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AMES REPORTS THIRD-QUARTER RESULTS

 AMES REPORTS THIRD-QUARTER RESULTS
 ROCKY HILL, Conn., Dec. 10 /PRNewswire/ -- Ames Department Stores,


Inc. (NYSE: ADD), today reported sales for the third quarter ended Oct. 26 of $708.3 million vs. $740.2 million in last year's third quarter. The decrease in total sales reflects the closing of 13 stores in the past year and the exclusion of October sales from 77 stores, following the announcement that those stores would close early next year.
 Comparable-store sales for the third quarter, which compares sales of stores open at least one full fiscal year, increased 2.6 percent over last year's third quarter.
 For the third quarter ended Oct. 26, Ames reported a net loss of $196.3 million, or $5.31 per share, vs. a net loss of $183.2 million, or $4.97 per share, in last year's third quarter. The loss includes a charge of $147.2 million in this year's third quarter for the closing of the 77 stores and related restructuring costs, vs. a charge of $129.0 million in last year's third quarter. Results for the nine months show a net loss of $290.5 million, or $8.00 per share, vs. a net loss of $766.7 million, or $20.67 per share, last year. Total sales for the nine months were $2.1 billion vs. $2.3 billion for the same period last year.
 Stephen L. Pistner, Ames' chairman and chief executive officer, said, "Ames continues to progress toward its goal of emerging from Chapter 11 as a financially sound and competitively viable company. Our expense levels are well-controlled and we achieved a comparable-store sales increase in the third quarter despite the continuing economic sluggishness in the Northeast.
 "We entered the important holiday season with a good in-stock position and well-balanced inventories, and we continue to expect positive fourth-quarter EBIT," Pistner said. "EBIT is earnings before interest, taxes, restructuring and Chapter 11 expense.
 "Our cash position remains strong; seasonal borrowings, which were substantially lower than we forecast, have already been repaid -- well ahead of schedule," Pistner said.
 Ames filed for Chapter 11 under the U.S. Bankruptcy Code in April 1990. After the store closings, Ames will operate 371 stores in 15 Northeastern states.
 AMES DEPARTMENT STORES, INC., AND SUBSIDIARIES
 (Operating as Debtor-in-Possession)
 Consolidated Condensed Statement of Operations
 (000s omitted except per share amounts)
 (Unaudited)
 Periods 13 Weeks 39 Weeks
 Ended 10/26/91 10/27/90 10/26/91 10/27/90
 Total sales $ 708,282(A) $ 740,185(B) $2,106,472(A) $2,291,310
 Less: leased
 department sales 35,185 40,495 103,425 126,028
 Net sales 673,097(A) 699,690(B) 2,003,047(A) 2,163,282
 Cost of goods sold,
 transportation &
 buying expenses 504,901 518,645 1,496,219 1,760,114
 Gross profit 168,196 181,045 506,828 403,168
 Leased department
 income 6,333 7,289 18,617 23,045
 Other operating
 income 3,728 4,889 12,486 9,298
 Total 178,257 193,223 537,931 435,511
 Store operating,
 admin. & general
 expenses, incl.
 leased department
 expenses 195,858 209,140 586,048 683,156
 Depreciation &
 amortization 13,876 15,892 42,617 65,292
 Bankruptcy exps. 6,000 7,500 18,000 15,000
 Restructuring
 charges 147,200 129,000 147,200 354,000
 Loss from opers. (184,677) (168,309) (255,934) (681,937)
 Int. & debt exp. (16,060) (21,232) (50,517) (92,435)
 Interest income 4,469 6,322 15,936 9,512
 Loss before
 income taxes (196,268) (183,219) (290,515) (764,860)
 Income tax exp. -- -- -- (1,802)
 Net loss $(196,268) $(183,219) $(290,515) $(766,662)
 Wtd. aver. com.
 shrs. outstg. (D) 37,582 37,582 37,582 37,582
 Net loss per
 common share (D) $(5.31) $(4.97) $(8.00) $(20.67)
 NOTE: A pro forma condensed statement of operations for the 39 weeks is attached to present results without closed stores.
 (A) -- Includes sales of 77 closing stores only through September 1991 (pre-announcement).
 (B) -- Includes sales of 13 stores closed subsequent to October 1990 and not included in the current year's results.
 (C) -- Includes sales of 234 stores closed last year and not included in the current year's results.
 (D) -- Earnings per share are computed based on the average common shares outstanding and reflect preferred stock dividends of $3,392 and $10,176 for the 13 and 39 weeks ended Oct. 26, 1991, respectively, and $3,412 and $10,236 for the comparable prior year periods. The convertible preferred stock is not included as a common stock equivalent because the effect would be to decrease the loss per common share otherwise computed.
 AMES DEPARTMENT STORES, INC., AND SUBSIDIARIES
 Balance Sheets
 (000s omitted)
 (Unaudited)
 10/26/91 1/26/91 10/27/90
 ASSETS
 Current assets:
 Cash, short-term investments
 and receivables $ 345,048 $ 483,645 $ 324,221
 Inventories 655,604 552,471 797,812
 Net assets held for disposition 21,976 39,022 9,279
 Other current assets 17,519 15,266 19,344
 Total current assets 1,040,147 1,090,404 1,150,656
 Net property 332,850 424,571 451,357
 Other assets 66,038 87,402 128,370
 Total assets $1,439,035 $1,602,377 $1,730,383
 LIABILITIES & STOCKHOLDERS' EQUITY
 Current liabilities:
 Accounts payable, note payable &
 current portion of capital lease
 obligations $ 235,979 $ 134,111 $ 231,316
 Accrued expenses 87,757 81,681 80,425
 Other current liabilities 9,355 5,971 5,604
 Total current liabilities 353,091 221,763 317,345
 Liabilities subject to settlement
 under the rerganization case 1,759,102 1,726,621 1,710,343
 Capital lease obligations 67,367 84,002 93,721
 Other long-term liabilities 7,000 7,000 19,166
 Stockholders' equity (727,525) (437,009) (410,212)
 Total liabilities & stockholders'
 equity $1,439,035 $1,602,377 $1,730,383
 NOTE: The entry to record the disposition of the 77 stores' assets is included in the Oct. 26, 1991, balance sheet.
 AMES DEPARTMENT STORES, INC., AND SUBSIDIARIES
 (Operating as Debtor-in-Possession)
 Pro Forma Consolidated Condensed Statement of Operations
 (000s omitted except per share amounts)
 (Unaudited)
 Pro Forma
 For the 39 weeks ended 10/26/91 10/27/90
 Total sales $1,837,042 $1,645,695
 Less: leased department sales 91,573 93,935
 Net sales 1,745,469 1,551,760
 Cost of goods sold, transportation
 & buying expenses 1,302,002 1,290,481
 Gross profit 443,467 261,279
 Leased department stores 16,484 16,908
 Other operating income 11,393 6,363
 Total 471,344 284,550
 Store operating, admin. & general
 expenses, including leased
 department expenses 512,551 492,271
 Depreciation & amortization 37,131 51,406
 Bankruptcy expenses 18,000 15,000
 Loss from operations (96,338) (274,127)
 Interest & debt expense (49,000) (76,847)
 Interest income 19,568 18,901
 Loss from opers. before income taxes (125,770) (332,073)
 Income tax expense -- (1,802)
 Net loss from operations (125,770) (333,875)
 Restructuring charges (152,686) (367,886)
 Net loss $ (278,456) $ (701,761)
 Weighted average com. shares outstg. 37,582 37,582
 Net loss from opers. per common share $(3.62) $(9.15)
 Net loss per common share $(7.68) $(18.94)
 NOTE: Pro forma worksheets are included in the Oct. 26, 1991, Form 10-Q. Although there were reductions made in overhead costs in connection with the store closings, no estimates of such reductions have been included in the retroactive (pro forma) adjustments. Only expenses directly attributable to the closed stores' operations have been removed from the historical expense totals.
 -0- 12/10/91
 /CONTACT: Doug Ewing or Bill Roberts of Ames, 203-257-2600 or -2666; or Andrea Priest of Adams & Rinehart, 212-557-0100, for Ames/
 (ADD) CO: Ames Department Stores, Inc. ST: Connecticut IN: REA SU: ERN


JT-GK -- NY048 -- 1233 12/10/91 17:18 EST
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