Michaels keeps cash on its balance sheet, intends to preserve money

By Devika Patel

Knoxville, Tenn., March 17 – Michaels Cos., Inc. plans to preserve as much cash on the balance sheet as possible until the Covid-19 uncertainty is over.

“I would say, in the current situation, we like the optionality of the cash on the balance sheet until we get through kind of the Covid piece,” president and chief executive officer designate Ashley Buchanan said on the company’s fourth quarter and year ended Feb. 1 earnings conference call on Tuesday.

“In the mode we’re in right now, we’re not doing anything other than preserve cash,” chief executive officer Mark Cosby said on the call.

“We are saving money at this point,” Cosby said.

The company may consider debt pay-down in the future, but management is not thinking about debt right now.

“Going forward, we will assess all of our options,” Cosby said.

“We’ll look at all the things that makes sense, whether that's debt pay-down or share buybacks.

“We’re not really in a position now where we're even contemplating anything on that front,” Cosby said.

Cash and cash equivalents were $409,964,000 as of Feb. 1, 2020, compared to $245,887,000 as of Feb. 2, 2019.

Long-term debt was $2,644,460,000 as of Feb. 1, 2020, compared to $2,681,000,000 as of Feb. 2, 2019.

Michaels is an Irving, Texas-based retailer of arts and crafts supplies and home decor products.

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