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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
( X ) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended July 31, 2003
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OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission File Number 0-12188
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DEB SHOPS, INC.
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(Exact name of registrant as specified in its charter)
Pennsylvania 23-1913593
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
9401 Blue Grass Road, Philadelphia, Pennsylvania 19114
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(215) 676-6000
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(Registrant's telephone number, including area code)
Not Applicable
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(Former name and 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 l934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes ___X___ No ________
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).
Yes ___X___ No ________
Indicate the number of shares outstanding of each of the issuer's classes of
Common Stock, as of the latest practicable date.
Common Stock, Par Value $.01 13,684,900
- ---------------------------- ------------------------------------
(Class) (Outstanding at September 6, 2003)
DEB SHOPS, INC. AND SUBSIDIARIES
I N D E X
Page
PART I. Financial Information:
Item 1. Financial statements (Unaudited)
Consolidated Balance Sheets -
July 31, 2003 and January 31, 2003 1
Consolidated Statements of Operations - Three Months
and Six Months Ended July 31, 2003 and 2002 2
Consolidated Statements of Cash Flows -
Six Months Ended July 31, 2003 and July 31, 2002 3
Notes to Consolidated Financial Statements -
July 31, 2003 4
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 6 - 9
Item 3. Quantitative and Qualitative Disclosures About
Market Risk 9
Item 4. Controls and Procedures 10
PART II. Other Information 10-11
DEB SHOPS, INC. & SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
July 31, January 31,
2003 2003
------------ ------------
ASSETS
CURRENT ASSETS
Cash and cash equivalents $152,907,331 $152,617,355
Merchandise inventories 35,358,172 29,911,290
Prepaid expenses and other 3,905,044 2,692,479
Deferred income taxes 1,453,227 1,453,227
------------ ------------
Total Current Assets 193,623,774 186,674,351
------------ ------------
PROPERTY, PLANT AND EQUIPMENT, at cost
Land 150,000 150,000
Buildings 2,365,697 2,365,697
Leasehold improvements 40,663,326 42,135,335
Furniture and equipment 16,607,635 17,619,473
------------ ------------
59,786,658 62,270,505
Less accumulated depreciation
and amortization 40,900,118 42,409,030
------------ ------------
18,886,540 19,861,475
------------ ------------
OTHER ASSETS
Deferred income taxes 4,892,273 4,892,273
Other 1,962,223 1,962,223
------------ ------------
Total Other Assets 6,854,496 6,854,496
------------ ------------
$219,364,810 $213,390,322
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Trade accounts payable $ 30,978,068 $ 21,616,666
Accrued expenses and other 9,797,250 9,864,161
Income taxes payable 1,357,287 3,871,945
------------ ------------
Total Current Liabilities 42,132,605 35,352,772
------------ ------------
Shareholders' Equity
Series A Preferred Stock, par value $1.00
per share:
Authorized - 5,000,000
shares Issued and outstanding - 460 shares,
liquidation value $460,000 460 460
Common Stock, par value $.01 per share:
Authorized - 50,000,000 shares
Issued - 15,688,290 shares 156,883 156,883
Additional paid in capital 5,864,790 5,864,790
Retained earnings 183,634,792 184,440,137
------------ ------------
189,656,925 190,462,270
Less 2,003,390 common treasury shares, at cost 12,424,720 12,424,720
------------ ------------
177,232,205 178,037,550
------------ ------------
$219,364,810 $213,390,322
============ ============
See notes to consolidated financial statements.
-1-
DEB SHOPS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended July 31, Six Months Ended July 31,
--------------------------- ---------------------------
2003 2002 2003 2002
------------ ------------ ------------ ------------
Revenues
Net Sales $ 73,018,632 $ 76,682,641 $143,180,223 $153,646,984
------------ ------------ ------------ ------------
Costs and Expenses
Cost of sales, including
buying and occupancy costs 50,269,898 47,806,551 102,663,901 103,435,083
Selling and administrative 17,779,797 16,751,951 34,458,894 32,504,041
Depreciation and amortization 1,043,118 931,587 2,081,777 1,854,050
------------ ------------ ------------ ------------
69,092,813 65,490,089 139,204,572 137,793,174
------------ ------------ ------------ ------------
Operating Income 3,925,819 11,192,552 3,975,651 15,853,810
Other income, principally interest 409,811 435,775 810,953 1,028,615
------------ ------------ ------------ ------------
Income Before Income Taxes 4,335,630 11,628,327 4,786,604 16,882,425
Income Taxes 1,630,000 4,360,000 1,801,000 6,330,000
------------ ------------ ------------ ------------
Net Income $ 2,705,630 $ 7,268,327 $ 2,985,604 $ 10,552,425
============ ============ ============ ============
Net Income Per Common Share
Basic $ 0.20 $ 0.53 $ 0.22 $ 0.77
============ ============ ============ ============
Diluted $ 0.20 $ 0.52 $ 0.22 $ 0.76
============ ============ ============ ============
Cash Dividend Declared
Per Common Share $ 0.175 $ 0.150 $ 0.275 $ 0.225
============ ============ ============ ============
Weighted Average Number of
Common Shares Outstanding
Basic 13,684,900 13,684,900 13,684,900 13,659,247
============ ============ ============ ============
Diluted 13,684,900 13,991,950 13,684,900 13,898,471
============ ============ ============ ============
See notes to consolidated financial statements.
-2-
DEB SHOPS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended July 31,
------------------------------
2003 2002
------------- -------------
Cash flows provided by operating activities:
Net income $ 2,985,604 $ 10,552,425
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 2,081,777 1,854,050
Deferred income tax (benefit) -- (337,000)
Loss on retirement of property, plant and equipment 23,988 37,392
Change in operating assets and liabilities:
Increase in merchandise inventories (5,446,882) (6,114,477)
Increase in prepaid expenses and other (1,212,565) (14,428)
Increase in trade accounts payable 9,361,402 6,472,949
(Decrease) increase in accrued expenses and other (1,093,279) 395,449
Decrease in income taxes payable (2,514,658) (2,445,328)
------------- -------------
Net cash provided by operating activities 4,185,387 10,401,032
------------- -------------
Cash flows used in investing activities:
Purchase of property, plant and equipment, net (1,130,830) (2,256,795)
------------- -------------
Net cash used in investing activities (1,130,830) (2,256,795)
------------- -------------
Cash flows used in financing activities:
Preferred stock cash dividends paid (27,600) (27,600)
Common stock cash dividends paid (2,736,981) (2,048,237)
Proceeds from exercise of stock options -- 420,000
Principal payments under capital lease obligations -- (301,117)
------------- -------------
Net cash used in financing activities (2,764,581) (1,956,954)
------------- -------------
Increase in cash and cash equivalents 289,976 6,187,283
Cash and cash equivalents at beginning of period 152,617,355 135,251,663
------------- -------------
Cash and cash equivalents at end of period $ 152,907,331 $ 141,438,946
============= =============
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Income taxes, net $ 5,561,822 $ 9,112,328
============= =============
See notes to consolidated financial statements.
-3-
DEB SHOPS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
JULY 31, 2003
NOTE A - ORGANIZATION / BASIS OF PRESENTATION
Deb Shops, Inc. (the "Company") sells popularly priced fashion apparel
for junior and plus-sized females and males through 331 stores. The Company's
stores are located in regional malls and strip shopping centers principally
located in the East and Midwest regions of the United States.
The accompanying unaudited consolidated financial statements have been
prepared in accordance with accounting principles generally accepted in the
United States for interim financial information. Accordingly, they do not
include all of the information and footnotes required by accounting principles
generally accepted in the United States for complete financial statements. In
the first and third quarters, cost of goods sold and inventories are estimated
based on the use of the gross profit method. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary for a
fair presentation have been included. Operating results for the three and
six-month periods ended July 31, 2003 are not necessarily indicative of the
results that may be expected for the fiscal year ending January 31, 2004. The
Consolidated Balance Sheet at January 31, 2003 has been derived from the audited
financial statements at that date. For further information, refer to the
consolidated financial statements and footnotes thereto included in the
Company's Annual Report on Form 10-K for the fiscal year ended January 31, 2003.
The preparation of the consolidated financial statements in conformity
with accounting principles generally accepted in the United States requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.
NOTE B - NET INCOME PER SHARE
The table below sets forth the reconciliation of the numerators and
denominators of the basic and diluted net income per common share computations.
Three Months Ended July 31, Six Months Ended July 31,
---------------------------- ----------------------------
2003 2002 2003 2002
------------ ------------ ------------ ------------
Net income $ 2,705,630 $ 7,268,327 $ 2,985,604 $ 10,552,425
Dividends on preferred stock (13,800) (13,800) (27,600) (27,600)
------------ ------------ ------------ ------------
Income available to
common shareholders $ 2,691,830 $ 7,254,527 $ 2,958,004 $ 10,524,825
============ ============ ============ ============
Basic weighted average
number of common
shares outstanding 13,684,900 13,684,900 13,684,900 13,659,247
Effect of dilutive stock options -- 307,050 -- 239,224
------------ ------------ ------------ ------------
Diluted weighted average
number of common
shares outstanding 13,684,900 13,991,950 13,684,900 13,898,471
============ ============ ============ ============
-4-
In February 2002, the Company granted options to purchase 1,426,500
shares of common stock, at a weighted average exercise price of $23.77 per
share. The effect of these options on the diluted weighted average number of
common shares outstanding for the three and six-month periods ended July 31,
2002 are reflected in the preceding table.
Options to purchase an average of 1,381,000 shares of common stock, at
a weighted average exercise price of $23.77 per share, were outstanding during
the three and six-month periods ended July 31, 2003. These options were not
included in the computation of diluted earnings per share because the exercise
price was greater than the average market price of the common stock during the
period and, therefore, the effect would have been antidilutive.
NOTE C - INCOME TAXES
The Company's effective tax rate differs from the federal statutory
rate due primarily to state income taxes, offset by tax-exempt interest
earnings.
NOTE D - STOCK RELATED COMPENSATION
The Company has a stock option plan whereby options may be granted to
employees or non-employee directors on the basis of contributions to the
operations of the Company. Details concerning the plan are described in Note F
to the financial statements included in the Company's Annual Report on Form 10-K
for the fiscal year ended January 31, 2003. The Company continues to use the
accounting method under Accounting Principles Board Opinion No. 25 ("APB No.
25"), "Accounting for Stock Issued to Employees," and related interpretations
for these plans. Under APB No. 25, generally, when the exercise price of the
Company's stock options equals the market price of the underlying stock on the
date of the grant, no compensation expense is recognized.
Had the Company recognized compensation cost for the stock option plan
consistent with the provisions of SFAS No. 123, "Accounting for Stock-Based
Compensation," net income and basic and diluted net income per share would have
been adjusted to the following pro forma amounts.
Three months ended July 31, Six months ended July 31,
-------------------------- -------------- ----------
2003 2002 2003 2002
----------- ----------- ----------- -----------
Net income as reported $ 2,705,630 $ 7,268,326 $ 2,985,604 $10,552,424
Stock-based employee
compensation cost 517,819 1,129,239 1,217,420 1,919,705
----------- ----------- ----------- -----------
Pro forma net income 2,187,811 6,139,087 1,768,184 8,632,719
Dividends on preferred stock 13,800 13,800 27,600 27,600
----------- ----------- ----------- -----------
Net income available to
common shareholders $ 2,174,011 $ 6,125,287 $ 1,740,584 $ 8,605,119
=========== =========== =========== ===========
Basic net income per common
share, as reported $ 0.20 $ 0.53 $ 0.22 $ 0.77
=========== =========== =========== ===========
Pro forma basic net income
per common share $ 0.16 $ 0.45 $ 0.13 $ 0.63
=========== =========== =========== ===========
Diluted net income per
common share, as reported $ 0.20 $ 0.52 $ 0.22 $ 0.76
=========== =========== =========== ===========
Pro forma diluted net
income per common share $ 0.16 $ 0.45 $ 0.13 $ 0.63
=========== =========== =========== ===========
-5-
Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Forward-Looking Statements
Deb Shops, Inc. (the "Company") has made in this report, and from time
to time may otherwise make, "forward-looking statements" (as that term is
defined under federal securities laws) concerning the Company's future
operations, performance, profitability, revenues, expenses and financial
condition. Such forward-looking statements are subject to various risks and
uncertainties. Actual results could differ materially from those currently
anticipated due to a number of factors. Such factors may include, but are not
limited to, the Company's ability to improve or maintain sales and margins,
respond to changes in fashion, find suitable retail locations and the Company's
ability to attract and retain key management personnel. Such factors may also
include other risks and uncertainties detailed in the Company's other filings
with the Securities and Exchange Commission, including the Company's Annual
Report on Form 10-K for the fiscal year ended January 31, 2003 (the "2003
10-K"). The Company assumes no obligation to update or revise its
forward-looking statements even if experience or future changes make it clear
that any projected results expressed or implied therein will not be realized.
Critical Accounting Policies
The Company's critical accounting policies are discussed in Management's
Discussion and Analysis of Financial Condition and Results of Operations and
notes accompanying the consolidated financial statements that appear in the 2003
10-K. Except as otherwise disclosed in the financial statements and accompanying
notes included in this report, there were no material changes subsequent to the
filing of the 2003 10-K in the Company's critical accounting policies or in the
assumptions or estimates used to prepare the financial information appearing in
this report.
Overview
The Company operates 325 women's specialty apparel retail stores
offering popularly priced, fashionable, coordinated sportswear, dresses, coats,
lingerie, accessories, shoes and novelty items to the junior and plus-sized
fashion-conscious female. Stores are located in 41 states, principally in the
East and Midwest portions of the United States. The Company also operates six
Tops 'N Bottoms stores which sell moderately priced men's and women's apparel.
Results of Operations
Net sales decreased 6.8% during the six-months ended July 31, 2003 (the
"Current Year-to-Date Period") to $143,180,000 from $153,647,000 during the
six-months ended July 31, 2002 (the "Comparable Year-to-Date Period"). For the
quarter ended July 31, 2003 (the "Current Quarter"), net sales decreased 4.8% to
$73,019,000 from $76,683,000 for the quarter ended July 31, 2002 (the
"Comparable Quarter"). The sales decrease in both periods was attributable to
economic softness in the Company's core markets, principally the East and
Midwest portions of the United States. Additional factors contributing to the
decrease were higher gas prices, unfavorable weather conditions during the first
four months of the Current Year-to-Date Period and the subsequent merchandising
challenges created by those conditions.
-6-
The following table sets forth certain store information:
Three Months Six Months
Ended July 31,(1) Ended July 31,(1)
------------------ ------------------
2003 2002 2003 2002
----- ----- ----- -----
Stores open at end of the period 331 318 331 318
Average number in operation during the period 331 318 330 314
Average net sales per store (in thousands) $ 221 $ 241 $ 433 $ 489
Average operating income per store
(in thousands) $ 12 $ 35 $ 12 $ 51
Comparable Store Sales(2)- Percent Change (9.2)% 4.8% (11.3)% 5.5%
Cost of sales, including buying and occupancy costs, decreased 0.8%
during the Current Year-to-Date Period to $102,664,000 from $103,435,000 during
the Comparable Year-to-Date Period. As a percentage of net sales, these costs
increased to 71.7% from 67.3% in the Comparable Year-to-Date Period. During the
Current Quarter, cost of sales, including buying and occupancy costs, increased
5.2% to $50,270,000 from $47,807,000 in the Comparable Quarter and increased to
68.9% of sales from 62.3% of sales in the Comparable Quarter. The increase as a
percentage of sales for both comparable periods was due to increased markdowns
taken to stimulate sales as well as the de-leveraging of buying and occupancy
costs as a result of the comparable store sales decrease.
Selling and administrative expenses increased 6.0% during the Current
Year-to-Date Period to $34,459,000 from $32,504,000 during the Comparable
Year-to-Date Period. As a percentage of net sales, these costs increased to
24.1% from 21.2% in the Comparable Year-to-Date Period. During the Current
Quarter, selling and administrative expenses increased 6.1% to $17,780,000 from
$16,752,000 in the Comparable Quarter and increased to 24.3% of net sales from
21.8% of net sales in the Comparable Quarter. The increases in both comparable
periods was due primarily to costs associated with operating an average of 16
additional stores during the Current Year-to-Date Period as compared to the
Comparable Year-to-Date Period and 13 additional stores during the Current
Quarter as compared to the Comparable Quarter. During both periods, the increase
in selling and administrative expenses as a percentage of net sales was due to
the inability to leverage infrastructure expenses as a result of the decrease in
comparable store sales.
Depreciation expense increased $228,000 or 12.3% to $2,082,000 in the
Current Year-to-Date Period from $1,854,000 in the Comparable Year-to-Date
Period. For the Current Quarter, depreciation expense increased $112,000 or
12.0% to $1,043,000 from $932,000 in the Comparable Quarter. The increases
during both periods were due to the depreciation of costs incurred for new store
openings and remodeling of existing stores.
Other income, principally interest, decreased $218,000 or 21.2% to
$811,000 in the Current Year-to-Date Period from $1,029,000 in the Comparable
Year-to-Date Period. For the Current Quarter, other income, principally
interest, decreased $26,000 or 6.0% to $410,000 in the Current Quarter from
$436,000 in the Comparable Quarter. The decreases during both periods were the
result of declining interest rates, partially offset by higher cash balances.
- --------
1 Includes Tops 'N Bottoms stores.
2 Comparable store sales include stores open for both periods in the current
format and location. A store is added to the comparable store base in its
13th month of operation.
-7-
As a result of the foregoing, net income for the Current Year-to-Date
Period was $2,986,000 or $0.22 per diluted share versus $10,552,000 or $0.76 per
diluted share in the Comparable Year-to-Date Period. For the Current Quarter,
net income was $2,706,000 or $0.20 per diluted share versus $7,268,000 or $0.52
per diluted share in the Comparable Quarter.
Liquidity and Capital Resources - Consolidated
The Company has funded all of its operating needs internally, including
capital expenditures for the opening of new stores and the remodeling of
existing stores. For the Current Year-to-Date Period, cash provided by operating
activities was $4,185,000. These funds were provided by net income and the
non-cash charges for depreciation and amortization as well as from an increase
in trade accounts payable. Offsetting these items were uses of cash relating to
the seasonal increase in merchandise inventories, income tax and accrued
liability payments and an increase in prepaid expenses. For the Comparable
Year-to-Date Period, cash provided by operating activities was $10,401,000.
These funds were provided by net income, an increase in accounts payable and
non-cash charges for depreciation and amortization, partially offset by
increases in merchandise inventories and decreases in income taxes payable. The
inventory turnover rates were approximately 1.3 and 1.5 times during the Current
and Comparable Year-to-Date Periods, respectively.
Net cash used in investing activities was $1,131,000 and $2,257,000 for
the Current and Comparable Year-to-Date Periods, respectively. During both
periods, these funds were used for the opening of new stores and the remodeling
of existing stores.
For the Current Year-to-Date Period, net cash used in financing
activities was $2,765,000. These funds were used for the payment of dividends on
preferred and common stock. During the Comparable Year-to-Date Period, cash used
in financing activities was $1,957,000. These funds were used for the payment of
dividends on preferred and common stock and for principal payments on a capital
lease obligation. These payments were partially offset by proceeds from the
exercise of stock options.
As of July 31, 2003, the Company had cash and cash equivalents of
$152,907,000 compared with $141,439,000 at July 31, 2002.
On May 29, 2003, the Company announced a special dividend of $0.05 per
share on its common stock, and an increase to its existing quarterly dividend
from $0.10 to $0.125 per share on its common stock. The new rate and special
dividend was incorporated into the Company's dividend payment on August 19,
2003, which was payable to shareholders of record as of July 31, 2003.
-8-
The Company believes that its existing cash and cash equivalents and
internally generated funds will be sufficient to meet its anticipated capital
expenditures, none of which are material, and current operating needs. The
Company had an unsecured and uncommitted line of credit in the amount of
$20,000,000 as of July 31, 2003. Of this amount, $1,959,000 was outstanding as
letters of credit for the purchase of inventory. The Company leases its retail
apparel stores, warehouse and office building for periods ranging from one to 20
years. Following is a summary of the Company's contractual obligations for
minimum rental payments on its non-cancelable operating leases and minimum
payments on its other commitments as of July 31, 2003.
Payments Due by Period
Within 1 1 - 3 4 - 5 After 5
Total Year years years years
---------------------------------------------------------------------------------------------------
Operating
leases $ 142,878,000 $ 23,827,000 $ 41,603,000 $ 31,069,000 $ 46,379,000
Other
commitments 1,959,000 1,959,000 -- -- --
---------------------------------------------------------------------------------------------------
Total $ 144,837,000 $ 25,786,000 $ 41,603,000 $ 31,069,000 $ 46,379,000
===================================================================================================
Other Matters
Seasonality and Quarterly Results
The Company's operating results are subject to seasonal fluctuations.
Highest sales levels have historically occurred during the five-month period
from August 1 to December 31 of each year (the back-to-school and holiday
periods). Sales generated during these periods have traditionally had a
significant impact on the Company's results of operations. Any decreases in
sales for these periods or in the availability of working capital needed in the
months preceding these periods could have a material adverse effect on the
Company's results of operations. Results of operations in any one fiscal quarter
are not necessarily indicative of the results of operations that can be expected
for any other fiscal quarter or for the full fiscal year.
The Company's results of operations may also fluctuate from quarter to
quarter as a result of the amount and timing of expenses incurred in connection
with, and sales contributed by, new stores, store remodels and the integration
of new stores into the operations of the Company.
Item 3.
QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
As of July 31, 2003, the Company had cash and cash equivalents of
$152,907,000 compared to $141,439,000 as of July 31, 2002. These funds are
invested primarily in money market mutual funds and short-term municipal bonds,
all of which are fully insured or guaranteed by letters-of-credit. The Company
does not invest for trading purposes. Accordingly, the Company does not believe
it has significant exposure to market risk with respect to its investments.
-9-
Item 4.
CONTROLS AND PROCEDURES
The Company's management, with the participation of the Company's Chief
Executive Officer and Chief Financial Officer, evaluated the effectiveness of
the Company's disclosure controls and procedures as of the end of the period
covered by this report. Based upon that evaluation, the Chief Executive Officer
and Chief Financial Officer concluded that the Company's disclosure controls and
procedures are functioning effectively to provide reasonable assurance that
information required to be disclosed by the Company in reports filed under the
Securities Exchange Act of 1934 is recorded, processed, summarized and reported
within the time periods specified in the SEC's rules and forms. There has been
no change in the Company's internal control over financial reporting during the
Company's most recent fiscal quarter that has materially affected, or is
reasonably likely to materially affect, the Company's internal control over
financial reporting.
PART II. OTHER INFORMATION
Items 1 - 3. NOT APPLICABLE
- -----------
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS:
- ------ ----------------------------------------------------
The annual meeting of the Company was held on Thursday, May
29, 2003. Total votes present either in person or by proxy were 12,840,875.
Votes were cast as follows for the election of directors:
FOR WITHHELD
Marvin Rounick 12,652,825 188,050
Warren Weiner 12,652,825 188,050
Jack A. Rounick 12,627,625 213,250
Barry H. Feinberg 12,767,104 73,771
Barry H. Frank 12,627,625 213,250
Ivan Inerfeld 12,767,054 73,821
There were no other matters voted on at the meeting.
Item 5. NOT APPLICABLE
-10-
Item 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
Exhibit 31.1 Section 302 Certification by President and
Chief Executive Officer
Exhibit 31.2 Section 302 Certification by Chief Financial
Officer
Exhibit 32.1 Certification of Periodic Report by President
and Chief Executive Officer
Exhibit 32.2 Certification of Periodic Report by Chief
Financial Officer
(b) Reports on Form 8-K
The following reports on Form 8-K were filed during the second quarter
of 2003:
1. Report on Form 8-K, filed May 12, 2003, included the press
release dated May 8, 2003 discussing sales results for the
month of April, 2003 and the Company's fiscal first quarter
ended April 30,2003.
2. Report on Form 8-K, filed May 15, 2003, included the press
release dated May 15, 2003 discussing the Company's financial
results for the fiscal first quarter ended April 30, 2003.
-11-
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.
DEB SHOPS, INC.
DATE: September 12, 2003 By Marvin Rounick
---------------------------------------
Marvin Rounick
President and Chief Executive Officer
DATE: September 12, 2003 By Barry J. Susson, CPA
---------------------------------------
Barry J. Susson, CPA
Chief Financial Officer