The Michaels Companies 3Q 2017 financial results: Total net sales increased 1.1

  • Comparable store sales increased 1.0%, including the negative impact of approximately 80 basis points related to lost sales from hurricanes
  • Operating income of $153.9 million
  • Diluted EPS of $0.44, including the negative impact of approximately $0.01 related to hurricanes

IRVING, Texas, 2017-Dec-04 — /EPR Retail News/ — The Michaels Companies, Inc. (NASDAQ: MIK) today (2017-11-30) announced financial results for the third quarter ended October 28, 2017.

“We are pleased we delivered third quarter operating income in-line with our guidance and diluted EPS above our guidance. We are seeing nice momentum in our business, excluding the disruption from the hurricanes, and we are encouraged by the customer’s response to the improvements we have made, both in-stores and online, to make it easier for customers to MAKE,” said Chuck Rubin, Chairman and Chief Executive Officer. “As we turn to the fourth quarter, we believe our holiday assortment is bigger and better than ever, and our teams are ready to serve customers, both in stores and online. We are pleased with the start to the quarter, although we recognize the heart of the season still lies ahead. We are excited about our plans, and we are confident the investments we’ve made to create an easier, more integrated omnichannel experience will drive continued momentum and deliver stronger financial results.”

Third Quarter Highlights

  • Net sales increased 1.1% to $1,240.2 million, from $1,227.2 million in the third quarter of fiscal 2016, inclusive of an estimated $10 million in lost sales related to Hurricanes Harvey and Irma. The increase in net sales was primarily a result of a 1.0% increase in comparable store sales (0.5% on a constant currency basis), and sales from the operation of 16 new Michaels stores (net of closures) in fiscal 2017. As expected, this increase was partially offset by lower wholesale revenues.
  • Gross profit increased 3.8% to $484.1 million, from $466.6 million in the third quarter of fiscal 2016. As a percentage of net sales, gross profit increased 100 basis points to 39.0% compared to 38.0% in the third quarter of fiscal 2016. The increase, as a percentage of net sales, was due to higher merchandise margin resulting from our ongoing sourcing initiatives, the timing of distribution-related costs and the comparison against $0.7 million of net non-recurring, inventory-related purchase accounting adjustments recorded in the third quarter of fiscal 2016 related to the acquisition of Lamrite West. These benefits were partially offset by higher inventory shrinkage.
  • Selling, general and administrative expense, including store pre-opening costs, (“SG&A”) increased 3.1% to $330.3 million, or 26.6% of sales, from $320.3 million, or 26.1% of sales, in the third quarter of fiscal 2016. The increase in SG&A was primarily due to an increase in incentive-based compensation, marketing expenses and healthcare expenses. The increase was partially offset by a comparison against $1.6 million of net non-recurring integration expenses recorded in the third quarter of fiscal 2016 related to the acquisition of Lamrite West.
  • Operating income increased 5.1% to $153.9 million, or 12.4% of sales, compared to $146.3 million, or 11.9% of sales, in the third quarter of fiscal 2016. Excluding net non-recurring, inventory-related purchase accounting adjustments and integration expenses associated with the acquisition of Lamrite West, adjusted operating income for the third quarter of fiscal 2016 was $148.6 million.
  • Interest expense increased $1.3 million to $32.8 million, from $31.5 million in the third quarter of fiscal 2016 primarily due to higher interest rates on the Company’s variable rate asset-based revolving credit facility and term loan credit facility.
  • The effective tax rate was 34.3% for the third quarter of fiscal 2017, compared to 29.0% for the third quarter of fiscal 2016. The higher effective tax rate was primarily due to certain federal tax credits recognized in the third quarter of fiscal 2016 and an increase in state taxes, partially offset by benefits realized from the Company’s direct sourcing initiatives.
  • Net income increased 4.3% to $79.8 million, compared to $76.5 million in the third quarter of fiscal 2016. Excluding net non-recurring, inventory-related purchase accounting adjustments, integration expenses associated with the acquisition of Lamrite West, and losses on early extinguishment of debt and refinancing costs, less related tax adjustments, adjusted net income for the third quarter of fiscal 2016 was $82.1 million.
  • Diluted earnings per share increased 18.9% to $0.44, from $0.37 in the third quarter of fiscal 2016. Diluted weighted-average common shares outstanding for the quarter were 182.0 million compared with 205.3 million in the third quarter of fiscal 2016. Excluding net non-recurring, inventory-related purchase accounting adjustments, integration expenses associated with the acquisition of Lamrite West, and losses on early extinguishment of debt and refinancing costs, less related tax adjustments, adjusted diluted earnings per share in the third quarter of fiscal 2016 was $0.40.
  • During the third quarter of fiscal 2017, the Company opened eight new Michaels stores and one new Pat Catan’s store. The Company also closed one Michaels store and three Aaron Brothers stores during the quarter. In the third quarter of fiscal 2016, the Company opened 14 new Michaels stores and closed two Michaels stores. At the end of the third quarter, the Company operated 1,237 Michaels stores, 98 Aaron Brothers stores, and 36 Pat Catan’s stores.
  • The Company ended the third quarter of fiscal 2017 with $176.8 million in cash, $2.9 billion in total debt and $675.7 million in availability under its asset-based revolving credit facility.
  • Total merchandise inventory at the end of the third quarter was $1,404.2 million compared to $1,394.1 million in the third quarter of fiscal 2016. Average Michaels inventory on a per store basis, inclusive of distribution centers, in transit and inventory for the Company’s e-commerce site, decreased 1.2% to $1,028,000, compared to $1,040,000 at the end of the third quarter of fiscal 2016.
  • During the quarter, the Company purchased 2.4 million shares, or $48.6 million, under its share repurchase authorization. The total remaining authorization for future repurchases is approximately $350.0 million. The share repurchase program does not have an expiration date, and the timing and number of repurchase transactions under the program will depend on market conditions, corporate considerations, debt agreements, and regulatory requirements.

Fourth Quarter and Fiscal Year 2017 Outlook:

For fiscal 2017, a 53-week year, the Company expects:

  • total net sales growth of 2.9% to 3.2%, or 2.7% to 3.0% on a constant currency basis, including the impact of the 53rd week, which is planned to be approximately $80 million;
  • comparable store sales to increase 0.6% to 0.9%, or 0.4% to 0.7% on a constant currency basis;
  • to open 18 new stores, including 17 new Michaels stores and one new Pat Catan’s store; relocate 12 Michaels stores; and close 17 stores, including 15 Aaron Brothers stores and two Michaels stores;
  • operating income to be in the range of $735 million to $745 million;
  • interest expense to be approximately $130 million;
  • the effective tax rate to be between 34% and 35%;
  • diluted earnings per common share to be between $2.13 and $2.16, based on diluted weighted average common shares of approximately 186 million; and
  • capital expenditures to be approximately $120 million.

The outlook for fiscal 2017 includes approximately $0.01 of favorable earnings per share impact related to 2.4 million shares repurchased in the third quarter of fiscal 2017 and approximately $0.01 of favorable earnings per share impact related to a stronger Canadian Dollar. The Company now expects the Canadian exchange rate will average $1.29 for the full year.

For the fourth quarter of fiscal 2017, the Company expects:

  • comparable store sales to increase 1.5% to 2.5%, or 1.0% to 2.0% on a constant currency basis;
  • to open one new Michaels store and close four Aaron Brothers stores;
  • operating income to be between $354 million and $364 million;
  • interest expense to be approximately $35 million;
  • the effective tax rate to be between 34% and 35%; and
  • diluted earnings per common share to be between $1.15 and $1.18, based on diluted weighted average common shares of 182 million.

Conference Call Information

A conference call to discuss third quarter financial results is scheduled for today, November 30, 2017, at 8:00 a.m. Central Time. Investors who would like to join the conference call are encouraged to pre-register for the conference call using the following link: http://dpregister.com/10113759. Callers who pre-register will be given a phone number and a unique PIN to gain immediate access to the call and bypass the live operator. Participants may pre-register at any time, including up to and after the call start time.

Investors without internet access or who are unable to pre-register can join the call by dialing (844) 340-4762 or (412) 717-9617.

The conference call will also be webcast at http://investors.michaels.com/. To listen to the live call, please go to the website at least 15 minutes before the call is scheduled to begin to register and download any necessary audio software. The webcast will be accessible for 30 days after the call. Additionally, a telephone replay will be available until December 14, 2017, by dialing (877) 344-7529 or (412) 317-0088, access code 10113759.

Non-GAAP Information

This press release includes non-GAAP measures including operating income excluding net non-recurring, inventory-related purchase accounting adjustments and integration expenses associated with the acquisition of Lamrite West (“Adjusted operating income”); net income excluding net non-recurring, inventory-related purchase accounting adjustments and integration expenses associated with the acquisition of Lamrite West and losses on early extinguishment of debt and refinancing costs, less related tax adjustments, (“Adjusted net income”); and diluted earnings per share excluding net non-recurring, inventory-related purchase accounting adjustments and integration expenses associated with the acquisition of Lamrite West and losses on early extinguishment of debt and refinancing costs, less related tax adjustments (“Adjusted diluted earnings per share”). The Company has reconciled these non-GAAP financial measures with the most directly comparable GAAP financial measures in a table accompanying this release. The Company believes that these non-GAAP financial measures not only provide its management with comparable financial data for internal financial analysis but also provide meaningful supplemental information to investors. Specifically, these non-GAAP financial measures allow investors to better understand the performance of the Company’s business and facilitate a meaningful evaluation of its quarterly and fiscal 2017 diluted earnings per common share and actual results on a comparable basis with its quarterly and fiscal 2016 results.

In evaluating these non-GAAP financial measures, investors should be aware that in the future the Company may incur expenses or be involved in transactions that are the same as or similar to some of the adjustments in this presentation. The Company’s presentation of non-GAAP financial measures should not be construed to imply that its future results will be unaffected by any such adjustments. The Company has provided this information as a means to evaluate the results of its ongoing operations. Other companies in the Company’s industry may calculate these items differently than it does. Each of these measures is not a measure of performance under GAAP and should not be considered as a substitute for the most directly comparable financial measures prepared in accordance with GAAP. Non-GAAP financial measures have limitations as analytical tools, and investors should not consider them in isolation or as a substitute for analysis of the Company’s results as reported under GAAP.

Forward-Looking Statements

This news release includes forward-looking statements which reflect management’s current views and estimates regarding the Company’s industry, business strategy, goals, and expectations concerning its market position, future operations, margins, profitability, capital expenditures, share repurchases, liquidity and capital resources, and other financial and operating information. The words “anticipate,” “assume,” “believe,” “continue,” “could,” “estimate,” “expect,” “forecast,” “future,” “guidance,” “imply,” “intend,” “may,” “outlook,” “plan,” “potential,” “predict,” “project,” and similar terms and phrases are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. The Company cannot assure investors that future developments affecting the Company will be those that it has anticipated. Actual results may differ materially from these expectations due to risks relating to the effect of economic uncertainty; substantial changes to fiscal and tax policies; our reliance on foreign suppliers; regulatory changes; the seasonality of our business; changes in customer demand; damage to the reputation of the Michaels brand or our private and exclusive brands; unexpected or unfavorable consumer responses to our promotional or merchandising programs; our failure to adequately maintain security and prevent unauthorized access to electronic and other confidential information; increased competition including internet-based competition from other retailers; and other risks and uncertainties including those identified under the heading “Risk Factors” in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”), which is available at www.sec.gov, and other filings that the Company may make with the SEC in the future. If one or more of these risks or uncertainties materialize, or if any of the Company’s assumptions prove incorrect, the Company’s actual results may vary in material respects from those projected in these forward-looking statements. Any forward-looking statement made by the Company in this news release speaks only as of the date on which the Company makes it. Factors or events that could cause the Company’s actual results to differ may emerge from time to time, and it is not possible for the Company to predict all of them. The Company does not undertake and specifically disclaims any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by any applicable securities laws.

About The Michaels Companies, Inc.:

A Fortune 500® Company, The Michaels Companies, Inc. is North America’s largest specialty provider of arts, crafts, framing, floral, wall décor, and seasonal merchandise for Makers and do-it-yourself home decorators.

As of October 28, 2017, the Company owned and operated 1,371 stores in 49 states and Canada under the brands Michaels, Aaron Brothers and Pat Catan’s. The Michaels Companies, Inc., also owns Artistree, a manufacturer of high quality custom and specialty framing merchandise, and Darice, a premier wholesale distributor in the craft, gift and decor industry. The Michaels Companies, Inc. produces a number of private brands including Recollections®, Studio Decor®, Bead Landing®, Creatology®, Ashland®, Celebrate It®, ArtMinds®, Artist’s Loft®, Craft Smart®, Loops & Threads®, Make Market®, Foamies®, LockerLookz®, Imagin8®, and Sticky Sticks®. Learn more about Michaels at www.michaels.com.

Investor Contact:
Kiley F. Rawlins
CFA
972-409-7404
Kiley.Rawlins@michaels.com

ICR, Inc.
Farah Soi
CFA
203-682-8200
Farah.Soi@icrinc.com

Caitlin Morahan
203-682-8200
Caitlin.Morahan@icrinc.com

Financial Media Contact:
ICR, Inc.
Jessica Liddell/ Julia Young
203-682-8200
Michaels@icrinc.com

Source: The Michaels Companies, Inc.

The Michaels Companies, Inc. announces new share repurchase program for up to $500 million of its common stock

IRVING, Texas, 2017-Jun-15 — /EPR Retail News/ — The Michaels Companies, Inc. (NASDAQ: MIK) today (June 15, 2017) announced that its Board of Directors has authorized a new share repurchase program for up to $500 million of its common stock. This announcement is in advance of the Company’s Analyst Day presentation which is scheduled to begin today, June 15, 2017, at 8:30am ET.

Chuck Rubin, Chairman and Chief Executive Officer, said, “We are pleased to announce a new $500 million share repurchase authorization today. The retail-leading profitability and high returns on invested capital we have generated have resulted in a track record of strong and consistent free cash flow. In the last three years alone we have generated more than $1.5 billion in cash from operations, of which $500 million has been allocated towards share repurchases, and over $500 million towards debt reduction.”

Shares may be repurchased from time to time on the open market, through block trades or otherwise. The share repurchase program does not have an expiration date, and the timing and number of repurchase transactions under the program will depend on market conditions, corporate considerations, debt agreements, and regulatory requirements.

A live webcast of today’s investor event will be available at http://investors.michaels.com/. The webcast will be accessible for 30 days after the event.

About The Michaels Companies, Inc.:

The Michaels Companies, Inc. is North America’s largest specialty provider of arts, crafts, framing, floral, wall décor, and seasonal merchandise for the hobbyist and do-it-yourself home decorator.

As of April 29, 2017, the Company owned and operated 1,364 stores in 49 states and Canada under the brands Michaels, Aaron Brothers, and Pat Catan’s. The Michaels Companies, Inc., also owns Artistree, a manufacturer of high quality custom and specialty framing merchandise, and Darice, a premier wholesale distributor in the craft, gift and decor industry. The Michaels Companies, Inc. produces a number of private brands including Recollections®, Studio Decor®, Bead Landing®, Creatology®, Ashland®, Celebrate It®, ArtMinds®, Artist’s Loft®, Craft Smart®, Loops & Threads®, Make Market®, Foamies®, LockerLookz®, Imagin8®, and Sticky Sticks®. Learn more about Michaels at www.michaels.com.

SOURCE: The Michaels Companies, Inc.

Investor Contact:
The Michaels Companies, Inc.
Kiley F. Rawlins
CFA, 972-409-7404
Kiley.Rawlins@michaels.com

ICR, Inc.
Farah Soi
203-682-8200
Farah.Soi@icrinc.com

Financial Media Contact:
ICR, Inc.
Jessica Liddell
203-682-8200

Julia Young
203-682-8208
Michaels@icrinc.com

News Provided by Acquire Media

Michaels Companies 1Q FY 2017 financial results: Net sales were $1.16 billion, flat with net sales in 1Q FY 2016

  • Total net sales of $1.16 billion; comparable store sales decreased 1.2%
  • Operating income of $139.3 million
  • Diluted EPS of $0.38
  • Fiscal 2017 guidance updated in response to weakening Canadian exchange rates

IRVING, Texas, 2017-Jun-07 — /EPR Retail News/ — The Michaels Companies, Inc. (NASDAQ: MIK) today (2017-06-06) announced financial results for the first quarter ended April 29, 2017.

“I am encouraged with the improving trend in customer transactions this quarter, especially given the headwinds we faced as we anniversaried last year’s coloring trend,” said Chuck Rubin, Chairman and Chief Executive Officer. “We continue to make progress on our 2017 and long term operational and strategic priorities, and we look forward to sharing more about our long-term goals at our upcoming analyst day.”

First Quarter Highlights

  • Net sales were $1.16 billion, flat with net sales in the first quarter of fiscal 2016. Sales from the operation of 12 additional stores (net of closures) was offset by a decline in comparable store sales. Comparable store sales decreased 1.2% driven by a decrease in average ticket. During the quarter, the Company opened three new Michaels stores and closed one Michaels store and five Aaron Brothers stores. At the end of the first quarter, the Company operated 1,225 Michaels stores, 104 Aaron Brothers stores, and 35 Pat Catan’s stores.
  • Gross profit increased 0.6% to $467.6 million, from $464.8 million in the first quarter of fiscal 2016. As a percentage of net sales, gross profit increased to 40.4% compared to 40.1% in the first quarter of fiscal 2016. The increase, as a percentage of net sales, was due to the comparison against $3.6 million of net non-recurring, inventory-related purchase accounting adjustments related to the acquisition of Lamrite West in the first quarter of fiscal 2016 and higher merchandise margin. These benefits were offset by higher inventory shrinkage and occupancy cost deleverage.
  • Selling, general and administrative expense, including store pre-opening costs, (“SG&A”) increased 2.8% to $328.4 million, or 28.3% of net sales, from $319.4 million, or 27.6% of net sales, in the first quarter of fiscal 2016. The increase in SG&A was primarily due to expenses associated with the operation of 12 additional stores (net of closures), marketing investments and higher health care expenses. The increase was partially offset by a comparison against $4.1 million of integration expenses recorded in the first quarter of fiscal 2016 related to the acquisition of Lamrite West.
  • Operating income decreased 4.2% to $139.3 million, or 12.0% of net sales, from $145.3 million, or 12.5% of net sales, in the first quarter of fiscal 2016. Excluding net non-recurring, inventory-related purchase accounting adjustments and integration expenses associated with the acquisition of Lamrite West, adjusted operating income for the first quarter of fiscal 2016 was $153.0 million.
  • Interest expense decreased $1.8 million to $30.4 million, from $32.2 million in the first quarter of fiscal 2016 due to interest rate savings from the refinancing of the revolving credit facility in the second quarter of fiscal 2016 and the refinancing of the term loan credit facility in the third quarter of fiscal 2016.
  • The effective tax rate was 33.7%, compared to 37.2% in the first quarter of fiscal 2016. The lower effective tax rate is primarily due to benefits realized from our direct sourcing initiatives and the recognition of $0.9 million of excess tax benefits associated with the adoption of a new accounting standard related to share-based compensation.
  • Net income increased 2.0% to $72.2 million, from $70.8 million in the first quarter of fiscal 2016. Excluding net non-recurring, inventory-related purchase accounting adjustments and integration expenses associated with the acquisition of Lamrite West, adjusted net income for the first quarter of fiscal 2016 was $75.5 million.
  • Diluted earnings per share increased 11.8% to $0.38, from $0.34 in the first quarter of fiscal 2016. Excluding net non-recurring, inventory-related purchase accounting adjustments and integration expenses associated with the acquisition of Lamrite West, adjusted diluted earnings per share in the first quarter of fiscal 2016 was $0.36.
  • The Company ended the first quarter of fiscal 2017 with $197.9 million in cash, $2.8 billion in debt and $727.6 million in availability under its asset-based revolving credit facility.
  • Inventory at the end of the first quarter increased 4.2% to $1,102.3 million, compared to $1,057.6 million in the first quarter of fiscal 2016. The increase in inventory was primarily due to additional inventory associated with the operation of 12 additional stores (net of closures). Average Michaels inventory on a per store basis, inclusive of distribution centers, in transit and inventory for the Company’s e-commerce site, increased 2.0% to $803,000, compared to $787,000 at the end of the first quarter of fiscal 2016.
  • Capital expenditures for the quarter were $15.7 million, compared to $14.7 million in the first quarter of fiscal 2016.
  • As previously announced, the Company purchased 4.8 million shares, or $99.3 million, of the Company’s common stock during the quarter, utilizing the remaining availability under the Company’s share repurchase authorization.

Second Quarter and Fiscal Year 2017 Outlook:

“Our operational expectations for the remainder of 2017 have not changed. We continue to believe that top-line trends will improve in the second half as we anniversary the 2016 coloring headwind, disruption created from store layout changes made in the third quarter last year, and the U.S. elections. However, the value of the Canadian dollar has weakened since we established our prior outlook, and we have adjusted our fiscal 2017 full year guidance to reflect our expectation this currency trend continues,” concluded Mr. Rubin.

For fiscal 2017, a 53-week year, the Company expects:

  • Total net sales growth of 2.2% to 3.7%, or 2.5% to 4.0% on a constant currency basis, including the impact of the 53rd week, which is planned to be approximately $80 million;
  • Comparable store sales to be down 0.2% to up 1.3%, or flat to up 1.5% on a constant currency basis;
  • To open 18 new stores, including 17 new Michaels stores and one new Pat Catan’s store, and close 11 Aaron Brothers stores;
  • Operating income to be in the range of $723 million to $756 million;
  • Interest expense to be approximately $131 million;
  • The effective tax rate to be between 34% and 35%;
  • Diluted earnings per common share to be between $2.03 and $2.15, based on diluted weighted average common shares of approximately 190 million; and
  • Capital expenditures to be between $125 million and $135 million.

For the second quarter of fiscal 2017, the Company expects:

  • Comparable store sales to decrease 0.5% to 1.5%, or be approximately flat to down 1.0% on a constant currency basis;
  • To open four new Michaels stores, relocate two Michaels stores and close four Aaron Brothers stores;
  • Operating income to be between $75 million and $80 million;
  • Interest expense to be approximately $30 million;
  • The effective tax rate to be between 34% and 35%; and
  • Diluted earnings per common share to be between $0.15 and $0.17, based on diluted weighted average common shares of 189 million.

Conference Call Information

A conference call to discuss first quarter financial results is scheduled for today, June 6, 2017, at 8:00 am Central Time. Investors who would like to join the conference call are encouraged to pre-register for the conference call using the following link: http://dpregister.com/10107108. Callers who pre-register will be given a phone number and a unique PIN to gain immediate access to the call and bypass the live operator. Participants may pre-register at any time, including up to and after the call start time.

Investors without internet access or who are unable to pre-register can join the call by dialing (866) 777-2509 or (412) 317-5413.

The conference call will also be webcast at http://investors.michaels.com/. To listen to the live call, please go to the website at least 15 minutes before the call is scheduled to begin to register and download any necessary audio software. The webcast will be accessible for 30 days after the call. Additionally, a telephone replay will be available until June 20, 2017, by dialing (877) 344-7529 or (412) 317-0088, access code 10107108.

Non-GAAP Information

This press release includes non-GAAP measures including Adjusted EBITDA; operating income excluding integration costs and non-recurring, inventory-related purchase accounting entries related to the acquisition of Lamrite West (“Adjusted operating income”); and net income excluding integration costs, non-recurring, inventory-related purchase accounting entries related to the acquisition of Lamrite West, (“Adjusted net income”); and earnings per share excluding integration costs, non-recurring, inventory-related purchase accounting entries related to the acquisition of Lamrite West (“Adjusted earnings per share”). The Company has reconciled these non-GAAP financial measures with the most directly comparable GAAP financial measures in a table accompanying this release. The Company believes that these non-GAAP financial measures not only provide its management with comparable financial data for internal financial analysis but also provide meaningful supplemental information to investors. Specifically, these non-GAAP financial measures allow investors to better understand the performance of the Company’s business and facilitate a meaningful evaluation of its quarterly and fiscal 2017 diluted earnings per common share and actual results on a comparable basis with its quarterly and fiscal 2016 results.

In evaluating these non-GAAP financial measures, investors should be aware that in the future the Company may incur expenses or be involved in transactions that are the same as or similar to some of the adjustments in this presentation. The Company’s presentation of non-GAAP financial measures should not be construed to imply that its future results will be unaffected by any such adjustments. The Company has provided this information as a means to evaluate the results of its ongoing operations. Other companies in the Company’s industry may calculate these items differently than it does. Each of these measures is not a measure of performance under GAAP and should not be considered as a substitute for the most directly comparable financial measures prepared in accordance with GAAP. Non-GAAP financial measures have limitations as analytical tools, and investors should not consider them in isolation or as a substitute for analysis of the Company’s results as reported under GAAP.

Forward-Looking Statements

This news release includes forward-looking statements which reflect management’s current views and estimates regarding the Company’s industry, business strategy, goals and expectations concerning its market position, future operations, margins, profitability, capital expenditures, share repurchases, liquidity and capital resources, and other financial and operating information. The words “anticipate”, “assume”, “believe”, “continue”, “could”, “estimate”, “expect”, “forecast”, “future”, “guidance”, “imply”, “intend”, “may”, “outlook”, “plan”, “potential”, “predict”, “project”, and similar terms and phrases are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. The Company cannot assure investors that future developments affecting the Company will be those that it has anticipated. Actual results may differ materially from these expectations due to risks relating to the effect of economic uncertainty, substantial changes to fiscal and tax policies; our reliance on foreign suppliers; regulatory changes; the seasonality of our business; changes in customer demand; damage to the reputation of the Michaels brand or our private and exclusive brands; unexpected or unfavorable consumer responses to our promotional or merchandising programs; our failure to adequately maintain security and prevent unauthorized access to electronic and other confidential information; increased competition including internet-based competition from other retailers; and other risks and uncertainties including those identified under the heading “Risk Factors” in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”), which is available at www.sec.gov, and other filings that the Company may make with the SEC in the future. If one or more of these risks or uncertainties materialize, or if any of the Company’s assumptions prove incorrect, the Company’s actual results may vary in material respects from those projected in these forward-looking statements. Any forward-looking statement made by the Company in this news release speaks only as of the date on which the Company makes it. Factors or events that could cause the Company’s actual results to differ may emerge from time to time, and it is not possible for the Company to predict all of them. The Company does not undertake and specifically disclaims any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by any applicable securities laws.

About The Michaels Companies, Inc.:

The Michaels Companies, Inc. is North America’s largest specialty provider of arts, crafts, framing, floral, wall décor, and seasonal merchandise for the hobbyist and do-it-yourself home decorator.

As of April 29, 2017, the Company owned and operated 1,364 stores in 49 states and Canada under the brands Michaels, Aaron Brothers, and Pat Catan’s. The Michaels Companies, Inc., also owns Artistree, a manufacturer of high quality custom and specialty framing merchandise, and Darice, a premier wholesale distributor in the craft, gift and decor industry. The Michaels Companies, Inc. produces a number of private brands including Recollections®, Studio Decor®, Bead Landing®, Creatology®, Ashland®, Celebrate It®, ArtMinds®, Artist’s Loft®, Craft Smart®, Loops & Threads®, Make Market®, Foamies®, LockerLookz®, Imagin8®, and Sticky Sticks®. Learn more about Michaels at www.michaels.com.

Investor Contact:
The Michaels Companies, Inc.
Kiley F. Rawlins
CFA
972-409-7404
Kiley.Rawlins@michaels.com

ICR, Inc.
Farah Soi
203-682-8200
Farah.Soi@icrinc.com

Financial Media Contact:
ICR, Inc.
Jessica Liddell
203-682-8200

Julia Young
203-682-8208
Michaels@icrinc.com

Source: The Michaels Companies, Inc.

The Michaels Companies presents 3Q 2016 financial results

  • Total net sales increased 5.0%; comparable store sales decreased 2.0%
  • Operating income of $146.3 million compared to $155.9 million in fiscal 2015; adjusted operating income of $148.6 million
  • Diluted EPS of $0.37 compared to $0.37 in fiscal 2015; adjusted diluted EPS of $0.40
  • Management provides updated guidance for fiscal 2016 adjusted diluted EPS to be between $1.86 and $1.90 compared to $1.72 in fiscal 2015
  • Board of Directors Increases Share Repurchase Authorization by $300 million

IRVING, Texas, 2016-Dec-09 — /EPR Retail News/ — The Michaels Companies, Inc. (NASDAQ: MIK) today (2016-12-06) announced financial results for the third quarter ended October 29, 2016.

“In a tough environment, I am encouraged we continued to increase adjusted net income, gain market share, and invest to support our long-term strategy. We are disappointed our plans did not result in expected comp and earnings growth, and we have taken steps to position the fourth quarter for better performance,” said Chuck Rubin, Chairman and Chief Executive Officer. “We are the leader in the channel, and we have a strong financial model with consistent cash flows. Although the industry may be facing some temporary headwinds, we intend to leverage our leadership position to continue to expand our market share while continuing to return cash to shareholders.”

Third Quarter Highlights

  • Net sales increased 5.0% to $1.227 billion, from $1.168 billion in the third quarter of fiscal 2015. The increase was primarily a result of the acquisition of Lamrite West in February 2016 and sales from 19 additional stores (net of closures). Comparable store sales decreased 2.0% driven by a decrease in customer transactions, which was partially offset by an increase in average ticket.
  • Gross profit increased 0.2% to $466.6 million, from $465.6 million in the third quarter of fiscal 2015. As a percentage of net sales, gross profit was 38.0% compared to 39.8% in the third quarter of fiscal 2015. The decrease, as a percentage of net sales, was due to a higher mix of sales from merchandise sold on promotion, the timing of distribution-related costs, and the acquisition of Lamrite West, including the impact of Lamrite West’s wholesale business, which has a lower gross margin rate than the Michaels business. The decrease, as a percentage of sales, was partially offset by improved sourcing and pricing efficiencies.
  • Selling, general and administrative expense, including store pre-opening costs, (“SG&A”) increased 3.4% to $320.3 million, or 26.1% of sales, from $309.7 million, or 26.5% of sales, in the third quarter of fiscal 2015. The increase in SG&A was primarily due to $17.3 million associated with the acquisition of Lamrite West, including $1.6 million of integration expenses; expenses associated with the operation of 19 additional stores (net of closures); and higher professional fees. The increase was partially offset by a decrease in incentive-based compensation and lower marketing expense.
  • Operating income was $146.3 million, compared to $155.9 million in the third quarter of fiscal 2015. As a percent of net sales, operating income was 11.9% compared to 13.3% in the third quarter of fiscal 2015. Excluding net non-recurring, inventory-related purchase accounting adjustments and integration expenses associated with the acquisition of Lamrite West, adjusted operating income was $148.6 million, or 12.1% of net sales.
  • Interest expense decreased $2.3 million to $31.5 million, from $33.8 million in the third quarter of fiscal 2015 due to a voluntary principal payment of $150.0 million on the term loan credit facility in the fourth quarter of fiscal 2015 and interest rate savings from the refinancing of the revolving credit facility. The Company recorded a loss on the early extinguishment of debt of $6.9 million during the third quarter of fiscal 2016 related to the refinancing of the term loan credit facility in September 2016.
  • The effective tax rate was 29.0% for the third quarter of fiscal 2016, compared to 37.0% for the third quarter of fiscal 2015. The lower effective tax rate is primarily due to benefits realized from our direct sourcing initiatives, certain federal tax credits and a decrease in state taxes.
  • Net income was $76.5 million, compared to $76.8 million in the third quarter of fiscal 2015. As a percent of net sales, net income was 6.2% compared to 6.6% in the third quarter of fiscal 2015. Excluding net non-recurring, inventory-related purchase accounting adjustments, integration expenses associated with the acquisition of Lamrite West, and losses on early extinguishments of debt and refinancing costs, adjusted net income for the third quarter of fiscal 2016 was $82.1 million, or 6.7% of net sales.
  • Diluted earnings per common share was $0.37, flat with the third quarter of fiscal 2015. Excluding net non-recurring, inventory-related purchase accounting adjustments, integration expenses associated with the acquisition of Lamrite West, and losses on early extinguishments of debt and refinancing costs, adjusted diluted earnings per common share for the third quarter was $0.40.
  • During the third quarter of fiscal 2016, the Company opened 14 new Michaels stores, compared with 10 new Michaels store openings in the third quarter of 2015. At the end of the third quarter, the Company operated 1,221 Michaels stores, 112 Aaron Brothers stores, and 35 Pat Catan’s stores.
  • The Company ended the third quarter of fiscal 2016 with $150.0 million in cash and cash equivalents, $2.8 billion in debt and $792.7 million in availability under its asset-based revolving credit facility.
  • Inventory at the end of the third quarter increased $117.0 million, or 9.2%, to $1.394 billion, compared to $1.277 billion at the end of the third quarter of fiscal 2015. The increase in inventory was due to $95.4 million in additional inventory from the acquisition of Lamrite West. Average Michaels inventory on a per store basis, inclusive of distribution centers, in transit and inventory for the Company’s e-commerce site, was flat compared to average inventory per store at the end of the third quarter of fiscal 2015.
  • During the quarter, the Company purchased 1.2 million shares, or $29.5 million, under its share repurchase authorization, previously announced in March 2016.

Share Repurchase Authorization

In December 2016, the Board of Directors authorized the Company to purchase, from time to time, as market conditions warrant, $300 million of the Company’s common stock, which is in addition to its prior repurchase authorization. As of December 6, 2016, the total authorization for future repurchases was approximately $343.5 million. The share-repurchase program does not have an expiration date, and the timing and number of repurchase transactions under the program will depend on market conditions, corporate considerations, debt agreements, and regulatory requirements.

Fourth Quarter and Fiscal Year 2016 Outlook:

For the fourth quarter of fiscal 2016, the Company expects:

  • Comparable store sales growth to be flat to down 1.5%;
  • Adjusted operating income of $335 million to $348 million;
  • Interest expense to be approximately $31 million;
  • The effective tax rate to be approximately 36%; and
  • Adjusted diluted earnings per common share of $0.94 to $0.98, based on diluted weighted average common shares of 204 million.

For fiscal 2016, the Company expects:

  • Comparable store sales to be approximately flat;
  • Total net sales growth, including revenues from Lamrite West, of 5.8% to 6.2%;
  • Approximately 1.3% sales growth from 22 net new store openings, including 3 new Pat Catan’s stores;
  • Lamrite West to generate $225 million to $250 million in revenues;
  • Adjusted operating income to be in the range of $724 million to $737 million, excluding approximately $14 million to $15 million of integration costs and net non-recurring, inventory-related purchase accounting entries;
  • Annual interest expense to be approximately $127 million;
  • The effective tax rate to be approximately 35%;
  • Adjusted diluted earnings per common share to be between $1.86 and $1.90, based on diluted weighted average common shares of approximately 207 million; and
  • Capital expenditures of between $115 million and $125 million.

Conference Call Information

A conference call to discuss third quarter financial results is scheduled for today, December 6, 2016, at 8:00 am CST. Analysts and investors who would like to join the conference call are encouraged to pre-register for the conference call using the following link: http://dpregister.com/10096593. Callers who pre-register will be given a conference call passcode and a unique PIN to gain immediate access to the call and bypass the live operator. Participants may pre-register at any time, including up to and after the call start time. Investors without internet access or who are unable to pre-register can join the call by dialing (866) 777-2509 or (412)-317-5413.

The conference call will also be webcast at http://investors.michaels.com/. To listen to the live call, please go to the website at least 15 minutes before the call is scheduled to begin to register and download any necessary audio software. The webcast will be accessible for 30 days after the call. Additionally, a telephone replay will be available untilDecember 13, 2016, by dialing (877) 344-7529 or (412) 317-0088, access code 10096593.

Non-GAAP Information

This press release includes non-GAAP measures including Adjusted EBITDA; operating income excluding integration costs and non-recurring, inventory-related purchase accounting entries related to the acquisition of Lamrite West (“Adjusted operating income”); net income excluding integration costs, non-recurring, inventory-related purchase accounting entries related to the acquisition of Lamrite West, and losses on early extinguishments of debt and refinancing costs (“Adjusted net income”); and earnings per share excluding integration costs, non-recurring, inventory-related purchase accounting entries related to the acquisition of Lamrite West, and losses on early extinguishments of debt and refinancing costs (“Adjusted earnings per share”). The Company has reconciled these non-GAAP financial measures with the most directly comparable GAAP financial measures in a table accompanying this release. The Company believes that these non-GAAP financial measures not only provide its management with comparable financial data for internal financial analysis but also provide meaningful supplemental information to investors. Specifically, these non-GAAP financial measures allow investors to better understand the performance of the Company’s business and facilitate a meaningful evaluation of its quarterly and fiscal 2016 diluted earnings per common share and actual results on a comparable basis with its quarterly and fiscal 2015 results.

In evaluating these non-GAAP financial measures, investors should be aware that in the future the Company may incur expenses or be involved in transactions that are the same as or similar to some of the adjustments in this presentation. The Company’s presentation of non-GAAP financial measures should not be construed to imply that its future results will be unaffected by any such adjustments. The Company has provided this information as a means to evaluate the results of its ongoing operations. Other companies in the Company’s industry may calculate these items differently than it does. Each of these measures is not a measure of performance under GAAP and should not be considered as a substitute for the most directly comparable financial measures prepared in accordance with GAAP. Non-GAAP financial measures have limitations as analytical tools, and investors should not consider them in isolation or as a substitute for analysis of the Company’s results as reported under GAAP.

Forward-Looking Statements

This news release includes forward-looking statements which reflect management’s current views and estimates regarding the Company’s industry, business strategy, goals and expectations concerning its market position, future operations, margins, profitability, capital expenditures, share repurchases, liquidity and capital resources, and other financial and operating information. The words “anticipate,” “assume,” “believe,” “continue,” “could,” “estimate,” “expect,” “forecast,” “future,” “guidance,” “imply,” “intend,” “may,” “outlook,” “plan,” “potential,” “predict,” “project,” and similar terms and phrases are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. The Company cannot assure investors that future developments affecting the Company will be those that it has anticipated. Actual results may differ materially from these expectations due to risks relating to the effect of economic uncertainty, risks associated with our substantial outstanding indebtedness of $2.8 billion, changes in customer demand, risks relating to our failure to adequately maintain security and prevent unauthorized access to electronic and other confidential information, increased competition including internet-based competition from other retailers, risks relating to our reliance on foreign suppliers, risks relating to how well we manage our business, risks related to our ability to open new stores and increase comparable store sales growth, damage to the reputation of the Michaels brand or our private and exclusive brands, risks associated with executing or integrating an acquisition, a business combination or major business initiative, and other risks and uncertainties including those identified under the heading “Risk Factors” in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”), which is available at www.sec.gov, and other filings that the Company may make with the SEC in the future. If one or more of these risks or uncertainties materialize, or if any of the Company’s assumptions prove incorrect, the Company’s actual results may vary in material respects from those projected in these forward-looking statements. Any forward-looking statement made by the Company in this news release speaks only as of the date on which the Company makes it. Factors or events that could cause the Company’s actual results to differ may emerge from time to time, and it is not possible for the Company to predict all of them. The Company does not undertake and specifically disclaims any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by any applicable securities laws.

About The Michaels Companies, Inc.:

The Michaels Companies, Inc. is North America’s largest specialty provider of arts, crafts, framing, floral, wall décor, and seasonal merchandise for the hobbyist and do-it-yourself home decorator. As of October 29, 2016, the Company owned and operated 1,368 stores in 49 states and Canada under the brands Michaels, Aaron Brothers, and Pat Catan’s. The Michaels Companies, Inc., also owns Artistree, a manufacturer of high quality custom and specialty framing merchandise, and Darice, a premier wholesale distributor in the craft, gift and decor industry. The Michaels Companies, Inc. produces a number of exclusive private brands including Recollections®, Studio Decor™, Bead Landing®, Creatology®, Ashland®, Celebrate It®, Art Minds®, Artist’s Loft®, Craft Smart®, Loops & Threads®, Make Market®, Foamies®, LockerLookz®, and Sticky Sticks®. Learn more about Michaels at www.michaels.com.

Investor Contacts:
The Michaels Companies, Inc.
Kiley F. Rawlins, CFA
972-409-7404
Kiley.Rawlins@michaels.com

ICR, Inc.
Farah Soi / Anne Rakunas
203-682-8200
Farah.Soi@icrinc.com / Anne.Rakunas@icrinc.com

Financial Media Contact:
ICR, Inc.
Jessica Liddell
203-682-8200

Julia Young
203-682-8208
Michaels@icrinc.com

Source: The Michaels Companies, Inc.

The Michaels Companies, Inc. to present at the Goldman Sachs 23rd Annual Global Retailing Conference on September 7, 2016

IRVING, Texas, 2016-Sep-05 — /EPR Retail News/ — The Michaels Companies, Inc. (NASDAQ:MIK) today (Sept. 01, 2016) announced that it will participate in the Goldman Sachs 23rd Annual Global Retailing Conference, which will be held at The Plaza Hotel in New York City, New York. Chuck Rubin, Chairman and CEO, and Denise Paulonis, EVP – Chief Financial Officer, are scheduled to present on Wednesday, September 7, 2016, at 8:50 a.m., Eastern Time.

The audio portion of the presentation will be webcast live at http://investors.michaels.com/, and an archived replay will be available for 30 days.

About The Michaels Companies, Inc.
The Michaels Companies, Inc. is North America’s largest specialty provider of arts, crafts, framing, floral, wall décor, and seasonal merchandise for the hobbyist and do-it-yourself home decorator.  As of July 30, 2016, the Company owned and operated 1,356 stores in 49 states and Canada under the brands Michaels, Aaron Brothers, and Pat Catan’s.  The Michaels Companies, Inc., also owns Artistree, a manufacturer of high quality custom and specialty framing merchandise, and Darice, a premier wholesale distributor in the craft, gift and decor industry.  The Michaels Companies, Inc. produces a number of exclusive private brands including Recollections®, Studio Decor™, Bead Landing®, Creatology®, Ashland®, Celebrate It®, Art Minds®, Artist’s Loft®, Craft Smart®, Loops & Threads®, Make Market®, Foamies®, LockerLookz®, and Sticky Sticks®. Learn more about Michaels at www.michaels.com.

Investor Contact:
Kiley F. Rawlins, CFA
972.409.7404
Kiley.Rawlins@michaels.com

ICR, Inc.
Farah Soi / Anne Rakunas
203.682.8200
Farah.Soi@icrinc.com / Anne.Rakunas@icrinc.com

Financial Media Contact:
ICR, Inc.
Michael Fox / Jessica Liddell
203.682.8200 / 203.682.8208

Source: Michaels Stores, Inc./GLOBE NEWSWIRE

The Michaels Companies announces financial results for the first quarter ended April 30, 2016

  • Total net sales increased 7.5% to $1.16 billion, or 8.1% on a constant currency basis
  • Comparable store sales increased 0.9%, or 1.4% on a constant currency basis
  • Operating income increased 0.9% to $145.3 million; adjusted operating income increased 6.3% to $153.0 million
  • Diluted EPS increased 6.3% to $0.34; adjusted diluted EPS increased 12.5% to $0.36

IRVING, Texas, 2016-Jun-09 — /EPR Retail News/ — The Michaels Companies, Inc. (NASDAQ:MIK) today announced financial results for the first quarter ended April 30, 2016.

“I am pleased with our overall financial performance for the first quarter,” said Chuck Rubin, Chairman and Chief Executive Officer. “From a comparable store sales standpoint, the quarter got off to a strong start. We saw a very positive customer response to our Easter and Spring assortment before trends softened in April, resulting in a comp shortfall for the quarter versus our initial expectations.  Despite this, we expanded gross margins and leveraged expenses in the core Michaels business, driving adjusted earnings per share to the upper end of our guidance range, representing a 12.5% increase over the prior year. In addition we made progress against each of our initiatives, including the integration of Lamrite West, and we continued to make strategic investments in support of our Vision 2020 strategy.”

First Quarter Highlights

  • Net sales increased 7.5%, or 8.1% on a constant currency basis, to $1.16 billion, from $1.08 billion in the first quarter of fiscal 2015.  The increase was primarily a result of the acquisition of Lamrite West in February 2016 and sales from 24 additional stores (net of closures) during the quarter.  Comparable store sales increased 0.9%, or 1.4% on a constant currency basis.
  • Gross profit increased 5.2% to $464.8 million, from $441.8 million in the first quarter of fiscal 2015.  As a percentage of net sales, gross profit decreased to 40.1% compared to 41.0% in the first quarter of fiscal 2015. The decrease, as a percentage of net sales, was due to the acquisition of Lamrite West, including: the impact of Lamrite West’s wholesale business, which has a lower gross margin rate than the Michaels business; $3.6 million of net non-recurring, inventory-related purchase accounting adjustments; and the timing of profit recognition for the product Michaels procures through Lamrite West.
  • Selling, general and administrative expense, including store pre-opening costs, (“SG&A”) increased 7.3% to $319.4 million, from $297.8 million in the first quarter of fiscal 2015. The increase in SG&A was primarily due to $19.3 million associated with the acquisition of Lamrite West, including $4.1 million of integration expenses; expenses associated with operating 24 additional stores (net of closures); and increased advertising expense.  This increase was partially offset by lower professional fees.  As a percent of net sales, SG&A was flat compared to the first quarter of fiscal 2015.
  • Operating income increased 0.9% to $145.3 million, from $144.0 million in the first quarter of fiscal 2015.  As a percent of net sales, operating income decreased 82 basis points to 12.5% compared to 13.4% in the first quarter of fiscal 2015. The decrease was primarily due to the acquisition of Lamrite West. Excluding net non-recurring, inventory-related purchase accounting adjustments and integration expenses associated with the acquisition of Lamrite West, adjusted operating income increased 6.3% to $153.0 million, or 13.2% of net sales.
  • Interest expense decreased $5.6 million to $32.2 million, from $37.8 million in the first quarter of fiscal 2015 due to the early redemption of $180.9 million of the 7.50%/8.25% PIK Toggle Notes during the second quarter of fiscal 2015 and a voluntary principal payment of $150.0 million on the Restated Term Loan Credit Facility in the fourth quarter of fiscal 2015.
  • Net income increased 6.0% to $70.8 million, from $66.7 million in the first quarter of fiscal 2015. Excluding net non-recurring, inventory-related purchase accounting adjustments and integration expenses associated with the acquisition of Lamrite West, adjusted net income increased 13.2% to $75.5 million.
  • Diluted earnings per share increased 6.3% to $0.34, from $0.32 in the first quarter of fiscal 2015.  Excluding net non-recurring, inventory-related purchase accounting adjustments and integration expenses associated with the acquisition of Lamrite West, adjusted diluted earnings per share increased 12.5% to $0.36.
  • During the first quarter of fiscal 2016, the Company opened 11 new Michaels stores and one new Pat Catan’s store and closed three Michaels stores and two Aaron Brothers stores, compared with ten new Michaels store openings, one Michaels store closure and two Aaron Brothers store closures in the first quarter of 2015. At the end of the first quarter, the Company operated 1,204 Michaels stores, 115 Aaron Brothers stores, and 33 Pat Catan’s stores.
  • The Company ended the first quarter of fiscal 2016 with $171.9 million in cash, $2,785.9 million in debt and $585.5 million in availability under its asset-based revolving credit facility. In May 2016, the Company entered into an amended and restated credit agreement to amend various terms of its Restated Revolving Credit Facility (“Amended Revolving Credit Facility”). The Amended Revolving Credit Facility provides for senior secured financing of up to $850.0 million maturing on May 25, 2021.
  • Inventory at the end of the first quarter increased 7.3% to $1,057.6 million, compared to $985.4 million in the first quarter of fiscal 2015.  The increase in inventory was due to $82.0 million in additional inventory from the acquisition of Lamrite West.  Average Michaels inventory on a per store basis, inclusive of distribution centers, in transit and inventory for the Company’s e-commerce site, decreased 2.8% to $787,000, compared to $810,000 at the end of the first quarter of fiscal 2015.  This decrease in inventory per store was primarily a result of higher inventory in fiscal 2015 resulting from the early receipt of seasonal merchandise in an effort to mitigate the impact of West Coast port issues in early 2015.
  • Capital expenditures for the quarter were $14.7 million, compared to $35.0 million in the first quarter of fiscal 2015.  The decline in capital expenditures was primarily due to the timing of new and relocated stores and the timing of capital investments in existing stores as compared to the first quarter of fiscal 2015.
  • During the quarter, the Company purchased $59.3 million, or 2.3 million shares, under its share repurchase authorization. The total remaining authorization for future repurchases is approximately $141 million.  The share repurchase program does not have an expiration date, and the timing and number of repurchase transactions under the program will depend on market conditions, corporate considerations, debt agreements, and regulatory requirements.

Executive Management Update

The Company announced today that Charles M. Sonsteby has been named to the newly created role of Vice Chairman of The Michaels Companies, Inc.  Mr. Sonstebycurrently serves as Chief Administrative Officer and Chief Financial Officer.  In this new role, Mr. Sonsteby will assume executive responsibility for the growth and continued integration of Lamrite West, in addition to his current responsibilities.  The Company has launched a search for a new Chief Financial Officer.  Mr. Sonsteby will continue to serve as Chief Financial Officer until a successor has been named.

Second Quarter and Fiscal Year 2016 Outlook:

“As we turn to the balance of the year, we’ve seen nothing that warrants a change in our annual outlook,” concluded Mr. Rubin.  “While we face some unique, but anticipated, headwinds in the second quarter, we continue to expect to see the beneficial results of our strategic investments on profitability as we move through the second half of fiscal 2016.”

For fiscal 2016, the Company continues to expect:

  • Comparable store sales to increase 2.2% to 2.7%;
  • Total net sales growth, including revenues from Lamrite West, of 8.0% to 9.0%;
  • Approximately 1.3% sales growth from 26 net new store openings, including 3 new Pat Catan’s stores;
  • Lamrite West to generate $225 million to $250 million in revenues;
  • Operating income to be in the range of $761 million to $786 million, excluding approximately $11 million to $12 million of integration costs and net non-recurring, inventory-related purchase accounting entries;
  • Annual interest expense to be approximately $129 million;
  • The effective tax rate to be approximately 37.0%;
  • Diluted earnings per common share to be between $1.89 and $1.97, based on diluted weighted average common shares of approximately 209 million; and
  • Capital expenditures of between $125 million and $135 million.

For the second quarter of fiscal 2016, the Company expects:

  • Comparable store sales growth of 0.4% to 1.4%;
  • Approximately 3 net new store openings;
  • Operating income of $87 million to $93 million;
  • Interest expense to be approximately $32 million;
  • The effective tax rate to be approximately 37.1%; and
  • Diluted earnings per common share of $0.16 to $0.18, based on diluted weighted average common shares of 208 million.

The outlook for fiscal 2016 includes approximately $0.015 of favorable earnings per share impact related to 2.3 million shares repurchased in the first quarter of fiscal 2016 and includes the impact of unfavorable Canadian exchange rates.

Conference Call Information

A conference call to discuss first quarter financial results is scheduled for today, June 7, 2016, at 8:00 am Central Time. Investors and analysts interested in participating in the call are invited to dial (877) 303-9132, conference ID# 98562042, approximately 10 minutes prior to the start of the call. The conference call will also be webcast at http://investors.michaels.com/. To listen to the live call, please go to the website at least 15 minutes early to register and download any necessary audio software. The webcast will be accessible for 30 days after the call.  A telephone replay will be available until June 14, 2016, by dialing (855) 859-2056, conference ID# 98562042.

Non-GAAP Information

This press release includes non-GAAP measures including Adjusted EBITDA, operating income excluding integration benefits and costs and non-recurring, inventory-related purchase accounting entries related to the acquisition of Lamrite West (“Adjusted operating income”), net income excluding integration benefits and costs and non-recurring, inventory-related purchase accounting entries related to the acquisition of Lamrite West (“Adjusted net income”), and earnings per share excluding integration benefits and costs and non-recurring, inventory-related purchase accounting entries related to the acquisition of Lamrite West (“Adjusted earnings per share”).  The Company has reconciled these non-GAAP financial measures with the most directly comparable GAAP financial measures in a table accompanying this release. The Company believes that these non-GAAP financial measures not only provide its management with comparable financial data for internal financial analysis but also provide meaningful supplemental information to investors. Specifically, these non-GAAP financial measures allow investors to better understand the performance of the Company’s business and facilitate a meaningful evaluation of its quarterly and fiscal 2016 diluted earnings per common share and actual results on a comparable basis with its quarterly and fiscal 2015 results.

In evaluating these non-GAAP financial measures, investors should be aware that in the future the Company may incur expenses or be involved in transactions that are the same as or similar to some of the adjustments in this presentation. The Company’s presentation of non-GAAP financial measures should not be construed to imply that its future results will be unaffected by any such adjustments. The Company has provided this information as a means to evaluate the results of its ongoing operations. Other companies in the Company’s industry may calculate these items differently than it does. Each of these measures is not a measure of performance under GAAP and should not be considered as a substitute for the most directly comparable financial measures prepared in accordance with GAAP. Non-GAAP financial measures have limitations as analytical tools, and investors should not consider them in isolation or as a substitute for analysis of the Company’s results as reported under GAAP.

Forward-Looking Statements

This news release includes forward-looking statements which reflect management’s current views and estimates regarding the Company’s industry, business strategy, goals and expectations concerning its market position, future operations, margins, profitability, capital expenditures, share repurchases, liquidity and capital resources, and other financial and operating information. The words “anticipate”, “assume”, “believe”, “continue”, “could”, “estimate”, “expect”, “forecast”, “future”, “guidance”, “imply”, “intend”, “may”, “outlook”, “plan”, “potential”, “predict”, “project”, and similar terms and phrases are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. The Company cannot assure investors that future developments affecting the Company will be those that it has anticipated. Actual results may differ materially from these expectations due to risks relating to the effect of economic uncertainty, risks associated with our substantial outstanding indebtedness of $2.8 billion, changes in customer demand, risks relating to our failure to adequately maintain security and prevent unauthorized access to electronic and other confidential information, increased competition including internet-based competition from other retailers, risks relating to our reliance on foreign suppliers, risks relating to how well we manage our business, risks related to our ability to open new stores and increase comparable store sales growth, damage to the reputation of the Michaels brand or our private and exclusive brands, risks associated with executing or integrating an acquisition, a business combination or major business initiative, and other risks and uncertainties including those identified under the heading “Risk Factors” in the Company’s Form 10-K filed with the Securities and Exchange Commission(“SEC”), which is available at www.sec.gov, and other filings that the Company may make with the SEC in the future. If one or more of these risks or uncertainties materialize, or if any of the Company’s assumptions prove incorrect, the Company’s actual results may vary in material respects from those projected in these forward-looking statements. Any forward-looking statement made by the Company in this news release speaks only as of the date on which the Company makes it. Factors or events that could cause the Company’s actual results to differ may emerge from time to time, and it is not possible for the Company to predict all of them. The Company does not undertake and specifically disclaims any obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by any applicable securities laws.

About The Michaels Companies, Inc.:
The Michaels Companies, Inc. is North America’s largest specialty provider of arts, crafts, framing, floral, wall décor, and seasonal merchandise for the hobbyist and do-it-yourself home decorator.  As of April 30, 2016, the Company owned and operated 1,352 stores in 49 states and Canada under the brands Michaels, Aaron Brothers, and Pat Catan’s.  The Michaels Companies, Inc., also owns Artistree, a manufacturer of high quality custom and specialty framing merchandise, and Darice, a premier wholesale distributor in the gift and decor industry.  The Michaels Companies, Inc. produces a number of exclusive private brands including Recollections®, Studio Decor™, Bead Landing®, Creatology®, Ashland®, Celebrate It®, Art Minds®, Artist’s Loft®, Craft Smart®, Loops & Threads®, Make Market®, Foamies®, LockerLookz®, and Sticky Sticks®. Learn more about Michaels at www.michaels.com.

Investor Contact:
Kiley F. Rawlins, CFA
972.409.7404
Kiley.Rawlins@michaels.com

ICR, Inc.
Farah Soi/Anne Rakunas
203.682.8200
Farah.Soi@icrinc.com/Anne.Rakunas@icrinc.com

or

Financial Media Contact:
ICR, Inc.
Michael Fox/ Jessica Liddell
203.682.8200/ 203.682.8208
Michaels@icrinc.com

 

Source: Michaels Stores Inc.

The Michaels Companies, Inc. announces the acquisition of Lamrite West, Inc. for $150 million

IRVING, Texas, 2016-Feb-04 — /EPR Retail News/ — The Michaels Companies, Inc. (NASDAQ:MIK) today announced that it has acquired Lamrite West, Inc. and certain of its affiliates and subsidiaries (“Lamrite West”), an international wholesale and retail supplier of arts and crafts, for $150.0 million. The Company anticipates that the impact of the acquisition, excluding purchase accounting adjustments and integration expenses, will be neutral to diluted earnings per share in fiscal 2016 and accretive to diluted earnings per share in fiscal 2017. The Company will provide more detail with the fourth quarter and fiscal 2015 earnings release.

“The acquisition of Lamrite West represents a unique opportunity to add a business to the Michaels portfolio that will strategically enhance our private brand development capabilities, accelerate our direct sourcing initiatives, and strengthen our business-to-business capabilities,” said Chuck Rubin, Chairman and Chief Executive Officer. “As CEO of Lamrite West, Mike Catanzarite has built a strong leadership team and cultivated a pervasive culture of customer service. Together, we will serve our combined customer base better to help us achieve our long-term growth goals.”

“I have long admired the Michaels team, and with the full weight of Michaels resources, I know that our employees and customers will realize tangible benefits from this combination,” said Michael Catanzarite, Chief Executive Officer of Lamrite West.

Lamrite West will maintain its team and facilities in Strongsville, Ohio and will continue to operate as a distinct business within Michaels. Michael Catanzarite, whose father founded the company in 1954, will continue to lead the team as CEO of Lamrite West and will serve on Michaels executive committee.

Fiscal 2015 Earnings Results:

The Company plans to report its fourth quarter and fiscal 2015 results before the market opens on Thursday, March 17, 2016.

Forward-Looking Statements:

Any forward-looking statement made by the Company in this news release speaks only as of the date on which the Company makes it. Factors or events that could cause the Company’s actual results to differ may emerge from time to time, including those identified under the heading “Risk Factors” included in the Company’s Form 10-K which was filed with the Securities and Exchange Commission (“SEC”) on March 19, 2015, which is available at www.sec.gov, and other filings that the Company may make with the SEC in the future. The Company does not undertake and specifically disclaims any obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by any applicable securities laws.

About The Michaels Companies, Inc.:
The Michaels Companies, Inc. is North America’s largest specialty retailer of arts and crafts. As of October 31, 2015, the Company owned and operated 1,196 Michaels stores in 49 states and Canada and 118 Aaron Brothers stores, and produces 12 exclusive private brands including Recollections®, Studio Decor®, Bead Landing®, Creatology®, Ashland®, Celebrate It®, Art Minds®, Artist’s Loft®, Craft Smart®, Loops & Threads®, Imagin8® and Make MarketTM.

Investor:
Kiley F. Rawlins, CFA
972.409.7404
Kiley.Rawlins@michaels.com

ICR, Inc.
Farah Soi/Anne Rakunas
203.682.8200
Farah.Soi@icrinc.com/Anne.Rakunas@icrinc.com

or

Media:
ICR, Inc.
Michael Fox/Kristina Jorge
203.682.8200/ 646.277.1234
Michaels@icrinc.com

Source: Michaels Stores Inc.

News Provided by Acquire Media

Crafts retailer Michaels and online DIY marketplace Darby Smart to make crafting simpler and more accessible to everyone

Craft Leader and Online DIY Marketplace Join Forces to Make Crafting Easier, More Accessible for All

IRVING, Texas, 2015-8-20— /EPR Retail News/ — Michaels (Nasdaq:MIK), the world’s largest arts and crafts retailer and top online crafting resource, has partnered with trend-driven online DIY marketplace Darby Smart to make crafting simpler and more accessible to everyone.

The partnership will launch in September to bring the best of Michaels – including its huge variety of innovative products and craft industry leadership – to Darby Smart, and the best of Darby Smart’s on-trend projects and online community to Michaels.

“Aligning with Darby Smart is another way to connect with novice crafters and make it easy for them to engage in creating projects, with simple step-by-step instructions that help them achieve great results,” said Michaels CEO Chuck Rubin. “Michaels and Darby Smart share a deep commitment to the maker movement, and this partnership helps us bring more people into the fold with accessible, modern, designer projects that anyone can make.”

Darby Smart, known for its innovative DIY ideas and active online community, will gain exposure to the more than 9 million people who visit Michaels.com each month through a link on the Michaels site’s project page. Darby Smart users will have access to more craft categories and a wider variety of supplies through the partnership, while Michaels customers will have access to the Darby Smart digital shopping lists, ideas and tutorials.

“I’ve been shopping at Michaels for many years, and there’s no other playground like it for the creative,” said Darby Smart co-founder and CEO Nicole Shariat Farb. “Our community will benefit from Michaels’ unique product offerings that are broad in category, deep in selection and high in quality, and we welcome Michaels customers to our unique, online maker community.”

Initially, the partnership will focus on easy, beautiful projects for personalized fall, Thanksgiving and holiday decorating, entertaining and giving.

About The Michaels Companies, Inc.
The Michaels Companies, Inc., is North America’s largest specialty retailer of arts and crafts. As of May 2, 2015, the Company owns and operates 1,177 Michaels stores in 49 states and Canada and 118 Aaron Brothers stores, and produces 12 exclusive private brands including Recollections®, Studio Decor®, Bead Landing®, Creatology®, Ashland®, Celebrate It®, ArtMinds®, Artist’s Loft®, Craft Smart®, Loops & Threads®, Imagin8® and Make Market™. Visit www.Michaels.com for additional information.

About Darby Smart
Darby Smart is the destination for DIY -whether it’s made by you or made for you, Darby Smart allows you to browse, share and shop everything DIY. On Darby Smart, you can browse unlimited ideas, share what you’ve made and shop supplies and handmade items. Darby Smart connects DIY enthusiasts across the globe, from aspiring crafters to leading DIYers. With a rapidly growing and passionate community, Darby Smart is the place to find endless DIY inspiration, view tutorials, connect with others and shop products. Founded and headquartered in San Francisco, Darby Smart brings DIY to the masses. To learn more, visit www.darbysmart.com

Media Contact: Megan Duran or Loren Rutledge
817-329-3257
Michaels@spmcommunications.com

Kathleen Flaherty for Darby Smart
K21 Communications
Kflaherty@k21.com
310-203-8444

Source: The Michaels Companies, Inc.