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1

FORM 10-Q

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(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 2, 2002

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 1-7288


THE BOMBAY COMPANY, INC.
(Exact name of registrant as specified in its charter)

Delaware 75-1475223
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)



550 Bailey Avenue, Fort Worth, Texas 76107
(Address of principal executive offices) (Zip Code)


(817) 347-8200
(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 by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). Yex X No ______

Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date.

Class Number of shares outstanding at November 30, 2002
Common stock, $1 par value 32,971,386



Page 1 of 20


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THE BOMBAY COMPANY, INC. AND SUBSIDIARIES

Form 10-Q

Quarter Ended November 2, 2002



TABLE OF CONTENTS


PART I - FINANCIAL INFORMATION

Item Page No.

1. Financial Statements 3-10

2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 11-14

3. Quantitative and Qualitative Disclosures About Market Risk 14

4. Controls and Procedures 14



PART II - OTHER INFORMATION

6. Exhibits and Reports on Form 8-K 15

Signature 16

Certifications 17-20
















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3


THE BOMBAY COMPANY, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)



Three Months Ended Nine Months Ended

November 2, November 3, November 2, November 3,
2002 2001 2002 2001


Net revenue $113,841 $96,945 $304,736 $284,951


Costs and expenses:
Cost of sales, buying and
store occupancy costs 80,971 71,789 225,601 212,128

Selling, general and
administrative expenses 32,659 28,312 90,199 85,422

Interest expense (income), net 73 324 (115) 329


Total costs and expenses 113,703 100,425 315,685 297,879


Income (loss) before income taxes 138 (3,480) (10,949) (12,928)

Provision (benefit) for income taxes 54 (1,247) (4,325) (4,979)

Net income (loss) $84 ($2,233) ($6,624) ($7,949)



Basic earnings per share $0.00 ($0.07) ($0.20) ($0.24)


Diluted earnings per share $0.00 ($0.07) ($0.20) ($0.24)


Average common shares outstanding 32,895 32,799 32,994 32,755

Average common shares outstanding and
dilutive potential common shares 33,025 32,799 32,994 32,755



The accompanying notes are an integral part of these consolidated financial statements.


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4


THE BOMBAY COMPANY, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(Dollars in thousands)



November 2, February 2, November 3,
2002 2002 2001
(Unaudited) (Unaudited)


ASSETS
Current assets:
Cash and cash equivalents $13,511 $38,415 $5,022
Inventories 125,030 89,798 129,881
Other current assets 23,159 16,893 22,412

Total current assets 161,700 145,106 157,315


Property and equipment, net 47,080 48,713 52,259
Goodwill, less amortization 423 430 437
Other assets 11,356 12,640 13,843

Total assets $220,559 $206,889 $223,854



LIABILITIES AND STOCKHOLDERS' EQUITY


Current liabilities:
Bank borrowings $ 17,938 $ -- $ 28,000
Accounts payable and
accrued expenses 34,774 27,281 35,033
Income taxes payable 358 3,220 --
Accrued payroll and bonuses 3,739 5,015 2,313
Gift certificates redeemable 4,683 5,724 4,651

Total current liabilities 61,492 41,240 69,997

Accrued rent and other liabilities 6,249 6,942 7,247

Stockholders' equity:
Preferred stock, $1 par value,
1,000,000 shares authorized -- -- --
Common stock, $1 par value,
50,000,000 shares authorized,
38,149,646 shares issued 38,150 38,150 38,150
Additional paid-in capital 75,301 75,267 75,636
Retained earnings 62,520 69,144 57,471
Accumulated other comprehensive
loss (1,591) (1,776) (1,792)
Common shares in treasury,
at cost, 5,259,048;
5,112,696 and 5,338,935
shares, respectively (21,528) (20,861) (21,823)
Stock purchase loans -- (950) (1,032)
Deferred compensation (34) (267) --

Total stockholders' equity 152,818 158,707 146,610

Total liabilities and
stockholders' equity $220,559 $206,889 $223,854



The accompanying notes are an integral part of these consolidated financial statements.




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5


THE BOMBAY COMPANY, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Dollars in thousands)
(Unaudited)




Nine Months Ended

November 2, November 3,
2002 2001


Cash flows from operating activities:
Net loss ($6,624) ($7,949)
Adjustments to reconcile net loss
to net cash from operations:
Depreciation and amortization 10,897 11,837
Restricted stock expense (reversal), net (98) 96
Deferred taxes and other 264 (416)
Change in assets and liabilities:
Increase in inventories (35,002) (26,065)
Increase in other current assets (5,195) (5,789)
Increase (decrease) in current liabilities 1,233 (4,077)
(Increase) decrease in noncurrent assets (4) 31
Decrease in noncurrent liabilities (456) (350)

Net cash used by operations (34,985) (32,682)

Cash flows from investing activities:
Purchases of property and equipment (8,227) (13,535)
Sales of property and equipment 128 604

Net cash used by investing activities (8,099) (12,931)

Cash flows from financing activities:
Net bank borrowings 17,938 28,000
Purchases of treasury stock (895) --
Sale of stock to employee benefit plans 77 111
Collection of stock purchase loans 968 --
Proceeds from the exercise of employee
stock options 213 --

Net cash provided by financing activities 18,301 28,111

Effect of exchange rate change on cash (121) 367

Net decrease in cash and cash equivalents (24,904) (17,135)

Cash and cash equivalents at beginning of period 38,415 22,157

Cash and cash equivalents at end of period $13,511 $5,022



Supplemental disclosure of cash flow information:

Interest paid $ 153 $ 368
Income taxes paid 2,131 6,081
Non-cash financing activities:
Distributions of deferred director fees 250 --
Issuance of restricted stock -- 215


The accompanying notes are an integral part of these consolidated financial statements.



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6

THE BOMBAY COMPANY, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements


(1) Accounting Principles

In the opinion of the Company, the accompanying consolidated financial
statements contain all adjustments (consisting of only normal recurring
adjustments) necessary to present fairly the financial position as of
November 2, 2002 and November 3, 2001, the results of operations for the three
and nine months then ended, and cash flows for the nine months then ended.
The results of operations for the three and nine month periods ended
November 2, 2002 and November 3, 2001 are not necessarily indicative of the
results to be expected for the full fiscal year. The consolidated financial
statements should be read in conjunction with the financial statement
disclosures contained in the Company's 2001 Annual Report on Form 10-K.


(2) New Accounting Pronouncements

During fiscal 2002, the Company adopted Statement of Financial Accounting
Standards ("SFAS") No. 142, "Goodwill and Other Intangible Assets," which
supersedes Accounting Principles Board ("APB") Opinion No. 17, "Intangible
Assets." This statement addresses the initial recognition and measurement of
intangible assets acquired outside of a business combination and the accounting
for goodwill and other intangible assets subsequent to their acquisition. SFAS
No. 142 also provides that intangible assets with finite useful lives be
amortized and that goodwill and intangible assets with indefinite lives will
not be amortized, but will rather be tested for impairment upon adoption and
on an annual basis thereafter. The Company completed the initial impairment
test and concluded that goodwill has not been impaired. The adoption of SFAS
No. 142 during the fiscal year did not have a material impact on the Company's
consolidated balance sheets or its statements of operations, shareholders'
equity and cash flows.

During fiscal 2002, the Company also adopted SFAS No. 144, "Accounting
for the Impairment or Disposal of Long-Lived Assets," which replaces SFAS
No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of." SFAS No. 144 retains the fundamental
provisions of SFAS No. 121 with additional guidance on estimating cash flows
when performing a recoverability test, requires that a long-lived asset to be
disposed of, other than by sale, be classified as "held and used" until it is
disposed of and establishes more restrictive criteria to classify an asset as
"held for sale." SFAS No. 144 also supersedes APB Opinion No. 30, "Reporting
the Results of Operations-Reporting the Effects of Disposal of a Segment of a
Business, and Extraordinary, Unusual and Infrequently Occurring Events and
Transactions," regarding the disposal of a segment of a business and extends
the reporting of a discontinued operation to a "component of an entity" and
requires the operating losses thereon to be recognized in the period in which
they occur. The adoption of SFAS No. 144 did not have a material impact on the
Company's consolidated balance sheets or its statements of operations,
shareholders' equity and cash flows.

The Company will adopt the provisions of SFAS No. 146, "Accounting for
Costs Associated with Exit or Disposal Activities". SFAS No. 146 requires
that certain costs associated with exit or disposal activities be recognized
when they are incurred rather than at the date of commitment to an exit or
disposal plan. The provisions of the SFAS No. 146 will be required for exit
or disposal activities initiated after December 31, 2002.

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7

THE BOMBAY COMPANY, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (cont'd)


(3) Earnings per Share

Basic earnings per share are based upon the weighted average number of
shares outstanding. Diluted earnings per share are based upon the weighted
average number of shares outstanding plus the shares that would be outstanding
assuming exercise of dilutive stock options and distribution of deferred
director compensation.

The computations for basic and diluted earnings per share are as follows (in
thousands, except per share amounts):




Three Months Ended Nine Months Ended

November 2, November 3, November 2, November 3,
2002 2001 2002 2001


Numerator:
Net income (loss) $84 ($2,233) ($6,624) ($7,949)

Denominator, basic
earnings per share:
Average common shares
outstanding 32,895 32,799 32,994 32,755


Denominator, diluted
earnings per share:
Average common shares
outstanding 32,895 32,799 32,994 32,755
Stock options 87 -- -- --
Deferred director compensation 43 -- -- --

33,025 32,799 32,994 32,755


Basic earnings per share $0.00 ($0.07) ($0.20) ($0.24)


Diluted earnings per share $0.00 ($0.07) ($0.20) ($0.24)




During periods where the Company reported a net loss, common stock
equivalents would be anti-dilutive and, thus, are not included in the
computation of diluted earnings per share.


(4) Comprehensive Income/Loss

Comprehensive income or loss represents the change in equity (net assets)
of a business enterprise during a period from transactions and other events
and circumstances from non-owner sources. It includes all changes in equity
during a period except those resulting from investments by owners and
distributions to owners.





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8

THE BOMBAY COMPANY, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (cont'd)


The following reflects the components of comprehensive income or loss
(in thousands):






Three Months Ended Nine Months Ended

November 2, November 3, November 2, November 3,
2002 2001 2002 2001


Net income (loss) $84 ($2,233) ($6,624) ($7,949)
Other comprehensive income (loss) 152 (289) 185 (525)

Comprehensive income (loss) $236 ($2,522) ($6,439) ($8,474)



Other comprehensive income or loss consists of the cumulative effect of
foreign currency translation adjustments.


(5) Financing Arrangements

Effective July 5, 2002, the Company entered into a new three-year,
unsecured, revolving credit agreement with a group of banks, with an aggregate
commitment of up to $50,000,000. The facility replaced the Company's previous
$50,000,000 committed facility, which expired coincident with the closing of
the new facility.

The new credit facility, which expires July 5, 2005, is for working
capital, inventory financing and letter of credit purposes. Borrowings under
the facility can be made, at the Company's option and subject to certain
limitations, in the form of loans or by the issuance of bankers' acceptances
with respect to inventory purchases. Loans under the facility bear interest,
at the Company's option, at either the lead bank's prime lending rate plus a
margin of .5% to 1.0% or the LIBOR rate plus a margin of 1.5% to 2.5%, with
the margin depending on the Company's leverage ratio. Bankers' acceptances
are discounted by the lead bank's bankers' acceptance rate plus a margin of
1.25% to 2.0%, with the margin depending on the Company's leverage ratio.
Availability of the bank commitment is limited to 45% of eligible inventory,
not to exceed $50,000,000. Under terms of the agreement, the Company is
required to maintain certain financial ratios and other financial conditions.
The agreement prohibits the Company from making certain investments, advances
or loans, and limits the dollar amounts of capital expenditures, purchases of
treasury shares, cash dividends and assets sales. In the event that the
Company is in default of certain provisions of the agreement, the lenders
would be permitted to file liens against the Company's inventory located in
the United States and perfect the pledge of 65% of the stock of the Company's
Canadian subsidiary, thereby securing the indebtedness.

At November 2, 2002, letters of credit totaling $6,506,000 and
borrowings in the form of bankers' acceptances totaling $17,938,000 were
outstanding under the facility. The average borrowing rate at
November 2, 2002 was 3.87% and $25,556,000 was available for additional
borrowings or letters of credit.


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9

THE BOMBAY COMPANY, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (cont'd)


(6) Stock Purchase Loans

On May 16, 2002, the Board of Directors elected, with the consent of
all currently employed participants, to abolish the Company's Executive Stock
Loan Program, which originated in August 1999. Under the program, certain
executive officers were given the opportunity to borrow funds for up to
specified amounts to be used to purchase shares of Company common stock at
current market prices. All principal and accrued interest on the loans were
payable at the end of a three year term. The loans were not collateralized by
the common stock, but the program provided that if any of the shares were sold
within three years following the date of purchase, any sales proceeds per
share over the purchase price per share would be payable to the Company unless
at the time of the sale all principal and accrued interest on the loan used to
purchase the common stock had been paid to the Company.

As of May 15, 2002, the effective date of the program cancellation,
currently employed participants under the program had purchased 154,131 shares
of Company common stock, and had loans and accrued interest outstanding of
$735,000. The Company purchased, at the market price on the effective date,
the Company common stock that was purchased by the executive officers under the
program, and the notes were extinguished. Amounts owed to the Company or the
participants as a result of the difference between the market value of the
stock and the loan balance plus accrued interest have been paid in full.

During the third fiscal quarter, the Company purchased 34,900 shares
of Company common stock issued under the program from the estate of a retired
executive at the then market price. The difference between the market value
of the stock and the loan balance plus accrued interest was paid in full, and
the related note was extinguished.

As of November 2, 2002, all notes previously issued under the Executive
Stock Loan Program had been settled in full, and the program was closed.


(7) Management Change

On August 20, 2002, the Company announced the departure of its
President and Chief Executive Officer. In connection with the separation, a
charge of $1.1 million, or $.02 per share, which includes obligations under an
executive severance agreement as well as other costs associated with the
retained search for a new Chief Executive Officer, was recognized in the third
fiscal quarter.






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10


THE BOMBAY COMPANY, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (cont'd)

(8) Pending Legal Action

On July 18, 2002, the Company was served with a summons and complaint
of a lawsuit, seeking class action status, asserting claims for overtime pay
under California law for managers of Bombay's California stores. Based upon
its review of the complaint and its initial investigation of this matter, the
Company believes the plaintiffs' claims are without merit and it intends to
vigorously defend against them. While it is not possible to predict the
outcome of this legal action or provide a reasonable estimate of potential
liability, if any, that may arise, the Company believes that costs resulting
from the action will not have a material adverse impact on its consolidated
financial position, cash flows or liquidity, but could possibly be material to
the consolidated results of operations in a particular quarter
or fiscal year.

































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11

THE BOMBAY COMPANY, INC. AND SUBSIDIARIES


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

Special Note Regarding Forward-Looking Statements

Certain statements in this Form 10-Q under "Management's Discussion and
Analysis of Financial Condition and Results of Operations" constitute
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. Such forward-looking statements involve known
and unknown risks, uncertainties and other factors which may cause the actual
results, performance or achievements of The Bombay Company, Inc. ("Company")
to be materially different from any future results, performance or
achievements expressed or implied by such forward-looking statements. Such
factors include, among others, the following: downward pressure in retail due
to economic pessimism and declining consumer sentiment; competition;
seasonality; success of operating initiatives; new product development and
introduction schedules; uninterrupted flow of product from overseas sources;
acceptance of new product offerings including children's merchandise;
advertising and promotional efforts; adverse publicity; expansion of the store
chain; availability, locations and terms of sites for store development;
ability to renew leases on an economic basis; changes in business strategy or
development plans; availability and terms of capital for operating purposes;
labor and employee benefit costs; reliance on technology; changes in
government regulations including anti-terrorism regulations relating to
importers; risks associated with international business; terrorist attacks and
other acts of war; impact of litigation; regional weather conditions; success
of new business initiatives including international strategy, Internet and
wholesale product offerings; hiring and retention of key management personnel
and other risks and uncertainties contained in the Company's 2001 Annual
Report on Form 10-K and other SEC filings as they occur.

General

The Bombay Company, Inc. designs, sources and markets a unique line of home
accessories, wall decor and furniture through 429 retail locations in 43
states in the United States and nine Canadian provinces, as well as through
specialty catalogs and the Internet in the U.S. and internationally. The
Company also has international licensing agreements under which a total of
seven licensed international stores are operating. During 2001, the Company
introduced BombayKIDS ("KIDS"), a new line of children's furniture, textile
and accessories, which is currently being sold in five KIDS store locations as
well as through catalog and Internet channels. The Company's wholesale
operation, Bailey Street Trading Company, markets a limited number of
furniture and accessory SKUs under separate brands to specialty gift stores,
furniture stores, department stores, catalogers and mass merchants. The
operations of BombayKIDS, International and Bailey Street Trading Company are
all relatively new and immaterial to the overall results and, therefore, are
not discussed separately.

The largest percentage of the Company's sales and operating income is realized
in the fiscal quarter that includes December (Christmas season). Merchandise
is manufactured to Company specifications through a worldwide network of
contract manufacturers. As a result, the impact of inflation on operating
results is typically not significant. The Company attempts to alleviate
inflationary pressures by adjusting selling prices (subject to competitive
conditions), improving designs and finding alternative production sources in
lower cost countries.

11
12

Results of Operations

Quarters Ended November 2, 2002 and November 3, 2001

Net revenue increased 17% to $113,841,000 for the quarter ended November 2,
2002 compared to $96,945,000 for the quarter ended November 3, 2001. Same
store sales increased 9% for the quarter attributable to improved execution
throughout the organization. During the quarter, the Company has focused on a
goal of increased velocity of sales while driving incremental margin dollars.
There has been improved coordination amongst the merchandising, stores and
marketing functions while instilling a selling culture throughout the
organization. During the quarter, the Company has increased density of
merchandise in the stores, focused on strategic price points, improved clarity
of price signage, and simplified communications and store tasks so that
associates can spend more time selling. In addition to the same store sales
growth, the increase in revenues is attributable to growth from new stores and
stores converted to the large format as well as Internet, International, and
Bailey Street Trading Company operations. Revenue from non-store operations
represented 8% of total revenue compared to 6% last year.

On a geographical basis, all regions of the United States and Canada reported
positive same store sales with the Northeast, West Coast and Canada reporting
double-digit same store sales gains. The Midwest and South reported strong
mid-single digit increases. From a sales mix standpoint, for the core retail
business, furniture represented 49% of the business, wall decor was 13% and
accessories were 38%, compared to the prior year of 47% furniture, 15% wall
decor and 38% accessories. All categories experienced improvement in sales,
with furniture and accessories showing the strongest growth. The average
retail ticket increased 2% to $94 for the quarter compared to $92 in the same
quarter last year, while the number of transactions increased almost 13%.

Cost of sales, including buying and occupancy costs, was $80,971,000 for the
third fiscal quarter compared to $71,789,000 for the same period last year.
As a percentage of revenue, cost of sales decreased to 71.1% for the quarter
compared to 74.1% for the prior year period. Product margins improved 50
basis points as the Company leveraged logistics and overseas sourcing costs.
Buying and occupancy costs increased approximately 5% to $23,485,000 from
$22,399,000 while total retail square footage increased 4% over the third
quarter of the prior fiscal year. These costs increased due to store
expansion as well as rent increases and higher utilities. As a percentage of
revenues, buying and occupancy costs declined to 20.6% from 23.1% in the
comparable prior year period reflecting significant leverage from the increase
in same store sales.

Selling, general and administrative expenses were $32,659,000 during the third
quarter of the current fiscal year compared to $28,312,000 in the comparable
prior year period. As a percentage of revenue, these costs declined to 28.7%
in the current quarter compared to 29.2% in the prior year. Excluding the
charge relating to the departure of the Chief Executive Officer, selling,
general and administrative expenses were 27.7% of revenues, an improvement of
150 basis points over the prior year quarter. Of the total $4.3 million
increase, $1.1 million related to the CEO departure, $1.8 million related to
increased investment in advertising, while the remainder of the increase is
primarily due to higher payroll and related costs, as well as higher
insurance costs.

For the quarter ended November 3, 2002, net interest expense was $73,000
compared to $324,000 in the third quarter of Fiscal 2001. The improvement is
due to higher overall cash levels and lower borrowing levels in the current
year primarily related to higher revenues, lower inventory balances and
capital expenditures, as well as lower borrowing rates.

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13

Nine Months Ended November 2, 2002 and November 3, 2001

For the nine months ended November 3, 2002, net revenue increased 7%
to $304,736,000 compared to $284,951,000 in the first nine months of the prior
fiscal year. Same store sales declined 2% for the year-to-date comparison.
While the third fiscal quarter showed significant improvement over the first
half of the year, the first six months reflected the negative consequences of
decisions made in Fall 2001 related to cancelled and delayed merchandise
orders and marketing changes. All regions of the United States and Canada
reported flat to low single-digit negative same store sales in the core retail
business on a year-to-date basis. Furniture represented 49% of the core
retail business, wall decor was 14% and accessories were 37%, compared to 48%
furniture, 15% wall decor and 37% accessories in the prior fiscal year. The
average transaction was approximately $95 during the first nine months of the
year, less than $1 higher than in the comparable prior year period, and the
number of transactions increased almost 4%.

The decline in same store sales was offset by sales from new stores
and stores converted to the large format as well as revenue from Internet,
International, KIDS and Bailey Street Trading Company operations. Revenues
from non-store operations represented 7% of total revenue for the nine-month
period, compared to 4% in the prior year period.

Cost of sales, including buying and store occupancy costs, was
$225,601,000 during the nine months ended November 3, 2002, an increase of 6%
over the prior year comparable amount of $212,128,000. As a percentage of
revenue, cost of sales declined to 74.0% from 74.4%. Product margins improved
20 basis points with improvement realized in the third fiscal quarter. Buying
and occupancy costs increased to $69,648,000 or 22.9% of revenue from
$65,815,000 or 23.1% of revenue reflecting the significant leverage gained in
the third quarter in same store sales as total retail square footage increased
4% since November 3, 2001.

Selling, general and administrative expenses were $90,199,000 for the nine
months compared to $85,422,000 in the prior year period. Of the $4.8 million
increase, $1.1 million related to the CEO departure, $2.3 million was spent in
additional advertising investment, insurance costs increased $1.3 million
while less significant fluctuations in other categories comprised the
remainder of the change. As a percentage of revenues, expenses improved
slightly at 29.6% in the current period compared to 30.0% last year.
Improvement as a percentage of revenue is primarily related to payroll and
related costs.

For the nine months ended November 2, 2002, net interest income was $115,000
compared to net interest expense of $329,000 in the nine months ended
November 3, 2001. The improvement is a result of lower inventory balances and
capital expenditures throughout the current year and higher sales
levels in the third quarter, which resulted in higher invested cash balances
and lower seasonal borrowings, coupled with lower borrowing rates in the
current year.








13

14


Liquidity and Capital Resources

The primary sources of liquidity and capital resources are cash flows
from operations and bank lines of credit. The Company has an unsecured,
revolving credit agreement with a group of banks, with an aggregate commitment
of up to $50,000,000, available for working capital, inventory financing
through bankers' acceptances and letter of credit purposes. Availability of
the bank commitment is limited to 45% of eligible inventory, not to exceed
$50,000,000. At November 2, 2002, the bank commitment was $50,000,000.
Letters of credit and bankers' acceptances totaling $6,506,000 and
$17,938,000, respectively, primarily to support inventory purchases, were
outstanding, and $25,556,000 was available for borrowings or additional
letters of credit. The Company ended the fiscal quarter with cash balances of
$13.5 million, $8.5 million higher than at the prior year third quarter, due
in part to lower inventory levels and lower capital expenditures.

Through the third quarter of Fiscal 2002, the Company has opened ten large
format stores, seven outlets and three KIDS stores. Two regular stores were
converted to the large format and ten under-performing stores were closed
during the period. As of the end of the third quarter, the Company had 331
large format stores, 52 regular stores, 43 outlets and three KIDS stores for a
total of 429 stores compared to 427 stores as of the end of the third quarter
of Fiscal 2001. During the remainder of Fiscal 2002, the Company expects to
open approximately eight additional stores, including two outlets and two KIDS
stores. Approximately 15 stores are expected to close before the end of
the year.

Over the next two and one-half years, the Company will have lease renewals
related to approximately 200 stores. The Company plans to either renew or
replace substantially all of the stores as leases expire. The Company also
believes that it will be able to open over 100 KIDS stores over the next three
years. The Company currently expects to finance its expansion objectives
through cash flows from operations and its credit facility.


Item 3. Quantitative and Qualitative Disclosures About Market Risk

As of November 2, 2002, the Company does not have any market risk sensitive
instruments.


Item 4. Controls and Procedures

Within 90 days prior to the date of this filing, an evaluation was performed
under the supervision and with the participation of Company's management,
including the Interim Executive Committee and Chief Financial Officer, of the
effectiveness of the design and operation of the Company's disclosure controls
and procedures pursuant to Rule 13a-14 under the Securities Exchange Act of
1934. Based on that evaluation, the Company's management, including the
Interim Executive Committee and Chief Financial Officer, concluded that the
Company's disclosure controls and procedures were effective in timely alerting
them to material information relating to the Company that is required to be
included in periodic filings with the Securities and Exchange Commission.
There have been no significant changes in the Company's internal controls or
in other factors that could significantly affect internal controls subsequent
to the date of the evaluation.


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THE BOMBAY COMPANY, INC. AND SUBSIDIARIES

PART II - OTHER INFORMATION



Item 6. Exhibits and Reports on Form 8-K

(a) The Exhibits filed as a part of this report are listed below.

Exhibit No. Description


99 Certifications of Registrant Pursuant to 18 U.S.C.
Section 1350, as Adopted Pursuant to Section 906
of the Sarbanes-Oxley Act of 2002.


(b) The Company filed a Form 8-K relating to a California lawsuit on
August 7, 2002.





























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THE BOMBAY COMPANY, INC. AND SUBSIDIARIES

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 as both an officer of the registrant and
as the principal financial officer.


THE BOMBAY COMPANY, INC.
(Registrant)




/s/ BRIAN N. PRIDDY

Brian N. Priddy
Executive Vice President - Operations
Chairman - Interim Executive Committee






/s/ ELAINE D. CROWLEY

Elaine D. Crowley
Senior Vice President, Chief
Financial Officer and Treasurer


Date: December 17, 2002

















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THE BOMBAY COMPANY, INC. AND SUBSIDIARIES

CERTIFICATION PURSUANT TO 18 U.S.C.
SECTION 1350 AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002


I, Brian N. Priddy, certify that:

1. I have reviewed this quarterly report on Form 10-Q of The Bombay
Company, Inc.;

2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report.

4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this quarterly report is being
prepared;

b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and

c) presented in this quarterly report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5. The registrant's other certifying officer and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):

a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls;
and






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6. The registrant's other certifying officer and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.



Date: December 17, 2002

/S/BRIAN N. PRIDDY

Brian N. Priddy
Executive Vice President - Operations
Chairman - Interim Executive Committee*









* On August 20, 2002, the Company announced the resignation of Carmie
Mehrlander, as Chairman, President and Chief Executive Officer. An Interim
Executive Committee of management has been appointed to direct the Company's
business until a new Chief Executive Officer is named.
























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THE BOMBAY COMPANY, INC. AND SUBSIDIARIES

CERTIFICATION PURSUANT TO18 U.S.C.
SECTION 1350 AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002


I, Elaine D. Crowley, certify that:

1. I have reviewed this quarterly report on Form 10-Q of The Bombay
Company, Inc.;

2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report.

4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this quarterly report is being prepared;

b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and

c) presented in this quarterly report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5. The registrant's other certifying officer and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):

a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls;
and




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6. The registrant's other certifying officer and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.



Date: December 17, 2002

/S/ELAINE D. CROWLEY

Elaine D. Crowley
Senior Vice President, Chief
Financial Officer and Treasurer


































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