**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 1, 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 November 30, 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 November 1, 2003      
Part I - FINANCIAL INFORMATION
Page   
Item 1.
Financial Statements     
Consolidated Balance Sheets - November 1, 2003 (unaudited) and February 1, 2003	
3    
Consolidated Statements of Operations -  
Thirteen Weeks and Thirty-Nine Weeks ended November 1, 2003 (unaudited)

and November 2, 2002 (unaudited) 	 
5    
Consolidated Statements of Cash Flows -  
Thirty-Nine Weeks ended November 1, 2003 (unaudited) and November 2, 2002 (unaudited)	
6    
Notes to Interim Consolidated Financial Statements	
7   
Item 2.
Management's Discussion and Analysis of Financial Condition and Results of Operations	
11   
Item 3. 
Quantitative and Qualitative Disclosure About Market Risk	
13   
Item 4.
Controls and Procedures	
14   
Part II - OTHER INFORMATION    
Item 1.
Legal Proceedings	
14   
Item 2.
Changes in Securities and Use of Proceeds	
14   
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	
15    
Signatures	7
16
** 

**HAROLD'S STORES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

ASSETS

(In Thousands)       
November 1,

2003 
February 1,

2003  
(Unaudited)       
Current assets:         
Cash and cash equivalents 
$     425 
$     483
Trade accounts receivable, less allowance for doubtful accounts of $200 in November and February 
7,909 
6,365
Note and other receivables 
108 
219
Merchandise inventories 
21,281 
20,630
Prepaid expenses 
1,981 
1,960     
Total current assets 
31,704 
29,657     
Property and equipment, at cost 
31,495 
30,632
Less accumulated depreciation and amortization 
(20,570) 
(17,868)     
Net property and equipment 
10,925 
12,764     
Total assets 
$42,629 
$42,421     
** 

 

 

**HAROLD'S STORES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

LIABILITIES AND STOCKHOLDERS' DEFICIT

(In Thousands Except Share Data)       
November 1,

2003 
February 1,

2003  
(Unaudited)       
Current liabilities:         
Accounts payable 
$  6,786 
$ 10,026
Redeemable gift certificates 
782 
1,155
Accrued payroll expenses and bonuses 
883 
734
Accrued rent expense 
54 
76
Current maturities of long-term debt 
277 
1,265     
Total current liabilities 
8,782 
13,256     
Accrued rent expense, net of current maturities 
1,248 
1,378
Long-term debt, net of current maturities 
21,495 
17,713     
Total liabilities 
31,525 
32,347     
Commitments and contingencies (See Note 7)         
Preferred stock of $.01 par value    
Amended Series 2001-A, authorized 600,000 shares, issued and outstanding 331,631 in November and 328,484 in February 
 

6,609 
 

6,495
Series 2002-A, authorized 300,000 shares, issued and outstanding 208,803 in November and 202,627 in February 
 

4,125 
 

3,980
Series 2003-A, authorized 100,000 shares, issued and outstanding 52,024 in November and none in February 
 

5,191 
 

-
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           
15,925 
10,475     
Stockholders' deficit:         
Common stock of $.01 par value

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

61 
 

61
Additional paid-in capital 
34,224 
34,224
Accumulated deficit 
(39,104) 
(34,684)  
(4,819) 
(399)
Less:  Treasury stock of 205 shares in November and February recorded at cost 
(2) 
(2)
Total stockholders' deficit 
(4,821) 
(401)     
Total liabilities and stockholders' deficit 
$42,629 
$42,421     

 

**HAROLD'S STORES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(In Thousands Except Per Share Data)         
13 Weeks Ended 
39 Weeks Ended 
November 1,

2003 
November 2,

2002 
November 1,

2003 
November 2,

2002 
(Unaudited)        
Sales
$23,863 
$21,355 
$68,118 
$65,019        
Costs and expenses:       
Costs of goods sold (including occupancy and central buying expenses, exclusive of items shown separately below)
 

14,776 
 

14,655 
 

46,033 
 

47,908        
Selling, general and administrative expenses
6,947 
7,525 
20,325 
22,260        
Depreciation and amortization
909 
980 
2,817 
2,967        
Store closing expenses
- 
- 
1,630 
-        
Interest expense
221 
325 
650 
940        
Total costs and expenses
22,853 
23,485 
71,455 
74,075        
Income (loss) before income taxes
1,010 
(2,130) 
(3,337) 
(9,056)        
Provision (benefit) for income taxes
- 
- 
- 
-        
Net income (loss)
$1,010 
$(2,130) 
$(3,337) 
$(9,056)                
NET INCOME (LOSS) APPLICABLE TO COMMON STOCKHOLDERS:               
Net income (loss)
$1,010 
$(2,130) 
$(3,337) 
$(9,056)        
Less:  Preferred stock dividends and accretion of preferred stock issuance costs
381 
234 
1,083 
583        
Net income (loss) applicable to common stockholders
$  629 
$(2,364) 
$(4,420) 
$(9,639)        
Net income (loss) per common share:       
Basic
$0.10 
$(0.39) 
$(0.72) 
$(1.58)
Diluted
$0.06 
$(0.39) 
$(0.72) 
$(1.58)        

 

**HAROLD'S STORES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands)     
39 Weeks Ended  
November 1,

2003 
November 2,

2002  
(Unaudited)     
Cash flows from operating activities:    
Net loss 
$(3,337) 
$(9,056)
Adjustments to reconcile net loss to net cash used in operating activities:    
Depreciation and amortization 
2,817 
2,967
(Gain) loss on sale of assets 
(11) 
89
Shares issued to members of the board of directors 
- 
12
Changes in assets and liabilities:    
Increase in trade and other accounts receivable
(1,442) 
(294)
Increase in merchandise inventories 
(651) 
(321)
(Increase) decrease in prepaid expenses ******************************************