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ARAMARK Reports Fiscal Year 2006 Results.


Record Full-Year Sales of $11.6 Billion

PHILADELPHIA -- ARAMARK Corporation (NYSE NYSE

See: New York Stock Exchange
:RMK RMK Remark (Weather METAR)
RMK Rocky Mountain King (Polaris Snowmobiles)
RMK Remarks
RMK Resource Manager Kernel
), a world leader in providing professional services (job) professional services - A department of a supplier providing consultancy and programming manpower for the supplier's products. , today reported fiscal 2006 sales of $11.6 billion, up 6 percent from fiscal 2005. Organic sales growth was 5 percent. Net income was $261 million and diluted earnings per share diluted earnings per share

An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of
 were $1.41.

Sales for the fourth quarter were $2.93 billion, up 5 percent from the prior year quarter, and organic sales growth was 5 percent. Net income was $74 million.

Fourth quarter diluted earnings per share were $0.40 and include costs incurred in the shutdown of the healthcare apparel direct marketing business, professional fees related to the proposed merger, and the impact of the expensing of employee stock options.

Full Year and Fourth-Quarter Results

In the Food and Support Services support services Psychology Non-health care-related ancillary services–eg, transportation, financial aid, support groups, homemaker services, respite services, and other services  - U.S. segment, sales for the fiscal year increased 5 percent from the prior year to $7.5 billion. Organic sales growth was 5 percent. Segment operating income Operating Income

The profit realized from a business' own operations.

Notes:
This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit.
 was $398 million.

Fourth quarter sales were $1.9 billion, up 4 percent from the prior year quarter. Organic sales growth was 4 percent. Segment operating income was $125 million, reflecting weaker results in the sports and entertainment group related to baseball and parks operations.

Sales in the Food and Support Services - International segment for the full year were $2.5 billion, up 12 percent from fiscal year 2005. Organic sales growth was 8 percent. Segment operating income was $109 million.

For the fourth quarter, sales were $620 million, up 10 percent from the prior year quarter. Organic sales growth was 6 percent. Segment operating income was $21 million.

In the Uniform and Career Apparel - Rental segment, sales for the full year increased 7 percent over the prior year to $1.2 billion, with organic sales growth of 6 percent. Segment operating income was $134 million.

Fourth quarter sales were up 7 percent from the prior year quarter to $306 million. Organic sales growth was 6 percent. Segment operating income was $35 million.

Sales in the Uniform and Career Apparel - Direct Marketing segment for the full year were $418 million. The segment reported an operating loss operating loss

The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income.
 of $44 million, which includes the $43 million third-quarter charge for the writedown of goodwill and adjustments to asset and liability carrying values.

Fourth quarter sales were $94 million and the segment reported an operating loss of $5 million, due in large part to the shutdown of the healthcare apparel direct marketing business.

Corporate expenses increased approximately $29 million for the full year and $12 million for the fourth quarter over the prior year, primarily due to stock option expense and professional expenses incurred in connection with the proposed merger.

Cash flow remained strong for the year as the company funded $139 million of acquisitions, $113 million of share buybacks and $50 million of dividends while reducing year-over-year debt by about $40 million.

Proposed Merger

On August 8, 2006, the company announced that it has signed a definitive merger agreement under which Joseph Neubauer and investment funds Noun 1. investment funds - money that is invested with an expectation of profit
investment

assets - anything of material value or usefulness that is owned by a person or company
 managed by GS Capital Partners, CCMP CCMP Comprehensive Conservation and Management Plan
CCMP Counter-Mode/CBC-Mac Protocol (IEEE 802.11I encryption algorithm)
CCMP Capacitively Coupled Microwave Plasma
CCMP Coalition of Concerned Medical Professionals
 Capital Advisors and J.P. Morgan Partners, Thomas H. Lee Partners This article or section is written like an .
Please help [ rewrite this article] from a neutral point of view.
Mark blatant advertising for , using . Thomas H.
 and Warburg Pincus Warburg Pincus is a private equity firm with offices in the United States, Europe and Asia. It has been a leading private equity investor since 1971. The firm currently has approximately $14 billion under management, and invests in a range of industries including information and  LLC (Logical Link Control) See "LANs" under data link protocol.

LLC - Logical Link Control
 will acquire ARAMARK in a transaction valued at approximately $8.3 billion, including the assumption or repayment of approximately $2.0 billion of debt. Under the terms of the agreement, ARAMARK stockholders would receive upon completion of the merger $33.80 in cash for each share of ARAMARK common stock they hold.

The transaction is subject to receipt of stockholder approval and customary regulatory approvals, as well as the satisfaction of other customary closing conditions. The transaction is expected to close in late 2006 or early 2007.

Due to the proposed merger, the company will not hold a conference call or Webcast regarding its fourth quarter and full year results.

About ARAMARK

ARAMARK is a leader in professional services, providing award-winning food services food services Hospital services A 24/7 department in a hospital that provides for the nutritional needs of inpatients–eg, those needing special diets, preparing meals and transporting them to the floor and, through the cafeteria, the hospital staff and , facilities management The management of a user's computer installation by an outside organization. All operations including systems, programming and the datacenter can be performed by the facilities management organization on the user's premises. , and uniform and career apparel to health care institutions, universities and school districts, stadiums and arenas, and businesses around the world. In FORTUNE magazine's 2006 list of "America's Most Admired Companies A yearly publication by Fortune Magazine, America's Most Admired Companies consists of corporations that are highly esteemed by the likes of Business Executives, Directors, and Analysts. A survey is taken of close to 3300 professionals who give their opinions on the companies. ," ARAMARK was ranked number one in its industry, consistently ranking since 1998 as one of the top three most admired companies in its industry as evaluated by peers and industry analysts. The company was also ranked first in its industry in the 2006 FORTUNE 500 survey. Headquartered in Philadelphia, ARAMARK has approximately 240,000 employees serving clients in 20 countries. Learn more at the company's Web site, www.aramark.com

Forward-Looking Statements

Forward-looking statements speak only as of the date made. We undertake no obligation to update any forward-looking statements, including prior forward-looking statements, to reflect the events or circumstances arising after the date as of which they were made. As a result of these risks and uncertainties, readers are cautioned not to place undue reliance on any forward-looking statements included herein or that may be made elsewhere from time to time by, or on behalf of, us.

This press release includes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and  of 1995 that reflect our current views as to future events, including the proposed merger, and financial performance with respect to our operations. These statements can be identified by the fact that they do not relate strictly to historical or current facts. They use words such as "aim," "anticipate," "are confident," "estimate," "expect," "will be," "will continue," "will likely result," "project," "intend," "plan," "believe," "look to" and other words and terms of similar meaning in conjunction with a discussion of future operating or financial performance or the proposed merger.

These statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the forward-looking statements. Factors that might cause such a difference include: unfavorable economic conditions; ramifications ramifications nplAuswirkungen pl  of any future terrorist attacks or increased security alert levels; increased operating costs, including labor-related and energy costs; shortages of qualified personnel or increases in labor costs; costs and possible effects of further unionization of our workforce; currency risks and other risks associated with international markets; risks associated with acquisitions, including acquisition integration issues and costs; our ability to integrate and derive the expected benefits from our recent acquisitions; competition; decline in attendance at client facilities; unpredictability of sales and expenses due to contract terms and terminations; the impact of natural disasters on our sales and operating results; the risk that clients may become insolvent; the risk that our insurers may become insolvent or may liquidate; the contract intensive nature of our business, which may lead to client disputes; high leverage; claims relating to the provision of food services; costs of compliance with governmental regulations and government investigations; liability associated with noncompliance noncompliance

failure of the owner to follow instructions, particularly in administering medication as prescribed; a cause of a less than expected response to treatment.

noncompliance 
 with governmental regulations, including regulations pertaining to food services, the environment, the Federal school lunch program, Federal and state employment and wage and hour laws and import and export controls and customs laws; dram shop compliance and litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute.

When a person begins a civil lawsuit, the person enters into a process called litigation.
; contract compliance and administration issues, inability to retain current clients and renew existing client contracts; determination by customers to reduce their outsourcing and use of preferred vendors; seasonality; and other risks that are set forth in the "Risk Factors," "Legal Proceedings All actions that are authorized or sanctioned by law and instituted in a court or a tribunal for the acquisition of rights or the enforcement of remedies. " and "Management Discussion and Analysis of Results of Operations and Financial Condition" sections of and elsewhere in ARAMARK's SEC filings, copies of which may be obtained by contacting ARAMARK's investor relations Investor relations

The process by which the corporation communicates with its investors.
 department via its website www.aramark.com.

These factors also include the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement; the outcome of any legal proceedings that have been or may be instituted against ARAMARK and others following announcement of the proposal or the merger agreement; the inability to complete the merger due to the failure to obtain stockholder approval or the failure to satisfy other conditions to the completion of the merger; the failure to obtain the necessary debt financing Debt Financing

When a firm raises money for working capital or capital expenditures by selling bonds, bills, or notes to individual and/or institutional investors. In return for lending the money, the individuals or institutions become creditors and receive a promise to repay
 arrangements set forth in commitment letters received in connection with the merger; risks that the proposed transaction disrupts current plans and operations and the potential difficulties in employee retention as a result of the merger; the ability to recognize the benefits of the merger; the amount of the costs, fees, expenses and charges related to the merger and the actual terms of certain financings that will be obtained for the merger; and the impact of the substantial indebtedness incurred to finance the consummation of the merger.

Editor's Note: ARAMARK defines organic growth as sales growth adjusted to exclude the effects of acquisitions, divestitures and the impact of currency translation.
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Publication:Business Wire
Date:Nov 15, 2006
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