1
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: July 31, 1997
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 number: 0-028176
Marks Bros. Jewelers, Inc.
(Exact name of registrant as specified in its charter)
Delaware 36-1433610
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
155 No. Wacker, Chicago, IL. 60606
(Address of principal executive offices)
312/782-6800
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal
year, 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. 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.
The number of the Registrant's common stock $.001 par value per share,
outstanding as of September 10, 1997 was 10,073,437 and the number of the
Registrant's Class B common stock $1.00 par value as of such date was 101.298.
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MARKS BROS. JEWELERS, INC.
INDEX TO FORM 10-Q
FOR THE QUARTER ENDED JULY 31, 1997
PART 1 - FINANCIAL INFORMATION
Item 1. Financial Statements
Statements of Operations for the three months and six months ended
July 31, 1997 and 1996 (unaudited)
Balance Sheets - July 31, 1997, January 31, 1997 and July 31, 1996
(unaudited)
Statements of Cash Flows for the six months ended July 31, 1997 and
1996 (unaudited)
Notes to Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
(b) Reports on Form 8-K
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PART 1 - FINANCIAL INFORMATION
Item 1. Financial Statements
Marks Bros. Jewelers, Inc.
Statements of Operations
for the three months and six months ended July 31, 1997 and 1996
(unaudited)(in thousands, except for per share data)
Three months ended Six months ended
July 31, July 31, July 31, July 31,
1997 1996 1997 1996
------------- ------------- ------------- -------------
Net sales $ 40,515 $ 34,906 $ 75,229 $ 64,466
Cost of sales (including buying and
occupancy expenses) 24,218 20,692 45,281 38,626
------------- ------------- ------------- -------------
Gross profit 16,297 14,214 29,948 25,840
Selling, general and administrative
expenses 12,429 10,367 24,271 20,385
------------- ------------- ------------- -------------
Income from operations 3,868 3,847 5,677 5,455
Interest expense 983 1,543 1,906 4,557
------------- ------------- ------------- -------------
Income before income taxes 2,885 2,304 3,771 898
Income tax expenses 1,125 898 1,471 350
------------- ------------- ------------- -------------
Income before extraordinary gain 1,760 1,406 2,300 548
Extraordinary gain on
extinguishment of debt, net of
taxes --- 11,164 --- 11,164
------------- ------------- ------------- -------------
Net income $ 1,760 $ 12,570 $ 2,300 $ 11,712
============== ============= ============= =============
Primary earnings per share:
Income before extraordinary gain $ 0.17 $ 0.16 $ 0.23 $0.08
Extraordinary gain on
extinguishment of debt, net of
taxes --- 1.25 --- 1.53
------------- ------------- ------------- -------------
Net income $ 0.17 $ 1.41 $ 0.23 $ 1.61
============= ============= ============== =============
Weighted average common share
and common share equivalents 10,208 8,938 10,198 7,287
Fully diluted earnings per share:
Income before extraordinary gain $ 0.17 $0.16 $ 0.23 $ 0.07
Extraordinary gain on
extinguishment of debt, net of
taxes --- 1.25 --- 1.53
------------- ------------- ------------- -------------
Net income $ 0.17 $ 1.41 $ 0.23 $ 1.60
============= ============= ============= =============
Weighted average common share
and common share equivalents 10,222 8,938 10,217 7,321
The accompanying notes are an integral part of the financial statements.
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Marks Bros. Jewelers, Inc.
Balance Sheets
(unaudited, in thousands)
July 31, January 31, July 31,
1997 1997 1996
--------------- --------------- ---------------
ASSETS
Current Assets:
Accounts receivable, net $ 1,677 $ 1,354 $ 1,672
Layaway receivables, net 2,314 2,041 1,454
Merchandise inventories 82,164 64,482 46,542
Other current assets 499 638 366
Deferred financing costs 292 292 427
Deferred income taxes, net 1,326 1326 817
--------------- --------------- ---------------
Total current assets 88,272 70,133 51,278
Property and equipment, net 21,181 16,305 14,657
Deferred financing costs 1,002 1,148 1,978
Deferred income tax, net 5,947 5,947 7,387
--------------- --------------- ---------------
Total assets $ 116,402 $ 93,533 $ 75,300
=============== =============== ===============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Outstanding checks, net $ 1,646 $ 7,242 $ 4,207
Revolver loan 24,607 10,747 8,782
Current portion of long-term debt --- --- 1,250
Accounts payable 26,521 14,706 13,535
Accrued payroll 2,151 2,607 1,630
Other accrued expenses 9,870 9,007 6,844
--------------- --------------- ---------------
Total current liabilities 64,795 44,309 36,248
Total long-term debt, net of current portion 10,520 10,520 33,500
Other long-term liabilities 1,269 1,197 1,157
--------------- --------------- ---------------
Total liabilities 76,584 56,026 70,905
Commitments and contingencies
Stockholders' equity:
Common stock 10 10 8
Class B common stock --- --- ---
Class C common stock --- --- ---
Class D common stock --- --- ---
Additional paid-in capital 59,815 59,804 33,708
Accumulated deficit (20,007) (22,307) (29,321)
--------------- --------------- ---------------
Total stockholders' equity 39,818 37,507 4,395
--------------- --------------- ---------------
Total liabilities and stockholders' equity $ 116,402 $ 93,533 $ 75,300
=============== =============== ===============
The accompanying notes are an integral part of the financial statements.
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Marks Bros. Jewelers, Inc.
Statements of Cash Flows
for the six months ended July 31, 1997 and 1996
(unaudited, in thousands)
Six months ended
----------------------------
July 31, July 31,
1997 1996
------------ ------------
Cash flows from operating activities:
Net income $2,300 $11,712
Adjustments to reconcile net income to net cash (used in) provided by
operating activities:
Gain on extinguishment of debt, net of taxes --- (11,164)
Depreciation and amortization 1,833 1,529
Interest on zero coupon notes --- 121
Interest on senior accreting notes --- 1,339
Interest on subordinated debt --- 790
Loss (Gain) on disposition of assets 36 (1)
Changes in assets and liabilities:
(Increase) in accounts receivable, net (323) (503)
(Increase) decrease in layaway receivables, net (273) 122
(Increase) in merchandise inventories, net of gold consignment (17,682) (6,436)
Decrease in other current assets 139 348
(Increase) in deferred financing costs --- (2,405)
Decrease in deferred taxes, net --- 349
Increase in accounts payable 11,815 4,498
Increase (decrease)in accrued liabilities 479 (711)
------------ ------------
Net cash used in operating activities (1,676) (412)
Cash flows from investing activities:
Capital expenditures (6,599) (3,333)
------------ ------------
Net cash used in investing activities (6,599) (3,333)
Cash flows from financing activities:
Borrowing on old revolver loan --- 38,078
Repayment of old revolver loan --- (40,197)
Borrowing on new revolver loan 246,343 39,865
Repayment of new revolver loan (232,683) (31,083)
Repayment of term loan --- (250)
Repayment of old term loan --- (26,600)
Repayment of senior accreting notes --- (50,502)
Repayment of zero coupon note --- (2,000)
Repayment of subordinated debt --- (10,618)
Proceeds from term loan --- 15,000
Proceeds from subordinated debt --- 20,000
Proceeds from gold consignment --- 15,295
Proceeds from stock issuance, net --- 40,416
Proceeds from exercise of stock options 11 123
Proceeds from exercise of warrants --- 2
(Decrease) in outstanding checks, net (5,596) (3,784)
------------ ------------
Net cash provided by financing activities 8,275 3,745
------------ ------------
Net change in cash and cash equivalents --- ---
Cash and cash equivalents at beginning of period --- ---
------------ ------------
Cash and cash equivalents at end of period $--- $---
============ ============
The accompanying notes are an integral part of the financial statements.
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Marks Bros. Jewelers, Inc.
Notes to Financial Statements
1. Description of Operations
The financial statements of Marks Bros. Jewelers, Inc. (the "Company")
include the results of the Company's chain of specialty retail fine jewelry
stores. The Company operates exclusively in one business segment, specialty
retail jewelry. The Company has a national presence with 184 stores as of July
31, 1997, located in 24 states, operating in regional or super-regional
shopping malls.
2. Summary of Significant Accounting Policies
Basis for Presentation
The accompanying Balance Sheet as of January 31, 1997 was derived from the
audited financial statements for the year ended January 31, 1997. The
accompanying unaudited Balance Sheets as of July 31, 1997 and 1996 and the
Statements of Operations for the three months and six months ended July 31,
1997 and 1996 have been prepared in accordance with generally accepted
accounting principles for interim financial information. The interim financial
statements reflect all adjustments (consisting only of normal recurring
accruals) which are, in the opinion of management, necessary for a fair
statement of the results for the interim periods presented. The interim
financial statements should be read in the context of the Financial Statements
and footnotes thereto included in the Marks Bros. Jewelers, Inc. Annual Report
for the fiscal year ended January 31, 1997. The Company operates on a fiscal
year which ends on January 31. References in the following notes to years and
quarters are references to fiscal years and fiscal quarters.
Impact of New Accounting Standard
During 1996, the Financial Accounting Standards Board ("FASB") issued a new
pronouncement, SFAS No. 128 "Earnings per Share" which is relevant to the
Company's operations. The statement is effective for financial statement
periods ending after December 15, 1997. Earlier application is not permitted.
The Company intends to adopt SFAS No. 128 for the year ended January 31, 1998,
and expects that the effect will not be material to earnings per share.
3. Accounts Receivables, Net
Accounts receivable are shown net of the allowance for doubtful accounts
of $669,000, $708,000 and $686,000 as of July 31, 1997, January 31, 1997 and
July 31, 1996, respectively.
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4. Inventory
As of July 31, 1997, January 31, 1997 and July 31, 1996, merchandising
inventories consist of:
July 31, 1997 January 31, 1997 July 31, 1996
------------- ---------------- -------------
(in thousands)
Raw Materials $ 5,427 $ 5,908 $ 2,401
Finished Goods 76,737 58,574 44,141
------------- ---------------- -------------
Inventory $82,164 $64,482 $46,542
============= ================ =============
Raw materials primarily consist of diamonds, precious gems, semi-precious
gems and gold. There was no work-in-progress at July 31, 1997, January 31,
1997, or July 31, 1996. Included within finished goods inventory are allowances
for inventory shrink, scrap, and miscellaneous costs of $1,414,000, $1,711,000
and $1,225,000 as of July 31, 1997, January 31, 1997 and July 31, 1996,
respectively. As of July 31, 1997, January 31, 1997 and July 31, 1996,
consignment inventories held by the Company that are not included in the
balance sheets total $20,074,000, $17,395,000, and $13,418,000, respectively.
In addition, gold consignments of $15,295,000 are not included in the
Company's balance sheets as of July 31, 1997, January 31, 1997 and July 31,
1996.
5. Financing Arrangements
Effective March 17, 1997, the Company and its bank group amended the
Credit Agreement to provide for a total facility of $60.0 million through April
30, 2001. Interest rates and the commitment fee charged on the unused facility
float in a grid based upon the Company's quarterly financial performance.
Under this agreement, the banks have a security interest in substantially
all of the assets of the Company. The Credit Agreement contains certain
restrictions on capital expenditures, payment of dividends and assumption of
additional debt and requires the Company to maintain specified minimum levels
of certain financial measures, including fixed charge ratio and certain balance
sheet measures.
Revolver Loan
The Dollar Facility Revolving Credit is available up to a maximum of
$40,000,000 and is limited by a borrowing base computed based on the value of
the Company's inventory and accounts receivable. A commitment fee of 25 basis
points per annum on the unused portion of the commitment is payable monthly.
Interest rates for borrowings under this agreement are, at the Company's
option, Eurodollar rates plus 125 basis points or the banks' prime rate.
Interest is payable monthly for prime borrowings and upon maturity for
Eurodollar borrowings. The interest expense for the six months ended July 31,
1997 and 1996 was $786,000 and $123,000, reflecting a weighted average interest
rate of 7.6% and 8.2%, respectively.
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Gold Consignment
During the second quarter of 1996, the Company sold and simultaneously
consigned a total of 39,000 ounces of gold for approximately $15,295,000 under
the Gold Facility. The Gold Facility currently provides for the sale of a
maximum of 50,000 troy ounces or $20,000,000. Under the agreement, the Company
pays consignment fees of 125 basis points over the rate set by the bank based
on the London Interbank Bullion Rates payable monthly. A commitment fee of 25
basis points per annum on the unused portion of the Gold Facility is payable
monthly. The consignment fees totaled $208,000 and $136,000 for the six months
ended July 31, 1997 and 1996 at a weighted average rate of 3.1% and 3.8%,
respectively.
Subordinated Notes
Series C Subordinated Notes due 2004 (the "Series C Notes") totaling
$10,520,000 bear interest at 12.15% per annum payable in cash, with interest
payments due quarterly. Interest expense was $639,000 and $613,000 for the six
months ended July 31, 1997 and 1996, respectively.
As of July 31, 1997, January 31, 1997, and July 31, 1996, respectively,
the current portion and noncurrent portion of long-term debt consisted of the
following:
July 31, 1997 January 31, 1997 July 31, 1996
------------- ---------------- -------------
(in thousands)
Current portion of long-term debt
Term loan $ --- $ --- $ 1,250
------------- ---------------- -------------
Total $ --- $ --- $ 1,250
============= ================ =============
Long-term debt, net of current portion
Term loan $ --- $ --- $13,500
Subordinated debt 10,520 10,520 20,000
------------- ---------------- -------------
Total $10,520 $10,520 $33,500
============= ================ =============
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6. Stock Incentive Plans
On February 24, 1997, the Company approved the 1997 Long-Term Incentive
Plan (the "1997 Plan"). Under the 1997 Plan, the Company may grant incentive
stock options ("ISOs") or nonqualified stock options. The 1997 Plan also
provides for the grant of stock appreciation rights ("SARs"), bonus stock
awards which are vested upon grant, stock awards which may be subject to a
restriction period and specified performance measures, and performance shares.
Performance shares are rights, contingent upon the attainment of performance
measures within a specified performance period, to receive one share of Common
Stock, which may be restricted, or the fair market value of such performance
share in cash. A total of 400,000 shares of Common Stock have been reserved
for issuance under the 1997 Plan. Grants may be made under the 1997 Plan
during the ten years after its effective date.
As of July 31, 1997, the Company has granted 144,952 options under the
1997 Plan. Stock options generally become exercisable in cumulative annual
installments of 25% of the shares subject to option beginning on the first
anniversary of the date of the option grant. The outstanding stock options
granted and exercise prices under all plans are as follows:
Options Exercise Price Range
--------- --------------------
117,573 $0.90 - $0.99
245,175 $9.38 - $12.99
684,540 $14.00
--------- --------------------
1,047,288 $0.90 - $14.00
========= ====================
The weighted average exercise price of outstanding options under all plans is
$11.82.
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PART I - FINANCIAL INFORMATION
Item 2 - Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations for the Three Months Ended July 31, 1997
Net sales for the second quarter of fiscal 1997 increased $5.6 million, or
16.1%, to $40.5 million. Comparable store sales were flat in the second
quarter of fiscal 1997. Sales from new stores contributed $6.1 million to the
overall sales increase. These sales increases were partially offset by lost
sales of $0.3 million related to the closing of one store in fiscal 1997 and
two stores in fiscal 1996, together with stores closed for remodeling for
limited periods. The average number of units sold on a comparable store basis
decreased by approximately 0.9% in the second quarter of fiscal 1997, while the
average price per merchandise sale increased to $268 in fiscal 1997 from $267
in fiscal 1996. Comparable store sales were flat compared to an increase of
13.0% in the second quarter of fiscal 1996. Certain factors which had a
negative impact on sales in fiscal 1997 include increased customer returns
resulting from the adoption of a more flexible refund policy during the second
quarter of fiscal 1997, the discontinuation of the First-Time Buyers Program
during the fourth quarter of fiscal 1996, lower sales of gold jewelry as a
percentage of total sales, and a more competitive and promotional environment.
Certain factors that had a positive impact on comparable store sales in fiscal
1997 include increased inventory levels and on-going improvements in the
Company's store-based personnel. The Company opened 8 new stores and closed
one store in the second quarter of fiscal 1997 increasing the number of stores
opened to 184 as of July 31, 1997 compared to 155 as of July 31, 1996.
Gross profit increased $2.1 million to $16.3 million in the second quarter
of fiscal 1997. Gross profit as a percentage of sales declined to 40.2% in the
second quarter of fiscal 1997 from 40.7% compared to the second quarter of
fiscal 1996. This decline resulted from a number of factors including higher
occupancy costs resulting from new store openings, shifts in sales mix away
from higher margin categories, and higher inventory shrinkage. This decline
was partially offset by improved margin on gold sales due to a decline in gold
prices.
Selling, general and administrative expenses increased $2.1 million, or
19.9%, to $12.4 million in the second quarter of fiscal 1997 from $10.4 million
in the prior period. As a percentage of net sales, selling, general and
administrative expenses increased to 30.7% in the second quarter of fiscal 1997
from 29.7% in the second fiscal quarter of fiscal 1996. The dollar increase
primarily relates to higher payroll expenses ($1.1 million), and higher other
expenses ($0.4 million). Of these expenses, $2.0 million relates to new store
openings.
Interest expense decreased $0.6 million to $1.0 million in the second
quarter of fiscal 1997 from $1.5 million in the second quarter of fiscal 1996.
The impact of lower average interest rates on revolver and reduced borrowings,
due to the initial public offering, recapitalization and secondary offering
completed in fiscal 1996, contributed to the interest savings.
Income tax expense of $1.1 million and $0.9 million in the second quarter
of fiscal 1997 and 1996, respectively, reflected an effective annual tax rate
of 39% in both periods.
Net income before extraordinary gain increased to $1.8 million in the
second quarter of fiscal 1997 from $1.4 million in the second quarter of fiscal
1996 as a result of the factors discussed above.
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Results of Operations for the Six Months Ended July 31, 1997
Net sales for the six months ended July 31,1997 increased $10.8 million, or
16.7%, to $75.2 million. Comparable store sales increased $0.6 million, or
1.0%, for the six months ended July 31, 1997. Sales from new stores contributed
$10.8 million to the overall sales increase. These sales increases were
partially offset by lost sales of $0.5 million due to the closing of one store
in fiscal 1997 and two stores in fiscal 1996, together with stores closed
for remodeling for limited periods. The average number of units sold on a
comparable store basis decreased by approximately 1.9% for the six months ended
July 31, 1997, while the average price per merchandise sale increased to $271 in
fiscal 1997 from $262 in fiscal 1996. Comparable store sales increased 1.0%
compared to an increase of 13.4% in the six months ended July 31, 1996. Certain
factors which had a negative impact on sales in fiscal 1997 include increased
customer returns resulting from the adoption of a more flexible refund policy
during the second quarter of fiscal 1997, the discontinuation of the First-Time
Buyers Program during the fourth quarter of fiscal 1996, lower sales of gold
jewelry as a percentage of total sales, and a more competitive and promotional
environment. Certain factors that had a positive impact on comparable store
sales in fiscal 1997 include increased inventory levels and on-going
improvements in the Company's store-based personnel. The Company opened 21 new
stores and closed one store during the six months ended July 31, 1997 increasing
the number of stores opened to 184 as of July 31, 1997 compared to 155 as of
July 31, 1996.
Gross profit increased $4.1 million to $29.9 million for the six months
ended July 31, 1997. Gross profit as a percentage of sales declined to 39.8%
for the six months ended July 31, 1997 from 40.1% compared to the six months
ended July 31, 1996. This decline resulted from a number of factors including
higher occupancy costs resulting from new store openings, shifts in sales mix
away from higher margin categories, and higher inventory shrinkage. This
decline was partially offset by improved margin on gold sales due to a decline
in gold prices.
Selling, general and administrative expenses increased $3.9 million, or
19.1%, to $24.3 million for the six months ended July 31, 1997 from $20.4
million. As a percentage of net sales, selling, general and administrative
expenses increased to 32.3% for the six months ended July 31, 1997 from 31.6%
in the six months ended July 31, 1996. The dollar increase primarily relates to
higher payroll expenses ($2.3 million) and higher other expenses ($0.8
million). Of these expenses, $3.4 million relates to new store openings.
Interest expense decreased $2.7 million to $1.9 million for the six months
ended July 31, 1997 from $4.6 million in the six months ended July 31, 1996.
The impact of lower average interest rates on revolver and reduced borrowings,
due to the initial public offering, recapitalization and secondary offering
completed in fiscal 1996, contributed to the interest savings.
Income tax expense of $1.5 million and $0.4 million was recorded for the
six months ended July 31, 1997 and 1996, respectively, reflecting an effective
annual tax rate of 39% in both periods.
Net income before extraordinary gain increased to $2.3 million for the six
months ended July 31, 1997 from $0.5 million in the six months ended July 31,
1996 as a result of the factors discussed above.
A gain on the extinguishment of debt was recorded as of July 31, 1996, for
$11.2 million, net of taxes, as an extraordinary item. This reflects debt
discounts on senior accreting loans of $0.6 million, zero coupon notes of $4.0
million, and subordinated debt of $13.7 million.
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Liquidity and Capital Resources
The Company's cash requirements consist principally of funding increases
in inventory at existing stores, capital expenditures and working capital
(primarily inventory) associated with the Company's new stores. The Company's
primary sources of liquidity have been cash flow from operations and bank
borrowings under the Company's revolver.
The Company's inventory levels and working capital requirements have
historically been highest in advance of the Christmas season. The Company has
funded these seasonal working capital needs through borrowings under the
Company's revolver and increases in trade payables and accrued expenses.
The Company's cash flow used in operations increased from $0.4 million in
the six months ended July 31, 1996 to $1.7 million in the six months ended July
31, 1997. Higher income from operations together with increases in accounts
payable ($11.8 million) were more than offset by increases in merchandise
inventories ($17.7 million). The increase in merchandise inventories primarily
resulted from merchandising 21 new stores and increased inventory levels of
solitaire diamonds and diamond engagement sets. In the six months ended July
31, 1997, the primary sources of the Company's liquidity included a $13.9
million net increase in the amount outstanding under the Company's revolver
less a decrease of $5.6 million in outstanding checks. The Company utilized
cash in the six months ended July 31, 1996 primarily to fund capital
expenditures of $6.6 million, primarily related to the opening of 21 new stores
in the six months ended July 31, 1997.
Inflation
Management believes that inflation generally has not had a material effect
on results of its operations.
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PART II - OTHER INFORMATION
Item 4 - Submission of Matters to a Vote of Security Holders
The Company's Annual Meeting of Stockholders was held on June 5, 1997.
The matters voted upon at the Annual Meeting were:
1. Election of Director Hugh M. Patinkin 8,076,706.5829 For
--------------
107,038.4978 Withheld Authority
--------------
--- Broker Non-Votes
--------------
2. Election of Director Norman J. Patinkin 8,085,484.5829 For
--------------
98,260.4978 Withheld Authority
--------------
--- Broker Non-Votes
--------------
3. Election of Director Daniel H. Levy 8,146,280.5829 For
--------------
37,464.4978 Withheld Authority
--------------
--- Broker Non-Votes
Approval of the Company's 1997 --------------
4. Long-Term Incentive Plan 5,402,612.8002 For
--------------
2,541,300.0000 Against
--------------
195,636.2805 Abstentions
--------------
44,196.0000 Broker Non-Votes
--------------
Item 5 - Other Information
Forward-Looking Statements
All statements, trend analysis and other information contained in this
report and elsewhere (such as in other filings by the Company with the
Securities and Exchange Commission, press releases, presentations by the
Company or its management or oral statements) relative to markets for the
Company's products and trends in the Company's operations or financial results,
as well as other statements including words such as "anticipate," "believe,"
"plan," "estimate," "expect," "intend," and other similar expressions,
constitute forward-looking statements under the Private Securities Litigation
Reforms Act of 1995. These forward-looking statements are subject to known and
unknown risks, uncertainties and other factors which may cause actual results
to be materially different from those contemplated by the forward-looking
statements. Such factors include, among other things: (1) the extent and
results of the Company's expansion strategy; (2) the seasonality of the
Company's business; (3) the Company's leverage; (4) economic conditions, the
retail sales environment and the Company's ability to execute its business
strategy and the related effects on comparable store sales and other results;
(5) the extent to which the Company is able to retain and attract key
personnel; (6) competition; (7) the availability and cost of consumer credit;
(8) relationships with suppliers; (9) fluctuations in gem and gold prices; (10)
regulation; and (11) the risk factors or uncertainties listed from time to time
in the Company's filings with the Securities and Exchange Commission.
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Item 6 - Exhibits and Reports on Form 8-K
Exhibit 11 Statement re Computation of Per Share Earnings (attached)
Exhibit 27 Financial Data Schedule (SEC/EDGAR only)
(b) Reports on Form 8-K
None
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MARKS BROS. JEWELERS, INC.
(Registrant)
Date: September 10, 1997 By: /s/ John R. Desjardins
________________________________
John R. Desjardins
Executive Vice President -
Finance and Administration
and Treasurer (principal
financial officer)
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