta Market. From 1990
through April 1992, he managed the Company's Forest Park, Georgia store. Mr.
James joined the Company in 1988.

MICHAEL E. RAY joined the Company and was elected President-Tampa Market in
August 1996. Prior thereto, from 1991 through August 1996, he was Vice
President, Director of Stores, Kane's Furniture, Pinellas Park, Florida.

JAMES H. SCOTT was elected President-Cincinnati Market in February 1996. From
February 1995 through February 1996, he was General Sales Manager in the
Company's Atlanta Market. From February 1992 through February 1995, he was the
furniture buyer in the Company's Atlanta market. From 1991 through February
1992, he was the furniture buyer in the Company's Tampa market. Prior thereto,
Mr. Scott held a number of warehouse, sales, and management positions since
joining the Company in 1980.

ARTHUR C. LANCIERS joined Roberds in March 1993 as Vice President-Furniture.
From 1990 through March 1993, he was Corporate Buyer, Rhodes, Inc., Atlanta,
Georgia.

MICHAEL VAN AUTREVE was named Vice President-Bedding in 1988. From 1977 to 1988,
he was a furniture and bedding buyer for the Company.

CHARLES H. PALKO joined the Company and was elected Vice President-Appliances in
March 1996. From December 1993 through March 1996, Mr. Palko was Vice
President-Merchandising, Fretter, Inc., Brighton, Michigan. Fretter, Inc. filed
for protection under the United States Bankruptcy laws in October 1996. From
1989 through December 1993, Mr. Palko was General Manager of Luskins, Inc.,
Columbia, Maryland.

WILLIAM A. WEBBER was named Vice President-Electronics in August 1995. From July
1994 to August 1995, he was General Sales Manager for the Tampa Market. From
1984 through July 1994, he served as electronics buyer for the Tampa Market. He
joined the Company in 1979, and served in various warehouse and sales positions
through 1984.

DEAN P. MARCARELLI joined Roberds in July 1993 as Director of Advertising, and
in May 1994 was elected Vice President-Advertising. From September 1992 until
July 1993, he was Marketing Manager, Rhodes Furniture, Atlanta, Georgia. From
1990 through September 1992 he was Director of Advertising, Kane's Furniture,
Tampa, Florida.

ROBERT M. WILSON was elected General Counsel, Secretary, and a director in June
1993. He has also served as Executive Vice President and Chief Financial Officer
of Roberds and its affiliated companies since 1988. He served as Treasurer from
June 1993 through May 1995, when he was elected Assistant Treasurer.

MICHAEL A. BRUNS joined Roberds in April 1994 as Manager of Financial Reporting
and Analysis, and was elected Vice President, Controller, and Chief Accounting
Officer in August 1994. From 1984 through April 1994, he was associated with
Deloitte & Touche (now Deloitte & Touche LLP) in various capacities, most
recently as Audit Senior Manager in the Dayton, Ohio office.

WAYNE B. HAWKINS was elected Treasurer in May 1995. Prior thereto, he was
Assistant Treasurer since February 1994. Prior thereto, he was Vice President,
PNC Bank, Ohio, NA, since January 1992. Prior thereto, he was associated with
Maryland National Bank.

                                       17

<PAGE>   18


The Company's future performance will depend to a significant extent upon the
efforts and abilities of certain members of senior management, particularly
those of Mr. Fletcher, who has served as President of the Company since its
founding in 1971. The loss of the services of any member of senior management,
and in particular those of Mr. Fletcher, could have a material adverse effect on
the Company.

At January 31, 1997, the Initial Shareholders, and their spouses, owned
approximately 53 percent of the Company's outstanding shares. They are therefore
in a position to control the election of the entire Board of Directors of the
Company and to control the outcome of all actions requiring shareholder
approval, thereby insuring their ability to control the future direction and
management of the Company.

The Company's Amended Articles of Incorporation and Regulations contain certain
provisions that may discourage acquisition bids for the Company and could limit
the price that certain investors might be willing to pay for the Company's
common shares. Among others, these provisions include the classification of the
Board of Directors, certain restrictions on shareholders' ability to remove
directors, certain "fair price" provisions adopted by the Company under Ohio
law, and the Company's adoption of certain restrictions on shareholders' ability
to bring matters before meetings of shareholders. In addition, the Company has
the ability to issue preferred shares, which could serve to discourage
acquisition bids for the Company's common shares.

The common shares held by the Initial Shareholders are not registered for sale
under the Securities Act of 1933; however, such shares can be sold under SEC
Rule 144 and other provisions of the securities laws. In addition, shares that
may be acquired by directors and executive officers of the Company through
certain benefit plans are registered for resale by such directors and executive
officers. Sales of substantial numbers of shares by the Company, the Initial
Shareholders, or other officers or directors, or the perception that such sales
could occur, could adversely affect the market price of the Company's stock.



                                       18

<PAGE>   19



                                   PART II


ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS


Trading in the common shares of Roberds, Inc. commenced in November 1993,
following an initial public offering at $13.00 per share. The shares trade on
the Nasdaq National Market tier of The Nasdaq Stock Market, under the symbol
"RBDS." The following table sets forth the high, low, and closing prices for
trading in the Company's common shares, as reported on The Nasdaq Stock Market
for each quarter in fiscal 1996 and 1995.
<TABLE>
<CAPTION>

                                  First           Second           Third             Fourth
                                 Quarter          Quarter         Quarter           Quarter
<S>                              <C>              <C>               <C>              <C>    
1996
High                             $11.375          $11.25            $11.75           $10.375

Low                                8.00             9.75              7.75             8.00

Close                             10.75            10.625             8.50             8.25


1995
High                             $11.00           $10.50            $13.00           $13.00

Low                                7.25             8.75              9.00             8.25

Close                              9.75             9.50             12.50             9.00

</TABLE>

Such quotations include inter-dealer prices, without retail mark-up, mark-down,
or commission, and may not necessarily reflect actual transactions. At the close
of trading on January 31, 1997, the Company had approximately 196 shareholders
of record. Based upon the quantity of shareholder materials provided to
brokerage houses and individual shareholders requesting such materials, the
Company estimates that the total number of record and beneficial shareholders at
January 31, 1997 was approximately 2,200.

Prior to the initial public offering of its common shares, the Company paid
dividends from time to time. As part of the initial public offering in 1993, the
Company paid an $11.3 million dividend to the Initial Shareholders. In the
fourth quarter of 1994, the Company reimbursed the Initial Shareholders for
$193,000, pursuant to the Tax Indemnification Agreement entered into by the
Company and the Initial Shareholders at the time of the initial public offering.
Such reimbursement has been reflected in the Company's financial statements as a
distribution of retained earnings. Other than the distributions and
reimbursement described above, the Company has declared no dividends since the
initial public offering of its common shares and none are being contemplated by
the Board of Directors.

The Company's revolving bank line of credit contains certain covenants and
restrictions which limit its ability to pay dividends. See Notes to the
Consolidated Financial Statements, which are included elsewhere in this Report,
for additional information concerning restrictions on the Company's ability to
pay dividends. Under the most restrictive debt covenants, no retained earnings
were available for dividends at December 31, 1996.


                                       19

<PAGE>   20




ITEM 6. SELECTED FINANCIAL DATA 
(All amounts in thousands, except per share data, percentages, and inventory
turnover)

The earnings statement data and the balance sheet data presented below have been
derived from the Company's consolidated financial statements and should be read
in conjunction with Management's Discussion and Analysis of Financial Condition
and Results of Operations and the Consolidated Financial Statements and Notes
thereto, included elsewhere herein. Certain reclassifications have been made in
the prior years' selected financial data to conform to the classifications used
in 1996. These reclassifications had no effect on the net earnings or
shareholders' equity as previously reported.
<TABLE>
<CAPTION>

                                                          Year Ended December 31,
                                 1996              1995              1994             1993               1992

EARNINGS STATEMENT DATA:

<S>                             <C>              <C>               <C>              <C>               <C>     
Net revenues                    $342,102         $301,324          $259,159         $217,673          $191,716
Cost of sales                    238,645          209,320           180,947          152,104           132,834
Gross profit                     103,457           92,004            78,212           65,569            58,882
Selling, delivery, and
 administrative expenses         102,043           81,187            71,089           61,549            53,228
Interest expense (net)             5,681            3,500             1,636            1,261             1,062
Litigation                         3,314
Finance participation income      (2,451)          (2,489)           (2,908)          (3,330)           (2,813)
Other income, net                 (3,690)          (3,440)           (2,123)            (328)              (30)
Earnings (loss) before
  income taxes (benefit) (1)      (1,440)          13,246            10,518            6,417             7,435
Income taxes (benefit) (1)          (530)           5,225             3,925           (1,478)
Net earnings  (loss) (1)       $    (910)          $8,021            $6,593           $7,895            $7,435

Earnings (loss) per share         $(0.15)           $1.36             $1.12
Weighted average
  shares outstanding               5,934            5,898             5,871


PRO FORMA DATA:
Pro forma net earnings (1)                                                            $3,850            $4,462
Pro forma net earnings per share                                                       $0.91             $1.10
Pro forma weighted average shares outstanding                                          4,245             4,051

</TABLE>


                                       20

<PAGE>   21
<TABLE>
<CAPTION>


BALANCE SHEET DATA (AT PERIOD END):
                                                                               Year Ended December 31,                        
                                                        1996             1995              1994            1993            1992

<S>                                                 <C>               <C>               <C>              <C>            <C>       
Working capital (deficiency) ...............        $  34,952         $  23,060         $  15,764        $  22,338      $  (1,908)
Merchandise inventories ....................        $  62,998         $  41,377         $  37,247        $  31,061      $  26,932
Property and equipment, net ................        $ 104,953         $  81,310         $  55,791        $  29,188      $  16,480
Total assets ...............................        $ 192,208         $ 142,049         $ 105,556        $  99,607      $  55,406
Long-term debt,
  including capital leases,
  less current maturities ..................        $  90,365         $  54,448         $  29,168        $  18,454      $   8,809
Deferred warranty revenue ..................        $  11,627         $   9,546         $   6,925        $   4,199      $   2,937
Total shareholders'
  equity ...................................        $  46,570         $  47,199         $  38,965        $  32,470      $   4,270


SELECTED OPERATING DATA:

Stores open at end
 of period .................................               25                23                19               16             15
Total selling square
  footage at end
  of period (2) ............................            1,784             1,394             1,133              931            853
Percentage increase
  (decrease) in comparable
  store net sales (3) ......................             (8.1)             (0.9)             10.0             12.3           10.5
Inventory turnover (4) .....................              4.6               5.3               5.3              5.2            5.0

</TABLE>


(1)  Prior to the initial public offering of common shares, the entities that
     made up the Company had either elected S Corporation status or were a
     partnership. Accordingly, federal income taxes were the responsibility of
     the shareholders and partners. The pro forma information has been computed
     as if the Company had been subject to corporate income taxes for all
     periods presented, based on the tax laws in effect during the period.
     Concurrently with the initial public offering, the Company became taxable
     as a corporation under the Internal Revenue Code. Accordingly, the Company
     adopted Financial Accounting Standards No. 109 (SFAS 109), Accounting for
     Income Taxes.
(2)  Total selling square footage includes selling and office space within each
     store, but excludes warehouse space.
(3)  Comparable store sales are computed monthly for each period presented by
     comparing the sales results in a month (for those stores that were open for
     the entire month in the current year and the entire comparable month in the
     prior year) with the sales results for the comparable month in the prior
     year.
(4)  Inventory turnover is calculated by dividing cost of sales for the period
     by the average of the beginning and ending inventory balances for the
     period.


                                       21

<PAGE>   22



ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (All dollar amounts in thousands, except per share data)


RESULTS OF OPERATIONS

The following table sets forth the results of operations as a percentage of
sales for the last three years:
<TABLE>
<CAPTION>

                                                     YEAR ENDED DECEMBER 31,
                                                 1996         1995         1994
<S>                                              <C>          <C>          <C>   
Net sales and service revenues ..........        100.0%       100.0%       100.0%
Cost of sales ...........................         69.8         69.5         69.8
Gross profit ............................         30.2         30.5         30.2
Selling, delivery and
  administrative expenses ...............         29.8         26.9         27.4
Interest expense, net ...................          1.6          1.2          0.6
Litigation ..............................          1.0
Finance participation income ............         (0.7)        (0.8)        (1.1)
Other income, net .......................         (1.1)        (1.2)        (0.8)
(Loss) earnings before income
  taxes (benefit) .......................         (0.4)         4.4          4.1
Income taxes (benefit) ..................         (0.1)         1.7          1.5
Net (loss) earnings .....................         (0.3)%        2.7%         2.6%

</TABLE>

Sales by major product category as a percentage of total sales for each of the
last three years follows:
<TABLE>
<CAPTION>

                                                        YEAR ENDED DECEMBER 31,
                                                        1996      1995       1994

<S>                                                      <C>       <C>       <C>
Furniture ........................................       39%       37%       36%

Bedding ..........................................       12        12        11

Major appliances .................................       25        26        28

Consumer electronics .............................       21        21        22

Extended warranty contracts and other ............        3         4         3

                                                        100%      100%      100%
</TABLE>


1996 COMPARED TO 1995. Sales in 1996 increased to $342,102 from $301,324 in
1995, a 13.5% increase. Sales in 1996 were positively affected by the opening of
the new Cincinnati megastore in July 1996 and, to a lesser extent, the opening
of the Buckhead, Georgia store in November 1996. Additional volume from four new
showrooms opened during 1995 also contributed to the increase in sales for 1996.
Comparable store sales in 1996 decreased by 8.1%. A highly promotional and
competitive retail environment for big ticket goods that began in the fourth
quarter of 1995 and continued throughout 1996 contributed to the decrease in
comparable store sales.

                                       22

<PAGE>   23




For 1996, the percentage decreases in sales in the Company's three established
market areas (excluding Cincinnati) were as follows:
<TABLE>
<CAPTION>

                                            Total            Comparable
                                            Stores              Stores
<S>                                           <C>                 <C> 
Dayton .................................      (4)%                (8)%

Atlanta ................................      (1)                (11)

Tampa ..................................      (1)                 (4)
</TABLE>


Sales in the Dayton and Atlanta market areas were adversely affected by the
severe winter weather experienced during the early part of 1996. The
Beavercreek, Ohio store, which opened in April 1995, and the Fayetteville,
Georgia store, which opened in September 1995, appear to have taken some sales
from the other Dayton and Atlanta area stores, and adversely affected the
comparable store sales during 1996. In addition to the highly competitive retail
environment for big ticket goods mentioned above, comparable store sales in the
Atlanta market appear to have been disrupted by the Olympics during 1996.
Comparable store sales in Atlanta and Tampa were affected by the Company's
withdrawal from the sale of home-office products in those markets in the second
half of 1996. Comparable store sales in the Tampa market area were better than
the Company's comparable store sales in its other established markets; however,
the average store sales in Tampa remained below the Company's average and the
Tampa market was not profitable during 1996.

Gross profit for 1996 was $103,457, or 30.2% of sales, compared to $92,004, or
30.5% of sales, for 1995. The gross margin percentage for 1996 held relatively
steady despite a highly promotional and competitive retail environment. Gross
margin was affected favorably by a larger portion of total sales from the
furniture and bedding categories, primarily as a result of a higher percentage
of such sales in the new Cincinnati megastore. There was downward pressure on
gross profit margins from the Company's emphasis on a heavily price-promotional
merchandising strategy, in an attempt to attract additional store traffic during
the first half of 1996, and the Company's response to competitive conditions,
particularly in the consumer electronics and appliance categories.

Gross margin percentages for 1996 by category were approximately 38 percent for
furniture, 44 percent for bedding, 22 percent for major appliances, and 15
percent for consumer electronics. Gross margins for 1996, as compared to 1995,
increased slightly for bedding, remained relatively constant for appliances, and
decreased for furniture and electronics. The decrease in the furniture gross
margin percentage reflects more aggressive product prices in this category,
particularly in the Cincinnati market, while the decrease in the electronics
gross margin percentage reflects the highly competitive and promotional market
conditions experienced in this category.

Selling, delivery, and administrative expenses increased to $102,043, or 29.8%
of sales, in 1996 compared to $81,187, or 26.9% of sales, in 1995. The increase
in selling, delivery, and administrative expenses as a percentage of sales in
1996 was primarily attributable to: (i) an increase in finance charges for
extended financing programs offered to customers; (ii) increased expenses
associated with advertising and promotion; (iii) pre-opening costs associated
with the entry into the Cincinnati market; (iv) additional wages and operating
expenses incurred in the warehouse and delivery functions to support the
start-up of the Cincinnati market; (v) costs associated with the new warehouse
in Fairborn, Ohio, that were absorbed by the Dayton market until additional
volume was generated by the entry into the Cincinnati market during the second
half of 1996; and (vi) expenses related to the consolidation of warehouse
operations in the Dayton market during the first quarter of 1996.

Interest expense, net of interest income, increased to $5,681 for 1996, as
compared to $3,500 in 1995. Interest expense increased in 1996 primarily as the
result of additional indebtedness incurred to finance new stores, including the

                                       23

<PAGE>   24



Cincinnati megastore, and the new regional warehouse located in Fairborn, Ohio,
and the increase in merchandise inventory levels, primarily related to the
Cincinnati market entry. The increase in net expense was partially offset by the
capitalization of $685 of interest during 1996, compared to $994 in 1995.

Litigation for 1996 includes the Company's portion of the payment to settle the
class action shareholders' suit of $343; related legal expenses of $371; and a
$2,600 accrual for a dispute with the Ohio Bureau of Workers' Compensation.
Details regarding litigation are discussed more fully in the Notes to the
Consolidated Financial Statements, which are included elsewhere in this Report.

Finance participation income, which consists of income from the Company's
private-label credit card program, decreased to $2,451, or 0.7% of sales, in
1996, compared to $2,489, or 0.8% of sales, in 1995. The reduction in
participation resulted from the initial influx of non-interest-bearing accounts
into the private-label credit card program generated from the Cincinnati market
entry, coupled with continued increases in the use of extended-payment financing
programs offered to customers, which do not yield income during the extended
period. The balances on the accounts related to the Cincinnati entry result in
costs to the Company but do not yield participation to the Company during an
initial interest-free period, resulting in a decrease in the Company's
participation during the second half of 1996.

Other income, net, which consists primarily of cash discounts and rental income
from tenants, was $3,690, or 1.1% of sales, in 1996, compared to $3,440, or 1.2%
of sales, for 1995. Other income, net in 1996 included losses on the disposal of
fixed assets of approximately $97. Other income, net in 1995 included gains from
the sales of assets of $142, primarily related to the sale of excess land
surrounding the Beavercreek, Ohio and Tampa, Florida locations.

(Loss) earnings before income taxes decreased to a loss of $(1,440) in 1996,
from earnings of $13,246 in 1995. Income tax benefit for 1996 was $530, or
approximately 37% of the loss before taxes, as compared to an income tax expense
of $5,225, or 39% of earnings before taxes, in 1995. The lower effective tax
rate in 1996 reflects minimum taxes imposed by certain jurisdictions and the
effect of items which are not deductible for income tax purposes.


1995 COMPARED TO 1994. Sales in 1995 increased to $301,324 from $259,159 in
1994, a 16.3% increase. Sales in 1995 included additional volume from three new
showrooms opened during the second half of 1994, that were open for a full year
in 1995, and four new showrooms opened in 1995. Comparable store sales in 1995
decreased by 0.9%. Contributing to the decrease in comparable store sales was a
highly competitive retail environment, combined with a generally flat United
States economy, particularly in the fourth quarter of 1995. Additionally,
comparable store sales were adversely affected by the April 1995 opening of the
Beavercreek, Ohio store, which is part of the Dayton market. That store has
performed well, but took some sales from the other Dayton-area stores.

Sales in the Company's three market areas (Dayton, Atlanta, and Tampa) increased
6%, 24%, and 23%, respectively, during 1995 as compared to 1994. Comparable
store sales in Dayton decreased by 6%, while Atlanta and Tampa increased 1%, and
5%, respectively, during 1995 as compared to 1994. Sales in the Tampa market
grew faster than overall Company sales; however, the average store sales in
Tampa remained below the Company's average and the Tampa market was not
profitable in 1995.

Gross profit for 1995 was $92,004, or 30.5% of sales, compared to $78,212, or
30.2% of sales, for 1994. The increase from 1995 to 1994 in gross margin as a
percentage of sales occurred despite highly competitive market conditions. The
increase in gross profit margin percentage resulted from increased furniture and
bedding sales in relation to increases in sales of appliances and electronics,
which generate lower margins. Gross margins for 1995 by product category were
approximately 39% for furniture, 42% for bedding, 22% for major appliances, and
16% for consumer electronics. The gross margins by category remained relatively
constant from 1995 to 1994.

Selling, delivery, and administrative expenses increased to $81,187, or 26.9% of
sales, in 1995 compared to $71,089, or 27.4% of sales, in 1994. The decrease as
a percentage of sales is primarily attributable to the leveraging of fixed
expenses against increased sales and a reduction in the provisions for payments
under the management incentive and

                                       24

<PAGE>   25



profit-sharing plans. These decreases as an overall percentage of sales were
partially offset by an increase in depreciation related to new and remodeled
showrooms placed in service in 1994 and 1995, and an increase in finance charges
for extended financing programs offered to customers.

Interest expense, net of interest income, increased to $3,500 for 1995, as
compared to $1,636 in 1994. Interest expense increased in 1995 primarily as the
result of additional indebtedness incurred to finance new stores. The increase
in net expense was partially offset by the capitalization of $994 of interest
during 1995, compared to $524 in 1994.

Finance participation income, which consists of income from the Company's
private-label credit card program, decreased to $2,489, or 0.8% of sales, in
1995 compared to $2,908, or 1.1% of sales, in 1994. The reduction in
participation resulted from an increase in the cost of funds for the program,
which has decreased the net return to the Company, coupled with continued
increases in the use of extended financing programs offered to customers which
do not yield income during the extended period.

Other income, net, which consists primarily of cash discounts and rental income
from tenants, was $3,440 or 1.2% of sales in 1995, compared to $2,123, or 0.8%
of sales, for 1994. Other income, net in 1995 includes gains from the sales of
assets of $142, primarily related to the sale of excess land surrounding the
Beavercreek, Ohio and Tampa, Florida locations. Other income, net in 1994
included losses on the disposal of fixed assets of approximately $478, primarily
related to the remodeling of the Company's flagship stores in Dayton and Atlanta
and the relocation of the Company's original store in Tampa. The increase in
other income as a percentage of sales in 1995 as compared to 1994 also resulted
from the Company entering into agreements during the first quarter of 1994 with
substantially all of its vendors to provide direct payment terms for purchases
previously financed by finance companies. As a result of these agreements, the
Company generally receives discounts for early payment, which have been included
in other income. These programs were in effect for all of 1995 but for only a
portion of 1994.

Earnings before income taxes increased to $13,246 in 1995 from $10,518 in 1994.
Income tax expense for 1995 was $5,225 or approximately 39% of earnings before
taxes, as compared to $3,925 or 37% in 1994. During the fourth quarter of 1994,
the Company settled an examination of its 1991 and 1992 federal income tax
returns. This resulted in an additional tax benefit to the Company of $205 which
was recorded as a reduction of income tax expense in 1994. Excluding the
additional tax benefit, the effective tax rate for 1994 was approximately 39%.


LIQUIDITY AND CAPITAL RESOURCES

Cash increased to $2,794 at December 31, 1996 as compared to $2,410 at December
31, 1995. The Company utilized $4,518 of cash for operating activities during
1996. During 1996, inventories increased $21,621 primarily related to the entry
into the Cincinnati market area. Cash of $2,433 was generated from increased
customer deposits, primarily related to products that have been sold but were
not yet delivered. The Company borrowed $39,700 during 1996, including $26,700
under its revolving line of credit and $13,000 through long-term mortgage
financing. Borrowings under the line of credit were utilized to finance a
portion of the Company's capital expenditures and the increase in merchandise
inventories.

During the three year period ended December 31, 1996, the Company's capital
expenditures totaled $91,698, of which $32,179 was expended during 1996. The
1996 expenditures primarily related to: (i) the renovation of a former warehouse
facility in Cincinnati, Ohio into a 314,000 square foot megastore, (ii) the
purchase and renovation of an existing retail facility in the Buckhead area of
Atlanta, Georgia which opened in November 1996, (iii) the completion of
construction of a new warehouse facility in Fairborn, Ohio which is designed to
support the Company's planned growth in the Ohio area, (iv) the renovation of
former warehouse space at the Vandalia, Ohio store into a clearance center which
opened in the third quarter of 1996; and (v) the expansion of the West
Carrollton, Ohio store into space formerly used for warehousing. The West
Carrollton expansion, which is expected to be completed in the first quarter of
1997, will broaden the furniture offerings in the Dayton market and permit the
display of some of the higher-end merchandise that is already in stock to
support the Cincinnati market. In connection with the West Carrollton expansion

                                       25

<PAGE>   26



plan, the Company expects to incur approximately $1,400 in capital expenditures
during the first quarter of 1997. Capital expenditures for 1997 are expected to
be significantly less than the Company's expenditures in each of the last three
years.

A significant portion of the Company's capital expenditures during 1996 have
been financed under the Company's revolving bank line of credit agreement which
expires in January 2000. The amount available under the line is limited to the
lesser of: (i) $45,000, or (ii) an amount based upon a percentage of eligible
accounts receivable, inventory and previously incurred leasehold improvements.
The agreement also provides that an additional amount is available for any
expenditures for leasehold improvements and store expansion for which the
Company has commitments for permanent financing. At December 31, 1996, $42,939
was available under the line, of which $37,000 was outstanding. The line
includes certain restrictive covenants including, among others, limitations on
capital expenditures and the payment of dividends, maintenance of minimum
current, fixed-charge-coverage, funded-debt-to-earnings, and debt-to-
tangible-net-worth ratios. During 1996, the Company's revolving bank line of
credit was amended to increase the line from $40,000 to $45,000, and to relax
certain covenants under the agreement to permit the Company to remain in
compliance with those covenants.

The Company expects to fund its working capital requirements and the balance of
the West Carrollton expansion through a combination of cash flow from
operations, normal trade credit, and utilization of its revolving line of
credit. The Company is pursuing commitments for long-term mortgage financing for
the Buckhead facility of approximately $8 million. Approval is required from the
Company's primary lender prior to the funding of any long-term financing;
however, based on the Company's past working relationship with its primary
lender, the Company expects that such approvals will be obtained. Certain of the
covenants contained in the Company's revolving credit agreement become
increasingly restrictive through 1997 and into 1998. In order to remain in
compliance with those covenants, the Company's profitability and cash flow will
have to improve over the actual results experienced in 1996.

The Company has announced plans to enter the Columbus, Ohio market with a
facility similar in size and design to the Cincinnati store. The Columbus
market, which would represent the Company's fifth marketing area, would enable
the further utilization of the Fairborn, Ohio warehouse facility. The Company
has identified a number of suitable sites in Columbus; however, it has not made
any formal commitments for a site. Management does not believe that the Company
should take on the additional debt obligations necessary to enter the Columbus
market without additional equity. As a result, the Company does not plan to move
forward with the Columbus entry until it has identified a source for that
additional equity.


OUTLOOK

The Company intends to focus the majority of its resources over the next two
quarters on the expansion of the West Carrollton showroom. Additionally, it
plans to continue to refine its product mix and the staffing and systems in the
Cincinnati megastore, in order to serve the customer more effectively. The
Company also intends to refine its overall operations in preparation for future
expansion.

The Company's financial performance is influenced by consumer confidence,
interest rates, the general level of housing activity, and the general level of
economic activity in the United States. Since the fourth quarter of 1995
consumers have been buying big ticket goods very cautiously, and then only when
there have been very attractive prices and financing packages offered to them.
This has led to a very sharp competitive situation, as the major retailers have
struggled to build volume in a difficult retailing environment. This situation
will continue to put pressure on comparable store sales and product prices and
margins, particularly in the electronics and appliance categories.


INFLATION

The Company does not believe that inflation had any significant impact on its
operations in 1996, 1995, or 1994.

                                       26

<PAGE>   27



SEASONALITY

The Company typically experiences an increase in its overall sales in the fourth
quarter. This increase is driven by an increase in the sales of consumer
electronics and furniture products associated with the holiday season. At the
same time, major appliance sales typically decline in the fourth quarter. As a
result, operating results for the full year are highly dependent upon the
success of the Company's operations in the fourth quarter.

The following tables show the Company's quarterly sales, gross profit, net
(loss) earnings, and (loss) earnings per common share.

<TABLE>
<CAPTION>

                                                 1996
                               First       Second       Third         Fourth
                              Quarter      Quarter      Quarter       Quarter

<S>                           <C>         <C>          <C>          <C>  
Net sales and
  service revenues .......   $  70,664    $  73,205    $  94,471   $ 103,762

Gross profit .............      20,914       22,082       29,099      31,362

Net (loss) earnings ......        (207)        (719)         885      (1,399)(1)

(Loss) earnings
 per share ...............        (.03)        (.12)         .15        (.15)(1)


(1)      Net loss for the fourth quarter of 1996 includes a total of $3,154
         ($.32 per share) of litigation expenses, including the Company's share
         of the payment to settle the class action shareholders' suit of $343;
         the related legal expenses of $211; and a $2,600 accrual for a dispute
         with the Ohio Bureau of Workers' Compensation. Details regarding the
         litigation expense are discussed more fully in the Notes to the
         Consolidated Financial Statements, which are included elsewhere in this
         Report.


<CAPTION>

                                              1995
                              First      Second        Third        Fourth
                              Quarter    Quarter      Quarter      Quarter
<S>                         <C>          <C>           <C>          <C>    
Net sales and
  service revenues          $68,133      $71,405       $76,238      $85,548

Gross profit                 21,233       21,858        23,458       25,455

Net earnings                  1,625        1,650         2,080        2,666

Earnings per share              .28          .28           .35          .45

</TABLE>

FORWARD-LOOKING STATEMENTS

In the interest of providing the Company's shareholders and potential investors
with information concerning management's assessment of the outlook for the
Company, this report contains certain "forward-looking" statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities

                                       27

<PAGE>   28



Exchange Act of 1934, as amended. Readers should bear in mind that statements
relating to the Company's business prospects, as distinct from historical facts,
are forward-looking statements which, by their very nature, involve numerous
risks and uncertainties. Factors that could cause the Company's actual results
to differ materially from management's expectations include, but are not limited
to:

A. Changes in economic conditions in the United States, including but not
limited to the general level of economic activity, levels of housing activity,
interest rates, the availability of consumer credit, consumer confidence, and
inflation.

B. Changes in the economic conditions in the market areas in which the Company
operates, such as a strike or shutdown of a major employer or industry.

C. Unusual weather patterns, such as unusually hot or cool summers, which can
affect the sale of refrigeration products, or unusually cold winters, which can
affect consumers' desire and ability to shop for the Company's products. Acts of
God, such as floods, hurricanes, or tornados, that interrupt the Company's
ability to sell or deliver merchandise, interrupt consumers' ability to shop, or
destroy a major Company facility, in particular a warehouse or computer
facility.

D. Changes in the competitive environment in the Company's market areas,
including the bankruptcy or liquidation of existing competitors.

E. The entry into the Company's lines of business and market areas by new,
larger, well-financed competitors, which may have the ability to withstand
intense price competition over extended periods of time.

F. The availability and cost of adequate, appropriate newspaper, television, and
pre-printed advertising. A strike or work stoppage affecting the Company's media
outlets.

G. Adverse results in litigation matters.

H. Difficulties in hiring, training, and retaining a capable work force at
reasonable levels of compensation, in both existing market areas and in
expansion locations. Difficulties in hiring and retaining an effective senior
management group, particularly as the Company expands. An attempt to organize a
significant portion of the Company's work force.

I. The availability of appropriate sites for expansion, on favorable terms, and
the long-term receptivity of consumers to new store formats and locations.

J. Access to bank lines of credit and real estate mortgage financing sources at
favorable rates of interest, terms, and conditions.

K. Access to additional equity capital to fund the Company's long-term
expansion.

L. Access to extended-payment financing sources (e.g., "twelve months same as
cash") at a favorable cost to the Company and with favorable rates of approval
by the financing source. Access to private-label financing sources (e.g.,
"Roberds charge card") that provide favorable rates of interest to the customer,
favorable rates of return to the Company, and favorable rates of approval by the
financing source.

M. Rapid changes in products, particularly electronics products, such that the
Company bears the risk of obsolescence or the consumer withdraws from the market
until such time as the product category has stabilized.

N. Shifts in the mix of the Company's sales between its higher-margin products
(bedding and furniture) and its lower-margin products (electronics and
appliances), which may result from changes in consumer priorities, competitive
factors, or other factors.


                                       28

<PAGE>   29



O. The absence of new products in the Company's product categories that would
drive additional consumer interest and purchases.

P. Adverse changes in the cost or availability of the products the Company
sells. Rapid increases in the price of the Company's products, which cannot be
passed on to consumers as the result of competitive pressures.

Q. The loss, or significant reduction in the availability, of certain key
name-brand products. Decisions by vendors to curtail the availability of certain
product presently sold by the Company, or to make products that are presently
sold by the Company available to certain competitors that do not presently have
access to such products. Changes in import duties or restrictions affecting the
Company's ability to import certain products.

R. Changes in income tax rates or structures that may affect the Company's tax
burden or consumers' ability to purchase or finance big-ticket goods or new
housing. Significant increases in real estate tax rates affecting the Company's
properties.

S. Changes in government regulations affecting the Company, its products, its
advertising, or its work force, including changes in the minimum wage. Changes
in government regulations affecting the Company's employee benefit plans.

T. New competition from alternative sales media and channels of distribution,
such as catalog mail order, telemarketing, television shopping services, and
online media.

U. Changes in highway or street configurations such that the Company's stores
become less accessible to consumers. Changes in consumer use or ownership of
"second homes," particularly in the Tampa, Florida market.

V. Changes in the cost or availability of liability, property, and health
insurance.


ACCOUNTING PRONOUNCEMENTS

Effective January 1, 1995, the Company adopted Statement of Position 93-7,
"Reporting on Advertising Costs." Under this statement, production costs,
primarily those associated with the production of television advertising, have
been expensed the first time the related advertising is utilized. Adoption of
this statement did not have a material effect on the financial statements of the
Company.

The Company measures cost for stock options issued to employees using the method
of accounting prescribed by APB Opinion No. 25, "Accounting for Stock Issued to
Employees." In October 1995, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 123 (SFAS 123), "Accounting for
Stock Based Compensation," which was adopted by the Company in 1996. Pursuant to
the new standard, companies are encouraged, but not required, to adopt the fair
value method of accounting for stock options and similar equity instruments. The
Company has elected to continue measuring compensation cost in accordance with
APB Opinion No. 25.



ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA


The Company's Consolidated Financial Statements for the three years ended
December 31, 1996, the Notes thereto, and the Independent Auditors' Report
thereon are as follows:





                                       29

<PAGE>   30



INDEPENDENT AUDITORS' REPORT

Board of Directors
Roberds, Inc.
West Carrollton, Ohio

We have audited the accompanying consolidated balance sheets of Roberds, Inc.
and subsidiary as of December 31, 1996 and 1995 and the related consolidated
statements of operations, shareholders' equity and cash flows for each of the
three years in the period ended December 31, 1996. These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of Roberds, Inc. and subsidiary at
December 31, 1996 and 1995, and the results of their operations and their cash
flows for each of the three years in the period ended December 31, 1996, in
conformity with generally accepted accounting principles.



/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
Dayton, Ohio
February 27, 1997



                                       30

<PAGE>   31

<TABLE>
<CAPTION>


ROBERDS, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)


                                                                YEAR ENDED DECEMBER 31
                                                           1996          1995         1994

<S>                                                     <C>           <C>           <C>      
NET SALES AND SERVICE REVENUES                          $ 342,102     $ 301,324     $ 259,159

COST OF SALES                                             238,645       209,320       180,947
                                                        ---------     ---------     ---------
     Gross profit                                         103,457        92,004        78,212

SELLING, DELIVERY AND ADMINISTRATIVE EXPENSES             102,043        81,187        71,089
INTEREST EXPENSE, NET                                       5,681         3,500         1,636
LITIGATION (NOTE I)                                         3,314
FINANCE PARTICIPATION INCOME (NOTE F)                      (2,451)       (2,489)       (2,908)
OTHER INCOME, NET                                          (3,690)       (3,440)       (2,123)
                                                        ---------     ---------     ---------

(LOSS) EARNINGS BEFORE INCOME TAXES (BENEFIT)              (1,440)       13,246        10,518

INCOME TAXES (BENEFIT) (NOTE G)                              (530)        5,225         3,925
                                                        ---------     ---------     ---------

NET (LOSS) EARNINGS                                     ($    910)    $   8,021     $   6,593
                                                        =========     =========     =========

NET (LOSS) EARNINGS PER COMMON SHARE                    ($   0.15)    $    1.36     $    1.12
                                                        =========     =========     =========


WEIGHTED AVERAGE COMMON SHARES OUTSTANDING                  5,934         5,898         5,871
                                                        =========     =========     =========
</TABLE>




See notes to consolidated financial statements.








                                       31

<PAGE>   32

<TABLE>
<CAPTION>


ROBERDS, INC. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)


                                                               DECEMBER 31
ASSETS (NOTE C)                                             1996         1995
<S>                                                        <C>          <C>     
CURRENT ASSETS:
  Cash and cash equivalents                                $  2,794     $  2,410
  Receivables:
    Customers (less allowance of $80                          2,364        2,591
      in 1996 and $50 in 1995)
    Vendors and other (Note B)                                4,028        2,865
  Merchandise inventories (Note A)                           62,998       41,377
  Prepaid expenses and other                                  1,857        1,632
  Deferred tax assets (Note G)                                2,916        1,200
                                                           --------     --------
          Total current assets                               76,957       52,075


PROPERTY AND EQUIPMENT - AT COST (NOTES A AND D):
  Land                                                       15,534        8,986
  Buildings and improvements                                 63,032       41,765
  Leasehold improvements                                     34,542       22,871
  Furniture, fixtures and office equipment                    5,257        3,343
  Computer equipment                                          5,671        3,965
  Warehouse equipment and vehicles                            3,065        2,674
  Construction in progress                                    1,089       14,319
                                                           --------     --------
                                                            128,190       97,923
  Less accumulated depreciation and amortization             23,237       16,613
                                                           --------     --------
                                                            104,953       81,310


DEFERRED TAX ASSETS (NOTE G)                                  6,350        4,540

CERTIFICATES OF DEPOSIT - RESTRICTED (NOTE A)                 2,293        2,566

OTHER ASSETS                                                  1,655        1,558
                                                           --------     --------
                                                           $192,208     $142,049
                                                           ========     ========
</TABLE>



See notes to consolidated financial statements.


                                       32

<PAGE>   33

<TABLE>
<CAPTION>


ROBERDS, INC. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT PER SHARE DATA)


                                                                  DECEMBER 31
LIABILITIES AND SHAREHOLDERS' EQUITY                           1996       1995
<S>                                                          <C>        <C>     
CURRENT LIABILITIES:
  Accounts payable                                           $ 17,640   $ 13,246
  Accrued payroll and payroll taxes                             3,658      2,568
  Accrued sales taxes                                           2,265      1,932
  Other accrued expenses                                        1,653      1,011
  Customer deposits                                             8,787      6,354
  Accrued income taxes                                            543        112
  Litigation (Note I)                                           2,943
  Accrued self-insured workers' compensation                    1,125      1,045
  Current maturities of long-term debt (Note C)                 3,391      2,747
                                                             --------   --------
          Total current liabilities                            42,005     29,015

LONG-TERM LIABILITIES:
  Construction payables (Note C)                                             860
  Long-term debt including capital leases (Notes C and D)      90,365     54,448
  Deferred rent (Note D)                                        1,641        981
  Deferred warranty revenue (Note A)                           11,627      9,546
                                                             --------   --------
      Total long-term liabilities                             103,633     65,835



SHAREHOLDERS' EQUITY (NOTE E)
  Preferred stock - authorized 5,000 shares,
   none issued or outstanding
  Common stock - authorized 15,000 shares,
   no par value; issued and outstanding, 5,946
   and 5,909 respectively, stated at $.10 per share               595        591
  Additional paid-in capital                                   31,797     31,520
  Retained earnings                                            14,178     15,088
                                                             --------   --------
         Total shareholders' equity                            46,570     47,199
                                                             --------   --------
                                                             $192,208   $142,049
                                                             ========   ========
</TABLE>



See notes to consolidated financial statements.


                                       33

<PAGE>   34

<TABLE>
<CAPTION>


ROBERDS, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
(IN THOUSANDS)


                                                                 ADDITIONAL
                                                  COMMON STOCK    PAID-IN      RETAINED
                                                SHARES    AMOUNT   CAPITAL      EARNINGS

<S>                                              <C>      <C>       <C>       <C>    
BALANCE - December 31, 1993                      5,867    $   587   $31,216   $   667

  Issuance of common shares (Note E)                10          1        94
  Net earnings                                                                  6,593
  Cash distributions to initial
    shareholders pursuant to Tax
    Indemnification Agreement (Note G)                                           (193)
                                               -------    -------   -------   -------
BALANCE - December 31, 1994                      5,877        588    31,310     7,067

  Issuance of common shares (Note E)                32          3       210
  Net earnings                                                                  8,021
                                               -------    -------   -------   -------

BALANCE - December 31, 1995                      5,909        591    31,520    15,088

  Issuance of common shares (Note E)                37          4       277
  Net loss                                                                       (910)
                                               -------    -------   -------   -------

BALANCE - December 31, 1996                      5,946    $   595   $31,797   $14,178
                                               =======    =======   =======   =======
</TABLE>


See notes to consolidated financial statements.



                                      
                                      34

<PAGE>   35
<TABLE>
<CAPTION>



ROBERDS, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
(IN THOUSANDS)


INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                    YEAR ENDED DECEMBER 31
                                                                  1996       1995       1994
<S>                                                            <C>         <C>         <C>     
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net (loss) earnings                                           ($   910)   $  8,021    $  6,593
 Adjustments to reconcile net (loss) earnings to net
  cash (used in) provided by operating activities:
   Depreciation and amortization                                  7,516       5,622       3,795
   (Gain) loss on sales of fixed assets                              97        (142)        478
   Deferred income taxes                                         (3,526)     (1,840)     (1,820)
  Changes in assets and liabilities:
   Receivables                                                     (936)     (1,781)      1,417
   Merchandise inventories                                      (21,621)     (4,130)     (6,186)
   Prepaid expenses and other                                      (225)       (461)        415
   Accounts payable                                               4,394        (702)      3,930
   Customer deposits                                              2,433         711         715
   Accrued payroll and payroll taxes                              1,170         594       1,171
   Accrued expenses                                                 975         230         302
   Accrued income taxes                                             431        (134)       (356)
   Litigation                                                     2,943
   Deferred rent                                                    660          46         406
   Deferred warranty revenue                                      2,081       2,621       2,726
                                                               --------    --------    --------
    Net cash  (used in) provided by operating activities         (4,518)      8,655      13,586
CASH FLOWS FROM INVESTING ACTIVITIES:
 Capital expenditures                                           (32,179)    (33,042)    (26,477)
 Proceeds from sales of fixed assets                                163       1,088         190
 Decrease (increase) in certificates of deposit - restricted        273          (1)       (531)
 Other assets                                                      (131)         52        (276)
                                                               --------    --------    --------
   Net cash (used in) investing activities                      (31,874)    (31,903)    (27,094)
CASH FLOWS FROM FINANCING ACTIVITIES:
 Proceeds from long-term debt                                    39,700      28,325      10,900
 Payments on long-term debt                                      (3,139)     (2,228)     (1,401)
 Net proceeds from issuance of common shares                        281         213          95
 Debt issuance costs                                                (66)       (762)        (70)
 Line of credit with finance companies                                                  (21,944)
 Distributions to initial shareholders                                                   (1,777)
                                                               --------    --------    --------
   Net cash (used in) provided by financing activities           36,776      25,548     (14,197)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                384       2,300     (27,705)
CASH AND CASH EQUIVALENTS - Beginning of year                     2,410         110      27,815
                                                               --------    --------    --------
CASH AND CASH EQUIVALENTS - End of year                        $  2,794    $  2,410    $    110
                                                               ========    ========    ========
CASH PAID FOR:
 Interest, net of capitalized amounts of $685, $994
  and $524 in 1996, 1995 and 1994, respectively                $  5,600    $  3,624    $  1,899
                                                               ========    ========    ========
 Income taxes                                                  $  2,566    $  7,229    $  6,094
                                                               ========    ========    ========
NON-CASH TRANSACTIONS - Capital leases                                                 $  2,525
                                                               ========    ========    ========
</TABLE>



                                       35

<PAGE>   36


ROBERDS, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 1996, 1995
AND 1994 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)


A.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of
Roberds, Inc. and its wholly-owned subsidiary, Roberd Insurance Agency, Inc.
(the Company). All significant intercompany transactions and balances have been
eliminated. In August 1994, the Company merged its wholly-owned subsidiary,
Roberds Service Company, into Roberds, Inc., which is the surviving entity.

Operations

The Company operates retail stores selling furniture, bedding, appliances and
electronics. At December 31, 1996, the Company operated 25 large-format stores,
with six in the Dayton, Ohio market, ten in the Atlanta, Georgia market, eight
in the Tampa, Florida market, and one megastore in the Cincinnati, Ohio market.

Cash and Cash Equivalents

Cash equivalents include all highly liquid investments with a maturity of three
months or less when purchased.

The State of Florida requires the Company to maintain deposits to partially fund
its extended warranty and product maintenance contracts and its self insured
liability for workers' compensation. Such deposits are included in certificates
of deposit - restricted.

Merchandise Inventories

Merchandise inventories are valued at the lower of cost or market. Cost is
determined by the last-in, first-out (LIFO) method, except for electronics
(approximately 30% and 29% of merchandise inventories at December 31, 1996 and
1995, respectively) which are valued using the first-in, first-out (FIFO)
method. If the FIFO method had been used for all inventory, inventory values
would have been approximately $2,345 and $2,429 higher at December 31, 1996 and
1995, respectively.

Pre-Opening Costs

Costs incurred in the opening of new stores are expensed as incurred.

Property and Equipment

Property, equipment and improvements, including capital leases, are depreciated
or amortized over their estimated useful lives or the lease term using the
straight-line method. The lives, by category, generally are as follows:
<TABLE>
<CAPTION>

<S>                                                    <C>   <C>      
         Buildings and improvements                    10 to 40 years 
         Leasehold improvements                        10 years 
         Furniture, fixtures and office equipment      3 to 5 years
         Computer equipment                            3 to 8 years
         Warehouse equipment and vehicles              3 to 10 years
</TABLE>



                                       36

<PAGE>   37
Extended Warranty and Product Maintenance Contracts

Contracts with terms from nine months to ten years are sold to supplement or
extend manufacturers' warranties on appliances, electronics and furniture.
Revenues derived from the sales of such contracts are deferred and recognized
over the lives of the contracts. Service costs related to the contracts are
expensed as incurred.

Revenue Recognition

Merchandise inventory sales are recognized when the goods are delivered to the
customer.

Advertising

Effective January 1, 1995, the Company adopted Statement of Position 93-7,
"Reporting on Advertising Costs." Under this statement, production costs,
primarily those associated with the production of television advertising, are
expensed the first time the related advertising is utilized. Adoption of this
statement did not have a material effect on the financial statements.

Early Payment Discounts

Discounts received from vendors for early payment have been classified as other
income in the consolidated statements of earnings.

Use of Estimates

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

Stock Options

The Company measures cost for stock options issued to employees using the method
of accounting prescribed by APB Opinion No. 25, "Accounting for Stock Issued to
Employees." In October 1995, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 123 (SFAS 123), "Accounting for
Stock-Based Compensation," which was adopted by the Company in 1996. Pursuant to
the new standard, companies are encouraged, but not required, to adopt the fair
value method of accounting for stock options and similar equity instruments. The
Company has elected to continue measuring compensation cost in accordance with
APB Opinion No. 25.

Reclassifications

Certain reclassifications have been made in the 1995 and 1994 financial
statements to conform to the classifications used in 1996. These
reclassifications had no effect on the results of operations or shareholders'
equity as previously reported.

B.  ACCOUNTS RECEIVABLE FROM VENDORS AND OTHER

Accounts receivable from vendors and other consist primarily of amounts due from
vendors for various rebate and cooperative advertising programs and for
merchandise inventory returns.


                                       37

<PAGE>   38
<TABLE>
<CAPTION>



C.  LONG-TERM DEBT

                                                                  DECEMBER 31
                                                               1996        1995
<S>                                                            <C>       <C>    
Revolving line of credit                                       $37,000   $10,300
Mortgage note payable, due in monthly payments of $123,
 including interest at 7.875%, to February 2011                 12,609
Mortgage notes payable, due in monthly payments of $77,
 including interest at  9.675%, to June 2010                     6,976     7,219
Mortgage notes payable, due in monthly payments of $62,
 including interest at  8.00%, to December 2010                  6,294     6,531
Term loan agreement, due in monthly installments of $117,
 plus interest at  9.34%, to December 1999                       4,200     5,600
Mortgage note payable, due in monthly payments of $49,
 including interest at 9.00%, to July 2010                       4,642     4,809
Mortgage note payable, due in monthly payments of $35,
 including interest at 10.375%, to September 2000                3,420     3,478
Mortgage note payable, due in monthly payments of $35,
 including interest at 10.125%, to November 1998                 3,222     3,311
Mortgage note payable, due in monthly payments of $33
 including interest at 9.59%, to February 2010                   2,961     3,068
Capital lease obligations                                       12,432    12,879
                                                               -------   -------
                                                                93,756    57,195
Less current maturities                                          3,391     2,747
                                                               -------   -------
                                                               $90,365   $54,448
                                                               =======   =======
</TABLE>

The revolving bank line of credit expires in January 2000. The amount available
under the line is limited to the lesser of (i) $45,000 or (ii) an amount based
upon a percentage of eligible accounts receivable, inventory and previously
incurred leasehold improvements. The agreement also provides that an additional
amount is available for any expenditures for leasehold improvements and store
expansion for which the Company has commitments for permanent financing. At
December 31, 1996, $42,926 was available under the line of which $37,000 was
outstanding. The interest rate under the line is set monthly at the option of
the Company at either the prime rate (8.25% at December 31, 1996) or one of
various LIBOR rates plus 1.55% (7.113% at December 31, 1996).

The line and term loan agreements include certain restrictive covenants
including, among others, limitations on capital expenditures and the payment of
dividends, maintenance of minimum current, fixed charge coverage, funded debt to
earnings, and debt to tangible net worth ratios. Under the most restrictive debt
covenants, no retained earnings were available for dividends at December 31,
1996.

Excluding land and construction in process, essentially all of the Company's
assets are pledged as collateral for the above indebtedness. Mortgage notes
payable totaling $6,642 are guaranteed by two of the Company's principal
shareholders.


                                       38

<PAGE>   39

<TABLE>

<CAPTION>
Maturities of long-term debt are:


<S>                                         <C>   
  1997                                      $3,391
  1998                                       6,602
  1999                                       3,683
  2000                                      42,631
  2001                                       2,661
  Thereafter                                34,788
                                        ----------
                                           $93,756
                                        ==========
</TABLE>

The fair value of the Company's long-term debt based on current rates offered to
the Company for debt of similar maturities, excluding capital leases, was
$82,397 at December 31, 1996, and the related carrying value was $81,324.
Construction payables at December 31, 1995 were included in long-term
liabilities because the amounts were subsequently financed under a mortgage
loan.

D.  LEASING ACTIVITIES

The Company leases the majority of its retail locations, including some from
entities controlled by one or more of the initial shareholders. Most leases
include renewal options. In addition, the Company leases the majority of its
vehicles from third parties under operating leases. These vehicle leases
generally include contingent rentals based upon mileage.

Rent expense for all operating leases was approximately $7,921, $6,687, and
$6,220 for the years ended December 31, 1996, 1995 and 1994, respectively, which
included approximately $731, $1,271, and $1,463 for the years ended December 31,
1996, 1995 and 1994, respectively, to related parties. Rent expense also
included $246, $200, and $166 of contingent rentals based upon mileage for the
years ended December 31, 1996, 1995 and 1994, respectively.

Minimum lease commitments for leases with remaining lease terms in excess of one
year are as follows:
<TABLE>
<CAPTION>


                                                                          CAPITAL
                                                OPERATING LEASES          LEASES-
                                               RELATED                    RELATED
YEAR ENDING DECEMBER 31,                       PARTIES       OTHER        PARTIES
<C>                                              <C>         <C>           <C>   
1997                                             $721        $6,943        $1,919
1998                                              721         6,882         1,919
1999                                              721         6,689         1,919
2000                                              721         6,144         1,919
2001                                              721         5,950         1,919
2002 and later                                  7,469        26,303        16,001
                                           ----------    ----------    ----------
Total                                         $11,074       $58,911        25,596
                                           ==========    ==========
Less amount representing interest                                          13,164
                                                                       ----------
Capital lease obligations                                                 $12,432
                                                                       ==========

</TABLE>

Included in buildings and improvements at December 31, 1996 and 1995 are capital
leases totaling $13,641. Accumulated amortization related to the capitalized
leases is $2,713 and $1,833 at December 31, 1996 and 1995, respectively.


                                       39

<PAGE>   40



Certain leases include scheduled rent increases that have been recognized on a
straight-line basis over the term of the leases. The accumulated difference
between rent expense and cash payments is included in liabilities as deferred
rent.

E.   SHAREHOLDERS' EQUITY

The Company's stock-based compensation plans are described below. The Company
applies APB Opinion 25 and related Interpretations in accounting for its plans.
Accordingly, no compensation cost has been recognized for its stock option plans
and its employee stock purchase plan. Had compensation cost for the Company's
stock-based compensation plans been determined based on the fair value at the
grant dates for the awards under those plans consistent with the method of FASB
Statement 123, the effect on the Company's net income (loss) and earnings (loss)
per share for 1996 and 1995 would have been insignificant.

Employee Stock Purchase Plan.

The Company's employee stock purchase plan is qualified under the Internal
Revenue Code and permits employees to purchase shares at a price equal to 85% of
the lower of: (i) the fair market value of the shares at the commencement date
of each six-month option period or (ii) the fair market value of the shares at
the close of the option period. A maximum of 150,000 shares may be issued under
the plan. With certain exceptions, all employees of the Company may participate
in the plan and pay for their options through payroll deductions.

The Company issued 37,110 shares at $7.44 under the plan during 1996, 32,374
shares at $6.59 per share during 1995, and 9,958 shares at $9.61 per share
during 1994. In January 1997, the Company issued 18,221 shares at $7.23 per
share under the plan.

1993 Outside Director Stock Option Plan.

The Company has established a directors stock option plan which has reserved up
to 10,000 common shares to be offered to outside directors of the Company.
Grants are made at the market price of the stock at the date of grant. During
1993, the Company granted options on 6,000 common shares, at $13.00 per share.
During 1995, the Company granted an option on 2,000 common shares, at $9.25 per
share. All of the outstanding options were exercisable at December 31, 1996. At
December 31, 1996, 2,000 options were available under this plan for future
grants.

1993 Stock Incentive Plan.

The Company's stock incentive plan provides that options on up to 1,300,000
shares may be granted to employees of the Company. Grants are made at the market
price of the stock at the date of grant. One-fourth of the options are
exercisable on each anniversary of the grant. Any options which are not
exercisable by an employee at the termination of employment are canceled.


                                       40

<PAGE>   41


<TABLE>
<CAPTION>

A summary of option transactions under the stock incentive plan is as follows:


                                                WEIGHTED AVERAGE
                                       SHARES    EXERCISE PRICE

<S>                                    <C>          <C>     
Outstanding December 31, 1993          137,500      $  13.00

  Granted                              173,500          8.59
  Canceled                             (14,500)        12.69
                                      --------
Outstanding December 31, 1994          296,500         10.43

  Canceled                             (47,000)         9.86
                                      --------
Outstanding December 31, 1995          249,500         10.54

  Granted                               35,000          9.64
  Exercised                               (500)         8.88
  Canceled                             (44,500)        10.29
                                      --------
Outstanding December 31, 1996          239,500         10.46
                                      ========


</TABLE>



The following table shows various information about stock options outstanding at
December 31, 1996:
<TABLE>
<CAPTION>

                                         OPTIONS OUTSTANDING                      OPTIONS EXERCISABLE
                        -----------------------------------------------    ------------------------------
                                               WEIGHTED-                 
                                                AVERAGE
                             NUMBER            REMAINING      WEIGHTED-       NUMBER            WEIGHTED
                           OUTSTANDING AT     CONTRACTUAL      AVERAGE    EXERCISABLE AT        AVERAGE
        RANGE OF            DECEMBER 31,       LIFE (IN       EXERCISE     DECEMBER 31,         EXERCISE
    EXERCISE PRICES             1996            YEARS)          PRICE          1996              PRICE

<S>    <C>                        <C>             <C>        <C>                 <C>            <C>    
       $8.50                      118,500         8.0        $    8.50           59,250         $  8.50
 9.50 - 11.75                      25,000         9.0            10.03            2,500           10.63
       13.00                       96,000         6.9            13.00           72,000           13.00
                              -----------                                     ---------             
$8.50 - $13.00                    239,500         7.7          $ 10.46          133,750         $ 10.96
                              ===========                                     =========

</TABLE>

At December 31, 1996, 1,060,500 shares were available for future grants.

F.  FINANCE PARTICIPATION

The Company earns a finance participation fee on credit sales placed through a
private-label revolving credit plan with a bank. Receivables from this plan are
held by the bank without recourse to the Company. Sales under the private label
plan represented approximately 46, 43, and 39 percent of consolidated net sales
for the years ended December 31, 1996, 1995, and 1994, respectively. Because a
significant portion of the Company's sales are financed by consumers, the lack
of availability of consumer credit programs, or a significant increase in the
cost of such programs, could have a material adverse effect on the Company.

                                       41

<PAGE>   42



G.  INCOME TAXES

Deferred taxes reflect the effects of temporary differences between carrying
amounts of assets and liabilities for financial reporting purposes and the
amounts used for income tax purposes. The principal current and non-current
deferred income tax assets are as follows:
<TABLE>
<CAPTION>


                                                    DECEMBER 31
                                              1996             1995
<S>                                            <C>            <C>   
Deferred tax assets:                       
 Deferred warranty revenue                     $4,534         $3,720
 Merchandise inventories                        1,094            552
 Capital lease obligations                        587            418
 Depreciation                                   1,057            415
 Workers' compensation accrual                  1,453            408
 Vacation accrual                                 290            221
 Other                                            251              6
                                               ------         ------
Net deferred tax asset                         $9,266         $5,740
                                               ======         ======

Included in the balance sheet:
 Current                                       $2,916         $1,200
 Long-term                                      6,350          4,540
                                               ------         ------
                                               $9,266         $5,740
                                               ======         ======

Income taxes (benefit) consist of the following:
<CAPTION>

                                                     YEAR ENDED
                                                     DECEMBER 31
                                          1996            1995           1994
<S>                                     <C>             <C>             <C>    
Currently payable:
 Federal                                $ 2,461         $ 5,810         $ 4,685
 State and local                            535           1,255           1,060
                                        -------         -------         -------
                                          2,996           7,065           5,745
Deferred:
 Federal and state                       (3,526)         (1,840)         (1,615)
 Tax settlement                                                            (205)
                                        -------         -------         -------
                                         (3,526)         (1,840)         (1,820)
                                        -------         -------         -------
                                        ($  530)        $ 5,225         $ 3,925
                                        =======         =======         =======
</TABLE>

In connection with the initial public offering of stock in 1993, the initial
shareholders of the Company entered into a Tax Indemnification Agreement that
requires the Company to reimburse them for certain additional taxes that they
may have to pay for any adjustments in prior years' taxable income. In addition,
the agreement requires the initial shareholders to reimburse the Company for
certain decreases in taxes that are refunded to them for adjustments in prior
years' taxable income. The Company also agreed to conduct, at its expense, the
defense of, or the negotiations in settlement with respect to, any challenge to
the S Corporation status in prior years.


                                       42

<PAGE>   43



During the fourth quarter of 1994, the Company settled an examination of its
1991 and 1992 federal income tax returns. This resulted in an additional tax
benefit to the Company of $205 ($.03 per share). The Company was required under
the Tax Indemnification Agreement to reimburse the initial shareholders $193 for
additional taxes they were required to pay as part of the settlement. The
additional tax benefit was recorded as a reduction of income taxes for the year
ended December 31, 1994 and the payments were recorded as cash distributions to
the initial shareholders.

A reconciliation between the statutory federal income tax rate and the effective
tax rate follows:
<TABLE>
<CAPTION>


                                                     YEAR ENDED
                                                     DECEMBER 31
                                              1996         1995          1994

<S>                                       <C>         <C>            <C>
Statutory Federal income tax rate              (34)%           34%           34%
State and local income taxes,
  net of federal benefit                        (3)             5             5
Tax settlement                                                               (2)
                                         ---------    -----------    ----------
                                               (37)%           39%           37%
                                         ==========    ==========    ==========
</TABLE>

H.  EMPLOYEE BENEFIT PLANS

The Company has a profit sharing plan for all eligible employees. Contributions
to the plan are made under guidelines established in the Roberds, Inc. Executive
Compensation Plan. Profit sharing plan expense was $97 for the year ended
December 31, 1996 and $120 for the year ended December 31, 1994. No contribution
was made to the profit sharing plan for the year ended December 31, 1995.

The Company has a self-insured group health and welfare benefit plan. This plan
operates through an independent trust and offers major medical, dental and
disability insurance coverage to all eligible employees. The Company provides
life insurance for all employees and their dependents at no cost to the
employees. The Company's expense under the health and welfare benefit plan was
approximately $281, $200, and $140 for the years ended December 31, 1996, 1995
and 1994, respectively. At December 31, 1996 and 1995, the Company had advances
receivable from the health and welfare benefit of $250 and $50, respectively.
The Company does not provide post-employment or post-retirement benefits for its
employees.

I.  LITIGATION AND OTHER PROCEEDINGS

On February 28, 1994, the Company announced its earnings for the fourth quarter
and year ended December 31, 1993. Following that announcement, the Company's
stock price declined substantially. In March and April 1994, four lawsuits were
filed against the Company, certain of its directors, certain of its officers,
and its co-managing underwriters, in U.S. District Court for the Southern
District of Ohio, case numbers C-3-94-86, 99, 100, and 127. The suits were
consolidated into a single suit, In re Roberds Securities Litigation.

In December 1996, the Company reached an agreement in principle to settle the
class-action securities litigation. Based on such agreement, the Company entered
into a settlement stipulation with the named plaintiffs and filed such
stipulation with the court in February 1997. The settlement involves the payment
of $1.6 million into an escrow account to be used to satisfy the plaintiffs'
legal expenses and claims for damages to the class. In February 1997, Roberds
paid $342,500 into escrow as its share of the settlement, and the insurance
carrier for its officers and directors paid $1,257,500. Subject to approval by
the court, the Company expects the plaintiffs to give notice to the class,
validate claims, and then begin disbursement of funds in the latter part of
1997. No portion of the funds paid into escrow can revert to the Company.


                                       43

<PAGE>   44



During 1994, the Ohio Bureau of Workers' Compensation ("the Bureau") completed
an examination of the Company's 1992 and 1993 Ohio workers' compensation tax
returns. As a result of that audit, the Bureau issued an assessment against the
Company for approximately $1,000. As a result of the Company's appeals and an
adjustment received in 1995, the assessment has been reduced to $871. The
assessment is based on the Bureau's reclassification of the majority of the
Company's Ohio employees into higher rate classifications.

In January 1997, the Company lost its appeal of the assessment in the Ohio Court
of Appeals. The Company has filed another appeal of right with the Ohio Supreme
Court. If the Company is unsuccessful in this final appeal, the Company would
likely be liable not only for the $871 assessment but also for a similar
adjustment for the years subsequent to 1993. As a result of the Company being
unsuccessful in its appeals to date, $2,600 was accrued in the fourth quarter of
1996 for the estimated amount of the exposure for the entire 1992-1996 time
period. The Company continues to believe it has meritorious defenses against the
assessment and is defending the assessment vigorously.

The amount of the Company's payment to settle the shareholders' suit, and the
related legal expenses, and the $2,600 accrual for the workers' compensation
exposure are contained in Litigation in the consolidated statements of
operations.

In August 1995, a former employee of the Company brought suit against the
Company and one of its managers alleging, among other things, wrongful
termination of the employee and sexual harassment of the employee's wife. The
suit sought $100 in compensatory damages and $1,000 in punitive damages. Without
admitting liability, the Company settled the suit in June 1996 by paying the
plaintiff an amount which the parties have agreed not to disclose, but which
management of the Company believes is not material to the Company.

The Company is involved in various legal proceedings, incidental to normal
operations. At this time, it is not possible to determine the ultimate
liability, if any, in these matters. In the opinion of management, after
consultation with legal counsel, such proceedings will not have a material
effect on the financial position or results of operations.

J.   COMMITMENTS

In connection with the renovation of former warehouse space into an expanded
showroom, the Company had outstanding construction commitments of approximately
$1,400 at December 31, 1996.

                                       44

<PAGE>   45




ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE


None.



                                    PART III



Certain information required by Part III of this Report is omitted because the
Company will file a definitive proxy statement, pursuant to Regulation 14A, for
its 1997 annual meeting of shareholders ("1997 Proxy Statement"), not later than
120 days after the end of the fiscal year covered by this Report, and certain
information included in the 1997 Proxy Statement is incorporated herein by
reference.


ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT


Information concerning the Company's directors is contained in the "Election of
Directors" section of the Company's 1997 Proxy Statement and is incorporated
herein by reference.


ITEM 11.  EXECUTIVE COMPENSATION


The information required by this Item is incorporated herein by reference to the
"Executive Compensation" section of the Company's 1997 Proxy Statement.


ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT


The information required by this Item is incorporated herein by reference to the
"Security Ownership of Certain Beneficial Owners and Management" section of the
Company's 1997 Proxy Statement.



ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS


The information required by this Item is incorporated herein by reference to the
"Certain Relationships and Related Transactions" section of the Company's 1997
Proxy Statement.





                                       45

<PAGE>   46



                                     PART IV



ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K


         (A)(1)   FINANCIAL STATEMENTS

          The following financial statements are filed as part of this Report
          and are attached hereto:

                    Independent Auditors' Report.

                    Consolidated Balance Sheets at December 31, 1996 and 1995.

                    Consolidated Statements of Operations for the years ended
                    December 31, 1996, 1995, and 1994.

                    Consolidated Statements of Shareholders' Equity for the
                    years ended December 31, 1996, 1995, and 1994.

                    Consolidated Statements of Cash Flows for the years ended
                    December 31, 1996, 1995, and 1994.

                    Notes to Consolidated Financial Statements for the years
                    ended December 31, 1996, 1995 and 1994.



                                       46

<PAGE>   47




         (A)(2)   FINANCIAL STATEMENT SCHEDULES

The following financial statement schedule of the Company, for the three years
ended December 31, 1996, is filed as part of this Report and should be read in
conjunction with the consolidated financial statements of Roberds, Inc. for the
periods then ended:

         Independent Auditors' Report

         Schedule II, Valuation and qualifying accounts

Schedules not listed above are omitted because they are not applicable, are not
required, or the information required to be set forth therein is included in the
Consolidated Financial Statements or the notes thereto.





INDEPENDENT AUDITORS' REPORT

Board of Directors
Roberds, Inc.
West Carrollton, Ohio

We have audited the consolidated financial statements of Roberds, Inc. and
subsidiary as of December 31, 1996 and 1995 and for each of the three years in
the period ended December 31, 1996, and have issued our report thereon dated
February 27, 1997, such financial statements and report are included elsewhere
in this Annual Report on Form 10-K. Our audits also included the financial
statement schedule of Roberds, Inc. and subsidiary, listed in Item 14(a)(2) of
this Annual Report on Form 10-K. This financial statement schedule is the
responsibility of the Company's management. Our responsibility is to express an
opinion based on our audits. In our opinion, such financial statement schedule,
when considered in relation to the basic consolidated financial statements taken
as a whole, presents fairly in all material respects, the information set forth
therein.



/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
Dayton, Ohio
February 27, 1997



                                       47

<PAGE>   48




ROBERDS, INC. AND SUBSIDIARY
<TABLE>
<CAPTION>

SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
(IN THOUSANDS)


                COLUMN A                        COLUMN B         COLUMN C         COLUMN D          COLUMN E
-----------------------------------------    --------------    -------------    -------------     -------------
                                               BALANCE AT       CHARGED TO                         BALANCE AT
                                               BEGINNING         COSTS AND                           END OF
DESCRIPTION                                    OF PERIOD         EXPENSES        DEDUCTIONS          PERIOD
-----------------------------------------    --------------    -------------    -------------     -------------
<S>                                               <C>              <C>              <C>                <C>
YEAR ENDED DECEMBER 31, 1996:
   Allowance for doubtful accounts                $50              $619             $589               $80

YEAR ENDED DECEMBER 31, 1995:
   Allowance for doubtful accounts                $50              $246             $246               $50

YEAR ENDED DECEMBER 31, 1994:
   Allowance for doubtful accounts                $50              $249             $249               $50
</TABLE>





                                       48

<PAGE>   49





         (a)(3)   EXHIBITS

2.1       Certificate and Agreement of Merger between Dayton Factory Service,
          Inc. and Registrant, filed October 1, 1993 as Exhibit 2.1 to
          Registrant's Form S-1, Registration File No. 33-69876, and incorpo
          rated herein by reference.

2.2       Certificate and Agreement of Merger between Roberds of Atlanta, Inc.
          and Registrant, filed October 1, 1993 as Exhibit 2.2 to Registrant's
          Form S-1, Registration File No. 33-69876, and incorporated herein by
          reference.

2.3       Stock Purchase Agreement among Registrant, Kenneth W. Fletcher and
          Donald C. Wright trans ferring all of the outstanding shares of
          Roberds Service Company to Registrant, filed October 1, 1993 as
          Exhibit 2.3 to Registrant's Form S-1, Registration File No. 33-69876,
          and incorporated herein by reference.

2.4       Stock Purchase Agreement among Registrant, Kenneth W. Fletcher and
          Donald C. Wright trans ferring all of the outstanding shares of Roberd
          Insurance Agency, Inc. to Registrant, filed October 1, 1993 as Exhibit
          2.4 to Registrant's Form S-1, Registration File No. 33-69876, and
          incorporated herein by reference.

2.5       Certificate of merger of Roberds Service Company into Roberds, Inc.,
          effective August 31, 1994, filed as Exhibit 2.5 to Registrant's Annual
          Report on Form 10-K for the fiscal year ended December 31, 1994 and
          incorporated herein by reference.

3.1       Amended Articles of Incorporation of Registrant, filed January 10,
          1994, as Exhibit 4.1 to Registrant's Form S-8, Registration File No.
          33-73900, and incorporated herein by reference.

3.2       Amended Code of Regulations of Registrant, filed January 10, 1994, as
          Exhibit 4.2 to Registrant's Form S-8, Registration File No. 33-73900,
          and incorporated herein by reference.

4.1       Amended Articles of Incorporation of Registrant (filed as Exhibit
          3.1).

4.2       Amended Code of Regulations of Registrant (filed as Exhibit 3.2).

4.3       Specimen certificate for Registrant's Common Shares, filed October 1,
          1993 as Exhibit 4.3 to Registrant's Form S-1, Registration File No.
          33-69876, and incorporated herein by reference.

4.3.1     Amended specimen certificate for Registrant's Common Shares,
          reflecting the change in stock transfer agent to National City Bank,
          Cleveland, Ohio, effective November 1, 1995, filed as Exhibit 4.3.1 to
          Registrant's Annual Report on Form 10-K for the fiscal year ended
          December 31, 1995, and incorporated herein by reference.

4.4       Excluded from the exhibits are certain agreements relating to long
          term debt which, individually, do not exceed 10% of the total assets
          of Registrant. Registrant hereby undertakes to furnish a copy of such
          agreements upon request by the Commission.

10.1#     Roberds, Inc. 1993 Stock Incentive Plan, filed October 1, 1993 as
          Exhibit 10.1 to Registrant's Form S-1, Registration File No. 33-69876,
          and incorporated herein by reference.

10.1.1#   Amendment to Roberds, Inc. 1993 Stock Incentive Plan, filed as Exhibit
          99.1 to Registrant's Form S-1, File No. 33-97262, filed September 25,
          1995, and incorporated herein by reference.

                                       49

<PAGE>   50



*10.1.2#    Amendment to Roberds, Inc. 1993 Stock Incentive Plan, referred to in
            Exhibit 10.1, effective as of November 1, 1996, and filed herewith.

10.2#       Roberds, Inc. Employee Stock Purchase Plan, filed October 1, 1993 as
            Exhibit 10.2 to Registrant's Form S-1, Registration File No.
            33-69876, and incorporated herein by reference.

*10.2.1#    Amendment to Roberds, Inc. Employee Stock Purchase Plan, referred to
            in Exhibit 10.2, effective as of November 1, 1996, and filed
            herewith.

10.3#       Roberds, Inc. 1993 Outside Director Stock Option Plan, filed October
            1, 1993 as Exhibit 10.3 to Registrant's Form S-1, Registration File
            No. 33-69876, and incorporated herein by reference.

*10.3.1#    Amendment to Roberds, Inc. 1993 Outside Director Stock Option Plan,
            referred to in Exhibit 10.3, effective as of November 1, 1996, and
            filed herewith.

10.3.2#     Roberds, Inc. Profit Sharing and Employee Retirement Savings Plan,
            as amended, filed as Exhibit 99 to Registrant's Form S-8,
            Registration File No. 33-81086, and incorporated herein by
            reference.

10.3.3#     Roberds, Inc. Amended and Restated Deferred Compensation Plan for
            Outside Directors, effective 1996, filed as Exhibit 10.3.2 to
            Registrant's Annual Report on Form 10-K for the fiscal year ended
            December 31, 1995, and incorporated herein by reference.

*10.3.3.1#  Amendment to Roberds, Inc. Amended and Restated Deferred
            Compensation Plan for Outside Directors, referred to in Exhibit
            10.3.3, effective as of February 27, 1996, and filed herewith.

**10.3.3.2# Amendment to Roberds, Inc. Amended and Restated Deferred
            Compensation Plan for Outside Directors, referred to in Exhibit
            10.3.3, effective as of November 1, 1996, and filed as Exhibit 99.1
            to Registrant's Form S-8, Registration File No. 333-19903, and
            incorporated herein by reference.

10.4.1      Lease Agreement dated April 1, 1990 among Registrant, Kenneth W.
            Fletcher and Donald C. Wright, relating to Registrant's facility
            located at 1000 East Central Avenue, West Carrollton, Ohio, and
            amendments thereto, filed October 1, 1993 as Exhibit 10.4.1 to
            Registrant's Form S-1, Registration File No. 33-69876, and
            incorporated herein by reference.

10.4.1.1    Assignment and Assumption Agreement in connection with the transfer
            of ownership of Registrant's facility located at 1000 East Central
            Avenue, West Carrollton, Ohio from Kenneth W. Fletcher and Donald C.
            Wright, an Ohio general partnership, to Kenneth W. Fletcher,
            individually, and assigning Registrant's related lease of the
            property to Mr. Fletcher, all effective January 1, 1995, and filed
            as Exhibit 10.4.1.1 to Registrant's Annual Report on Form 10-K for
            the fiscal year ended December 31, 1994 and incorporated herein by
            reference.

10.4.1.2    Assignment and Assumption Agreement in connection with the transfer
            of ownership of Registrant's facility located at 1000 East Central
            Avenue, West Carrollton, Ohio from Kenneth W. Fletcher,
            individually, to DAF Investments LTD., an Ohio limited liability
            company controlled by Mr. Fletcher, and assigning Registrant's
            related lease of the property to DAF Investments LTD., all effective
            January 1, 1995, and filed as Exhibit 10.4.1.2 to Registrant's
            Annual Report on Form 10-K for the fiscal year ended December 31,
            1994 and incorporated herein by reference.

*10.4.1.3   Assignment and Assumption of Lease in connection with the transfer
            of ownership of Registrant's facility located at 1000 East Central
            Avenue, West Carrollton, Ohio from DAF Investments LTD., an Ohio
            limited liability company controlled by Mr. Kenneth W. Fletcher, to
            DAF West Carrollton Plaza, LTD., an Ohio limited liability company
            controlled by Mr. Fletcher, and assigning Registrant's

                                       50

<PAGE>   51



            related lease of the property to DAF West Carrollton Plaza, LTD.,
            effective January 14, 1997, and incorporated herein by reference and
            filed herewith.

10.4.2      Lease Agreement dated April 1, 1990 among Registrant, Kenneth W.
            Fletcher and Donald C. Wright, relating to Registrant's facility
            located at 1100 East Central Avenue, West Carrollton, Ohio, and
            amendments thereto, filed October 1, 1993 as Exhibit 10.4.2 to
            Registrant's Form S-1, Registration File No. 33-69876, and
            incorporated herein by reference.

10.4.2.1    Assignment and Assumption Agreement in connection with the transfer
            of ownership of Registrant's facility located at 1100 East Central
            Avenue, West Carrollton, Ohio from Kenneth W. Fletcher and Donald C.
            Wright, an Ohio general partnership, to Kenneth W. Fletcher,
            individually, and assigning Registrant's related lease of the
            property to Mr. Fletcher, all effective January 1, 1995, and filed
            as Exhibit 10.4.2.1 to Registrant's Annual Report on Form 10-K for
            the fiscal year ended December 31, 1994 and incorporated herein by
            reference.

10.4.2.2    Assignment and Assumption Agreement in connection with the transfer
            of ownership of Registrant's facility located at 1100 East Central
            Avenue, West Carrollton, Ohio from Kenneth W. Fletcher,
            individually, to DAF Investments LTD., an Ohio limited liability
            company controlled by Mr. Fletcher, and assigning Registrant's
            related lease of the property to DAF Investments LTD., all effective
            January 1, 1995, and filed as Exhibit 10.4.2.2 to Registrant's
            Annual Report on Form 10-K for the fiscal year ended December 31,
            1994 and incorporated herein by reference.

*10.4.2.3   Assignment and Assumption of Lease in connection with the transfer
            of ownership of Registrant's facility located at 1100 East Central
            Avenue, West Carrollton, Ohio from DAF Investments LTD., an Ohio
            limited liability company controlled by Mr. Kenneth W. Fletcher, to
            DAF West Carrollton Plaza, LTD., an Ohio limited liability company
            controlled by Mr. Fletcher, and assigning Registrant's related lease
            of the property to DAF West Carrollton Plaza, LTD., effective
            January 14, 1997, and incorporated herein by reference and filed
            herewith.

10.4.3      Lease Agreement dated June 1, 1988 among Registrant, Kenneth W.
            Fletcher and Donald C. Wright, relating to Registrant's Piqua, Ohio
            facility, and amendments thereto, filed October 1, 1993 as Exhibit
            10.4.3 to Registrant's Form S-1, Registration File No. 33-69876, and
            incorporated herein by reference.

10.4.3.1    Assignment and Assumption Agreement in connection with the transfer
            of ownership of Registrant's Piqua, Ohio facility from Kenneth W.
            Fletcher and Donald C. Wright, an Ohio general partnership, to
            Donald C. Wright, individually, and assigning Registrant's related
            lease of the property to Mr. Wright, all effective January 1, 1995
            and filed as Exhibit 10.4.3.1 to Registrant's Annual Report on Form
            10-K for the fiscal year ended December 31, 1994 and incorporated
            herein by reference.

10.4.4      Lease Agreement dated April 1, 1988 among Registrant, Kenneth W.
            Fletcher and Donald C. Wright, relating to Registrant's Richmond,
            Indiana facility, and amendments thereto, filed October 1, 1993 as
            Exhibit 10.4.4 to Registrant's Form S-1, Registration File No.
            33-69876, incorporated herein by reference.

10.4.4.1    Assignment and Assumption Agreement in connection with the transfer
            of ownership of Registrant's Richmond, Indiana facility from Kenneth
            W. Fletcher and Donald C. Wright, an Ohio general partnership, to
            Donald C. Wright, individually, and assigning Registrant's related
            lease of the property to Mr. Wright, all effective January 1, 1995,
            and filed as Exhibit 10.4.4.1 to Registrant's Annual Report on Form
            10-K for the fiscal year ended December 31, 1994 and incorporated
            herein by reference.


                                       51

<PAGE>   52



10.4.5      Lease Agreement dated March 1, 1992 among Registrant, Kenneth W.
            Fletcher and Donald C. Wright, relating to Registrant's 
            Springfield, Ohio facility, and amendments thereto, filed October 1,
            1993 as Exhibit 10.4.5 to Registrant's Form S-1, Registration File
            No. 33-69876, and incorporated herein by reference.

10.4.5.1    Assignment and Assumption of Leases transferring ownership of
            Registrant's Springfield, Ohio facility from Kenneth W. Fletcher and
            Donald C. Wright, an Ohio general partnership, to Springfield
            Properties, Inc., an Ohio corporation owned by Messrs. Fletcher and
            Wright, and assigning Registrant's related lease of the property to
            Springfield Properties, Inc., all effective November 16, 1994, and
            filed as Exhibit 10.4.5.1 to Registrant's Annual Report on Form 10-K
            for the fiscal year ended December 31, 1994 and incorporated herein
            by reference.

10.4.6      Lease Agreement dated March 1, 1987 between Registrant and Howard
            Investments, a partnership owned by the Initial Shareholders,
            relating to Registrant's Norcross, Georgia facility, filed October
            1, 1993 as Exhibit 10.4.6 to Registrant's Form S-1, Registration
            File No. 33-69876, and incorporated herein by reference.

10.4.6.1    Amendments to Lease Agreement between Registrant and Howard
            Investments, referred to in Exhibit 10.4.6, effective December 20,
            1995, pursuant to a sale of the property by Howard Investments to
            800 Broadway and Ponce de Leon Stores, which are unrelated to the
            Company and the Initial Shareholders, filed as Exhibit 10.4.6.1 to
            Registrant's Annual Report on Form 10-K for the fiscal year ended
            December 31, 1995, and incorporated herein by reference.

10.4.7      Lease Agreement dated March 1, 1987 between Registrant and Howard
            Investments, a partnership owned by the Initial Shareholders,
            relating to Registrant's Marietta, Georgia facility, filed October
            1, 1993 as Exhibit 10.4.7 to Registrant's Form S-1, Registration
            File No. 33-69876, and incorporated herein by reference.

10.4.8      Lease Agreement dated November 1, 1987 between Registrant and Howard
            Investments, a partnership owned by the Principal Shareholders,
            relating to Registrant's Forest Park, Georgia facility, and
            amendments thereto, filed October 1, 1993 as Exhibit 10.4.8 to
            Registrant's Form S-1, Registration File No. 33-69876, and
            incorporated herein by reference.

10.4.9      Rent-Up Guarantee Agreement, filed October 1, 1993 as Exhibit 10.4.9
            to Registrant's Form S-1, Registration File No. 33-69876, and
            incorporated herein by reference.

10.5        Tax Indemnification Agreement among Kenneth W. Fletcher, Donald C.
            Wright, Howard W. Smith, and Registrant, filed October 1, 1993 as
            Exhibit 10.5 to Registrant's Form S-1, Registration File No.
            33-69876, and incorporated herein by reference.

10.6.1      Amended and Restated Security Agreement between Registrant and
            Chrysler First Commercial Corporation, filed October 1, 1993 as
            Exhibit 10.6.1 to Registrant's Form S-1, Registration File No.
            33-69876, and incorporated herein by reference.

10.6.2      Inventory Financing and Security Agreement between Whirlpool
            Financial Corporation and Registrant, filed October 1, 1993 as
            Exhibit 10.6.2 to Registrant's Form S-1, Registration File No. 33-
            69876, and incorporated herein by reference.

10.6.3      Business Loan Agreement between Bank One, Dayton, NA and Registrant,
            dated November 23, 1993, for up to $30 million. Filed as Exhibit
            10.6.3 to Registrant's Form 10-K for the fiscal year ended December
            31, 1993, and incorporated herein by reference.


                                       52

<PAGE>   53



10.6.3.1    Amendment to Business Loan Agreement between Bank One, Dayton, NA
            and Registrant, dated April 20, 1994, amending the agreement
            referred to in Exhibit 10.6.3, and filed as Exhibit 10.6.3.1 to
            Registrant's Annual Report on Form 10-K for the fiscal year ended
            December 31, 1994, and incorporated herein by reference.

10.6.3.2    Amendment to Amended and Restated Business Loan Agreement between
            Bank One, Dayton, NA and Registrant, dated December 7, 1994,
            amending the agreement referred to in Exhibit 10.6.3, and filed as
            Exhibit 10.6.3.2 to Registrant's Annual Report on Form 10-K for the
            fiscal year ended December 31, 1994, and incorporated herein by
            reference.

10.6.3.3    Amendment to Amended and Restated Business Loan Agreement between
            Bank One, Dayton, NA and Registrant, dated October 13, 1995,
            amending the agreement referred to in Exhibit 10.6.3, filed as
            Exhibit 10.6.3.3 to Registrant's Annual Report on Form 10-K for the
            fiscal year ended December 31, 1995, and incorporated herein by
            reference.

*10.6.3.4   Amendment to Amended and Restated Business Loan Agreement between
            Bank One, Dayton, NA and Registrant, dated as of June 29, 1996,
            amending the agreement referred to in Exhibit 10.6.3, and filed
            herewith.

*10.6.3.5   Second Amendment to Amended and Restated Business Loan Agreement
            between Bank One, Dayton, NA and Registrant, dated December 31,
            1996, amending the agreement referred to in Exhibit 10.6.3.4, and
            filed herewith.

*10.6.3.6   Amendment to Second Amended and Restated Business Loan Agreement
            between Bank One, Dayton, NA and Registrant, dated February 27,
            1997, amending the agreement referred to in Exhibit 10.6.3, and
            filed herewith.

10.6.4      Term loan agreement between Bank One, Dayton, NA and Registrant,
            dated November 8, 1994, for up to $7 million, and filed as Exhibit
            10.6.4 to Registrant's Annual Report on Form 10-K for the fiscal
            year ended December 31, 1994, and incorporated herein by reference.

10.7        Amended and Restated Private Label Revolving Plan Agreement between
            Registrant and Bank One, Dayton, N.A., filed October 1, 1993 as
            Exhibit 10.7 to Registrant's Form S-1, Registration File No.
            33-69876, and incorporated herein by reference. Portions of the
            Exhibit have been omitted pursuant to a request by Registrant for
            confidential treatment.

10.8.1      Termination of Stock Redemption Agreement dated September 24, 1993
            between Roberds Service Company and shareholders of Roberds Service
            Company, filed October 1, 1993 as Exhibit 10.8.1 to Registrant's
            Form S-1, Registration File No. 33-69876, and incorporated herein by
            reference.

10.8.2      Termination of Stock Redemption Agreement dated September 24, 1993
            between Roberds, Inc. and shareholders of Roberds, Inc., filed
            October 1, 1993 as Exhibit 10.8.2 to Registrant's Form S-1, Regis-
            tration File No. 33-69876, and incorporated herein by reference.

10.9#       Letter Agreements Limiting Salary and Bonus of Messrs. Fletcher,
            Wright and Smith, filed November 12, 1993 as Exhibit 10.9 to
            Registrant's Amendment No. 3 to Form S-1, Registration File No. 33-
            69876, and incorporated herein by reference.

10.10#      Registrant's Executive Compensation Plan, adopted in 1994, effective
            for the 1995 calendar year, filed as Exhibit 10.10 to Registrant's
            Annual Report on Form 10-K for the fiscal year ended December 31,
            1994 and incorporated herein by reference.


                                       53

<PAGE>   54



10.10.1#    Registrant's Amended and Restated Executive Compensation Plan, as
            amended for the 1996 calendar year, amending the Plan referred to in
            Exhibit 10.10 above, and filed as Exhibit 10.10.1 to Registrant's
            Annual Report on Form 10-K for the fiscal year ended December 31,
            1995, and filed herewith.

*10.10.2#   Registrant's Seconded Amended and Restated Executive Compensation
            Plan, as amended for the 1997 calendar year, amending the Plan
            referred to in Exhibit 10.10.1 above, and filed herewith.

*10.11.1#   Employment Agreement, dated as of March 1, 1996, between Registrant
            and Charles H. Palko, Vice President-Appliances, and filed herewith.

*10.11.2#   Employment Agreement, dated as of July 10, 1996, between Registrant
            and Michael E. Ray, President-Tampa Market, and filed herewith.

11          Calculation of pro forma net earnings for the years ended December
            31, 1993 and 1992, filed on March 25, 1994, as Exhibit 11 to
            Registrant's Annual Report on Form 10-K for the year ended December
            31, 1993, Commission File Number 0-22702, and incorporated herein by
            reference.

21          Subsidiary of Registrant, filed as Exhibit 21 to Registrant's Annual
            Report on Form 10-K for the fiscal year ended December 31, 1994 and
            incorporated herein by reference.

*23         Independent Auditors' Consent.

*24         Powers of attorney.

*27         Financial Data Schedules



*        Exhibits electronically filed herewith.
**       Exhibits incorporated by reference for the first time.
#        Constitutes a "management contract or compensatory plan or 
          arrangement," pursuant to Item 14(a)(3),(c).


         (b)      REPORTS ON FORM 8-K

On December 4, 1996, the Company filed a Report on Form 8-K, announcing the
settlement of the class-action shareholders suit discussed elsewhere herein.

            
         (c)      EXHIBITS

The response to this portion of Item 14 is submitted as a separate section of
this Report.


         (d)      FINANCIAL STATEMENT SCHEDULES

The response to this portion of Item 14 is submitted as a separate section of
this Report.



                                       54

<PAGE>   55




                                   SIGNATURES



Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, Registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.

ROBERDS, INC., by



/s/ Kenneth W. Fletcher*
------------------------------------
Kenneth W. Fletcher, its
Chief Executive Officer
and President


/s/ Robert M. Wilson
------------------------------------
Robert M. Wilson, its
Executive Vice President and
Chief Financial Officer



/s/ Michael A. Bruns
------------------------------------
Michael A. Bruns, its
Vice President and
Chief Accounting Officer



           
*By:  /s/ Robert M. Wilson
    ----------------------------
 Robert M. Wilson
 Attorney in Fact



February 27, 1996






                                       55

<PAGE>   56



Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of Registrant and in
the capacities indicated on February 27, 1996.


/s/ Kenneth W. Fletcher*
------------------------------------
Kenneth W. Fletcher
Director

/s/ Carl E. Gunter*
------------------------------------
Carl E. Gunter
Director

/s/ Jerry L. Kirby*
------------------------------------
Jerry L. Kirby
Director

/s/ James F. Robeson*
------------------------------------
James F. Robeson
Director

/s/ Howard W. Smith*
------------------------------------
Howard W. Smith
Director

/s/ Gilbert P. Williamson*
------------------------------------
Gilbert P. Williamson
Director

/s/ Robert M. Wilson
------------------------------------
Robert M. Wilson
Director

/s/ Donald C. Wright*
------------------------------------
Donald C. Wright
Director


            
*By:  /s/ Robert M. Wilson
    ---------------------------------
 Robert M. Wilson
 Attorney in Fact

10k96.per



                                       56

<PAGE>   57



                                  EXHIBIT INDEX




2.1         Certificate and Agreement of Merger between Dayton Factory Service,
            Inc. and Registrant, filed October 1, 1993 as Exhibit 2.1 to
            Registrant's Form S-1, Registration File No. 33-69876, and incorpo-
            rated herein by reference.

2.2         Certificate and Agreement of Merger between Roberds of Atlanta, Inc.
            and Registrant, filed October 1, 1993 as Exhibit 2.2 to Registrant's
            Form S-1, Registration File No. 33-69876, and incorporated herein by
            reference.

2.3         Stock Purchase Agreement among Registrant, Kenneth W. Fletcher and
            Donald C. Wright transferring all of the outstanding shares of
            Roberds Service Company to Registrant, filed October 1, 1993 as
            Exhibit 2.3 to Registrant's Form S-1, Registration File No.
            33-69876, and incorporated herein by reference.

2.4         Stock Purchase Agreement among Registrant, Kenneth W. Fletcher and
            Donald C. Wright transferring all of the outstanding shares of
            Roberd Insurance Agency, Inc. to Registrant, filed October 1, 1993
            as Exhibit 2.4 to Registrant's Form S-1, Registration File No.
            33-69876, and incorporated herein by reference.

2.5         Certificate of merger of Roberds Service Company into Roberds, Inc.,
            effective August 31, 1994, filed as Exhibit 2.5 to Registrant's
            Annual Report on Form 10-K for the fiscal year ended December 31,
            1994 and incorporated herein by reference.

3.1         Amended Articles of Incorporation of Registrant, filed January 10,
            1994, as Exhibit 4.1 to Registrant's Form S-8, Registration File No.
            33-73900, and incorporated herein by reference.

3.2         Amended Code of Regulations of Registrant, filed January 10, 1994,
            as Exhibit 4.2 to Registrant's Form S-8, Registration File No.
            33-73900, and incorporated herein by reference.

4.1         Amended Articles of Incorporation of Registrant (filed as Exhibit
            3.1).

4.2         Amended Code of Regulations of Registrant (filed as Exhibit 3.2).

4.3         Specimen certificate for Registrant's Common Shares, filed October
            1, 1993 as Exhibit 4.3 to Registrant's Form S-1, Registration File
            No. 33-69876, and incorporated herein by reference.

4.3.1       Amended specimen certificate for Registrant's Common Shares,
            reflecting the change in stock transfer agent to National City Bank,
            Cleveland, Ohio, effective November 1, 1995, filed as Exhibit 4.3.1
            to Registrant's Annual Report on Form 10-K for the fiscal year ended
            December 31, 1995, and incorporated herein by reference.

4.4         Excluded from the exhibits are certain agreements relating to long
            term debt which, individually, do not exceed 10% of the total assets
            of Registrant. Registrant hereby undertakes to furnish a copy of
            such agreements upon request by the Commission.

10.1#       Roberds, Inc. 1993 Stock Incentive Plan, filed October 1, 1993 as
            Exhibit 10.1 to Registrant's Form S-1, Registration File No.
            33-69876, and incorporated herein by reference.


                                       57

<PAGE>   58



10.1.1#     Amendment to Roberds, Inc. 1993 Stock Incentive Plan, filed as
            Exhibit 99.1 to Registrant's Form S-1, File No. 33-97262, filed
            September 25, 1995, and incorporated herein by reference.

*10.1.2#    Amendment to Roberds, Inc. 1993 Stock Incentive Plan, referred to in
            Exhibit 10.1, effective as of November 1, 1996, and filed herewith.

10.2#       Roberds, Inc. Employee Stock Purchase Plan, filed October 1, 1993 as
            Exhibit 10.2 to Registrant's Form S-1, Registration File No.
            33-69876, and incorporated herein by reference.

*10.2.1#    Amendment to Roberds, Inc. Employee Stock Purchase Plan, referred to
            in Exhibit 10.2, effective as of November 1, 1996, and filed
            herewith.

10.3#       Roberds, Inc. 1993 Outside Director Stock Option Plan, filed October
            1, 1993 as Exhibit 10.3 to Registrant's Form S-1, Registration File
            No. 33-69876, and incorporated herein by reference.

*10.3.1#    Amendment to Roberds, Inc. 1993 Outside Director Stock Option Plan,
            referred to in Exhibit 10.3, effective as of November 1, 1996, and
            filed herewith.

10.3.2#     Roberds, Inc. Profit Sharing and Employee Retirement Savings Plan,
            as amended, filed as Exhibit 99 to Registrant's Form S-8,
            Registration File No. 33-81086, and incorporated herein by
            reference.

10.3.3#     Roberds, Inc. Amended and Restated Deferred Compensation Plan for
            Outside Directors, effective 1996, filed as Exhibit 10.3.2 to
            Registrant's Annual Report on Form 10-K for the fiscal year ended
            December 31, 1995, and incorporated herein by reference.

*10.3.3.1#  Amendment to Roberds, Inc. Amended and Restated Deferred
            Compensation Plan for Outside Directors, referred to in Exhibit
            10.3.3, effective as of February 27, 1996, and filed herewith.

**10.3.3.2# Amendment to Roberds, Inc. Amended and Restated Deferred
            Compensation Plan for Outside Directors, referred to in Exhibit
            10.3.3, effective as of November 1, 1996, and filed as Exhibit 99.1
            to Registrant's Form S-8, Registration File No. 333-19903, and
            incorporated herein by reference.

10.4.1      Lease Agreement dated April 1, 1990 among Registrant, Kenneth W.
            Fletcher and Donald C. Wright, relating to Registrant's facility
            located at 1000 East Central Avenue, West Carrollton, Ohio, and
            amendments thereto, filed October 1, 1993 as Exhibit 10.4.1 to
            Registrant's Form S-1, Registration File No. 33-69876, and
            incorporated herein by reference.

10.4.1.1    Assignment and Assumption Agreement in connection with the transfer
            of ownership of Registrant's facility located at 1000 East Central
            Avenue, West Carrollton, Ohio from Kenneth W. Fletcher and Donald C.
            Wright, an Ohio general partnership, to Kenneth W. Fletcher,
            individually, and assigning Registrant's related lease of the
            property to Mr. Fletcher, all effective January 1, 1995, and filed
            as Exhibit 10.4.1.1 to Registrant's Annual Report on Form 10-K for
            the fiscal year ended December 31, 1994 and incorporated herein by
            reference.

10.4.1.2    Assignment and Assumption Agreement in connection with the transfer
            of ownership of Registrant's facility located at 1000 East Central
            Avenue, West Carrollton, Ohio from Kenneth W. Fletcher,
            individually, to DAF Investments LTD., an Ohio limited liability
            company controlled by Mr. Fletcher, and assigning Registrant's
            related lease of the property to DAF Investments LTD., all effective
            January 1, 1995, and filed as Exhibit 10.4.1.2 to Registrant's
            Annual Report on Form 10-K for the fiscal year ended December 31,
            1994 and incorporated herein by reference.

*10.4.1.3   Assignment and Assumption of Lease in connection with the transfer
            of ownership of Registrant's facility located at 1000 East Central
            Avenue, West Carrollton, Ohio from DAF Investments LTD.,

                                       58

<PAGE>   59



            an Ohio limited liability company controlled by Mr. Kenneth W.
            Fletcher, to DAF West Carrollton Plaza, LTD., an Ohio limited
            liability company controlled by Mr. Fletcher, and assigning
            Registrant's related lease of the property to DAF West Carrollton
            Plaza, LTD., effective January 14, 1997, and incorporated herein by
            reference and filed herewith.

10.4.2      Lease Agreement dated April 1, 1990 among Registrant, Kenneth W.
            Fletcher and Donald C. Wright, relating to Registrant's facility
            located at 1100 East Central Avenue, West Carrollton, Ohio, and
            amendments thereto, filed October 1, 1993 as Exhibit 10.4.2 to
            Registrant's Form S-1, Registration File No. 33-69876, and
            incorporated herein by reference.

10.4.2.1    Assignment and Assumption Agreement in connection with the transfer
            of ownership of Registrant's facility located at 1100 East Central
            Avenue, West Carrollton, Ohio from Kenneth W. Fletcher and Donald C.
            Wright, an Ohio general partnership, to Kenneth W. Fletcher,
            individually, and assigning Registrant's related lease of the
            property to Mr. Fletcher, all effective January 1, 1995, and filed
            as Exhibit 10.4.2.1 to Registrant's Annual Report on Form 10-K for
            the fiscal year ended December 31, 1994 and incorporated herein by
            reference.

10.4.2.2    Assignment and Assumption Agreement in connection with the transfer
            of ownership of Registrant's facility located at 1100 East Central
            Avenue, West Carrollton, Ohio from Kenneth W. Fletcher,
            individually, to DAF Investments LTD., an Ohio limited liability
            company controlled by Mr. Fletcher, and assigning Registrant's
            related lease of the property to DAF Investments LTD., all effective
            January 1, 1995, and filed as Exhibit 10.4.2.2 to Registrant's
            Annual Report on Form 10-K for the fiscal year ended December 31,
            1994 and incorporated herein by reference.

*10.4.2.3   Assignment and Assumption of Lease in connection with the transfer
            of ownership of Registrant's facility located at 1100 East Central
            Avenue, West Carrollton, Ohio from DAF Investments LTD., an Ohio
            limited liability company controlled by Mr. Kenneth W. Fletcher, to
            DAF West Carrollton Plaza, LTD., an Ohio limited liability company
            controlled by Mr. Fletcher, and assigning Registrant's related lease
            of the property to DAF West Carrollton Plaza, LTD., effective
            January 14, 1997, and incorporated herein by reference and filed
            herewith.

10.4.3      Lease Agreement dated June 1, 1988 among Registrant, Kenneth W.
            Fletcher and Donald C. Wright, relating to Registrant's Piqua, Ohio
            facility, and amendments thereto, filed October 1, 1993 as Exhibit
            10.4.3 to Registrant's Form S-1, Registration File No. 33-69876, and
            incorporated herein by reference.

10.4.3.1    Assignment and Assumption Agreement in connection with the transfer
            of ownership of Registrant's Piqua, Ohio facility from Kenneth W.
            Fletcher and Donald C. Wright, an Ohio general partnership, to
            Donald C. Wright, individually, and assigning Registrant's related
            lease of the property to Mr. Wright, all effective January 1, 1995
            and filed as Exhibit 10.4.3.1 to Registrant's Annual Report on Form
            10-K for the fiscal year ended December 31, 1994 and incorporated
            herein by reference.

10.4.4      Lease Agreement dated April 1, 1988 among Registrant, Kenneth W.
            Fletcher and Donald C. Wright, relating to Registrant's Richmond,
            Indiana facility, and amendments thereto, filed October 1, 1993 as
            Exhibit 10.4.4 to Registrant's Form S-1, Registration File No.
            33-69876, incorporated herein by reference.

10.4.4.1    Assignment and Assumption Agreement in connection with the transfer
            of ownership of Registrant's Richmond, Indiana facility from Kenneth
            W. Fletcher and Donald C. Wright, an Ohio general partnership, to
            Donald C. Wright, individually, and assigning Registrant's related
            lease of the property to Mr. Wright, all effective January 1, 1995,
            and filed as Exhibit 10.4.4.1 to Registrant's Annual Report on Form
            10-K for the fiscal year ended December 31, 1994 and incorporated
            herein by reference.

                                       59

<PAGE>   60



10.4.5      Lease Agreement dated March 1, 1992 among Registrant, Kenneth W.
            Fletcher and Donald C. Wright, relating to Registrant's
            Springfield, Ohio facility, and amendments thereto, filed October 1,
            1993 as Exhibit 10.4.5 to Registrant's Form S-1, Registration File
            No. 33-69876, and incorporated herein by reference.

10.4.5.1    Assignment and Assumption of Leases transferring ownership of
            Registrant's Springfield, Ohio facility from Kenneth W. Fletcher and
            Donald C. Wright, an Ohio general partnership, to Springfield
            Properties, Inc., an Ohio corporation owned by Messrs. Fletcher and
            Wright, and assigning Registrant's related lease of the property to
            Springfield Properties, Inc., all effective November 16, 1994, and
            filed as Exhibit 10.4.5.1 to Registrant's Annual Report on Form 10-K
            for the fiscal year ended December 31, 1994 and incorporated herein
            by reference.

10.4.6      Lease Agreement dated March 1, 1987 between Registrant and Howard
            Investments, a partnership owned by the Initial Shareholders,
            relating to Registrant's Norcross, Georgia facility, filed October
            1, 1993 as Exhibit 10.4.6 to Registrant's Form S-1, Registration
            File No. 33-69876, and incorporated herein by reference.

10.4.6.1    Amendments to Lease Agreement between Registrant and Howard
            Investments, referred to in Exhibit 10.4.6, effective December 20,
            1995, pursuant to a sale of the property by Howard Investments to
            800 Broadway and Ponce de Leon Stores, which are unrelated to the
            Company and the Initial Shareholders, filed as Exhibit 10.4.6.1 to
            Registrant's Annual Report on Form 10-K for the fiscal year ended
            December 31, 1995, and incorporated herein by reference.

10.4.7      Lease Agreement dated March 1, 1987 between Registrant and Howard
            Investments, a partnership owned by the Initial Shareholders,
            relating to Registrant's Marietta, Georgia facility, filed October
            1, 1993 as Exhibit 10.4.7 to Registrant's Form S-1, Registration
            File No. 33-69876, and incorporated herein by reference.

10.4.8      Lease Agreement dated November 1, 1987 between Registrant and Howard
            Investments, a partnership owned by the Principal Shareholders,
            relating to Registrant's Forest Park, Georgia facility, and
            amendments thereto, filed October 1, 1993 as Exhibit 10.4.8 to
            Registrant's Form S-1, Registration File No. 33-69876, and
            incorporated herein by reference.

10.4.9      Rent-Up Guarantee Agreement, filed October 1, 1993 as Exhibit 10.4.9
            to Registrant's Form S-1, Registration File No. 33-69876, and
            incorporated herein by reference.

10.5        Tax Indemnification Agreement among Kenneth W. Fletcher, Donald C.
            Wright, Howard W. Smith, and Registrant, filed October 1, 1993 as
            Exhibit 10.5 to Registrant's Form S-1, Registration File No.
            33-69876, and incorporated herein by reference.

10.6.1      Amended and Restated Security Agreement between Registrant and
            Chrysler First Commercial Corporation, filed October 1, 1993 as
            Exhibit 10.6.1 to Registrant's Form S-1, Registration File No.
            33-69876, and incorporated herein by reference.

10.6.2      Inventory Financing and Security Agreement between Whirlpool
            Financial Corporation and Registrant, filed October 1, 1993 as
            Exhibit 10.6.2 to Registrant's Form S-1, Registration File No. 33-
            69876, and incorporated herein by reference.

10.6.3      Business Loan Agreement between Bank One, Dayton, NA and Registrant,
            dated November 23, 1993, for up to $30 million. Filed as Exhibit
            10.6.3 to Registrant's Form 10-K for the fiscal year ended December
            31, 1993, and incorporated herein by reference.


                                       60

<PAGE>   61



10.6.3.1    Amendment to Business Loan Agreement between Bank One, Dayton, NA
            and Registrant, dated April 20, 1994, amending the agreement
            referred to in Exhibit 10.6.3, and filed as Exhibit 10.6.3.1 to
            Registrant's Annual Report on Form 10-K for the fiscal year ended
            December 31, 1994, and incorporated herein by reference.

10.6.3.2    Amendment to Amended and Restated Business Loan Agreement between
            Bank One, Dayton, NA and Registrant, dated December 7, 1994,
            amending the agreement referred to in Exhibit 10.6.3, and filed as
            Exhibit 10.6.3.2 to Registrant's Annual Report on Form 10-K for the
            fiscal year ended December 31, 1994, and incorporated herein by
            reference.

10.6.3.3    Amendment to Amended and Restated Business Loan Agreement between
            Bank One, Dayton, NA and Registrant, dated October 13, 1995,
            amending the agreement referred to in Exhibit 10.6.3, filed as
            Exhibit 10.6.3.3 to Registrant's Annual Report on Form 10-K for the
            fiscal year ended December 31, 1995, and incorporated herein by
            reference.

*10.6.3.4   Amendment to Amended and Restated Business Loan Agreement between
            Bank One, Dayton, NA and Registrant, dated as of June 29, 1996,
            amending the agreement referred to in Exhibit 10.6.3, and filed
            herewith.

*10.6.3.5   Second Amendment to Amended and Restated Business Loan Agreement
            between Bank One, Dayton, NA and Registrant, dated December 31,
            1996, amending the agreement referred to in Exhibit 10.6.3.4, and
            filed herewith.

*10.6.3.6   Amendment to Second Amended and Restated Business Loan Agreement
            between Bank One, Dayton, NA and Registrant, dated February 27,
            1997, amending the agreement referred to in Exhibit 10.6.3, and
            filed herewith.

10.6.4      Term loan agreement between Bank One, Dayton, NA and Registrant,
            dated November 8, 1994, for up to $7 million, and filed as Exhibit
            10.6.4 to Registrant's Annual Report on Form 10-K for the fiscal
            year ended December 31, 1994, and incorporated herein by reference.

10.7        Amended and Restated Private Label Revolving Plan Agreement between
            Registrant and Bank One, Dayton, N.A., filed October 1, 1993 as
            Exhibit 10.7 to Registrant's Form S-1, Registration File No.
            33-69876, and incorporated herein by reference. Portions of the
            Exhibit have been omitted pursuant to a request by Registrant for
            confidential treatment.

10.8.1      Termination of Stock Redemption Agreement dated September 24, 1993
            between Roberds Service Company and shareholders of Roberds Service
            Company, filed October 1, 1993 as Exhibit 10.8.1 to Registrant's
            Form S-1, Registration File No. 33-69876, and incorporated herein by
            reference.

10.8.2      Termination of Stock Redemption Agreement dated September 24, 1993
            between Roberds, Inc. and shareholders of Roberds, Inc., filed
            October 1, 1993 as Exhibit 10.8.2 to Registrant's Form S-1, Regis-
            tration File No. 33-69876, and incorporated herein by reference.

10.9#       Letter Agreements Limiting Salary and Bonus of Messrs. Fletcher,
            Wright and Smith, filed November 12, 1993 as Exhibit 10.9 to
            Registrant's Amendment No. 3 to Form S-1, Registration File No. 33-
            69876, and incorporated herein by reference.

10.10#      Registrant's Executive Compensation Plan, adopted in 1994, effective
            for the 1995 calendar year, filed as Exhibit 10.10 to Registrant's
            Annual Report on Form 10-K for the fiscal year ended December 31,
            1994 and incorporated herein by reference.


                                       61

<PAGE>   62



10.10.1#    Registrant's Amended and Restated Executive Compensation Plan, as
            amended for the 1996 calendar year, amending the Plan referred to in
            Exhibit 10.10 above, and filed as Exhibit 10.10.1 to Registrant's
            Annual Report on Form 10-K for the fiscal year ended December 31,
            1995, and filed herewith.

*10.10.2#   Registrant's Seconded Amended and Restated Executive Compensation
            Plan, as amended for the 1997 calendar year, amending the Plan
            referred to in Exhibit 10.10.1 above, and filed herewith.

*10.11.1#   Employment Agreement, dated as of March 1, 1996, between Registrant
            and Charles H. Palko, Vice President-Appliances, and filed herewith.

*10.11.2#   Employment Agreement, dated as of July 10, 1996, between Registrant
            and Michael E. Ray, President-Tampa Market, and filed herewith.

11          Calculation of pro forma net earnings for the years ended December
            31, 1993 and 1992, filed on March 25, 1994, as Exhibit 11 to
            Registrant's Annual Report on Form 10-K for the year ended December
            31, 1993, Commission File Number 0-22702, and incorporated herein by
            reference.

21          Subsidiary of Registrant, filed as Exhibit 21 to Registrant's Annual
            Report on Form 10-K for the fiscal year ended December 31, 1994 and
            incorporated herein by reference.

*23         Independent Auditors' Consent.

*24         Powers of attorney.

*27         Financial Data Schedules


                                       62