**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 3, 2001**Commission File No.  1-10892   **OR   **[    ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934         **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 the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.   
As of November 30, 2001, the registrant had 6,089,128 shares of Common Stock outstanding.
** 

 

**Harold's Stores, Inc. & Subsidiaries

Index to

Quarterly Report on Form 10-Q

For the Period Ended November 3, 2001      
Part I - FINANCIAL INFORMATION
Page   
Item 1.
Financial Statements     
Consolidated Balance Sheets - November 3, 2001 (unaudited) and February 3, 2001	
3    
Consolidated Statements of Operations -  
Thirteen Weeks and Thirty-nine Weeks ended November 3, 2001(unaudited)

 and October 28, 2000 (unaudited) 	 
5    
Consolidated Statements of Cash Flows -  
Thirty-nine Weeks ended November 3, 2001 (unaudited) and October 28, 2000 (unaudited) 	
6    
Notes to Interim Consolidated Financial Statements	
7    
Report of Independent Public Accountants	
10   
Item 2.
Management's Discussion and Analysis of Financial Condition and Results of Operations	
11   
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	
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
** 

**HAROLD'S STORES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

ASSETS

(In Thousands)       
November 3,

2001 
February 3,

2001  
(Unaudited)       
Current assets:         
Cash and cash equivalents 
    $     802 
$     608
Trade accounts receivable, less allowance for doubtful accounts of $200 in November and February 
6,546 
5,679
Other receivables 
107 
169
Merchandise inventories 
27,146 
30,692
Prepaid expenses 
2,221 
2,805
Prepaid income tax 
3,270 
980
Deferred income taxes 
1,873 
1,873     
Total current assets 
41,965 
42,806     
Property and equipment, at cost 
33,036 
34,115
Less accumulated depreciation and amortization 
(16,464) 
(15,111)     
Net property and equipment 
16,572 
19,004     
Deferred income taxes, non-current 
2,330 
2,330
Goodwill (net) 
- 
3,358     
Total assets 
$60,867 
$67,498     
** 

 

 

**HAROLD'S STORES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

LIABILITIES AND STOCKHOLDERS' EQUITY

(In Thousands Except Share Data)       
November 3,

2001 
February 3,

2001  
(Unaudited)       
Current liabilities:         
Accounts payable 
$  4,880 
$  5,360
Redeemable gift certificates 
631 
1,128
Accrued payroll expenses and bonuses 
1,275 
1,011
Accrued rent expense 
1,151 
901
Current maturities of long-term debt 
2,220 
2,397     
Total current liabilities 
10,157 
10,797     
Long-term debt, net of current maturities 
24,428 
24,533     
Total liabilities 
34,585 
35,330     
Commitments and contingencies:         
Preferred stock of $.01 par value

    Authorized 1,000,000 shares; issued and outstanding  

         312,783 in November and none in February;      

         entitled to $20.00 per share plus accrued but unpaid   

         dividends in liquidation 
 

 

 

6,096 
 

 

 

-     
Stockholders' equity:         
Common stock of $.01 par value

Authorized 25,000,000 shares; issued and outstanding 6,089,128 in November and 6,084,097 in February 
 

61 
 

61
Additional paid-in capital 
34,200 
34,187
Retained deficit 
     (14,073) 
     (2,078)  
20,188 
32,170
Less:  Treasury stock of 205 shares in November and February recorded at cost 
                 2     
2
Total stockholders' equity 
20,186 
32,168     
Total liabilities and stockholders' equity 
$60,867 
    $67,498     

 

 

**HAROLD'S STORES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(In Thousands Except Per Share Data)         
13 Weeks Ended 
39 Weeks Ended 
November 3, 2001 
October 28,

2000 
November 3, 2001 
October 28,

2000 
(Unaudited)        
Sales
$24,965 
$31,099 
$74,979 
$94,022        
Costs and expenses:       
Costs of goods sold (including occupancy and central buying expenses, exclusive of items shown separately below)
 

19,274 
 

21,718 
 

58,690 
 

66,313        
Selling, general and administrative expenses
7,996 
8,540 
23,541 
25,956        
Depreciation and amortization
1,022 
1,112 
3,232 
3,341        
Write-off of goodwill
3,015 
- 
3,015 
-        
Interest expense
377 
439 
1,113 
1,295         
31,684 
31,809 
89,591 
96,905        
Loss before income taxes
      (6,719) 
         (710) 
    (14,612) 
      (2,883)        
Benefit for income taxes
             - 
         (284) 
      (3,077) 
      (1,153)        
Net loss
    ($6,719) 
       ($426) 
($11,535) 
    ($1,730)                
NET LOSS APPLICABLE TO COMMON STOCK:
               
Net loss
    ($6,719) 
       ($426) 
    ($11,535) 
    ($1,730)        
Less:  Preferred stock dividends and accretion of preferred stock issuance costs
203 
               - 
459 
-        
Net loss applicable to common stock
    ($6,922) 
       ($426) 
    ($11,994) 
    ($1,730)        
Net loss per common share:
       
Basic and diluted
      ($1.14) 
      ($0.07) 
      ($1.97) 
      ($0.28)        
Weighted average number of common shares - basic
6,089 
6,075 
6,086 
6,075        
** **
**HAROLD'S STORES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands)     
39 Weeks Ended  
November 3,

2001 
October 28,

2000  
(Unaudited)     
Cash flows from operating activities:    
Net loss 
($11,535) 
  ($1,730)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:    
Depreciation and amortization 
           6,247  
3,341
Gain on sale of assets 
            (105) 
(343)
Shares issued to members of the board of directors 
13 
-
Changes in assets and liabilities:    
Decrease (increase) in trade and other accounts receivable
(805) 
233
Decrease in merchandise inventories 
3,546 
2,419
Decrease (increase) in prepaid expenses 
584 
(375)
Increase in prepaid income tax 
(2,290) 
(523)
Decrease in accounts payable 
(480) 
 (864)
(Decrease) increase in accrued expenses 
17 
(159)     
Net cash (used in) provided by operating activities ****************************************