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ADVANCED MARKETING SERVICES REPORTS EARNINGS, AGREEMENT FOR DISTRIBUTION IN MEXICO WITH K-MART

 SAN DIEGO, July 22 /PRNewswire/ -- Advanced Marketing Services Inc. (NASDAQ: ADMS) today reported a 3 percent increase in net sales and a net loss of 2 cents per share for the first quarter of fiscal 1994, a slight improvement over the 3 cents per share loss in the period of the previous fiscal year.
 The company's net sales for the first quarter ended June 26, 1993, were $48,356,000, compared to $47,089,000 in the prior year's first quarter. Net loss for the quarter was $132,000, or 2 cents per share, compared to a loss of $161,000, or 3 cents per share in the previous year's quarter.
 Charles C. Tillinghast III, president, said sales were adversely impacted by higher-than-normal returns of books from the company's customers. This was caused by lower than expected book sales at the retail level and its customers' efforts to minimize inventory levels. As a result, same-store book sales were down 10 percent in the first quarter of fiscal 1994.
 "While this quarter's sales were disappointing, indications from our customers are positive regarding our offerings for the very important Christmas season," said Tillinghast.
 He also announced an understanding to be the primary book supplier to K-Mart Mexico, S.A. de C.V., which plans to open its first stores during early 1994.
 "Our agreement with K-Mart Mexico represents another important step in the company's efforts to bring its high value-added distribution services to major Mexican retailers and will complement our increasing sales to Price Club and Sam's Club locations in Mexico," said Tillinghast.
 In remarks prepared for the company's annual meeting of stockholders today in San Diego, Tillinghast discussed the proposed merger of Price Club and Costco.
 "Both companies are customers, and we anticipate our long-term relationship continuing," said Tillinghast. "The combination of these two major clubs should lead to more efficient operations for them as well as Advanced Marketing Services."
 Advanced Marketing Services provides product selection advice, specialized merchandising and product development programs and distribution and handling services to warehouse clubs and office product superstores in the United States, Canada and Mexico.
 ADVANCED MARKETING SERVICES INC.
 Unaudited Comparative Financial Results
 (Statement of Operations)
 (In thousands)
 Three Months Ended
 June 26 & 27,
 1993 1992
 Net sales $48,356 $47,089
 Cost of goods sold 44,029 43,219
 Gross profit 4,327 3,870
 Distribution & administrative
 expense 4,746 4,198
 Loss from operations (419) (328)
 Interest & dividend income
 (expenses), net 195 60
 Loss before taxes (224) (268)
 Benefit for income taxes 92 107
 Net loss ($132) ($161)
 Net loss per share ($.02) ($.03)
 Weighted average number of
 shares outstanding 5,388 5,357
 As of June 26 & 27,
 1993 1992
 Condensed balance sheet
 Assets
 Cash & short-term investments $16,289 $14,732
 Accounts receivable 15,164 15,216
 Inventories 66,074 64,834
 Other current assets 2,473 2,131
 Total current assets 100,000 96,913
 Net property & equipment 5,569 2,490
 Total assets $105,569 $99,403
 Liabilities and stockholders' equity
 Accounts payable & other current
 liabilities $64,424 $61,481
 Stockholders' equity 41,145 37,922
 Total equity $105,569 $99,403
 -0- 7/22/93 R
 /CONTACT: Charles C. Tillinghast III, president, or Jon S. Fish, executive VP-Finance, of Advanced Marketing Services, 619-457-2500/
 (ADMS)


CO: Advanced Marketing Services; K-Mart ST: California IN: REA SU: ERN

LM-LS -- SD008R -- 4558 07/22/93 12:44 EDT
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Date:Jul 22, 1993
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