FKI Logistex Awarded Michaels Material Handling Contract

(Danville, KY) FKI Logistex® LSE:FKI.L), a leading supplier of integrated material handling solutions for distribution, baggage handling, freight, parcel, and manufacturing applications, announces that its Automation Division and member company, Real Time Solutions, have signed contracts totaling $13.27 million to automate a new distribution center and expand the automation of two existing centers for Michaels Stores, Inc. (NYSE:MIK), the world's largest retailer of arts, crafts, framing, floral, wall decor, and seasonal merchandise for hobbyists and do-it-yourself home decorators.

The new 690,000 square foot distribution center, located in New Lenox, IL, will primarily serve the retail chain's Midwestern region. It will also enable the company's continued growth by providing additional high-speed order fulfillment and distribution capacity for its existing distribution network. The material handling system in the New Lenox facility will be the third partnership between Michaels and FKI Logistex, who completed work in 2002 on Michaels' distribution centers in Lancaster, CA and Hazelton, PA. The new contract includes expansion work at the Lancaster and Hazelton facilities.

"We are pleased that Michaels has given FKI Logistex this third vote of confidence in our equipment, systems and staff, and we look forward to working with Michaels in the future as it continues to build and grow," said Dave Martin, FKI Logistex president.

Work on the new Michaels projects begins immediately, with the New Lenox facility slated to be completed and commissioned by June, 2004. The New Lenox project combines equipment and systems from FKI Logistex Automation Division and FKI Logistex Real Time Solutions, who will also manage the systems integration. At the Lancaster and Hazelton centers, FKI Logistex will incorporate flow-through expansion of both facilities to include a new UniSort® X sliding shoe sorter with future expansion capabilities. Each system features 1,400 feet of FKI Logistex conveyor.

"We are excited about the capabilities that FKI Logistex is bringing to our new DC, and our existing buildings as well," said Les Gardner, Michaels vice president of distribution and logistics operations. "We have a strong partnership and feel confident that FKI Logistex will continue to provide us the systems and support we need."

Included in the Automation Division portion of the New Lenox deal are more than 38,000 feet of Photo-Eye Accuglideþ accumulation conveyor, Accuzoneþ pick-and-pass transfer conveyors, as well as two UniSort XV sliding shoe sorters, 20 truck loaders, and BOSSþ control software. Real Time Solutions will provide a complete pick-to-light system with 10,500 EASYpick® Trak Light picking locations and the warehouse control module of its Outbound Productivity Suite (OPSþ) software.

The 10,500 Trak Light locations will be almost 100 percent associated with an individual Michaels product SKU. SKUs will be zone picked into cartons bearing a side mounted bar code label. The carton bar code is scanned at each transfer within the carton flow pick module. The scan at each transfer identifies either a pick(s) in that zone or for the carton to proceed to the next zone transfer. This process continues until all picks for that carton are complete.

The Real Time Solutions systems work will include integrating the OPS software with the retailer's RedPrairieþ warehouse management software. OPS will receive orders from the RedPrairie system, forward picking requirements to the pick-to-light system and send conveyor routing messages to BOSS. The system, designed to manage full- and split-cases, will use picking and conveyor zones to maximize efficiency and minimize the number of touches per case.

FKI Logistex Automation Division is a designer and supplier of material handling systems for all phases of product distribution and material flow. Visit FKI Logistex Automation Division on the web at http://www.fkilogistex.com/automation

Michaels Stores, Inc. (NYSE:MIK) is the world's largest retailer of arts, crafts, framing, floral, wall decor, and seasonal merchandise for the hobbyist and do-it-yourself home decorator. Visit Michaels on the web at http://www.michaels.com

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