Exhibit 99.1
Angelica Reports Improved First Quarter Income
NOTE TO MEDIA: Multimedia assets available
Financial statements are available at URL:
http://www.businesswire.com/cgi-bin/photo.cgi?pw.052003/bb9
ST. LOUIS--(BUSINESS WIRE)--May 20, 2003--Angelica Corporation
(NYSE:AGL) announced today that for the first quarter ended April 26,
2003 it had higher income from continuing operations of $2,340,000
compared with $2,293,000 last year, an increase of 2.0 percent. On a
per share basis, because of a higher number of shares outstanding this
year versus last, income from continuing operations was unchanged from
last year's first quarter at $.27 per share ($.26 diluted). Operating
earnings for Textile Services, the largest segment, were down for the
quarter, and operating earnings for the retail segment, Life Uniform,
were down significantly. However, the total decline in segment
earnings was more than offset by lower interest expense.
Combined sales and revenues decreased 0.2 percent to $93,039,000
in this year's first quarter compared with $93,257,000 in the same
period last year as a result of weak retail sales at Life Uniform.
Pretax income from continuing operations in the first quarter was
$3,466,000 compared with $3,527,000 last year. Last year's first
quarter included a loss from discontinued operations resulting from
the sale of the Manufacturing and Marketing segment. Including that
loss on discontinued operations, first quarter results were net income
of $2,340,000 or $.27 per share ($.26 diluted) compared with a net
loss of $2,154,000 or $.25 per share last year.
In the Textile Services segment, first quarter revenues increased
4.4 percent to $71,383,000 compared with $68,381,000 in the same
period last year. Revenues continue to benefit from increases in net
new business (new business installed less lost business), which
exceeded increases in the first quarter last year. Operating earnings
were 7.2 percent lower at $5,462,000 in the first quarter versus
$5,884,000 in the prior year period largely due to higher energy and
fuel costs, higher payroll fringes, and the sharply increased workers'
compensation costs which became apparent late last year and were
reflected in last year's first quarter at much lower amounts. The
higher costs have prompted increased cost control efforts at this
segment which are expected to benefit the remaining quarters of this
year.
Textile Services expects its new state-of-the-art plant in
Phoenix, Arizona to be completed and operating by August. A sizable
amount of its capacity will be devoted to business now being handled
at facilities in Southern California, but the remaining capacity will
provide an opportunity to add additional new customers in the
attractive Phoenix market area. Reinforcing the conviction that this
is an opportune time to reinvest in our business and grow internally,
property has now been purchased for another new plant in Columbia,
South Carolina, which is currently targeted to be opened by year end.
At Life Uniform, a generally weak retail market and fewer stores
in operation in the first quarter caused sales of this segment to drop
to $21,656,000 from $24,876,000 in the same quarter last year, a
decrease of 12.9 percent. While same-store sales were positive in
every quarter last year, they were down 7.8 percent in the first
quarter this year. Catalogue and e-commerce sales, on the other hand,
increased slightly in the quarter. Operating earnings in the first
quarter were 80.7 percent lower than last year's $701,000, but still
positive at $135,000. As a result of the sales and earnings declines,
various expense reduction and control actions were instituted by this
segment during the quarter. These cost control actions will provide
benefit in future quarters.
Life Uniform also continues to reinvest for the future.
Replacement of the segment's merchandising and financial systems is
essentially complete, and a chain-wide rollout of new point-of-sale
equipment will be accomplished this summer.
From a corporate standpoint, a sizable reduction in interest
expense, from $1,543,000 in last year's first quarter to $151,000 this
year, substantially benefited results. The interest reduction was the
result of refinancing the Company's debt last year following the sale
of the Manufacturing and Marketing segment. Good cash flow from
operations also continues to lower debt levels, with total debt at
$13,952,000 at the end of the first quarter compared with $20,811,000
at last year end. The balance sheet remains very strong and capable of
handling opportunities for growth both internally and externally.
Don W. Hubble, Chairman, President and Chief Executive Officer of
Angelica said, "At Textile Services, some of the challenges I outlined
in our Annual Report to Shareholders have come to pass and have
negatively affected its first quarter results. I am pleased to report,
however, that the segment management team has reacted strongly and
positively to compensate with actions to reduce costs in other areas.
We expect to see positive future results from these actions." He went
on to say, "Future prospects for Life Uniform are closely tied to
sales levels, and we are hopeful that the retail climate will improve
soon. Here as well, we are actively pursuing expense reduction
measures to counteract the weak sales picture." Hubble also said,
"While the first quarter results were below our expectations, we
believe we can achieve a per share earnings increase for continuing
operations for the whole year in the high single or low double-digit
range."
Angelica Corporation, traded on the New York Stock Exchange under
the symbol AGL, provides textile rental and linen management services
to healthcare institutions, and operates a national chain of retail
healthcare uniform and shoe stores with a fully-integrated catalogue
and e-commerce operation.
Unaudited results for first quarter ended April 26, 2003 compared with
first quarter ended April 27, 2002
(dollars in thousands except per share amounts):
First Quarter
----------------- Percent
Fiscal Fiscal Increase
2004 2003 (Decrease)
-------- -------- -----------
Continuing Operations:
- ----------------------
Combined sales and revenues:
Textile Services $71,383 $68,381 4.4
Life Uniform $21,656 $24,876 (12.9)
-------- --------
Total $93,039 $93,257 (0.2)
Operating earnings:
Textile Services $5,462 $5,884 (7.2)
Life Uniform $135 $701 (80.7)
Total $5,597 $6,585 (15.0)
Interest expense $151 $1,543 (90.2)
Corporate expense and other, net $1,980 $1,515 30.7
Pretax income $3,466 $3,527 (1.7)
Income from continuing operations $2,340 $2,293 2.0
Earnings per share:
- Basic $.27 $.27 --
- Diluted $.26 $.26 --
Discontinued Operations:
- ------------------------
Loss from discontinued operations, net
of tax -- $(4,447)
Combined Continuing and Discontinued
- -----------------------------------
Operations:
-----------
Net income (loss) $2,340 $(2,154) nm
Earnings (loss) per share:
- Basic $.27 $(.25) nm
- Diluted $.26 $(.25) nm
Unaudited condensed balance sheets as of April 26, 2003 and
January 25, 2003
(dollars in thousands):
April 26, Jan. 25,
2003 2003
-------- --------
Current assets:
Cash and investments $ 7,531 $ 18,166
Receivables, net 35,042 35,316
Inventories 12,168 13,395
Linens in service 33,220 32,520
Other 10,145 11,333
Net current assets of discontinued segment 100 2,162
-------- --------
Total current assets 98,206 112,892
Property and equipment, net 80,583 78,553
Other long-term assets 36,995 36,839
-------- --------
Total assets $215,784 $228,284
======== ========
Current liabilities:
Current maturities of long-term debt $ 237 $ 237
Accounts payable 16,668 19,905
Other 26,965 31,453
-------- --------
Total current liabilities 43,870 51,595
Long-term debt, less current maturities 13,715 20,574
Other long-term liabilities 16,576 16,455
Shareholders' equity 141,623 139,660
-------- --------
Total liabilities and shareholders' equity $215,784 $228,284
======== ========
Forward-Looking Statements:
Any forward-looking statements made in this document reflect the
Company's current views with respect to future events and financial
performance and are made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. Such statements are
subject to certain risks and uncertainties that may cause actual
results to differ materially from those set forth in these statements.
These potential risks and uncertainties include, but are not limited
to, competitive and general economic conditions, the ability to retain
current customers and to add new customers in competitive market
environments, competitive pricing in the marketplace, delays in the
shipment of orders, availability of labor at appropriate rates,
availability and cost of energy and water supplies, the cost of
workers' compensation and healthcare benefits, the ability to attract
and retain key personnel, actual charges to the restructuring reserve
significantly different from estimated charges, unusual or unexpected
cash needs for operations or capital transactions, the ability to
obtain financing in required amounts and at appropriate rates, and
other factors which may be identified in the Company's filings with
the Securities and Exchange Commission.
Note: Financial statements are available at URL:
http://www.businesswire.com/cgi-bin/photo.cgi?pw.052003/bb9
CONTACT: Angelica Corporation, St. Louis
Don W. Hubble or T. M. Armstrong, 314/854-3800
www.angelica.com