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HOUSE OF FABRICS REPORTS FOURTH QUARTER FINANCIAL RESULTS

 SHERMAN OAKS, Calif., March 3 /PRNewswire/ -- House of Fabrics Inc. (NYSE: HF) today reported lower net income for both the fourth quarter and fiscal year ended Jan. 31, 1993.
 Fourth quarter net income was $2,209,000, equal to 16 cents per share, compared with last year's record $8,346,000, or 56 cents per share. Sales for the quarter were $157,745,000, compared with $153,299,000 in the prior year.
 Average shares outstanding were 13,920,844 in the current quarter and 14,978,014 in the corresponding quarter a year ago. The decreased number of shares outstanding reflects the company's repurchase of its common shares under authorization granted by the board of directors.
 Gary L. Larkins, president and chief executive officer, said: "Net income for the quarter showed improvement from the third quarter level. However, we continue to be adversely affected by the weak economy, especially in California, where a substantial number of our stores are located, as well as highly competitive conditions in the retail fabrics industry. In addition, sales were hit hard in January by bad weather across the country, but particularly on the Pacific Coast."
 For the fiscal year, net income was $5,203,000, equal to 37 cents per share, compared with $19,691,000, or $1.44 per share in the previous fiscal year. Average shares outstanding were 13,990,112 in fiscal 1993 and 13,702,976 in fiscal 1992. Sales for the year were $557,521,000, exceeding last year's record $493,062,000, with the increase primarily attributed to a full year's sales being included for Fabricland compared to approximately six months' sales from the date of its acquisition in the previous year.
 Larkins continued: "The company was successful in meeting its year-end objectives. Both inventories and bank debt have been reduced substantially from where they stood at the end of the second quarter when we formulated our goals. Our aggressive promotions helped drive sales, but also reduced gross margin. Per store inventories have been lowered, and we're pleased by the improvement in our balance sheet.
 "During the year, we continued to press forward with our strategic program of converting operations to the large superstore format. During the fourth quarter, we opened an additional 14 superstores while closing 10 older locations, primarily smaller, mall-based units. For the fiscal year, 84 new superstores were opened or acquired while 56 older locations were closed. This year's aggressive super store opening program, the largest in our history, had a negative impact on profits in that we recognize all pre-opening expenses in the year of opening. At year-end, the company operated 546 superstores and 149 mall-based units.
 "In the coming year, our focus is on improving operations, and we will moderate our expansion in an intensely competitive industry which has seen substantial growth in capacity during the past two years. Plans call for the opening of 25 to 30 new superstores while closing approximately 60 older locations, primarily mall-based stores.
 "As to the outlook, while it would be unrealistic to anticipate a turnaround overnight, we are optimistic about prospects for steady improvement in the coming year. Much, of course, depends on the extent and pace of economic recovery. Our reduced corporate overhead and strengthened balance sheet certainly represent positive factors as we seek to improve operations."
 House of Fabrics Inc. is one of the nation's leading chains of company owned and operated retail fabric stores with 693 currently in operation.
 HOUSE OF FABRICS INC.
 Summary of Consolidated Operations
 Preliminary
 Three Months Ended Jan. 31,
 1993 1992
 Sales $157,745,000 $153,299,000
 Expenses:
 Cost of sales $89,719,000 $79,638,000
 Selling, general & admin. $63,027,000 $58,517,000
 Operating profit $4,999,000 $15,144,000
 Interest expense $1,214,000 $1,048,000
 Intangibles amortization $315,000 $306,000
 Income before income taxes $3,470,000 $13,790,000
 Income taxes $1,261,000 $5,444,000
 Net income $2,209,000 $8,346,000
 Net income per share $0.16 $0.56
 Average shares outstanding 13,920,844 14,978,014
 12 Months Ended Jan. 31,
 1993 1992
 Sales $557,521,000 $493,062,000
 Expenses:
 Cost of sales $300,698,000 $251,003,000
 Selling, general & admin. $241,294,000 $204,871,000
 Operating profit $15,529,000 $37,188,000
 Interest expense $5,296,000 $4,039,000
 Intangibles amortization $1,280,000 $662,000
 Income before income taxes $8,953,000 $32,487,000
 Income taxes $3,750,000 $12,796,000
 Net income $5,203,000 $19,691,000
 Net income per share $0.37 $1.44
 Average shares outstanding 13,990,112 13,702,976
 Summary Balance Sheet Information
 (Unaudited)
 Jan. 31, Jan. 31,
 1993 1992
 Inventories $254,262,000 $247,009,000
 Property - Net $68,260,000 $57,016,000
 Total assets $382,190,000 $363,698,000
 Bank debt $94,403,000 $49,142,000
 Other liabilities $108,196,000 $131,964,000
 Total liabilities $202,599,000 $181,106,000
 Shareholders' equity $179,591,000 $182,592,000
 -0- 3/3/93
 /CONTACT: Gary L. Larkins, president and CEO of House of Fabrics, 818-995-7000/
 (HF)


CO: House of Fabrics Inc. ST: California IN: REA SU: ERN

MS-JL -- LA004 -- 2283 03/03/93 08:31 EST
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Date:Mar 3, 1993
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