Exhibit 99.1
Delivering Healthcare Linen Management Everyday
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Angelica Corporation Analyst Presentation September, 2005
Safe Harbor Statement
This presentation contains forward-looking statements, which reflect
Angelica Corporation's current views with respect to future events and
financial performance and are made pursuant to the Private Securities
Litigation Reform Act of 1995. These forward-looking statements involve
risks and uncertainties that may cause our actual results to be materially
different from those expressed or implied by these statements. A more
detailed description of certain factors that could affect actual results
include, but are not limited to, those discussed in Angelica Corporation's
filings with the Securities and Exchange Commission.
[Angelica logo]
Our Vision
Angelica's objective is to be the
leading provider of linen management services
to the U.S. healthcare market, using its
customer-focused and value-driven approach
to differentiate its services.
[Angelica logo]
Equity Snapshot
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o Exchange/Symbol NYSE: AGL
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o Share Price as of 9/9/05 $21.15
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o Market Capitalization $197M
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o Shares Outstanding 9.3 M
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o Market Cap/Revenues (ttm) 0.53
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o Dividend/Yield $0.44/2.1%
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[Angelica logo]
Angelica's History
o Founded in 1878 as uniform manufacturing company
o IPO in 1958; listed on NYSE in 1972
o Expanded business to three divisions in 1960's: Manufacturing, Textile
Services and Retail
o Sold Manufacturing division in 2002
o Sold Retail division in July 2004
[Angelica logo]
Angelica's Future
o Now focused solely on the Healthcare Services Industry
o Reduced corporate headcount from 50 people to 15 people as part of
company refocus
o Consolidating large fragmented market through both organic growth and
acquisitions
o Improving efficiency of operations and refining cost structure
[Angelica logo]
Experienced Management Team
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Steve O'Hara, CEO Became CEO in September 2003 after 3 years
as outside director; 26 years business
experience
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Dave Van Vliet, President & COO Joined Angelica as President and COO in
June 2005; 28 years of business experience,
most recently President & CEO of Growing
Family, Inc.
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Jim Shaffer, CFO CPA with 28 years finance experience,
including 6 years with Angelica
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Steve Frey, General Counsel 30 years experience, including corporate,
regulatory and acquisitions. Over 6 years
with Angelica.
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Russell Watson, ATS VP Ops 4 years with ATS, after 12 years with
National Service Industries
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Rich Fiorillo, ATS CFO; CAO CPA with 23 years finance experience
including 4 years with ATS
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Steve Lang, VP Sales & Marketing Joined Angelica in September 2004 after
8 years with Novartis Ophthalmics and
16 years with Allergan, Inc.
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[Angelica logo]
Angelica Textile Services (ATS)
o Delivers linen management solutions everyday
o 32 plants located in U.S.
[U.S. map]
[Angelica logo]
Participant in Large and Growing Market
|X| ATS serves approximately U.S. HEALTHCARE LINEN MARKET
half of healthcare market ----------------------------
ESTIMATED AT $5.6 BILLION
|X| Current market share in
markets served [pie chart]
|X| Hospitals -29%
HOSPITALS $2.0B
|X| Clinics -3%
CLINICS $2.4B
|X| Long-Term Care -6%
LONG-TERM CARE $1.2B
[Angelica logo]
Industry Environment
o Favorable Demographic trends support future increase in product demand
o Highly fragmented
- Only two national competitors (Crothall Services and Sodexho Laundry
Services)
- Approximately 11 mid-size regional providers
- Approximate number of other providers:
1,469 hospital on-premise laundries (OPLs)
335 hospital laundry coops
200 single operation providers
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2,004
[Angelica logo]
Significant Market Opportunities
ACUTE CARE MARKETS IN WHICH AGL UNTAPPED ACUTE CARE
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PARTICIPATES MARKETS
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[pie chart] [pie chart]
ON-PREMISE LAUNDRIES 22% ON-PREMISE LAUNDRIES 34%
ANGELICA 29% COOPS 7%
COOPS 6% COMPETITORS 59%
COMPETITORS 43%
[Angelica logo]
Growth Strategy
o Provide superior service and competitive pricing for organic growth
o Expand into high growth clinic and long-term care markets
o Target on-premise laundry conversions
o Pursue complementary and accretive acquisitions
o Improve efficiency of operations and refine cost structure via facility
rationalization and investment
[Angelica logo]
Cost Plans to Improve Model
o Leverage scale in linen purchasing (17.1% of revenues in first half
FY05)
o Leverage scale and test new models to lower delivery expenses (13.8% of
revenues in first half FY05)
o Focus FY05's $25M in capital investment to improve labor productivity
(34.7% of revenues in first half FY05) and energy efficiency (8.9% of
revenues in first half FY05)
o Move to long-term purchases of natural gas (4.9% of revenues in first
half FY05)
[Angelica logo]
Strategic Acquisitions
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DATE TRANSACTION BENEFIT REVENUES
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August 2005 Purchased customer contracts and assets from Bob Strengthened regional position $3 M
White Services in northern Ohio and upstate New York and capacity utilization
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March 2005 Purchased Royal Institutional Services' healthcare More than tripled New England $45 M
business in Somerville and Worcester, MA presence
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January 2005 Laundry plants and contracts in Dallas and Wichita Falls Strengthened Southwest $18 M
from National Linen Services position
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January 2005 Assumed lease and operations of Long Island healthcare Improved access to NY market, $28 M
plant from Tartan Textile especially long-term care
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December 2004 Healthcare laundry operations and customer contracts of Strengthens presence in $20 M
Golden State Services in Northern California Northern California market
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May 2004 Purchased New England healthcare business of Tartan Strengthened New England $1 M
Textile position
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April 2004 Duke University Health System laundry in Durham, NC Example of hospital system $5 M
outsourcing linen management
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December 2003 National Services' healthcare plant and business located Enabled AGL to serve 75% of $12 M
in Safety Harbor, FL the Florida market
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November 2003 Customer contracts and selected assets of Tenney Strengthened regional position $2 M
Laundry Services in Batavia, NY
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[Angelica logo]
January 2005 Acquisitions
|X| National Linen Service Provides expansion and efficiency
- Dallas laundry plant improvements in Dallas market
- Wichita Falls plant >
- Total revenue of $18M Provides market expansion
capabilities into Oklahoma
|X| Tartan Textile Improves access to NY market,
- Assumed leased laundry especially long-term care
plant in Hempstead, NY
- 100% healthcare > Enables delivery synergies with NJ
- Revenue of $28M plant
Eliminates non-compete in
Philadelphia area
[Angelica logo]
Other 2005 Acquisitions
|X| Royal Institutional Services Moves to market leader in New
- 2 plants in Massachusetts England
- Healthcare revenues of
$45M > Adds needed capacity in New England
Brings in some service best practices
|X| Bob White Services
- Purchased customer Strengthens position in region and
contracts and selected increases our market share
assets in Cleveland, OH >
and upstate New York Improves capacity utilization in
- Revenue of $3M Lorain, OH and Batavia,
NY facilities
[Angelica logo]
FINANCIAL REVIEW
[Angelica logo]
Steady Annual ATS Revenue Growth
[graph]
$ in Millions
FY00 FY01 FY02 FY03 FY04
$242.6 $259.1 $271.3 $291.5 $316.1
[Angelica logo]
Annual Pretax Income from Continuing Operations
[graph]
$ in Millions
FY00 FY01 FY02 FY03 FY04
$2.1 $6.8 $13.2* $15.3 $12.6
Note: FY02 is before $6.8 loss on early extinguishment of debt
[Angelica logo]
Revenue and Income for First 6 months of FY 2005
NET REVENUE
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6 mo. FY 04 6 mo. FY 05
$155.6 $209.8
PRETAX INCOME FROM CONTINUING OPERATIONS
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6 mo. FY 04 6 mo. FY 05
$7.0 $0.1
$ in Millions
[Angelica logo]
Reasons for FY05 First Half Profit Decline
o Union campaign, settled in June, cost $1.5M
o Facility consolidation in Northern California cost $0.7M
o Management severance and financing expense write-off, $0.8M
o Lower non-operating income and other income from sale of non-healthcare
business ($2.2M )
o Energy cost rising 0.9% of revenues ($2.1M volume adjusted)
o Workers' compensation costs up $0.7M, volume adjusted (union related)
[Angelica logo]
Acquisitions have been mildly accretive in first half of FY05, after
accounting for increased amortization and debt costs
[Angelica logo]
Strong Balance Sheet
CONDENSED AND UNAUDITED AS OF JULY 30, 2005 ($000)
ASSETS LIABILITIES AND EQUITY
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CASH $ 658 CURRENT MATURITIES OF LONG-TERM DEBT $ 10,419
ACCOUNTS RECEIVABLE (NET) 57,160 ACCOUNTS PAYABLE 17,009
LINENS IN SERVICE 43,892 OTHER CURRENT LIABILITIES 39,884
OTHER CURRENT ASSETS 7,921
PROPERTY AND EQUIPMENT (NET) 108,731 LONG-TERM DEBT 93,301
OTHER LONG-TERM LIABILITIES 13,619
OTHER ASSETS 108,152 SHAREHOLDERS' EQUITY 152,282
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TOTAL ASSETS $326,514 TOTAL LIABILITIES AND EQUITY $326,514
A/R DAYS OUTSTANDING 47 PERCENT DEBT TO TOTAL CAPITALIZATION 40.5%
[Angelica logo]
Looking Ahead
|X| Forecasting (FY05):
|X| Revenues of approximately $420 million
|X| Gross margin between 13.0% and 13.5%
|X| FY 2005 EPS between $0.00 and $0.20
|X| Long term
|X| Gross margins rising to 20% by FY08
|X| 15% annual revenue growth
[Angelica logo]
Angelica Advantages
|X| Market leader in healthcare textile services
|X| Extensive national reach, with regional focus
|X| Scalable operations
|X| Strong, experienced management team focused on profitable growth
|X| Dividend, currently at $0.11 per share quarterly, provides 2.1% return
[Angelica logo]
Summary
By pursuing its stated growth initiatives,
Angelica will be the leading provider of linen
management services to the U.S. healthcare
market and, as a result, will maximize
earnings and cash flow and generate superior
returns for its shareholders.
[Angelica logo]
Delivering Healthcare Linen Management Everyday
[pic]
Angelica Corporation Analyst Presentation September, 2005
[Angelica logo]