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SOUTHWEST CAFES, INC. ANNOUNCES FISCAL 1992 RESULTS

 SOUTHWEST CAFES, INC. ANNOUNCES FISCAL 1992 RESULTS
 DALLAS, Aug. 3 /PRNewswire/ -- Southwest Cafes, Inc. (NYSE: TXMX)


today announced its results for the fiscal year ended June 1, 1992. For the 53-week fiscal year, the company recorded a net loss of $969,000, or $0.22 per share, on total revenues of $90.8 million including sales from company-owned restaurants of $86 million. A loss was expected and included a previously announced pre-tax special charge of $4 million at year-end reflecting writedowns of underperforming restaurants and other properties and assets; severance, long-term incentive plan vesting and other non-recurring costs of management changes and restructuring; and an accrual for higher than expected workers' compensation and general liability claims cost. The results compare with $1,242,000 of net income, or $0.28 per share, on $84.5 million in revenues including sales from company-owned restaurants of $80.8 million in the 52-week prior fiscal year.
 For the 17-week fiscal fourth quarter Southwest Cafes had a $2 million net loss, or $0.47 per share on $29.2 million in revenues, compared with the year earlier 16-week fourth quarter net income of $452,000, or $0.10 per share, on $25.9 million in revenues.
 Lawrence E. White, chief financial officer said, "The results of fiscal 1992 mark the beginning of a transition for our company. Our growth and flagship concept, El Chico, is strong and poised for the future. In addition to healthy double-digit store operating profit, company-owned El Chico restaurants had same-store comparable period sales increases of 3.1 percent in the fourth quarter and 2.1 percent for the year. We are pleased that we continue to experience positive comparable store sales this fiscal year, even without broadcast support, considering that a year ago we were advertising in most markets. Additionally, our balance sheet is very strong as we begin this transition, with over $7 million in cash and only $1.2 million in long- term debt at fiscal year end."
 Chairman of the board and chief executive officer, J. Michael Jenkins added, "We are reestablishing El Chico as the growth vehicle for our company. We have executed lease agreements on two sites for new company stores and plan to begin construction of our newly designed prototype El Chico on one site in August and the other in September. Other locations are under evaluation, and we are actively searching for additional sites. Within a few weeks our franchise offering documents will be completed, and we can begin pursuing this avenue of growth also. We expect to open as many as eight to 10 new restaurants over the next 18 months." Jenkins continued, "We have begun the process of converting three of our existing specialty restaurants to El Chico's, and a remodeling and critical maintenance upgrade of virtually every company- owned El Chico in the system will begin in September."
 Southwest Cafes, Inc., owns and franchises a group of 88 full- service Mexican and other concept restaurants in 12 states throughout the Southern and Southwestern regions of the United States.
 SOUTHWEST CAFES Summary of Operating Results
 (In Thousands, Except Per Share Amounts)
 17 Weeks 16 Weeks 53 Weeks 52 Weeks
 Ended Ended Ended Ended
 6/1/92 5/27/91 6/1/92 5/27/91
 Total Revenues $ 29,178 $ 25,901 $ 90,818 $ 84,465
 Sales from company-
 owned restaurants 27,954 24,812 86,030 80,841
 Income/(Loss) Before
 Income Taxes (3,135) 725 (1,568) 1,870
 Net Income/(Loss) (2,026) 452 (969) 1,242
 Net Income/(Loss)
 per Common Share (0.47) 0.10 (0.22) 0.28
 Memo: Special Pre-
 Tax Charge (3,977) -- (3,977) --
 Weighted Average
 Shares Outstanding 4,355 4,319 4,318 4,389
 -0- 8/3/92
 /CONTACT: Lawrence E. White, chief financial officer of Southwest Cafes, Inc., 214-241-5500/
 (TXMX) CO: Southwest Cafes ST: Texas IN: FOD SU: ERN


LD -- NY096 -- 6422 08/03/92 19:37 EDT
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Date:Aug 3, 1992
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