**UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D.C.  20549       **FORM 10-Q    **[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934  **For the quarterly period ended November 2, 2002    **OR   **[    ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934   **For the transition period from __________ to __________     **Commission File No.  1-10892  **HAROLD'S STORES, INC.

(Exact name of registrant as specified in its charter)       **Oklahoma

(State or other jurisdiction of

incorporation or organization) **73-1308796

(IRS Employer Identification No.)   **5919 Maple Avenue

Dallas, Texas  75235

(Address of  principal executive offices)

(Zip Code) **(214) 366-0600

(Registrant's telephone number,

including area code)

   
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   
Yes   [X] 
No   [   ]   
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act)   
Yes   [   ] 
No   [X]   
Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.   
As of November 29, 2002, the registrant had 6,099,503 shares of Common Stock outstanding. 
** 

 

**Harold's Stores, Inc. & Subsidiaries

Index to

Quarterly Report on Form 10-Q

For the Period Ended November 2, 2002      
Part I - FINANCIAL INFORMATION
Page   
Item 1.
Financial Statements     
Consolidated Balance Sheets - November 2, 2002 (unaudited) and February 2, 2002	
3    
Consolidated Statements of Operations -  
Thirteen Weeks and Thirty-nine Weeks ended November 2, 2002 (unaudited)

 and November 3, 2001 (unaudited) 	 
5    
Consolidated Statements of Cash Flows -  
Thirty-nine Weeks ended November 2, 2002 (unaudited) and November 3, 2001 (unaudited)	
6    
Notes to Interim Consolidated Financial Statements	
7   
Item 2.
Management's Discussion and Analysis of Financial Condition and Results of Operations	
10   
Item 3. 
Quantitative and Qualitative Disclosure About Market Risk	
13   
Item 4.
Controls and Procedures	
13   
Part II - OTHER INFORMATION    
Item 1.
Legal Proceedings	
13   
Item 2.
Changes in Securities and Use of Proceeds	
13   
Item 3.
Defaults Upon Senior Securities	
14   
Item 4.
Submission of Matters to a Vote of Security Holders	
14   
Item 5.
Other Information	
14   
Item 6.
Exhibits and Reports on Form 8-K	
14    
Signatures	7
15    
Certifications	7
16
** 

**HAROLD'S STORES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

ASSETS

(In Thousands)       
November 2,

2002 
February 2,

2002  
(Unaudited)       
Current assets:         
Cash and cash equivalents 
$     476 
$     562
Trade accounts receivable, less allowance for doubtful accounts of $200 in November and February 
6,680 
6,386
Note and other receivables 
30 
17
Merchandise inventories 
21,872 
21,551
Prepaid expenses 
1,789 
1,919
Prepaid income tax 
- 
4,237
Deferred income taxes 
1,678 
1,678     
Total current assets 
32,525 
36,350     
Property and equipment, at cost 
31,102 
32,248
Less accumulated depreciation and amortization 
(17,003) 
(16,400)     
Net property and equipment 
14,099 
15,848     
Note and other receivables, non-current 
59 
-
Deferred income taxes, non-current 
1,528 
1,528     
Total assets 
$48,211 
$53,726     
** 

 

 

**HAROLD'S STORES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

LIABILITIES AND STOCKHOLDERS' EQUITY

(In Thousands Except Share Data)       
November 2,

2002 
February 2,

2002  
(Unaudited)       
Current liabilities:         
Accounts payable 
$  6,753 
$  6,901
Redeemable gift certificates 
699 
1,071
Accrued payroll expenses and bonuses 
917 
1,049
Accrued rent expense 
1,297 
1,244
Income taxes payable 
60 
-
Current maturities of long-term debt 
18,999 
1,979     
Total current liabilities 
28,725 
12,244     
Long-term debt, net of current maturities 
1,689 
18,452     
Total liabilities 
30,414 
30,696     
Commitments and contingencies:         
Preferred stock of $.01 par value

Authorized 1,000,000 shares    
Amended Series 2001-A issued and outstanding 328,484 in November and 312,783 in February 
6,479 
6,113
Series 2002-A issued and outstanding 202,627 in November and none in February 
4,016 
-
Both series entitled to $20.00 per share plus accrued but unpaid dividends in liquidation         
Stockholders' equity:         
Common stock of $.01 par value

Authorized 25,000,000 shares; issued and outstanding 6,099,503 in November and 6,089,128 in February 
 

61 
 

61
Additional paid-in capital 
34,223 
34,200
Retained deficit 
(26,980) 
(17,342)  
7,304 
16,919
Less:  Treasury stock of 205 shares in November and February recorded at cost 
(2) 
(2)
Total stockholders' equity 
7,302 
16,917     
Total liabilities and stockholders' equity 
$48,211 
$53,726     

 

 

**HAROLD'S STORES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(In Thousands Except Per Share Data)         
13 Weeks Ended 
39 Weeks Ended 
November 2,

2002 
November 3,

2001 
November 2,

2002 
November 3,

2001 
(Unaudited)        
Sales
$21,357 
$24,965 
$65,021 
$74,979        
Costs and expenses:       
Costs of goods sold (including occupancy and central buying expenses, exclusive of items shown separately below)
 

14,655 
 

19,274 
 

47,908 
 

58,690        
Selling, general and administrative expenses
7,527 
7,996 
22,262 
23,541        
Depreciation and amortization
980 
1,022 
2,967 
3,232        
Write-off of goodwill
- 
3,015 
- 
3,015        
Interest expense
325 
377 
940 
1,113         
23,487 
31,684 
74,077 
89,591        
Loss before income taxes
(2,130) 
(6,719) 
(9,056) 
(14,612)        
Benefit for income taxes
- 
- 
- 
(3,077)        
Net loss
($2,130) 
($6,719) 
($9,056) 
($11,535)                
NET LOSS APPLICABLE TO COMMON STOCK:               
Net loss
($2,130) 
($6,719) 
($9,056) 
($11,535)        
Less:  Preferred stock dividends and accretion of preferred stock issuance costs
234 
203 
583 
459        
Net loss applicable to common stock
($2,364) 
($6,922) 
($9,639) 
($11,994)        
Net loss per common share:       
Basic and diluted
($0.39) 
($1.14) 
($1.58) 
($1.97)        
Weighted average number of common shares - basic
6,100 
6,089 
6,095 
6,086        
** **
**HAROLD'S STORES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands)     
39 Weeks Ended  
November 2,

2002 
November 3,

2001  
(Unaudited)     
Cash flows from operating activities:    
Net loss 
($9,056) 
($11,535)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:    
Depreciation and amortization 
2,967 
6,247
Loss (gain) on sale of assets 
89 
(105)
Shares issued to members of the board of directors 
12 
13
Changes in assets and liabilities:    ******************************************