TCR_Public/960809.MBX BANKRUPTCY CREDITORS' SERVICE, INC.


Bankruptcy and Troubled Company News


August 9, 1996



  1. Comptronix Corp. files for Chapter 11
  2. United States Leather, Inc. Reports Second Quarter Results
  3. EPE Announces Second Quarter Financial Results
  4. Prime Retail, Inc. Reports Results...





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COMPTRONIX CORPORATION FILES FOR CHAPTER 11; REPORTS SECOND QUARTER RESULTS


        


            BRENTWOOD, Tenn.  --  Aug. 9, 1996  --  Comptronix
        Corporation
(OTC Bulletin Board:CMPX) today announced it has filed
        for protection under Chapter 11 of the Bankruptcy Code.  The Company
        has been unable to reach agreement with its principal lender on
        terms for continued lending and a waiver of covenants in its current
        credit agreement for the Company's second quarter performance;
        however, the Company said that it has reached an agreement with its
        principal lender, The CIT Group, which will allow the Company to use
        its cash from operations to fund its business.  
        


            E. Townes Duncan, Chairman and Chief Executive Officer, said,
        "The decision to file under Chapter 11 was a difficult one.  We were
        forced to take this action as a result of difficult business
        conditions in the second quarter and our inability to reach an
        agreement with our principal lender on terms for continued lending
        or obtain a waiver of financial performance covenants from our
        principal lender.  We have concluded that the best way to protect
        the value of the Company and its business is to proceed with the
        protection of the Court.  Chapter 11 allows us to continue operating
        while we consider all our strategic alternatives, including a sale
        of the Company, and develop a restructuring plan."  
        


            The Company also reported a net loss of $3.5 million for the
        second quarter ended June 30, 1996.  Accrued preferred dividends
        payable in kind for the second quarter were $0.3 million; and the
        total net loss for the quarter amounted to $3.8 million, or $0.29
        per share, compared with a net loss, including preferred dividends,
        of $1.9 million, or $0.14 per share, for the second quarter of 1995.
        Sales for the 1996 second quarter totaled $17.8 million compared
        with $22.8 million for the second quarter of 1995.  
        


            For the six months ended June 30, 1996, the Company reported a
        net loss, including preferred dividends, of $5.6 million, or $0.42
        per share, compared with a net loss, including preferred dividends,
        of $2.0 million, or $0.16 per share, for the six months ended July
        2, 1995.  Sales for the first half of 1996 were $41.3 million
        compared with $50.2 million for the first half of 1995.  
        


            Commenting on the second quarter results, Mr. Duncan said, "As
        we previously reported, several large customers in the
        telecommunications industry reduced their production schedules for
        the second quarter of 1996 citing the need to reduce their finished
        goods inventory levels.  This reduction was even more significant
        than expected and was the principal factor in the decline in sales
        in the second quarter.  Revenues for the second quarter of 1996
        decreased 24% compared with the first quarter of 1996.  We had
        anticipated an increase in shipments to these customers for the
        second half of 1996, but shipment levels have continued at second
        quarter levels to date; and we are unable to forecast with
        confidence when demand from these customers will increase.  During
        the next several months, our focus will remain on reducing overhead
        and other costs to match the Company's anticipated level of sales
        while maintaining the resources necessary to continue to provide
        responsive, high quality manufacturing services to our customers."  
        


            Comptronix Corporation provides contract manufacturing services
        to original equipment manufacturers in the electronics industry at
        its ISO 9002 registered facilities in Guntersville, Alabama, and at
        its Empalme, Sonora, Mexico, facility.  It specializes in assembling
        printed circuit boards and system level "Box Build" products, as
        well as providing engineering, order fulfillment and other services,
        for customers requiring strict quality control and prompt,
        responsive service.


        
                               Comptronix Corporation
                                Financial Highlights

                        (In thousands, except per share data)
         
                                               Three Months Ended   
                                             June 30,        July 2,
                                               1996           1995  
        Net sales                               $ 17,768       $ 22,737
         
        Gross profit (loss)                     $ (1,009)      $  1,262
         
        Marketing, general and administrative
          expenses                              $  1,544       $  1,798
        Interest expense, net                        952            938
        Other expense                                 19            125
         
        Net loss from operations                  (3,524)        (1,599)
        Dividend in kind on Preferred Stock          295            277
        Net loss applicable to Common Stock     $ (3,819)      $ (1,876)
         
        Net loss per common share               $  (0.29)      $  (0.14)
         
        Weighted average common shares            13,298         13,263
         
                                                Six Months Ended    
                                             June 30,        July 2,
                                               1996            1995  
        Net sales                               $ 41,265        $ 50,240
         
        Gross profit                            $    203        $  3,490
         
        Marketing, general and administrative
          expenses                              $  3,007        $  3,153
        Interest expense, net                      1,967           1,931
        Other expense                                251             (69)
         
        Net loss from operations                  (5,022)         (1,525)
        Dividend in kind on Preferred Stock          586             512
        Net loss applicable to Common Stock     $ (5,608)       $ (2,037)
         
        Net loss per common share               $  (0.42)       $  (0.16)
         
        Weighted average common shares            13,298          12,975

        CONTACT:  Comptronix Corporation, Brentwood
                  E. Townes Duncan, 205/582-1810 or                  
                  Joseph G. Andersen, 205/582-1820


United States Leather, Inc. Reports Second Quarter Results


        


            MILWAUKEE, WI  --  Aug. 9, 1996  --  United States Leather, Inc.
        reported today that net sales for the second quarter of 1996 were
        $81.0 million which was flat to the average of the last three
        quarters.  As compared to the same period in 1995, however, second
        quarter 1996 sales decreased by $12.7 million or 13.6%. This
        reduction was principally the result of a 9% reduction in the square
        footage of finished leather sold, reduced sales from the USL Trading
        Division, which the Company is discontinuing, and lower selling
        prices.  While the square footage of finished leather sold in the
        second quarter of 1996 was less than the same period last year, the
        square footage of finished leather sold in the second quarter of
        1996 was flat as compared to the first quarter of 1996 and increased
        1% and 5% as compared to the fourth quarter and third quarter of
        1995, respectively.  The lower selling prices were partially the
        result of lower hide costs in the second quarter of 1996 as compared
        to the second quarter of 1995.  Net sales for the six month period
        were $160.1 million, a decrease of $37.4 million or 18.9%, versus
        the same period last year.
        


            On June 24, 1996, the Company announced a series of business
        decisions resulting from an evaluation of the business that was
        initiated immediately after the April 9, 1996 change in control.
        These decisions were designed to improve operating trends and to
        focus on core businesses and markets.  These decisions included:
        


            The Company recorded nonrecurring expenses of $9.4 million in
        the second quarter of 1996 to recognize the cost of the above
        initiatives.  The nonrecurring charges included $6.6 million as an
        inventory reserve, which was included in cost of sales, $2.1 million
        of severance expense and $0.4 million for the closing of the German
        furniture branch, both of which were shown as restructuring
        expenses, and $0.3 million of amortization related to the write-off
        of goodwill.  The Company expects, although there can be no
        assurance, that annual pretax savings resulting from these actions
        will exceed $4 million excluding the intangible benefits resulting
        from the refocusing of management.
        


            While sales in the second quarter of 1996 dropped by 13.6% as
        compared to the same period last year, cost of sales, excluding the
        nonrecurring $6.6 million inventory reserve, declined by only 11.2%.
        As a result, excluding the inventory reserve, gross profit for the
        second quarter of 1996 was $9.9 million, a reduction of $3.7 million
        or 27.2% as compared to the same period last year.  The decrease was
        principally the result of reduced square footage of finished leather
        sold, increased unit conversion costs and reduced selling prices,
        partially offset by reduced cattlehide prices.  The reduced sales
        and production volumes contributed to the increased unit
        manufacturing costs.  As a percentage of sales, excluding the
        nonrecurring inventory adjustment, gross profits dropped from 14.5%
        in the second quarter of 1995 to 12.2% in the second quarter of
        1996.  Including the nonrecurring inventory reserve, the Company had
        a gross profit of $3.3 million in the second quarter of 1996.  The
        Company recorded a $0.8 million LIFO revaluation credit to
        operations in the second quarter of 1996 as compared to a $1.1
        million LIFO revaluation credit during the same period last year.
        


            Excluding the $9.4 million of nonrecurring expenses, the Company
        recorded income from operations of $2.8 million during the second
        quarter of 1996 as compared to $6.5 million during the second
        quarter of 1995, a reduction of $3.7 million principally due to
        reduced sales and reduced gross profits. Including the nonrecurring
        expenses, the Company had a loss from operations of $6.6 million
        during the second quarter of 1996.  During the first half of 1996,
        the Company recorded a loss from operations of $2.3 million as
        compared to income from operations during the first half of 1995 of
        $15.6 million, a reduction of $17.9 million.  Excluding the
        nonrecurring expenses, income from operations was $7.1 million
        through the first half of 1996.
        


            Interest expense in the second quarter of 1996 was $4.3 million,
        a decrease of $0.2 million versus the same period last year.  For
        the six month period ended June 30, 1996, interest expense was $8.6
        million as compared to $9.0 million in the first six months of 1995.
        The decrease in both periods was principally the result of reduced
        average borrowings in the Company's revolving credit facility.
        


            The Company had a net loss of $7.3 million in the second quarter
        of 1996 as compared to net income of $1.0 million during the second
        quarter of 1995. The nonrecurring expenses reduced net income by
        $5.8 million; the remainder of the decrease was principally the
        result of reduced sales and reduced gross profits.  For the six
        month period ended June 30, 1996, the Company recorded a loss of
        $7.6 million, $5.8 million of which is nonrecurring, as compared to
        net income of $3.9 million in the first half of 1995. 1995 year-to-
        date income included a $0.4 million extraordinary gain related to
        the Company's repurchase of its 10.25% senior notes due 2003 during
        the first quarter of 1995.
        


            United States Leather, Inc. is a diversified producer and
        marketer of finished leather serving the footwear, furniture,
        personal leather goods and automotive markets.  The Company has four
        operating divisions: Pfister & Vogel and A.L. Gebhardt based in
        Milwaukee, Wis.; Lackawanna Leather based in Conover, N.C.; and A.R.
        Clarke based in Toronto, Canada.  Pfister & Vogel is a leading
        domestic producer of finished leather used in the production of high
        quality men's footwear; A.L. Gebhardt is a producer and marketer of
        a wide variety of finished leather for footwear, accessories,
        sporting goods, apparel and other personal leather goods; Lackawanna
        Leather is a leading supplier of upholstery leather to the domestic
        furniture and automobile industries; and A.R. Clarke, specializing
        in waterproof leathers, is principally a supplier to the Canadian
        footwear industry.
        



                     UNITED STATES LEATHER, INC. AND SUBSIDIARIES
                      CONDENSED STATEMENTS OF INCOME (UNAUDITED)

                                (Dollars in Millions)
        
                                                      3 Months Ended    6
        Months Ended
        
                                                     June 30,           June 30,
            Income Statement Data                      1996    1995
        1996     1995
        
            Net sales                                 $81.0   $93.7
        $160.1   $197.5
        
            Cost of sales                              77.7    80.1
        145.4    167.9
        
            Gross profit                                3.3    13.6
        14.7     29.6
        
            Selling, general & administrative expenses  6.2     6.3
        12.3     12.4
        
            Restructuring expense                       2.5     0.0
        2.5      0.0
        
            Amortization of intangible assets           1.2     0.8
        2.2      1.6
        
            Income (loss) from operations              (6.6)    6.5
        (2.3)    15.6
        
            Other (income) expense                      0.1     0.0
        0.1      0.0
        
            Interest expense                            4.3     4.5
        8.6      9.0
        
        Income before taxes and
             extraordinary gain                       (11.0)    2.0
        (11.0)     6.6
        
            Income tax provision                       (3.7)    1.0
        (3.4)     3.1
        
        Net income (loss) before
             extraordinary gain                        (7.3)    1.0
        (7.6)     3.5
        
            Extraordinary gain, net of tax              0.0     0.0
        0.0      0.4
        
        Net income (loss) available for
             Common Shares                            ($7.3)   $1.0
        ($7.6)    $3.9
        
        Other Data
            EBITDA                                    ($3.6)   $8.9
        $3.5    $20.4
        
        % of Net Sales
            Gross profit margin                         4.1%  14.5%
        9.2%    15.0%
        
            Income from operations                     -8.1%   6.9%
        -1.4%     7.9%
        
            EBITDA                                     -4.4%   9.5%
        2.2%    10.3%
        

CONTACT:  Robert Hale, Chief Financial Officer of United States Leather, Inc., 414-291-3014


EPE Announces Second Quarter Financial Results for the Reorganized Company


        


            EL PASO, Texas  --  Aug. 9, 1996  --  El Paso Electric
        Company
("EPE") reported net income applicable to common stock of
        approximately $6.6 million for the quarter ended June 30, 1996.  The
        net income applicable to common stock for the period Feb. 12, 1996
        to June 30, 1996 was approximately $6.7 million.  The results
        reflect the effects of EPE's Plan of Reorganization and its
        emergence from bankruptcy on Feb. 12, 1996.  For financial reporting
        purposes, the reorganization and application of "fresh-start"
        reporting caused significant changes to EPE's financial information,
        which means the financial information for the post reorganization
        period is not comparable to past results.  
        


            In June, July and August 1996, the company repurchased $9.0
        million, $16.8 million and $6.0 million, respectively, of its first
        mortgage bonds, at a discount from the original price.  The
        repurchases, individually or collectively, net of related issuance
        cost, did not result in a material net gain or loss.  The company
        intends to continue to use a portion of its available cash flow to
        reduce fixed obligations by making open market purchases of first
        mortgage bonds, from time to time, based on prevailing market
        conditions.  
        


            The company achieved a new record system peak demand of 1,387 MW
        (megawatts) on June 20, 1996, which was a 0.9 percent increase over
        1995's record system peak of 1,374 MW.  The company also recorded a
        native system peak demand of 1,105 MW on June 20, 1996, a 1.6
        percent increase from the previous record of 1,088 MW set in 1995.  
        


            EPE is an electric utility serving approximately 276,000
        customers in El Paso, Texas and an area of the Rio Grande Valley in
        West Texas and Southern New Mexico, and to wholesale customers in
        Southern California, New Mexico, Texas and Mexico.  EPE's common
        stock trades on the American Stock Exchange under symbol "EE."  

        
        El Paso Electric Company's results of operations for the three
        months ended June 30, 1996 and the period Feb.  12 to June 30, 1996
        are as follows (in thousands except share data):
      


  
                                                        Three Months Ended
                                                             June 30,
                                                               1996
                                                        ------------------
        
        Operating revenues                                   $  144,388
        Operating expenses                                     (110,292)
        Interest charges                                        (25,440)
        Net income (1)                                            9,500
        Preferred stock dividend requirements                     2,897
        Net income applicable to common stock                $    6,603
                                                             
        Net income per weighted average share
         of common stock                                     $     0.11
                                                             
        Weighted average number of common shares
         outstanding                                         59,999,981
                                                             
        
                                                        Period From Feb. 12
                                                          to June 30, 1996
                                                       ---------------------
        Operating revenues                                   $  214,295
        Operating expenses                                     (165,452)
        Interest charges                                        (38,961)
        Net income (1)                                           11,189
        Preferred stock dividend requirements                     4,449
        Net income applicable to common stock                $    6,740
                                                             
        Net income per weighted average share
         of common stock                                     $     0.11
                                                             
        Weighted average number of common shares
         outstanding                                         59,999,981
                                                             
        
        (1)  Three months ended net income includes $22,407 of depreciation
             and amortization expense, and $6,564 of income taxes.  For the
             period from Feb. 12 to June 30, 1996 net income includes
             $34,369 of depreciation and amortization expenses, and $7,634
             of income taxes.


        CONTACT: El Paso Electric Company
                 Henry Quintana Jr., 915/543-5824


Prime Retail, Inc. Reports Closing of $253.0 Million in Loans and Second Quarter Funds from Operations


        


            BALTIMORE, MD  --  Aug. 9, 1996  --  Prime Retail, Inc. (Nasdaq:
        PRME, PRMEP) today announced the closing of $253.0 million in
        mortgage loans with Nomura Asset Capital Corporation ("Nomura") on
        August 1, 1996, and its operating results for the second quarter
        ended June 30, 1996.
        


            As previously announced, Prime Retail obtained a binding loan
        commitment from Nomura dated June 5, 1996, to refinance certain
        credit facilities and a securitized mortgage loan by providing first
        and second mortgage loans to the Company in the aggregate principal
        amount of $260.0 million (the "Mortgage Loans"). On August 1, 1996,
        the Company closed on the refinancing of the existing credit
        facilities with Nomura which provided an aggregate of $253.0 million
        of financing to the Company on the same economic terms as the
        Mortgage Loans. Such financing was utilized (i) to refinance $151.3
        million which was outstanding under such credit facilities, (ii) to
        refinance $97.4 million which was outstanding under a securitized
        mortgage loan, (iii) to pay loan fees and transaction costs of $3.6
        million, and (iv) for working capital purposes. Under the terms of
        the refinancing, the amended credit facilities consist of two notes,
        one in the amount of $218.0 million and the other in the amount of
        $35.0 million. Each note requires monthly payments of interest only
        at a rate equal to 30-day LIBOR plus 1.513%. The Mortgage Loans are
        expected to be advanced by Nomura to refinance such credit
        facilities in a securitized REMIC transaction to close on or before
        September 30, 1996. If the Mortgage Loans are not advanced by
        September 30, 1996, the interest rate on the credit facilities will
        increase to a rate equal to 30-day LIBOR plus 1.717%.
        


            As previously announced, on June 27, 1996, the Company completed
        its exchange offer to exchange shares of its common stock for up to
        4,209,000 shares, or 60%, of its 8.5% Series B Cumulative
        Participating Convertible Preferred Stock (the "Series B Preferred
        Stock"). The Company issued 6,734,323 shares of its common stock in
        exchange for 4,209,000 shares of the Series B Preferred Stock. In
        connection with the exchange offer, on July 15, 1996, the Company
        paid a special cash dividend of $0.145 per share to the common
        shareholders of record on June 27, 1996. In addition, on July 3,
        1996, the Company completed a secondary offering of 3,795,328 shares
        of its common stock at $11.375 per share.  Of the total offering,
        3,705,000 shares were sold by the Company and 90,328 shares were
        sold by a selling stockholder. The Company's net proceeds from the
        secondary offering amount of $38.9 million were used primarily to
        repay indebtedness.
        


            In accordance with the new definition of funds from operations
        ("FFO") established by the National Association of Real Estate
        Investment Trusts in 1995, FFO before allocations to preferred
        shareholders and minority interests was $1.0 million for the three
        months ended June 30, 1996, compared to $6.6 million for the three
        months ended June 30, 1995. On a primary basis, FFO per common share
        equivalent was $(0.17) for the three months ended June 30, 1996,
        compared to $0.11 for the three months ended June 30, 1995. On a
        fully diluted basis, FFO per common share equivalent was $(0.03) for
        the three months ended June 30, 1996, compared to $0.25 for the
        three months ended June 30, 1995.
        


            The results for the three months ended June 30, 1996, included a
        one-time nonrecurring charge and extraordinary loss of $6.1 million
        and $4.3 million, respectively, related to the binding loan
        commitment obtained from Nomura dated June 5, 1996. The nonrecurring
        loss results from (i) the termination of previously obtained
        financing commitments from Nomura for which the Company paid $3.3
        million in nonrefundable financing fees, (ii) the unamortized cost
        of certain interest rate protection contracts of $3.7 million, and
        (iii) other nonrefundable deferred financing costs of $1.3 million,
        less the estimated fair market value of the interest rate protection
        contracts of $2.2 million based on their fair market value at May
        31, 1996.  The extraordinary loss results from (i) the write-off of
        unamortized deferred financing costs of $3.5 million relating to the
        early extinguishment of debt and (ii) debt prepayment penalties of
        $0.8 million.
        


            FFO before allocations to preferred shareholders and minority
        interests was $8.6 million for the six months ended June 30, 1996,
        compared to $13.5 million for the six months ended June 30, 1995. On
        a primary basis, FFO per common share equivalent was $0.02 for the
        six months ended June 30, 1996, compared to $0.24 for the six months
        ended June 30, 1995.  On a fully diluted basis, FFO per common share
        equivalent was $0.26 for the six months ended June 30, 1996,
        compared to $0.50 for the six months ended June 30, 1995.
        


            Income (loss) (GAAP basis) before allocations to preferred
        shareholders, minority interests and the extraordinary loss was
        $(0.9) million and $6.2 million for the six months ended June 30,
        1996 and 1995, respectively, and $(3.9) million and $3.1 million for
        the three months ended June 30, 1996 and 1995, respectively.
        


            Abraham Rosenthal, chief executive officer of the Company,
        stated, "The events of the past three months have been milestones
        for Prime Retail. First, the Company obtained and closed a
        commitment from Nomura to refinance $253.0 million of debt at a
        lower "all-in" cost. Second, we successfully completed the exchange
        offer by converting 60% of the Series B Preferred Stock to common
        stock. Finally, we raised over $42.0 million as a result of our
        secondary common stock offering. These transactions significantly
        enhance our capital structure and will provide a solid platform for
        the continued expansion of our business."
        


            For the six months ended June 30, 1996, same-space sales by
        tenants in centers owned by the Company increased 3% compared to the
        same period in 1995. Same-space sales is defined as weighted average
        sales per square foot reported for space opened since January 1,
        1995. Prime Retail's same-space sales for the year ended December
        31, 1995, were $244.00 per square foot.
        


            The Company expects to open approximately 829,000 square feet of
        GLA during 1996.  As of June 30, 1996, the Company had two new
        centers and eight expansions of existing centers under construction
        that in the aggregate accounted for 440,000 and 389,000 square feet
        of GLA, respectively.
        


            On July 17, 1996, the board of directors approved a dividend of
        $0.295 per common share payable on August 15, 1996, to common
        shareholders of record on August 1, 1996.  The dividend covers the
        period from April 1, 1996, through June 30, 1996.  The dividend is
        the pro rata equivalent of an annual dividend of $1.18 per share.
        In addition, the board approved a dividend of $0.53125 per share on
        the 8.5% Series B Preferred Stock.  This dividend is payable on
        August 15, 1996, to Series B Preferred shareholders of record on
        August 1, 1996.  The dividend covers the period from May 16, 1996,
        through August 15, 1996.  The dividend is the pro rata equivalent of
        an annual dividend of $2.125 per share.  The board further approved
        a dividend of $0.65625 per share on the 10.5% Series A Senior
        Cumulative Preferred Stock.  This dividend is payable on August 15,
        1996, to Series A Preferred shareholders of record on August 1,
        1996.  The dividend covers the period from May 16, 1996 through
        August 15, 1996.  The dividend is the pro rata equivalent of an
        annual dividend of $2.625 per share. Finally, on August 7, 1996, the
        board approved a distribution of
        


        $1.9 million, or $0.219 per common unit, to the limited partners of
        the Operating Partnership of record on August 8, 1996. The
        distribution is payable on August 15, 1996.
        


            Prime Retail is a self-administered, self-managed real estate
        investment trust engaged in the ownership, development,
        construction, acquisition, leasing, marketing and management of
        factory outlet centers.  Prime Retail's outlet center portfolio
        consists of 17 outlet centers in 14 states, which total
        approximately 4.3 million square feet of GLA as of June 30, 1996.
        As of June 30, 1996, Prime Retail's factory outlet center portfolio
        was approximately 96% leased and 94% occupied. Prime Retail has been
        a developer of factory outlet centers since 1988.
        


        Notes:


                
  1. Net loss per common share (GAAP basis) is net of applicable
            preferred dividends.  Fully diluted per share amounts (GAAP basis)
            are not presented since the effect would be anti-dilutive.
            
            
  2. Includes reserves for capital expenditures and working capital.
              
  3. In accordance with its Partnership Agreement, Prime Retail,
            L.P. will pay a preferential distribution of $0.295 in each quarter
            for each common unit held by Prime Retail, Inc. (the total of such
            units is equal to the number of outstanding common shares of the
            Company) before any distribution is paid for the common units held
            by the Limited Partners.  After payment of the preferential
            distribution to Prime Retail, Inc., up to $0.295 will be distributed
            for each common unit held by the Limited Partners.  Any additional
            distributions will be allocated pro rata among the common units held
            by the Company and by the Limited Partners.  The preferential
            distribution for common units held by the Company will terminate
            after Prime Retail, L.P. has paid quarterly distributions of at
            least $0.295 on all common units (21,910 common units after giving
            effect to the exchange offer and the secondary common stock
            offering) during four successive quarters without distributing for
            the Convertible Preferred Units and common units more than 90% of
            FFO after payment of distributions for the Senior Preferred Units in
            any such quarter. Once the preferential distribution is terminated,
            distributions with respect to the common units held by Prime Retail,
            Inc. and the Limited Partners will be pro rata to the holders
            thereof.  Accordingly, FFO must equal at least $10,347 (or $0.335
            per common share equivalent-primary) for four successive quarters to
            terminate the preferential distribution to the Company.  For
            purposes of determining whether the Company's FFO is sufficient to
            terminate the preferential distribution, FFO will be calculated
            based on the old definition of Funds from Operations.
            
                
  4. "FFO per common share outstanding" is equal to FFO after
            minority interests less Series A and Series B preferred dividends
            and distributions to limited partners divided by the number of
            common shares outstanding.
            
                
  5. "FFO per common share and common share equivalent-primary"
            is equal to FFO after minority interests less Series A and Series B
            preferred dividends divided by the total of (a) the number of common
            shares and (b) the number of limited partner common units.
            
                
  6. "FFO per common share and common share equivalent-fully
            diluted" is equal to FFO after minority interests less Series A
            preferred dividends divided by the total of (a) the total number of
            common shares, (b) the number of limited partner common units and
            (c) the number of common share equivalents assuming a full
            conversion of all Series B convertible preferred shares.
            
                
  7. Funds from operations means net income (loss) (computed in
            accordance with GAAP), excluding gains or losses from debt
            restructuring and sales of real property, plus depreciation and
            amortization and after adjustments for unconsolidated partnerships
            and joint ventures. In March 1995, the National Association of Real
            Estate Investment Trusts established guidelines clarifying the
            definition of FFO (as modified, the "New Definition").  For the
            Company, the primary impact of reporting FFO under the New
            Definition is a reduction in FFO since the amortization of
            capitalized debt costs and depreciation of non-real estate assets
            are not added back to income before allocations to minority
            interests (GAAP basis).
            
                
  8. In accordance with its Partnership Agreement, Prime Retail,
            L.P. excludes non-cash charges in determining its distributable net
            cash flow.
            
                
  9. In accordance with the Partnership Agreement, dividends paid
            on newly issued shares of common stock are not subtracted in
            connection with calculating the amount to be distributed to the
            limited partners to the extent such newly issued shares were not
            issued and outstanding for the entire quarter.
            



                                  PRIME RETAIL, INC.
                         Selected Financial Data (Unaudited)
              Amounts in thousands except per share and unit information
        
        GAAP BASIS
        
                                            Three Months Ended  Six Months Ended
                                                   June 30        June 30
                                               1996     1995    1996    1995
        STATEMENTS OF OPERATIONS
        
        Revenues
        Base rents                            $12,786$10,956  $25,530 $21,628
        Percentage rents                          368    327      811     728
        Tenant reimbursements                   5,895  5,548   12,034  10,421
        Income from investment partnerships       168    657      609     787
        Interest and other                        933  1,302    2,297   2,500
                                               20,150 18,790   41,281  36,064
        
        Expenses
        Property operating                      4,796  4,044    9,415   7,814
        Real estate taxes                       1,012  1,545    2,485   2,779
        Depreciation and amortization           4,612  3,739    8,999   7,344
        Corporate general and administrative      966    692    1,859   1,536
        Interest                                6,148  5,022   12,204   9,478
        Other charges                           6,566    685    7,212     908
           Total expenses                      24,100 15,727   42,174  29,859
        
        Income (loss) before minority interests and
          extraordinary item                   -3,950  3,063     -893   6,205
        Loss allocated to minority interests    1,731  1,395    3,208   2,861
        Income (loss) before extraordinary item-2,219  4,458    2,315   9,066
        Extraordinary item - loss on early
          extinguishment of debt, net of minority
          interests in the amount of $3,263    -1,017      -   -1,017       -
        Net income (loss)                      -3,236  4,458    1,298   9,066
        Income allocated to preferred shareholders3,0005,236    8,236  10,472
        Loss allocated to common shareholders -$6,236  -$778  -$6,938 -$1,406
        Per common share (1):
          Loss before extraordinary item       -$1.65 -$0.27   -$1.96  -$0.49
          Extraordinary item                    -0.32      -    -0.34       -
          Net loss                             -$1.97 -$0.27   -$2.30  -$0.49
        Weighted average common shares outstanding3,1712,875    3,023   2,875
        

                               SELECTED BALANCE SHEET DATA
        
                                                               June 30
                                                           1996          1995
        
        Rental properties before accumulated depreciation$482,612    $416,755
        
        Cash and cash equivalents                          4,040        3,007
        Total assets                                     460,792      420,397
        Mortgage and other debt                          318,777      250,452
        Total liabilities                                349,676      276,030
        Shareholders' equity                             110,686      124,549
        

             FUNDS FROM OPERATIONS (FFO) and DIVIDEND DISTRIBUTION SUMMARY
        
                                                        3 Months Ended 6
        Months Ended
        
                                                         June 30       June 30
        
                                                            1996   1995
        1996   1995
        
        RECONCILIATION OF GAAP INCOME
        TO FFO (NEW and OLD DEFINITION)
        
        Income (loss) before minority interests
          and extraordinary item (GAAP basis)     -$3,950 $3,063  -$893  $6,205
        Adjustments:
           Depreciation and amortization             4,612  3,739 8,999   7,344
           Amortization of deferred financing costs and
             interest rate protection contracts     1,138  1,138  2,250   2,206
           Non-cash charges                         6,131      -  6,131       -
           Unconsolidated joint venture adjustments   482    -53    841     165
        Distributable net cash flow(8)              8,413  7,887 17,328  15,920
           Non-cash charges                        -6,131      - -6,131       -
        FFO - Old Definition(7)                     2,282  7,887 11,197  15,920
           Non-real estate depreciation
            and amortization                       -1,331 -1,266 -2,631  -2,452
        
        FFO - New Definition(7)                      $951 $6,621 $8,566 $13,468
        
        DIVIDEND DISTRIBUTION SUMMARY
        
        Distributable net cash flow                $8,413 $7,887$17,328 $15,920
        Preferred stock dividend - Series A        -1,509 -1,509 -3,019  -3,019
                                                    6,904  6,378 14,309  12,901
        Reserves at 10%(2)                           -691   -638 -1,431  -1,290
                                                    6,213  5,740 12,878  11,611
        Preferred stock dividend - Series B        -1,491 -3,727 -5,217  -7,453
                                                    4,722  2,013  7,661   4,158
        Common stock dividend                      -3,954   -848 -4,802  -1,696
                                                      768  1,165  2,859   2,462
        Distribution adjustment(9)                  1,093      -  1,093       -
        Total distribution to limited partners     $1,861 $1,165 $3,952  $2,462
        
        Per share/unit amounts:
          Preferred stock
            Series A                               $0.656 $0.656 $1.313  $1.313
            Series B                               $0.531 $0.531 $1.062  $1.062
        
            Common stock(3)                        $0.295 $0.295 $0.590  $0.590
        
            Limited partner units(3)               $0.219 $0.126 $0.446  $0.267
        FUNDS FROM OPERATIONS SUMMARY - NEW DEFINITION
        
                                                         3 Months Ended 6
        Months Ended
        
                                                       June 30      June 30
                                                      1996  1995   1996    1995
        
        FFO - New Definition                         $951 $6,621 $8,566 $13,468
        Minority interests                            -67    -59   -119    -142
                                                      884  6,562  8,447  13,326
        Preferred stock dividends
          Series A                                 -1,509 -1,509 -3,019  -3,019
          Series B                                 -1,491 -3,727 -5,217  -7,453
                                                   -2,116  1,326    211   2,854
        Distribution to limited partners             -768 -1,165 -2,859  -2,462
        
        Allocation to common shares outstanding   -$2,884   $161-$2,648    $392
        
        FFO per common share outstanding(3)(4)     -$0.91  $0.06 -$0.88   $0.14
        
        FFO per common share equivalent -
                                primary(3)(5)      -$0.17  $0.11  $0.02   $0.24
        
        FFO per common share equivalent -
                                fully diluted(3)(6)-$0.03  $0.25  $0.26   $0.50
        
        Weighted Average Shares and Units Outstanding
        
        Common Shares                               3,171  2,875  3,023   2,875
        Limited partner common units                9,193  9,221  9,207   9,221
          Total primary shares                     12,364 12,096 12,230  12,096
        Series B convertible preferred shares       8,170  8,391  8,281   8,391
          Total fully diluted shares               20,534 20,487 20,511  20,487
        
                      FUNDS FROM OPERATIONS SUMMARY - OLD DEFINITION
        
                                                         3 Months Ended 6
        Months Ended
        
                                                       June 30     June 30
                                                      1996  1995   1996    1995
        FFO - Old Definition                       $2,281 $7,887$11,196 $15,920
        Minority interests                            -67    -84   -120    -146
                                                    2,214  7,803 11,076  15,774
        Preferred stock dividends
          Series A                                 -1,509 -1,509 -3,019  -3,019
          Series B                                 -1,491 -3,727 -5,217  -7,453
                                                     -786  2,567  2,840   5,302
        Distribution to limited partners             -768 -1,165 -2,859  -2,462
        
        Allocation to common shares outstanding   -$1,554 $1,402   -$19  $2,840
        
        FFO per common share outstanding(3)(4)     -$0.49  $0.49 -$0.01   $0.99
        
        FFO per common share equivalent - primary(3)(5)-$0.06$0.21$0.23   $0.44
        
        FFO per common share equivalent -
                                  fully diluted(3)(6)$0.03 $0.31  $0.39   $0.62
        
        Weighted Average Shares and Units Outstanding
        
        Common Shares                               3,171  2,875  3,023   2,875
        Limited partner common units                9,193  9,221  9,207   9,221
        
          Total primary shares                     12,364 12,096 12,230  12,096
        Series B convertible preferred shares       8,170  8,391  8,281   8,391
          Total fully diluted shares               20,534 20,487 20,511  20,487
        

CONTACT:  Robert P. Mulreaney, Chief Financial Officer, or Anya T.
        Harris, Vice President, Public Relations, of Prime Retail, 410-234-
        0782