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DEPARTMENT 56 POSTS STRONG SECOND QUARTER SALES AND NET INCOME

 MINNEAPOLIS, Aug. 4 /PRNewswire/ -- Department 56, Inc. (NYSE: DFS), a leading specialty giftware company, today reported a 12 percent increase in sales and a 24 percent increase in net income for the second quarter ended July 3, 1993, compared to pro forma results for the second quarter of 1992. Sales in the 1993 second quarter increased to $55.4 million from $49.4 million in the same period last year, and net income increased to $8.8 million, or $.41 per share, from $7.1 million, or $.33 per share, on a pro forma basis.
 For the 26 weeks ended July 3, 1993, sales were $94.6 million and net income was $13.3 million, increases of 17 percent and 36 percent, respectively, over pro forma levels for the first 27 weeks of 1992. Earnings per share were $.62 for the 1993 26-week period vs. a pro forma $.46 in 1992.
 "Strong operating performance and growth in sales this year have resulted from excellent demand in all major product categories combined with our efforts to expand production capacity to meet increased customer orders. During the first half of this year we have seen encouraging growth in customer orders for non-collectible lines, especially new products. In addition, the trend of the U.S. dollar against the Taiwanese dollar has been favorable so far this year, yielding reductions in our import costs," said Ed Bazinet, chairman and chief executive officer. "Net income has increased at a greater rate than net sales due to improved gross profit margin and the fixed cost nature of interest on subordinated debt and amortization of goodwill and trademarks."
 In June, Department 56, completed an initial public offering of 5.29 million shares of common stock, representing approximately 24 percent ownership of the company. Shares sold in the offering had been held by Forstmann Little & Co. and members of the company's management.
 Department 56, Inc. is a leading designer, importer and distributor of fine quality collectibles and other specialty giftware products sold through gift and home accessory retailers. The company is best known for its series of collectible, hand-crafted, lit ceramic and porcelain houses, buildings and related accessories in The Original Snow Village Collection and The Heritage Village Collection. In addition, Department 56 offers an extensive line of holiday and home decorative accessory products, including its Snowbabies collectible porcelain and pewter hand-painted figurines, Christmas decorative products and other giftware items.
 DEPARTMENT 56, INC.
 Unaudited Statement of Income
 (in millions, except per share amounts)
 Periods ended Quarter 26 weeks 27 weeks
 7/3/93 7/4/92 7/3/93 7/4/92
 (Pro forma (Pro forma for
 for acquisition) acquisition)
 Net sales $55.4 $49.4 $94.6 $80.9
 Cost of sales 26.5 24.0 45.6 39.5
 Gross profit 28.9 25.4 49.0 41.4
 S,G,&A 9.4 8.5 16.9 14.7
 Goodwill and
 trademark amort. 1.1 1.1 2.3 2.2
 Operating inc. 18.4 15.8 29.8 24.5
 Int. expense 4.0 4.0 8.1 7.9
 Other inc., net - (0.2) (0.5) (0.5)
 Income before inc.
 taxes 14.4 12.0 22.2 17.1
 Inc. taxes 5.6 4.9 8.9 7.3
 Net inc. $ 8.8 $ 7.1 $13.3 $ 9.8
 Net inc. per common
 & common equiv.
 share $ .41 $ .33 $ .62 $ .46
 NOTES:
 -- The 1992 pro forma statements of income are based on the assumption that the company's acquisition of the Predecessor Company occurred on Dec. 29, 1991. These pro forma statements include the effects of adjustments related to the acquisition, primarily adjustments to interest expense to reflect financing costs of the acquisition, amortization of intangibles related to the acquisition and adjustments to eliminate costs associated with employment contracts terminated in connection with the acquisition.
 -- Net income per common and common equivalent share for 1992 is calculated employing the weighted average number of common and common equivalent shares outstanding (using the treasury stock method) at the time of the company's initial public offering.
 -0- 8/4/93
 /CONTACT: Bob Coccoluto or Tim Schugel of Department 56, Inc., 612-944-5600, or George Sard or Anna Cordasco of Sard Verbinnen & Co., 212-687-8080, for Department 56/
 (DFS)


CO: Department 56, Inc. ST: Minnesota IN: REA SU: ERN

MP-SP -- NY012 -- 9226 08/04/93 09:14 EDT
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Date:Aug 4, 1993
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