- Net Income Increases 15% -
- EPS Climbs 17% -
IRVING, Texas, Aug. 27 /PRNewswire-FirstCall/ -- Michaels Stores, Inc.
(NYSE: MIK) today reported record financial results for its second quarter and
the six months ended August 2, 2003. Net income for the quarter was
$24.3 million, a 15% increase compared to net income of $21.1 million in the
same period last year. Diluted earnings per share for the quarter were
$.35 compared to $.30 in the same period last year, a 17% increase.
Net income for the six months was $45.1 million compared to net income of
$32.6 million in the same period last year, a 38% increase. Diluted earnings
per share for the six months, after the cumulative effect of an accounting
change, were $.65 compared to $.46 in the same period last year, a 41%
increase. The first half of last year included a charge for the cumulative
effect of an accounting change of $7.4 million, net of tax, for the early
adoption of EITF 02-16, Accounting by a Customer for Cash Consideration
Received from a Vendor. Net income for the six months, before the cumulative
effect of the accounting change, increased 13% from the $40 million reported
in the same period last year and diluted earnings per share for the period,
before the cumulative effect of an accounting change in the first quarter of
2002, increased 14% over last year's $.57.
Total sales for the second quarter increased 7% to $616.5 million from
$576.6 million for the same period last year. Year-to-date sales of
$1.273 billion increased 8% from $1.180 billion for the same period last year.
Same-store sales were up 1% for the quarter and 2% year-to-date.
Michael Rouleau, Chief Executive Officer, said, "We are very pleased with
our record performance for the second quarter as we build upon the momentum we
have generated over the last six years. The significant investments we have
made in our infrastructure are starting to bear fruit, and they give us great
confidence in our future. Despite the soft economic environment, we remain
optimistic for a solid second half performance, a strong Holiday selling
season, and another record year."
During the second quarter, the Company opened eight and relocated four
Michaels stores, opened one Village Crafts store, opened four Aaron Brothers
stores and opened one ReCollections store.
A conference call will be held at 4:00 p.m. CDT today to discuss second
quarter earnings results. Those who wish to participate in the call may do so
by dialing 973-633-6740. Any interested party will also have the opportunity
to access the call via the Internet at http://www.michaels.com . To listen to the
live call, please go to the website at least fifteen minutes early to register
and download any necessary audio software. For those who cannot listen to the
live broadcast, a replay will be available for 30 days after the date of the
event. Replay may be accessed at http://www.michaels.com or by phone at
973-341-3080, PIN 3697349.
The Company plans to release its August 2003 sales results on Thursday,
September 4, 2003 at 6:30 a.m. CDT. Any interested party may view the
Company's press release at http://www.michaels.com .
Michaels Stores, Inc. is the world's largest retailer of arts, crafts,
framing, floral, wall decor, and seasonal merchandise for the hobbyist and do-
it-yourself home decorator. The Company owns and operates 775 Michaels stores
in 48 states and Canada, eight Village Crafts stores across the U.S.,
158 Aaron Brothers stores, located primarily on the West Coast, one
ReCollections store in Frisco, Texas, and one wholesale operation in Dallas,
Texas.
Certain statements contained herein which are not historical facts are
forward looking statements that involve risks and uncertainties, including,
but not limited to, customer demand and trends in the arts and crafts
industry, related inventory risks due to shifts in customer demand, the effect
of economic conditions, the impact of competitors' locations or pricing, the
availability of acceptable locations for new stores, difficulties with respect
to new information system technologies, supply constraints or difficulties,
the results of financing efforts, the effectiveness of advertising strategies
and other risks detailed in the Company's Securities and Exchange Commission
filings. The Company intends these forward-looking statements to speak only
as of the time of this release and does not undertake to update or revise them
as more information becomes available.
This press release is also available on the Michaels Stores, Inc. website
(http://www.michaels.com ).
- Tables follow -
MICHAELS STORES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands except per share data)
2nd Quarter 6 Months YTD
2003 2002 2003 2002
Net sales $616,516 $576,580 $1,272,904 $1,179,800
Cost of sales and occupancy
expense 382,788 359,682 803,336 751,762
Gross profit 233,728 216,898 469,568 428,038
Selling, general, and
administrative expense 186,673 174,303 381,267 347,502
Store pre-opening costs 1,590 2,123 3,343 3,807
Operating income 45,465 40,472 84,958 76,729
Interest expense 5,065 5,145 10,136 10,229
Other (income) and expense, net (722) (429) (1,578) (1,283)
Income before income taxes and
cumulative effect of
accounting change 41,122 35,756 76,400 67,783
Provision for income taxes 16,860 14,660 31,324 27,791
Income before cumulative
effect of accounting change 24,262 21,096 45,076 39,992
Cumulative effect of
accounting change, net of tax --- --- --- 7,433
Net income $24,262 $21,096 $45,076 $32,559
Earnings per common share
before cumulative effect of
accounting change:
Basic $0.36 $0.32 $0.67 $0.60
Diluted $0.35 $0.30 $0.65 $0.57
Earnings per common share
after cumulative effect of
accounting change:
Basic $0.36 $0.32 $0.67 $0.49
Diluted $0.35 $0.30 $0.65 $0.46
Common shares used in per
share calculations:
Basic 66,673 66,355 66,878 66,157
Diluted 69,883 70,591 69,518 70,383
CONSOLIDATED BALANCE SHEETS
(In thousands except number of stores)
August 2, August 3,
2003 2002
Assets:
Cash and equivalents $137,201 $16,528
Merchandise inventories 988,276 943,472
Property and equipment 368,987 370,671
Goodwill, net 115,839 115,839
Deferred income taxes and income
tax receivable 20,946 33,662
Other assets 37,256 30,472
$1,668,505 $1,510,644
Debt and Equity:
Trade payables $209,911 $210,770
Bank debt --- 20,400
Other liabilities 221,464 216,888
Senior notes due 2009 200,000 200,000
Stockholders' equity 1,037,130 862,586
$1,668,505 $1,510,644
Number of Michaels retail stores open (A) 781 729
Inventory per Michaels retail store (A) $1,208 $1,240
(A) Includes Village Crafts by Michaels stores
SOURCE Michaels Stores, Inc.
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Related links:
http://www.michaels.com
Company News On-Call:
http://www.prnewswire.com/comp/115769.html
CONTACT:
Jeffrey N. Boyer, Executive Vice President -
Chief Financial Officer, +1-972-409-1581, or Christopher J.
Holland, Vice President - - Finance, +1-972-409-1667, both of
Michaels Stores, Inc.
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