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MICHAELS ANNOUNCES RECORD THIRD QUARTER SALES AND EARNINGS

 IRVING, Texas, Nov. 18 ~PRNewswire~ -- Michaels Stores, Inc. (NASDAQ: MIKE) today reported record third quarter net income of $3,605,000, representing an increase of nearly 120 percent from the prior year's $1,646,000. Earnings per share increased 50 percent to $.21 per share on 19 percent higher sales of $123.3 million. This compares to $.14 per share on sales of $103.6 million for the third quarter of fiscal 1991.
 For the nine months ended Nov. 1, 1992, net income increased to $9,293,000 from $3,124,000 in the prior year. Earnings per share for the first nine months of fiscal 1992 more than doubled to $.55 per share from $.26 per share in the prior year.
 The dramatic increases in earnings are attributable to the company's strong sales gains, margin improvements and the elimination of nearly all interest expense in the first nine months of 1992.
 Sales in the first nine months of 1992 increased $44.4 million to $311.1 million or 17 percent above sales of $266.7 million for the prior year, including a 7 percent increase in same store sales. Operating income for the first nine months increased 32 percent to $15.9 million from $12.1 million in the prior year. The impact of this sales increase was enhanced by a 2 percent higher gross margin year to date. The gross margin improvement is due to lower distribution costs, favorable purchase prices and improved inventory management, coupled with the reduction of vendor financing for the company's seasonal inventory purchases in 1992.
 The company opened nine more stores during the third quarter, and has increased its store count from 140 to 168 during 1992. Michaels noted that the company has been very pleased to date with the performance of its new stores, with sales and operating margins well ahead of expectations.
 The nation's leading retailer of arts and crafts, Michaels Stores, Inc. offers a wide selection of picture framing materials and services, silk and dried flowers, hobby and art supplies, creative crafts, party, and seasonal and holiday merchandise. The company owns and operates 168 stores in 24 states, from California to the Carolinas.
 MICHAELS STORES, INC.
 STATEMENTS OF INCOME
 (In thousands except per share data)
 3rd Quarter 9 Months
 1992 1991 1992 1991
 Net sales $123,349 $103,637 $311,108 $266,704
 Cost of sales and
 occupancy expense 80,831 70,020 203,733 179,440
 Selling, general and
 administrative expense 36,218 28,771 91,436 75,212
 Operating income 6,300 4,846 15,939 12,052
 Interest expense 32 1,824 74 5,473
 Other expense, net 351 283 530 1,374
 Income before income
 taxes 5,917 2,739 15,335 5,205
 Provision for income taxes 2,312 1,093 6,042 2,081
 Net income 3,605 1,646 9,293 3,124
 Earnings per share $0.21 $0.14 $0.55 $0.26
 Weighted average common
 and common equivalent
 shares outstanding 16,988 12,186 16,761 12,102
 BALANCE SHEETS
 (In thousands)
 Nov. 1, Nov. 3,
 1992 1991
 Assets:
 Cash and cash equivalents $ 9,127 $ 132
 Merchandise inventories 147,004 116,805
 Other current assets 11,121 5,851
 Property and equipment
 - net 38,984 30,928
 Costs in excess of net
 assets of acquired
 operations - net 24,457 22,547
 Other assets 3,081 5,350
 $233,774 $181,613
 Debt and Equity:
 Current liabilities $ 87,308 $ 74,945
 Bank debt -- 8,500
 12-3~4 percent subordinated
 notes -- 41,796
 Deferred income taxes
 and other 3,873 4,382
 Shareholders' equity 142,593 51,990
 $233,774 $181,613
 -0- 11~18~92
 ~CONTACT: R. Don Morris, executive vice president and chief financial officer of Michaels Stores, Inc., 214-714-7100~
 (MIKE)


CO: Michaels Stores, Inc. ST: Texas IN: REA SU: ERN

PS -- NY016 -- 2220 11~18~92 09:58 EST
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Date:Nov 18, 1992
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