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E-Z SERVE REPORTS FIRST QUARTER, 1992 RESULTS

 E-Z SERVE REPORTS FIRST QUARTER, 1992 RESULTS
 HOUSTON, May 18 /PRNewswire/ -- E-Z Serve Corporation (AMEX: EZS) of


Houston today reported a net loss of $2,661,000, or $0.34 per common share, for the first quarter ended March 31, 1992, as compared to net income of $498,000 or $0.23 per common share for the first quarter ended March 31, 1991. The first quarter of 1992 included $453,000 of non- recurring expenses primarily related to the planned closing of the company's Kingsville, Texas office; 1991's first quarter included a gain of $5 million related to the sale of the company's Hawaiian retail gasoline marketing subsidiary, partially offset by $584,000 of non-recurring expenses, which were primarily bad debt adjustments. Without these one-time adjustments, the company would have reported net losses of $2,208,000 and $3,918,000 for the three months ended March 31, 1992 and 1991, respectively. Operating results in 1992 include the effects of the previously announced Taylor Petroleum acquisition since March 1, 1992.
 Total operating revenues in the first quarter ended March 31, 1992 were $54,899,000, a decline of four percent from the $57,225,000 reported for the same period in 1991. The decrease was due to lower selling prices at the pump, a decline in the number of open and operating retail locations, and the shutdown of the bulk wholesale business, partially offset by the addition of the operations of Taylor Petroleum.
 Retail motor fuel sales increased by 4.2 million gallons, or nine percent, to 48.7 million gallons for the three months ended March 31, 1992 as compared to the same 1991 period due to the addition of Taylor Petroleum, partially offset by reductions caused by the lower number of open and operating locations in 1992. In the first quarter of 1992, the company averaged 541 open and operating retail locations selling motor fuels as compared to an average of 604 locations for the first quarter of 1991. However, gallons sold per location per month increased 20 percent to 30,000 gallons per location, and gross profit per location per month increased seven percent to $3,000 per location in the first quarter of 1992 when compared to 1991's first quarter.
 For the three months ended March 31, 1992, convenience store merchandise sales increased by $2.3 million, or 43 percent, reflecting the addition of Taylor Petroleum. Merchandise sales per location per month of $28,000 in the first quarter of 1992 declined by $3,000 per location, or 10 percent, from the 1991 first quarter as the average sales per store at Taylor Petroleum is lower than the non-Taylor Petroleum average. However, the gross profit per location per month of $9,100 in the first quarter of 1992 increased $600 per location or seven percent, largely due to an increase in the average gross profit percentage from 27.13 percent to 33.05 percent as the company's redefined pricing and rebate program in the non-Taylor locations began to show results in the first quarter of 1992.
 Excluding the expenses associated with the planned closing of the company's Kingsville, Texas administrative office, all categories of expense declined in the first quarter of 1992 from the amounts reported in the first quarter of 1991. These reductions occurred despite the addition of Taylor Petroleum and are due to the reduced number of open and operating locations and the company's continuing efforts to control costs in all areas. In particular, the 1992 first quarter expense of $818,000 reflects a reduction of $1,220,000, or 60 percent, from the 1991 first quarter, due to the conversion of long-term debt to equity upon completion of a common stock rights offering in April 1991 which established separate ownership for the company from its former parent, Harken Energy Corporation. Interest expense also declined as interest rates declined and as the company applied the proceeds from asset sales to reduce bank debt. Total long-term debt declined 52 percent from $74.2 million at March 31, 1991 to $35.8 million at March 31, 1992, and long-term bank debt declined 18 percent from $34.6 million to $28.3 million for the same periods.
 Neil H. McLaurin, president and chief executive officer, commented, "The company's top priority is to reach profitability by continuing to reduce bank debt and overhead costs, and by realizing the benefits from consolidating and improving the operations of Taylor Petroleum. We are gaining ground in a very difficult operating environment for our industry, but we must continue to aggressively pursue our business plan of acquiring profitable locations and disposing of those that demonstrate no future potential."
 E-Z SERVE CORPORATION
 Selected Operational Information
 (Dollar amounts in thousands)
 Three months ended March 31, 1992 1991
 Motor Fuels -- Retail
 Average number of open and
 operating locations (A) 541 604
 Gallons sold 48,718 44,530
 Gallons sold per location per month 30 25
 Revenues $46,908 $49,711
 Gross profit (B) $4,931 $5,029
 Gross profit per gallon $0.1012 $0.1129
 Gross profit per location per month $3.0 $2.8
 Convenience Store (C)
 Average number of open and
 operating locations 91 56
 Merchandise sales $7,521 $5,253
 Merchandise sales per location per month 28 31
 Gross profit $2,486 $1,425
 Gross profit percentage 33.05 27.13
 Gross profit per location per month $9.1 $8.5
 Motor Fuels -- Wholesale (D)
 Gallons sold -- 2,404
 Revenues -- $1,732
 Gross profit (loss) -- $241
 Gross profit (loss) per gallon -- $0.1002
 (A) Represents retail outlets and company-owned convenience stores that retail gasoline.
 (B) Gross profit is shown before deducting compensation paid to operators of locations not operated by the company of $1,394 and $1,689 for the three months ended March 31, 1992 and 1991, respectively.
 (C) Represents revenues from merchandise related sales at company- owned locations.
 (D) Represents operations shut down in September 1991.
 E-Z SERVE CORPORATION
 Selected Financial Information (A)
 (In Thousands Except Per Share Amounts)
 Three months ended March 31, 1992 1991
 Operating revenues $54,899 $57,225
 Cost of sales (47,060) (50,001)
 Gross profit 7,839 7,224
 Operating expenses (5,509) (5,588)
 Selling, general and administrative
 expenses (2,758) (2,540)
 Depreciation and amortization (1,322) (1,392)
 Interest expense:
 Bank (560) (1,086)
 Related parties (132) (899)
 Other (126) (53)
 Gain (loss) on sale of assets (6) 4,832
 Loss before income taxes (2,574) 498
 Income tax expense (87) --
 Net loss $(2,661) $498
 Loss attributable to common stock:
 Net loss $(2,661) $498
 Preferred stock dividends (96) --
 Total $(2,757) $498
 Loss per common share $(0.34) $0.23
 Average shares outstanding 8,114,729 2,127,013
 (A) Certain amounts in 1991 have been reclassified to conform to the presentation used in 1992.
 E-Z Serve Corporation is a distributor of motor fuels through 447 retail outlets and 164 company-owned convenience stores located predominantly in rural areas in 19 states.
 -0- 5/18/92
 /CONTACT: John Miller, senior vice president of E-Z Serve, 800-256-0600, or 713-591-1111/ CO: E-Z Serve ST: Texas IN: OIL SU:


SM -- NY091 -- 1583 05/18/92 19:21 EDT
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