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G&K SERVICES REPORTS FIRST QUARTER RESULTS; SAYS OUTLOOK FOR FISCAL 1993 IS FAVORABLE

 G&K SERVICES REPORTS FIRST QUARTER RESULTS;
 SAYS OUTLOOK FOR FISCAL 1993 IS FAVORABLE
 MINNEAPOLIS, Oct. 29 /PRNewswire/ -- G&K Services, Inc. (NASDAQ-NMS: GKSRA) today reported first quarter earnings that reflect significant improvement in its Canadian operations when compared with the preceding two quarters. In remarks prepared for the company's annual meeting, Chairman and CEO Richard Fink told stockholders that G&K's outlook for fiscal 1993 is favorable.
 Revenues for the quarter ended Sept. 28, 1992, rose 3.1 percent to $49,446,000 from $47,976,000 in the year earlier quarter. Net earnings were $2,428,000, up slightly from $2,399,000 earned a year ago. On a per share basis, earnings equalled 18 cents per share in both reporting periods. The net earnings figure for fiscal 1992 included a $465,000 pre-tax gain from the sale of two small, marginally profitable U.S. locations. Excluding the effect of that transaction, net income in the first quarter was up 15 percent over the prior year.
 Fink said, "Earnings of 18 cents per share were the same as last year's first quarter, which was our strongest quarter of the 1992 fiscal year. They did reflect a gain over results in the last two quarters of fiscal 1992, and the turnaround was supported by a significant improvement in Canadian operating margins.
 "However," he said, "Canadian revenues remained under pressure from a very stagnant economy, and were down 13 percent from a year ago. On a more positive note," he added, "revenue levels have been relatively stable for the last three quarters, following a severe drop during December and January. We expect them to begin moving up as the year proceeds."
 U.S. earnings increased over the prior year period due to continued operating improvements. Consolidated earnings also benefited from reduced interest costs as a result of lower interest rates and borrowing levels compared with last year.
 "G&K's revenues from U.S. operations rose 9.4 percent from the year earlier period. This rate of growth is up two percentage points from the fourth quarter of fiscal 1992, reflecting continued strong new account sales and retention rates as well as a slight increase in activity from existing accounts."
 Commenting on the remainder of fiscal 1993, Fink said, "We expect continued progress in our results. Canadian earnings will strengthen further as the economy revives and the changes we have introduced take hold. The U.S. revenue growth rate should improve from last year's level and our margins should remain strong. We look forward to a record earnings year."
 To receive the latest information about G&K Services, Inc. via FAX, at no cost, dial 1-800-PRO-INFO, code 078.
 G&K SERVICES, INC. AND SUBSIDIARIES
 CONSOLIDATED STATEMENTS OF INCOME
 (In thousands, except per share amounts)
 (Unaudited)
 For the Three Months Ended
 Sept. 26, Sept. 28,
 1992 1991
 REVENUES $49,446 $47,976
 EXPENSES
 Operating 27,782 27,552
 Cost of merchandise sold 1,237 921
 Selling and administrative 11,190 10,529
 Depreciation 2,647 2,583
 Amortization of intangibles 778 772
 -- 43,634 42,357
 INCOME FROM OPERATIONS 5,812 5,619
 Interest expense 1,784 2,112
 Interest income (153) (63)
 Other (income) expense, net 45 (504)
 INCOME BEFORE INCOME TAXES 4,136 4,074
 Provision for income taxes 1,708 1,675
 NET INCOME $2,428 $2,399
 Weighted average number of
 shares outstanding 13,502 13,485
 NET INCOME PER SHARE $0.18 $0.18
 -0- 10/29/92
 /CONTACT: Richard Fink, chairman, G&K Services, 612-546-7440; or Nick Farina, 312-266-7800 or Karen Griffiths, 212-661-8030, both of the Financial Relations Board/
 (GKSRA) CO: G&K Services, Inc. ST: Minnesota IN: SU: ERN


KH -- MN009 -- 6593 10/29/92 12:41 EST
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Date:Oct 29, 1992
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