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FOR IMMEDIATE RELEASE
ST. LOUIS, MISSOURI
September
4, 2007
Angelica Announces Intent to Sell or Close Edison, NJ
Service Center
Reorganizes Down to Eight
Markets
St. Louis, Missouri (September 4, 2007) – Angelica Corporation (NYSE: AGL), a
leading provider of healthcare linen management services, announced today its
plan to sell or close its Edison, NJ service center and reorganize into fewer
markets.
The Edison, NJ service center has been underperforming for some time, which
has been depressing overall financial results in the New York market. The
Edison facility failed to make the progress we had been expecting in the second
quarter. Therefore, we have decided to close or sell this service center given
the underlying value of the real estate.
While Angelica expects to sell or close this facility before the end of the
current fiscal year, the exact timing has not been finalized, as Angelica
intends to fulfill its existing customer commitments, work to find other
providers for customers no longer in its market area, and seek to accommodate as
many employees as possible at its other locations, if the facility closes versus
sells.
In conjunction with the Edison decision, Angelica has taken the opportunity
to further streamline its operations from nine to eight markets. This provides
more effective coverage of our remaining markets at lower cost.
Commenting on the reorganization, Steve O’Hara, Chief Executive Officer of
Angelica, noted “We are disappointed that Edison’s performance did not improve
as expected in the second quarter. While we believe this performance could
improve with time and additional capital invested in the facility, we think that
in order to maximize shareholder value, those resources could be better deployed
elsewhere. This market consolidation should also help achieve our target
SG&A expense of 11% of revenue in fiscal 2008. We’ll discuss our decision
in greater detail on our second quarter earnings call on September 5, 2007.”
The analyst conference call will be webcast live on Angelica’s website, www.angelica.com. The call will be archived
on the Angelica website and the replay will be available for two weeks beginning
two hours after the call.
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 in 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 the Company’s recently
announced initiatives to reduce key operating costs as a percentage of revenues,
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.
For additional information contact:
JIM SHAFFER DEVLIN
LANDER
CHIEF FINANCIAL OFFICER INTEGRATED CORPORATE
RELATIONS, INC.
(314) 854-3800
(415) 292-6855
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