<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended January 31, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from ------------ to ------------
Commission file number 0-11822
A. Full title of the plan and the address of the plan, if
different from that of the issuer named below:
MICHAELS STORES, INC. EMPLOYEES 401(K) PLAN
B. Name of issuer of the securities held pursuant to the
plan and the address of its principal executive office:
MICHAELS STORES, INC.
5931 Campus Circle Drive, Irving, Texas 75063
P.O. Box 619566, DFW, Texas 75261-9566
Pursuant to the requirements of the Securities Exchange
Act of 1934, the trustees have duly caused this annual report to be
signed on its behalf by the undersigned thereunto duly authorized.
MICHAELS STORES, INC.
EMPLOYEES 401(K) PLAN
Date: July 29, 1994 By: -------------------
Donald C. Toby
Trustee
<PAGE>
MICHAELS STORES, INC. EMPLOYEES 401(K) PLAN
In February 1987, Michaels Stores, Inc. (the "Company") established
the Michaels Stores, Inc. Employees 401(k) Plan (the "401(k) Plan"). The
fiscal year of the 401(k) Plan is February 1 to the following January 31.
The name of the issuer of the securities held pursuant to the 401(k) Plan and
the address of its principal executive office is Michaels Stores, Inc., 5931
Campus Circle Drive, Irving, Texas 75063, P.O. Box 619566, DFW, Texas 75261-
9566.
Changes in the 401(k) Plan. There were no material changes in the
provisions of the 401(k) Plan during the fiscal year ending January 31, 1994
("Fiscal 1993").
Changes in Investment Policy. There were no changes in the
investment policy of the 401(k) Plan during Fiscal 1993.
Contributions Under the 401(k) Plan. The Company makes annual
employer matching contributions to the 401(k) Plan for the account of each
participating employee in an amount equal to $.50 for each $1.00 of salary
reduction contributed by such employee, up to a maximum Company contribution
equal to 3% of the employee's compensation; provided that the aggregate
amount required to be contributed by the Company during any fiscal year to
all plans sponsored by the Company that are qualified within the meaning of
Sections 401(a) and 401(k) of the Internal Revenue Code of 1986 (the "Code")
is limited to 20% of the Company's net profit for such fiscal year.
Participating Employees. As of January 31, 1994, there were 1,969
employees participating in the 401(k) Plan.
Administration of the Plan. The 401(k) Plan is administered by an
Administration Committee consisting of three persons, all employees of the
Employer, appointed by the Employer's Board of Directors. The members of the
Administration Committee serve at the discretion of the Board of Directors
without compensation for their services. The members of the Administration
Committee are:
Sam Wyly Chairman of the Board
of Directors and
Chief Executive Officer,
Michaels Stores, Inc.
Jack E. Bush President, Chief Operating Officer
and Director,
Michaels Stores, Inc.
Donald C. Toby Vice President-Personnel,
Michaels Stores, Inc.
-1-
<PAGE>
The address of each of the members of the Administration Committee
listed above is Michaels Stores, Inc., 5931 Campus Circle Drive, Irving,
Texas 75063, P.O. Box 619566, DFW, Texas 75261-9566. The Administration
Committee directs the operation of the 401(k) Plan and may make
administrative and procedural regulations. Certain administrative functions
may be delegated to officers or employees of the Company. Administration
Committee members, officers and employees do not receive compensation from
the 401(k) Plan.
Custodian of Investments. The assets of the 401(k) Plan are held
by a trust and managed by trustees ("Trustees"), who may be employees of the
Company. At present, the members of the Administration Committee also serve
as the Trustees. The Company furnishes the 401(k) Plan with a fidelity bond
in the amount of $1,000,000 covering the Trustees. The Trustees receive no
compensation from the 401(k) Plan.
Reports to Participating Employees. Each participant and retired
participant having an interest in the 401(k) Plan receives quarterly
statements of his or her accounts each plan year.
-2-
<PAGE>
INDEX TO FINANCIAL STATEMENTS
PAGE
Report of Independent Auditors F-1
- - ------------------------------
Financial Statements:
- - --------------------
Statements of Net Assets Available for Plan Benefits F-2 to F-3
Statements of Changes in Net Assets Available for
Plan Benefits F-4 to F-5
Notes to Financial Statements F-6 to F-11
Supplemental Schedule: Schedule
- - ---------------------
Assets Held for Investment Purposes 1 F-12
Consent of Independent Auditors F-13
- - -------------------------------
A schedule of party-in-interest transactions has not been presented because
there were no party-in-interest transactions which are prohibited by ERISA
Section 406 and for which there is no statutory or administrative exemption.
-3-
<PAGE>
REPORT OF INDEPENDENT AUDITORS
Board of Directors
Michaels Stores, Inc.
We have audited the accompanying statements of net assets available
for plan benefits of Michaels Stores, Inc. Employees 401(k) Plan as
of January 31, 1994 and 1993, and the related statements of changes
in net assets available for plan benefits for the years then ended.
These financial statements are the responsibility of the Plan's
management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the net assets available for plan
benefits of the Plan at January 31, 1994 and 1993, and the changes
in its net assets available for plan benefits for the years then
ended, in conformity with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the
basic financial statements taken as a whole. The accompanying
supplemental schedule of Assets Held for Investment Purposes
(Schedule 1) is presented for purposes of complying with the
Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of
1974, and is not a required part of the basic financial statements.
The supplemental schedule has been subjected to the auditing
procedures applied in our audit of the financial statements and, in
our opinion, is fairly stated in all material respects in relation
to the basic financial statements taken as a whole.
ERNST & YOUNG
Dallas, Texas
July 22, 1994
F-1
<PAGE>
MICHAELS STORES, INC. EMPLOYEES 401 (K) PLAN
STATEMENTS OF
NET ASSETS AVAILABLE FOR PLAN BENEFITS
(In thousands)
<TABLE>
<CAPTION>
January 31, 1994
-------------------------------------------------
Inter-
Growth mediate
American Fund of Bond Fund
General Balanced America of America
Subfund Subfund Subfund Subfund Subtotal
------- -------- ------- ---------- --------
<C> <C> <C> <C> <C>
<S>
ASSETS
Investment in Michaels
Stores, Inc. common stock $15,832 $15,832
Investment in mutual funds - $420 $ 748 $1,731 2,899
Participant loans receivable 331 30 110 161 632
Contributions receivable:
Participants 79 21 29 32 161
Employer (1,751) - - - (1,751)
------ ---- ------ ------ ------
(1,672) 21 29 32 (1,590)
Interfund due to/(from) (1,046) 209 345 31 (461)
Cash 318 - - - 318
------- ---- ------ ------ -------
Net assets available for
plan benefits $13,763 $680 $1,232 $1,955 $17,630
======= ==== ====== ====== =======
</TABLE>
See accompanying notes.
F-2 (1 of 2)
<PAGE>
MICHAELS STORES, INC. EMPLOYEES 401 (K) PLAN
STATEMENTS OF
NET ASSETS AVAILABLE FOR PLAN BENEFITS
(In thousands)
<TABLE>
<CAPTION>
January 31, 1994
---------------------------------------------
Investment
Previous Company of New
Page America Perspective
Subtotal Subfund Subfund Total
-------- ---------- ----------- -------
<C> <C> <C> <C>
<S>
ASSETS
Investment in Michaels
Stores, Inc. common stock $15,832 $15,832
Investment in mutual funds 2,899 $ 953 $249 4,101
Participant loans receivable 632 51 6 689
Contributions receivable:
Participants 161 23 11 195
Employer (1,751) - - (1,751)
(1,590) 23 11 (1,556)
------- ------ ---- -------
Interfund due to/(from) (461) 269 192 -
Cash 318 - - 318
------- ------ ---- -------
Net assets available for
plan benefits $17,630 $1,296 $458 $19,384
======= ====== ==== =======
</TABLE>
See accompanying notes.
F-2 (2 of 2)
<PAGE>
MICHAELS STORES, INC. EMPLOYEES 401 (K) PLAN
STATEMENTS OF
NET ASSETS AVAILABLE FOR PLAN BENEFITS
(In thousands)
<TABLE>
<CAPTION>
January 31, 1993
-------------------------------------------------
Inter-
Growth mediate
American Fund of Bond Fund
General Balanced America of America
Subfund Subfund Subfund Subfund Subtotal
------- -------- ------- ---------- --------
<C> <C> <C> <C> <C>
<S>
ASSETS
Investment in Michaels
Stores, Inc. common stock $16,187 $16,187
Investment in mutual funds - $333 $593 $1,545 2,471
Participant loans receivable 157 14 47 145 363
Contributions receivable:
Participants 89 18 32 48 187
Employer (251) - - - (251)
------- ---- ---- ------ --------
(162) 18 32 48 (64)
Interfund due to/(from) (907) 103 223 222 (359)
Cash 771 - - - 771
------- ---- ---- ------ -------
Net assets available for
plan benefits $16,046 $468 $895 $1,960 $19,369
======= ==== ==== ====== =======
</TABLE>
See accompanying notes.
F-3 (1 of 2)
<PAGE>
MICHAELS STORES, INC. EMPLOYEES 401 (K) PLAN
STATEMENTS OF
NET ASSETS AVAILABLE FOR PLAN BENEFITS
(In thousands)
<TABLE>
<CAPTION>
January 31, 1993
---------------------------------------------
Investment
Previous Company of New
Page America Perspective
Subtotal Subfund Subfund Total
-------- ---------- ----------- -----
<C> <C> <C> <C>
<S>
ASSETS
Investment in Michaels
Stores, Inc. common stock $16,187 $16,187
Investment in mutual funds 2,471 $ 779 $171 3,421
Participant loans receivable 363 53 1 417
Contributions receivable:
Participants 187 37 11 235
Employer (251) - - (251)
------- ------ ---- -------
(64) 37 11 (16)
Interfund due to/(from) (359) 269 90 -
Cash 771 - - 771
------- ------ ---- -------
Net assets available for
plan benefits $19,369 $1,138 $273 $20,780
======= ====== ==== =======
</TABLE>
See accompanying notes.
F-3 (2 of 2)
<PAGE>
MICHAELS STORES, INC. EMPLOYEES 401 (K) PLAN
STATEMENTS OF CHANGES IN
NET ASSETS AVAILABLE FOR PLAN BENEFITS
(In thousands)
<TABLE>
<CAPTION>
Fiscal 1993
-------------------------------------------------
Inter-
Growth mediate
American Fund of Bond Fund
General Balanced America of America
Subfund Subfund Subfund Subfund Subtotal
------- -------- ------- ---------- --------
<C> <C> <C> <C> <C>
<S>
Investment income:
Interest $ 24 $ 2 $ 5 $ 11 $ 42
Dividends - 18 3 114 135
Capital gains - 15 25 8 48
Net unrealized
appreciation in fair
value of investments (678) 15 71 11 (581)
------- ---- ------ ------ -------
(654) 50 104 144 (356)
Contributions:
Participants 780 220 292 304 1,596
Employer 459 - - - 459
Interfund transfers (146) 52 73 (51) (72)
------- ---- ------ ------ -------
Total additions 439 322 469 397 1,627
Distributions
to participants (2,722) (110) (132) (402) (3,366)
------- ---- ------ ------ -------
Net increase
(decrease) (2,283) 212 337 (5) (1,739)
Net assets available
for plan benefits:
Beginning of year 16,046 468 895 1,960 19,369
------- ---- ------ ------ -------
End of year $13,763 $680 $1,232 $1,955 $17,630
======= ==== ====== ====== =======
</TABLE>
See accompanying notes.
F-4 (1 of 2)
<PAGE>
MICHAELS STORES, INC. EMPLOYEES 401 (K) PLAN
STATEMENTS OF CHANGES IN
NET ASSETS AVAILABLE FOR PLAN BENEFITS
(In thousands)
<TABLE>
<CAPTION>
Fiscal 1993
--------------------------------------------
Investment
Previous Co. of New
Page America Perspective
Subtotal Subfund Subfund Total
-------- ---------- ----------- -------
<C> <C> <C> <C>
<S>
Investment income:
Interest $ 42 $ 5 $ 1 $ 48
Dividends 135 22 3 160
Capital gains 48 35 6 89
Net unrealized
appreciation in fair
value of investments (581) 60 50 (471)
------- ------ ---- -------
(356) 122 60 (174)
Contributions:
Participants 1,596 282 85 1,963
Employer 459 - - 459
Interfund transfers (72) 1 71 -
------- ------ ---- -------
Total additions 1,627 405 216 2,248
Distributions
to participants (3,366) (247) (31) (3,644)
------- ------ ---- -------
Net increase
(decrease) (1,739) 158 185 (1,396)
Net assets available
for plan benefits:
Beginning of year 19,369 1,138 273 20,780
------- ------ ---- -------
End of year $17,630 $1,296 $458 $19,384
======= ====== ==== =======
</TABLE>
See accompanying notes.
F-4 (2 of 2)
<PAGE>
MICHAELS STORES, INC. EMPLOYEES 401(K) PLAN
STATEMENTS OF CHANGES IN
NET ASSETS AVAILABLE FOR PLAN BENEFITS
(In thousands)
<TABLE>
<CAPTION>
Fiscal 1992
-------------------------------------------------------
Growth
Fixed American Fund of
General Income Guaranteed Balanced America
Subfund Subfund Subfund Subfund Subfund Subtotal
------- ------- ---------- -------- ------- --------
<C> <C> <C> <C> <C> <C>
<S>
Investment income:
Interest $ 17 $ 135 $ 9 $ - $ 1 $ 162
Dividends - - - 10 6 16
Capital gains - - - 1 - 1
Net unrealized
appreciation in
fair value of
investments 6,460 - - 1 53 6,514
------- ------ ---- ---- ---- ------
6,477 135 9 12 60 6,693
Contributions:
Participants 749 348 - 100 179 1,376
Employer 668 - - - - 668
Interfund transfers (207) (3,519) (186) 362 674 (2,876)
------- ------ ---- ---- ---- ------
Total additions 7,687 (3,036) (177) 474 913 5,861
Distributions to
participants (1,051) (152) (10) (6) (18) (1,237)
------- ------ ---- ---- ---- -------
Net increase
(decrease) 6,636 (3,188) (187) 468 895 4,624
Net assets available
for plan benefits:
Beginning of year 9,410 3,188 187 - - 12,785
------- ------ ---- ---- ---- -------
End of year $16,046 $ - $ - $468 $895 $17,409
======= ====== ==== ==== ==== =======
</TABLE>
See accompanying notes.
F-5 (1 of 2)
<PAGE>
MICHAELS STORES, INC. EMPLOYEES 401(K) PLAN
STATEMENTS OF CHANGES IN
NET ASSETS AVAILABLE FOR PLAN BENEFITS
(In thousands)
<TABLE>
<CAPTION>
Fiscal 1992
-----------------------------------------------------
Inter-
mediate Investment
Previous Bond Fund Co. of New
Page of America America Perspective
Subtotal Subfund Subfund Subfund Total
-------- ---------- --------- ----------- ------
<C> <C> <C> <C> <C>
<S>
Investment income:
Interest $ 162 $ 3 $ 2 $ 1 $ 168
Dividends 16 43 20 2 81
Capital gains 1 - 2 - 3
Net unrealized
appreciation in fair
value of investments 6,514 (4) 14 - 6,524
------- ------ ----- ---- ------
6,693 42 38 3 6,776
Contributions:
Participants 1,376 254 203 59 1,892
Employer 668 - - - 668
Interfund transfers (2,876) 1,758 905 213 -
------- ------ ----- ----- ------
Total additions 5,861 2,054 1,146 275 9,336
Distributions to
participants (1,237) (94) (8) (2) (1,341)
------- ------ ----- ---- ------
Net increase
(decrease) 4,624 1,960 1,138 273 7.995
Net assets available
for plan benefits:
Beginning of year 12,785 - - - 12,785
------- ------ ------ ---- -------
End of year $17,409 $1,960 $1,138 $273 $20,780
======= ====== ====== ==== =======
</TABLE>
See accompanying notes.
F-5 (2 of 2)
<PAGE>
MICHAELS STORES, INC. EMPLOYEES 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 1994
1.Description of the Plan and Basis of Presentation
The Michaels Stores, Inc. Employees 401(k) Plan (the "Plan")
became effective on February 1, 1987, for eligible employees of
Michaels Stores, Inc. (the "Employer" or the "Company"). The Plan
is a defined contribution plan designed to comply with the Employee
Retirement Income Security Act of 1974 ("ERISA"). The following is
a brief description of the Plan. Participants should refer to the
plan agreement for complete information regarding the Plan.
Participation - Employees become eligible to participate in
the Plan once they have reached the age of 21 and have completed
1,000 hours of service during the previous twelve months. Eligible
employees who desire to participate in the Plan must elect to
participate on the form or forms provided by the Plan's
Administration Committee and authorize the Employer to make payroll
deductions for contributions to the Plan.
Contributions - Each participant may elect to have his/her
salary reduced, in increments of whole percents, at a minimum of 2%
up to a maximum of 15% of the participant's considered
compensation, as defined by the Plan, and have the Employer
contribute to the Plan the amount of such reduction ("Salary
Reduction Contribution"). A participant's Salary Reduction
Contribution may not exceed an amount determined by the Internal
Revenue Service each calendar year ($9,240 in 1994 and $8,994 in
1993). Each participant may also elect to make voluntary, after-
tax contributions at a minimum of 1% up to a maximum of 10% of the
participant's considered compensation ("Employee Contributions").
In addition, the Employer is required to make an annual
contribution ("Employer Matching Contribution") to the account of
each participant in an amount equal to 50% of the participant's
Salary Reduction Contribution which does not exceed 3% of such
participant's total considered compensation for the year, provided
that the aggregate Employer Matching Contribution shall not exceed
20% of the Employer's net profits for the fiscal year of the
Employer which ends nearest to the end of the Plan year.
Employer Matching Contributions are net of forfeitures, as defined,
and are to be deposited no later than the date on which the
Employer files its federal income tax return for such year,
including any extensions which have been granted. Forfeitures of
$266,000 and $69,000 were applied against Employer Matching
Contributions to the Plan for the years ended January 31, 1994 and
1993, respectively. During 1993, Employer Matching Contributions
exceeded the amount required under the Plan document by $1,500,000.
The excess contributions are attributable to unsecured advances
made for the payment of benefits in accordance with the terms of
the Plan. These excess contributions will be used to satisfy 1994
and a portion of 1995 Employer Matching Contributions.
F-6
<PAGE>
The Plan provides for, among other things, an Investment Committee
to direct Plan investments held in trust and managed by trustees
(the "Trustees"), all employees of the Employer, appointed by the
Board of Directors of the Employer. Participants may elect
investment of their Salary Reduction Contributions and Employee
Contributions in one of or in a combination of any four of the
following investment options:
(a) General Subfund - consists of investments in the
common stock of the Employer and idle cash utilized to
purchase Employer common stock. All Employer Matching
Contributions are invested in the General Subfund. At
January 31, 1994, 1,497 employees participated in this
subfund.
(b) American Balanced Subfund - a mutual fund investing
in both domestic growth and income producing securities
seeking conservation of capital, current income, and
long term growth of both capital and income. At January
31, 1994, 398 employees participated in this subfund.
(c) Growth Fund of America Subfund - a mutual fund
investing in domestic growth equities seeking growth of
capital. At January 31, 1994, 599 employees
participated in this subfund.
(d) Intermediate Bond Fund of America Subfund - a
mutual fund investing in intermediate term investment
grade corporate bonds and government instruments seeking
current income and preservation of capital. At January
31, 1994, 679 employees participated in this subfund.
(e) Investment Company of America Subfund - a mutual
fund investing in common stocks seeking long term growth
of capital and income. At January 31, 1994, 553
employees participated in this subfund.
(f) New Perspective Subfund - a mutual fund investing
in both domestic and foreign securities, including both
equity and debt instruments, seeking long term growth of
capital. At January 31, 1994, 214 employees
participated in this subfund.
Administration of the Plan - The Plan is administered by an
Administration Committee consisting of three persons, all employees
of the Employer, appointed by the Employer's Board of Directors.
The members of the Administration Committee serve at the discretion
of the Board of Directors without compensation for their services.
A separate account is maintained for each participant. The account
balances for participants are adjusted periodically as follows:
(a) Salary Reduction Contributions and Employee Contributions and
any withdrawals are allocated on a monthly basis.
(b) Employer Matching Contributions are allocated to participants'
accounts quarterly on January 31, April 30, July 31 and October 31.
F-7
<PAGE>
(c) Income and gains and losses from investments are also
allocated to the participants' accounts quarterly determined by the
percentage which the participant's account balance at the end of
the period bears to the total of all participants' account balances
at that date.
Vesting - Participants become partially vested in the
Employer Matching Contributions (including investment
income and gains and losses thereon) at the rate of: 20%
after two years of service; 40% after three years; 60%
after four years; and 80% after five years. Employer
Matching Contributions vest 100% upon completing six
years of service (five years of service for individuals
employed before May 1, 1992); attaining the age of 65;
becoming disabled; or death. Salary Reduction
Contributions and Employee Contributions are 100% vested
and are nonforfeitable.
Withdrawals - Upon death, disability or termination of
employment with the Company, participants are entitled
to the vested portion of Employer Matching Contributions
and 100% of Salary Reduction Contributions and Employee
Contributions.
Income tax status - The Plan is designed to be a
qualified plan under Section 401(a) of the Internal
Revenue Code ("Code") and exempt from federal income tax
under Section 501(a) of the Code. The Plan has not yet
received a favorable determination letter from the
Internal Revenue Service as to the qualification for tax
exempt status; however, a favorable determination letter
is expected.
Salary Reduction Contributions and Employer Matching
Contributions are not included in the participant's
gross income for federal income tax purposes in the year
such contributions are made. A participant will not be
subject to federal income taxes with respect to these
contributions until the amounts are withdrawn or
distributed. Employee Contributions are not excluded
from a participant's gross income for federal income tax
purposes in the year such contributions are made.
Termination of the Plan - While the Employer has not
expressed any intent to discontinue the Plan, the
Employer may terminate the Plan at any time. In the
event the Plan is terminated, the participants would
become fully vested, and the net assets would be
distributed to participants in proportion to their
account balances.
F-8
<PAGE>
2. Summary of significant accounting policies
Investments in the common stock of the Employer are
valued at the last reported sales price on the last
business day of the Plan year as reported on the NASDAQ
National Market System. Investments in the mutual funds
of American Funds Service Company are valued at the last
reported net asset value (NAV) on the last business day
of the Plan year as reported on the NASDAQ automated
quotation system.
Security transactions are recorded on a trade date
basis.
Contributions and interest income are recorded on the
accrual basis.
Certain amounts in the 1992 financial
statements have been reclassified to conform to the
presentation in the 1993 financial statements.
F-9
<PAGE>
3. Investments
Investments at January 31, 1994, are as follows:
<TABLE>
<CAPTION>
Number (In thousands)
of shares Cost Market
---------- ------ -------
<C> <C> <C>
<S>
Michaels Stores, Inc. common stock 490,925 $3,852 $15,832
American Mutual Funds:
American Balanced Fund 32,632 404 420
The Growth Fund of America 27,274 625 748
Intermediate Bond Fund of America 120,568 1,724 1,731
The Investment Company of America 49,259 879 953
New Perspective Fund 15,924 198 249
------ -------
$7,682 $19,933
====== =======
</TABLE>
The net unrealized appreciation in fair value of investments was determined as
follows:
<TABLE>
<CAPTION>
(In thousands)
Unrealized
Investments, Investments, Appreciation
at cost at market (Depreciation)
------------ ------------ --------------
<C> <C> <C>
<S>
January 31, 1994 $7,682 $19,933 $12,251
Less: January 31, 1993 6,886 19,608 12,722
------ ------- -------
Net unrealized appreciation in
fair value of investments $ 796 $ 325 $ (471)
====== ======= ========
</TABLE>
Investments at January 31, 1993, are as follows:
<TABLE>
<CAPTION>
Number (In thousands)
of shares Cost Market
--------- ------- --------
<C> <C> <C>
<S>
Michaels Stores, Inc. common stock 479,606 $3,528 $16,187
American Mutual Funds:
American Balanced Fund 26,894 333 333
The Growth Fund of America 23,928 541 593
Intermediate Bond Fund of America 108,391 1,548 1,545
The Investment Company of America 43,079 765 779
New Perspective Fund 13,936 171 171
------ -------
$6,886 $19,608
</TABLE>
<TABLE>
<CAPTION>
(In thousands)
Unrealized
Investments, Investments, Appreciation
at cost at market (Depreciation)
------------ ------------ --------------
<C> <C> <C>
<S>
January 31, 1993 $6,886 $19,608 $12,722
Less: January 31, 1992 2,848 9,046 6,198
------ ------- -------
Net unrealized appreciation in
fair value of investments $4,038 $10,562 $ 6,524
====== ======= =======
</TABLE>
F-10
<PAGE>
4. Related party transactions
--------------------------
Under the terms of the Plan, all expenses and fees of the Plan
are to be paid by the Employer. The Employer paid approximately
$70,000 and $184,000, respectively, for administrative and
accounting fees on behalf of the Plan during fiscal 1993 and 1992,
respectively.
During fiscal 1993 and 1992, the Plan purchased 11,319 and
30,092 shares, respectively, of the Employer's common stock at a
cost of approximately $324,000 and $680,000, respectively.
5. Differences Between Financial Statements and Form 5500:
------------------------------------------------------
The following is a reconciliation of net assets available for
benefits per the financial statements to the Form 5500:
<TABLE>
<CAPTION>
(In thousands)
Year Ended Year Ended
January 31, January 31,
1994 1993
----------- -----------
<C> <C>
<S>
Net assets available for benefits
per the financial statements $19,384 $20,780
Amounts allocated to withdrawn
participants (1,184) (800)
------- -------
Net assets available for benefits
per the form 5500 $18,200 $19,980
======= =======
</TABLE>
The following is a reconciliation of distributions paid to
participants per the financial statements to the Form 5500:
<TABLE>
<CAPTION>
(In thousands)
Year Ended Year Ended
January 31, January 31,
1994 1993
----------- -----------
<C> <C>
<S>
Distributions paid to participants
per the financial statements $3,644 $1,341
Add: Amounts allocated to withdrawn
participants at January 31, 1994
and 1993, respectively 1,184 800
Less: Amounts allocated to withdrawn
participants at January 31, 1993
and 1992, respectively (800) (148)
------ ------
Distributions paid to participants
per the Form 5500 $4,028 $1,993
====== ======
</TABLE>
Amounts allocated to withdrawn participants are recorded on the
Form 5500 for termination distributions that have been processed
and approved for payment prior to year-end but not yet paid.
F-11
<PAGE>
Schedule 1
MICHAELS STORES, INC. EMPLOYEES 401(K) PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
January 31, 1994
<TABLE>
<CAPTION>
(In thousands)
Number of Fair
Description Shares Cost Value
- - ----------- --------- ------ -------
<C> <C> <C>
<S>
Michaels Stores, Inc.
common stock 490,925 $3,852 $15,832
American Mutual Funds:
American Balanced Fund 32,632 404 420
The Growth Fund of America 27,274 625 748
Intermediate Bond Fund
of America 120,568 1,724 1,731
The Investment Company
of America 49,259 879 953
New Perspective Fund 15,924 198 249
Participant loans
receivable (Interest
rates are at 7% with
maturities from May,
1994 to January, 2004 689 689
------ -------
$8,371 $20,622
====== =======
</TABLE>
F-12
<PAGE>
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration
Statement (Form S-8 No. 33-11985) pertaining to the Michaels
Stores, Inc. Employees 401(k) Plan and in the related Prospectus
and in the Registration Statement (Form S-8 No. 33-21573)
pertaining to the Moskatel's Inc. Savings/Retirement Plan and in
the related Prospectus of our report dated July 22, 1994, with
respect to the financial statements and schedule of the Michaels
Stores, Inc. Employees 401(k) Plan included in this Annual Report
(form ll-K) for the year ended January 31, 1994.
ERNST & YOUNG
Dallas, Texas
July 28, 1994
F-13
