Angelica Reports Fourth Quarter and Fiscal Year 2002 Results.

Business Editors

NOTE TO MEDIA: Spreadsheet is available in a Smart News Release(TM)

on Business Wire's Home Page at www.businesswire.com and at

www.newstream.com

ST. LOUIS--(BUSINESS WIRE)--March 21, 2002

Angelica Corporation (NYSE:AGL) announced today results for the fourth quarter and fiscal year ended January 26, 2002. Results for both the quarter and year reflect the decision to discontinue operations of the Manufacturing and Marketing segment, which has been accounted for as a discontinued operation, and to record in fiscal year 2002 an anticipated loss on sale plus the expected costs of winding down and ultimate discontinuation of that business segment. Results also reflect restructuring and other charges of $4,180,000 pretax taken in the fourth quarter in the Life Retail Stores segment.

With respect to continuing operations, consisting of the Textile Services and Life Retail segments, combined sales and textile service revenues in fiscal 2002 were $350,063,000 compared with $335,298,000 in the prior year, an increase of 4.4 percent. Operating earnings before the restructuring and other charges increased 5.8 percent to $17,970,000 in fiscal 2002 versus $16,980,000 last year. Including the restructuring and other charges, net income per share from continuing operations was $.19 in fiscal 2002 compared with $.35 in the prior year. In the fourth quarter, combined sales and textile service revenues from continuing operations were $86,491,000 compared with $84,516,000 in the same quarter last year, an increase of 2.3 percent. Fourth quarter operating earnings from continuing operations before the restructuring and other charges were $3,575,000, down 3.0 percent from $3,686,000 in last year's fourth quarter. Including the restructuring and other charges, the fourth quarter this year resulted in a net loss from continuing operations of $.31 per share compared with net income of $.09 last year.

Results of discontinued operations in fiscal 2002, which reflect Manufacturing and Marketing and the estimated loss on its sale and discontinuation, were a net loss of $24,338,000 after tax or $2.83 per share ($2.81 fully diluted). This compared with net income of $3,539,000 or $.41 per share in the prior year from discontinued operations. Under discontinued operations accounting, the results for both fiscal years do not reflect any portion of the Company's interest expense, all of which is allocated to continuing operations. Looking at the Manufacturing and Marketing segment on an operating basis before the estimated loss on sale and discontinuation, sales in fiscal 2002 decreased 3.8 percent to $143,064,000 and operating results were a loss of $539,000 compared with income of $5,907,000 in the prior year. For the Company in total, combining continuing and discontinued operations resulted in a net loss of $2.64 per share ($2.62 fully diluted) in fiscal 2002 compared with net income of $.76 per share in fiscal 2001.

Textile Services revenues in fiscal 2002, increased 6.8 percent from $242,623,000 to $259,078,000, as annualized net new business (new business installed less lost business) reached a record $18,200,000, up 33.8 percent from the prior year. Operating earnings for the year showed a 29.0 percent increase to $18,741,000 from $14,526,000 last year, reflecting not only the revenue increase but also better pricing and continuing improvements in productivity and linen management. In the fourth quarter, revenues of $64,113,000 were 4.5 percent above $61,363,000 in last year's fourth quarter, and operating earnings rose 38.4 percent to $4,385,000 from $3,169,000 last year.

At Life Retail stores, sales of $90,985,000 in fiscal 2002 were 1.8 percent lower than sales of $92,675,000 in the prior year, largely the result of a 4.5 percent same-store sales decline in a weak retail market over the last three quarters of the year. Fourth quarter sales of $22,378,000 were down 3.3 percent compared with the same quarter last year on a 6.2 percent decline in same-store sales. Operating results of this segment for fiscal 2002 before restructuring and other charges and on a basis comparable to last year were a loss of $771,000 compared with earnings of $2,454,000 last year. After the charges, Life had an operating loss of $4,951,000 for the year. In addition to providing for the closing of 27 stores with a combined operating loss of $869,000 in fiscal 2002, the restructuring and other charges included $1,198,000 for inventory writedowns charged to cost of goods sold covering inventory at the closed stores and reflecting the exit from a small amount of low-margin business in the hospitality market.

On the Manufacturing and Marketing sale transactions, Angelica continues to negotiate with the two purchasers identified earlier in the month, and execution of definitive asset purchase agreements is expected soon. Closing dates for the separate purchases still have not been fixed. The expected loss on sale recognized in fiscal 2002 results will require the Company to notify its lenders that it is not in compliance with the minimum net worth covenant in one of its debt agreements. After 30 days, the lenders will have the right to declare the principal amount of the debt due and payable. Discussions between the Company and current and prospective lenders are already under way with respect to refinancing the debt. It is expected that as a part of the refinancing, approximately $50,000,000 of sale proceeds will be used to pay down a portion of outstanding debt, which should reduce interest expense in fiscal 2003.

Don W. Hubble, Chairman, President and Chief Executive Officer of Angelica said, "Our Textile Services segment had an excellent fourth quarter and year, and shows good promise for the future in terms of both revenues and earnings. Life Retail did not have a good year in fiscal 2002, but should improve as the economy improves and has good future growth prospects, especially in the catalogue distribution channel." With respect to the Manufacturing and Marketing segment, Hubble added "We clearly have made the correct decision to exit this segment, as we have not been able to add economic profit and the future does not indicate any change in that position. The interest of the strategic purchasers with whom we are negotiating testifies to the need for consolidation in this industry. We will have our hands full a good part of this year in completing the transactions we are working on, but over the long term we are confident we will be able to provide better value for our shareholders."

Angelica Corporation, traded on the New York Stock Exchange under the symbol AGL, provides textile rental and laundry services to healthcare institutions, manufactures and markets uniforms for institutions and businesses, and operates a national chain of retail uniform and shoe stores.

Note: A Spreadsheet is available at URL: http://www.businesswire.com/photowire/pw.032102/snr10.xls