- Net Income Increases 18% -
- EPS Up 17% -
IRVING, Texas, Nov. 25 /PRNewswire-FirstCall/ -- Michaels Stores, Inc.
(NYSE: MIK) today reported record financial results for its third quarter and
the nine months ended November 1, 2003. Net income for the quarter was
$38.2 million, an 18% increase compared to net income of $32.3 million in the
same period last year. Diluted earnings per share for the quarter were
$.54 compared to $.46 in the same period last year, a 17% increase. Net
income for the third quarter of this year benefited from a reduction in the
effective tax rate versus last year, generating a tax savings of approximately
$.05 per share on a diluted basis.
Net income for the nine months was $83.3 million compared to net income of
$64.9 million in the same period last year, a 28% increase. Diluted earnings
per share for the nine months, after the cumulative effect of an accounting
change, were $1.19 compared to $.92 in the same period last year, a 29%
increase. The first quarter 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 nine months, before the cumulative
effect of the accounting change, increased 15% from the $72.3 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 17% over last year's $1.02. The reduction in the effective
tax rate versus last year increased diluted earnings per share by $.05 on a
year-to-date basis.
Total sales for the third quarter increased 7% to $755.2 million from
$704.6 million for the same period last year. Year-to-date sales of
$2.028 billion increased 8% from $1.884 billion for the same period last year.
Same-store sales were up 2% for the quarter and 2% year-to-date.
Michael Rouleau, Chief Executive Officer, said, "We are pleased with our
third quarter performance and our progress year-to-date and, as we enter the
fourth quarter, we are looking forward to another record year. Our stores are
in great shape, and we have never been better prepared for the Holiday season.
For the fourth quarter, we continue to expect our diluted EPS to be in the
$1.28 to $1.32 range, up approximately 21% from $1.07 last year. For the full
year, we currently expect our diluted EPS to increase approximately 18% and to
range from $2.45 to $2.50."
During the third quarter, the Company opened 25 and relocated seven
Michaels stores, opened three Village Crafts stores, opened one Aaron Brothers
store, opened one ReCollections store, and opened one Star Wholesale store.
A conference call will be held at 4:00 p.m. CT today to discuss third
quarter earnings results, the outlook for the fourth quarter, and a
preliminary view of fiscal 2004. 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 4066300.
The Company plans to release its November 2003 sales results on Thursday,
December 4, 2003 at 6:30 a.m. CT. 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 798 Michaels stores
in 48 states and Canada, 11 Village Crafts stores across the U.S., 158 Aaron
Brothers stores, located primarily on the West Coast, two ReCollections stores
in Dallas and Frisco, Texas, and two wholesale operations in Atlanta, Georgia
and 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)
3rd Quarter 9 Months YTD
2003 2002 2003 2002
Net sales $755,246 $704,613 $2,028,150 $1,884,413
Cost of sales and occupancy
expense 479,471 435,973 1,282,807 1,187,735
Gross profit 275,775 268,640 745,343 696,678
Selling, general, and
administrative expense 208,474 204,527 589,741 552,029
Store pre-opening costs 3,702 3,546 7,045 7,353
Operating income 63,599 60,567 148,557 137,296
Interest expense 5,049 5,668 15,185 15,897
Other (income) and expense, net 77 73 (1,501) (1,210)
Income before income taxes and
cumulative effect of
accounting change 58,473 54,826 134,873 122,609
Provision for income taxes 20,265 22,478 51,589 50,269
Income before cumulative
effect of accounting change 38,208 32,348 83,284 72,340
Cumulative effect of
accounting change, net of tax --- --- --- 7,433
Net income $38,208 $32,348 $83,284 $64,907
Earnings per common share
before cumulative effect of
accounting change:
Basic $0.57 $0.48 $1.24 $1.09
Diluted $0.54 $0.46 $1.19 $1.02
Earnings per common share
after cumulative effect of
accounting change:
Basic $0.57 $0.48 $1.24 $0.98
Diluted $0.54 $0.46 $1.19 $0.92
Common shares used in per
share calculations:
Basic 67,311 66,830 67,022 66,381
Diluted 70,849 71,070 69,962 70,612
CONSOLIDATED BALANCE SHEETS
(In thousands except number of stores)
November 1, November 2,
2003 2002
Assets:
Cash and equivalents $105,477 $44,874
Merchandise inventories 1,103,527 1,065,737
Property and equipment 376,812 369,087
Goodwill, net 115,839 115,839
Deferred and prepaid income taxes 20,380 24,957
Other assets 42,582 32,755
$1,764,617 $1,653,249
Debt and Equity:
Trade payables $220,349 $193,360
Bank debt --- 90,000
Other liabilities 249,411 237,394
Senior notes due 2009 200,000 200,000
Stockholders' equity 1,094,857 932,495
$1,764,617 $1,653,249
Number of Michaels retail stores open (A) 809 759
Inventory per Michaels retail store (A) $1,313 $1,351
(A) Includes Village Crafts by Michaels stores
SOURCE Michaels Stores, Inc.
 back to top
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.
|
