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ALLOU HEALTH & BEAUTY CARE WARRANT EXERCISE GENERATES $6.5 MILLION IN NEW EQUITY

 ALLOU HEALTH & BEAUTY CARE WARRANT EXERCISE GENERATES $6.5 MILLION
 IN NEW EQUITY
 BRENTWOOD, N.Y., May 19 /PRNewswire/ -- Allou Health & Beauty Care, Inc. (AMEX: ALU), announced today that 99 percent of its outstanding redeemable Class A warrants issued in connection with the company's public offering in July 1989 and called for redemption were exercised. Allou received net proceeds of approximately $6.5 million from the exercise of the Class A warrants. The remaining 11,874 Class A warrants were redeemed and cancelled.
 Each Class A warrant, exercisable at $5 per share, entitled holders to one share of Class A common stock and one redeemable Class B warrant, entitling the holder to purchase one share of Class A common stock at a fixed price of $7.50 per share until July 10, 1994. The exercise of the Class A warrants increased the number of shares outstanding by 1.3 million.
 "The enormous success of the warrant exercise clearly demonstrates the confidence and enthusiasm that individual investors and institutions have in Allou's future," David Shamilzadeh, chief financial officer, said. He added that the proceeds generated will be used to expand the company's inventory levels and to accelerate growth.
 "Management's goals are clearly defined," Shamilzadeh said. "We are optimistic that a 20 percent annual growth in sales and earnings will be achieved despite the prevailing economic climate. This growth will result in increased stockholder value and the expectation for greater recognition of Allou in the financial community.
 "Additionally, Allou's management and directors are pleased to announce that Allou Health & Beauty Care, Inc., has been ranked No. 48, an upgrading from No. 52 last year, by Business Week in its May 25, 1992, issue of the 100 Best Small Growth Companies. We consider this recognition as an endorsement of management's efforts to establish goals, which through the dedication of our employees, the loyalty of Allou's customers and the confidence of its stockholders, have been surpassed."
 Allou Health & Beauty Care, Inc., is the premier distributor of over 8,000 nationally advertised health and beauty aid products in the Northeast and Miami areas. In addition, the company is a leading nationwide distributor of over 7,000 prestige designer fragrances and cosmetics. The company also distributes nationally advertised non- perishable branded food items. Allou's account base consists of 3,500 independent drug and convenience stores including the leading national chain stores.
 -0- 5/19/92
 /CONTACT: David Shamilzadeh, chief financial officer of Allou, 516-273-4000/
 (ALU) CO: Allou Health & Beauty Care, Inc. ST: New York IN: HOU SU:


GK-TS -- NY020 -- 1693 05/19/92 09:47 EDT
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Publication:PR Newswire
Date:May 19, 1992
Words:430
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