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SOLO SERVE CORPORATION REPORTS FIRST QUARTER EARNINGS

 SAN ANTONIO, Texas, May 24 /PRNewswire/ -- Solo Serve Corporation (NASDAQ: SOLO) today reported that its net income for the first quarter was $.1 million, or $.02 per share, compared to $1.2 million, or $.28 per share for the same period last year. First quarter 1992 results have been restated to reflect the company's 1992 adoption of SFAS No. 106, Employer's Accounting for Postretirement Benefits Other Than Pension, from net income of $1.4 million, or $.33 per share to $1.2 million, or $.28 per share. The earnings per share calculation for the first quarter ended May 1, 1993, reflects the company's initial public offering of 1.6 million shares of common stock, effective May 5, 1992.
 Net sales for the first quarter ended May 1, 1993 increased 10.2 percent over the prior year first quarter to $38.3 million from $34.8 million. For the first quarter of 1993, comparable store sales were down 7.4 percent from the comparable period of the prior year. Management attributes this decline in part to consumers' concerns about the economy and the company's efforts to reduce inventory levels. The results for the first quarter of 1993 also reflect lower profit margins as a percentage of sales than the comparable quarter of 1992. This variance is attributable in part to lower than expected sales in the quarter and the impact of additional markdown and clearance activities.
 During the quarter, the company opened two additional Solo Serve stores, bringing the total number of stores in operation to 43 at May 1, 1993 compared to 35 at May 2, 1992.
 Solo Serve Corporation operates a chain of off-price retail stores offering a wide selection of name brand and other merchandise at prices 20-60 percent below traditional department and specialty stores. The company currently has 36 Solo Serve stores in Texas, Louisiana and Alabama and seven off-price discount stores in Texas and Louisiana currently operating under the name Half & More.
 SOLO SERVE CORPORATION
 CONDENSED BALANCE SHEET
 (unaudited)
 May 1, May 2,
 Assets 1993 1992
 Current Assets:
 Cash and time deposits $ 1,200,282 $ 1,391,737
 Inventory 28,115,901 26,443,732
 Other current assets 4,359,128 4,450,547
 Total current assets 33,675,311 32,286,016
 Property and equipment, net 24,856,911 17,948,545
 Goodwill and service marks, net 751,701 878,084
 Deferred income taxes, net 467,608 99,450
 Total Assets $59,751,531 $51,212,095
 Liabilities and Stockholders' Equity
 Current Liabilities:
 Current portion of long-term debt 38,411 1,707,419
 Accounts payable and accrued expenses 14,834,313 15,793,229
 Total current liabilities 14,872,724 17,500,648
 Long-term debt 11,886,623 21,154,338
 Post-retirement benefit obligation 307,025 292,500
 Total Liabilities 27,066,372 38,947,486
 Total Stockholders' Equity 32,685,159 12,264,609
 Total Liabilities and Stockholders'
 Equity $59,751,531 $51,212,095
 SOLO SERVE CORPORATION
 CONDENSED STATEMENTS OF INCOME
 (unaudited)
 Thirteen Weeks Ended May 1, 1993 May 2, 1992
 Net sales $ 38,335,889 $ 34,790,937
 Cost of goods sold (including
 buying and distribution,
 excluding depreciation
 shown below) 26,177,331 22,675,696
 Gross profit 12,158,558 12,115,241
 Selling, general, and
 administrative expense 10,783,591 8,872,068
 Depreciation and amortization 930,876 628,054
 Operating income 444,091 2,615,119
 Interest expense, net 217,889 375,927
 Income before taxes 226,202 2,239,192
 Provision for income taxes 84,373 841,937
 Income before accounting
 change 141,829 1,397,255
 Cumulative effect of change
 in accounting for post-
 retirement benefits net
 of tax -- 193,050
 Net Income $ 141,829 $ 1,204,205
 Income per common share
 before accounting change $ .02 $ .33
 Net income per common share $ .02 $ .28
 Weighted average common shares
 outstanding 5,869,703 4,297,891
 -0- 5/24/93
 /CONTACT: Timothy L. Grady, Solo Serve Corporation, 210-662-6262/
 (SOLO)


CO: Solo Serve Corporation ST: Texas IN: REA SU: ERN

LD -- NY097 -- 1920 05/24/93 19:07 EDT
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Date:May 24, 1993
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