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MICHAELS REPORTS 1991 EARNINGS CLIMB 83 PERCENT TO NEW RECORD

 MICHAELS REPORTS 1991 EARNINGS CLIMB 83 PERCENT TO NEW RECORD
 IRVING, Texas, March 3 /PRNewswire/ -- Michaels Stores, Inc. (NASDAQ: MIKE) today reported record earnings for both the fourth quarter and full-year ended Feb. 2, 1992. For the last three months, the company said net income increased 58 percent to a record $7,615,000 before extraordinary items, or $0.58 per share on a fully-diluted basis. These amounts were up from the previous year's fourth quarter earnings of $4,816,000 or $0.47 per share.
 Net income before extraordinary items for fiscal year 1991 increased 83 percent to a record $10,739,000, or $0.87 per share, compared to $5,855,000, or $0.57 per share for the prior year.
 In conjunction with the early retirement of its senior subordinated notes in January of 1992, the company incurred an extraordinary charge of $3,843,000 after tax, or $0.31 per share, in the fourth quarter of fiscal 1991, representing the excess of the redemption price of the notes over the recorded value as of the redemption date. The notes bore an effective interest rate of nearly 16 percent.
 "Michaels' strong fourth quarter performance continues the trend of improving results by the company which began 18 months ago," said Sam Wyly, chairman and chief executive. "These operating results, together with the strength of the company's current financial position, with no debt and $126,299,000 of shareholders' equity on an asset base of $180,913,000, leave the company well positioned to carry out its plans for aggressive expansion," said Wyly. "Our growth plans will allow us to continue to optimize economies of scale in terms of distribution, advertising coverage and increased buying power, and will allow us to spread our fixed costs over a larger base. In addition, as existing markets are filled in and new markets are penetrated under an improved marketing program for new stores, we are seeing an acceleration in the sales volume maturity process."
 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 owns and operates 142 stores in 20 states, from California to the Carolinas.
 MICHAELS STORES, INC.
 STATEMENTS OF INCOME
 (In thousands except per share data)
 Full Year
 1991 1990
 Net sales $410,899 $362,028
 Cost of sales and
 occupancy expense 274,375 246,656
 Selling, general and
 administrative expense 110,881 94,678
 Operating income 25,643 20,694
 Interest expense 6,971 9,739
 Other income and
 expense, net 913 1,213
 Income before income taxes
 and extraordinary item 17,759 9,742
 Provision for income taxes 7,020 3,887
 Net income before
 extraordinary item 10,739 5,855
 Extraordinary charge--early
 extinguishment of debt, net
 of income tax of $2335 3,843 --
 Net income after
 extraordinary item $ 6,896 $ 5,855
 Earnings per common share
 Net income before
 extraordinary item $0.87 $0.57
 Extraordinary charge 0.31 0.00
 Net income after
 extraordinary item $0.56 $0.57
 Weighted average common and
 common equivalent shares
 outstanding 12,411 10,312
 Fourth Quarter
 1991 1990
 Net sales $144,195 $133,401
 Cost of sales and
 occupancy expense 94,935 90,303
 Selling, general and
 administrative expense 35,669 32,552
 Operating income 13,591 10,546
 Interest expense 1,498 1,933
 Other income and
 expense, net (461) 634
 Income before income taxes
 and extraordinary item 12,554 7,979
 Provision for income taxes 4,939 3,163
 Net income before
 extraordinary item 7,615 4,816
 Extraordinary charge--early
 extinguishment of debt, net
 of income tax of $2335 3,843 --
 Net income after
 extraordinary item $ 3,772 $ 4,816
 Earnings per common share
 Net income before
 extraordinary item $0.58 $0.47
 Extraordinary charge 0.29 0.00
 Net income after
 extraordinary item $0.29 $0.47
 Weighted average common and
 common equivalent shares
 outstanding 13,231 10,351
 BALANCE SHEETS
 (in thousands)
 Feb. 2, Feb. 3,
 1992 1991
 Assets:
 Cash $ 27,356 $ 108
 Merchandise inventories 89,348 79,329 -30-
 Other current assets 9,169 5,135
 Property and equipment--
 net 28,950 30,684
 Costs in excess of net
 assets of acquired
 operations--net 22,375 23,035
 Other 3,715 5,947
 $180,913 $144,238
 Debt and equity:
 Current liabilities $ 51,087 $ 40,492
 Secured bank debt -- 10,500
 12-3/4 pct. senior
 subordinated notes -- 42,983
 Deferred taxes and other 3,527 3,648
 Stockholders' equity 126,299 46,615
 $180,913 $144,238
 -0- 3/3/92
 /CONTACT: Don Morris, executive vice president & chief financial officer of Michaels Stores, Inc., 214-580-8242/
 (MIKE) CO: Michaels Stores, Inc. ST: Texas IN: REA SU: ERN


PS -- NY094 -- 4730 03/03/92 18:31 EST
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