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AMES REPORTS NOVEMBER-DECEMBER, JANUARY RESULTS

    ROCKY HILL, Conn., April 5 /PRNewswire/ -- Ames Department Stores, Inc., which consummated its plan of reorganization and emerged from Chapter 11 protection on Dec. 30, 1992, today reported operating results covering its fourth fiscal quarter and its full fiscal year ended Jan. 30, 1993.
    Under the requirements of fresh-start reporting, which is applicable to companies, that are reorganized under Chapter 11, the company's balance sheet reflects the consummation of its plan of reorganization and fresh-start reporting as of Dec. 26, 1992, the effective date for accounting purposes.  As a consequence, results covering the quarter and the ful ?year were reported as nine-week and 48-week periods, ended Dec. 26, 1992, as well as a five-week period ended Jan. 30, 1993.
    For the nine weeks ended Dec. 26, 1992, Ames reported that EBIT (earnings before interest, taxes, restructuring and Chapter 11 expense) profit improved $6.4 million to $51.7 million from an EBIT profit of $45.3 for the nine weeks ended Dec. 28, 1991.  Net profit for the nine weeks ended Dec. 26, 1992, prior to fresh-start reporting adjustments was $26.1 million, which included a $16 million restructuring charge and $4 million in increased bankruptcy expenses, partially offset by a $7.3 million reduction in net interest expense as a result of the curtailment of interest accrued on certain pre-petition debt, compared with net profit of $32.4 million for the nine weeks ended Dec. 28, 1991.  The net profit for the nine weeks ended Dec. 26, 1992, was positively impacted by a LIFO credit of $9.5 million.
    Net sales for the nine weeks ended Dec. 26, 1992, were $601.1 million, compared with net sales of $680.6 million in the year-earlier period.  The nine-week period ended Dec. 28, 1991, included the results of 60 stores that were subsequently closed as part of the company's final restructuring prior to its emergence from Chapter 11 and not included in the nine-week period ended Dec. 28, 1992.  Comparable-store sales increased 3.3 percent for the nine-week period on a 309-store base.
    Ames reported an EBIT loss of $26.5 million for the 48 weeks ended Dec. 26, 1992, compared with an EBIT loss of $45.4 million for the 48 weeks ended Dec. 28, 1991.  The net loss for the 48 weeks ended Dec. 26, 1992, prior to fresh-start reporting adjustments, was $139.2 million, which included $88.5 million in restructuring charges, partially offset by $43.8 million, which included $88.5 million in restructuring charges, partially offset by a $43.8 million reduction in net interest expense as a result of the curtailment of interest accrued on certain pre-petition debt, compared with a net loss of $258.1 million, which included $147.2 million in restructuring charges, for the 48 weeks ended Dec. 28, 1991.
    Net sales for the 48 weeks ended Dec. 26, 1992, were $2.3 billion, which included results of the 60 closed stores through October 1992. Net sales for the year-earlier period were $2.7 billion, which included results of 139 stores that were closed from September 1991 through October 1992, as well as former subsidiary Mathews & Boucher Inc., and 14 freestanding Crafts & More stores (through October 1991), which were closed or sold subsequent to December 1991.  Comparable-store sales were virtually flat, with a 0.3 percent decline for the 48-week period on a 309-store base.
    In reporting its January results, the company stated that the adoption of fresh-start reporting as of Dec. 26, 1992, resulted in a statement of operations for the five weeks ended Jan. 30, 1993, that is not comparable in material respects to the statement of operations for the four-week period ended Jan. 25, 1992.
    For the five weeks ended Jan. 30, 1993, the company reported an EBIT loss of $22.3 million and a net loss of $23.9 million.  Net sales for the five weeks were $142.3 million.  Comparable-store sales increased 4.9 percent over sales for the year-earlier period on a 309-store base.
    For the four weeks ended Jan. 25, 1992, Ames reported an EBIT loss of $17.8 million, which included a LIFO credit of $12.9 million.  The net loss for the period was $24.3 million.  Net sales were $135.8 million for this four-week period.
    Peter Thorner, Ames' president and chief operating officer, said, "These results close the book on Ames' performance while in Chapter 11. In the current year, our efforts will be focused on improved operational performance, which we anticipate will result in financial performance trending toward profitability.  During the year, we will complete the implementation of chain-wide scanning, continue to expand crafts, jewelry and other successful departments, and undertake small-scale remodeling of some of Ames' oldest stores."
    Ames operates 309 discount department stores in 14 Northeastern states.  The stock of the reorganized Ames (AMES) is trading on a when- issued basis on the National Association of Securities Dealers Automated Quotation (NASDAQ) system.
            AMES DEPARTMENT STORES, INC. AND SUBSIDIARIES
           Consolidated Condensed Statements of Operations
                         (In thousands)
                          Two months                Eleven months
    Periods ended    12/26/92   12/28/91(A)   12/26/92(B)  12/28/91(C)
    Total sales      $627,855   $709,220     $2,395,570   $2,815,692
    Less: leased
     department sales  26,805     28,633        111,544      132,058
    Net sales         601,050    680,587      2,284,026    2,683,634
    Cost of goods sold,
     transportation and
     buying expenses  436,543    508,589      1,706,818    2,004,808
    Gross profit      164,507    171,998        577,208      678,826
    Leased department
     and other operating
     income            11,946      7,716         35,537        38,819
    Total             176,453    179,714        612,745       717,645
    Store operating,
     administrative and
     general expenses,
     including leased
     department
     expenses         115,933    126,762        595,420      712,810
    Depreciation and
     amortization       8,779      7,604         43,775       50,221
    Profit (loss) before
     int., txs., rest.,
     and Ch. 11 exps.  51,741     45,348        (26,450)     (45,386)
    Bankruptcy expenses(9,000)    (5,000)       (25,500)     (23,000)
    Restructuring
     charges          (16,000)        --        (88,500)    (147,200)
    Interest and debt
     (expense) income,
     net                 (609)    (7,925)         1,279      (42,506)
    Income taxes           --         --             --           --
    Net profit (loss)
     before fresh-start
     & ext. gain       26,132     32,423       (139,171)     (258,092)
    Revaluation of assets
     and liabilities under
     fresh-start
     reporting       (391,204)        --       (391,204)           --
    Extraordinary item --
     gain on debt
     discharge      1,249,264         --      1,249,264            --
    Net profit (loss) 884,192     32,423        718,889      (258,092)
    Note:  The two-month and 11-month periods include nine weeks and 48 weeks in both years and for this year include certain year-end adjustments, including LIFO credits of $9.5 million and $5.5 million, respectively.  Also, earnings per share is not presented because such presentation would not be meaningful.  The old stock was canceled under the plan of reorganization and the new stock was not issued until the consummation date (Dec. 30, 1992).
    (A) -- Includes the results of 60 department stores (closed as part of the company's final restructuring prior to emergence) included in this year's results only through October 1992 (the month of their announced closings).  Also includes the results of two additional department stores closed in the ordinary course of business and included in this year's results only through May 1992.
    (B) -- Includes the results of the 60 closed department stores (see (A) above) only through October 1992 and the results of the two closed department stores only through May 1992.
    (C) -- Includes the results of 77 department stores, through September 1991, and M&B (the company's former wholesales sporting goods subsidiary) and 14 freestanding Crafts & More stores, through October 1991, which were closed or sold subsequent to December 1991 and not included in this year's results.  Also includes the results of the 60 closed department stores (see (A) above) included in this year's results only through October 1992 and the results of two additional department stores closed in the ordinary course of business and included in this year's results only through May 1992.
             AMES DEPARTMENT STORES, INC. AND SUBSIDIARIES
                Consolidated Condensed Balance Sheets
                 (In thousands, except share amounts)
    The purchase method of accounting was used to record the fair value
    of assets and assumed liabilities of the reorganized company at
    Dec. 26, 1992.  Accordingly, the accompanying balance sheet as of
    Dec. 26, 1992, is not comparable in material respects to such
    balance sheet as of Jan. 25, 1992, or for any prior periods, since
    the balance sheet of Dec. 26, 1992, is that of a reorganized entity.
    The purchase method of accounting required, among other things, that
    the revalued non-current assets be written-off to the extent of the
    excess of revalued net assets over equity, with any remaining excess
    recorded as a deferred credit and amortized as income.
    ASSETS                                       12/26/92      1/25/92
    Current assets:
    Unrestricted cash and short-term
     investments                                  $53,013     $227,955
    Restricted cash and short-term
     investments                                  103,977      237,245
    Total cash and short-term investments         156,990      465,200
    Receivables                                    32,324       29,432
    Merchandise inventories                       477,969      439,959
    Prepaid expenses and other current
     assets                                        10,195       12,375
    Net assets held for disposition                47,548       50,570
    Total current assets                          725,026      997,536
    Net fixed assets                                   --      326,856
    Other assets                                       --       65,253
    Total                                         725,026    1,389,645
    LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT)
    Current liabilities:
    Accounts payable:
    Trade                                         $96,157      $34,258
    Other                                          70,862       74,911
    Total accounts payable                        167,019      109,169
    Current portion of long-term and
     capital lease obligations                     27,205        3,505
    Accrued expenses and other current
     liabilities                                  157,492      115,629
    Restructuring reserve                          29,396       33,812
    Total current liabilities                     381,112      262,115
    Liabilities subject to settlement
     under the reorganization case                     --    1,776,634
    Excess of revalued net assets over equity
     under fresh-start reporting                   59,757           --
    Long-term debt                                131,014           --
    Capital lease obligations                      45,470       64,445
    Other long-term liabilities                    37,673        5,842
    Stockholders' equity (deficit):
     Priority common stock (12 million shares
      authorized, issued and outstanding; par
      value $.01; aggregate liquidation preference
      value $105 million as of Dec. 26, 1992)         120           --
     Common stock (40 million shares authorized;
      8 million shares issued; par value $.01)         80           --
     6 percent Series A cumulative convertible
      senior preferred stock (500,000 shares
      authorized; 425,000 shares issued and
      outstanding at Jan. 25, 1992; no par value;
      stated value of $500 per share; canceled
      under plan of reorganization)                    --      144,242
     Preferred stock dividend payable                  --        6,424
     Common stock (100 million shares authorized;
      37,987,000 shares issued at Jan. 25, 1992;
      par value $.50; canceled under plan of
      reorganization)                                  --       18,994
     Additional paid-in capital                    69,800(A)   223,348
     Accumulated deficit                               --   (1,108,542)
     Less: common stock in treasury (405,000
      shares at cost as of Jan. 25, 1992)              --        3,857
     Total stockholders' equity (deficit)          70,000     (719,391)
    Total                                         725,026    1,389,645
    (A) -- The equity value of the reorganized company was based primarily on discounted projected cash flows.
           AMES DEPARTMENT STORES, INC. AND SUBSIDIARIES
          Consolidated Condensed Statements of Operations
             (In thousands, except per share amounts)
    The purchase method of accounting was used to record the fair market
    value of assets and assumed liabilities of the reorganized company
    at Dec. 26, 1992.  Accordingly, the accompanying Statement of
    Operations for the five weeks ended Jan. 30, 1993, is not comparable
    in material respects to such statement for the four weeks ended
    Jan. 25, 1992.  The purchase method of accounting required, among
    other things, that the revalued non-current assets as of Dec. 26,
    1992, be written-off to the extent of the excess of revalued net
    assets over equity, with any remainie?xcess recorded as a deferred
    credit and amortized as income.
                                         5 Weeks Ended   4 Weeks Ended
                                            1/30/93       1/25/92(C)
    Total sales                            $148,003        $141,070
    Less: leased department sales             5,654           5,269
    Net sales                               142,349         135,801
    Cost of goods sold and transportation
     expenses(A)                            119,465          92,329
    Gross profit                             22,884          43,472
    Leased department and other
     operating income                         2,081           3,303
    Total                                    24,965          46,775
    Store operating, administrative &
     general expenses, including leased
     department expenses                     47,790          58,338
    Depreciation and amortization (credit)
     expense(B)                                (528)          6,252
    Loss before interest, taxes, and
     Chapter 11 expenses                    (22,297)        (17,815)
    Bankruptcy expenses                          --          (5,000)
    Interest and debt expense, net           (1,595)         (1,475)
    Income taxes                                 --              --
    Net loss                                (23,892)        (24,290)
    Weighted average common shares
     outstanding (D)                         20,000          37,582
    Net loss per common share (C)            $(1.19)         $(0.67)
    (A) The prior year period included a LIFO credit (reduction in cost of goods sold) of $12.9 million.
    (B) The current year period includes a credit of $530 for the amortization of the excess of revalued net assets over equity under fresh-start reporting.  In addition, as noted above, the revalued non- current assets as of Dec. 26, 1992 were written-off and therefore the current period's depreciation expense is for January additions only.
    (C) Includes the results of 60 stores (closed as part of the
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Date:Apr 5, 1993
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