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DISCOVERY ZONE, INC. ANNOUNCES 274 PERCENT INCREASE IN REVENUE FOR THIRD QUARTER

 CHICAGO, Oct. 20 /PRNewswire/ -- Discovery Zone, Inc. (NASDAQ: ZONE), the nation's largest owner, operator and franchisor of children's indoor playgrounds (FunCenters), reported earnings for the third quarter ended Sept. 30, 1993, of $1,274,000 or $0.03 per share, compared to a loss of $(1,243,000) or $(0.04) per share for the comparable period a year ago. Third quarter 1993 revenue increased 274 percent to $13.9 million from $3.7 million during the third quarter of 1992. Increased revenue is primarily attributable to an increase in the number of company-owned FunCenters in operation during the period as well as the acquisitions, during the third quarter of 1993, of 24 FunCenters from the former franchisees. System-wide revenue increased to $20.2 million during the quarter from $8.6 million during the same period in the prior year. At Sept. 30, 1993, there were 115 Discovery Zone FunCenters in operation, 70 company-owned and 45 franchised, in 32 states and Puerto Rico. At Sept. 30, 1992, there were 46 FunCenters in operation, one company-owned and 45 franchised.
 For the nine months ended Sept. 30, 1993, the company earned $2,087,000 or $0.05 per share, compared to the first nine months of 1992 when the company lost $(1,844,000) or $(0.05) per share. Revenue for the first nine months of 1993 increased 181 percent to $31.0 million from $11.0 million during the comparable period in 1992. All of these amounts reflect restatements that were required as a result of certain of the acquisitions of former franchisees being treated as pooling of interests combinations. System-wide revenues increased to $48.9 million for the first nine months of 1993 from $22.2 million during the first nine months of 1992.
 Donald F. Flynn, chairman and chief executive officer, said, "The Discovery Zone network continues to grow, and we are on track to meet our goal of having between 200 and 210 FunCenters in operation by Dec. 31, 1993. Our successful LYONs offering helps to lock in our cost of capital while we pursue our aggressive expansion plans for 1994 and beyond. We believe our recent joint venture agreement to establish 70 FunCenters in Mexico, and our current development of FunCenters in the United Kingdom, represent important first steps in our global strategy."
 Discovery Zone FunCenters feature a distinct play zone comprised of a series of tubes, slides, ball bins, climbing mountains, air and water trampolines, obstacle courses, ramps, stairs and other devices for crawling, jumping, swinging and climbing. Discovery Zone FunCenters also include a separate play zone for smaller children, an open play area for infants and toddlers, a game room, party rooms, a food service area, a retail sales area and a parents' room.
 DISCOVERY ZONE, INC.
 Condensed Consolidated Statements of Operations
 (Unaudited)
 Three Months Ended
 (In thousands, except per share Sept. 30,
 and FunCenter data) 1993 1992
 Revenue $13,885 $ 3,709
 Cost of Sales 2,383 1,605
 Operating, Selling, and
 Administrative Expenses 10,007 3,342
 Operating Income (Loss) 1,495 (1,238)
 Interest and Other Income (Expense), Net 219 (5)
 Income (Loss) Before Provision for
 Income Taxes 1,714 (1,243)
 Provision For Income Taxes 440 0
 Net Income (Loss) $ 1,274 $(1,243)
 Earnings (Loss) Per Common and
 Equivalent Share $ 0.03 $ (0.04)
 Weighted Average Common and
 Equivalent Shares 45,777 34,478
 Number of FunCenters in Operation
 At End of Period:
 Company-Owned 70 1
 Franchised 45 45
 Total 115 46
 System-wide Revenue $20,161 $ 8,619
 DISCOVERY ZONE, INC.
 Condensed Consolidated Statements of Operations
 (Unaudited)
 Nine Months Ended
 (In thousands, except per Sept. 30,
 share data) 1993 1992
 Revenue $30,992 $11,037
 Cost of Sales 7,121 4,246
 Operating, Selling and
 Administrative Expenses 21,617 8,561
 Operating Income (Loss) 2,254 (1,770)
 Interest and Other Income (Expense), Net 288 (74)
 Income (Loss) Before Provision for
 Income Taxes 2,542 (1,844)
 Provision For Income Taxes 455 0
 Net Income (Loss) $ 2,087 $(1,844)
 Earnings (Loss) Per Common and
 Equivalent Share $ 0.05 $ (0.05)
 Weighted Average Common and
 Equivalent Shares 40,367 34,371
 System-wide Revenue $48,936 $22,238
 -0- 10/20/93
 /CONTACT: Robert D. Mitchum, vice president and chief financial officer of Discovery Zone, 312-616-3800/
 (ZONE)


CO: Discovery Zone, Inc. ST: Illinois IN: LEI SU: ERN

AR-BM -- CL019 -- 4485 10/20/93 10:35 EDT
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Publication:PR Newswire
Date:Oct 20, 1993
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