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LONGS DRUG STORES ANNOUNCES THIRD QUARTER EARNINGS

 WALNUT CREEK, Calif., Nov. 17 ~PRNewswire~ -- Longs Drug Stores (NYSE: LDG) today announced an increase of four percent in sales and a 19 percent decrease in net income for the third quarter ended Oct. 29, 1992, and the declaration of a 28 cent quarterly dividend.
 Unaudited sales for the third quarter ended Oct. 29, 1992, were $593,669,000 as compared to $571,318,000 reported last year. Sales for the three quarters were $1,808,759,000 compared to $1,717,403,000 for the prior year, representing a five percent increase.
 Unaudited net income for the third quarter was $9,275,000, or 45 cents per share, as compared to $11,484,000, or 56 cents per share, for the prior year. Net income for the three quarters decreased eight percent to $36,497,000, or $1.77 per share, compared to $39,764,000, or $1.95 per share, reported last year.
 According to William Combs, Vice President Administration and Corporate Relations, "We are disappointed in our results for this quarter. Whereas sales were soft, profit margins declined. The sluggish economy, especially in the California marketplace, continues to affect our business adversely.
 "We are challenged to confront changes in the industry and the economy, and are commited to the following in order to improve our results:
 "Expansion -- We have stepped up our expansion, opening five new stores this quarter. We expect to open 15-18 new stores next year.
 "Point of Sale (Scanning) -- We are on schedule and have installed scanning in 175 of our stores. We anticipate completing our scanning rollout to most stores by the end of next year. Fiscal '93 operating results included expenses related to the scanning rollout of approximately $2.6 million for the third quarter and $7 million for the three quarters. We remain excited with regard to the future potential of the system.
 "Expense Containment -- While the conversion to point of sale has had the short-term effect of increasing expenses, the corporation's ultimate goal is to reduce expenses as a percentage of sales.
 "Small Store Program -- We have opened four Longs Pharmacies this year, and expect to open two more next year. We see this as a viable format for a number of locations that are not large enough to fit a standard-size Longs Drug Store.
 "Stock Repurchase Program -- This quarter we once again started repurchasing our Longs Drug Store stock. To date we have repurchased 117,000 shares, which is part of our continued effort to increase shareholder value."
 The Board of Directors at its meeting today declared a quarterly dividend of 28 cents per share of Common Stock to holders of record at the close of business Dec. 1, 1992, payable Jan. 8, 1993.
 At quarter end, Longs operated 272 stores in California, Hawaii, Alaska, Nevada and Colorado. Five new stores were opened during the quarter, and one was closed. The company has opened one store since the end of the quarter, and anticipates opening one more store before the end of the fiscal year.
 LONGS DRUGS
 Quarter Ended Three Quarters Ended
 (unaudited)
 10~29~92 10~31~91 10~29~92 10~31~91
 (Thousands Except Per Share)
 SALES $593,669 $571,318 $1,808,759 $1,717,403
 COSTS AND EXPENSES:
 Cost of merchandise sold 447,494 429,917 1,361,819 1,287,217
 Expenses 130,900 122,417 387,043 364,522
 INCOME BEFORE TAXES
 ON INCOME 15,275 18,984 59,897 65,664
 TAXES ON INCOME 6,000 7,500 23,400 25,900
 NET INCOME $ 9,275 $ 11,484 $ 36,497 $ 39,764
 EARNINGS PER COMMON SHARE $ 0.45 $ 0.56 $ 1.77 $ 1.95
 Weighted average number of
 common shares outstanding 20,568 20,444 20,566 20,409
 -0- 11~17~92
 ~CONTACT: Bill Combs of Longs Drug Stores, 510-210-6726~
 (LDG)


CO: Longs Drug Stores ST: California, Hawaii, Nevada, Colorado, Alaska IN: REA SU: ERN

SG -- SF009 -- 2105 11~17~92 18:21 EST
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Date:Nov 17, 1992
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