MATTHEWS, N.C., Feb. 3 /PRNewswire/ -- PCA International, Inc.,
(Nasdaq: PCAI) today announced a restructuring plan in connection with the
merger with American Studios, Inc.  The merger creates one of the largest
professional portrait photography companies in North America
with over 2,400 permanent portrait studios photographing more than 5 million
customers annually and combined sales for fiscal 1996 in excess of $260
million.
    In order to realize expected synergies from the consolidation of
the North American operations of both companies, PCA's restructuring plan will
focus on three major initiatives:  (1) The integration of corporate and field
general and administrative functions; (2) The upgrading of all non-digital
Wal-Mart studios with PCA's proprietary digital imaging technology; and, (3)
The closing of approximately 415 underperforming U.S. Kmart Portrait Studios.
The Company expects to complete these activities during the first six months
of fiscal 1997.  As a result, the Company will take a fourth quarter
restructuring charge of approximately $3.6 million, which will reduce after-
tax earnings by an estimated $.44 per share.  This one-time charge against
earnings relates to the write-off of the unamortized studio leasehold
improvements and accruals for expected expenses associated with the studio
closures.
    In addition to the synergistic benefits expected to be realized
as a result of the company's restructuring plan, the merger provides
significant business opportunities and advantages for PCA.  The business
combination greatly expands the Company's distribution channels and access to
customers, both domestically and internationally, through the largest retailer
in the world, Wal-Mart Stores, Inc.  Furthermore, the Company expects to
realize improved studio operating profits and enhanced customer satisfaction
levels as it leverages the benefits (higher sales order averages and lower
production costs) of its proprietary digital imaging technology into the
current 850 Wal-Mart portrait studios, and the more than 100 new Wal-Mart
studios planned to be opened in fiscal 1997.
    PCA's fourth quarter and fiscal full year ended on Sunday, February 2,
1997.  The Company expects to report fourth quarter sales of approximately $51
million and full year sales of approximately $155 million.  Net income for the
fourth quarter, before the $3.6 million restructuring charge, is estimated to
be $4.6 million, or $.56 per share, approximately a six percent decline over
the prior year's fourth quarter.  For the full year, net income, before the
restructuring charge, is estimated to be $6.6 million, or approximately $.81
per share.  The merger will be accounted for as a purchase business
combination at February 2, 1997 and therefore PCA's fiscal 1996 year-end
financials will not include the financial results of American Studios, Inc.
    John Grosso, president and chief executive officer of PCA stated, "Our
earnings in the fourth quarter and for the full year, were below our original
expectations, principally due to the aggressive investment spending
initiatives to pursue our diversification objectives.  We view this shortfall
in earnings as an investment in future opportunities for profitable growth.
The completion of the acquisition of American Studios and the inherent future
benefits to be realized have made 1996 a milestone year in our Company's
history."

    DISCLAIMER:  Certain statements in this release may constitute "forward-
looking statements" and involve risks, uncertainties, and other factors which
may cause the actual performance of PCA International, Inc. to be materially
different from the performance expressed or implied by such statements.  These
risks are discussed in the latest Form 10K on file with the SEC.

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