SECURITIES AND EXCHANGE COMMISSION
                      WASHINGTON, D.C. 20549

                            FORM 10-Q

(Mark One)
[X]       QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
          OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended November 1, 1997
                          
                              OR

[ ]       TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
          OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from          to         
                               ________    ________

                  Commission File Number 0-11822
                  ______________________________
                                

                      MICHAELS STORES, INC.
      (Exact name of registrant as specified in its charter)

           Delaware                          75-1943604
(State or other jurisdiction of           (I.R.S. Employer
 incorporation or organization)       Identification Number)

           8000 Bent Branch Drive, Irving, Texas  75063
             P.O. Box 619566, DFW, Texas  75261-9566
   (Address of principal executive offices, including zip code)

                          (972) 409-1300
       (Registrant's telephone number, including area code)
                 ______________________________
                                

Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days.    Yes X   No   
                            ___

Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.

                                         Shares Outstanding as of
         Title                              December 10, 1997
         _____                           ________________________

Common stock, par value $.10 per share           28,872,120

<PAGE>

                           MICHAELS STORES, INC.
                               FORM 10-Q    
                      PART I - FINANCIAL INFORMATION
 
Item 1.  Financial Statements 

                           MICHAELS STORES, INC.
                        CONSOLIDATED BALANCE SHEETS
                      (In thousands except share data)
                               (unaudited)
<TABLE>
<CAPTION>

                                  ASSETS
                                
                                              November 1,      February 1,  
                                                 1997            1997 
                                              ___________      ___________
<S>                                             <C>              <C>     
Current assets:
  Cash and equivalents                          $ 48,089         $ 59,069
  Merchandise inventories                        489,755          351,208
  Income taxes receivable and
    deferred income taxes                          6,178           15,207
  Prepaid expenses and other                      17,528           12,059
                                                ________         ________
    Total current assets                         561,550          437,543
                                                ________         ________

Property and equipment, at cost                  319,416          294,022   
  Less accumulated depreciation                 (132,346)        (104,943)
                                                ________         ________
                                                 187,070          189,079
                                                ________         ________

Costs in excess of net assets of
  acquired operations, net                       137,795          140,697
Deferred income taxes                             19,141           10,550
Other assets                                       3,320            6,566
                                                ________         ________
                                                 160,256          157,813
                                                ________         ________
                                                $908,876         $784,435
                                                ________         ________
                                                ________         ________

       
                   LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
  Accounts payable                              $154,288         $104,966
  Accrued liabilities and other                   94,659           92,765
                                                ________         ________
    Total current liabilities                    248,947          197,731   
                                                ________         ________

Senior notes                                     125,000          125,000
Convertible subordinated notes                    96,940           96,940
Other long-term liabilities                       29,510           31,962
                                                ________         ________
    Total long-term liabilities                  251,450          253,902
                                                ________         ________
                                                 500,397          451,633
                                                ________         ________


Commitments and contingencies

Shareholders' equity:
  Common stock, 28,746,454 shares
    outstanding                                    2,875            2,369
  Additional paid-in capital                     342,452          271,405
  Retained earnings                               63,152           59,028
                                                ________         ________
    Total shareholders' equity                   408,479          332,802
                                                ________         ________
                                                $908,876         $784,435
                                                ________         ________
                                                ________         ________
 
</TABLE>


See accompanying notes to consolidated financial statements.



<PAGE>


                           MICHAELS STORES, INC.
                   CONSOLIDATED STATEMENTS OF OPERATIONS
                   (In thousands except per share data)
                                (Unaudited)
<TABLE>
<CAPTION>
                                                  Quarter Ended           
                                            __________________________         
                                            November 1,    October 27,   
                                               1997           1996    
                                            ___________    ___________
<S>                                           <C>            <C>
Net sales                                     $350,070       $322,221 

Cost of sales and occupancy expense            237,528        259,928 
Selling, general and administrative
  expense                                       99,599         99,912
                                              ________      _________
Operating income (loss)                         12,943        (37,619)

Interest expense                                 5,936          6,502  
Other (income) and expense, net                   (126)             1 
                                              ________      _________
Income (loss) before income taxes                7,133        (44,122)

Provision (benefit) for income taxes             2,711         (9,892)
                                              ________       ________
Net income (loss)                             $  4,422       $(34,230)
                                              ________       ________
                                              ________       ________

Earnings (loss) per common and               
  common equivalent share                       $  .15         $(1.45) 
                                                ______         ______
                                                ______         ______

Weighted average common and common
  equivalent shares outstanding                 30,285         23,553
                                                ______         ______
                                                ______         ______


</TABLE>




See accompanying notes to consolidated financial statements.

<PAGE>

                           MICHAELS STORES, INC.
                   CONSOLIDATED STATEMENTS OF OPERATIONS
                   (In thousands except per share data)
                                (Unaudited)
<TABLE>
<CAPTION>

                                               Nine Months Ended      
                                           ___________________________          
                                           November 1,     October 27, 
                                              1997            1996    
                                           ___________     ___________
<S>                                          <C>             <C>  
Net sales                                    $949,426        $884,572

Cost of sales and occupancy expense           648,654         649,569
Selling, general and administrative      
  expense                                     277,030         272,863
                                             ________        ________
Operating income (loss)                        23,742         (37,860)

Interest expense                               17,380          15,036
Other income, net                              (1,214)           (372)
                                             ________        ________
Income (loss) before income taxes               7,576         (52,524)

Provision (benefit) for income taxes            2,879         (13,086)
                                             ________        ________
Net income (loss)                            $  4,697        $(39,438)
                                             ________        ________
                                             ________        ________

Earnings (loss) per common and
  common equivalent share                      $  .17          $(1.71)
                                               ______          ______
                                               ______          ______
      
Weighted average common and common
  equivalent shares outstanding                28,072          23,039
                                               ______          ______
                                               ______          ______

</TABLE>






See accompanying notes to consolidated financial statements.
<PAGE>

                           MICHAELS STORES, INC.
                   CONSOLIDATED STATEMENTS OF CASH FLOWS
                              (In thousands)
                                (Unaudited)
<TABLE>
<CAPTION>
                                                     Nine Months Ended     
                                                  ________________________
                                                  November 1,  October 27,
                                                     1997          1996
                                                  ___________  ___________    
<S>                                                <C>           <C>
Operating activities:
  Net income (loss)                                $  4,697      $(39,438)

  Adjustments:
    Depreciation                                     30,663        27,173
    Amortization                                      3,173         3,143
    Other                                             1,402           676
    Change in assets and liabilities:
      Merchandise inventories                      (138,547)     (104,981) 
      Prepaid expenses and other                     (5,469)       (3,450)
      Deferred income taxes and other                 6,327       (14,224)
      Accounts payable                               49,322        54,958   
      Accrued liabilities and other                   1,120         1,249
                                                   ________      ________ 
        Net change in assets and liabilities        (87,247)      (66,448)
                                                   ________      ________

        Net cash used in operating activities       (47,312)      (74,894) 
                                                   ________      ________

Investing activities:
  Additions to property and equipment               (27,380)      (23,823)
  Net proceeds from sales of property
    and equipment                                     1,623            - 
  Net proceeds from sales of investments              3,386         1,122   
                                                   ________      ________ 
        Net cash used in investing activities       (22,371)      (22,701)
                                                   ________      ________

Financing activities:
  Net repayments under bank credit facilities            -        (47,600)
  Payment of other long-term liabilities             (3,331)         (938)
  Proceeds from issuance of senior notes                 -        120,542
  Proceeds from issuance of common stock and other   62,034        25,356 
                                                   ________      ________     
        Net cash provided by financing activities    58,703        97,360
                                                   ________      ________ 
Net decrease in cash and equivalents                (10,980)         (235)
Cash and equivalents at beginning of year            59,069         2,870
                                                   ________      ________
Cash and equivalents at end of period              $ 48,089      $  2,635
                                                   ________      ________
                                                   ________      ________

</TABLE>

See accompanying notes to consolidated financial statements.

<PAGE>

                           MICHAELS STORES, INC.
                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           For the Three and Nine Months Ended November 1, 1997
                                (Unaudited)

Note A
______

The accompanying consolidated financial statements are unaudited (except for
the Consolidated Balance Sheet as of February 1, 1997) and, in the opinion of
management, reflect all adjustments that are necessary for a fair
presentation of financial position and results of operations for the three
and nine months ended November 1, 1997.  All of such adjustments are of a
normal and recurring nature.  Because of the seasonal nature of the Company's
business, the results of operations for the three and nine months ended
November 1, 1997 are not indicative of the results to be expected for the
entire year.  Certain fiscal 1996 amounts have been reclassified to conform
to the fiscal 1997 presentation.

Note B
______

Earnings per share data are based on the weighted average number of shares
outstanding, including common stock equivalents and other dilutive securities
when applicable.  The assumed conversion of the convertible subordinated
notes was anti-dilutive for each period presented and was therefore not
included in the calculation of fully diluted earnings per share data.


Note C
______

Investing and financing activities not affecting cash during the nine months
ended November 1, 1997 included additions to property and equipment through
capital lease obligations of $3,292,000 related to the acquisition of new
computer equipment.

Note D
______

In August 1995, two lawsuits were filed by certain security holders against
the Company and certain present and former officers and directors seeking
class action status on behalf of purchasers of the Company's Common Stock
between February 1, 1995 and August 23, 1995.  Among other things, the
plaintiffs alleged that misstatements and omissions by defendants relating to
projected and historical operating results, inventory and other matters
involving future plans resulted in an inflation of the price of the Company's
Common Stock during the period between February 1, 1995 and August 23, 1995. 
The United States District Court for the Northern District of Texas
subsequently consolidated those two lawsuits and certified the class.  The
Company and the other defendants denied any liability and believed they had
meritorious defenses to the lawsuit.  On September 9, 1997, the Company,
together with the other defendants, and the plaintiffs agreed in principal to
a settlement with a cash payment of $6.25 million.  After giving effect to
prior expenditures for costs incurred in defending the lawsuit, substantially
all of the settlement amount is expected to be covered by insurance.  The
settlement is subject to the Court's approval of the fairness of the
settlement terms.  The Court has scheduled a hearing on December 22, 1997 to
consider the fairness of the settlement.  If the settlement is not approved,
the lawsuit will proceed.




<PAGE>



A lawsuit was commenced against the Company and several other parties on
September 19, 1994 in the Superior Court of Stanislaus County, California, on
behalf of a former employee, Naomi Snyder, her child, and her husband.  The
complaint alleges that the former employee and her then-unborn child were
exposed to excessive levels of carbon monoxide in one of the Company's stores
caused by a propane gas powered floor buffer which was operated by an outside
cleaning service, resulting, among other things, in severe and permanent
injuries to the child.  Plaintiffs' Statement of Damages, filed on or about
January 26, 1995, seeks $11 million.  On April 10, 1995 the trial court ruled
the plaintiff's pleadings did not state a cause of action against the Company
upon which relief could be granted.  However, the ruling by the trial court
was overturned by the Court of Appeals of the State of California, Fifth
Appellate District, on September 23, 1996.  On October 30, 1997, the
California Supreme Court sustained the appellate court ruling and remanded
the case to the trial court.  The Company believes it has meritorious
defenses to this action and will defend itself vigorously.

The Company is a defendant from time to time in lawsuits incidental to its
business.  Based on currently available information, the Company believes
that resolution of all known contingencies, including the litigation
described above, is uncertain, and there can be no assurance that future
costs related to such litigation would not be material to the Company's
financial position or results of operations.

Note E
______

The FASB has issued Statement of Financial Accounting Standards No. 128,
Earnings Per Share, which is effective for financial statements issued after
December 15, 1997.  The new standard eliminates primary and fully diluted
earnings per share and requires presentation of basic and diluted earnings
per share together with disclosure of how the per share amounts were
computed.  The adoption of this new standard is not expected to have a
material impact on the disclosure of earnings per share in the financial
statements.

<PAGE>

Item 2.    Management's Discussion and Analysis of
           Financial Condition and Results of Operations

General
_______

Certain statements contained in this section which are not historical facts
are forward-looking statements that involve risks and uncertainties,
including, but not limited to, customer demand and trends in the arts and
crafts industry, related inventory risks due to shifts in customer demand,
the effect of economic conditions, the impact of competitors' locations or
pricing, the availability of acceptable real estate locations for new stores,
difficulties with respect to new information system technologies, supply
constraints or difficulties, the results of financing efforts, the effect of
the Company's accounting policies, and other risks detailed in the Company's
Securities and Exchange Commission filings.

Results of Operations
_____________________

The following table shows the percentage of net sales that each item in the
Consolidated Statements of Operations represents.  This table should be read
in conjunction with the following discussion and with the Company's financial
statements, including the notes:
  
<TABLE>
<CAPTION>
                                    For the               For the
                                Quarter Ended          Nine Months Ended   
                            _______________________ _______________________
                            November 1, October 27, November 1, October 27, 
                              1997        1996         1997        1996    
                            ___________ ___________ ___________ ___________
<S>                           <C>        <C>           <C>        <C>
Net sales                     100.0%     100.0%        100.0%     100.0%
Cost of sales and occupancy
  expense                      67.9       80.7          68.3       73.4
Selling, general and
  administrative expense       28.4       31.0          29.2       30.9
                              _____      _____         _____     ______
 
Operating income (loss)         3.7      (11.7)          2.5       (4.3)

Interest expense                1.7        2.0           1.8        1.7
Other income, net               0.0        0.0          (0.1)      (0.1)
                              _____      _____         _____     ______
Income (loss) before
  income taxes                  2.0      (13.7)          0.8       (5.9)
Provision (benefit) for
  income taxes                  0.7       (3.1)          0.3       (1.4)
                              _____      _____         _____     ______     
Net income (loss)               1.3%     (10.6)%         0.5%      (4.5)%
                              _____      _____         _____     ______
                              _____      _____         _____     ______
 
</TABLE>

<PAGE>

Three months ended November 1, 1997 compared to the
___________________________________________________

  three months ended October 27, 1996
  ___________________________________

Net sales in the third quarter of fiscal 1997 increased $27.9 million, or 9%,
over the third quarter of fiscal 1996.  The results for the third quarter of
fiscal 1997 included sales from 10 new Michaels stores that were opened
during the twelve month period ended November 1, 1997.  During the third
quarter, sales at the new stores (net of 9 closures) accounted for an
increase of $3.5 million.  Same-store sales increased 9% in the third quarter
of fiscal 1997 compared to the third quarter of fiscal 1996, which
contributed $24.4 million to the net sales increase.  The improvement in
same-store sales performance is due to strong performance in the Company's
core categories of general crafts, framing, art and floral, which management
believes is the result of obtaining improved information from the new 
point-of-sale (POS) item sales history database.  Utilizing a "could-have-sold"
process, the Company planned the current year's order quantities by analyzing
the prior year's POS item sales history and item out-of-stock positions.  In
addition, the Company held grand re-openings during the third quarter in
seven major markets in which the majority of the completed store relocations
and remodels were located.

Cost of sales and occupancy expense, as a percentage of net sales, for the
third quarter of fiscal 1997 decreased by 12.8% compared to the third quarter
of fiscal 1996.  This decrease was primarily due to the $47.7 million of
unusual costs and expenses recorded in the third quarter of fiscal 1996 to
cover losses on an extended sidewalk sale starting on Labor Day, markdowns on
discontinued home decor and other merchandise, and reserves for the closure
of four unproductive stores and the write-down of leasehold improvements in
three others.  Adjusting for the 1996 unusual items, cost of sales and
occupancy expense for the third quarter of fiscal 1997 was unchanged from the
prior year at 67.9%.  An improved leveraging of fixed occupancy costs and
improved gross margins, which management attributes to decreasing the
dependency on advertising to fuel sales growth and fewer seasonal clearance
markdowns, was offset by higher distribution costs, which increased due to
the Company's increased utilization of the upgraded warehouse network.
  
Selling, general and administrative expense, as a percentage of net sales,
decreased by 2.6% in the third quarter of fiscal 1997 compared to the third
quarter of 1996.  This decrease included $3.1 million of unusual costs and
expenses related primarily to an extended sidewalk sale starting on Labor Day
recorded in the third quarter of fiscal 1996.  In addition, the Company saved
$1.5 million in advertising costs versus last year, and showed improved
expense leverage in store labor and all other categories of store operating
expenses.

<PAGE>

Nine months ended November 1, 1997 compared to the
__________________________________________________

  nine months ended October 27, 1996
  __________________________________

Net sales in the first nine months of fiscal 1997 increased $64.9 million, or
7%, over the first nine months of fiscal 1996.  The results for the first
nine months of fiscal 1997 included sales from 10 new Michaels stores that
were opened during the twelve month period ended November 1, 1997.  During
the first nine months, sales at the new stores (net of 9 closures) accounted
for an increase of $11.3 million.  Same-store sales increased 6% in the first
nine months of fiscal 1997 compared to the first nine months of fiscal 1996,
which contributed $53.6 million to the net sales increase.  The improvement
in same-store sales performance is due to strong performance in the Company's
core categories of general crafts, framing, art and floral, which management
believes is the result of updated planograms put into place during the summer
in 1996 and obtaining improved information from the new POS item sales
history database.  The POS item information and "could-have-sold" ordering
process has provided for improved in-stock positions in top selling and hot
items.

Cost of sales and occupancy expense, as a percentage of net sales, for the
first nine months of fiscal 1997 decreased by 5.1% compared to the first nine
months of fiscal 1996.  The first nine months of fiscal 1996 included $47.7
million of unusual costs and expenses recorded in the third quarter of fiscal
1996 to cover losses on an extended sidewalk sale starting on Labor Day,
markdowns on discontinued home decor and other merchandise, and reserves for
the closure of four unproductive stores and the write-down of leasehold
improvements in three others.  Adjusting for the 1996 unusual items, cost of
sales and occupancy expense for the first nine months of fiscal 1997
decreased by 0.5% compared to the first nine months of fiscal 1996.  This
decrease was principally due to improved gross margins which management
attributes to decreasing the dependency on advertising to fuel sales growth
and fewer seasonal clearance markdowns in the third quarter of fiscal 1997.
The decrease was partially offset by higher distribution costs, which
increased due to the Company's increased utilization of the upgraded
warehouse network.

Selling, general and administrative expense, as a percentage of net sales,
decreased by 1.7% in the first nine months of fiscal 1997 compared to the
first nine months of fiscal 1996.  This decrease included $3.1 million of
unusual costs and expenses related primarily to an extended sidewalk sale
starting on Labor Day recorded in the third quarter of fiscal 1996.  In
addition, the Company saved $8.4 million in advertising costs versus last
year, and showed improved expense leverage in store labor and nearly all
other categories of store operating expenses with the exception of
depreciation, which reflects the impact of its increased investment in the
POS system.

<PAGE>

Liquidity and Capital Resources
_______________________________

Cash flow from operations of negative $47.3 million was generated during the
first nine months of fiscal 1997 compared to negative $74.9 million of cash
flow from operations generated during the first nine months of fiscal 1996. 
These results are consistent with the Company's pattern of building inventory
and opening and relocating stores early in the fiscal year.  Inventories per
Michaels store increased 4% to $1,047,000 at November 1, 1997 compared to
$1,009,000 last year reflecting higher levels of basic stock merchandise
purchased to improve the Company's in-stock position.  Borrowings outstanding
under the Company's bank credit agreement ("Credit Agreement"), which expires
in June 1999, were $39.6 million at the end of the third quarter of fiscal
1996 and there were no borrowings outstanding at November 1, 1997.

The Company opened nine Michaels stores and closed eight during the first
nine months of fiscal 1997.  Capital expenditures for the newly opened stores
amounted to approximately $2.3 million.  Additional capital expenditures of
approximately $25.1 million during the first nine months related primarily to
the relocation or remodeling of approximately 37 existing stores, and for
interim construction costs for the relocation in 1998 of one of its
distribution centers and various systems enhancements.  The Company expects
capital expenditures during the remainder of fiscal 1997 to total
approximately $12 to $14 million, relating primarily to costs for new stores,
store relocations and remodeling, merchandising and other information systems
and various other projects.  In addition, the Company may incur interim
construction costs and additional equipment costs during the remainder of
fiscal 1997 and in fiscal 1998 of an additional $21 million for the
relocation in 1998 of one of its distribution centers. The Company is
presently negotiating a sale/leaseback transaction with respect to this
distribution facility to be effected when the facility is completed. 
However, no definitive agreement has been reached.

At November 1, 1997, the Company had working capital of $312.6 million
compared to $239.8 million at February 1, 1997.  The Credit Agreement
provides for an unsecured line of credit of up to $100 million.  Management
believes that the Company's available cash, funds generated by operations and
funds available under the Credit Agreement should be sufficient to finance
continuing operations and sustain current growth plans.  Management believes
that the Company can finance an annual store expansion of 12% to 15% (on a
square footage basis) from internally generated cash flow.

<PAGE>

                           MICHAELS STORES, INC.
                                 FORM 10-Q
                        Part II - OTHER INFORMATION

Item 1.  Legal Proceedings

     For a description of legal proceedings, see Note D to "Notes to
     Consolidated Financial Statements," which description is incorporated
     herein by this reference.

Item 6.  Exhibits and Reports on Form 8-K

(a)  Exhibits

     Exhibit 11.1 - Computation of Earnings Per Common Share for the Three
Months Ended November 1, 1997.

     Exhibit 11.2 - Computation of Earnings Per Common Share for the Nine
Months Ended November 1, 1997.

     Exhibit 27 - Financial Data Schedule.

(b)  Reports on Form 8-K

No reports on Form 8-K were filed by the Company during the period covered by
this report.

<PAGE>

                           MICHAELS STORES, INC.



                                SIGNATURES



Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.



MICHAELS STORES, INC.


By:  /s/ Bryan M. DeCordova  
    _______________________    
    Bryan M. DeCordova
    Executive Vice President and
    Chief Financial Officer
    (Principal Financial Officer)



Dated: December 16, 1997


<PAGE>

                               EXHIBIT INDEX

EXHIBIT
NUMBER                      DESCRIPTION                          PAGE

11.1                  Computation of Earnings Per Common
                      Share for the Three Months Ended
                      November 1, 1997.

11.2                  Computation of Earnings Per Common 
                      Share for the Nine Months Ended 
                      November 1, 1997.


27                    Financial Data Schedule


<PAGE>

                                                               EXHIBIT 11.1
                           MICHAELS STORES, INC.

                 Computation of Earnings Per Common Share
                    Three Months Ended November 1, 1997
                                (Unaudited)
<TABLE>
<CAPTION>
                                                        Weighted
                                                        Average
                                                       Outstanding
                                                    Equivalent Shares 
                                                  _____________________   
                                     Total                       Fully
                                  Outstanding    Primary        Diluted  
                                  ___________   __________     __________
<S>                                <C>          <C>            <C>
Outstanding at beginning
  of quarter                       27,954,811   27,954,811     27,954,811

Shares issued during
  period                              791,643      468,602        468,602
                                                __________     __________

Weighted average common
  shares outstanding                            28,423,413     28,423,413   
                     
Net shares to be issued upon
  exercise of dilutive stock 
  options after applying treasury    
  stock method                                   1,727,743      1,861,836
                                   __________   __________     __________
Total outstanding common shares    28,746,454   30,151,156     30,285,249
                                   __________   __________     __________
                                   __________   __________     __________
Earnings per common and 
  common equivalent share                             $.15           $.15
                                                      ____           ____
                                                      ____           ____

</TABLE>
<PAGE>
                                                               EXHIBIT 11.2
                           MICHAELS STORES, INC.

                 Computation of Earnings Per Common Share
                    Nine Months Ended November 1, 1997
                                (Unaudited)
<TABLE>
<CAPTION>
                                                        Weighted
                                                         Average
                                                       Outstanding
                                                    Equivalent Shares
                                                  _______________________    
                                     Total                      Fully
                                  Outstanding    Primary       Diluted  
                                                __________     __________
<S>                                <C>          <C>            <C>
Outstanding at beginning
  of year                          23,690,926   23,690,926     23,690,926

Shares issued during
  period                            5,055,528    2,959,604      2,959,604
                                                __________     __________
Weighted average common
  shares outstanding                            26,650,530     26,650,530   
                     
Net shares to be issued upon
  exercise of dilutive stock 
  options after applying treasury    
  stock method                                   1,281,834      1,421,770
                                   __________   __________     __________
Total outstanding common shares    28,746,454   27,932,364     28,072,300
                                   __________   __________     __________
                                   __________   __________     __________

Earnings per common and 
  common equivalent share                             $.17           $.17
                                                      ____           ____
                                                      ____           ____
</TABLE>