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MICHAELS ANNOUNCES RECORD SECOND QUARTER SALES AND EARNINGS

 MICHAELS ANNOUNCES RECORD SECOND QUARTER SALES AND EARNINGS
 IRVING, Texas, Aug. 19 /PRNewswire/ -- Michaels Stores, Inc. (NASDAQ: MIKE) today reported record second quarter net income of $2,643,000, representing an increase of more than 250 percent from the prior year's $684,000. Earnings per share increased 167 percent to $.16 per share on 16 percent higher sales of $93.4 million. This compares to $.06 per share on sales of $80.3 million for the second quarter of fiscal 1991.
 For the six months ended Aug. 2, 1992, net income increased to $5,688,000 from $1,478,000 in the prior year. Earnings per share for the first half of fiscal 1992 more than doubled to $.34 per share from $.13 per share in the prior year.
 According to President Jack Bush, the company's dramatic second quarter growth in earnings is due not only to continued strong sales at existing stores but also to margin improvement and what he termed the highly encouraging performance of additional stores opened during the first half.
 Bush said that the expansion program has already resulted in almost twice as many new stores being opened as were originally planned; so far this year store count has increased from 140 to 160 and the company remains debt free.
 "Michaels is benefiting from the strengths of stores which clearly are meeting the demands of our customers, as well as from a strategy -- put in place over a year ago -- to aggressively expand our store population," explained Bush, noting that current plans call for at least five new stores in the third quarter. He added that the benefits of having eliminated all its debt, and related interest costs, are also being reflected in significant earnings growth for the year to date.
 The nation's leading retailer of arts and crafts, Michaels Stores, Inc. offers a wide selection of picture framing materials, silk and dried flowers, hobby and art supplies, creative crafts, and party, seasonal and holiday merchandise. The company now owns and operates 160 stores in 23 states, from California to the Carolinas.
 MICHAELS STORES, INC.
 Statements of Income
 (In thousands except per share data)
 Second quarter Six months
 1992 1991 1992 1991
 Net sales $ 93,408 $ 80,265 $187,759 $163,067
 Cost of sales and
 occupancy expense 61,161 54,131 122,902 109,420
 Selling, general and
 administrative expense 27,646 22,593 55,218 46,441
 Operating income 4,601 3,541 9,639 7,206
 Interest expense 26 1,848 42 3,649
 Other expense, net 198 556 179 1,091
 Income before income taxes 4,377 1,137 9,418 2,466
 Provision for income taxes 1,734 453 3,730 988
 Net income 2,643 684 5,688 1,478
 Earnings per share $ 0.16 $ 0.06 $ 0.34 $ 0.13
 Weighted average common and
 common equivalent shares
 outstanding 16,665 11,436 16,646 11,252
 Balance Sheets
 (In thousands)
 8/2/92 8/4/92
 Assets:
 Cash and cash equivalents $ 5,871 $ 102
 Merchandise inventories 113,446 98,139
 Other current assets 12,130 7,389
 Property and equipment-net 35,503 31,083
 Costs in excess of net
 assets of acquired
 operations-net 24,624 22,711
 Other assets 3,349 5,656
 Total $194,923 $165,080
 Debt and Equity:
 Current liabilities $ 54,853 $ 56,019
 Bank debt 0 12,000
 12-3/4 percent subordinated notes 0 43,162
 Deferred income taxes and
 other 3,897 4,223
 Shareholders' equity 136,173 49,676
 Total $194,923 $165,080
 -0- 8/19/92
 /CONTACT: R. Don Morris, executive vice president and chief financial officer of Michaels Stores, 214-714-7100/
 (MIKE) CO: Michaels Stores, Inc. ST: Texas IN: REA SU: ERN


TS -- NY031 -- 1278 08/19/92 10:39 EDT
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Date:Aug 19, 1992
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