##### Table of Contents



United States  Securities and Exchange Commission
 WASHINGTON, D.C. 20549
 
 Form 10-Q
 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OFTHE SECURITIES EXCHANGE ACT OF 1934
 For the Quarterly Period Ended August 1, 2009
 Commission File No. 1-6695
 
 Jo-Ann Stores, Inc.
  Ohio
    
    34-0720629(State or other jurisdiction of
    
    (I.R.S. Employer Identification No.)incorporation or organization)5555 Darrow Road, Hudson, Ohio
    
    44236(Address of principal executive offices)
    
    (Zip Code)
 (330) 656-2600
 þ o
 o o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
(Do not check if a smaller reporting company)
    
    Smaller reporting company o
 Yes o No þ




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##### 



Jo-Ann Stores, Inc.
Form 10-Q Index
For the Quarter Ended August 1, 2009
 Page NumbersPart I. Financial InformationItem 1. Financial StatementsConsolidated Balance Sheets  August 1, 2009 (Unaudited), August 2, 2008 (Unaudited) and January 31, 2009
    
    
    1Unaudited Consolidated Statements of Operations for the Thirteen and Twenty-Six Weeks Ended August 1, 2009 and August 2, 2008
    
    
    2Unaudited Consolidated Statements of Cash Flows for the Twenty-Six Weeks Ended August 1, 2009 and August 2, 2008
    
    
    3Notes to Unaudited Consolidated Financial Statements
    
    
    4Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    14Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    26Item 4. Controls and Procedures
    
    
    26Part II. Other InformationItem 1. Legal Proceedings
    
    
    27Item 1A. Risk Factors
    
    
    27Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    27Item 3. Defaults Upon Senior Securities
    
    
    27Item 4. Submission of Matters to a Vote of Security Holders
    
    
    28Item 5. Other Information
    
    
    28Item 6. Exhibits
    
    
    28Signatures
    
    
    29Exhibit 31.1Exhibit 31.2Exhibit 32.1




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##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 Item 1.
    Financial Statements
 Jo-Ann Stores, Inc.
 
 Consolidated Balance Sheets
 (Unaudited)August 1,
    
    
    August 2,
    
    
    January 31,2009
    
    
    2008
    
    
    2009(Dollars in millions, except share and per share data)AssetsCurrent assets:Cash and cash equivalents
    
    $
    80.2
    
    
    $
    41.2
    
    
    $
    80.6Inventories
    
    
    460.1
    
    
    
    472.6
    
    
    
    429.4Deferred income taxes
    
    
    20.8
    
    
    
    25.6
    
    
    
    23.5Prepaid expenses and other current assets
    
    
    27.6
    
    
    
    26.4
    
    
    
    31.7Total current assets
    
    
    588.7
    
    
    
    565.8
    
    
    
    565.2Property, equipment and leasehold improvements, net
    
    
    302.7
    
    
    
    304.6
    
    
    
    314.8Goodwill
    
    
    11.6
    
    
    
    11.8
    
    
    
    11.6Other assets
    
    
    8.3
    
    
    
    12.4
    
    
    
    9.5Total assets
    
    $
    911.3
    
    
    $
    894.6
    
    
    $
    901.1Liabilities and Shareholders EquityCurrent liabilities:Accounts payable
    
    $
    178.5
    
    
    $
    159.8
    
    
    $
    145.1Accrued expenses
    
    
    97.8
    
    
    
    102.5
    
    
    
    112.5Total current liabilities
    
    
    276.3
    
    
    
    262.3
    
    
    
    257.6Long-term debt
    
    
    50.5
    
    
    
    100.0
    
    
    
    66.0Long-term deferred income taxes
    
    
    0.5
    
    
    
    
    
    
    
    3.2Lease obligations and other long-term liabilities
    
    
    95.7
    
    
    
    93.2
    
    
    
    96.6Shareholders equity:Preferred stock, no par value, 5,000,000 shares authorized, none issued
    
    
    
    
    
    
    
    
    
    
    Common stock, stated value $0.05 per share; 150,000,000 authorized;
issued 29,366,390; 28,594,867 and 28,872,085 shares, respectively
    
    
    1.5
    
    
    
    1.4
    
    
    
    1.4Additional paid-in capital
    
    
    218.1
    
    
    
    203.5
    
    
    
    211.7Retained earnings
    
    
    315.8
    
    
    
    279.8
    
    
    
    310.4535.4
    
    
    
    484.7
    
    
    
    523.5Treasury stock, at cost; 3,756,128; 3,657,758 and 3,667,677 shares, respectively
    
    
    (47.1
    )
    
    
    (45.6
    )
    
    
    (45.8
    )Total shareholders equity
    
    
    488.3
    
    
    
    439.1
    
    
    
    477.7Total liabilities and shareholders equity
    
    $
    911.3
    
    
    $
    894.6
    
    
    $
    901.1
   1




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Jo-Ann Stores, Inc.
 
 Consolidated Statements of Operations
 (Unaudited)
 Thirteen Weeks Ended
    
    
    Twenty-Six Weeks EndedAugust 1,
    
    
    August 2,
    
    
    August 1,
    
    
    August 2,2009
    
    
    2008
    
    
    2009
    
    
    2008(Dollars in millions, except share and per share data)Net sales
    
    $
    419.4
    
    
    $
    403.0
    
    
    $
    879.4
    
    
    $
    849.1Cost of sales (exclusive of depreciation and
amortization shown separately below)
    
    
    212.8
    
    
    
    211.2
    
    
    
    449.9
    
    
    
    450.5Gross margin
    
    
    206.6
    
    
    
    191.8
    
    
    
    429.5
    
    
    
    398.6Selling, general and administrative expenses
    
    
    193.3
    
    
    
    191.6
    
    
    
    383.7
    
    
    
    376.1Store pre-opening and closing costs
    
    
    2.8
    
    
    
    3.5
    
    
    
    6.4
    
    
    
    5.3Depreciation and amortization
    
    
    13.9
    
    
    
    13.2
    
    
    
    27.9
    
    
    
    26.3Operating
(loss) profit
    
    
    (3.4
    )
    
    
    (16.5
    )
    
    
    11.5
    
    
    
    (9.1
    )Gain on purchase of senior subordinated notes
    
    
    
    
    
    
    
    
    
    
    (1.2
    )
    
    
    Interest expense, net
    
    
    1.5
    
    
    
    2.2
    
    
    
    3.1
    
    
    
    4.6(Loss) income before income taxes
    
    
    (4.9
    )
    
    
    (18.7
    )
    
    
    9.6
    
    
    
    (13.7
    )Income tax (benefit) provision
    
    
    (1.7
    )
    
    
    (7.0
    )
    
    
    4.2
    
    
    
    (5.0
    )Net (loss) income
    
    $
    (3.2
    )
    
    $
    (11.7
    )
    
    $
    5.4
    
    
    $
    (8.7
    )Net (loss) income per common share  basic
    
    $
    (0.13
    )
    
    $
    (0.47
    )
    
    $
    0.21
    
    
    $
    (0.35
    )Net (loss) income per common share  diluted
    
    $
    (0.13
    )
    
    $
    (0.47
    )
    
    $
    0.21
    
    
    $
    (0.35
    )Weighted average shares outstanding (in thousands):Basic
    
    
    25,516
    
    
    
    24,794
    
    
    
    25,405
    
    
    
    24,668Diluted
    
    
    25,516
    
    
    
    24,794
    
    
    
    26,093
    
    
    
    24,668
   2




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Jo-Ann Stores, Inc.
 
 Consolidated Statements of Cash Flows
 (Unaudited)
 Twenty-Six Weeks EndedAugust 1,
    
    
    August 2,2009
    
    
    2008(Dollars in millions)Net cash flows provided by operating activities:Net income (loss)
    
    $
    5.4
    
    
    $
    (8.7
    )Adjustments to reconcile net income (loss) to net cash provided by operating activities:Depreciation and amortization
    
    
    27.9
    
    
    
    26.3Deferred income taxes
    
    
    
    
    
    
    (0.7
    )Stock-based compensation expense
    
    
    4.2
    
    
    
    5.1Amortization of deferred financing costs
    
    
    0.3
    
    
    
    0.5Loss on disposal of fixed assets
    
    
    0.9
    
    
    
    0.3Gain on purchase of senior subordinated notes
    
    
    (1.2
    )
    
    
    Changes in operating assets and liabilities:Increase in inventories
    
    
    (30.7
    )
    
    
    (0.4
    )Decrease (increase) in prepaid expenses and other current assets
    
    
    4.1
    
    
    
    (2.6
    )Increase in accounts payable
    
    
    33.4
    
    
    
    30.4Decrease in accrued expenses
    
    
    (14.7
    )
    
    
    (7.5
    )(Decrease) increase in lease obligations, net
    
    
    (0.7
    )
    
    
    3.3Decrease in other long-term liabilities
    
    
    (0.2
    )
    
    
    (0.1
    )Other, net
    
    
    0.7
    
    
    
    0.9Net cash provided by operating activities
    
    
    29.4
    
    
    
    46.8Cash flows used for investing activities:Capital expenditures
    
    
    (16.7
    )
    
    
    (33.7
    )Cash used for investing activities
    
    
    (16.7
    )
    
    
    (33.7
    )Net cash flows (used for) provided by financing activities:Purchase of senior subordinated notes
    
    
    (14.1
    )
    
    
    Proceeds from stock-based compensation plans
    
    
    2.4
    
    
    
    3.0Other, net
    
    
    (1.4
    )
    
    
    (0.3
    )Net cash (used for) provided by financing activities
    
    
    (13.1
    )
    
    
    2.7Net (decrease) increase in cash and cash equivalents
    
    
    (0.4
    )
    
    
    15.8Cash and cash equivalents at beginning of period
    
    
    80.6
    
    
    
    25.4Cash and cash equivalents at end of period
    
    $
    80.2
    
    
    $
    41.2Supplemental disclosures of cash flow information:Cash paid during the period for:Interest
    
    $
    3.1
    
    
    $
    4.1Income taxes, net of refunds
    
    
    16.6
    
    
    
    2.8
   3




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Notes to Consolidated Financial Statements (Unaudited)
 Jo-Ann Stores, Inc.
 Note 1  Basis of Presentation
        Note 2  Earnings Per Share
   4




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##### Table of Contents



Thirteen Weeks Ended
    
    
    Twenty-Six Weeks EndedAugust 1,
    
    
    August 2,
    
    
    August 1,
    
    
    August 2,2009
    
    
    2008
    
    
    2009
    
    
    2008Weighted average shares outstanding:Basic common shares
    
    
    25,516
    
    
    
    24,794
    
    
    
    25,405
    
    
    
    24,668Incremental shares from assumed
exercise of stock options
    
    
    
    
    
    
    
    
    
    
    169
    
    
    
    Incremental restricted shares
    
    
    
    
    
    
    
    
    
    
    519
    
    
    
    Diluted common shares
    
    
    25,516
    
    
    
    24,794
    
    
    
    26,093
    
    
    
    24,668
   Note 3  Shareholders Equity
  CommonStock
    
    
    Additional
    
    
    
    
    
    
    
    
    
    
    TotalCommon
    
    
    Treasury
    
    
    Stated
    
    
    Paid-In
    
    
    Treasury
    
    
    Retained
    
    
    ShareholdersShares
    
    
    Shares
    
    
    Value
    
    
    Capital
    
    
    Stock
    
    
    Earnings
    
    
    Equity(Shares in thousands)
    
    
    (Dollars in millions)Balance, January 31, 2009
    
    
    25,204
    
    
    
    3,668
    
    
    $
    1.4
    
    
    $
    211.7
    
    
    $
    (45.8
    )
    
    $
    310.4
    
    
    $
    477.7Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5.4
    
    
    
    5.4Exercise of stock options
    
    
    125
    
    
    
    
    
    
    
    
    
    
    
    1.5
    
    
    
    
    
    
    
    
    
    
    
    1.5Excess tax benefits
(deficits) on
equity compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.1
    )
    
    
    
    
    
    
    
    
    
    
    (0.1
    )Stock-based compensation
    
    
    307
    
    
    
    
    
    
    
    0.1
    
    
    
    4.1
    
    
    
    
    
    
    
    
    
    
    
    4.2Purchase of common stock
    
    
    (88
    )
    
    
    88
    
    
    
    
    
    
    
    
    
    
    
    (1.3
    )
    
    
    
    
    
    
    (1.3
    )Associate Stock Ownership Plan
    
    
    62
    
    
    
    
    
    
    
    
    
    
    
    0.9
    
    
    
    
    
    
    
    
    
    
    
    0.9Year-to-date activity
    
    
    406
    
    
    
    88
    
    
    
    0.1
    
    
    
    6.4
    
    
    
    (1.3
    )
    
    
    5.4
    
    
    
    10.6Balance, August 1, 2009
    
    
    25,610
    
    
    
    3,756
    
    
    $
    1.5
    
    
    $
    218.1
    
    
    $
    (47.1
    )
    
    $
    315.8
    
    
    $
    488.3
   5




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##### Table of Contents



Note 4  Financing
   Note 5  Segment Reporting
    Large-format
    
    
    Small-format(Dollars in millions)
    
    Stores
    
    
    Stores
    
    
    Other
    
    
    ConsolidatedThirteen Weeks Ended August 1, 2009Net sales
    
    $
    226.1
    
    
    $
    185.8
    
    
    $
    7.5
    
    
    $
    419.4Store pre-opening and closing costs
    
    
    0.4
    
    
    
    2.4
    
    
    
    
    
    
    
    2.8Depreciation and amortization
    
    
    7.9
    
    
    
    2.7
    
    
    
    3.3
    
    
    
    13.9Operating profit (loss)
    
    
    14.1
    
    
    
    17.5
    
    
    
    (35.0
    )
    
    
    (3.4
    )Capital expenditures
    
    
    1.2
    
    
    
    4.9
    
    
    
    4.0
    
    
    
    10.1Thirteen Weeks Ended August 2, 2008Net sales
    
    $
    209.9
    
    
    $
    186.0
    
    
    $
    7.1
    
    
    $
    403.0Store pre-opening and closing costs
    
    
    1.6
    
    
    
    1.9
    
    
    
    
    
    
    
    3.5Depreciation and amortization
    
    
    7.8
    
    
    
    2.3
    
    
    
    3.1
    
    
    
    13.2Operating profit (loss)
    
    
    5.5
    
    
    
    12.3
    
    
    
    (34.3
    )
    
    
    (16.5
    )Capital expenditures
    
    
    6.5
    
    
    
    7.3
    
    
    
    6.6
    
    
    
    20.4
  6




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Large-format
    
    
    Small-format(Dollars in millions)
    
    Stores
    
    
    Stores
    
    
    Other
    
    
    ConsolidatedTwenty-Six Weeks Ended August 1, 2009Net sales
    
    $
    470.7
    
    
    $
    391.7
    
    
    $
    17.0
    
    
    $
    879.4Store pre-opening and closing costs
    
    
    2.2
    
    
    
    4.2
    
    
    
    
    
    
    
    6.4Depreciation and amortization
    
    
    15.7
    
    
    
    5.4
    
    
    
    6.8
    
    
    
    27.9Operating profit (loss)
    
    
    35.6
    
    
    
    43.5
    
    
    
    (67.6
    )
    
    
    11.5Capital expenditures
    
    
    4.8
    
    
    
    5.7
    
    
    
    6.2
    
    
    
    16.7Property, equipment and leasehold
improvements, net
    
    
    159.9
    
    
    
    50.4
    
    
    
    92.4
    
    
    
    302.7Twenty-Six Weeks Ended August 2, 2008Net sales
    
    $
    441.1
    
    
    $
    392.7
    
    
    $
    15.3
    
    
    $
    849.1Store pre-opening and closing costs
    
    
    2.8
    
    
    
    2.5
    
    
    
    
    
    
    
    5.3Depreciation and amortization
    
    
    15.6
    
    
    
    4.5
    
    
    
    6.2
    
    
    
    26.3Operating profit (loss)
    
    
    21.2
    
    
    
    37.0
    
    
    
    (67.3
    )
    
    
    (9.1
    )Capital expenditures
    
    
    11.0
    
    
    
    8.1
    
    
    
    14.6
    
    
    
    33.7Property, equipment and leasehold
improvements, net
    
    
    161.2
    
    
    
    35.1
    
    
    
    108.3
    
    
    
    304.6
 Note 6  Recent Accounting Pronouncements
    
    
    FSP FAS 107-1 and Accounting Principles Board Opinion 28-1, Interim Disclosures about
Fair Value of Financial Instruments (FSP FAS 107-1), which requires disclosures
regarding fair value of financial instruments to be disclosed on an interim as well as on
an annual basis;
 
    
    FSP FAS 157-4, Determining Fair Value When the Volume and Level of Activity for the
Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not
Orderly (FSP FAS 157-4), which provides additional guidance regarding (1) estimating
the fair value of an asset or liability when the volume and level of activity for the
asset or liability have significantly declined and (2) identifying transactions that are
not orderly, as well as requiring disclosures in interim periods of the inputs and
valuation techniques used to measure fair value.
  7




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Note 7  Consolidating Financial Statements (Unaudited)
    8




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Note 7  Consolidating Financial Statements (Unaudited)  CONTINUED
 Consolidating Balance Sheets
August 1, 2009
 GuarantorParent
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    Consolidated(Dollars in millions)AssetsCurrent assets:Cash and cash equivalents
    
    $
    80.2
    
    
    $
    
    
    
    $
    
    
    
    $
    80.2Inventories
    
    
    460.1
    
    
    
    
    
    
    
    
    
    
    
    460.1Deferred income taxes
    
    
    20.3
    
    
    
    0.5
    
    
    
    
    
    
    
    20.8Prepaid expenses and other current assets
    
    
    26.5
    
    
    
    1.1
    
    
    
    
    
    
    
    27.6Total current assets
    
    
    587.1
    
    
    
    1.6
    
    
    
    
    
    
    
    588.7Property, equipment and leasehold improvements,
net
    
    
    299.2
    
    
    
    3.5
    
    
    
    
    
    
    
    302.7Goodwill
    
    
    
    
    
    
    11.6
    
    
    
    
    
    
    
    11.6Other assets
    
    
    5.4
    
    
    
    2.9
    
    
    
    
    
    
    
    8.3Investment in subsidiaries
    
    
    32.5
    
    
    
    
    
    
    
    (32.5
    )
    
    
    Intercompany receivable
    
    
    
    
    
    
    13.1
    
    
    
    (13.1
    )
    
    
    Total assets
    
    $
    924.2
    
    
    $
    32.7
    
    
    $
    (45.6
    )
    
    $
    911.3Liabilities and Shareholders EquityCurrent liabilities:Accounts payable
    
    $
    178.3
    
    
    $
    0.2
    
    
    $
    
    
    
    $
    178.5Accrued expenses
    
    
    90.4
    
    
    
    7.4
    
    
    
    
    
    
    
    97.8Total current liabilities
    
    
    268.7
    
    
    
    7.6
    
    
    
    
    
    
    
    276.3Long-term debt
    
    
    50.5
    
    
    
    
    
    
    
    
    
    
    
    50.5Long-term deferred income taxes
    
    
    11.7
    
    
    
    (11.2
    )
    
    
    
    
    
    
    0.5Lease obligations and other long-term liabilities
    
    
    91.9
    
    
    
    3.8
    
    
    
    
    
    
    
    95.7Intercompany payable
    
    
    13.1
    
    
    
    
    
    
    
    (13.1
    )
    
    
    Shareholders equity:Preferred stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Common stock
    
    
    1.5
    
    
    
    
    
    
    
    
    
    
    
    1.5Additional paid-in capital
    
    
    218.1
    
    
    
    
    
    
    
    
    
    
    
    218.1Retained earnings
    
    
    315.8
    
    
    
    32.5
    
    
    
    (32.5
    )
    
    
    315.8535.4
    
    
    
    32.5
    
    
    
    (32.5
    )
    
    
    535.4Treasury stock, at cost
    
    
    (47.1
    )
    
    
    
    
    
    
    
    
    
    
    (47.1
    )Total shareholders equity
    
    
    488.3
    
    
    
    32.5
    
    
    
    (32.5
    )
    
    
    488.3Total liabilities and shareholders equity
    
    $
    924.2
    
    
    $
    32.7
    
    
    $
    (45.6
    )
    
    $
    911.3
  9




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Note 7  Consolidating Financial Statements (Unaudited)  CONTINUED
 Consolidating Balance Sheets
January 31, 2009
 GuarantorParent
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    Consolidated(Dollars in millions)AssetsCurrent assets:Cash and cash equivalents
    
    $
    55.0
    
    
    $
    25.6
    
    
    $
    
    
    
    $
    80.6Inventories
    
    
    206.5
    
    
    
    222.9
    
    
    
    
    
    
    
    429.4Deferred income taxes
    
    
    16.2
    
    
    
    7.3
    
    
    
    
    
    
    
    23.5Prepaid expenses and other current assets
    
    
    25.5
    
    
    
    6.2
    
    
    
    
    
    
    
    31.7Total current assets
    
    
    303.2
    
    
    
    262.0
    
    
    
    
    
    
    
    565.2Property, equipment and leasehold improvements,
net
    
    
    165.5
    
    
    
    149.3
    
    
    
    
    
    
    
    314.8Goodwill
    
    
    11.6
    
    
    
    
    
    
    
    
    
    
    
    11.6Other assets
    
    
    (3.9
    )
    
    
    13.4
    
    
    
    
    
    
    
    9.5Investment in subsidiaries
    
    
    100.0
    
    
    
    
    
    
    
    (100.0
    )
    
    
    Intercompany receivable
    
    
    307.7
    
    
    
    
    
    
    
    (307.7
    )
    
    
    Total assets
    
    $
    884.1
    
    
    $
    424.7
    
    
    $
    (407.7
    )
    
    $
    901.1Liabilities and Shareholders EquityCurrent liabilities:Accounts payable
    
    $
    158.6
    
    
    $
    (13.5
    )
    
    $
    
    
    
    $
    145.1Accrued expenses
    
    
    112.5
    
    
    
    
    
    
    
    
    
    
    
    112.5Total current liabilities
    
    
    271.1
    
    
    
    (13.5
    )
    
    
    
    
    
    
    257.6Long-term debt
    
    
    66.0
    
    
    
    
    
    
    
    
    
    
    
    66.0Long-term deferred income taxes
    
    
    (3.4
    )
    
    
    6.6
    
    
    
    
    
    
    
    3.2Lease obligations and other long-term liabilities
    
    
    72.7
    
    
    
    23.9
    
    
    
    
    
    
    
    96.6Intercompany payable
    
    
    
    
    
    
    307.7
    
    
    
    (307.7
    )
    
    
    Shareholders equity:Preferred stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Common stock
    
    
    1.4
    
    
    
    
    
    
    
    
    
    
    
    1.4Additional paid-in capital
    
    
    211.7
    
    
    
    
    
    
    
    
    
    
    
    211.7Retained earnings
    
    
    310.4
    
    
    
    100.0
    
    
    
    (100.0
    )
    
    
    310.4523.5
    
    
    
    100.0
    
    
    
    (100.0
    )
    
    
    523.5Treasury stock, at cost
    
    
    (45.8
    )
    
    
    
    
    
    
    
    
    
    
    (45.8
    )Total shareholders equity
    
    
    477.7
    
    
    
    100.0
    
    
    
    (100.0
    )
    
    
    477.7Total liabilities and shareholders equity
    
    $
    884.1
    
    
    $
    424.7
    
    
    $
    (407.7
    )
    
    $
    901.1
  10




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##### Table of Contents



Note 7  Consolidating Financial Statements (Unaudited)  CONTINUED
 Consolidating Statements of Operations
Thirteen Weeks Ended August 1, 2009 and August 2, 2008
 August 1, 2009GuarantorParent
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    Consolidated(Dollars in millions)Net sales
    
    $
    285.2
    
    
    $
    218.5
    
    
    $
    (84.3
    )
    
    $
    419.4Cost of sales (exclusive of depreciation and
amortization shown separately below)
    
    
    156.2
    
    
    
    140.9
    
    
    
    (84.3
    )
    
    
    212.8Gross margin
    
    
    129.0
    
    
    
    77.6
    
    
    
    
    
    
    
    206.6Selling, general and administrative expenses
    
    
    133.5
    
    
    
    59.8
    
    
    
    
    
    
    
    193.3Store pre-opening and closing costs
    
    
    2.2
    
    
    
    0.6
    
    
    
    
    
    
    
    2.8Depreciation and amortization
    
    
    9.3
    
    
    
    4.6
    
    
    
    
    
    
    
    13.9Operating (loss) profit
    
    
    (16.0
    )
    
    
    12.6
    
    
    
    
    
    
    
    (3.4
    )Interest expense, net
    
    
    0.9
    
    
    
    0.6
    
    
    
    
    
    
    
    1.5(Loss) income before income taxes
    
    
    (16.9
    )
    
    
    12.0
    
    
    
    
    
    
    
    (4.9
    )Income tax (benefit) provision
    
    
    (5.1
    )
    
    
    3.4
    
    
    
    
    
    
    
    (1.7
    )(Loss) income before equity income
    
    
    (11.8
    )
    
    
    8.6
    
    
    
    
    
    
    
    (3.2
    )Equity income from subsidiaries
    
    
    8.6
    
    
    
    
    
    
    
    (8.6
    )
    
    
    Net (loss) income
    
    $
    (3.2
    )
    
    $
    8.6
    
    
    $
    (8.6
    )
    
    $
    (3.2
    )
 August 2, 2008GuarantorParent
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    Consolidated(Dollars in millions)Net sales
    
    $
    215.2
    
    
    $
    304.2
    
    
    $
    (116.4
    )
    
    $
    403.0Cost of sales (exclusive of depreciation and
amortization shown separately below)
    
    
    121.2
    
    
    
    206.4
    
    
    
    (116.4
    )
    
    
    211.2Gross margin
    
    
    94.0
    
    
    
    97.8
    
    
    
    
    
    
    
    191.8Selling, general and administrative expenses
    
    
    99.0
    
    
    
    92.6
    
    
    
    
    
    
    
    191.6Store pre-opening and closing costs
    
    
    2.2
    
    
    
    1.3
    
    
    
    
    
    
    
    3.5Depreciation and amortization
    
    
    6.7
    
    
    
    6.5
    
    
    
    
    
    
    
    13.2Operating loss
    
    
    (13.9
    )
    
    
    (2.6
    )
    
    
    
    
    
    
    (16.5
    )Interest expense, net
    
    
    0.9
    
    
    
    1.3
    
    
    
    
    
    
    
    2.2Loss before income taxes
    
    
    (14.8
    )
    
    
    (3.9
    )
    
    
    
    
    
    
    (18.7
    )Income tax benefit
    
    
    (5.7
    )
    
    
    (1.3
    )
    
    
    
    
    
    
    (7.0
    )Loss before equity loss
    
    
    (9.1
    )
    
    
    (2.6
    )
    
    
    
    
    
    
    (11.7
    )Equity loss from subsidiaries
    
    
    (2.6
    )
    
    
    
    
    
    
    2.6
    
    
    
    Net loss
    
    $
    (11.7
    )
    
    $
    (2.6
    )
    
    $
    2.6
    
    
    $
    (11.7
    )
  11




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##### Table of Contents



Note 7  Consolidating Financial Statements (Unaudited)  CONTINUED
 Consolidating Statements of Operations
Twenty-Six Weeks Ended August 1, 2009 and August 2, 2008
 August 1, 2009GuarantorParent
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    Consolidated(Dollars in millions)Net sales
    
    $
    538.5
    
    
    $
    559.2
    
    
    $
    (218.3
    )
    
    $
    879.4Cost of sales (exclusive of depreciation and
amortization shown separately below)
    
    
    296.7
    
    
    
    371.5
    
    
    
    (218.3
    )
    
    
    449.9Gross margin
    
    
    241.8
    
    
    
    187.7
    
    
    
    
    
    
    
    429.5Selling, general and administrative expenses
    
    
    234.0
    
    
    
    149.7
    
    
    
    
    
    
    
    383.7Store pre-opening and closing costs
    
    
    4.4
    
    
    
    2.0
    
    
    
    
    
    
    
    6.4Depreciation and amortization
    
    
    16.9
    
    
    
    11.0
    
    
    
    
    
    
    
    27.9Operating (loss) profit
    
    
    (13.5
    )
    
    
    25.0
    
    
    
    
    
    
    
    11.5Gain on purchase of senior subordinated notes
    
    
    (1.2
    )
    
    
    
    
    
    
    
    
    
    
    (1.2
    )Interest expense, net
    
    
    1.7
    
    
    
    1.4
    
    
    
    
    
    
    
    3.1(Loss) income before income taxes
    
    
    (14.0
    )
    
    
    23.6
    
    
    
    
    
    
    
    9.6Income tax (benefit) provision
    
    
    (3.8
    )
    
    
    8.0
    
    
    
    
    
    
    
    4.2(Loss) income before equity income
    
    
    (10.2
    )
    
    
    15.6
    
    
    
    
    
    
    
    5.4Equity income from subsidiaries
    
    
    15.6
    
    
    
    
    
    
    
    (15.6
    )
    
    
    Net income (loss)
    
    $
    5.4
    
    
    $
    15.6
    
    
    $
    (15.6
    )
    
    $
    5.4
 August 2, 2008GuarantorParent
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    Consolidated(Dollars in millions)Net sales
    
    $
    453.8
    
    
    $
    640.8
    
    
    $
    (245.5
    )
    
    $
    849.1Cost of sales (exclusive of depreciation and
amortization shown separately below)
    
    
    260.8
    
    
    
    435.2
    
    
    
    (245.5
    )
    
    
    450.5Gross margin
    
    
    193.0
    
    
    
    205.6
    
    
    
    
    
    
    
    398.6Selling, general and administrative expenses
    
    
    187.4
    
    
    
    188.7
    
    
    
    
    
    
    
    376.1Store pre-opening and closing costs
    
    
    3.1
    
    
    
    2.2
    
    
    
    
    
    
    
    5.3Depreciation and amortization
    
    
    13.2
    
    
    
    13.1
    
    
    
    
    
    
    
    26.3Operating (loss) income
    
    
    (10.7
    )
    
    
    1.6
    
    
    
    
    
    
    
    (9.1
    )Interest expense, net
    
    
    2.0
    
    
    
    2.6
    
    
    
    
    
    
    
    4.6Loss before income taxes
    
    
    (12.7
    )
    
    
    (1.0
    )
    
    
    
    
    
    
    (13.7
    )Income tax benefit
    
    
    (4.7
    )
    
    
    (0.3
    )
    
    
    
    
    
    
    (5.0
    )Loss before equity loss
    
    
    (8.0
    )
    
    
    (0.7
    )
    
    
    
    
    
    
    (8.7
    )Equity loss from subsidiaries
    
    
    (0.7
    )
    
    
    
    
    
    
    0.7
    
    
    
    Net loss
    
    $
    (8.7
    )
    
    $
    (0.7
    )
    
    $
    0.7
    
    
    $
    (8.7
    )
  12




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##### Table of Contents



Note 7  Consolidating Financial Statements (Unaudited)  CONTINUED
 Consolidating Statements of Cash Flows
Twenty-Six Weeks Ended August 1, 2009 and August 2, 2008
 August 1, 2009GuarantorParent
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    Consolidated(Dollars in millions)Net cash
provided by (used for) operating activities
    
    $
    52.7
    
    
    $
    (23.3
    )
    
    $
    
    
    
    $
    29.4Cash flows used for investing activities:Capital expenditures
    
    
    (14.4
    )
    
    
    (2.3
    )
    
    
    
    
    
    
    (16.7
    )Cash used for investing activities
    
    
    (14.4
    )
    
    
    (2.3
    )
    
    
    
    
    
    
    (16.7
    )Net cash flows used for financing activities:Purchase of senior subordinated notes
    
    
    (14.1
    )
    
    
    
    
    
    
    
    
    
    
    (14.1
    )Proceeds from stock-based compensation plans
    
    
    2.4
    
    
    
    
    
    
    
    
    
    
    
    2.4Other, net
    
    
    (1.4
    )
    
    
    
    
    
    
    
    
    
    
    (1.4
    )Net cash used for financing activities
    
    
    (13.1
    )
    
    
    
    
    
    
    
    
    
    
    (13.1
    )Net increase (decrease) in cash and cash equivalents
    
    
    25.2
    
    
    
    (25.6
    )
    
    
    
    
    
    
    (0.4
    )Cash and cash equivalents at beginning of period
    
    
    55.0
    
    
    
    25.6
    
    
    
    
    
    
    
    80.6Cash and cash equivalents at end of period
    
    $
    80.2
    
    
    $
    
    
    
    $
    
    
    
    $
    80.2
 August 2, 2008GuarantorParent
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    Consolidated(Dollars in millions)Net cash provided by operating activities
    
    $
    42.4
    
    
    $
    4.4
    
    
    $
    
    
    
    $
    46.8Cash flows used for investing activities:Capital expenditures
    
    
    (28.6
    )
    
    
    (5.1
    )
    
    
    
    
    
    
    (33.7
    )Cash used for investing activities
    
    
    (28.6
    )
    
    
    (5.1
    )
    
    
    
    
    
    
    (33.7
    )Net cash flows provided by financing activities:Proceeds from stock-based compensation plans
    
    
    3.0
    
    
    
    
    
    
    
    
    
    
    
    3.0Other, net
    
    
    (0.3
    )
    
    
    
    
    
    
    
    
    
    
    (0.3
    )Net cash provided by financing activities
    
    
    2.7
    
    
    
    
    
    
    
    
    
    
    
    2.7Net increase (decrease) in cash and cash equivalents
    
    
    16.5
    
    
    
    (0.7
    )
    
    
    
    
    
    
    15.8Cash and cash equivalents at beginning of period
    
    
    (1.0
    )
    
    
    26.4
    
    
    
    
    
    
    
    25.4Cash and cash equivalents at end of period
    
    $
    15.5
    
    
    $
    25.7
    
    
    $
    
    
    
    $
    41.2
  13




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##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
  General Overview
    Executive Overview
  
    
    Margin expansion;
 
    
    Further enhance our customer shopping experience;
 
    
    Continue to update our store base; and
 
    
    Improve our leasing terms.
    14




---



##### Table of Contents




    
    More direct sourcing of products from Asia;
 
    
    Lower transportation expenses;
 
    
    Product cost deflation on imported merchandise;
 
    
    Reduced seasonal and fashion merchandise; and
 
    
    Improvements in markdown controls from our new POS system enhancements.
     Recent Developments and Business Update
 Outlook for Fiscal 2010
   15




---



##### Table of Contents




    
    Same-store sales approximately flat to up 1% for the year;
 
    
    Gross margin rate improvement for the year;
 
    
    Slightly higher selling, general and administrative expenses as a percentage of net
sales for the year;
 
    
    Capital expenditures, net of landlord allowances, for the full year of $30 to $32
million;
 
    
    Earnings per diluted share in the range of $1.35 to $1.50 for the year (excluding any
gains on debt purchases);
 
    
    Free cash flow in the range of $70 to $74 million for the year (free cash flow is
defined as net income plus depreciation and amortization, stock-based compensation expense
and changes in working capital, less capital expenditures);
 
    
    Weighted-average diluted share count of approximately 26 million shares for the year.
 Results of Operations
  Percentage of Net SalesThirteen Weeks Ended
    
    
    Twenty-Six Weeks EndedAugust 1,
    
    
    August 2,
    
    
    August 1,
    
    
    August 2,2009
    
    
    2008
    
    
    2009
    
    
    2008Net sales
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Gross margin
    
    
    49.3
    %
    
    
    47.6
    %
    
    
    48.8
    %
    
    
    46.9
    %Selling, general and
administrative expenses
    
    
    46.1
    %
    
    
    47.5
    %
    
    
    43.6
    %
    
    
    44.3
    %Store pre-opening and closing costs
    
    
    0.7
    %
    
    
    0.9
    %
    
    
    0.7
    %
    
    
    0.6
    %Depreciation and amortization
    
    
    3.3
    %
    
    
    3.3
    %
    
    
    3.2
    %
    
    
    3.1
    %Operating (loss) profit
    
    
    (0.8
    )%
    
    
    (4.1
    )%
    
    
    1.3
    %
    
    
    (1.1
    )%
 Net Sales .
 Consolidated Net Sales:
 Thirteen Weeks Ended
    
    
    
    
    
    
    Twenty-Six Weeks EndedAugust 1,
    
    
    August 2,
    
    
    Percentage
    
    
    August 1,
    
    
    August 2,
    
    
    Percentage(Dollars in millions)
    
    2009
    
    
    2008
    
    
    Change
    
    
    2009
    
    
    2008
    
    
    ChangeConsolidated net sales
    
    $
    419.4
    
    
    $
    403.0
    
    
    
    4.1
    %
    
    $
    879.4
    
    
    $
    849.1
    
    
    
    3.6
    %Increase from prior year
    
    $
    16.4
    
    
    
    
    
    
    
    
    
    
    $
    30.3Same-store sales
percentage change
    
    
    1.8
    %
    
    
    3.3
    %
    
    
    
    
    
    
    1.4
    %
    
    
    3.9
    %
  16




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##### Table of Contents



Comparison of the Thirteen Weeks Ended August 1, 2009 to August 2, 2008
    Comparison of the Twenty-Six Weeks Ended August 1, 2009 to August 2, 2008
     17




---



##### Table of Contents



Sales by Segment:
 Thirteen Weeks Ended
    
    
    
    
    
    
    Twenty-Six Weeks EndedAugust 1,
    
    
    August 2,
    
    
    Percentage
    
    
    August 1,
    
    
    August 2,
    
    
    Percentage(Dollars in millions)
    
    2009
    
    
    2008
    
    
    Change
    
    
    2009
    
    
    2008
    
    
    ChangeLarge-format storesNet sales
    
    $
    226.1
    
    
    $
    209.9
    
    
    
    7.7
    %
    
    $
    470.7
    
    
    $
    441.1
    
    
    
    6.7
    %Increase from prior year
    
    $
    16.2
    
    
    
    
    
    
    
    
    
    
    $
    29.6Same-store sales
percentage change
    
    
    0.1
    %
    
    
    2.3
    %
    
    
    
    
    
    
    (0.2
    )%
    
    
    2.8
    %Small-format storesNet sales
    
    $
    185.8
    
    
    $
    186.0
    
    
    
    (0.1
    )%
    
    $
    391.7
    
    
    $
    392.7
    
    
    
    (0.3
    )%Decrease from prior year
    
    $
    (0.2
    )
    
    
    
    
    
    
    
    
    
    $
    (1.0
    )Same-store sales
percentage change
    
    
    3.9
    %
    
    
    4.4
    %
    
    
    
    
    
    
    3.4
    %
    
    
    5.2
    %OtherNet sales
    
    $
    7.5
    
    
    $
    7.1
    
    
    
    5.6
    %
    
    $
    17.0
    
    
    $
    15.3
    
    
    
    11.1
    %Increase from prior year
    
    $
    0.4
    
    
    
    
    
    
    
    
    
    
    $
    1.7
 Comparison of the Thirteen Weeks Ended August 1, 2009 to August 2, 2008
       18




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##### Table of Contents



Comparison of the Twenty-Six Weeks Ended August 1, 2009 to August 2, 2008
      Gross Margin.
 Gross Margin:
 Thirteen Weeks Ended
    
    
    
    
    
    
    Twenty-Six Weeks EndedAugust 1,
    
    
    August 2,
    
    
    Percentage
    
    
    August 1,
    
    
    August 2,
    
    
    Percentage(Dollars in millions)
    
    2009
    
    
    2008
    
    
    Change
    
    
    2009
    
    
    2008
    
    
    ChangeGross margin
    
    $
    206.6
    
    
    $
    191.8
    
    
    
    7.7
    %
    
    $
    429.5
    
    
    $
    398.6
    
    
    
    7.8
    %Increase from prior year
    
    $
    14.8
    
    
    
    
    
    
    
    
    
    
    $
    30.9Percentage of
consolidated net sales
    
    
    49.3
    %
    
    
    47.6
    %
    
    
    
    
    
    
    48.8
    %
    
    
    46.9
    %
  19




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##### Table of Contents



Selling, general and administrative expenses.
 Selling, General and Administrative Expenses:
 Thirteen Weeks Ended
    
    
    
    
    
    
    Twenty-Six Weeks EndedAugust 1,
    
    
    August 2,
    
    
    Percentage
    
    
    August 1,
    
    
    August 2,
    
    
    Percentage(Dollars in millions)
    
    2009
    
    
    2008
    
    
    Change
    
    
    2009
    
    
    2008
    
    
    ChangeSG&A
    
    $
    193.3
    
    
    $
    191.6
    
    
    
    0.9
    %
    
    $
    383.7
    
    
    $
    376.1
    
    
    
    2.0
    %Increase from prior year
    
    $
    1.7
    
    
    
    
    
    
    
    
    
    
    $
    7.6Percentage of
consolidated net sales
    
    
    46.1
    %
    
    
    47.5
    %
    
    
    
    
    
    
    43.6
    %
    
    
    44.3
    %
      20




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##### Table of Contents



Store pre-opening and closing costs.
     Depreciation and amortization.
  Operating
(Loss) Profit:
 Thirteen Weeks Ended
    
    
    
    
    
    
    Twenty-Six Weeks EndedAugust 1,
    
    
    August 2,
    
    
    Percentage
    
    
    August 1,
    
    
    August 2,
    
    
    Percentage(Dollars in millions)
    
    2009
    
    
    2008
    
    
    Change
    
    
    2009
    
    
    2008
    
    
    ChangeOperating (loss) profit
    
    $
    (3.4
    )
    
    $
    (16.5
    )
    
    
    79.4
    %
    
    $
    11.5
    
    
    $
    (9.1
    )
    
    
    226.4
    %Increase from prior year
    
    $
    13.1
    
    
    
    
    
    
    
    
    
    
    $
    20.6
   21




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##### Table of Contents



Operating Profit (Loss) by Segment:
 Thirteen Weeks Ended
    
    
    
    
    
    
    Twenty-Six Weeks EndedAugust 1,
    
    
    August 2,
    
    
    Percentage
    
    
    August 1,
    
    
    August 2,
    
    
    Percentage(Dollars in millions)
    
    2009
    
    
    2008
    
    
    Change
    
    
    2009
    
    
    2008
    
    
    ChangeLarge-format storesOperating profit
    
    $
    14.1
    
    
    $
    5.5
    
    
    
    156.4
    %
    
    $
    35.6
    
    
    $
    21.2
    
    
    
    67.9
    %Increase from prior year
    
    $
    8.6
    
    
    
    
    
    
    
    
    
    
    $
    14.4Small-format storesOperating profit
    
    $
    17.5
    
    
    $
    12.3
    
    
    
    42.3
    %
    
    $
    43.5
    
    
    $
    37.0
    
    
    
    17.6
    %Increase from prior year
    
    $
    5.2
    
    
    
    
    
    
    
    
    
    
    $
    6.5OtherOperating loss
    
    $
    (35.0
    )
    
    $
    (34.3
    )
    
    
    2.0
    %
    
    $
    (67.6
    )
    
    $
    (67.3
    )
    
    
    0.4
    %Increase from prior year
    
    $
    (0.7
    )
    
    
    
    
    
    
    
    
    
    $
    (0.3
    )
 Comparison of the Thirteen Weeks Ended August 1, 2009 to August 2, 2008
    Comparison of the Twenty-Six Weeks Ended August 1, 2009 to August 2, 2008
     22




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##### Table of Contents



Gain on purchase of senior subordinated notes.
 Interest expense.
  Income taxes .
 Liquidity and Capital Resources
    Dollars in millions
    
    2010
    
    
    2009Net cash provided by operating activities
    
    $
    29.4
    
    
    $
    46.8Cash used for investing activities
    
    
    (16.7
    )
    
    
    (33.7
    )Net cash (used for) provided by financing activities
    
    
    (13.1
    )
    
    
    2.7Net (decrease) increase in cash and cash equivalents
    
    $
    (0.4
    )
    
    $
    15.8Ending cash and cash equivalents
    
    $
    80.2
    
    
    $
    41.2
  23




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##### Table of Contents



Net cash provided by operating activities
  Cash used for investing activities
  Twenty-Six Weeks EndedAugust 1,
    
    
    August 2,Dollars in millions
    
    2009
    
    
    2008Cash
    
    $
    9.8
    
    
    $
    30.9Cash  landlord reimbursed
    
    
    6.9
    
    
    
    2.8Total
    
    $
    16.7
    
    
    $
    33.7
  Net cash (used for) provided by financing activities
   24




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##### Table of Contents



Off-Balance Sheet Transactions
  Seasonality and Inflation
   Critical Accounting Policies
  Contractual Obligations
   25




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##### Table of Contents



Cautionary Statement Concerning Forward-Looking Statements
  
 Item 3. Quantitative and Qualitative Disclosures About Market Risk
  
 Item 4. Controls and Procedures
     26




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##### Table of Contents



PART II. OTHER INFORMATION
 
 Item 1. Legal Proceedings
   
 Item 1A. Risk Factors
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
 Purchases of Equity Securities by Jo-Ann Stores, Inc.
 Total Number of
    
    
    Maximum NumberShares Purchased
    
    
    of Shares that MayTotal Number
    
    
    Average
    
    
    as Part of Publicly
    
    
    Yet Be Purchasedof Shares
    
    
    Price Paid
    
    
    Announced Plans
    
    
    Under the Plans orPurchased
    
    
    per Share
    
    
    or Programs
    
    
    ProgramsMay 3  30, 2009
    
    
    38
    
    
    $
    21.45
    
    
    
    1,184,577
    
    
    
    965,423May 31  July 4, 2009
    
    
    1,152
    
    
    $
    23.17
    
    
    
    1,185,729
    
    
    
    964,271July 5  August 1, 2009
    
    
    10,456
    
    
    $
    22.87
    
    
    
    1,196,185
    
    
    
    953,815Total
    
    
    11,646
    
    
    $
    22.89
    
    
    
    1,196,185
    
    
    
    953,815
  
 Item 3. Defaults Upon Senior Securities
   27




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##### Table of Contents



Item 4. Submission of Matters to a Vote of Security Holders
 a)
    
    Our Annual Meeting of Shareholders was held on June 11, 2009.
 b)
    
    Ten directors were elected to serve on the Board of Directors until
the 2010 Annual Meeting of Shareholders and until a successor is elected and
qualified.
 c)
    
    The nominees for Directors as listed in the proxy statement were
elected with the following vote:
 Votes
    
    
    VotesNominee
    
    For
    
    
    WithheldScott Cowen
    
    
    21,369,920
    
    
    
    2,037,979Joseph DePinto
    
    
    21,950,142
    
    
    
    1,457,757Ira Gumberg
    
    
    21,626,847
    
    
    
    1,781,052Patricia Morrison
    
    
    22,029,646
    
    
    
    1,378,253Frank Newman
    
    
    21,249,415
    
    
    
    2,158,484David Perdue
    
    
    23,243,835
    
    
    
    164,064Beryl Raff
    
    
    21,943,969
    
    
    
    1,463,930Alan Rosskamm
    
    
    22,721,237
    
    
    
    686,662Tracey Travis
    
    
    23,245,112
    
    
    
    162,787Darrell Webb
    
    
    22,796,503
    
    
    
    611,396
 d)
    
    To ratify the selection of Ernst & Young LLP to serve as our independent
registered public accountants for the fiscal year ending January 30, 2010.
 Votes For
    
    
    Votes Against
    
    
    Abstentions23,357,379
    
    
    43,104
    
    
    7,415
 
 Item 5. Other Information
  
 Item 6. Exhibits
 a)
    
    Exhibits
 No.
    
    Exhibit Description31.1
    
    
    Section 302 Certification By Chief Executive Officer31.2
    
    
    Section 302 Certification By Chief Financial Officer32.1
    
    
    Section 906 Certification of Principal Executive Officer and
Principal Financial Officer
  28




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##### Table of Contents



SIGNATURES
  JO-ANN STORES, INC.DATE: September 8, 2009
    /s/ Darrell WebbDarrell Webb,President and Chief Executive Officer/s/ James KerrJames Kerr,Executive Vice President and Chief Financial Officer  29




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##### Table of Contents



EXHIBIT INDEX
 Exhibit No.
    
    Description31.1
    
    
    Section 302 Certification By Chief Executive Officer31.2
    
    
    Section 302 Certification By Chief Financial Officer32.1
    
    
    Section 906 Certification of Principal Executive Officer and
Principal Financial Officer