Friedman's Announces Second Quarter Operating Results

Apr 25, 2001, 01:00 ET from Friedman's Inc.

    SAVANNAH, Ga., April 25 /PRNewswire/ -- Friedman's Inc. (Nasdaq:   FRDM), a
 leading specialty retailer of fine jewelry, today announced financial and
 operating results for its second fiscal quarter ended March 31, 2001.
     For the second fiscal quarter ended March 31, 2001, net sales increased
 9.5%, to $88.0 million from $80.4 million in the comparable period last year.
 Comparable store sales decreased 0.2% during the second quarter versus an
 increase of 10.7% for the comparable quarter last year.  At March 31, 2001,
 the Company had 635 stores in operation, an increase of 10.6% from the prior
 year.
     Diluted earnings per share, before certain charges, for the second fiscal
 quarter were $0.21 per share versus $0.21 per share for the same quarter last
 fiscal year, excluding a $0.04 per share charge for store closings and a non-
 comparable loss related to the Company's Internet joint venture.  The charges
 consisted of a $0.02 per share expense for the closure of seven stores and a
 $0.02 per share loss related to Internet operations.  After these items,
 diluted earnings per share for the second quarter were $0.17 per share
 compared to $0.21 per share for the comparable period last year.
     The table below summarizes Friedman's operating results for the quarter
 ended March 31, 2001 and April 1, 2000:
 
                  (Amounts in millions, except per share amounts)
 
                                      Fiscal Quarter Ended        % Increase
                                      3/31/01         4/1/00      (Decrease)
 
     Net sales                         $88.0           $80.4          9.5%
     EBITDA(a)                           8.0             7.5          6.4%
     Income from operations(a)           5.2             5.2           ---
     Diluted earnings per share(a)     $0.21           $0.21           ---
     Non-comparable charges
      (after tax):
       Store closing expense           (0.02)            ---           ---
       Internet operating loss         (0.02)            ---           ---
     Diluted earnings per share        $0.17           $0.21        (19.0)%
     Weighted average shares
      outstanding                       14.5            14.4          0.7%
 
     Credit data(b)
     Allowance as a percent of
      receivables                       9.7%           10.3%         (0.6)%
     Currency(c)                       88.8%           88.4%          0.4%
     Delinquency 90+ days past due      3.2%            3.9%         (0.7)%
 
     (a)  Excludes expenses associated with the closing of seven stores and the
          non-comparableInternet joint venture loss.
     (b)  As of March 31, 2001 and April 1, 2000, respectively.
     (c)  Percent of accounts receivable less than 30 days past due.
 
     For the six months ended March 31, 2001, net sales increased 12.7% to
 $261.3 million versus $231.8 million in the comparable period last year.
 Comparable store sales increased 3.5% for the six months ended March 31, 2001
 compared to a 7.6% increase last year.  Diluted earnings per share for the
 six-month period increased 15.4% to $1.42 per share compared to $1.23 per
 share for the comparable period last year, excluding the store closing charge
 discussed above and the loss from the Company's Internet joint venture for the
 six month period ended March 31, 2001 of approximately $0.03 per share.  After
 these items, diluted earnings per share for the year-to-date period increased
 11.4% to $1.37 per share compared to $1.23 per share for the comparable period
 last year.
     The table below summarizes Friedman's operating results for the six-month
 period ended March 31, 2001 and April 1, 2000:
 
                  (Amounts in millions, except per share amounts)
 
                                        Six-Months Ended          % Increase
                                     3/31/01          4/1/00      (Decrease)
 
     Net sales                        $261.3          $231.8         12.7%
     EBITDA(a)                          38.5            34.1         13.1%
     Income from operations(a)          33.0            29.5         11.7%
     Diluted earnings per share(a)     $1.42           $1.23         15.4%
     Non-comparable charges
      (after tax):
       Store closing expense           (0.02)            ---           ---
       Internet operating loss         (0.03)            ---           ---
     Diluted earnings per share        $1.37           $1.23         11.4%
     Weighted average shares
      outstanding                       14.5            14.4          0.7%
 
     (a) Excludes expenses associated with the closing of seven stores and the
         non-comparable Internet joint venture loss.
 
     Crescent Jewelers, Friedman's west coast based affiliate, reported a
 decrease in operating profits on a slight increase in net sales for the three
 months ending March 31, 2001.  Net sales for the quarter increased 1.4% to
 $28.7 million, compared to $28.4 million for the comparable period last year.
 Comparable store sales decreased 1.2% versus an increase of 13.4% for the
 comparable quarter last year.  EBITDA for the quarter ended March 31, 2001
 decreased to $1.3 million from $2.6 million in the prior year's comparable
 quarter.  A significant portion of the decrease, approximately $1.1 million,
 is a result of a more aggressive charge-off program during the quarter than in
 the year ago quarter.  As a result, Crescent's receivable portfolio is
 significantly better positioned than at the same time in the prior year;
 portfolio currency was 90.1% versus 86.8%, and 90+ day delinquent accounts
 were 4.1% versus 4.6% the prior year.
     The table below summarizes the unaudited operating results of Crescent for
 the six-month period ended March 31, 2001 and April 1, 2000:
 
                               (Amounts in millions)
 
                                       Six-Months Ended(a)         % Increase
                                      3/31/01         4/1/00       (Decrease)
 
     Number of stores                    152             149          2.0%
     Comparable store sales             3.2%           15.5%
     Net sales                         $85.4           $82.1          4.0%
     EBITDA(b)                          10.6            11.2         (5.5)%
     Total operating assets(c)         111.5           105.2          6.0%
     Total bank debt                   108.8           101.9          6.8%
 
     Credit data(d)
     Allowance as a percent
      of receivables                   14.0%           14.1%         (0.1)%
     Currency(e)                       90.1%           86.6%          3.5%
     Delinquency 90+ days past due      4.1%            4.6%         (0.5)%
 
     (a)  This financial information was provided to Friedman's by Crescent's
          management and has not been independently verified by Friedman's or
          its accountants. Number of stores, results from operations, and
          balance sheet as of March 31, 2001.
     (b)  Before Internet joint venture loss.
     (c)  Consists of cash, accounts receivable (net), inventory, and fixtures
          and equipment (net).
     (d)  As of March 31, 2001 and April 1, 2000, respectively
     (e)  Percent of accounts receivable less than 30 days past due.
 
     Commenting on the results, Bradley J. Stinn, President and Chief Executive
 Officer of both Friedman's and Crescent, said, "As expected, the March quarter
 proved to be a difficult trading period for the retail jewelry industry.
 While not satisfied with flat comparable store sales, we believe these sales
 results will place Friedman's and Crescent at the favorable end of the range
 for comparable publicly traded retail jewelers.
     "Friedman's EBITDA profit margin during the quarter, excluding the impact
 of non-comparable charges, decreased slightly to 9.1% of net sales from 9.4%
 of net sales the prior year.  The decrease in EBITDA margin is due to
 increased advertising expense: advertising expanded as a percent to sales by
 approximately 130 basis points as a result of an expanded marketing calendar
 and a modest amount of investment spending in certain geographic markets.  All
 other expense categories on a combined basis declined as a percent to sales
 (approximately 100 basis points), reflecting excellent expense control during
 the quarter.  At March 31, 2001, Friedman's balance sheet was in solid shape
 with a 1.1% reduction in inventory per store and a reduction in the level of
 delinquent credit accounts.
     "In addition, Friedman's closed seven stores during the quarter as part of
 a focus on improving the overall productivity of the store portfolio.  While
 reducing earnings for the preceding quarter, this action is intended to
 improve return on investment in future periods.
     "On the Crescent side, we are very pleased to announce the appointment of
 R. Randall Poe as President and Chief Operating Officer of Crescent Jewelers
 on February 1, 2001, a position that had been vacant for approximately six
 months.  Prior to assuming this responsibility, he served for 13 years in a
 variety of senior management positions for both the Crescent and Friedman's
 brands.  We are very excited about the impact his strong and experienced
 leadership will have on the growth of the Crescent brand and on the daily
 execution of its business strategies.
     "Looking forward, we are assuming continued weak retail jewelry sales for
 at least the next several quarters.  As such, we have taken steps to reduce
 expenses and capital expenditures, and are tightly monitoring inventory
 levels.  We plan to continue our extensive marketing programs, but to
 eliminate investment-spending portions of the budget.  Furthermore, in light
 of six months of e-commerce experience, we are working to reconfigure our
 Internet activities to reduce the quarterly earnings drag, while building a
 viable on-line presence and better integrating on-line and off-line branding
 activities."
     Friedman's Inc. is a leading specialty retailer of fine jewelry based in
 Savannah, Georgia. The Company is the leading operator of fine jewelry stores
 located in power strip centers.  At April 25, 2001 Friedman's Inc. operated a
 total of 635 stores in 21 states, of which 415 were located in power strip
 centers and 220 were located in regional malls.  Crescent Jewelers, Friedman's
 West-Coast affiliate, operates 153 stores in seven states, 98 of which are
 located in regional malls and 55 of which are located in power strip centers.
 On a combined basis the two companies operate 788 stores in 27 states and
 offer products on-line at www.friedmans.com and www.crescentonline.com ,
 respectively.  Friedman's Class A Common Stock is traded on the Nasdaq
 National Market (Nasdaq symbol, FRDM).
 
     Some of the statements included in this press release, particularly those
 anticipating future financial performance, business prospects, growth and
 operating strategies and similar matters, are forward-looking statements that
 involve a number of risks and uncertainties.  For those statements, we claim
 the protection of the safe harbor for forward-looking statements contained in
 the Private Securities Litigation Reform Act of 1995.  In addition to the
 factors described above, among the other factors that could cause actual
 results to differ materially are the following: our ability to improve gross
 margins and operating margins, which in turn is dependent on our merchandise
 mix and continued efforts to hold down our operating expenses; our ability to
 restructure our internet sales effort and reduce the losses associated with
 this sales channel; our ability to identify and secure suitable and
 commercially attractive locations for new stores and hire and train additional
 store personnel; the costs associated with opening new stores; the successful
 application of our operational framework over a larger store base; the
 economic conditions in the new areas into which we expand and uncertainties in
 the customer credit portfolios in these areas; the condition of the U.S.
 general economy and its effect on our target customer purchasing patterns
 including their use of our credit program; and other risk factors identified
 from time to time in our SEC reports, including, but not limited to, the
 report on Form 10-K for the year ended September 30, 2000.
 
     Contact:
     Victor M. Suglia
     Senior Vice President & Chief Financial Officer
     Telephone Number: (912) 233-9333 x6103
 
 
                                FRIEDMAN'S INC.
                         Consolidated Income Statements
                 (Amounts in thousands, except per share data)
 
 
                                          For the three    For the six months
                                          months ended,          ended,
                                        March 31,  April 1, March 31, April 1,
                                          2001      2000      2001      2000
                                            (Unaudited)        (Unaudited)
 
     Net Sales                           $88,024   $80,403  $261,276  $231,821
 
     Operating Costs and Expenses:
        Cost of goods sold including
         occupancy,
           distribution and buying        47,678    43,516   134,733   121,990
        Selling, general and
         administrative
           expenses                       32,346    29,369    87,997    75,739
     Operating income (loss) before
      depreciation
        and amortization                   8,000     7,518    38,546    34,092
 
     Depreciation and amortization         2,819     2,324     5,555     4,544
 
     Income from operations                5,181     5,194    32,991    29,548
 
     Store closing expense*                  457       ---       457       ---
     Internet operating loss, net of
      minority interest*                     366       ---       742       ---
 
     Income from operations including
      store closing expense and
        and internet operating loss, net
         of minority interest              4,358     5,194    31,792    29,548
 
     Interest expense                        595       530     1,369       964
 
     Income (loss) before income taxes     3,763     4,664    30,423    28,584
     Income tax expense                    1,317     1,701    10,648    10,791
 
     Net income (loss)                    $2,446    $2,963   $19,775   $17,793
 
     Diluted earnings per share            $0.17     $0.21     $1.37     $1.23
 
     Weighted average shares              14,494    14,438    14,483    14,433
 
     Number of stores open                   635       574       635       574
 
 
      *  The Company's presentation of its store closing expense and internet
         operation is not in accordance with GAAP, and as a result will not
         agree to the presentation that will be included in the Company's
         quarterly report on form 10Q.
 
 
                                FRIEDMAN'S INC.
                     Condensed Consolidated Balance Sheets
           (Dollars in thousands, except per share and share amounts)
 
                                                   March 31,          April 1,
                                                     2001              2000*
                                                           (Unaudited)
     Assets
     Current Assets:
       Cash and cash equivalents                       $420            $1,042
       Accounts receivable, net of
        allowance for doubtful accounts of
        $15,550, at March 31, 2001 and
        $13,881 at April 1, 2000                    145,557           121,523
       Inventories, at cost                         140,488           128,462
       Deferred income taxes                          3,107             3,629
       Other current assets                           8,169             3,267
         Total current assets                       297,741           257,923
 
     Equipment and improvements, net                 56,463            49,734
     Tradename rights, net                            5,258             5,728
     Other assets                                     3,579             4,384
         Total assets                              $363,041          $317,769
 
     Liabilities and Stockholders' Equity
     Current Liabilities:
       Accounts payable                             $49,900           $37,470
       Accrued liabilities and other                 20,804            22,964
         Total current liabilities                   70,704            60,434
 
     Bank debt                                       59,304            45,853
     Deferred income taxes and other                  1,769             2,026
     Minority interest in equity of
      subsidiaries                                      665               ---
 
     Stockholders' Equity:
       Preferred stock, par value $.01,
        10,000,000 shares authorized
         and none issued                                ---               ---
       Class A common stock, par value
        $.01, 25,000,000 shares
        authorized, 13,320,100 and
        13,250,857 issued and outstanding
        at March 31, 2001 and April 1,
        2000, respectively                              133               133
       Class B common stock, par value
        $.01, 7,000,000 shares authorized,
         1,196,283 issued and outstanding                12                12
       Additional paid-in-capital                   119,014           118,681
       Retained earnings                            112,600            91,815
       Stock purchase loans                          (1,160)           (1,185)
           Total stockholders' equity               230,599           209,456
           Total liabilities and
            stockholders' equity                   $363,041          $317,769
 
     *  Certain balances as of April 1, 2000 have been reclassified to conform
        to the current year financial statement presentation.
 
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SOURCE Friedman's Inc.
    SAVANNAH, Ga., April 25 /PRNewswire/ -- Friedman's Inc. (Nasdaq:   FRDM), a
 leading specialty retailer of fine jewelry, today announced financial and
 operating results for its second fiscal quarter ended March 31, 2001.
     For the second fiscal quarter ended March 31, 2001, net sales increased
 9.5%, to $88.0 million from $80.4 million in the comparable period last year.
 Comparable store sales decreased 0.2% during the second quarter versus an
 increase of 10.7% for the comparable quarter last year.  At March 31, 2001,
 the Company had 635 stores in operation, an increase of 10.6% from the prior
 year.
     Diluted earnings per share, before certain charges, for the second fiscal
 quarter were $0.21 per share versus $0.21 per share for the same quarter last
 fiscal year, excluding a $0.04 per share charge for store closings and a non-
 comparable loss related to the Company's Internet joint venture.  The charges
 consisted of a $0.02 per share expense for the closure of seven stores and a
 $0.02 per share loss related to Internet operations.  After these items,
 diluted earnings per share for the second quarter were $0.17 per share
 compared to $0.21 per share for the comparable period last year.
     The table below summarizes Friedman's operating results for the quarter
 ended March 31, 2001 and April 1, 2000:
 
                  (Amounts in millions, except per share amounts)
 
                                      Fiscal Quarter Ended        % Increase
                                      3/31/01         4/1/00      (Decrease)
 
     Net sales                         $88.0           $80.4          9.5%
     EBITDA(a)                           8.0             7.5          6.4%
     Income from operations(a)           5.2             5.2           ---
     Diluted earnings per share(a)     $0.21           $0.21           ---
     Non-comparable charges
      (after tax):
       Store closing expense           (0.02)            ---           ---
       Internet operating loss         (0.02)            ---           ---
     Diluted earnings per share        $0.17           $0.21        (19.0)%
     Weighted average shares
      outstanding                       14.5            14.4          0.7%
 
     Credit data(b)
     Allowance as a percent of
      receivables                       9.7%           10.3%         (0.6)%
     Currency(c)                       88.8%           88.4%          0.4%
     Delinquency 90+ days past due      3.2%            3.9%         (0.7)%
 
     (a)  Excludes expenses associated with the closing of seven stores and the
          non-comparableInternet joint venture loss.
     (b)  As of March 31, 2001 and April 1, 2000, respectively.
     (c)  Percent of accounts receivable less than 30 days past due.
 
     For the six months ended March 31, 2001, net sales increased 12.7% to
 $261.3 million versus $231.8 million in the comparable period last year.
 Comparable store sales increased 3.5% for the six months ended March 31, 2001
 compared to a 7.6% increase last year.  Diluted earnings per share for the
 six-month period increased 15.4% to $1.42 per share compared to $1.23 per
 share for the comparable period last year, excluding the store closing charge
 discussed above and the loss from the Company's Internet joint venture for the
 six month period ended March 31, 2001 of approximately $0.03 per share.  After
 these items, diluted earnings per share for the year-to-date period increased
 11.4% to $1.37 per share compared to $1.23 per share for the comparable period
 last year.
     The table below summarizes Friedman's operating results for the six-month
 period ended March 31, 2001 and April 1, 2000:
 
                  (Amounts in millions, except per share amounts)
 
                                        Six-Months Ended          % Increase
                                     3/31/01          4/1/00      (Decrease)
 
     Net sales                        $261.3          $231.8         12.7%
     EBITDA(a)                          38.5            34.1         13.1%
     Income from operations(a)          33.0            29.5         11.7%
     Diluted earnings per share(a)     $1.42           $1.23         15.4%
     Non-comparable charges
      (after tax):
       Store closing expense           (0.02)            ---           ---
       Internet operating loss         (0.03)            ---           ---
     Diluted earnings per share        $1.37           $1.23         11.4%
     Weighted average shares
      outstanding                       14.5            14.4          0.7%
 
     (a) Excludes expenses associated with the closing of seven stores and the
         non-comparable Internet joint venture loss.
 
     Crescent Jewelers, Friedman's west coast based affiliate, reported a
 decrease in operating profits on a slight increase in net sales for the three
 months ending March 31, 2001.  Net sales for the quarter increased 1.4% to
 $28.7 million, compared to $28.4 million for the comparable period last year.
 Comparable store sales decreased 1.2% versus an increase of 13.4% for the
 comparable quarter last year.  EBITDA for the quarter ended March 31, 2001
 decreased to $1.3 million from $2.6 million in the prior year's comparable
 quarter.  A significant portion of the decrease, approximately $1.1 million,
 is a result of a more aggressive charge-off program during the quarter than in
 the year ago quarter.  As a result, Crescent's receivable portfolio is
 significantly better positioned than at the same time in the prior year;
 portfolio currency was 90.1% versus 86.8%, and 90+ day delinquent accounts
 were 4.1% versus 4.6% the prior year.
     The table below summarizes the unaudited operating results of Crescent for
 the six-month period ended March 31, 2001 and April 1, 2000:
 
                               (Amounts in millions)
 
                                       Six-Months Ended(a)         % Increase
                                      3/31/01         4/1/00       (Decrease)
 
     Number of stores                    152             149          2.0%
     Comparable store sales             3.2%           15.5%
     Net sales                         $85.4           $82.1          4.0%
     EBITDA(b)                          10.6            11.2         (5.5)%
     Total operating assets(c)         111.5           105.2          6.0%
     Total bank debt                   108.8           101.9          6.8%
 
     Credit data(d)
     Allowance as a percent
      of receivables                   14.0%           14.1%         (0.1)%
     Currency(e)                       90.1%           86.6%          3.5%
     Delinquency 90+ days past due      4.1%            4.6%         (0.5)%
 
     (a)  This financial information was provided to Friedman's by Crescent's
          management and has not been independently verified by Friedman's or
          its accountants. Number of stores, results from operations, and
          balance sheet as of March 31, 2001.
     (b)  Before Internet joint venture loss.
     (c)  Consists of cash, accounts receivable (net), inventory, and fixtures
          and equipment (net).
     (d)  As of March 31, 2001 and April 1, 2000, respectively
     (e)  Percent of accounts receivable less than 30 days past due.
 
     Commenting on the results, Bradley J. Stinn, President and Chief Executive
 Officer of both Friedman's and Crescent, said, "As expected, the March quarter
 proved to be a difficult trading period for the retail jewelry industry.
 While not satisfied with flat comparable store sales, we believe these sales
 results will place Friedman's and Crescent at the favorable end of the range
 for comparable publicly traded retail jewelers.
     "Friedman's EBITDA profit margin during the quarter, excluding the impact
 of non-comparable charges, decreased slightly to 9.1% of net sales from 9.4%
 of net sales the prior year.  The decrease in EBITDA margin is due to
 increased advertising expense: advertising expanded as a percent to sales by
 approximately 130 basis points as a result of an expanded marketing calendar
 and a modest amount of investment spending in certain geographic markets.  All
 other expense categories on a combined basis declined as a percent to sales
 (approximately 100 basis points), reflecting excellent expense control during
 the quarter.  At March 31, 2001, Friedman's balance sheet was in solid shape
 with a 1.1% reduction in inventory per store and a reduction in the level of
 delinquent credit accounts.
     "In addition, Friedman's closed seven stores during the quarter as part of
 a focus on improving the overall productivity of the store portfolio.  While
 reducing earnings for the preceding quarter, this action is intended to
 improve return on investment in future periods.
     "On the Crescent side, we are very pleased to announce the appointment of
 R. Randall Poe as President and Chief Operating Officer of Crescent Jewelers
 on February 1, 2001, a position that had been vacant for approximately six
 months.  Prior to assuming this responsibility, he served for 13 years in a
 variety of senior management positions for both the Crescent and Friedman's
 brands.  We are very excited about the impact his strong and experienced
 leadership will have on the growth of the Crescent brand and on the daily
 execution of its business strategies.
     "Looking forward, we are assuming continued weak retail jewelry sales for
 at least the next several quarters.  As such, we have taken steps to reduce
 expenses and capital expenditures, and are tightly monitoring inventory
 levels.  We plan to continue our extensive marketing programs, but to
 eliminate investment-spending portions of the budget.  Furthermore, in light
 of six months of e-commerce experience, we are working to reconfigure our
 Internet activities to reduce the quarterly earnings drag, while building a
 viable on-line presence and better integrating on-line and off-line branding
 activities."
     Friedman's Inc. is a leading specialty retailer of fine jewelry based in
 Savannah, Georgia. The Company is the leading operator of fine jewelry stores
 located in power strip centers.  At April 25, 2001 Friedman's Inc. operated a
 total of 635 stores in 21 states, of which 415 were located in power strip
 centers and 220 were located in regional malls.  Crescent Jewelers, Friedman's
 West-Coast affiliate, operates 153 stores in seven states, 98 of which are
 located in regional malls and 55 of which are located in power strip centers.
 On a combined basis the two companies operate 788 stores in 27 states and
 offer products on-line at www.friedmans.com and www.crescentonline.com ,
 respectively.  Friedman's Class A Common Stock is traded on the Nasdaq
 National Market (Nasdaq symbol, FRDM).
 
     Some of the statements included in this press release, particularly those
 anticipating future financial performance, business prospects, growth and
 operating strategies and similar matters, are forward-looking statements that
 involve a number of risks and uncertainties.  For those statements, we claim
 the protection of the safe harbor for forward-looking statements contained in
 the Private Securities Litigation Reform Act of 1995.  In addition to the
 factors described above, among the other factors that could cause actual
 results to differ materially are the following: our ability to improve gross
 margins and operating margins, which in turn is dependent on our merchandise
 mix and continued efforts to hold down our operating expenses; our ability to
 restructure our internet sales effort and reduce the losses associated with
 this sales channel; our ability to identify and secure suitable and
 commercially attractive locations for new stores and hire and train additional
 store personnel; the costs associated with opening new stores; the successful
 application of our operational framework over a larger store base; the
 economic conditions in the new areas into which we expand and uncertainties in
 the customer credit portfolios in these areas; the condition of the U.S.
 general economy and its effect on our target customer purchasing patterns
 including their use of our credit program; and other risk factors identified
 from time to time in our SEC reports, including, but not limited to, the
 report on Form 10-K for the year ended September 30, 2000.
 
     Contact:
     Victor M. Suglia
     Senior Vice President & Chief Financial Officer
     Telephone Number: (912) 233-9333 x6103
 
 
                                FRIEDMAN'S INC.
                         Consolidated Income Statements
                 (Amounts in thousands, except per share data)
 
 
                                          For the three    For the six months
                                          months ended,          ended,
                                        March 31,  April 1, March 31, April 1,
                                          2001      2000      2001      2000
                                            (Unaudited)        (Unaudited)
 
     Net Sales                           $88,024   $80,403  $261,276  $231,821
 
     Operating Costs and Expenses:
        Cost of goods sold including
         occupancy,
           distribution and buying        47,678    43,516   134,733   121,990
        Selling, general and
         administrative
           expenses                       32,346    29,369    87,997    75,739
     Operating income (loss) before
      depreciation
        and amortization                   8,000     7,518    38,546    34,092
 
     Depreciation and amortization         2,819     2,324     5,555     4,544
 
     Income from operations                5,181     5,194    32,991    29,548
 
     Store closing expense*                  457       ---       457       ---
     Internet operating loss, net of
      minority interest*                     366       ---       742       ---
 
     Income from operations including
      store closing expense and
        and internet operating loss, net
         of minority interest              4,358     5,194    31,792    29,548
 
     Interest expense                        595       530     1,369       964
 
     Income (loss) before income taxes     3,763     4,664    30,423    28,584
     Income tax expense                    1,317     1,701    10,648    10,791
 
     Net income (loss)                    $2,446    $2,963   $19,775   $17,793
 
     Diluted earnings per share            $0.17     $0.21     $1.37     $1.23
 
     Weighted average shares              14,494    14,438    14,483    14,433
 
     Number of stores open                   635       574       635       574
 
 
      *  The Company's presentation of its store closing expense and internet
         operation is not in accordance with GAAP, and as a result will not
         agree to the presentation that will be included in the Company's
         quarterly report on form 10Q.
 
 
                                FRIEDMAN'S INC.
                     Condensed Consolidated Balance Sheets
           (Dollars in thousands, except per share and share amounts)
 
                                                   March 31,          April 1,
                                                     2001              2000*
                                                           (Unaudited)
     Assets
     Current Assets:
       Cash and cash equivalents                       $420            $1,042
       Accounts receivable, net of
        allowance for doubtful accounts of
        $15,550, at March 31, 2001 and
        $13,881 at April 1, 2000                    145,557           121,523
       Inventories, at cost                         140,488           128,462
       Deferred income taxes                          3,107             3,629
       Other current assets                           8,169             3,267
         Total current assets                       297,741           257,923
 
     Equipment and improvements, net                 56,463            49,734
     Tradename rights, net                            5,258             5,728
     Other assets                                     3,579             4,384
         Total assets                              $363,041          $317,769
 
     Liabilities and Stockholders' Equity
     Current Liabilities:
       Accounts payable                             $49,900           $37,470
       Accrued liabilities and other                 20,804            22,964
         Total current liabilities                   70,704            60,434
 
     Bank debt                                       59,304            45,853
     Deferred income taxes and other                  1,769             2,026
     Minority interest in equity of
      subsidiaries                                      665               ---
 
     Stockholders' Equity:
       Preferred stock, par value $.01,
        10,000,000 shares authorized
         and none issued                                ---               ---
       Class A common stock, par value
        $.01, 25,000,000 shares
        authorized, 13,320,100 and
        13,250,857 issued and outstanding
        at March 31, 2001 and April 1,
        2000, respectively                              133               133
       Class B common stock, par value
        $.01, 7,000,000 shares authorized,
         1,196,283 issued and outstanding                12                12
       Additional paid-in-capital                   119,014           118,681
       Retained earnings                            112,600            91,815
       Stock purchase loans                          (1,160)           (1,185)
           Total stockholders' equity               230,599           209,456
           Total liabilities and
            stockholders' equity                   $363,041          $317,769
 
     *  Certain balances as of April 1, 2000 have been reclassified to conform
        to the current year financial statement presentation.
 
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 SOURCE  Friedman's Inc.