<PAGE>


                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

(MARK ONE)

    [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
                                               ----------------

                                     - OR -

    [ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934.

              For the transaction period from__________to__________

                         COMMISSION FILE NUMBER 0-20664

                              BOOKS-A-MILLION, INC.
                              ---------------------
             (Exact name of registrant as specified in its charter)

     DELAWARE                                              63-0798460
     --------                                              ----------
(State or other jurisdiction of               (IRS Employer Identification No.)
incorporation or organization)

      402 Industrial Lane, Birmingham, Alabama                35211
      ----------------------------------------                -----
      (Address of principal executive offices)              (Zip Code)

                                 (205) 942-3737
                                 --------------
                 (Registrant's phone number including area code)

                                      NONE
                                      ----
      (Former name, former address and former fiscal year, if changed since
                                  last period)

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 common stock,
as of the latest practicable date: Shares of common stock, par value $.01 per
share, outstanding as of December 11, 2001 were 18,138,122 shares.

<PAGE>


                     BOOKS-A-MILLION, INC. AND SUBSIDIARIES

                                      INDEX



<TABLE>
<CAPTION>
                                                                             Page No.

<S>                                                                          <C>
PART I. FINANCIAL INFORMATION

Item 1.  Unaudited and Condensed Financial Statements

     Consolidated Balance Sheets                                                3

     Consolidated Statements of Operations                                      4

     Consolidated Statement of Stockholders' Investment                         5

     Consolidated Statements of Cash Flows                                      6

     Notes to Consolidated Financial Statements                                 7

Item 2.  Management's Discussion and Analysis of Financial Condition
         and Results of Operations                                              9

PART II. OTHER INFORMATION

Item 1.  Legal Proceedings                                                      12

Item 2.  Changes in Securities                                                  12

Item 3.  Defaults Upon Senior Securities                                        12

Item 4.  Submission of Matters of Vote of Security-Holders                      12

Item 5.  Other Information                                                      12

Item 6.  Exhibits and Reports on Form 8-K                                       12
</TABLE>


                                       2
<PAGE>



                          PART 1. FINANCIAL INFORMATION
                          ITEM 1. FINANCIAL STATEMENTS
                      BOOKS-A-MILLION, INC. & SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                             (DOLLARS IN THOUSANDS)
                                   (CONDENSED)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                      NOVEMBER 3, 2001    FEBRUARY 3, 2001
                                                                      ----------------    ----------------
<S>                                                                   <C>                 <C>
ASSETS
CURRENT ASSETS:
  Cash and cash equivalents                                              $   6,233           $   5,282
   Accounts receivable, net                                                 10,245              10,775
   Inventories                                                             244,718             205,986
   Prepayments and other                                                     4,290               4,521
   Deferred income taxes                                                     6,246               3,791
                                                                         ---------           ---------
       TOTAL CURRENT ASSETS                                                271,732             230,355
                                                                         ---------           ---------

PROPERTY AND EQUIPMENT:
   Gross property and equipment                                            141,141             134,901
   Less accumulated depreciation and amortization                           85,056              74,242
                                                                         ---------           ---------
     NET PROPERTY AND EQUIPMENT                                             56,085              60,659
                                                                         ---------           ---------

OTHER ASSETS:
   Goodwill, net                                                             1,378               1,410
   Other                                                                       557                 117
                                                                         ---------           ---------
     TOTAL OTHER ASSETS                                                      1,935               1,527
                                                                         ---------           ---------
           TOTAL ASSETS                                                  $ 329,752           $ 292,541
                                                                         =========           =========

LIABILITIES AND STOCKHOLDERS' INVESTMENT
CURRENT LIABILITIES:
   Accounts payable                                                      $ 119,778           $ 102,510
   Accrued expenses                                                         23,032              22,611
   Accrued income taxes                                                         --                 650
   Current portion of long-term debt                                        27,103                 460
                                                                         ---------           ---------
       TOTAL CURRENT LIABILITIES                                           169,913             126,231
                                                                         ---------           ---------

LONG TERM DEBT                                                              43,091              41,526
                                                                         ---------           ---------
DEFERRED INCOME TAXES                                                        1,232               1,554
                                                                         ---------           ---------

STOCKHOLDERS' INVESTMENT:
   Preferred stock, $.01 par value, 1,000,000 shares
     authorized, no shares outstanding                                          --                  --
   Common stock, $.01 par value, 30,000,000 shares authorized,
     18,138,122 and 18,092,001 shares issued and outstanding at
     November 3, 2001 and February 3, 2001, respectively                       181                 181
   Additional paid-in capital                                               70,717              70,634
   Less treasury stock at cost (1,914,950 shares at November 3,
     2001 and 597,600 shares at February 3, 2001)                           (4,952)             (1,563)
   Accumulated other comprehensive income (loss)                            (1,451)                  0
   Retained earnings                                                        51,021              53,978
                                                                         ---------           ---------
       TOTAL STOCKHOLDERS' INVESTMENT                                      115,516             123,230
                                                                         =========           =========
           TOTAL LIABILITIES AND STOCKHOLDERS' INVESTMENT                $ 329,752           $ 292,541
                                                                         =========           =========
</TABLE>


                             SEE ACCOMPANYING NOTES


                                       3
<PAGE>

                      BOOKS-A-MILLION, INC. & SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
                                   (CONDENSED)
                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                                             THIRTEEN WEEKS ENDED                  THIRTY-NINE WEEKS ENDED
                                                             --------------------                  -----------------------

                                                      NOVEMBER 3, 2001   OCTOBER 28, 2000   NOVEMBER 3, 2001    OCTOBER 28, 2000
                                                      ----------------   ----------------   ----------------    ----------------
<S>                                                   <C>                <C>                <C>                 <C>
NET SALES                                                 $ 97,812           $ 90,133           $ 299,313           $ 276,861
  Cost of products sold (including warehouse
  distribution and store occupancy costs) (1)               73,605             67,898             222,778             205,582
                                                          --------           --------           ---------           ---------

GROSS PROFIT                                                24,207             22,235              76,535              71,279
  Operating, selling and administrative expenses            22,177             19,758              66,082              59,365
  Depreciation and amortization                              3,908              3,772              11,681              11,074
                                                          --------           --------           ---------           ---------

OPERATING INCOME (LOSS)                                     (1,878)            (1,295)             (1,228)                840
  Interest expense, net                                      1,133              1,345               3,542               3,637
                                                          --------           --------           ---------           ---------

INCOME (LOSS) BEFORE INCOME TAXES                           (3,011)            (2,640)             (4,770)             (2,797)
  Income taxes provision (benefit)                          (1,145)            (1,003)             (1,813)             (1,063)
                                                          --------           --------           ---------           ---------

NET INCOME (LOSS)                                         $ (1,866)          $ (1,637)          $  (2,957)          $  (1,734)
                                                          ========           ========           =========           =========

WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING - BASIC                                  16,417             18,010              16,837              18,008
                                                          ========           ========           =========           =========
NET INCOME (LOSS) PER SHARE - BASIC                       $  (0.11)          $  (0.09)          $   (0.18)          $   (0.10)
                                                          ========           ========           =========           =========
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING - DILUTED                                16,417             18,010              16,837              18,008
                                                          ========           ========           =========           =========
NET INCOME (LOSS) PER SHARE - DILUTED                     $  (0.11)          $  (0.09)          $   (0.18)          $   (0.10)
                                                          ========           ========           =========           =========
</TABLE>


(1) Inventory purchases from related parties were $11,673, $10,594, $28,870 and
$28,100, respectively, for each of the periods presented above.


                             SEE ACCOMPANYING NOTES


                                       4
<PAGE>


                      BOOKS-A-MILLION, INC. & SUBSIDIARIES
               CONSOLIDATED STATEMENT OF STOCKHOLDERS' INVESTMENT
                                 (IN THOUSANDS)
                                   (CONDENSED)
                                   (UNAUDITED)



<TABLE>
<CAPTION>
                                                                                                         ACCUMULATED
                                         COMMON STOCK     ADDITIONAL   TREASURY STOCK                       OTHER         TOTAL
                                       ----------------    PAID-IN    -----------------       RETAINED  COMPREHENSIVE  STOCKHOLDERS'
                                       SHARES    AMOUNT    CAPITAL    SHARES     AMOUNT       EARNINGS   INCOME (LOSS)  INVESTMENT
                                       -------------------------------------------------------------------------------------------
<S>                                    <C>       <C>       <C>        <C>        <C>          <C>        <C>            <C>
BALANCE, FEBRUARY 3, 2001              18,092     $181     $70,634       598     $(1,563)     $ 53,978      $     0      $ 123,230
                                       -------------------------------------------------------------------------------------------
  Net income (loss)                        --       --          --        --          --        (2,957)          --      $  (2,957)
  Cumulative effect
    of accounting change (Note 3)          --       --          --        --          --            --         (465)      $   (465)
  Unrealized loss on
    derivative instruments (Note 3)        --       --          --        --          --            --         (986)     $    (986)
                                       -------------------------------------------------------------------------------------------
  SUBTOTAL
    Comprehensive Income (Loss)            --       --          --        --          --            --           --      $  (4,408)
                                       -------------------------------------------------------------------------------------------
    Issuance of stock for
      employee stock purchase plan
                                           46       --          83        --          --            --           --      $      83
    Purchase of treasury stock             --       --          --     1,317      (3,389)           --           --      $  (3,389)
                                       -------------------------------------------------------------------------------------------
BALANCE, NOVEMBER 3, 2001              18,138     $181     $70,717     1,915     $(4,952)     $ 51,021      $(1,451)     $ 115,516
                                       ===========================================================================================
</TABLE>


                             SEE ACCOMPANYING NOTES


                                       5
<PAGE>

                      BOOKS-A-MILLION, INC. & SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (DOLLARS IN THOUSANDS)
                                   (CONDENSED)
                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                                                                THIRTY-NINE WEEKS ENDED
                                                                                -----------------------

                                                                        NOVEMBER 3, 2001      OCTOBER 28, 2000
                                                                        ----------------      ----------------
<S>                                                                     <C>                   <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income (loss)                                                        $  (2,957)            $  (1,734)
                                                                            ---------             ---------
   Adjustments to reconcile net income to net cash used in
   operating activities:
     Depreciation and amortization                                             11,681                11,074
     Loss on disposal of property and equipment                                   246                   943
     Change in deferred income taxes                                           (1,876)               (1,083)
     Changes in assets and liabilities:                                       (17,388)              (30,975)
                                                                            ---------             ---------
        Total adjustments                                                      (7,337)              (20,041)
                                                                            ---------             ---------

        Net cash used in operating activities                                 (10,294)              (21,775)
                                                                            ---------             ---------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Capital expenditures                                                        (7,149)               (9,496)
   Acquisition of certain assets (Note 4)                                      (6,532)                    0
   Proceeds from sale of equipment                                                 23                    65
                                                                            ---------             ---------
        Net cash used in investing activities                                 (13,658)               (9,431)
                                                                            ---------             ---------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Borrowings under credit facilities                                         146,551               133,113
   Repayments under credit facilities                                        (118,342)             (100,188)
   Proceeds from sale of common stock, net                                         83                    71
   Purchase of treasury stock                                                  (3,389)                   --
                                                                            ---------             ---------
        Net cash provided by financing activities                              24,903                32,996
                                                                            ---------             ---------

Net increase in cash and temporary cash investments                               951                 1,790
Cash and temporary cash investments at beginning of period                      5,282                 4,920
                                                                            ---------             ---------

Cash and temporary cash investments at end of period                        $   6,233             $   6,710
                                                                            ---------             ---------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
    Cash paid during the period for:
            Interest                                                        $   3,180             $   3,337
                                                                            ---------             ---------
            Income taxes, net of refunds                                    $   1,019             $   2,913
                                                                            ---------             ---------
        Non-cash transactions:
             Cumulative effect of hedging activities, net of tax
             benefit of $900                                                $   1,451             $       0
                                                                            ---------             ---------
</TABLE>


                             SEE ACCOMPANYING NOTES


                                       6
<PAGE>


                     BOOKS-A-MILLION, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                   (Condensed)
                                   (Unaudited)

1.       BASIS OF PRESENTATION

         The accompanying unaudited condensed consolidated financial statements
of Books-A-Million, Inc. and its Subsidiaries (the "Company") for the thirteen
and thirty-nine week periods ended November 3, 2001 and October 28, 2000, have
been prepared in accordance with U.S. generally accepted accounting principles
for interim financial information and are presented in accordance with the
requirements of Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do
not include all of the information and footnotes required by U.S. generally
accepted accounting principles for complete financial statements. These
financial statements should be read in conjunction with the consolidated
financial statements and notes thereto for the fiscal year ended February 3,
2001, included in the Company's 2001 Annual Report on Form 10-K. In the opinion
of management, the consolidated financial statements included herein contain all
adjustments (consisting only of normal recurring adjustments) considered
necessary for a fair presentation of the Company's financial position as of
November 3, 2001, and the results of its operations and cash flows for the
thirteen and thirty-nine week periods then ended. Certain prior year amounts
have been reclassified to conform to current year presentation.

         The Company has experienced, and expects to continue to experience,
significant variability in sales and net income from quarter to quarter.
Therefore, the results of the interim periods presented herein are not
necessarily indicative of the results to be expected for any other interim
period or the full year.

2.       NET INCOME PER SHARE

         Basic net income per share ("EPS") excludes dilution and is computed by
dividing income available to common shareholders by the weighted average number
of common shares outstanding for the period. Diluted EPS reflects the potential
dilution that could occur if securities or other contracts to issue common stock
are exercised or converted into common stock or resulted in the issuance of
common stock that then shared in the earnings of the Company. Diluted EPS has
been computed based on the average number of shares outstanding including the
effect of outstanding stock options, if dilutive, in each respective thirteen
and thirty-nine week period. A reconciliation of the weighted average shares for
basic and diluted EPS is as follows:


<TABLE>
<CAPTION>
                                                                         For the Thirteen Weeks Ended
                                                                                (in thousands)
                                                            November 3, 2001                        October 28, 2000
                                                          ----------------------------------------------------------
<S>                                                       <C>                                       <C>
Weighted average shares outstanding:
Basic                                                                 16,417                                  18,010
Dilutive effect of stock options outstanding                               0                                       0
                                                          ----------------------------------------------------------
Diluted                                                               16,417                                  18,010
                                                          ----------------------------------------------------------


                                                                       For the Thirty-Nine Weeks Ended
                                                                                (in thousands)
                                                            November 3, 2001                         October 28,2000
                                                          ----------------------------------------------------------
Weighted average shares outstanding:
Basic                                                                 16,837                                  18,008
Dilutive effect of stock options outstanding                               0                                       0
                                                          ----------------------------------------------------------
Diluted                                                               16,837                                  18,008
                                                          ----------------------------------------------------------
</TABLE>


                                       7
<PAGE>


Options outstanding of 1,447,270 and 1,448,520 for the thirteen weeks and
thirty-nine weeks ended November 3, 2001 and outstanding options of 1,515,717
and 1,529,489 for the thirteen and thirty-nine weeks ended October 28, 2000 were
not included in the table above as they were anti-dilutive.


3.       ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

         In June 1998, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities,
amended by SFAS No. 137, Accounting for Derivative Instruments and Hedging
Activities - Deferral of the Effective Date of FASB Statement No. 133, and SFAS
No. 138, Accounting for Certain Derivatives and Certain Hedging Activities. SFAS
No. 133 establishes accounting and reporting standards requiring that every
derivative instrument (including certain derivative instruments embedded in
other contracts) be recorded in the balance sheet as either an asset or
liability measured at its fair value. SFAS No. 133 requires that changes in the
derivative's fair value be recognized currently in earnings unless specific
hedge accounting criteria are met. Special accounting for qualifying hedges
allows a derivative's gains and losses to offset related results on the hedged
item in the income statement, and requires that a company must formally
document, designate and assess the effectiveness of transactions that receive
hedge accounting.

         The Company adopted these statements effective February 4, 2001. The
adoption of these statements resulted in a cumulative after-tax increase to
other comprehensive loss, pertaining to prior years, of $465,000 and an after
tax increase to other comprehensive loss, for the current year, of $986,000, of
which $61,000 reduced net income for the thirty-nine weeks ended November 3,
2001. The $2.4 million liability related to the derivatives is reflected in
Accrued Expenses, and the relative tax benefit of $900,000 is reflected in
Current Deferred Tax Assets in the accompanying condensed consolidated balance
sheet at November 3, 2001. The adoption of these statements may increase
volatility in earnings.

4.       ACQUISITION OF ASSETS

         During March 2001, the Company acquired inventory and lease-rights of
eighteen retail stores from Crown Books Corporation for $6.5 million. The stores
are located in the Chicago and Washington, D.C. metropolitan areas. The results
of operations for these stores are reflected in the consolidated financial
statements beginning in the first quarter of fiscal 2002.

5.       CONTINGENCIES

         The Company is a party to various legal proceedings incidental to its
business. In the opinion of management, after consultation with legal counsel,
the ultimate liability, if any, with respect to those proceedings is not
presently expected to materially affect the financial position or results of
operations of the Company.


                                       8
<PAGE>


                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS


SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

         This document contains certain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995 that involve a
number of risks and uncertainties. A number of factors could cause actual
results, performance, achievements of the Company, or industry results to be
materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. These factors include,
but are not limited to, the competitive environment in the book retail industry
in general and in the Company's specific market areas; inflation; economic
conditions in general and in the Company's specific market areas; the number of
store openings and closings; the profitability of certain product lines, capital
expenditures and future liquidity; liability and other claims asserted against
the Company; uncertainties related to the Internet and the Company's Internet
initiatives; and other factors referenced herein. In addition, such
forward-looking statements are necessarily dependent upon the assumptions,
estimates and dates that may be incorrect or imprecise and involve known and
unknown risks, uncertainties and other factors. Accordingly, any forward-looking
statements included herein do not purport to be predictions of future events or
circumstances and may not be realized. Given these uncertainties, shareholders
and prospective investors are cautioned not to place undue reliance on such
forward-looking statements. The Company disclaims any obligations to update any
such factors or to publicly announce the results of any revisions to any of the
forward-looking statements contained herein to reflect future events or
developments.

RESULTS OF OPERATIONS

         Net sales increased 8.5% to $97.8 million in the thirteen weeks ended
November 3, 2001, from $90.1 million in the thirteen weeks ended October 28,
2000. Net sales increased 8.1% to $299.3 million in the thirty-nine weeks ended
November 3, 2001, from $276.9 million in the thirty-nine weeks ended October 28,
2000. The increase in net sales resulted from 18 new stores acquired this year
from Crown Books Corporation combined with 10 additional new stores opened in
the last 12 months. Comparable store sales in the third quarter decreased 3.8%
versus last year. Excluding collector sales, comparable store sales decreased
2.0% over the same period last year. During the thirteen weeks ended November 3,
2001, three superstores and one newsstand were opened, and one Bookland store
and one superstore were closed.

         Gross profit increased $2.0 million or 8.9% to $24.2 million in the
thirteen weeks ended November 3, 2001 from $22.2 million in the thirteen weeks
ended October 28, 2000, and in the thirty-nine weeks ended November 3, 2001,
gross profit increased 7.4% to $76.5 million from $71.3 million in the same
period last year. Gross profit as a percentage of net sales for the thirteen
weeks ended November 3, 2001 was relatively constant with the same period last
year at 24.7%. Gross profit as a percentage of net sales for the thirty-nine
weeks ended November 3, 2001 was 25.6% versus 25.7% in the same period last
year. The decrease as a percentage of net sales for the thirty-nine week period
was due to higher occupancy costs as a percentage of sales.

         Operating, selling and administrative expenses increased $2.4 million
or 12.2% to $22.2 million in the thirteen weeks ended November 3, 2001, from
$19.8 million in the thirteen weeks ended October 28, 2000, and in the
thirty-nine weeks ended November 3, 2001, operating, selling and administrative
expenses increased 11.3% to $66.1 million from $59.4 million in the same period
last year. Operating, selling and administrative expenses as a percentage of net
sales for the thirteen weeks ended November 3, 2001, increased to 22.7% from
21.9% in the same period last year. For the thirty-nine week period operating,
selling and administrative expenses as a percentage of net sales increased to
22.1% from 21.4% in the same period last year. The increase in this percentage
for the thirteen and thirty-nine week periods was due to lower comparable store
sales and higher store selling costs as a percent to sales.

         Depreciation and amortization increased $0.1 million or 3.6% to $3.9
million in the thirteen weeks ended November 3, 2001, from $3.8 million in the
thirteen weeks ended October 28, 2000, and in the thirty-nine week period
depreciation and amortization increased $0.6 million or 5.5% to $11.7 million
from $11.1 million in the same period last year. The increase in depreciation
and amortization for the thirteen and thirty-nine week periods was primarily the
result of the increased number of superstores operated by the Company.


                                       9
<PAGE>


Interest expense was $1.1 million in the thirteen weeks ended November 3, 2001
versus $1.3 million in the thirteen weeks ended October 28, 2000, and $3.5
million in the thirty-nine weeks ended November 3, 2001 versus $3.6 million in
the same period last year. The decrease in interest expense for the third
quarter and year to date is due to lower interest rates versus last year.

LIQUIDITY AND CAPITAL RESOURCES

         During the first thirty-nine weeks of fiscal 2002, the Company's cash
requirements have been funded with net cash from operations and with borrowings
under the Company's credit facilities. Similar to many retailers, the Company's
business is seasonal, with its highest retail sales, gross profits and net
income traditionally occurring during the fourth fiscal quarter, reflecting the
increased demand for books and gifts during the year-end, holiday selling
season. Working capital requirements are generally highest during the third
fiscal quarter and the early part of the fourth fiscal quarter due to the
seasonality of the Company's business.

         The Company has a revolving credit facility that allows borrowings up
to $90 million for which no principal repayments are due until the facility
expires on June 18, 2003, and an unsecured working capital line of credit for
$15 million, which is subject to annual renewal each June. As of November 3,
2001, $61.8 million was outstanding under these facilities combined. Both credit
facilities have certain financial and non-financial covenants with which the
Company is in compliance. Additionally, as of November 3, 2001, the Company has
outstanding borrowings associated with the issuance of an industrial development
revenue bond totaling $7.5 million.

         The Company's capital expenditures totaled $7.1 million during the
first thirty-nine weeks of fiscal 2002. These expenditures were primarily used
for new store expenditures, renovation and improvements to existing stores,
investments in information systems and warehouse distribution purposes.
Management estimates that capital expenditures for the remainder of fiscal 2002
will be approximately $4.1 million, and that such amounts will be used primarily
for new stores, renovation and improvements to existing stores and investments
in management information systems. Management believes that existing cash
balances and net cash from operating activities, together with borrowings under
the Company's credit facilities, will be adequate to finance the Company's
planned capital expenditures and to meet the Company's working capital
requirements through next year.

         During the thirty-nine weeks ended November 3, 2001, the Company
acquired 18 stores from Crown Books Corporation, located in the Chicago and
Washington D.C. metropolitan areas. In addition, the Company opened three
superstores and three newsstands; and, closed two superstores and three Bookland
stores. Inventory and debt balances at November 3, 2001 increased as compared to
February 3, 2001 due to seasonal fluctuations in inventory levels and the
acquisition of inventory and lease-rights from Crown Books Corporation. Accounts
payable balances at November 3, 2001, increased compared to February 3, 2001,
due to the increased inventory balances.

         When necessary, the Company establishes certain reserves for the
closing of under-performing stores. Management feels that this year's activity
will not significantly vary from the number of closings in the prior year.

RELATED PARTY ACTIVITIES

         Certain principal stockholders of the Company have controlling
ownership interests in other entities with which the Company conducts business.
Significant transactions between the Company and these various other entities
("related parties") are summarized in the following paragraph.

         The Company purchases a portion of its inventories for resale from
related parties; such purchases were $28.9 million in the thirty-nine weeks
ended November 3, 2001, versus $28.1 million in the thirty-nine weeks ended
October 28, 2000. The increase in related party purchases is primarily due to
increased purchases of magazine merchandise. The Company sells a portion of its
inventories to related parties; such sales amounted to $1.7 million and $2.3
million in the thirty-nine weeks ended November 3, 2001 and October 28, 2000,
respectively. This decrease in related party sales is primarily due to lower
sales of bargain books. Management believes the terms of these related party
transactions are substantially equivalent to those available from unrelated
parties and, therefore, have no significant impact on gross profit.


                                       10
<PAGE>


NEW AND PENDING ACCOUNTING PRONOUNCEMENTS

         On July 20, 2001, the Financial Accounting Standards Board ("FASB")
issued Statements of Financial Accounting Standards No. 141, "Business
Combinations" ("FAS 141") and No. 142, "Goodwill and Other Intangible Assets"
("FAS 142"). Business combinations initiated after June 30, 2001, must be
accounted for under the provisions of these two statements. The Company must
also apply these provisions to previously recorded business combinations as of
January 1, 2002. The principal provisions of FAS 141 and FAS 142 are as follows:

         All business combinations initiated after June 30, 2001 will be
         accounted for using the "purchase" method, under which the identifiable
         assets and liabilities of the acquired business are recorded at their
         respective fair market values with the residual amount being recorded
         as goodwill. The "pooling-of-interests" method, under which the
         financial statements of the acquirer and the acquiree were combined as
         if the two businesses had always been one, will no longer be used.

         Goodwill and identifiable intangible assets will no longer be amortized
         over a maximum period of forty years. Goodwill will not be amortized
         but will instead be tested for impairment annually or upon the
         occurrence of certain "triggering events". Identifiable intangible
         assets will be amortized over their expected useful lives; those with
         indefinite expected useful lives will not be amortized. Identifiable
         intangible assets will continue to be tested for impairment under
         previously existing accounting standards.

         The Company will adopt FAS 141 and FAS 142 on February 3, 2002, and
expects the adoption of these standards to have no material impact on its
financial condition, results of operations or cash flows.

MARKET RISK

         The Company is subject to interest rate fluctuations involving its
credit facilities. The average amount of debt outstanding under the Company's
credit facilities was $64.1 million during fiscal 2001. However, the Company
utilizes both fixed and variable debt to manage this exposure. On February 9,
1998, the Company entered into an interest rate swap agreement, with a five-year
term, which carries a notional principal amount of $30.0 million. The swap
effectively fixes the interest rate on $30.0 million of variable rate debt at
6.78%. The swap agreement expires on February 11, 2003. Also, on May 14, 1996,
the Company entered into an interest rate swap agreement, with a ten-year term,
which carries a notional principal amount of $7.5 million. The swap effectively
fixes the interest rate on $7.5 million of variable rate debt at 7.98%. The swap
agreement expires on June 7, 2006. The counter party to the interest rate swaps
is one of the Company's primary banks. The Company believes the credit and
liquidity risk of the counter party failing to meet its obligation is remote as
the Company settles its interest position with the bank on a quarterly basis.


                                       11
<PAGE>


                             II - OTHER INFORMATION

ITEM 1:  Legal Proceedings

                  The Company is a party to various legal proceedings incidental
                  to its business. In the opinion of management, after
                  consultation with legal counsel, the ultimate liability, if
                  any, with respect to those proceedings is not presently
                  expected to materially affect the financial position or
                  results of operations of the Company.

ITEM 2:  Changes in Securities

                  None

ITEM 3:  Defaults Upon Senior Securities

                  None

ITEM 4:  Submission of Matters of Vote of Security-Holders

                  None

ITEM 5:  Other Information

                  None

ITEM 6:  Exhibits and Reports on Form 8-K

         (A) Exhibits

                  Exhibit 3i Certificate of Incorporation of Books-A-Million,
                  Inc. (incorporated herein by reference to Exhibit 3.1 in the
                  Company's Registration Statement on Form S-1 (Capital
                  Registration No. 33-52256))

                  Exhibit 3ii By-Laws of Books-A-Million, Inc. (incorporated
                  herein by reference to Exhibit 3.2 in the Company's
                  Registration Statement on Form S-1 (Capital Registration No.
                  33-52256))

         (B) Reports on Form 8-K

                  There were no reports filed on Form 8-K during the thirteen
                  week period ended November 3, 2001


                                       12
<PAGE>



                                   SIGNATURES

         Pursuant to the requirements of the Securities Exchange Act of 1934,
   the Registrant has duly caused this report to be signed on its behalf by the
   undersigned duly authorized.









                              BOOKS-A-MILLION, INC.



   Date: December 14, 2001              by:/s/ Clyde B. Anderson
                                           ---------------------
                                        Clyde B. Anderson
                                        Chief Executive Officer



   Date: December 14, 2001              by:/s/ Richard S. Wallington
                                           -------------------------
                                        Richard S. Wallington
                                        Chief Financial Officer