MATTHEWS, N.C., May 28 /PRNewswire/ -- PCA International, Inc.
(Nasdaq: PCAI), today reported fiscal 1997 first quarter results which include
the operations of American Studios acquired in January 1997.
    PCA sales for the quarter ended May 4, 1997, increased 63 percent to $58.7
million from $36.1 million in the prior year.  Income from operations
increased 52 percent to $3.1 million, compared to $2.0 million reported last
year.  Additionally, earnings from operations before interest, taxes,
depreciation, and amortization (EBITDA), increased 59 percent to $6.8 million
compared to $4.3 million in the year-ago quarter.  The Company reported net
income of $0.64 million, or $0.08 per share, in the 1997 quarter, compared to
$1.1 million, or $0.14 per share, in the 1996 first quarter.  Pretax earnings
for the 1997 quarter were reduced by interest expense of $1.6 million and
amortization of intangible assets of $0.5 million, totaling $2.1 million, both
relating to the American Studios' acquisition.
    "We are pleased with the substantial progress made this quarter in
integrating American Studios, Wal-Mart's portrait provider in the United
States and Mexico.  First quarter 1997 results are better than our original
expectations and reflect an accelerated realization of the synergies of this
business combination as evidenced by the 52 percent increase in operating
income," said John Grosso, president and chief executive officer.
    Given these favorable results and positive operating trends, PCA's Board
of Directors authorized a $10 million prepayment of the Company's $65 million
5-Year Term Loan and approved the reinstatement of a $0.07 per share quarterly
cash dividend.  The dividend will be payable on July 2, 1997, for shareholders
of record as of June 11, 1997.
    PCA is the largest operator of discount retail portrait photography
studios in North America. The Company operates more than 2,000 permanent
portrait studios within Kmart, Wal-Mart, and PETsMART stores and supercenters.
PCA also operates traveling promotions in more than 1,350 Wal-Mart locations
and offers on-site photography services to churches, day care facilities, and
other institutions. The Company's studios are located throughout the United
States, Canada, Mexico, Puerto Rico and in South America.

                     PCA INTERNATIONAL, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (Unaudited)

                                              May 4,    February 2,
    ASSETS:                                    1997     1997
    Current Assets:
     Cash and cash equivalents              $3,734,654   $1,536,234
     Other current assets                   24,365,471   25,464,269

     Total Current Assets                   28,100,125   27,000,503

    Net Property and Equipment              58,277,515   58,264,560

    Intangible Assets                       62,290,985   60,256,854

    Other Assets                             2,639,084    1,139,305

     TOTAL ASSETS                         $151,307,709 $146,661,222

    LIABILITIES AND SHAREHOLDERS' EQUITY:

    Current Liabilities:
     Short-term borrowings                  $2,000,000 $         --
     Current portion of long-term debt       1,250,000           --
     Accounts payable-trade                 16,382,405   19,799,067
     Other current liabilities              28,668,087   29,672,985

     Total Current Liabilities              48,300,492   49,472,052

    Long-Term Debt                          63,228,450   58,679,770

    Other Liabilities                        4,617,371    4,868,660

    Shareholders' Equity                    35,161,396   33,640,740

     TOTAL LIABILITIES AND
      SHAREHOLDERS' EQUITY                $151,307,709 $146,661,222

                        CONSOLIDATED STATEMENTS OF INCOME
                                  (Unaudited)

                                             Three Months Ended
                                             May 4,    April 28,
                                             1997        1996
    SALES                                  $58,691,809  $36,087,986

    COSTS AND EXPENSES:
     Advertising and promotional costs       4,313,900    3,633,789
     Costs of photographic sales            21,794,658   11,904,402
     Store commissions and selling costs    18,892,362   11,747,366
     General and administrative expense     10,176,412    6,791,240
     Amortization of intangibles               455,738           --
     Total costs and expenses               55,633,070   34,076,797

    INCOME FROM OPERATIONS                   3,058,739    2,011,189

     Interest expense, net                   1,619,383       18,547

    INCOME BEFORE INCOME TAXES               1,439,356    1,992,642

    INCOME TAX PROVISION                       796,030      853,864

    NET INCOME                                $643,326   $1,138,778

    WEIGHTED AVERAGE NUMBER OF COMMON SHARES:
     Primary                                 8,133,965    7,868,479
     Fully diluted                           8,134,028    8,032,229

    PRIMARY AND FULLY DILUTED EARNINGS PER
     COMMON SHARE:

     Net income                                  $0.08        $0.14

    CASH DIVIDENDS PER COMMON SHARE              $  --        $0.07

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