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THE PRICE COMPANY REPORTS 2ND QUARTER RESULTS FISCAL 1992

 THE PRICE COMPANY REPORTS 2ND QUARTER RESULTS FISCAL 1992
 SAN DIEGO, April 2 /PRNewswire/ -- The Price Company (NASDAQ: PCLB) announced today, results for the second quarter of fiscal 1992 ending March 15, 1992.
 In the 12-week second quarter ended March 15, 1992, the reported sales were $1.519 billion, compared with $1.362 billion last year, an increase of 11.5 percent. Income before interest and taxes was $35.3 million, compared with $41.0 million, a decrease of 13.8 percent. Net income was $20.6 million, compared with $27.9 million last year, a decrease of 26.0 percent. Fully diluted earnings per share were $.42 compared with $.56 last year, a decrease of 25 percent.
 In the 28 weeks of fiscal 1992, sales were $3.973 billion, compared with $3.524 billion last year, an increase of 12.7 percent. Income before interest and taxes was $121.6 million, compared with $117.3 million, an increase of 3.6 percent. Net income was $71.0 million compared with $74.9 million last year, a decrease of 5.2 percent. Fully diluted earnings per share for the 28 weeks were $1.37 compared to $1.50 last year, a decrease of 8.7 percent.
 Comparable warehouse sales for all Price Clubs which were operating during the same period last year increased 3.59 percent in the second quarter and increased 3.58 percent for the 28-week period.
 Robert Price, chairman and chief executive officer, had the following comments: "While we are in no way sanguine about the comparative decline in profits, we believe it is the result of the confluence of several short-term considerations. Nevertheless, this development has made us take a long, hard look at the way we view expansion and growth, and we are making some responsive changes in our approach.
 "We have identified six factors adversely affecting this quarter's earnings in comparison to those of last year's second quarter. Last year, we reported a non-recurring after-tax gain of 4.7 cents per share on the sale of securities; there was no comparable unusual event this year. At the end of last year's second quarter we raised $287.5 million of convertible debt. At this time, approximately $120 million is currently invested in as-yet unproductive new properties. Some of our newly opened Price Clubs are still building up their sales and are not yet profitable, and some of them are draining sales from existing Price Clubs in the same general area, a phenomenon we refer to as 'cannibalization'. (This is particularly noticeable at our new clubs in Richmond, Va. and Yorba Linda, Calif.) Investments in new properties, early-stage operating losses, and cannibalization are all acceptable components of building for the future, so long as the sites involved are well chosen, and our operations at the new facilities are run well. In the short-term, however, they involved after-tax costs of about 5.5 cents per share.
 "Two adverse developments in Canada hurt reported earnings. We were required by judicial decisions to close on Sundays in the Quebec and Ontario provinces, leading, in our judgment, to a reduction in after-tax earnings of about 1 cent per share. Also, two significant accounting issues shifted about 2 cents of after-tax earnings from the second quarter to the first quarter, hurting comparative reported results. Finally, we are continuing to feel the impact of the recession, particularly in California, and this impact was heightened by our decision not to respond to short-term increased pressure on expenses by laying off employees. We view the compact between management and employees as a fundamental aspect of the Price Club philosophy, and we value our employees' loyalty; they are entitled to ours. In the long run, we believe our best investment is in our personnel.
 "In reviewing our experiences during the past six months, including the success achieved in Mexico, we are reevaluating the application of our capital and management resources. It is apparent that we must be more selective in opening locations in new markets, and the criteria we use should be influenced more by potential volume and profits than by increasing the number of locations. New Price Clubs will open in Philadelphia and Dallas during the third and fourth quarters of this fiscal year. We own properties in Chicago and Houston, and we plan to carefully evaluate the best time to open these locations. Regarding markets where Price Clubs have a strong presence, we will be more selective about expansion and attempt to reduce cannibalization. During the third and fourth quarters we plan to open in Santa Clarita, Calif. and Manassas, Va. We have decided that more of our time and money needs to be directed to making existing Price Clubs better. During the next 12 months many Price Clubs will be refurbished and expanded to allow for the addition of new products and services. We believe this increased focus on quality rather than quantity will prove beneficial to the company and to its shareholders."
 The company currently operates 77 Price Clubs in the United States and Canada (12 in Canada). In addition, the company, in a joint venture with Controladora Comercial Mexicana, S.A. de C.V., operates one Price Club in Mexico City.
 THE PRICE COMPANY
 Consolidated Income Statement
 Second Quarter Fiscal 1992 and 1991 (Unaudited)
 (000s except per share data)
 Second Quarter Year-to-Date
 (12 Weeks) (28 Weeks)
 March 15, March 17, March 15, March 17,
 1992 1991 1992 1991
 Operating revenues:
 Sales $1,519,232 $1,361,967 $3,972,897 $3,524,027
 Membership fees
 and other income 34,752 31,134 89,049 77,553
 Real estate
 operations, net 3,604 3,694 13,684 8,633
 Total operating
 revenues 1,557,588 1,396,795 4,075,630 3,610,213
 Operating costs
 and expenses:
 Cost of sales 1,383,296 1,241,947 3,621,402 3,218,576
 Selling, general
 and administrative 138,979 113,875 332,632 274,299
 Total operating
 expenses 1,522,275 1,355,822 3,954,034 3,492,875
 Operating Income 35,313 40,973 121,596 117,338
 Non-operating items:
 Income from
 investments 5,988 7,120 12,810 12,446
 Interest expense (7,041) (3,182) (16,533) (7,015)
 Income before income
 taxes 34,260 44,911 117,873 122,769
 Income taxes (13,635) (17,049) (46,913) (47,880)
 Net income $20,625 $27,862 $70,960 $74,889
 Net income per share:
 Primary $.42 $.56 $1.40 $1.50
 Fully diluted $.42 $.56 $1.37 $1.50
 Number of shares
 used in calculation:
 Primary 52,674 52,067 52,793 51,934
 Fully diluted 52,679 52,861 58,783 52,399
 THE PRICE COMPANY
 Consolidated Balance Sheet
 Second Quarter Fiscal 1992 and 1991 (Unaudited)
 (000s)
 March 15, March 17,
 1992 1991
 Assets
 Current Assets
 Cash $11,085 $0
 Short-term investments 173,562 292,524
 Merchandise inventories 381,883 311,370
 Receivables, net 49,882 60,445
 Prepaid expenses and other
 current assets 25,118 15,790
 Total current assets 641,530 680,129
 Property, Plant and Equipment
 Land 389,233 267,004
 Buildings and improvements 303,883 262,286
 Equipment and fixtures 163,451 119,290
 Construction in progress 35,145 12,616
 Total 891,712 661,196
 Less accumulated depreciation (127,451) (98,478)
 Total 764,261 562,718
 Other Assets
 Property held for development or
 lease to others, net 281,547 258,183
 Investment in and advances to
 joint ventures 50,133 23,499
 Goodwill, net 49,898 49,127
 Notes receivable 58,106 46,520
 Miscellaneous other assets 21,718 30,976
 Subtotal 461,402 408,305
 Total Assets $1,867,193 $1,651,152
 Liabilities and Shareholders' Equity
 Current Liabilities
 Bank checks outstanding,
 less cash on deposit $0 $4,126
 Accounts payable 355,795 316,904
 Payroll and related accruals 66,136 59,839
 Accrued sales and other taxes 31,010 26,079
 Income taxes payable 7,996 15,455
 Other current liabilities 42,860 41,984
 Total Current Liabilities 503,797 464,387
 Long-Term Liabilities
 Long-term debt 513,755 486,571
 Deferred taxes 9,512 8,212
 Other 8,573 6,841
 Total 531,840 501,624
 Shareholders' Equity
 Common stock 4,881 4,834
 Paid-in capital 124,370 104,223
 Retained earnings 704,966 574,467
 Foreign currency translation (2,661) 1,617
 Total 831,556 685,141
 Total liabilities and shareholders'
 Equity $1,867,193 $1,651,152
 NOTE: During the second quarter of fiscal 1992 the LIFO reserve


increased by $1,500,000 to a balance of $12,800,000. This compares to an increase of $1,300,000 in the second quarter of fiscal 1991 to an ending balance of $12,800,000.
 THE PRICE COMPANY
 Questions & Answers
 1. Do PCLB's 2nd quarter results reflect non-recurring events or an underlying earnings trend?
 As mentioned in the press release, several factors which were non- recurring in nature contributed to roughly one-half of the decline in net earnings and EPS when compared to the same quarter last year.
 The remaining difference reflects three general factors. First, the company was impacted by the performance of several warehouses which were opened during the past 18 months and are operating at less than expected volumes. The company has long recognized that with the higher level of competition within the industry that opening warehouse volumes, especially in new markets where Price Clubs are not well-known, would decline from the volumes achieved in the mid-to-late 1980s. The company believes that the current economic conditions are making it even tougher for these warehouses in new markets.
 In addition, the sluggish economic environment in California, in the Northeastern U.S. and Canada is impacting the highly successful core base of mature locations. These two factors can be expected to continue as long as the economy remains in its current state. Notwithstanding this factor, the company has many programs and efforts in place to counteract these broad influences on our business.
 Lastly, the company has added new Price Clubs in a few existing markets which have cannibalized the warehouses in those areas. While the company believes that this strategy is critical to developing the proper level of member service over the long run, it expects to see a more conservative approach to this strategy over the coming years.
 Rather, the company plans to invest significantly in the existing warehouses in situations where the economics of cannibalization are marginal. Therefore, the company would expect the impact of this factor on its results to diminish as it cycles through fiscal 1992.
 2. Has PCLB changed its expansion strategy?
 The company continues to believe that expansion of its business makes sense when directed in one of three ways: (1) to solidify its presence in existing markets when the economics support the decision, (2) to expand into new markets where the Price Club offers value not already available to prospective members, and (3) international expansion (e.g., Canada and Mexico) to capitalize on transferring this successful retail concept into expansive new markets. The company is expecting to open approximately 28 to 32 warehouses during the 1992 and 1993 fiscal years in the United States and Canada. Many of these will open in the fall and winter of 1992. The company believes that these locations fit well with its stated objectives for expansion.
 For fiscal years 1994 and thereafter, the company has not established a goal for the number of openings in order to be as opportunistic as possible to the market at that time. However, there is a possibility that the number of openings could decline from the fiscal 1992/93 levels. Should this occur, it would reflect an "intelligent loss of sales" philosophy to the site selection process, and would be in the best interests of the company and its shareholders.
 3. Does PCLB have any current plans to close existing Price Clubs?
 As demonstrated by the closure of the Cheektowaga (Buffalo), N.Y. warehouse, the company believes that under certain circumstances the long-term business interests are best served if an under-performing location is closed. While the company continues to evaluate the economics of a few of our under-performing locations, it currently believes that it will continue to grow and develop increased business at these warehouses and that it would be inappropriate to close them at this time.
 4. How was earnings per share calculated?
 Earnings per share was calculated as follows (000s):
 2nd Quarter Year-to-Date
 Primary F. Diluted Primary F. Diluted
 Shares outstanding (wtd. avg.) 48,832 48,832 48,848 48,848
 Impact of options/warrants 300 305 403 403
 Add'l shares (5.5 pct. converts) 3,542 3,542 3,542 3,542
 Add'l shares (6.75 pct. converts) 0 0 0 5,990
 Total shares used 52,674 52,679 52,793 58,783
 After-tax earnings $20,625 $20,625 $70,960 $70,960
 Interest, net (5.5 pct.
 converts) 1,367 1,367 3,189 3,189
 Interest, net (6.75 pct.
 converts) 0 0 0 6,291
 Adjusted income $21,992 $21,992 $74,149 $80,440
 Earnings per share $0.42 $0.42 $1.40 $1.37
 The number of common stock shares outstanding at March 15, 1992 was approximately 48,805,000.
 -0- 4/2/92
 /CONTACT: Daniel T. Carter, VP-finance of The Price Company, 619-581-4889/
 (PCLB) CO: The Price Company ST: California IN: REA SU: ERN


KJ -- SD002 -- 4187 04/02/92 08:04 EST
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