<PAGE>   1

                                  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, 1999

         [   ]   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)

                                  P.O. Box 8729
                             Dayton, Ohio 45401-8729
                                 (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 [ ].

At the close of trading on January 31, 2000, 6,240,958 common shares, without
par value, were outstanding. Of these, 3,124,315 common shares were held by
non-affiliates of the Registrant, with an aggregate market value of
approximately $2,441,652, based upon the average of the high and low trading
prices on January 14, 2000, which was the last day the shares traded. 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, 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 2000 annual meeting of
shareholders are incorporated into Part III herein by reference.


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                                TABLE OF CONTENTS



ITEM 1.   BUSINESS............................................................3


ITEM 2.   PROPERTIES..........................................................12


ITEM 3.   LEGAL PROCEEDINGS...................................................14


ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.................15


ITEM 5.   MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.......................................................................16


ITEM 6.   SELECTED FINANCIAL DATA.............................................18


ITEM 7.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.........................................................20


ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK..........28


ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA..........................28


ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE..........................................................47


ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT.......................48


ITEM 11. EXECUTIVE COMPENSATION...............................................51


ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.......51


ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.......................51


ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.....52

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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 high technology
consumer electronics. During 1999, the Company operated in three geographic
segments: the Ohio market, which includes six stores in the greater Dayton, Ohio
area and a single megastore in Cincinnati, Ohio; the greater Atlanta, Georgia
market, which includes nine stores; and the greater Tampa, Florida market, which
included eight stores.

On January 19, 2000, the Company filed for protection under Chapter 11 of the
Federal bankruptcy laws, and announced that it was closing its Tampa, Florida
market and the Cincinnati, Ohio store, and offering for sale the Atlanta
(Buckhead), Georgia store facility. The Company announced that it would focus
its efforts on turning around the financial performance in its remaining
markets, Dayton, Ohio and Atlanta, Georgia. The Company is operating as a
debtor-in-possession under case number 00-30194, Southern District of Ohio,
Western Division, Dayton, Ohio.

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, its mailing address is P.O. Box 8729, Dayton, Ohio 45401-8729, and
its telephone number is (937) 859-5127. The Company's common shares trade on the
Nasdaq SmallCap Market, under the symbol "RBDSQ." As described in Item 5 below,
trading in the Company's shares was halted by Nasdaq following the Company's
announcement that it would seek protection under the federal bankruptcy laws.


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 high technology 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,

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


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enabling Roberds 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 equal to or below those of its competitors. The Company believes that its
mix of products provides a strategic advantage over certain of its competitors.

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.

PRODUCT PRICING STRATEGY. The Company's product pricing strategy is to offer its
merchandise at competitive prices throughout the year. Roberds shops its
competition regularly, and attempts to set its prices equal to or below those of
its competitors. At the time of sale, and for 30 days thereafter, the Company
guarantees to its customers that its prices are equal to or below those of its
competitors.

BROAD SELECTION OF NAME-BRAND MERCHANDISE. The Company sells 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, 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.

STORE CONCENTRATION AND EFFICIENCIES. Roberds operates in metropolitan areas of
at least one million people. The Company has concentrated multiple stores 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 radio, and through direct
mail, and is able to benefit from the advertising efficiencies of locating
multiple stores within its geographic marketing areas. The Company's "hub and
spoke" warehouse and delivery functions also create operating leverage by
serving multiple stores from a regional facility.

CORPORATE COMMITMENT TO CUSTOMER SERVICE. The Company gives managers full
authority to respond to customer issues. Unlike many of its competitors, Roberds
employs commissioned, trained, professional sales associates, who are
knowledgeable about the products they sell, and almost all of whom are employed
full time by the Company. On in-stock merchandise, the Company offers delivery
within two days, for a reasonable charge, seven days per week. Roberds offers
same-day and next-day delivery service on selected merchandise. Roberds has a
competitive policy on replacements and returns. Roberds 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.

OPERATIONS. The Company has experienced operating losses in each of the last
four years. The Company is implementing a series of changes in its operating
strategy and the day-to-day execution of its business that are designed to
improve its operating results. These changes are outlined throughout this
Report, and are summarized below in Management's Discussion and Analysis of
Financial Condition and Results of Operations-Outlook.


EXPANSION STRATEGY
------------------

ENTRY INTO NEW MARKETS. The Company has no plans to enter new markets during
2000.

RELOCATION OR EXPANSION WITHIN EXISTING MARKETS. The Company believes that the
growth of the Atlanta, Georgia area may present opportunities to relocate one or
more of its existing Atlanta area stores, and may also present opportunities for
new locations. The Company is exploring such relocations and expansions during
for possible implementation


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in 2001 and beyond. However, the Company's ability to relocate or expand is
constrained by its financial condition and its line of credit.

STORE RENOVATIONS. The Company periodically renovates and upgrades its existing
stores to keep them fresh and to support changes in its product offerings. In
October 1999, Roberds opened a state-of-the-art electronics display in its
Norcross, Georgia store. During the third quarter of 1999, the Company opened a
Roberds Mattress Outlet in a vacant building in the parking lot of the Forest
Park, Georgia store. In addition, the two clearance centers that had been
operating within existing stores in the Atlanta market were consolidated into a
single, new clearance center located in space adjacent to the full-line Forest
Park store.

GENERAL. The Company's 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 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 high technology 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. 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 competitive with those of other furniture
retailers. 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 high technology 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. 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, 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.

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

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<PAGE>   6

frames, mattresses, box springs, water beds, and futons. The brand names sold by
the Company cover the full range of bedding quality, except that the Company
does not compete 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. Major appliance brands carried by the Company
include Amana, Frigidaire, General Electric, JennAir, KitchenAid, Maytag, and
Whirlpool, among others.

HIGH TECHNOLOGY CONSUMER ELECTRONICS PRODUCTS. High technology 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 focuses its efforts on large, big-ticket
electronics products, in particular, home theater systems and components, rather
than the small-ticket items carried by many mass merchants. 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, JVC, Mitsubishi, Pioneer, RCA, Sony, Toshiba, and Zenith,
among others.

Roberds has dedicated "home theater" displays 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 entertainment centers and recliners and other
"motion" furniture, Roberds believes that it is well positioned to capitalize on
the home theater merchandising concept. The Company has added high-definition
television ("HDTV") and plasma television to its product line, and has
identified digital products as a source for revenue growth.

OTHER. Selected floor-covering products are offered in the Ohio market.


ADVERTISING AND PROMOTION
-------------------------

Roberds employs a combination of newspaper, broadcast, and direct mail
advertisements. 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 inserted 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 Wednesday 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.

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'
commitment to be competitively priced.


CUSTOMER PROFILE
----------------

Roberds targets consumers who are 25 to 54 years of age, are married, and have
annual household incomes greater than $30,000. 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. Store 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 6:00 p.m., Sundays, providing ample opportunity for customers
to shop. Store hours are extended during peak selling seasons. Roberds employs
commissioned, trained, professional sales associates who are knowledgeable about
the products they sell, and almost all of whom are employed full time by the
Company.

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 third-party 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 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 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 Monday through Saturday, to provide maximum convenience for the
customer, and Sunday delivery service is offered throughout most of the year.
Typically, the customer can schedule deliveries of in-stock merchandise within
two days after the sale, and the Company offers same-day and next-day delivery
on selected 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 buyers review inventory and sales reports on a daily basis and place orders
based on analysis of past sales and existing inventory levels in the geographic
market areas. The buyers also adjust product pricing and advertising to meet
competitive needs in each geographic region.

Virtually all furniture, bedding, 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., a large national buying
group organized to purchase consumer electronics and major appliances. Roberds
believes its membership in NATM enables it to obtain better product pricing,
larger volume discounts, and more advertising rebates than it could obtain
independently.


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Vendors provide the Company with substantial incentives in the form of cash
discounts, volume rebates, promotional payments, and cooperative advertising
funds. The aggregate amount of these incentives was approximately $12.3 million
in 1999, $16.4 million in 1998, and $16.7 million in 1997. The decline in
incentives in 1999, as compared to 1998, was primarily due to a decline in the
volume of purchases by the Company, and a shift by the Company to products that
do not carry such incentives but have lower acquisition costs. There can be no
assurance that vendor incentives will continue at the current level. A delay or
reduction in, or discontinuance of, 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
------------

The Company operates a single distribution center in each of its market areas.
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, enterprise-wide 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. During 1999, the Company upgraded its
hardware and software to accommodate growth, gain efficiencies, and become Year
2000 compliant.

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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<PAGE>   9

CUSTOMER CREDIT PROGRAMS
------------------------

The Company offers qualified customers a private-label charge card administered
by GE Card Services ("GE"), formerly known as Banc One Private Label Credit
Services. According to GE, at December 31, 1999, the Company had more than
420,000 private-label charge card accounts that generated sales of approximately
$131 million in 1999. Such sales represent approximately 46 percent of the
Company's net sales and service revenues for 1999. The credit approval and
servicing process is administered by GE, 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) GE's cost of funds plus an administrative charge. As part of its
arrangement with GE, Roberds funds a reserve account designed to cover a portion
of the bad debt losses incurred by GE. All credit losses in excess of the
reserve account are the responsibility of GE. To the extent the Company utilizes
GE for programs other than its standard 90-days, same-as-cash program, the
Company pays a fee to GE for such programs.

As a result of this arrangement, Roberds holds no significant consumer
receivables and bears no credit risk beyond the fixed amount contributed to GE'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. GE is the sole provider of consumer financing to
the Company's customers.

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, for
furniture and bedding products, is 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 and internet
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.

One national furniture retailer entered the Dayton market in January 1999. A
regional appliance and electronics retailer entered the Cincinnati, Ohio and
Richmond, Indiana markets in 1999. Several national retailers operating in the
Company's markets have continued to expand within those markets. 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.

The industry competes on the basis of price; credit offerings; merchandise
selection, presentation, and availability; and service. The Company competes on
price by constantly shopping its competition within its geographic markets and
maintaining a competitive pricing approach. Because of its distinctive product
mix, Roberds can price its merchandise on the sales floor at or below the
competition. The Company believes it competes favorably on merchandise selection
because, at an average of 60,000 square feet of showroom size, 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. 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.

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<PAGE>   10

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 $6.4 million at December 31, 1999, compared to $8.9 million at
December 31, 1998.


EMPLOYEES
---------

At January 31, 2000, the Company had approximately 1,700 employees,
substantially all of whom were full time, including approximately 520 in sales
and sales management, 500 in office and administrative capacities, and 680 in
warehouse, service, and delivery functions. The Company has never experienced a
work stoppage due to labor difficulties. The Company considers its relations
with its employees to be good.

In May 1999, the commissioned sales associates in the Company's Ohio region
voted to be represented by the United Food and Commercial Workers, Local 1099
("UFCW"). Effective October 3, 1999, the Company and the UFCW entered into a
three-year agreement covering wages and working conditions for approximately 180
commissioned sales associates in the Ohio region. The Company does not believe
that the contract will have any significant effect on the Company's financial
position or operating results.

In November 1999, the drivers and helpers at the Company's Fairborn, Ohio
distribution center voted to be represented by Teamsters Local 957. The Company
is negotiating an agreement with the Teamsters. It is not possible to predict
the outcome of the negotiations or the effect of an agreement, if any, on the
Company's financial position or operating results.


SUBSIDIARIES
------------

Roberd Insurance Agency, Inc. is a wholly owned subsidiary of the Company, is a
licensed insurance agency under Ohio law, and earns a commission on credit
insurance sold by the Company.

                 ---------------------------------------------

                 ROBERDS, INC. 1999 ANNUAL REPORT ON FORM 10-K
                                 Page 10 of 128

<PAGE>   11

TRADEMARKS AND LICENSES
-----------------------

The trademarks ROBERDS(R), THE BIG ONE(R), EMPLOYEE PRICE SALE(R), BACK DOOR
SALE(R), ROBERDS GRAND FURNITURE APPLIANCES ELECTRONICS(R), BOTTOM LINE . . . IT
COSTS LESS AT ROBERDS(R), and DOUBLE THE DIFFERENCE(R) are registered by the
Company with the United States Patent and Trademark Office. Roberds has an
application pending to register HOME THEATER SOLUTIONS @ ROBERDS(TM), and has an
application pending to renew its registration Of AMERICA'S NAME BRAND
HEADQUARTERS(TM), which expired. 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.

                 ---------------------------------------------

                 ROBERDS, INC. 1999 ANNUAL REPORT ON FORM 10-K
                                 Page 11 of 128

<PAGE>   12


ITEM 2. PROPERTIES


Roberds' facilities are strategically located on major thoroughfares and many
are near interstate highways. Many stores are free-standing facilities, and all
have ample parking. The following table sets forth information regarding the
Company's stores and warehouses in each of its markets, at December 31, 1999:

<TABLE>
<CAPTION>

                                                SHOWROOM      WAREHOUSE       OWNED/
REGION                          YEAR OPENED    SQUARE FEET   SQUARE FEET      LEASED
------                          -----------    -----------   -----------      ------

OHIO
----
<S>                               <C>           <C>            <C>         <C>
West Carrollton, Ohio store        1971          145,000        15,000      Leased(1)
West Carrollton, Ohio offices      1974                                     Leased(1)
Piqua, Ohio                        1983           56,000         4,000      Leased(1)
Springfield, Ohio                  1985           50,000        16,000      Leased(1)
Richmond, Indiana                  1988           55,000         4,000      Leased(1)
Vandalia, Ohio                     1989          139,000        20,000      Owned
Beavercreek, Ohio                  1995           63,000         5,000      Owned
Fairborn, Ohio                     1996                        480,000      Owned
Springdale, Ohio                   1996          250,000        64,000      Leased(4)

GEORGIA
-------
Norcross, Georgia                  1979           75,000        13,000      Leased
Marietta, Georgia(2)               1984           59,000         4,000      Leased(1)
Forest Park, Georgia(2)            1987          110,000         4,000      Leased(1)
Roswell, Georgia                   1990           56,000         4,000      Leased
Doraville, Georgia                 1994                        217,000      Leased
Gainesville, Georgia               1994           71,000        10,000      Leased
Douglasville, Georgia(3)           1994           64,000         4,000      Owned
Athens, Georgia                    1995           62,000         4,000      Owned
Fayetteville, Georgia              1995           62,000         4,000      Owned
Atlanta (Buckhead), Georgia        1996           70,000         6,000      Owned(4)

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

         Total                                 1,855,000     1,081,000
                                               =========     =========

</TABLE>

                 ---------------------------------------------

                 ROBERDS, INC. 1999 ANNUAL REPORT ON FORM 10-K
                                 Page 12 of 128

<PAGE>   13



(1)  Facilities leased from entities controlled by one or more of the Initial
     Shareholders. See Item 13 of this Report, Certain Relationships and Related
     Transactions.
(2)  The facilities in Marietta, Georgia include approximately 14,000 square
     feet, and in Forest Park, Georgia approximately 8,000 square feet, not
     included in the table above, leased, or available to lease, to third party
     commercial and retail tenants.
(3)  The Douglasville, Georgia store includes approximately 17,000 square feet
     not included in the table above, leased to third parties.
(4)  In January 2000, the Company announced that these stores would be closed as
     part of its filing under Chapter 11 of the Federal bankruptcy laws and its
     plan to reorganize.


In October 1999, portions of the Norcross, Georgia store were renovated into a
state-of-the-art high-technology electronics product display. In addition, the
portion of the store that had been used as a clearance center was renovated into
a new display area, primarily for bedding products. The merchandise that had
been displayed in the clearance area was relocated to the Forest Park, Georgia
store.

In the third quarter of 1999, the Company relocated and expanded the clearance
center that had been located in the Forest Park, Georgia complex, into new space
within the complex that had been available for rent to third parties. The
Company opened Roberds Mattress Outlet in the former clearance space. Upon
completion of these changes and upgrades, the Company occupied the entire Forest
Park complex, except for approximately 8,000 square feet leased or available for
lease to third parties.

The stores leased from unaffiliated third parties generally involve an initial
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(2) 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.

At December 31, 1999, the Company was in default on substantially all real
property leases because timely payment was not made. As a result, in most cases,
landlords have the right to cancel the lease and take possession of the
property. The Company may also be subject to penalties. As part of the
bankruptcy proceedings, all executory contracts, including lease obligations,
may be assumed or rejected. The Company is currently in the process of reviewing
leases for assumption or rejection.


---------------------
(2) The Company's Initial Shareholders were 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 1993. Upon Mr.
Fletcher's death in January 1999, his shares moved into the hands of his estate
and into a trust for the benefit of his spouse. Further references in this
Report to the Initial Shareholders include the estate and trust as the context
requires. See also Item 12 of this Report, Security Ownership of Certain
Beneficial Owners and Management.

                 ---------------------------------------------

                 ROBERDS, INC. 1999 ANNUAL REPORT ON FORM 10-K
                                 Page 13 of 128


<PAGE>   14



ITEM 3. LEGAL PROCEEDINGS


GENERAL
-------

In 1994, the Ohio Bureau of Workers' Compensation ("Bureau") completed an
examination of the Company's 1992 and 1993 workers' compensation returns. After
adjustments, the Bureau assessed $871,000 against the Company, based on the
Bureau's reclassification of the majority of the Company's Ohio employees into
higher rate classifications. After a series of administrative and judicial
appeals by the Company, in August 1999 the Ohio Supreme Court ruled against the
Company in its final appeal. In 1998, the Company paid the $871,000 principal
amount of the 1992-1993 assessment. The Company has accrued $168,000 of
interest owed on the 1992-1993 assessment, which it expects to pay in 2000, as
well as the estimated amount of additional taxes that would be caused by a
reclassification of employees for the period from January 1994 through June
1996, consistent with the Bureau's position for 1992-93.

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.

On January 19, 2000, the Company filed for protection under Chapter 11 of the
Federal bankruptcy laws. It is not clear how long the Company may have to remain
under the protection of such laws, or whether the Company can successfully
emerge from bankruptcy protection.


ENVIRONMENTAL
-------------

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



                 ---------------------------------------------

                 ROBERDS, INC. 1999 ANNUAL REPORT ON FORM 10-K
                                 Page 14 of 128

<PAGE>   15

In 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 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.

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.

The Springfield site also included a gas station and car wash that were operated
for many years by a third-party tenant, under an agreement with the
Fletcher-Wright partnership. The Company was not a party to that agreement. In
December 1998, that operator abandoned the facilities and informed Springfield
Properties, Inc. that it did not intend to upgrade the underground gasoline
tanks that were on the site to comply with federal and state regulations
requiring such an upgrade. Late in 1999, Springfield Properties, Inc. removed
the abandoned tanks and demolished the former gas station and car wash.

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, 1999.

                 ---------------------------------------------

                 ROBERDS, INC. 1999 ANNUAL REPORT ON FORM 10-K
                                 Page 15 of 128


<PAGE>   16


                                     PART II


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

The Company's shares trade on the Nasdaq SmallCap Market, under the symbol
"RBDSQ." 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 1999 and 1998.

                 First          Second             Third           Fourth
                Quarter         Quarter           Quarter          Quarter
                -------         -------           -------          -------
1999
----
High            $3.33            $3.13             $2.19            $2.63

Low              1.69             1.88              1.00             0.50

Close            2.31             2.00              1.25             1.44

1998
----
High            $4.50            $3.50             $4.25            $3.00

Low              2.13             2.38              1.50             1.50

Close            3.00             2.63              2.50             2.06

Such quotations include inter-dealer prices, without retail markup, markdown, or
commission, and may not necessarily reflect actual transactions. At the close of
trading on January 31, 2000, the Company had approximately 245 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, 2000 was approximately 1,700.

In October 1998, Nasdaq informed the Company that it failed to meet one of the
requirements for continued listing on the Nasdaq National Market tier,
specifically the requirement that at least $5 million of stock be held by
individuals other than officers, directors, and those who own more than ten
percent of the Company's outstanding shares. In June 1999, following an appeal
by the Company, trading of the Company's stock was moved from the Nasdaq
National Market tier to the Nasdaq SmallCap Market. In August 1999, Nasdaq
formally approved the Company's stock for listing on the Nasdaq SmallCap Market.

Following the Company's announcement on January 18, 2000 that it would file for
protection under Chapter 11 of the Federal bankruptcy laws, Nasdaq suspended
trading in the Company's stock. In February 2000, the Company responded to
Nasdaq's request for information about the bankruptcy filing and the Company's
prospects for the future. The Company expects Nasdaq to convene a hearing on the
trading halt, though the timing of such hearing is not known. Nasdaq has not
indicated when, or if, it will permit the Company's stock to resume trading.

Through the initial public offering of its common shares in 1993, the Company
paid dividends from time to time. In 1998, the Company settled an examination of
its 1993 and 1994 federal income tax returns, and accrued $225,000 payable to
the Initial Shareholders as the result of that settlement, pursuant to the Tax
Indemnification Agreement entered into at the time of the initial public
offering. A portion of that accrual was paid during 1999, and a portion remains
unpaid and subject to the bankruptcy proceedings. See Notes to the Consolidated
Financial Statements included elsewhere in this Report.


                 ---------------------------------------------

                 ROBERDS, INC. 1999 ANNUAL REPORT ON FORM 10-K
                                 Page 16 of 128

<PAGE>   17

Other than reimbursements made pursuant to the Tax Indemnification Agreement,
the Company has declared no dividends since the initial public offering of its
common shares, and the Board of Directors contemplates no dividends. The
Company's revolving line of credit contains a covenant prohibiting the payment
of dividends. Therefore, no retained earnings were available for dividends at
December 31, 1999.


                 ---------------------------------------------

                 ROBERDS, INC. 1999 ANNUAL REPORT ON FORM 10-K
                                 Page 17 of 128


<PAGE>   18



ITEM 6. SELECTED FINANCIAL DATA

The operations 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, and the independent auditor's report thereon, included
elsewhere herein. Certain reclassifications have been made in the prior years'
selected financial data to conform to the classifications used in 1999. These
reclassifications had no effect on the net (loss) earnings or shareholders'
equity as previously reported.


OPERATIONS STATEMENT DATA:
---------------------------
(In thousands, except per share data)

<TABLE>
<CAPTION>
                                                         YEAR-ENDED DECEMBER 31
                                     1999           1998           1997           1996           1995
                                     ----           ----           ----           ----           ----
<S>                             <C>            <C>            <C>            <C>            <C>
Net revenues                      $ 287,008      $ 318,710      $ 341,703      $ 342,102      $ 301,324
Cost of sales                       189,064        218,497        230,754        238,645        209,320
                                  ---------      ---------      ---------      ---------      ---------
Gross profit                         97,944        100,213        110,949        103,457         92,004
Selling, delivery, and
    administrative expenses         111,874        110,358        111,642        102,043         81,187
Interest expense, net                 6,991          7,224          7,545          5,681          3,500
Litigation                               --             --             --          3,314             --
Finance participation income         (2,528)        (3,032)        (3,217)        (2,451)        (2,489)
Other income, net                    (4,415)        (3,536)        (3,495)        (3,690)        (3,440)
                                  ---------      ---------      ---------      ---------      ---------
(Loss) earnings before income
    taxes                           (13,978)       (10,801)        (1,526)        (1,440)        13,246
Income taxes (benefit)                   --          5,322           (425)          (530)         5,225
Net (loss) earnings               $ (13,978)     $ (16,123)     $  (1,101)     $    (910)     $   8,021
                                  =========      =========      =========      =========      =========

Basic and diluted earnings
  (loss) per share                $   (2.26)     $   (2.66)     $   (0.18)     $   (0.15)     $    1.36
                                  =========      =========      =========      =========      =========
Weighted average shares out-
standing:
    Basic                             6,189          6,065          5,979          5,934          5,898
                                  =========      =========      =========      =========      =========
    Diluted                           6,189          6,065          5,979          5,934          5,919
                                  =========      =========      =========      =========      =========

</TABLE>

                 ---------------------------------------------

                 ROBERDS, INC. 1999 ANNUAL REPORT ON FORM 10-K
                                 Page 18 of 128


<PAGE>   19


BALANCE SHEET DATA (AT PERIOD END):
(In thousands)

<TABLE>
<CAPTION>
                                                                 DECEMBER 31
                                        1999          1998           1997           1996           1995
                                        ----          ----           ----           ----           ----
<S>                                <C>            <C>            <C>            <C>            <C>
Working capital (1)                 $ (42,641)     $   8,514      $  18,182      $  34,952      $  23,060
Merchandise inventories                36,660         43,937         51,173         62,998         41,377
Property and equipment, net            88,212         92,085         99,364        104,953         81,310
Total assets                          133,482        148,208        172,691        192,208        142,049
Long-term debt, including
   capital leases, less current
   maturities                          29,959         70,065         73,309         90,365         54,448
Deferred warranty revenue               2.632          5,211          8,727         11,627          9,546
Total shareholders' equity             15,917         29,672         45,769         46,570         47,199

SELECTED OPERATING DATA:
Stores open at end of period               24             24             24             25             23
Selling square footage at end
  of period (in thousands) (2)          1,805          1,805          1,782          1,784          1,394
Percentage (decrease) in
  in comparable store sales (3)          (9.9)          (4.6)         (11.0)          (8.1)          (0.9)
Inventory turnover (4)                    4.7            4.6            4.0            4.6            5.3

</TABLE>


1)   For 1999, includes $36,222 in debt, excluding capitalized lease
     obligations, reclassified from long-term to current liabilities (Note D).
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 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 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.


                 ---------------------------------------------

                 ROBERDS, INC. 1999 ANNUAL REPORT ON FORM 10-K
                                 Page 19 of 128

<PAGE>   20



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:

                                         YEAR ENDED DECEMBER 31
                                      1999        1998        1997

Net sales and service revenues       100.0%      100.0%      100.0%
Cost of sales and services            65.9        68.6        67.5
                                     -----       -----       -----
Gross profit                          34.1        31.4        32.5
Selling, delivery and
  administrative expenses             39.0        34.6        32.7
Interest expense, net                  2.4         2.2         2.2
Finance participation income          (0.9)       (1.0)       (1.0)
Other income, net                     (1.5)       (1.0)       (1.0)
                                     -----       -----       -----
(Loss)  before income
  taxes (benefit)                     (4.9)       (3.4)       (0.4)
Income taxes (benefit)                --           1.7        (0.1)
                                     -----       -----       -----
Net (loss)                            (4.9)%      (5.1)%      (0.3)%
                                     =====       =====       =====

Sales by the Company's three market areas as a percentage of total sales for
each of the last three years were as follows:

                                       YEAR ENDED DECEMBER 31

                                      1999     1998      1997

Ohio                                   46%      49%      50%

Georgia                                33       31       30

Florida                                21       20       20
                                      ---      ---      ---
                                      100%     100%     100%
                                      ===      ===      ===


                 ---------------------------------------------

                 ROBERDS, INC. 1999 ANNUAL REPORT ON FORM 10-K
                                 Page 20 of 128

<PAGE>   21


Sales by major product category as a percentage of total sales for each of the
last three years were as follows:

                                          YEAR ENDED DECEMBER 31
                                          1999     1998     1997

Furniture ...........................      42%      38%      37%

Bedding .............................      13       13       13

Major appliances ....................      21       24       25

Consumer electronics ................      18       18       19

Extended warranty contracts and other       6        7        6
                                          ---      ---      ---

                                          100%     100%     100%
                                          ===      ===      ===

1999 COMPARED TO 1998. Sales in 1999 were $287,008, compared to $318,710 in
1998, a 9.9% decrease. All stores were comparable in 1999. For 1999, the
percentage decreases in sales in the Company's three market areas were as
follows: Ohio (16%); Georgia (4%); and Florida (5%). During the third quarter of
1999, the Company was involved in the negotiation of a labor contract with its
sales force in the Ohio region, the Company's largest region. During the
negotiations, the union called for a boycott of the Company's Ohio stores, and
the sales associates were distracted by the bargaining, contributing to the
decline in Ohio sales. The labor contract has since been finalized. As a whole,
the Company believes that a highly competitive retail environment exists for its
major product lines. Distribution channels, particularly with electronics and
appliances, continue to expand to include national retailers, adding further
competitive pressures. These competitive factors also contributed to the decline
in comparable store sales (see "Business-Competition").

Furniture sales continued to increase as a percentage of total sales as the
Company continued to increase its emphasis on this higher margin category to
mitigate competitive pressures. The decline in major appliance sales as a
percentage of total sales reflects a highly competitive retailing environment,
expanded distribution channels in the industry, and a lack of new products in
this category. It is anticipated that the appliance category will remain under
pressure during 2000.

Gross profit for 1999 was $97,944, or 34.1% of sales, compared to $100,213, or
31.4% of sales, for 1998. The majority of the gross profit percentage
improvement in 1999 reflected an increase in the percentage of furniture sales
to total sales, which generated higher gross profit than other categories.
Additionally, furniture gross profit margins improved over 1998 due to better
pricing controls and fewer liquidations of discontinued merchandise. The gross
margin percentage in the fourth quarter of 1999 was positively affected by a
liquidation of LIFO inventory and a reduction in inventory shrinkage, which was
partially offset by a reduction in vendor incentives. Contributing to the gross
margin percentage improvement in 1999 was a decrease in the LIFO inventory
reserve of $298 versus an increase in the reserve of $1,211 in 1998.

Gross margins percentages for 1999 by category, were approximately 40% for
furniture, 46% for bedding, 22% for major appliances, and 17% for consumer
electronics. The gross margin percentages for 1999 increased for furniture as
compared to 1998, while margins for bedding, consumer electronics, and major
appliances held relatively steady. Product prices and margins in consumer
electronics and appliances continued to be under pressure during 1999, as a
result of competitive conditions in these categories.

                 ---------------------------------------------

                 ROBERDS, INC. 1999 ANNUAL REPORT ON FORM 10-K
                                 Page 21 of 128

<PAGE>   22


Selling, delivery, and administrative expenses increased to $111,874, or 39.0%
of sales in 1999, compared to $110,358, or 34.6% of sales, in 1998. The increase
in expense in 1999 as compared to 1998 was primarily attributable to increased
advertising and workers' compensation expense. The increase in expenses as a
percentage of sales for 1999, as compared to 1998, was primarily due to the
effects of fixed costs in light of the Company's decline in store sales and an
increase in advertising expense.

Interest expense, net of interest income, decreased to $6,991 for 1999, as
compared to $7,224 in 1998. The decrease in interest expense in 1999 resulted
primarily from a reduction in merchandise inventories, which resulted in a
decrease in the related indebtedness incurred to carry such inventories.

Finance participation income, which consists of income from the Company's
private-label credit card program, decreased to $2,528, or 0.9% of sales, in
1999, compared to $3,032, or 1.0% of sales, in 1998. Finance participation
decreased in 1999 compared to 1998 as a result of ongoing changes in the use of
income-generating finance programs compared to longer-term, same-as-cash
programs that generate financing expense. Such shifts may occur again in the
future, thereby affecting the Company's finance participation income.

Other income, net, which consists primarily of cash discounts and rental income
from tenants, was $4,415, or 1.5% of sales, in 1999, compared to $3,536, or 1.0%
of sales, for 1998. The increase in other income for 1999 was primarily due to
the receipt of life insurance proceeds of $1,102 resulting from the death of the
Company's chairman.

Loss before income taxes increased to $(13,978) in 1999, from $(10,801) in 1998
as a result of the above-mentioned items. There was no income tax expense for
1999 as compared to income tax expense of $5,322, or approximately 49% of the
loss before taxes, in 1998. The provision for income taxes in 1998 reflects an
increase in the valuation reserve provided for deferred tax assets resulting in
the elimination of all deferred tax assets at December 31, 1998. The increase in
the reserve was deemed necessary as a result of the uncertainty of the
recoverability of such future tax benefits.

As a result of the Company's continued declining sales in 1999, the resulting
sustained losses and inability to generate sufficient cash flow from operations,
and the failure to meet its debt covenant requirements, in January 2000 the
Company initiated a restructuring effort and filed for protection under the
United States Bankruptcy laws (see Note A).

1998 COMPARED TO 1997. Sales in 1998 were $318,710, compared to $341,703 in
1997, a 6.7% decrease. Comparable store sales in 1998 decreased by 4.6 %. The
decline in total sales includes the effect of closing the Decatur, Georgia store
in December 1997 ($7,728) and, to a lesser extent, the withdrawal from the
personal computer business in the Ohio market area ($4,303).

For 1998, the percentage increases (decreases) in sales in the Company's three
market areas were as follows:

                                 TOTAL              COMPARABLE
                                 STORES               STORES

Ohio                              (8)%                 (8)%

Georgia                           (4)                   3

Florida                           (8)                  (8)

Overall, the Company believes that a highly competitive retail environment for
big-ticket goods, combined with an industry wide softness in consumer
electronics and high consumer debt, contributed to the decrease in comparable
store sales. See "Business Competition."


                 ---------------------------------------------

                 ROBERDS, INC. 1999 ANNUAL REPORT ON FORM 10-K
                                 Page 22 of 128


<PAGE>   23

In March 1997, the Company entered into an agreement to sell third-party
extended warranty contracts. Revenues and the related costs of the contracts
entered into after the effective date of the agreement are being recognized at
the time the third-party contracts are sold. Revenues and selling costs related
to contracts sold prior to the effective date of the agreement are recognized
over the remaining lives of the contracts, and the expenses related to service
costs are recognized as incurred. Total sales were positively affected by this
new agreement by approximately 0.5% in 1998.

Gross profit for 1998 was $100,213, or 31.4% of sales, compared to $110,949, or
32.5% of sales, for 1997. The majority of the decline in gross profit margin
percentage in 1998 reflects the liquidation at reduced selling prices of certain
aged inventories and inventories from certain vendors that were being
de-emphasized or discontinued. Also contributing to the gross margin percentage
decline was an increase in the LIFO inventory reserve of $1,211 versus a
decrease in the reserve of $239 in 1997. Partially offsetting the decline in
gross margin percentage were the above-mentioned sales of third-party extended
warranty contracts, which favorably affected gross margins as a percentage of
sales by approximately 0.2% in 1998. The effect of the sale of third-party
warranty contracts on gross margin as a percentage of sales became comparable in
the second quarter of 1998.

Gross margin percentages for 1998 by category were approximately 34% for
furniture, 45% for bedding, 21% for major appliances, and 17% for consumer
electronics. The gross margin percentages for 1998 decreased for furniture as
compared to 1997, while margins for bedding, consumer electronics, and major
appliances held relatively steady. Contributing to the decline in gross margin
percentage for furniture was the above mentioned liquidation of certain aged and
de-emphasized merchandise and the increase in the LIFO reserve. This liquidation
is now complete. Product prices and margins in consumer electronics and
appliances continued to be under pressure during 1998, as a result of
competitive conditions in these categories.

Selling, delivery, and administrative expenses decreased to $110,358, or 34.6%
of sales in 1998, compared to $111,642, or 32.7% of sales, in 1997. The increase
in expenses as a percentage of sales for 1998, as compared to 1997, was
primarily due to increases in selling and warehouse expenses to support the
clearance of aged and discontinued merchandise and, to a lesser extent,
increases in provisions for certain employee benefits and the effect of fixed
costs in light of the Company's decline in comparable store sales. Selling,
delivery and administrative expenses for 1998 reflect: (a) reduced net
advertising and promotional credit expenses; (b) a one-time refund of premiums
of $1,053 and a 75% rate reduction for the first half of 1998 to all
participants in the State of Ohio workers' compensation fund; (c) a reduction in
worker's compensation expense as a result of a change to insured programs in
Georgia and Florida; (d) a decrease in professional fees for outside consulting
services; and (e) a reduction in property insurance expenses due to a change in
insurance carriers.

Interest expense, net of interest income, decreased to $7,224 for 1998, as
compared to $7,545 in 1997. The decrease in interest expense in 1998 resulted
primarily from a reduction in merchandise inventories, which resulted in a
decrease in the related indebtedness incurred to carry such inventories.

Finance participation income, which consists of income from the Company's
private-label credit card program, decreased to $3,032, or 1.0% of sales, in
1998, compared to $3,217, or 1.0% of sales, in 1997. Finance participation
decreased in 1998 as compared to 1997 as a result of ongoing changes in the use
of income-generating finance programs compared to longer-term, same-as-cash
programs that generate financing expense. Such shifts may occur again in the
future, thereby affecting the Company's finance participation income.

Other income, net, which consists primarily of cash discounts and rental income
from tenants, was $3,536, or 1.0% of sales, in 1998, compared to $3,495, or 1.0%
of sales, for 1997. The increase in other income for 1998 is a result of the
Company taking advantage of various cash discounts offered by its vendors.

Loss before income taxes (benefit) increased to $(10,801) in 1998, from $(1,526)
in 1997. Income tax expense for 1998 was $5,322, or approximately 49% of the
loss before taxes, as compared to income tax benefit of $425, or 28% of loss
before taxes, in 1997. The disproportionate provision for income taxes in 1998
reflects an increase in the valuation


                 ---------------------------------------------

                 ROBERDS, INC. 1999 ANNUAL REPORT ON FORM 10-K
                                 Page 23 of 128


<PAGE>   24

reserve provided for deferred tax assets resulting in the elimination of all
deferred tax assets at December 31, 1998. The reserve was deemed necessary as a
result of the uncertainty of the recoverability of such future tax benefits.


LIQUIDITY AND CAPITAL RESOURCES
-------------------------------

Cash increased to $2,177 at December 31, 1999, compared to $932 at December 31,
1998. The Company generated $5,444 of cash from operating activities during
1999. Cash of $7,575 was provided from a reduction in merchandise inventories
due to limited vendor credit during the fourth quarter and to align inventory
with declining sales. Cash was also generated from: (a) the receipt of a tax
refund; (b) an increase in customer deposits resulting from delayed product
deliveries; (c) an increase in accounts payable due to liquidity issues; (d)
proceeds from a life insurance policy received after the death of the Chairman;
(e) a reduction in prepaid rent expense; and (f) a reduction in vendor
receivables due primarily to lower volume purchases. These funds were utilized
in part by reductions of $1,844 in accrued expenses and $2,579 in the balance of
deferred warranty revenue. As a result of the above factors, the Company paid
down debt by $1,330.

During 1999, the Company's capital expenditures totaled $3,087. These
expenditures primarily represented normal replacement and upgrade projects,
including the conversion of the former clearance space in the Norcross, Georgia
store into an expanded bedding center, the renovation of the electronics area in
that store into a state-of-the-art electronics display, and the consolidation of
the Company's two existing clearance centers in Atlanta, Georgia into the Forest
Park center. In addition, the Company took delivery of a new enterprise-wide
computer hardware and software system, financed by a $1,558 capital lease. The
Company has no other significant expansion or capital expenditure plans for 2000
other than normal replacement, repair and upgrade projects. The Company acquired
approximately $2,800 of vehicles and warehouse equipment during 1999, which were
financed by operating leases.

In March 1999, the Company refinanced its revolving line of credit. The amount
available under the line was limited to the lesser of: (a) $30,000 or (b) an
amount based upon a percentage of eligible inventory and receivables, which
varies seasonally. At December 31, 1999, $18,985 was available under the line,
of which $19,135 was outstanding. The line of credit bore interest at either the
bank's base rate (8.75% at December 31, 1999) or LIBOR plus 2.25% (8.60% at
December 31, 1999). The line of credit included certain restrictive covenants
including, among others, limitations on capital expenditures and the aggregate
amount of funded debt. The line prohibited the payment of dividends. The line
also required the maintenance of a minimum fixed-charge-coverage ratio.

On January 19, 2000, the Company filed a voluntary petition for reorganization
under Chapter 11 of the United States bankruptcy laws. In February 2000, the
Company entered into a debtor-in-possession credit facility and the existing
credit facility described above was repaid. As a result of various covenant
violations, mortgage loans are classified as current. The debtor-in-possession
credit facility will be classified as long-term (see Note A).

One of the mortgage notes payable contains a balloon payment which is due in
September 2000.


YEAR 2000 READINESS DISCLOSURE
------------------------------

The Company has so far experienced no significant problems caused by the
calendar year rollover to Year 2000. However, there still may be unknown Year
2000 issues the Company or its suppliers may experience throughout the upcoming
year. The costs related to the conversion of the credit-card processing system
were insignificant. The costs to upgrade the software and hardware for its
primary management information system were approximately $1,800, of which $1,558
was financed through a capital lease. The majority of the expenditures were for
hardware upgrades to accommodate new software.

The Company has upgraded several secondary information systems, such as payroll,
delivery, telephone, personal computer, and service department systems, to be
Year 2000 compliant. The majority of the costs were for software to

                 ---------------------------------------------

                 ROBERDS, INC. 1999 ANNUAL REPORT ON FORM 10-K
                                 Page 24 of 128

<PAGE>   25

incorporate the Company's service departments into the primary management
information system. These costs were approximately $500.

OUTLOOK
-------

In January 2000 the Company announced the closing of its Tampa, Florida market
and the Cincinnati, Ohio store, and offering for sale its Atlanta (Buckhead),
Georgia store facility. During 2000, the Company will continue to focus on
improving business operations and customer service in its remaining markets in
Dayton, Ohio and Atlanta, Georgia. Areas of focus include improved selling-floor
disciplines, improving warehouse operations and delivery performance, improving
the management of inventory, improving asset utilization, reducing operating
expenses, and turning around comparable store sales. These efforts have required
operating expenditures that adversely affected the Company's financial results
for 1999. The Company believes these initiatives will yield improvement in the
Company's operations during 2000 and beyond.

The Company's financial performance is influenced by product availability,
consumer confidence, interest rates, consumer debt, the general level of housing
activity, and the general level of economic activity in the United States.
Although the Company has seen a modest reduction in competitors' use of
same-as-cash promotions, consumers continue to respond best to deep-discount
price and finance promotions. This competitive situation is expected to continue
to put pressure on comparable store sales, gross margins, promotional finance
expenses, and operating results. If the economy slows, the competition can be
expected to be even more aggressive.

There are a number of changes in the competitive environment in the Company's
markets. One national furniture retailer entered the Dayton market in January
1999. A regional appliance and electronics retailer entered the Cincinnati, Ohio
and Richmond, Indiana markets in 1999. Several national retailers operating in
the Company's markets have continued to expand within those markets. 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.

The Company expects the first quarter of 2000 to reflect a significant decrease
in net sales compared to the first quarter of 1999, due to limited product
availability resulting from the bankruptcy proceedings and the change of credit
facilities (see Note A). The Company expects increased merchandise availability
near the end of the first quarter, but there can be no assurance that the level
of inventory available under its line of credit and trade credit arrangements
will be adequate to sustain sales growth during subsequent periods.

INFLATION
---------

The Company does not believe that inflation had any significant impact on its
operations in 1999, 1998, or 1997.

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.


                 ---------------------------------------------

                 ROBERDS, INC. 1999 ANNUAL REPORT ON FORM 10-K
                                 Page 25 of 128

<PAGE>   26

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

                                                    1999
                            --------------------------------------------------
                              FIRST        SECOND         THIRD        FOURTH
                             QUARTER       QUARTER       QUARTER       QUARTER
Net sales and
  service revenues          $ 72,433      $ 68,950      $ 70,810      $ 74,815

Gross profit                  25,595        25,314        23,953        23,082

Net loss                        (210)       (1,656)       (3,347)       (8,765)

 Basic and diluted loss
   per share                   (0.03)        (0.27)        (0.54)        (1.42)




                                                    1998
                            --------------------------------------------------
                              FIRST        SECOND         THIRD        FOURTH
                             QUARTER       QUARTER       QUARTER       QUARTER
Net sales and
  service revenues          $ 78,512      $ 73,894      $ 78,696      $ 87,608

Gross profit                  24,681        23,096        25,460        26,976

Net loss                      (1,972)       (1,218)       (1,150)      (11,783)

 Basic and diluted loss
   per share                   (0.33)        (0.20)        (0.19)        (1.93)


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. 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 tornadoes, that interrupt the Company's
ability to sell or deliver merchan-

                 ---------------------------------------------

                 ROBERDS, INC. 1999 ANNUAL REPORT ON FORM 10-K
                                 Page 26 of 128

<PAGE>   27


dise, 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. Difficulties in hiring and retaining an
effective senior management group. Business interruptions due to union
activities. An attempt to organize additional portions 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 lines of credit and real estate mortgage financing sources at
favorable rates of interest, terms, and conditions.

K. Access to additional equity capital.

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.

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.


                 ---------------------------------------------

                 ROBERDS, INC. 1999 ANNUAL REPORT ON FORM 10-K
                                 Page 27 of 128

<PAGE>   28

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 or
workers' compensation arrangements.

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."

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

W. Ability to emerge successfully from bankruptcy protection.



ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK


Not applicable.


ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA


The Company's Consolidated Financial Statements for the three years ended
December 31, 1999, the Notes thereto, and the Independent Auditors' Report
thereon are as follows:

                 ---------------------------------------------

                 ROBERDS, INC. 1999 ANNUAL REPORT ON FORM 10-K
                                 Page 28 of 128


<PAGE>   29



INDEPENDENT AUDITORS' REPORT

Board of Directors
Roberds, Inc.
Dayton, Ohio

We have audited the accompanying consolidated balance sheets of Roberds, Inc.
(Debtor) and subsidiary (the "Company") as of December 31, 1999 and 1998, and
the related statements of operations, stockholders' equity and cash flows for
each of the three years in the period ended December 31, 1999. 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 auditing standards generally accepted
in the United States of America. 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 financial statements present fairly, in all material
respects, the financial position of the Company at December 31, 1999 and 1998,
and the results of their operations and their cash flows for each of the three
years in the period ended December 31, 1999, in conformity with accounting
principles generally accepted in the United States of America.

As discussed in Note A, on January 19, 2000, the Company filed for
reorganization under Chapter 11 of the federal bankruptcy laws. The accompanying
financial statements do not purport to reflect or provide for the consequences
of the bankruptcy proceedings. In particular, such financial statements do not
purport to show (a) as to assets, their realizable value on a liquidation basis
or their availability to satisfy liabilities; (b) as to pre-petition
liabilities, the amounts that may be allowed for claims or contingencies, or the
status and priority thereof; (c) as to stockholder accounts, the effect of any
changes that may be made in the capitalization of the Company; or (d) as to
operations, the effect of any changes that may be made in its business.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note A, the Company's
recurring losses from operations and negative working capital raise substantial
doubt about its ability to continue as a going concern. Management's plans
concerning these matters are also discussed in Note A. The financial statements
do not include adjustments that might result from the outcome of this
uncertainty.

DELOITTE & TOUCHE LLP
Dayton, Ohio
February 25, 2000



                 ---------------------------------------------

                 ROBERDS, INC. 1999 ANNUAL REPORT ON FORM 10-K
                                 Page 29 of 128



<PAGE>   30


ROBERDS, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
----------------------------------------

<TABLE>
<CAPTION>

                                                           YEAR ENDED DECEMBER 31
                                                     1999           1998            1997

<S>                                             <C>            <C>            <C>
NET SALES AND SERVICE REVENUES (NOTE G)           $ 287,008      $ 318,710      $ 341,703

COST OF SALES AND SERVICES                          189,064        218,497        230,754
                                                  ---------      ---------      ---------
     Gross profit                                    97,944        100,213        110,949

SELLING, DELIVERY AND ADMINISTRATIVE EXPENSES       111,874        110,358        111,642
INTEREST EXPENSE, NET                                 6,991          7,224          7,545
FINANCE PARTICIPATION INCOME (NOTE H)                (2,528)        (3,032)        (3,217)
OTHER INCOME, NET                                    (4,415)        (3,536)        (3,495)
                                                  ---------      ---------      ---------
LOSS BEFORE INCOME TAXES (BENEFIT)                  (13,978)       (10,801)        (1,526)

INCOME TAXES (BENEFIT) (NOTE I)                          --          5,322           (425)
                                                  ---------      ---------      ---------

NET LOSS                                           ($13,978)      ($16,123)       ($1,101)
                                                  =========      =========      =========

BASIC AND DILUTED NET LOSS PER COMMON SHARE          ($2.26)        ($2.66)        ($0.18)
                                                  =========      =========      =========

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING -
  BASIC AND DILUTED                                   6,189          6,065          5,979
                                                  =========      =========      =========


</TABLE>


See notes to consolidated financial statements.

                 ---------------------------------------------

                 ROBERDS, INC. 1999 ANNUAL REPORT ON FORM 10-K
                                 Page 30 of 128

<PAGE>   31


ROBERDS, INC. AND SUBSIDIARY
----------------------------

CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
--------------

<TABLE>
<CAPTION>

                                                                         DECEMBER 31
ASSETS                                                               1999         1998
------

<S>                                                               <C>          <C>
CURRENT ASSETS:
  Cash and cash equivalents                                        $  2,177     $    932
  Receivables:
   Customers (less allowance of $370
    in 1999 and $212 in 1998)                                           842          921
   Vendors and other (less allowance of $820 in 1999) (Note C)          924        2,390
  Merchandise inventories (Note B)                                   36,660       43,937
  Refundable income taxes                                               116        2,360
  Prepaid expenses and other                                            817        1,983
                                                                   --------     --------
          Total current assets                                       41,536       52,523

PROPERTY AND EQUIPMENT - AT COST (NOTES B AND E):
  Land                                                               15,539       15,539
  Buildings and improvements                                         65,465       65,432
  Leasehold improvements                                             34,927       33,590
  Furniture, fixtures and office equipment                            6,553        6,145
  Computer equipment                                                  4,611        5,788
  Warehouse equipment and vehicles                                    2,576        3,176
  Construction in progress                                              189          111
                                                                   --------     --------
                                                                    129,860      129,781
  Less accumulated depreciation and amortization                     41,648       37,696
                                                                   --------     --------
                                                                     88,212       92,085

CERTIFICATES OF DEPOSIT - RESTRICTED (NOTE B)                         2,361        2,331

OTHER ASSETS                                                          1,373        1,269
                                                                   --------     --------
                                                                   $133,482     $148,208
                                                                   ========     ========

</TABLE>


See notes to consolidated financial statements.

                 ---------------------------------------------

                 ROBERDS, INC. 1999 ANNUAL REPORT ON FORM 10-K
                                 Page 31 of 128


<PAGE>   32



ROBERDS, INC. AND SUBSIDIARY
----------------------------

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

<TABLE>
<CAPTION>

                                                                   DECEMBER 31
LIABILITIES AND SHAREHOLDERS' EQUITY                            1999         1998
------------------------------------

<S>                                                           <C>          <C>
CURRENT LIABILITIES:
  Accounts payable                                            $15,488       $14,130
  Accrued payroll and payroll taxes                             5,028         5,702
  Accrued sales taxes                                           1,636         2,073
  Other accrued expenses                                        2,033         2,510
  Customer deposits                                            13,547        11,573
  Litigation (Note L)                                           1,271         1,271
  Accrued self-insured workers' compensation                      852         1,225
  Deferred warranty revenue - current (Note B)                  1,042         2,580
  Current maturities of long-term debt (Notes D and E)         43,280         2,945
                                                             --------      --------
          Total current liabilities                            84,177        44,009


LONG-TERM LIABILITIES:
  Long-term debt including capital leases (Notes D and E)      29,959        70,065
  Deferred rent (Note E)                                        1,839         1,831
  Deferred warranty revenue (Note B)                            1,590         2,631
                                                             --------      --------
          Total long-term liabilities                          33,388        74,527



SHAREHOLDERS' EQUITY (NOTE F)
  Preferred stock - authorized 5,000 shares,
    none issued or outstanding
  Common shares - authorized 15,000 shares,
    no par value; issued and outstanding, 6,241 and
    6,108  respectively, stated at $.10 per share                 624           611
  Additional paid-in capital                                   32,542        32,332
  (Deficit)                                                  (17,249)       (3,271)
                                                             --------      --------
         Total shareholders' equity                            15,917        29,672
                                                             --------      --------
                                                             $133,482      $148,208
                                                             ========      ========

</TABLE>


See notes to consolidated financial statements.


                 ---------------------------------------------

                 ROBERDS, INC. 1999 ANNUAL REPORT ON FORM 10-K
                                 Page 32 of 128


<PAGE>   33


ROBERDS, INC. AND SUBSIDIARY
----------------------------

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
(IN THOUSANDS)
--------------

<TABLE>
<CAPTION>

                                                                                      ADDITIONAL     RETAINED
                                                                  COMMON STOCK          PAID-IN      EARNINGS
                                                               SHARES       AMOUNT      CAPITAL      (DEFICIT)

<S>                                                         <C>           <C>          <C>          <C>
BALANCE - December 31, 1996                                     5,946      $    595     $ 31,797     $ 14,178

  Issuance of common shares (Note F)                               60             6          294
  Net loss                                                                                             (1,101)
                                                             --------      --------     --------     --------

BALANCE - December 31, 1997                                     6,006           601       32,091       13,077

  Issuance of common shares (Note F)                              102            10          241
  Net loss
                                                                                                      (16,123)
  Distributions payable to initial shareholders pursuant
   to Tax Indemnification Agreement (Note I)
                                                                                                         (225)
                                                             --------      --------     --------     --------

BALANCE - December 31, 1998                                     6,108           611       32,332       (3,271)

  Issuance of common shares (Note F)                              133            13          210
  Net loss
                                                                                                      (13,978)
                                                             --------      --------     --------     --------

BALANCE - December 31, 1999                                     6,241      $    624     $ 32,542     ($17,249)
                                                             ========      ========     ========     ========

</TABLE>

See notes to consolidated financial statements.



                 ---------------------------------------------

                 ROBERDS, INC. 1999 ANNUAL REPORT ON FORM 10-K
                                 Page 33 of 128

<PAGE>   34


ROBERDS, INC. AND SUBSIDIARY
----------------------------

CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997 (IN THOUSANDS)
                                             --------------

<TABLE>
<CAPTION>

 INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                               YEARS ENDED DECEMBER 31
                                                                            1999         1998           1997
<S>                                                                      <C>          <C>           <C>
 CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss                                                               ($13,978)     ($16,123)     ($ 1,101)
  Adjustments to reconcile net loss to net
    Cash provided by operating activities:
      Depreciation and amortization                                         8,314         8,795         9,025
      LIFO reserve                                                           (298)        1,211          (239)
      (Gain) loss on sales of property and equipment                          (16)           38            87
      Deferred income taxes                                                     -         7,756         1,510
      Changes in assets and liabilities:
         Receivables                                                        1,545           693         2,388
         Merchandise inventories                                            7,575         6,025        12,064
         Refundable income taxes                                            2,244          (335)       (2,025)
         Prepaid expenses and other                                         1,166          (191)           65
         Accounts payable                                                   1,333        (2,654)         (769)
         Customer deposits                                                  1,974          (113)        2,899
         Accrued expenses                                                  (1,844)          679          (230)
         Deferred warranty revenue and rent                                (2,571)       (3,406)       (2,820)
                                                                         --------      --------      --------
      Net cash provided by operating activities                             5,444         2,375        20,854
CASH FLOWS FROM INVESTING ACTIVITIES:
  Capital expenditures                                                     (3,087)       (1,499)       (3,413)
  Proceeds from sales of property and equipment                               392            61            54
  Decreases (increase) in certificates of deposit - restricted                (30)          210          (248)
  Other                                                                         -           189            94
                                                                         --------      --------      --------
      Net cash used in investing activities                                (2,725)       (1,039)       (3,513)
CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from debt                                                       19,134         2,500         8,080
  Payments on debt                                                        (20,464)       (5,531)      (25,796)
  Net proceeds from issuance of common shares                                 131           164           220
  Debt issuance costs                                                        (275)          (31)         (145)
                                                                         --------      --------      --------
      Net cash used in financing activities                                (1,474)       (2,898)      (17,641)
                                                                         --------      --------      --------
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS                        1,245        (1,562)         (300)
CASH AND CASH EQUIVALENTS - Beginning of year                                 932         2,494         2,794
                                                                         --------      --------      --------
CASH AND CASH EQUIVALENTS - End of year                                  $  2,177      $    932      $  2,494
                                                                         ========      ========      ========
CASH PAID (REFUNDED) FOR:
  Interest, net of capitalized amount of $38 in 1997                     $  6,765      $  6,878      $  7,621
                                                                         ========      ========      ========
  Income taxes                                                            ($2,386)      ($2,271)     $    826
                                                                         ========      ========      ========
NON-CASH TRANSACTIONS - Issuance of common shares to
   Roberds, Inc. Employee Profit Sharing and Retirement Savings Plan     $     92      $     87      $     80
   Capital lease                                                         ========      ========      ========
                                                                         $  1,558             -             -
                                                                         ========      --------      --------

</TABLE>

See notes to consolidated financial statements

                 ---------------------------------------------

                 ROBERDS, INC. 1999 ANNUAL REPORT ON FORM 10-K
                                 Page 34 of 128

<PAGE>   35


ROBERDS, INC. AND SUBSIDIARY
----------------------------

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
-----------------------------------------------

A. SUBSEQUENT EVENTS AND GOING CONCERN MATTERS

PROCEEDINGS UNDER CHAPTER 11 OF THE BANKRUPTCY LAWS. On January 19, 2000, the
Company ("Debtor") filed a voluntary petition for reorganization under Chapter
11 of the United States Bankruptcy laws, in the Southern District of Ohio,
Western Division, case number 00-30194 ("Chapter 11 Case"). The Debtor is
currently operating the business as debtor-in-possession.

In general, collection of the Debtor's pre-petition obligations, executory
contracts, and indebtedness is stayed during the bankruptcy proceedings.
Substantially all pre-petition liabilities are subject to settlement under a
plan of reorganization. Although the Debtor expects to file a plan to provide
for emergence from bankruptcy and liquidation of pre-petition obligations, there
can be no assurance that such a plan will be approved by the creditors or
confirmed by the Bankruptcy Court, or that any such plan will be consummated.
The Debtor has the exclusive right to submit a plan of reorganization for 120
days following the filing of the petition. The court may grant extensions of
time to file the plan. If the Debtor fails to file a plan of reorganization
during such period or if such plan is not accepted by the creditors and equity
holders, any party in interest may subsequently file its own plan of
reorganization for the Debtor. A plan of reorganization could result in holders
of the common shares receiving no value for their interest. Therefore, the value
of the Debtor's common shares is highly speculative.

The bankruptcy court has entered orders granting authority to the Debtor to pay
pre-petition employee wages, salaries, benefits, and other employee obligations,
and to honor certain pre-petition customer service obligations, including
deposits, refunds, warranties, returns and gift certificates.

In February 2000 the Company entered into a debtor-in-possession credit facility
(the "DIP Facility"). Under this agreement, the Company may borrow up to $25
million, subject to certain limitations, to fund ongoing working capital needs
while it operates under bankruptcy court protection. Financial covenants include
maintenance of a minimum ratio of inventory to post-petition trade payables,
limitations on capital expenditures, and compliance with cash flow budgets. The
DIP Facility includes a $3 million sub-facility for standby and trade letters of
credit. Interest rates on the DIP Facility are based on either the Base Rate as
to Prime Rate Loans plus 0.25% or the adjusted Eurodollar Rate plus 2.75%, at
the borrower's option. The DIP Facility is secured by substantially all assets
of the Company, subject to certain liens permitted by the DIP Facility.

Borrowings under the DIP Facility are based on a formula which considers
eligible inventories, eligible accounts receivable, eligible fair market value
of owned or liquidated real properties, and trade letters of credit obligations.
The DIP Facility contains certain restrictive covenants that limit capital
expenditures, prohibit dividends, and limit total indebtedness. The DIP Facility
expires the earlier of May 2002 or the effective date of the plan of
reorganization.

The bankruptcy court approved the DIP Facility on an interim basis with a final
hearing expected in March 2000. The Company believes the DIP Facility should
provide adequate liquidity to conduct its operations during bankruptcy.

RESTRUCTURING PLAN. As a result of the Company's decreased net sales in 1999,
the resulting negative cash flow from operations and the failure to meets its
debt covenants, in January 2000 the Company began a restructuring effort. In
late January 2000, the Company began the process of closing all eight stores and
the distribution center in Florida and the Roberds Grand store in Cincinnati,
Ohio, and listed for sale one store facility in Atlanta, Georgia. The Company
also began a reduction of its corporate staff.

                 ---------------------------------------------

                 ROBERDS, INC. 1999 ANNUAL REPORT ON FORM 10-K
                                 Page 35 of 128

<PAGE>   36


During the first quarter of 2000, the Company expects to record the following
estimated charge for the restructuring:

        Lease and other termination costs       $  5,629
        Fixed asset impairment                    12,221
                                                --------
           Total restructuring charge           $ 17,850
                                                ========

        Inventory liquidations                  $  1,200
                                                ========

Lease and other termination costs include contractual rent, estimated lease
termination costs, and other real estate costs consisting primarily of
utilities, common area maintenance fees and real estate taxes, reduced by
estimated sublease income. The Company will pay lease termination fees as it is
able to negotiate such terminations or as it rejects such leases under the
bankruptcy proceedings. At December 31, 1999 the leases on the locations to be
closed vary in length, with expiration dates from June 2005 to November 2010.
The ultimate timing of lease termination payments will depend on the Company's
ability to negotiate acceptable lease exit terms. Other costs include estimated
debt and lease termination fees.

Property and equipment associated with the restructuring will be written-down to
reflect estimated fair value. Management anticipates selling or abandoning
substantially all owned and leased property and equipment associated with the
markets to be closed.

Approximately 500 employees were terminated pursuant to the restructuring.
Employee severance costs are not expected to be significant, and will be paid or
accrued in the first quarter of 2000.

The Company will record a loss of approximately $1,200 on the February 2000 sale
of inventory to a liquidator in the Florida market and Cincinnati. This loss
will be included in cost of sales.

The Company is continuing to assess its operations as it develops a plan of
reorganization. Additional restructuring costs may be incurred as the plan is
developed.

GOING CONCERN MATTERS. The accompanying consolidated financial statements have
been prepared on a going concern basis of accounting and do not reflect any
adjustments that might result if the Company is unable to continue as a going
concern. The Company's recent losses and negative cash flows from operations,
and the bankruptcy case raise substantial doubt about the Company's ability to
continue as a going concern. As discussed above, management intends to submit a
plan for reorganization to the court. The ability of the Company to continue as
a going concern and appropriateness of using the going concern basis is
dependent upon, among other things, (i) the Company's ability to obtain and
comply with debtor-in-possession financing agreements, (ii) confirmation of a
plan of reorganization by the court, (iii) the Company's ability to achieve
profitable operations after such confirmation, and (iv) the Company's ability to
generate sufficient cash from operations to meet its obligations.

Management believes that the plan of reorganization, as it is being developed
and subject to approval of the bankruptcy court, and the DIP Facility, along
with cash provided by operations, will provide sufficient liquidity to allow the
Company to continue as a going concern; however, there can be no assurance that
the sources of liquidity will be available or sufficient to meet the Company's
needs. The consolidated financial statements do not include any adjustments
relating to recoverability and classification of recorded asset amounts or the
amount and classification of liabilities that might be necessary should the
Company be unable to continue as a going concern.


                 ---------------------------------------------

                 ROBERDS, INC. 1999 ANNUAL REPORT ON FORM 10-K
                                 Page 36 of 128

<PAGE>   37


B. 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.

OPERATIONS. The Company operates retail stores in three geographic market areas
selling furniture, bedding, appliances and electronics. At December 31, 1999,
the Company operated 24 large-format stores, with seven in the Ohio market,
including six in Dayton and one megastore in Cincinnati, nine in the Atlanta,
Georgia market, and eight in the Tampa, Florida market (see Note A).

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 which are valued using the first-in, first-out (FIFO) method.
Electronics represented approximately 25% of merchandise inventories at December
31, 1999 and 24% at December 31, 1998. If the FIFO method had been used for all
inventory, inventory values would have been approximately $3,019 higher at
December 31, 1999 and $3,317 higher at December 31, 1998. The significant
reduction of inventory levels during the fourth quarter of 1999 resulted in
liquidations of various LIFO layers.

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:

         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

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 products. In 1997, the
Company began to sell third-party extended warranty contracts. Revenues and the
related costs of the contracts entered into after the effective date of the
agreement are being recognized at the time the third-party contracts are sold.
Deferred warranty revenue and selling costs related to contracts sold prior to
the effective date of the agreement are recognized over the remaining lives of
the contracts, and the expenses related to service costs are recognized as
incurred.

REVENUE RECOGNITION. Merchandise inventory sales are recognized when the risk of
ownership transfers and goods are delivered to the customer.

ADVERTISING. Advertising production costs, primarily those associated with
television advertising, are expensed the first time the related advertising is
utilized.

EARLY PAYMENT DISCOUNTS. Discounts received from vendors for early payment have
been classified as other income in the consolidated statements of operations.



                 ---------------------------------------------

                 ROBERDS, INC. 1999 ANNUAL REPORT ON FORM 10-K
                                 Page 37 of 128

<PAGE>   38

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.

NET (LOSS) PER COMMON SHARE. In 1997, the Company adopted Statement of Financial
Accounting Standards (SFAS) No. 128, "Earnings Per Share." Diluted loss per
share is computed by dividing the net loss by the weighted average number of
common shares outstanding during the year, adjusted for the dilutive effect, if
any, of the Company's stock-based incentive plans. For the years ended December
31, 1999, 1998, and 1997, stock options outstanding under the Company's
stock-based incentive plans were anti-dilutive.

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."

PENDING ACCOUNTING PRONOUNCEMENT. In June 1998, the Financial Accounting
Standards Board ("FASB") issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities." This pronouncement will be effective for
all fiscal quarters of fiscal years beginning after June 15, 2000. The Company
is still in the process of analyzing the impact of the adoption of this
statement.

RECLASSIFICATIONS. Certain reclassifications have been made in the 1998 and 1997
financial statements to conform to the classifications used in 1999. These
reclassifications had no effect on the results of operations or shareholders'
equity as previously reported.

C. ACCOUNTS RECEIVABLE FROM VENDORS AND OTHER

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



                 ---------------------------------------------

                 ROBERDS, INC. 1999 ANNUAL REPORT ON FORM 10-K
                                 Page 38 of 128

<PAGE>   39

D. LONG-TERM DEBT

<TABLE>
<CAPTION>

                                                                       DECEMBER 31
                                                                    1999        1998

<S>                                                               <C>         <C>
Revolving line of credit                                           $19,135     $17,500
Mortgage note payable, due in monthly payments of $123,
     including interest at 7.875%, to February 2011                 11,019      11,558
Mortgage notes payable, due in monthly payments of $41,
     plus interest at 9.675%, to June 2010                           3,247       3,404
Mortgage notes payable, due in monthly payments of $62,
     including interest at 8.00%, to December 2010                   5,483       5,759
Mortgage note payable, due in monthly payments of $49,
    including interest at 9.00%, to July 2010                        4,059       4,259
Mortgage note payable, due in monthly payments of $29,
    including interest at 7.64%, to January 2013                     2,896       3,009
                                                                   -------     -------
Debt related to properties to be retained                           45,839      45,489

Mortgage notes payable, due in monthly payments of $82,
    plus interest at 9.03%, to April 2002                            6,644       7,137
Mortgage notes payable, due in monthly payments of $36,
    plus interest at 9.675%, to June 2010                            2,873       3,012
Mortgage note payable, due in monthly payments of $35,
    including interest at 10.375%, due in full, September 2000       3,216       3,287
Mortgage note payable, due in monthly payments of $33
    including interest at 9.59%, to February 2010                    2,583       2,713
                                                                   -------     -------
Debt related to properties to be disposed of                        15,316      16,149

                                                                   -------     -------
Capital lease obligations                                           12,084      11,372
                                                                   -------     -------
                                                                    73,239      73,010
Less current maturities                                             43,280       2,945
                                                                   -------     -------
                                                                   $29,959     $70,065
                                                                   =======     =======

</TABLE>

In March 1999, the Company refinanced its revolving line of credit. The amount
available under the line was limited to the lesser of: (a) $30,000 or (b) an
amount based upon a percentage of eligible inventory and receivables, which
varies seasonally. At December 31, 1999, $18,985 was available under the line,
of which $19,135 was outstanding. The line of credit bore interest at either the
bank's base rate (8.75% at December 31, 1999) or LIBOR plus 2.25% (8.60% at
December 31, 1999).The line of credit included certain restrictive covenants
including, among others, limitations on capital expenditures and the aggregate
amount of funded debt. The line prohibited the payment of dividends. The line
also required the maintenance of a minimum fixed-charge-coverage ratio.

On January 19, 2000, the Company filed a voluntary petition for reorganization
under Chapter 11 of the United States Bankruptcy Laws. In February 2000, the
Company entered into a debtor-in-possession credit facility and the existing
credit facility was repaid. Essentially all of the Company's assets are pledged
as collateral for the Company's indebtedness. As a result of various covenant
violations, mortgage loans are classified as current. The debtor-in-possession
credit facility will be classified as long-term (see Note A).

                 ---------------------------------------------

                 ROBERDS, INC. 1999 ANNUAL REPORT ON FORM 10-K
                                 Page 39 of 128

<PAGE>   40

E. 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.

Minimum commitments for leases with remaining terms in excess of one year are as
follows:

                                     OPERATING LEASES         CAPITAL LEASES
                                    RELATED                 RELATED
YEAR ENDING DECEMBER 31             PARTIES      OTHER      PARTIES      OTHER

2000                                $   721     $ 6,006     $ 1,919     $   590
2001                                    721       5,823       1,919         590
2002                                    721       5,676       1,919         246
2003                                    721       5,007       1,919           -
2004                                    605       4,050       1,919           -
2005 and later                        5,422      11,620      10,244           -
                                    -------     -------     -------     -------
Total                               $ 8,911     $38,182      19,839       1,426
                                    =======     =======     =======     =======
Less amount representing interest                             9,040         141
                                                            -------     -------
Capital lease obligations                                   $10,799     $ 1,285
                                                            =======     =======


At December 31, 1999, the Company was in default on substantially all real
property leases because timely payment was not made. As a result, in most cases,
landlords have the right to cancel the lease and take possession of the
property. The Company may also be subject to penalties. As part of the
bankruptcy proceedings, all executory contracts, including lease obligations,
may be assumed or rejected. The Company is currently in the process of reviewing
leases for assumption or rejection.

Rent expense for all operating leases was approximately $8,279, $8,067, and
$8,391, for the years ended December 31, 1999, 1998 and 1997, which included
approximately $750, $721, and $721, for the years ended December 31, 1999, 1998
and 1997, to related parties. Rent expense also included $218, $246, and $262,
of contingent rentals based upon vehicle mileage for the years ended December
31, 1999, 1998 and 1997.

Capital leases included in building and improvements totaled $13,641 at December
31, 1999 and 1998. The capital lease included in computer equipment totaled
$1,558 at December 31, 1999. Accumulated amortization related to the capitalized
leases is $5,658 at December 31, 1999 and $4,474 at December 31, 1998.

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.

F. SHAREHOLDERS' EQUITY

The Company's stock-based compensation plans are described below.

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 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
500,000 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.



                 ---------------------------------------------

                 ROBERDS, INC. 1999 ANNUAL REPORT ON FORM 10-K
                                 Page 40 of 128


<PAGE>   41


Subsequent to the Company's bankruptcy filing in January 2000, the Company
terminated the plan and is winding up its affairs.

The Company issued 84,157 shares at $1.56 per share under the plan during 1999;
31,715 shares at $2.34 per share and 37,574 shares at $2.39 per share under the
plan during 1998; and 18,221 shares at $7.23 per share and 19,517 shares at
$4.52 per share under the plan during 1997.

1993 OUTSIDE DIRECTOR STOCK OPTION PLAN. The Company has a director's stock
option plan for outside directors of the Company. Grants are made at the market
price of the stock at the date of grant. The Company has outstanding options on
6,000 common shares, at $13.00 per share. All of the outstanding options were
exercisable; however, none have been exercised. During 1999, options expired on
2,000 shares at $9.25 per share. At December 31, 1998, the plan expired though
the outstanding options remain exercisable through 2003.

1993 STOCK INCENTIVE PLAN. The Company's stock incentive plan provides that
options on up to 3,000,000 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 become exercisable on each anniversary of the grant.
Any options which are not exercisable by an employee at the termination of
employment are canceled.



                 ---------------------------------------------

                 ROBERDS, INC. 1999 ANNUAL REPORT ON FORM 10-K
                                 Page 41 of 128

<PAGE>   42

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

                                               WEIGHTED AVERAGE
                                     SHARES     EXERCISE PRICE
Outstanding December 31, 1996        239,500      $   10.46

  Granted                            151,000           5.10
  Canceled                           (39,500)         10.49
                                   ---------
Outstanding December 31, 1997        351,000           8.15

  Granted                            830,778           2.28
  Canceled                          (107,000)          5.43
                                   ---------
Outstanding December 31, 1998      1,074,778           3.89

  Granted                            200,783           1.76
  Canceled                          (314,522)          3.36
                                   ---------
Outstanding December 31, 1999        961,039           3.60
                                   =========

The following table shows various information about stock options outstanding at
December 31, 1999:

<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         1999            YEARS)        PRICE            1999         PRICE
    ---------------    --------------     -----------    ---------    --------------   --------
<S>                     <C>               <C>            <C>          <C>              <C>
      $1.03 - 2.87            702,280         9.0        $  2.15             126,625   $  2.29
      3.71 - 5.44             136,759         7.5           5.05              68,189      5.08
          8.50                 62,000         5.0           8.50              62,000      8.50
      9.50 - 9.87              12,500         5.8           9.80              10,000      9.78
         13.00                 47,500         3.9          13.00              47,500     13.00
                       --------------                                 --------------
      1.03 - 13.00            961,039         8.2           3.60             314,314      5.98
                       ==============                                 ==============

</TABLE>

At December 31, 1999, 2,038,461 shares were available for future grants under
the stock incentive plan.

                 ---------------------------------------------

                 ROBERDS, INC. 1999 ANNUAL REPORT ON FORM 10-K
                                 Page 42 of 128

<PAGE>   43

The Company applies APB Opinion 25 "Accounting for Stock Issued to Employees"
and related Interpretations to measure the cost of stock options issued to
employees. Accordingly, no compensation cost has been recognized for the stock
option or employee stock purchase plans. 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 "Accounting for Stock Based Compensation," the effect on the
Company's net loss and loss per share would have been as follows:

                                       YEAR ENDED DECEMBER 31
                                 1999           1998           1997
Net loss
   As reported                 ($13,978)      ($16,123)       ($1,101)
   Pro forma                    (14,167)       (16,241)        (1,199)
Net loss per share
   As reported                   ($2.26)        ($2.66)        ($0.18)
   Pro forma                      (2.29)         (2.68)         (0.20)


G. NET SALES AND SERVICE REVENUE

Net sales and service revenue includes the following products:

                                           YEAR ENDED DECEMBER 31
                                   1999            1998             1997
Furniture                        $120,615        $122,383         $125,154
Bedding                            37,876          42,342           43,015
Appliances                         59,514          75,155           85,814
Electronics                        50,363          57,693           65,859
Other                              18,640          21,137           21,861
                                 --------        --------         --------
                                 $287,008        $318,710         $341,703
                                 ========        ========         ========

Total 1999 sales include the following sales for the Florida and Cincinnati
markets which will be closed in 2000 (see Note A): $52,449 for furniture;
$15,545 for bedding; $16,666 for appliances; $17,553 for electronics; and $5,433
for other.

H. FINANCE PARTICIPATION

The Company earns a finance participation fee on credit sales placed through a
private-label revolving credit plan. Receivables from this plan are held by the
bank without recourse to the Company. Sales under the private label plan as a
percentage of consolidated net sales was approximately 46 percent in the year
ended December 31, 1999, 41 percent in 1998, and 40 percent in 1997. 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.



                 ---------------------------------------------

                 ROBERDS, INC. 1999 ANNUAL REPORT ON FORM 10-K
                                 Page 43 of 128

<PAGE>   44

I. 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:

                                                         DECEMBER 31
                                                      1999         1998
Deferred tax assets:
  Deferred warranty revenue                        $  1,027      $  2,032
  Merchandise inventories                               651           787
  Capital lease obligations                             874           860
  Depreciation                                        2,506           924
  Workers' compensation accrual                         701           973
  Vacation accrual                                      484           527
  Deferred rent                                         717           568
  Other                                                 719           528
  Net operating loss carryforwards                    7,393         2,608
  Valuation allowance                               (15,072)       (9,807)
                                                   ---------     ---------
Net deferred tax asset                             $      -      $      -
                                                   =========     =========




Income taxes (benefit) consist of the following:

                                                  YEAR ENDED DECEMBER 31
                                              1999         1998         1997
Currently payable (refundable):
  Federal                                   $      -     ($2,279)     ($1,985)
  State and local                                  -        (155)          50
                                            --------     --------     --------
                                                          (2,434)      (1,935)

Deferred federal and state                         -       7,756        1,510
                                            --------     --------     --------
                                            $      -      $5,322      ($  425)
                                            ========     ========     ========

A reconciliation between the statutory federal income tax rate and the effective
tax rate follows:

<TABLE>
<CAPTION>

                                                           YEAR ENDED DECEMBER 31
                                                       1998       1998       1997
<S>                                                  <C>        <C>         <C>
Statutory federal income tax rate                        (34)%      (34)%       (34)%
State and local income taxes, net of federal benefit      (4)        (5)         (4)
Tax settlement                                                       (2)
Change in valuation allowance                             38         90          10
                                                     -------    -------     -------
                                                           -%        49%        (28)%
                                                     =======    =======     =======
</TABLE>

                 ---------------------------------------------

                 ROBERDS, INC. 1999 ANNUAL REPORT ON FORM 10-K
                                 Page 44 of 128

<PAGE>   45

The current period reflects no provision for income tax benefits because the
Company has the ability to only carry losses forward. Based on the Company's
recent performance, a valuation allowance is necessary. The disproportionate
provision for income taxes in 1998 reflects an increase in the valuation reserve
provided for deferred tax benefits. The reserve was deemed necessary as a result
of the uncertainty of the recoverability of such tax benefits. The income tax
benefit in 1997 reflects minimum taxes imposed by certain jurisdictions and a
valuation reserve for certain state operating loss carryforwards. At December
31, 1999, the Company's federal net operating loss carryforward was
approximately $18,383, which expires in 2018 and 2019.

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 taxable income in years prior to the
offering. 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 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.

Through the initial public offering of its common shares in 1993, the Company
paid dividends from time to time. In 1998, the Company settled an examination of
its 1993 and 1994 federal income tax returns, and accrued $225 payable to the
Initial Shareholders as the result of that settlement, pursuant to the Tax
Indemnification Agreement entered into at the time of the initial public
offering. A portion of that accrual was paid during 1999, and a portion remains
unpaid and subject to the bankruptcy proceedings.

J. 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 $87 in the year ended
December 31, 1999, $82 in 1998, and $80 in 1997.

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 at no cost to the employees. The Company's
expense under the health and welfare benefit plan was approximately $512 in the
year ended December 31, 1999, $779 in 1998, and $484 in 1997.



                 ---------------------------------------------

                 ROBERDS, INC. 1999 ANNUAL REPORT ON FORM 10-K
                                 Page 45 of 128

<PAGE>   46

K. BUSINESS SEGMENTS
--------------------

The Company has adopted Statement of Financial Accounting Standards (SFAS) No.
131 "Disclosures about Segments of an Enterprise and Related Information." The
statement requires disclosure of segment information based upon the way
management organizes segments within the Company for making operating decisions
and assessing performance. The Company has identified the three geographic
market areas in which it operates as segments. A summary of the Company's
operations by segment for the years ended December 31, 1999, 1998 and 1997 are
as follows:

                                     EARNINGS (LOSS) DEPRECIATION    INTEREST
                                      BEFORE INCOME      AND         EXPENSE,
                       NET SALES         TAXES       AMORTIZATION      NET
1999 (NOTES A AND G)
-------------------
Ohio                   $ 131,904      ($  3,273)     $   4,494     $   3,316
Georgia                   94,321         (5,200)         2,521         2,503
Florida                   60,783         (5,505)         1,299         1,172
                       ---------      ---------      ---------     ---------
                       $ 287,008      ($ 13,978)     $   8,314     $   6,991
                       =========      =========      =========     =========
1998
----
Ohio                   $ 156,310       $  2,502      $   4,614     $   3,532
Georgia                   98,568         (5,144)         2,628         2,521
Florida                   63,832         (8,159)         1,553         1,171
                       ---------      ---------      ---------     ---------
                       $ 318,710      ($ 10,801)     $   8,795     $   7,224
                       =========      =========      =========     =========
1997
----
Ohio                   $ 169,557       $  5,161      $   4,644     $   3,670
Georgia                  103,063         (4,212)         2,969         2,665
Florida                   69,083         (2,475)         1,412         1,210
                       ---------      ---------      ---------     ---------
                       $ 341,703      ($  1,526)     $   9,025     $   7,545
                       =========      =========      =========     =========

Included in the operating results of the Company's segments are certain
corporate and non-segment expenses that have been allocated to the segments.
The Company does not report identifiable assets by operating segment. As a
result, such disclosures have been omitted from the segment data.

L. LITIGATION AND OTHER PROCEEDINGS

In 1994, the Ohio Bureau of Workers' Compensation ("Bureau") completed an
examination of the Company's 1992 and 1993 workers' compensation returns. After
adjustments, the Bureau assessed $871 against the Company, based on the Bureau's
reclassification of the majority of the Company's Ohio employees into higher
rate classifications. After a series of administrative and judicial appeals by
the Company, in August 1999 the Ohio Supreme Court ruled against the Company in
its final appeal. In 1998, the Company paid the $871 principal amount of the
1992-1993 assessment. The Company has accrued $168 of interest owed on the
1992-1993 assessment, which it expects to pay in 2000, as well as the estimated
amount of additional taxes that would be caused by a reclassification of
employees for the period from January 1994 through June 1996, consistent with
the Bureau's position for 1992-93.

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 herein, that would have a
material adverse effect on its operations or financial condition if the
proceeding was determined adversely to the Company.

On January 19, 2000, the Company filed for protection under Chapter 11 of the
Federal bankruptcy laws. It is not clear how long the Company may have to remain
under the protection of such laws, or whether the Company can successfully
emerge from bankruptcy protection.



                 ---------------------------------------------

                 ROBERDS, INC. 1999 ANNUAL REPORT ON FORM 10-K
                                 Page 46 of 128

<PAGE>   47


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


None.


                 ---------------------------------------------

                 ROBERDS, INC. 1999 ANNUAL REPORT ON FORM 10-K
                                 Page 47 of 128


<PAGE>   48

                                    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 2000 annual meeting of shareholders ("2000 Proxy Statement"), not later than
120 days after the end of the fiscal year covered by this Report, and certain
information included in the 2000 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 2000 Proxy Statement and is incorporated
herein by reference.

The following information concerning executive officers of the Company is
provided pursuant to instruction 3, item 401(b), Regulation S-K, at January 31,
2000. 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>      <C>
Melvin H. Baskin                  56       Chief Executive Officer and Director

Robert M. Wilson                  47       President, Chief Administrative Officer, General Counsel,
                                           Secretary, and Director

Billy D. Benton                   48       Executive Vice President-General Merchandise Manager

R. Brian Good                     41       Senior Vice President-Stores*

Steven S. Klug                    48       Senior Vice President-General Merchandise Manager

Gearry D. Davenport               45       Chief Financial Officer

Steven Dominguez                  41       Vice President-Store Planning and Accessories

Wayne B. Hawkins                  46       Treasurer and Assistant Secretary*

Jonathan W. House                 55       Vice President-Warehousing, Distribution and Logistics*

Sandra J. Jackson                 53       Vice President-Advertising and Marketing*

Wayne P. McCollum                 60       Chief Information Officer*

Theodore D. Palmer                36       Vice President-Store Operations and Control

M. Scott Taylor                   40       Vice President-Human Resources

Daniel L. Thobe                   49       Vice President, Controller, and Chief Accounting Officer

Michael Van Autreve               52       Vice President-Bedding and Flooring

</TABLE>
                 ---------------------------------------------

                 ROBERDS, INC. 1999 ANNUAL REPORT ON FORM 10-K
                                 Page 48 of 128

<PAGE>   49

* Positions eliminated in February and March 2000.

MELVIN H. BASKIN was elected Chief Executive Officer in July 1998 and has been a
Director since February 1999. He also served as President from July through
October 1998. From July 1997 through July 1998, he was Chief Operating Officer,
Farm Stores, Inc., Miami, Florida. From May 1997 through July 1997, he was
President, Breuner's Home Furnishings Corp., Lancaster, Pennsylvania, and from
June 1996 through July 1997 was President-Eastern Division of Breuner's. From
1993 through May 1996, he was President, Alex & Ivy Country Division, The Bombay
Company, Inc., Fort Worth, Texas.

ROBERT M. WILSON was elected President and Chief Administrative Officer in
October 1998. He has been General Counsel, Secretary, and a Director since 1993.
He served as Chief Financial Officer of Roberds from 1988 through July 1999, and
was Executive Vice President from 1988 through October 1998. He was Treasurer
from 1993 through May 1995, and Assistant Treasurer from May 1995 through May
1997.

BILLY D. BENTON was elected Executive Vice President--General Merchandise
Manager in April 1999. Prior thereto, he was Executive Vice President-Operations
from May 1997 through April 1999. From October 1996 through May 1997, he
consulted with several businesses and explored a number of business
opportunities. From January through October 1996, Mr. Benton was National
Director of Retail Marketing for Levitz Furniture Corporation, Boca Raton,
Florida. From August 1995 through January 1996, he was Eastern Division
President. From 1992 through August 1995, he was Vice President-General Manager,
Southeast Region. Levitz filed for protection under Chapter 11 of the bankruptcy
laws in September 1997.

R. BRIAN GOOD was elected Senior Vice President-Stores in November 1998. From
April 1998 through November 1998, he was Senior Divisional Vice President,
Good's division of Breuner's Home Furnishings Corp., Lancaster, Pennsylvania.
From June 1996 through April 1998, he was Senior Regional Vice President of the
Good's division. From January through June 1996, he was Senior Vice President of
Sales and Marketing, Good's Furniture, Inc. From 1990 through January 1996, he
was Vice President of Sales of Good's.

STEVEN S. KLUG was elected Senior Vice President-General Merchandise Manager in
January 2000. He was Senior Vice President-Appliances and Electronics from
October 1999 through January 2000. From March 1995 through November 1999, he was
Senior Vice President-General Merchandise Manager, HomePlace, Cleveland, Ohio,
with responsibility for the furniture and floor covering categories, and for
store planning and visual presentation. HomePlace filed for protection under the
bankruptcy laws in January 1998. Early in 1995, Mr. Klug was seeking employment.

GEARRY D. DAVENPORT was elected Chief Financial Officer in July 1999. From 1993
through July 1999, he was Chief Financial Officer, Lindemann Produce, LLC, and
its predecessors, Reno, Nevada, a produce distributor. He also served as a
director of Lindemann from 1993 through February 1999.

STEVEN DOMINGUEZ was elected Vice President-Store Planning and Accessories in
January 2000. He was Vice President-Visual Merchandising from February 1999
through January 2000. From January 1997 through November 1998, he was Director
of Visual Merchandising, Breuner's Home Furnishings Corporation, Lancaster,
Pennsylvania. From April 1995 through December 1996, he was Visual Merchandising
Associate, Huffman Koos, Nanuet, New York. From 1984 through April 1995, he was
a consultant in visual merchandising and graphic design.

WAYNE B. HAWKINS was elected Treasurer in May 1995, and Assistant Secretary in
May 1997. Prior thereto, he was Assistant Treasurer since 1994.



                 ---------------------------------------------

                 ROBERDS, INC. 1999 ANNUAL REPORT ON FORM 10-K
                                 Page 49 of 128

<PAGE>   50

JONATHAN W. HOUSE was elected Vice President-Warehousing, Distribution and
Logistics in May 1998. Prior thereto, he served as a consultant to the Company
since March 1998. From November 1996 through March 1998, he was a Senior
Consulting Project Manager in logistics, NCR Corporation, Dayton, Ohio. Prior
thereto, he served in the United States Army primarily in logistics functions
and commands, retiring as a Colonel in November 1996. From 1994 through November
1996, he was Commander and Deputy Commander, Defense Electronics Supply Center,
Dayton, Ohio.

SANDRA J. JACKSON was elected Vice President-Advertising and Marketing in April
1999. From January 1999 through April 1999, she explored business opportunities.
From January 1998 through January 1999, she was Creative Services Director,
Caldor Department Store, Norwalk, Connecticut. From January 1997 through January
1998, she was Creative Manager, Cadmus Communication, Atlanta, Georgia. From
1986 through January 1997, she was Creative Services Director, Federated
Department Stores, Inc., Atlanta, Georgia.

WAYNE P. MCCOLLUM was elected Chief Information Officer in November 1998. From
November 1997 through November 1998, he was Vice President of Information
Technology, Farm Stores, Inc., Miami, Florida. From April 1997 through November
1997, he explored business opportunities. From August 1995 through April 1997,
he was Chief Information Officer and later Chief Operating Officer, Rampage
Clothing Company, Los Angeles, California. From 1993 through August 1995, he was
Senior Consultant, Electronic Data Systems, Dallas, Texas, specializing in
retail clients.

THEODORE D. PALMER was elected Vice President-Store Operations and Control in
April 1999. From October 1998 through April 1999, he was Distribution Director
in the Company's Tampa market. From September 1996 through October 1998, he was
a store manager in the Company's Tampa market. From 1991 through September 1996,
he was Vice President/General Manager, Kane's Furniture, Tampa, Florida

M. SCOTT TAYLOR was elected Vice President-Human Resources in November 1998.
From October 1996 through November 1998, he was Vice President-Stores, Farm
Stores, Inc., Miami, Florida. From April 1995 through October 1996, he was
Director-Executive Placement, Sunglass Hut International, Coral Gables, Florida.
From 1991 through April 1995, he was Human Resource Manager, T.J. Maxx, Dedham,
Massachusetts.

DANIEL L. THOBE was elected Vice President, Controller, and Chief Accounting
Officer in November 1999. From June 1997 through November 1999, he was Vice
President and Corporate Controller, Breuner's Home Furnishings Corporation,
Lancaster, Pennsylvania. From September 1996 through June 1997, he was
Divisional Vice President and Controller, The Bon-Ton Stores, Inc., York,
Pennsylvania. From 1973 through August 1996, he was associated with Sears,
Roebuck and Company, Hoffman Estates, Illinois, in a variety of management
positions, most recently as National Director of Capital Accounting and Control.

MICHAEL VAN AUTREVE was elected Vice President-Bedding and Flooring in January
2000, and prior thereto had been Vice President-Bedding since 1988.

The Company's future performance will depend to a significant extent upon the
efforts and abilities of certain members of senior management. The loss of the
services of any member of senior management could have a material adverse effect
on the Company.

At January 31, 2000, the Initial Shareholders, and their spouses, owned
approximately 48.6 percent of the Company's outstanding shares. As a result,
they may be in a position to control the election of the entire Board of
Directors of the Company and control the outcome of all actions requiring
shareholder approval, thereby ensuring their ability to control the future
direction and management of the Company.


                 ---------------------------------------------

                 ROBERDS, INC. 1999 ANNUAL REPORT ON FORM 10-K
                                 Page 50 of 128

<PAGE>   51

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.


ITEM 11. EXECUTIVE COMPENSATION


The information required by this Item is incorporated herein by reference to the
"Executive Compensation" section of the Company's 2000 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 2000 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 2000
Proxy Statement.



                 ---------------------------------------------

                 ROBERDS, INC. 1999 ANNUAL REPORT ON FORM 10-K
                                 Page 51 of 128



<PAGE>   52


                                     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, 1999 and 1998.

                  Consolidated Statements of Operations for the years ended
                  December 31, 1999, 1998, and 1997.

                  Consolidated Statements of Shareholders' Equity for the years
                  ended December 31, 1999, 1998, and 1997.

                  Consolidated Statements of Cash Flows for the years ended
                  December 31, 1999, 1998, and 1997.

                  Notes to Consolidated Financial Statements for the years ended
                  December 31, 1999, 1998 and 1997.


                 ---------------------------------------------

                 ROBERDS, INC. 1999 ANNUAL REPORT ON FORM 10-K
                                 Page 52 of 128

<PAGE>   53




         (a)(2) FINANCIAL STATEMENT SCHEDULES
         ------------------------------------

The following financial statement schedule of the Company, for the three years
ended December 31, 1999, 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.
Dayton, Ohio

We have audited the consolidated financial statements of Roberds, Inc. and
subsidiary ("Company") as of December 31, 1999 and 1998 and for each of the
three years in the period ended December 31, 1999, and have issued our report
thereon dated February 25, 2000, which report includes explanatory paragraphs
describing uncertainties relating to bankruptcy proceedings and matters that
raise substantial doubt about the Company's ability to continue as a going
concern. 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.


DELOITTE & TOUCHE LLP
Dayton, Ohio
February 25, 2000


                 ---------------------------------------------

                 ROBERDS, INC. 1999 ANNUAL REPORT ON FORM 10-K
                                 Page 53 of 128


<PAGE>   54




ROBERDS, INC. AND SUBSIDIARY

SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
(IN THOUSANDS)


<TABLE>
<CAPTION>

           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, 1999:
   Allowance for doubtful accounts       $212        $1,349          $371         $1,190

YEAR ENDED DECEMBER 31, 1998:
   Allowance for doubtful accounts       $ 75        $  669          $532         $  212

YEAR ENDED DECEMBER 31, 1997:
   Allowance for doubtful accounts       $ 80        $  620          $625         $   75

</TABLE>

                 ---------------------------------------------

                 ROBERDS, INC. 1999 ANNUAL REPORT ON FORM 10-K
                                 Page 54 of 128


<PAGE>   55




         (a)(3)  EXHIBITS
         ----------------


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 4.1 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).

4.3.1            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-8, 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
                 as Exhibit 10.1.2 to Registrant's Annual Report on Form 10-K
                 for the fiscal year ended December 31, 1996, and incorporated
                 herein by reference.

*10.1.3#         Amendment to Roberds, Inc. 1993 Stock Incentive Plan, referred
                 to in Exhibit 10.1, effective as of April 30, 1999, 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 as Exhibit 10.2.1 to Registrant's Annual Report on
                 Form 10-K for the fiscal year ended December 31, 1996, and
                 incorporated herein by reference.

10.2.2#          Amendment to Roberds, Inc. Employee Stock Purchase Plan,
                 referred to in Exhibit 10.2, effective as of May 13, 1997, and
                 filed as Exhibit 99.1 to Registrant's Form S-8, Registration
                 File No. 333-37829, and incorporated herein by reference. In
                 January 2000, the Company terminated the plan and began to wind
                 up its affairs.

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.


                 ---------------------------------------------

                 ROBERDS, INC. 1999 ANNUAL REPORT ON FORM 10-K
                                 Page 55 of 128

<PAGE>   56

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 as Exhibit 10.3.1 to Registrant's Annual Report
                 on Form 10-K for the fiscal year ended December 31, 1996, and
                 incorporated herein by reference. The plan expired in 1998,
                 though options issued under the plan remain exercisable through
                 2003.

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.

10.3.2.1#        Roberds, Inc. Profit Sharing and Employee Retirement Savings
                 Plan, as adopted March 26, 1997, and filed as Exhibit 99 to
                 Registrant's Form S-8, Registration File No. 333-43977, 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 as Exhibit
                 10.3.3.1 to Registrant's Annual Report on Form 10-K for the
                 fiscal year ended December 31, 1996, and incorporated herein by
                 reference.

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 filed as Exhibit 10.3.3.2 to Registrant's Annual Report on
                 Form 10-K for the fiscal year ended December 31, 1996, and
                 incorporated herein by reference. The plan was terminated by
                 the filing for bankruptcy protection in January 2000, and its
                 affairs have been wound up.

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 related lease of the property to DAF
                 West Carrollton Plaza, LTD., effective January 14, 1997, and


                 ---------------------------------------------

                 ROBERDS, INC. 1999 ANNUAL REPORT ON FORM 10-K
                                 Page 56 of 128

<PAGE>   57

                 filed as Exhibit 10.4.1.3 to Registrant's Annual Report on Form
                 10-K for the fiscal year ended December 31, 1996, and
                 incorporated herein by reference.

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
                 filed as Exhibit 10.4.2.3 to Registrant's Annual Report on Form
                 10-K for the fiscal year ended December 31, 1996, and
                 incorporated herein by reference.

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.



                 ---------------------------------------------

                 ROBERDS, INC. 1999 ANNUAL REPORT ON FORM 10-K
                                 Page 57 of 128

<PAGE>   58
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.

10.5             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.

10.6.3.5         Second Amendment to Amended and Restated Business Loan
                 Agreement between Bank One, Dayton, NA and Registrant, dated
                 December 31, 1996, filed as Exhibit 10.6.3.5 to Registrant's
                 Annual Report on Form 10-K for the fiscal year ended December
                 31, 1996, and incorporated herein by reference.

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, filed as Exhibit 10.6.3.6 to Registrant's
                 Annual Report on Form 10-K for the fiscal year ended December
                 31, 1996, and incorporated herein by reference.

10.6.3.7.1       Second Amendment to Second Amended and Restated Business Loan
                 Agreement between Bank One, NA, successor by merger of Bank
                 One, Dayton, NA, and Registrant, dated as of June 30, 1997,
                 amending the agreement referred to in Exhibit 10.6.3, filed as
                 Exhibit 10 to Registrant's Quarterly Report on Form 10-Q for
                 the quarter ended September 30, 1997, and incorporated herein
                 by reference.


                 ---------------------------------------------

                 ROBERDS, INC. 1999 ANNUAL REPORT ON FORM 10-K
                                 Page 58 of 128


<PAGE>   59

10.6.3.7.2       Third Amendment to Second Amended and Restated Business Loan
                 Agreement between Bank One, NA, successor by merger of Bank
                 One, Dayton, NA, and Registrant, dated as of June 30, 1998,
                 amending the agreement referred to in Exhibit 10.6.3, filed as
                 Exhibit 10 to Registrant's Quarterly Report on Form 10-Q for
                 the quarter ended September 30, 1998, and incorporated herein
                 by reference.

10.6.3.7.3       Fourth Amendment to Second Amended and Restated Business Loan
                 Agreement between Bank One, NA, successor by merger of Bank
                 One, Dayton, NA, and Registrant, dated as of December 31, 1998,
                 amending the agreement referred to in Exhibit 10.6.3, filed as
                 Exhibit 10.6.3.7.3 to Registrant's Annual Report on Form 10-K
                 for the year ended December 31, 1998, 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, which runs through
                 2003.

10.7.1           Amended and Restated Private Label Revolving Credit Plan
                 Agreement between Registrant and Bank One, NA, dated as of June
                 17, 1998, filed as Exhibit 10.2 to Registrant's Quarterly
                 Report on Form 10-Q for the fiscal period ended June 30, 1998,
                 and incorporated herein by reference.

*10.7.2          Amendment to Amended and Restated Private Label Revolving
                 Credit Plan Agreement between Registrant and GE Capital
                 Consumer Card Co., as successor to Bank One, NA, dated as of
                 January 24, 2000, amending the agreement referred to in Exhibit
                 10.7.1, filed herewith.

10.8             Loan and Security Agreement between Registrant and BankBoston
                 Retail Finance Inc., dated March 3, 1999, filed as Exhibit 10.8
                 to Registrant's Annual Report on Form 10-K for the year ended
                 December 31, 1998, and incorporated herein by reference.

**10.8.1         First Amendment to Loan and Security Agreement between
                 Registrant and BankBoston Retail Finance, Inc., dated as of May
                 14, 1999, amending the Loan and Security Agreement referred to
                 in 10.8 above, filed as Exhibit 10.1 to Registrant's Quarterly
                 Report on Form 10-Q for the fiscal period ended June 30, 1999,
                 and incorporated herein by reference.

**10.8.2         First Modification Agreement to Loan and Security Agreement
                 between Registrant and BankBoston Retail Finance, Inc., dated
                 as of November 17, 1999, amending the Loan and Security
                 Agreement referred to in 10.8 above, filed as Exhibit 10.1 to
                 Registrant's Quarterly Report on Form 10-Q for the fiscal
                 period ended September 30, 1999, and incorporated herein by
                 reference.

*10.8.3          Post-Petition Loan and Security Agreement for up to $25 million
                 between Registrant and Jackson National Life Insurance Company,
                 dated as of February 22, 2000, replacing the financing referred
                 to in Exhibit 10.8.2, filed herewith.

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.

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 incorporated herein by
                 reference.


                 ---------------------------------------------

                 ROBERDS, INC. 1999 ANNUAL REPORT ON FORM 10-K
                                 Page 59 of 128


<PAGE>   60

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, filed
                 as Exhibit 10.10.2 to Registrant's Annual Report on Form 10-K
                 for the fiscal year ended December 31, 1996, and incorporated
                 herein by reference.

10.10.3#         Registrant's Third Amended and Restated Executive Compensation
                 Plan, as amended for the 1998 calendar year, amending the Plan
                 referred to in Exhibit 10.10.2 above, filed as Exhibit 10.10.3
                 to Registrant's Annual Report on Form 10-K for the fiscal year
                 ended December 31, 1997, and incorporated herein by reference.

10.11.3#         Employment Agreement, dated as of May 27, 1997, between
                 Registrant and Billy D. Benton, Executive Vice
                 President-Operations, filed as Exhibit 10.11.3 to Registrant's
                 Annual Report on Form 10-K for the year ended December 31,
                 1997, and incorporated herein by reference.

**10.11.4#       Amended and Restated Employment Agreement, dated as of April
                 30, 1999, between Registrant and Billy D. Benton, Executive
                 Vice President-General Merchandise Manager, superseding the
                 Agreement referred to in 10.11.3 above, filed as Exhibit 10.11
                 to Registrant's Report on Form 10-Q for the quarterly period
                 ended June 30, 1999, and incorporated herein by reference.

10.11.5#         Employment Agreement, dated July 6, 1998, between Registrant
                 and Melvin H. Baskin, Chief Executive Officer, filed as Exhibit
                 10.1 to Registrant's Report on Form 10-Q for the quarterly
                 period ended September 30, 1998, 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
         ----------------------------

None.

         (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.



                 ---------------------------------------------

                 ROBERDS, INC. 1999 ANNUAL REPORT ON FORM 10-K
                                 Page 60 of 128


<PAGE>   61



                                   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/ Melvin H. Baskin*
------------------------------------
Melvin H. Baskin, its
Chief Executive Officer


/s/ Gearry D. Davenport*
------------------------------------
Gearry D. Davenport, its
Chief Financial Officer


/s/ Daniel L. Thobe*
------------------------------------
Daniel L. Thobe, its
Vice President and
Chief Accounting Officer


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



February 25, 2000




                 ---------------------------------------------

                 ROBERDS, INC. 1999 ANNUAL REPORT ON FORM 10-K
                                 Page 61 of 128


<PAGE>   62


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 25, 2000.



/s/ Melvin H. Baskin*
------------------------------------
Melvin H. Baskin
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


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



                 ---------------------------------------------

                 ROBERDS, INC. 1999 ANNUAL REPORT ON FORM 10-K
                                 Page 62 of 128


<PAGE>   63



                                  EXHIBIT INDEX
                                  -------------


10.1.3            Amendment to Roberds, Inc. 1993 Stock Incentive Plan, referred
                  to in Exhibit 10.1, effective as of April 30, 1999.

10.7.2            Amendment to Amended and Restated Private Label Revolving
                  Credit Plan Agreement between Registrant and GE Capital
                  Consumer Card Co., as successor to Bank One, NA, dated as of
                  January 24, 2000, amending the agreement referred to in
                  Exhibit 10.7.1.

10.8.3            Post-Petition Loan and Security Agreement for up to $25
                  million between Registrant and Jackson National Life Insurance
                  Company, dated as of February 22, 2000, replacing the
                  financing referred to in Exhibit 10.8.2.

23                Independent Auditors' Consent.

24                Powers of attorney.

27                Financial Data Schedules.




                 ---------------------------------------------

                 ROBERDS, INC. 1999 ANNUAL REPORT ON FORM 10-K
                                 Page 63 of 128