Exhibit 99.1
Angelica Reports Fourth Quarter and Fiscal Year 2004 Results;
Annual Revenues Increase 8.4% to $316 Million
ST. LOUIS--(BUSINESS WIRE)--March 17, 2005--Angelica Corporation
(NYSE:AGL), a leading provider of healthcare linen management
services, reported today unaudited financial results for the fourth
quarter and twelve months ended January 29, 2005. For the year,
revenues rose 8.4% from fiscal year 2003 to $316.1 million. Diluted
earnings per share from continuing operations were $1.14, which was
one cent, or approximately $0.1 million of net income, below the prior
guidance range, as fourth quarter workers' compensation claims and
worker fringe benefit costs rose $1.3 million versus the prior year.
Continuing operating results exclude the Company's Life Uniform retail
division, which was sold during the second quarter of fiscal year 2004
and is shown as a discontinued operation.
Revenues from continuing operations for the fourth quarter of
fiscal year 2004 were $81.7 million, up 4.0% from $78.6 million in
fourth quarter of fiscal year 2003, despite one less week in the
fourth quarter of fiscal year 2004 versus fiscal year 2003.
Acquisitions net of divestitures added $6.2 million to fourth quarter
revenues, offset by the loss of $5.5 million of revenues from the
extra week in fiscal year 2003.
Net income from continuing operations for the fourth quarter was
$2.4 million, down 19.9% from fourth quarter fiscal year 2003 of $3.0
million. Diluted earnings per share for fourth quarter fiscal year
2004 were $0.26, compared to fourth quarter fiscal year 2003 earnings
per share of $0.33. The decrease versus prior year was primarily due
to the increase in workers' compensation and fringe benefit costs, a
$1.5 million increase in utilities and delivery fuel expense versus
the prior year, and the loss of gross margin from the one less week in
the quarter.
For the twelve months ended January 29, 2005, revenues from
continuing operations were $316.1 million, up 8.4% from $291.5 million
in the prior year. Acquisitions net of divestitures added $18.2
million to fiscal year 2004 revenues, offset by the loss of $5.5
million of revenues from the extra week in fiscal year 2003.
Healthcare revenues in fiscal year 2004 were $283.7 million, up 11.9%
from $253.6 million in fiscal year 2003. Non-healthcare revenues
declined 14.7% in fiscal year 2004, primarily reflecting our sale of
the Daytona Beach, Florida hospitality business.
Net income from continuing operations for fiscal year 2004 was
$10.4 million, down 6.0% from fiscal year 2003 net income from
continuing operations of $11.0 million. Increased revenue and gross
margin contribution from organic growth and acquisitions were
insufficient to offset a $4.0 million increase in utilities and
delivery fuel expense from the prior year. Diluted earnings per share
for fiscal year 2004 were $1.14, compared to fiscal year 2003 earnings
per share from continuing operations of $1.23.
For fiscal year 2004, net loss from the discontinued Life Uniform
operations was $4.0 million, including a $3.0 million loss on disposal
of the segment, versus a net loss of $1.8 million in fiscal year 2003.
The Company does not expect any additional charges from this operation
going forward.
During the fourth quarter of fiscal year 2004, Angelica completed
three strategic acquisitions. Facilities were purchased in Sacramento
and Turlock, CA from Golden States Services; in Hempstead, NY from
Tartan Textiles; and in Dallas and Wichita Falls, TX from National
Linen Services. Each acquisition strengthened the company's market
presence in their respective areas--Northern California, New York and
the Southwest.
Angelica continues to have significant borrowing capacity with its
revolving line of credit. The Company enhanced that borrowing capacity
in the fourth quarter by increasing its credit facility to $150
million with an accordion feature that could increase the amount to
$175 million. Year-end debt was $66.5 million, net of cash, and
shareholders' equity was $151.4 million.
Steve O'Hara, President and CEO, said, "We are pleased to have
been able to focus our business on healthcare linen services this past
year by selling Life Uniform, streamlining our overhead, and
accelerating our acquisition efforts. However, we are disappointed
that our organic growth fell short of our target 5.0% organic revenue
growth rate for fiscal year 2004 and that we were unable to offset the
significant cost increases in energy and workers' compensation and
benefits at the gross margin level."
Mr. O'Hara continued, "Competitive pressure held average price
increases below the rate of inflation which, along with the sharp
increase in natural gas and delivery fuel contributed to our gross
margin decline. Nevertheless, we continue to target a 20.0% gross
margin for Angelica within the next three years as competitive pricing
reflective of underlying costs is restored to the market and our cost
initiatives in linen procurement, distribution efficiency, natural gas
purchasing and capital investment lower our base costs."
Angelica Corporation will host a conference call on March 18, 2005
at 10:00 AM CST (11:00 EST) to discuss its fourth quarter and fiscal
year 2004 results. The conference call will be broadcast live over the
internet hosted at http://www.angelica.com and will be archived online
within one hour of the completion of the conference call.
Participating in the call will be Steve O'Hara, President and Chief
Executive Officer, and Jim Shaffer, Chief Financial Officer. A
telephonic replay of the call will be available through April 1, 2005
by calling 800-475-6701 and using the passcode 774246.
Angelica Corporation, traded on the New York Stock Exchange under
the symbol AGL, is a leading provider of textile rental and linen
management services to the U.S. healthcare market. More information
about Angelica is available on its website, www.angelica.com.
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, the ability of the Company to recover its
seller note and avoid future lease obligations as part of its sale of
Life Uniform, the ability of the Company to accomplish its strategy of
redirecting its resources to its healthcare linen management business
in a timely and financially advantageous manner, unusual or unexpected
cash needs for operations or capital transactions, the effectiveness
of certain expense reduction initiatives, the ability to obtain
financing in required amounts and at appropriate rates and terms, the
ability to identify, negotiate, fund, consummate and integrate
acquisitions, and other factors which may be identified in the
Company's filings with the Securities and Exchange Commission.
Unaudited results for fourth quarter and fiscal year ended January 29,
2005 compared with same periods ended January 31, 2004
(dollars in thousands, except per share amounts):
Fourth Quarter Ended Fiscal Year Ended
------------------------- --------------------------
Jan. 29, Jan. 31, Percent Jan. 29, Jan. 31, Percent
2005 2004 Change 2005 2004 Change
-------- -------- ------- -------- --------- -------
Continuing
operations:
Textile service
revenues $81,743 $78,577 4.0 $316,074 $291,499 8.4
Cost of textile
services (70,605) (64,672) 9.2 (267,138) (237,261) 12.6
-------- -------- ------ --------- --------- -------
Gross profit 11,138 13,905 (19.9) 48,936 54,238 (9.8)
Selling, general
and
administrative
expenses (8,325) (9,873) (15.7) (38,366) (39,955) (4.0)
Other operating
(expense) income,
net (171) (289) (40.8) 678 (523) nm
-------- -------- ------ --------- --------- -------
Income from
operations 2,642 3,743 (29.4) 11,248 13,760 (18.3)
Interest expense (531) (241) 120.3 (1,356) (714) 89.9
Non-operating
income, net 193 306 (36.9) 2,659 2,244 18.5
-------- -------- ------ --------- --------- -------
Income from
continuing
operations,
pretax 2,304 3,808 (39.5) 12,551 15,290 (17.9)
Provision for
income taxes 99 (809) nm (2,179) (4,261) (48.9)
-------- -------- ------ --------- --------- -------
Income from
continuing
operations 2,403 2,999 (19.9) 10,372 11,029 (6.0)
-------- -------- ------ --------- --------- -------
Discontinued
operations:
Income (loss) from
operations of
discontinued
segment, net of
tax 150 (1,300) nm (993) (1,826) (45.6)
Income (loss) on
disposal of
discontinued
segment, net of
tax 551 - nm (3,018) - nm
-------- -------- ------ --------- --------- -------
Income (loss)
from
discontinued
operations 701 (1,300) nm (4,011) (1,826) 119.7
-------- -------- ------ --------- --------- -------
Net income $3,104 $1,699 82.7 $6,361 $9,203 (30.9)
======== ======== ====== ========= ========= =======
Basic earnings
per share:
Income from
continuing
operations $0.27 $0.34 (20.6) $1.16 $1.25 (7.2)
Income (loss)
from
discontinued
operations 0.08 (0.15) nm (0.45) (0.21) 114.3
-------- -------- ------ --------- --------- -------
Net income $0.35 $0.19 84.2 $0.71 $1.04 (31.7)
======== ======== ====== ========= ========= =======
Diluted earnings
per share:
Income from
continuing
operations $0.26 $0.33 (21.2) $1.14 $1.23 (7.3)
Income (loss)
from
discontinued
operations 0.08 (0.14) nm (0.44) (0.20) 120.0
-------- -------- ------ --------- --------- -------
Net income $0.34 $0.19 78.9 $0.70 $1.03 (32.0)
======== ======== ====== ========= ========= =======
Unaudited condensed balance sheets as of January 29, 2005 and
January 31, 2004 (dollars in thousands):
January 29, January 31,
2005 2004
----------- -----------
ASSETS
- ------
Current Assets:
Cash and short-term investments $926 $2,188
Receivables, net 44,454 36,978
Linens in service 38,846 35,464
Prepaid expenses and other current assets 8,251 9,549
Assets of discontinued segment held for sale - 24,498
----------- -----------
Total Current Assets 92,477 108,677
Property and Equipment, net 101,665 82,252
Other Long-Term Assets 94,113 44,852
----------- -----------
Total Assets $288,255 $235,781
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------
Current Liabilities:
Accounts payable $21,091 $18,343
Other current liabilities 33,929 26,824
Liabilities of discontinued segment held for
sale - 7,783
----------- -----------
Total Current Liabilities 55,020 52,950
Long-Term Debt, less current maturities 67,811 19,542
Other Long-Term Obligations 14,068 16,629
Shareholders' Equity 151,356 146,660
----------- -----------
Total Liabilities and Shareholders' Equity $288,255 $235,781
=========== ===========
CONTACT: Angelica Corporation, St. Louis
Jim Shaffer/Colleen Hegarty, 314-854-3800
or
Integrated Corporate Relations, Inc.
John Mills, 310-395-2215