**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 August 2, 2003    **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 August 31, 2003, 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 August 2, 2003      
Part I - FINANCIAL INFORMATION
Page   
Item 1.
Financial Statements     
Consolidated Balance Sheets - August 2, 2003 (unaudited) and February 1, 2003	
3    
Consolidated Statements of Operations -  
Thirteen Weeks and Twenty-Six Weeks ended August 2, 2003 (unaudited)

and August 3, 2002 (unaudited) 	 
5    
Consolidated Statements of Cash Flows -  
Twenty-Six Weeks ended August 2, 2003 (unaudited) and August 3, 2002 (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	
12   
Item 4.
Controls and Procedures	
12   
Part II - OTHER INFORMATION    
Item 1.
Legal Proceedings	
12   
Item 2.
Changes in Securities and Use of Proceeds	
13   
Item 3.
Defaults Upon Senior Securities	
13   
Item 4.
Submission of Matters to a Vote of Security Holders	
13   
Item 5.
Other Information	
13   
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)       
August 2,

2003 
February 1,

2003  
(Unaudited)       
Current assets:         
Cash and cash equivalents 
$     436 
$     483
Trade accounts receivable, less allowance for doubtful accounts of $200 in August and February 
6,258 
6,365
Note and other receivables 
19 
219
Merchandise inventories 
19,675 
20,630
Prepaid expenses 
1,826 
1,960     
Total current assets 
28,214 
29,657     
Property and equipment, at cost 
30,914 
30,632
Less accumulated depreciation and amortization 
(19,766) 
(17,868)     
Net property and equipment 
11,148 
12,764     
Total assets 
$39,362 
$42,421     
** 

 

 

**HAROLD'S STORES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

LIABILITIES AND STOCKHOLDERS' DEFICIT

(In Thousands Except Share Data)       
August 2,

2003 
February 1,

2003  
(Unaudited)       
Current liabilities:         
Accounts payable 
$  7,732 
$ 10,026
Redeemable gift certificates 
820 
1,155
Accrued payroll expenses and bonuses 
657 
734
Accrued rent expense 
95 
76
Current maturities of long-term debt 
257 
1,265     
Total current liabilities 
9,561 
13,256     
Accrued rent expense, net of current maturities 
1,268 
1,378
Long-term debt, net of current maturities 
18,248 
17,713     
Total liabilities 
29,077 
32,347     
Commitments and contingencies (See Note 6)         
Preferred stock of $.01 par value    
Amended Series 2001-A, authorized 600,000 shares, issued and outstanding 330,545 in August and 328,484 in February 
 

6,571 
 

6,495
Series 2002-A, authorized 300,000 shares, issued and outstanding 206,668 in August and 202,627 in February 
 

4,075 
 

3,980
Series 2003-A, authorized 100,000 shares, issued and outstanding 50,996 in August and none in February 
 

5,090 
 

-
2001-A and 2002-A entitled to $20.00 per share, and 2003-A entitled to $100.00 per share, in each case plus accrued but unpaid dividends in liquidation           
15,736 
10,475     
Stockholders' deficit:         
Common stock of $.01 par value

Authorized 25,000,000 shares; issued and outstanding 6,099,503 in August and 6,099,503 in February 
 

61 
 

61
Additional paid-in capital 
34,224 
34,224
Accumulated deficit 
(39,734) 
(34,684)  
(5,449) 
(399)
Less:  Treasury stock of 205 shares in August and February recorded at cost 
(2) 
(2)
Total stockholders' deficit 
(5,451) 
(401)     
Total liabilities and stockholders' deficit 
$39,362 
$42,421     

 

**HAROLD'S STORES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(In Thousands Except Per Share Data)         
13 Weeks Ended 
26 Weeks Ended 
August 2,

2003 
August 3,

2002 
August 2,

2003 
August 3,

2002 
(Unaudited)        
Sales
$19,561 
$19,520 
$44,255 
$43,664        
Costs and expenses:       
Costs of goods sold (including occupancy and central buying expenses, exclusive of items shown separately below)
 

13,737 
 

17,140 
 

31,258 
 

33,253        
Selling, general and administrative expenses
6,381 
7,315 
13,379 
14,735        
Depreciation and amortization
939 
983 
1,908 
1,987        
Store closing expenses
462 
- 
1,630 
-        
Interest expense
201 
313 
428 
615        
Total costs and expenses
27,720 
25,751 
48,603 
50,590        
Loss before income taxes
(2,159) 
(6,231) 
(4,348) 
(6,926)        
Benefit for income taxes
- 
- 
- 
-        
Net loss
$(2,159) 
$(6,231) 
$(4,348) 
$(6,926)                
NET LOSS APPLICABLE TO COMMON STOCKHOLDERS:               
Net loss
$(2,159) 
$(6,231) 
$(4,348) 
$(6,926)        
Less:  Preferred stock dividends and accretion of preferred stock issuance costs
376 
179 
702 
348        
Net loss applicable to common stockholders
$(2,535) 
$(6,410) 
$(5,050) 
$(7,274)        
Net loss per common share:       
Basic and diluted
$(0.42) 
$(1.05) 
$(0.83) 
$(1.19)        
Weighted average number of common shares - basic
6,099 
6,097 
6,099 
6,093        

 

**HAROLD'S STORES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands)     
26 Weeks Ended  
August 2,

2003 
August 3,

2002  
(Unaudited)     
Cash flows from operating activities:    
Net loss 
$(4,348) 
$(6,926)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:    
Depreciation and amortization 
1,908 
1,987
(Gain) loss on sale of assets 
(54) 
115
Shares issued to members of the board of directors 
- 
12
Changes in assets and liabilities:    
Decrease in trade and other accounts receivable
302 
850
Decrease in merchandise inventories 
955 ******************************************