-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MKZuJhzr04rvKDkD63zBOTW+oNI98fBTRYYNxA30yRRNigUWRvYThrRByoNCjYMa M4dV3CLZkS84np4Vuy1tDg== 0000950148-96-002888.txt : 19961212 0000950148-96-002888.hdr.sgml : 19961212 ACCESSION NUMBER: 0000950148-96-002888 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19961027 FILED AS OF DATE: 19961211 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MAC FRUGALS BARGAINS CLOSE OUTS INC CENTRAL INDEX KEY: 0000078384 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-VARIETY STORES [5331] IRS NUMBER: 952745285 STATE OF INCORPORATION: DE FISCAL YEAR END: 0130 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-11164 FILM NUMBER: 96679189 BUSINESS ADDRESS: STREET 1: 2430 E DEL AMO BLVD CITY: DOMINGUEZ STATE: CA ZIP: 90220-6306 BUSINESS PHONE: 3105379220 MAIL ADDRESS: ZIP: ***** FORMER COMPANY: FORMER CONFORMED NAME: PIC N SAVE CORP DATE OF NAME CHANGE: 19920610 10-Q 1 10-Q 1 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 October 27, 1996 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 0-6672 MAC FRUGAL'S BARGAINS o CLOSE-OUTS INC. ------------------------------------------------------ (Exact name of registrant as specified in its charter) Delaware 95-2745285 - -------------------------------- ------------------------------- (State or other jurisdiction of (I.R.S. employer identification incorporation or organization) number) Mailing and Street Address: 2430 East Del Amo Boulevard, Dominguez, California 90220-6306 - ------------------------------------------------------------------------------- (Address of principal executive offices) Registrant's telephone number, including area code: (310) 537-9220 ---------------------------------------------------------------------- - -------------------------------------------------------------------------------- Former name, if changed since last report. 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. [X] Yes [ ] No Indicate the number of shares outstanding of each of the issuer's classes of Common Stock, as of the latest practicable date. Common Shares Outstanding at November 24, 1996 26,128,663 2 MAC FRUGAL'S BARGAINS o CLOSE-OUTS INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Amounts in thousands except par value)
October 27, January 28, 1996 1996 ---------- --------- Assets Current Assets : Cash and cash equivalents $ 41,448 $ 7,285 Merchandise inventories 224,222 200,616 Current deferred income tax asset 13,003 13,003 Insurance receivable 8,160 - Other current assets 8,396 9,965 --------- --------- Total current assets 295,229 230,869 Property, Equipment and Improvements : Land 35,224 35,195 Buildings and improvements 85,329 84,054 Automobiles and trucks 3,019 3,040 Furniture, fixtures and equipment 99,073 99,966 Leasehold improvements 85,867 84,127 Construction in progress 1,756 635 --------- --------- 310,268 307,017 Less: Accumulated depreciation and amortization (132,790) (121,106) --------- --------- 177,478 185,911 --------- -------- Deferred Income Tax Asset 604 604 Deferred Financing Costs and Other Assets 1,679 1,688 --------- --------- Total Assets $ 474,990 $ 419,072 ========= =========
See Notes to Consolidated Financial Statements. 3
October 27, January 28, 1996 1996 ------------ ---------- Liabilities and Stockholders' Equity Current Liabilities : Checks outstanding $ 15,438 $ 16,704 Loan payable to bank 22,000 - Current portion of long-term debt - 69 Accounts payable 25,441 14,781 Accrued expenses 40,869 40,605 Income taxes payable 5,900 4,664 Sales tax payable 7,067 9,527 -------- -------- Total current liabilities 116,715 86,350 -------- -------- Long-Term Debt 113,263 96,435 Deferred Income Taxes 5,888 5,888 Stockholders' Equity : Preferred stock, $1 par value; authorized, 500 shares; issued, none Common stock, $.02778 par value; authorized, 100,000 shares; issued 26,070 shares (October 27, 1996) and 25,582 shares (January 28, 1996) 724 711 Additional paid-in capital 5,873 512 Retained earnings 242,383 230,749 -------- -------- 248,980 231,972 Less: Treasury stock, at cost, 615 shares (October 27, 1996) and 119 shares (January 28,1996) (9,856) (1,573) Total Stockholders' Equity 239,124 230,399 -------- -------- Total Liabilities and Stockholders' Equity $474,990 $419,072 ======== ========
_____________ See Notes to Consolidated Financial Statements. 4 MAC FRUGAL'S BARGAINS o CLOSE-OUTS INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (LOSSES) (UNAUDITED) (Amounts in thousands except per share amounts)
For the three months ended For the nine months ended ---------------------------- --------------------------- October 27, October 29, October 27, October 29, 1996 1995 1996 1995 ----------- ----------- ----------- ----------- NET SALES $174,488 $152,353 $491,572 $453,357 COST OF SALES 99,528 114,741 280,779 276,557 -------- -------- -------- -------- GROSS PROFIT 74,960 37,612 210,793 176,800 -------- -------- -------- -------- Store expenses 52,315 46,895 146,573 139,523 Warehouse and administrative expenses 12,569 13,469 40,315 43,494 -------- -------- -------- -------- TOTAL OPERATING EXPENSES 64,884 60,364 186,888 183,017 OPERATING INCOME (LOSS) 10,076 (22,752) 23,905 (6,217) INTEREST EXPENSE, NET 1,836 3,699 5,141 9,317 -------- -------- -------- -------- EARNINGS(LOSS) BEFORE INCOME TAXES 8,240 (26,451) 18,764 (15,534) INCOME TAX EXPENSE (BENEFIT) 3,131 (10,448) 7,130 (6,136) -------- -------- -------- -------- NET EARNINGS (LOSS) $ 5,109 ($16,003) $ 11,634 ($9,398) ======== ======== ======== ======== EARNINGS(LOSS) PER COMMON SHARE $0.20 ($0.62) $0.45 ($0.36) ======== ======== ======== ======== AVERAGE SHARES OUTSTANDING 26,069 25,798 25,856 25,785 ======== ======== ======== ========
_____________ See Notes to Consolidated Financial Statements. 5 MAC FRUGAL'S BARGAINS o CLOSE-OUTS INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (Amounts in thousands)
For the nine months ended ------------------------------ October 27, October 29, 1996 1995 ----------- ----------- INCREASE IN CASH AND CASH EQUIVALENTS Cash flows from operating activities: Cash received from customers $ 491,572 $ 453,357 Cash paid to suppliers and employees (477,081) (503,549) Income taxes paid (5,894) (18,920) Interest paid (net of amount capitalized) (5,860) (8,309) Interest received 212 112 --------- --------- Net cash provided by (used in) operating activities 2,949 (77,309) Cash flows from investing activities: Capital expenditures (8,574) (20,279) Insurance receivable related to property, equipment and improvements 2,474 - Proceeds from sale of fixed assets 1,525 156 --------- --------- Net cash used in investing activities (4,575) (20,123) Cash flows from financing activities: Net borrowings of long-term debt 28,715 114,854 Net borrowings (repayments) under line of credit agreements 9,200 (7,400) Repurchase of treasury stock (8,283) - Proceeds from sale of stock options 5,313 309 Other (net) 844 945 --------- --------- Net cash provided by financing activities 35,789 108,708 --------- --------- Increase in cash and cash equivalents 34,163 11,276 Cash and cash equivalents, beginning of period 7,285 6,674 --------- --------- Cash and cash equivalents, end of period $ 41,448 $ 17,950 ========= =========
________________ See Notes to Consolidated Financial Statements. 6 MAC FRUGAL'S BARGAINS o CLOSE-OUTS INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (Amounts in thousands) (continued)
For the nine months ended ----------------------------------- October 27, October 29, 1996 1995 ----------- ----------- Reconciliation of Net Income (Loss) to Net Cash Provided By (Used in) Operating Activities: ------------------------------------------------------------ Net income (loss) $ 11,634 ($9,398) Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation and amortization 13,810 13,487 Gain on sale of fixed assets (802) (34) Non-cash compensation expense 61 64 Increase in net deferred income tax assets - (13,828) Changes in assets and liabilities: Increase in inventory (23,606) (62,845) Increase in insurance receivable (8,160) - Decrease in other assets 1,578 517 Increase in checks outstanding, accounts payable, accrued expenses and sales tax payable 7,198 5,956 Increase (decrease) in federal and state income taxes 1,236 (11,228) Total adjustments (8,685) (67,911) -------- -------- Net cash provided by (used in) operating activities $ 2,949 ($77,309) ======== ========
_______________ See Notes to Consolidated Financial Statements. 7 MAC FRUGAL'S BARGAINS o CLOSE-OUTS INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED) (Amounts in thousands)
Common Stock Treasury Stock ------------------- Additional ----------------------- Paid-in Retained Shares Amount Capital Earnings Shares Amount Total -------- -------- ---------- ---------- -------- ---------- --------- Balance, January 28, 1996 25,582 $711 $ 512 $230,749 119 ($1,573) $230,399 Exercise of stock options 488 13 5,300 5,313 Non-cash compensation expense 61 61 Purchase of Treasury stock, at cost 496 (8,283) (8,283) Net income for nine months 11,634 11,634 ------ ---- ------ -------- --- ------- -------- Balance, October 27, 1996 26,070 $724 $5,873 $242,383 615 ($9,856) $239,124 ====== ==== ====== ======== === ======= ========
____________ See Notes to Consolidated Financial Statements. 8 MAC FRUGAL'S BARGAINS o CLOSE-OUTS INC. AND SUBSIDIARIES PART I - ITEM I - FINANCIAL STATEMENTS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (DOLLAR AMOUNTS IN THOUSANDS) Note 1 The condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles, by Mac Frugal's Bargains o Close-outs Inc., "the Company" without audit. Pursuant to the rules and regulations of the Securities and Exchange Commission, certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with generally accepted accounting principles have been omitted or condensed. It is management's belief that the disclosures made are adequate to make the information presented not misleading and reflect all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of financial position and results of operations for the periods presented. The results of operations of the periods presented should not be considered as necessarily indicative of operations for the full year. It is recommended that these condensed consolidated financial statements be read in conjunction with the consolidated financial statements for the year ended January 28, 1996 and the notes thereto included in the Company's 10-K. Note 2 Earnings (loss) per Common Share is based on the weighted average number of Common Shares outstanding, adjusted for dilutive effects of stock options, if applicable. Note 3 The Company's effective tax rate for fiscal 1995 and the first three quarters of fiscal 1996 was 38.0%. For interim reporting purposes the entire provision for income tax expense was classified as current. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The Company had a net deferred tax asset of $7,719 at October 27, 1996 and January 28, 1996. The Company provided no valuation allowance against its deferred tax assets recorded as of October 27, 1996 and January 28, 1996 because management believes it is more likely than not that the deferred income tax asset will be realized. Note 4 At October 27, 1996, the Company classified the portion of its revolving debt as long-term that is not required to be repaid at its next annual clean-down date of September 30, 1997. Note 5 On March 21, 1996, the Company's distribution center in New Orleans, Louisiana ("NODC") and its contents were destroyed by fire. Since then, all of the Company's stores have been serviced by the Company's distribution center in Rancho Cucamonga, California. 9 The Company received an initial payment for the destruction of inventory from its insurance carriers of approximately $25.6 million during the second quarter ended July 28, 1996. Subsequent to the end of the third quarter, the Company's insurance carriers paid an additional $2.4 million in full settlement of the inventory destroyed in the fire. The insurance receivable at October 27, 1996 represents, in part, the insurance proceeds received subsequent to quarter end related to the inventory. Additionally, the net book value of the property, plant and equipment destroyed by the fire and certain other related business interruption expenses are included in this insurance receivable. The Company's lease of the distribution center with an unrelated third party landlord obligates the Company to rebuild. However, the Company reached an agreement with the landlord that enables the Company to terminate such lease at its option in exchange for a cash settlement of $30 million to the landlord and the purchase of the underlying land and land improvements from its owner, the City of New Orleans. This agreement is subject to certain conditions being satisfied by the Company. Subsequent to the end of the third quarter, these conditions were satisfied and the Company anticipates making the cash payment to the landlord of $30 million in the fourth quarter ending February 2, 1997. Additionally, in separate agreements, the Company has reached a comprehensive settlement with its insurance carriers relating to their obligation contained in their business interruption and building replacement insurance policies. The Company estimates that during the fourth quarter ending February 2, 1997, the Company will receive insurance proceeds totaling approximately $62.5 million. These proceeds will be used to offset certain business interruption and other fire related expenses incurred since the date of the casualty in addition to settling the distribution center lease with the landlord for $30 million and the purchase of the land and underlying land improvements from the City of New Orleans. The Company has not yet finalized the net income statement effect of this settlement due to some uncertainties as of the date of this filing. However, the Company estimates that it will finalize and realize a gain to be recognized in the fourth quarter ending February 2, 1997. 10 PART I - ITEM II - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND INTERIM RESULTS OF OPERATIONS (DOLLAR AMOUNTS IN THOUSANDS) EXCEPT FOR THE HISTORICAL INFORMATION CONTAINED HEREIN, THE MATTERS DISCUSSED IN THIS REPORT ON FORM 10-Q ARE FORWARD-LOOKING STATEMENTS WHICH INVOLVE RISKS AND UNCERTAINTIES, INCLUDING BUT NOT LIMITED TO ECONOMIC, COMPETITIVE, GOVERNMENTAL AND TECHNOLOGICAL FACTORS AFFECTING THE COMPANY'S OPERATIONS, MARKETS, PRODUCTS, SERVICES AND PRICES, AND OTHER FACTORS DISCUSSED IN THE COMPANY'S FILINGS WITH SECURITIES AND EXCHANGE COMMISSION. RESULTS OF OPERATIONS THIRTEEN WEEK PERIOD ENDED OCTOBER 27, 1996 ("THIRD QUARTER 1996") COMPARED WITH THIRTEEN WEEK PERIOD ENDED OCTOBER 29, 1995 ("THIRD QUARTER 1995"). Total sales and comparable store sales increased 14.5% and 11.1%, respectively, for the Third Quarter 1996 compared to the Third Quarter 1995. The total sales increase was a result of opening 14 net new stores since October 29, 1995, combined with the comparable store sales increase noted above. The comparable sales increase was driven by increases in customer traffic, and increases in sales of food, health and beauty aids and hardlines. At October 27, 1996, 317 stores were in operation compared to 303 stores at October 29, 1995. Sales from the 165 California stores open at October 27, 1996, were approximately 59% of the Company's total sales for the Third Quarter 1996 as compared to 60% in the Third Quarter 1995. California stores experienced a comparable store sales increase for the Third Quarter 1996, similar to that of the Company-wide trend. The Company is continuing to execute the components of its new strategic direction which was announced in November 1995. It is anticipated that this plan will continue to be implemented throughout fiscal 1996. The Third Quarter 1996 gross profit margin was 43.0%. The Third Quarter 1995 gross profit margin was 24.7% which included a $35 million non-cash charge to hasten the liquidation of aged inventory. Excluding this charge, the gross profit margin was 47.7%. The decrease in the gross profit margin for the Third Quarter 1996 versus the Third Quarter 1995 (excluding the $35 million non-cash charge) is due to more competitive pricing of merchandise and a change in merchandise mix as part of the implementation of the Company's new strategic plan. Operating expenses were 37.2% of sales for the Third Quarter of 1996 compared to 39.6% for the Third Quarter 1995. The improvement in operating expenses was the result of decreases in all areas: warehouse, administration and stores as discussed below. General cost containment and controls resulted in store expenses of 30.0% of sales for the Third Quarter 1996 compared to 30.8% of sales for the Third Quarter 1995. Reduced expenses in almost every expense category were only partially offset by an increase in advertising for additional markets and a fall promotion inviting customers to see the strategic initiatives which were implemented in the stores. Warehouse and administrative expenses were 7.2% and 8.8% of sales for the Third Quarter 1996 and the Third Quarter 1995, respectively. Expense controls in the administrative area resulted 11 in lower expenses as a percent of sales for the Third Quarter 1996 compared to the Third Quarter 1995. Continued expense containment also provided lower expenses in the warehouse in both dollars and as a percent of sales for the Third Quarter 1996 compared to the Third Quarter 1995. The $1,863 decrease in interest expense for the Third Quarter 1996 compared to the Third Quarter 1995 resulted from both a decrease in the average amount of debt outstanding and lower interest rates. The decrease in the average amount of debt outstanding is the combined result of a decrease in inventories and capital expenditures during the Third Quarter 1996 compared to the Third Quarter 1995. The income tax rate for the Third Quarter 1996 was 38.0%, and for interim purposes, the entire provision for income taxes is classified as current. The current rate of 38.0% is consistent with the fiscal 1995 rate. Income taxes were provided at a rate of 39.5% in the Third Quarter 1995. The Company had a net deferred tax asset of $7,719 at October 27, 1996 and January 28, 1996. THIRTY-NINE WEEK PERIOD ENDED OCTOBER 27, 1996 ("YEAR-TO-DATE 1996") COMPARED WITH THIRTY-NINE WEEK PERIOD ENDED OCTOBER 29, 1995 ("YEAR-TO- DATE 1995"). Total sales increased 8.4% and comparable store sales increased 3.5% for the Year-to-Date 1996 compared to the Year-to-Date 1995. The total sales increase was a result of opening 14 net new stores since October 29, 1995, coupled with the comparable store increased noted above. The comparable sales increase was due to increases in customer traffic, and increases in sales of food, health and beauty aids and hardlines, partially offset by a decrease in apparel sales due to the change in merchandise mix compared to last year and business interruption caused by the fire at NODC. Sales from the 165 California stores open at October 27, 1996, were approximately 59% of the Company's total sales for the Year-to-Date 1996 as compared to 62% for the Year-to-Date 1995. California stores experienced a comparable store sale increase for the Year-to-Date 1996, similar to that of the Company-wide trend. The Year-to-Date 1996 gross profit margin was 42.9%. The Year-to-Date 1995 gross profit margin was 39.0% including the $35 million non-cash charge and 46.7% excluding the charge. The decrease in the gross profit margin for the Year-to-Date 1996 versus the Year-to-Date 1995 (excluding the $35 million charge) is primarily due to more competitive pricing of merchandise and a change in merchandise mix as part of the implementation of the Company's new strategic plan. The gross profit margin for the Year-to-Date 1996 was further reduced by margin changes resulting from the business interruption and inventory imbalances caused by the destruction of inventory at NODC. 12 Operating expenses were 38.0% of sales for the Year-to-Date 1996 compared to 40.4% for the Year-to-Date 1995. The improvement in operating expenses was the result of decreases in all areas: warehouse, administration and stores. General cost containment resulted in store expenses of 29.8% of sales for the Year-to-Date 1996 compared to 30.8% of sales for the Year-to-Date 1995. Reduced expenses in payroll and workers' compensation were only partially offset by increases in occupancy cost, depreciation expense and advertising expense. Increases in occupancy, depreciation and advertising expenses are primarily the result of opening new stores. Warehouse and administrative expenses were 8.2% and 9.6% of sales for the Year-to-Date 1996 and the Year-to-Date 1995, respectively. Expense controls in the warehouse and administrative areas resulted in lower expenses in both dollars and as a percent of sales for the Year-to-Date 1996 compared to the Year-to-Date 1995. The $4,176 decrease in interest expense for the Year-to-Date 1996 compared to the Year-to-Date 1995 resulted from both a decrease in the average amount of debt outstanding and lower interest rates. The decrease in the average amount of debt outstanding is the combined result of a decrease in inventories and capital expenditures during the Year-to-Date 1996 compared to the Year-to-Date 1995. The income tax rate for the Year-to-Date 1996 was 38.0%, and for interim purposes, the entire provision for income taxes is classified as current. The current rate of 38.0% is consistent with the fiscal 1995 rate. Income taxes were provided at a rate of 39.5% for the Year-to- Date 1995. LIQUIDITY AND CAPITAL RESOURCES Cash and cash equivalents increased $34,163 in the first three quarters of 1996 compared to an increase of $11,276 in the first three quarters of 1995. The increase in cash and cash equivalents in the first three quarters of 1996 compared to the same period last year related primarily to the establishment of a $30,000 cash escrow account in anticipation of settling and terminating the NODC lease with its landlord as discussed in Note 5 of the Financial Statements. The escrow account was established by borrowing from the Company's existing credit facility. The cash to be disbursed from the escrow account will be reimbursed to the Company from the insurance proceeds of approximately $62,500. Reduced inventory purchases and associated debt, and lower income tax payments and capital expenditures, partially offset by the repurchase of 496 shares for $8,283 in the first three quarters of 1996 also contributed to the increase in cash and cash equivalents over the same period last year. As of October 27, 1996, the Company's long-term debt was 47.4% of equity and its total debt was 56.6% of equity compared to 57.9% and 93.1%, respectively, at October 29, 1995. At January 28, 1996, long-term debt and total debt were both 41.9% of equity. The decrease in the level of debt at October 27, 1996 compared to October 29, 1995 reflects the Company's strategic direction to reduce inventory levels and the borrowings necessary to finance them, and the planned reduction in capital expenditures, offset in part by the borrowing to establish the escrow account noted above and by the stock repurchase program in fiscal 1995 and the first nine months of 1996. The increase in the level of debt at October 27, 1996 compared to January 28, 1996 also reflects the Company's normal trend of increasing inventory levels in preparation for seasonal needs during this period of the year, offset in large, by the Company's direction of reducing inventory levels in the stores and warehouse. 13 The Company believes its present lines of credit are adequate to meet any seasonal or temporary liquidity needs that cannot be met with cash flow from operating activities. At October 27, 1996, the Company had $132,000 of outstanding revolving debt. Of this outstanding debt, $107,000 was borrowed under the Company's $200,000 committed credit line and $25,000 was borrowed under the Company's uncommitted credit lines. The Company's current ratio as of October 27, 1996 was 2.53 versus 2.67 at fiscal year end 1996 and 1.99 at October 29, 1995. The improvement in the Company's current ratio compared to October 29, 1995 is due primarily to reduced inventory levels and the reduction in the current portion of debt. For the nine months ended October 27, 1996, inventory turnover improved to 1.38 from 1.15 for the nine months ended October 29, 1995. This improvement in inventory turnover reflects the Company's sales strength and its commitment to reduce inventory levels and streamline the merchandise flow process from its vendors to its stores. 14 PART II - OTHER INFORMATION Item 6 Exhibits and Reports on Form 8-K (a) Exhibit 27 -- Financial Data Schedule. (b) Reports on Form 8-K - No reports on Form 8-K have been filed during the quarter ended October 27, 1996. 15 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 thereunto duly authorized. MAC FRUGAL'S BARGAINS o CLOSE-OUTS INC. /s/ Philip L. Carter ------------------------------------ Philip L. Carter Director, President and Chief Executive Officer /s/ Neil T. Watanabe ------------------------------------ Neil T. Watanabe Senior Vice President and Chief Financial Officer DATE: December 11, 1996 EX-27 2 FINANCIAL DATA SCHEDULE
5 1,000 9-MOS FEB-02-1997 JAN-29-1996 OCT-27-1996 41,448 0 0 0 224,222 295,229 310,268 132,790 474,990 116,715 0 0 0 724 238,400 474,990 491,572 491,572 280,779 280,779 186,888 0 5,141 18,764 7,130 11,634 0 0 0 11,634 .45 0
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