Angelica Announces Strategic Alternative Review for Life Uniform Segment and Provides Updated Fiscal Year Guidance.

Business Editors/Health/Medical Writers

ST. LOUIS--(BUSINESS WIRE)--Oct. 29, 2003

Angelica Corporation (NYSE:AGL) announced today that it has hired the New York investment banking firm of Morgan Joseph & Co. to review strategic alternatives for its Life Uniform segment. In addition, the Company noted that it now expects earnings from continuing operations for the fiscal year ending January 31, 2004 to be between $1.00 and $1.10 per share, including the second quarter non-operating income of $1.8 million pretax ($0.15 per share) which was realized in connection with life insurance policies owned by the Company. Full year earnings are expected to be between $0.85 and $0.95 per share without this non-recurring item and excluding any potential writedown of Life assets as a result of the strategic review process.

The Company noted that the Life Uniform segment, which sells scrubs and other uniforms to healthcare personnel through catalogues, the Internet, on-the-job shopping and 239 stores, continues to under-perform expectations with same-store sales down 8% for the first eight months of the fiscal year. The Angelica Textile Services segment, which provides linen management services primarily to hospitals, continues to grow revenues in mid-single digit percentages. Although fourth quarter results for this segment are expected to be up significantly over last year due to the prior years' higher charges for workers' compensation, profitability in the full fiscal year is expected to be slightly down relative to last year primarily due to higher energy and fuel expenses and increasing pricing pressures in a tight economy.

In announcing the hiring of Morgan Joseph to assess alternatives for Life Uniform, Steve O'Hara, Angelica's new President & CEO, noted, "Life Uniform continues to be the retail leader in providing uniforms to healthcare personnel. However, as we embark on a program to improve its profitability, it is timely to reassess its marketplace value and overall fit with our focus on better serving hospitals through Angelica Textile Services. We are pleased to have a firm of Morgan Joseph's capabilities assist us with this assessment."

Angelica Corporation also announced that Denis Raab, President of Life Uniform, has resigned his position. During the strategic alternative process, Steve O'Hara will assume Mr. Raab's responsibilities.

Angelica Corporation plans to announce its third quarter earnings on November 18, 2003. A conference call to discuss these results is scheduled for 10AM CST on November 19, 2003. The conference call will be webcast live and available in a listen-only mode to individual investors and to the public through CCBN Company Boardroom, which may be accessed at www.companyboardroom.com or through Angelica's website at www.angelica.com. Replays of the call will be available through CCBN for two weeks afterward as well. Angelica also plans to host analyst meetings in New York City in December. Qualified analysts wishing to be invited should contact Ted Armstrong, Angelica's CFO.

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.

Forward-Looking Statements

Any forward-looking statements made in this press release reflect Angelica Corporation'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 effectiveness of certain expense reduction initiatives, 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.