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G&K SERVICES NET INCOME RISES 39 PERCENT IN FIRST QUARTER; COMPANY SAYS OUTLOOK FOR FISCAL 1994 IS GOOD

 MINNEAPOLIS, Oct. 28 /PRNewswire/ -- G&K Services, Inc. (NASDAQ-NMS: GKSRA), today reported that first quarter net income rose 39 percent over the prior year due to continued strong U.S. results and a sharply improved performance from its Canadian business. In remarks prepared for the company's annual meeting, Chairman and CEO Richard Fink told stockholders that G&K's current momentum points toward a strong fiscal 1994.
 Net earnings for the quarter ended Oct. 2, 1993, were $3,385,000, or 25 cents per share, a gain of 39 percent over $2,428,000, or 18 cents per share, in the prior year. Revenues rose 8 percent to $53,354,000 from $49,446,000 a year ago.
 Fink said: "Our U.S. results continue a string of excellent quarters in which G&K's internal revenue growth has been well ahead of the industry. Strong new account sales and customer retention rates, combined with a slightly improved economy, contributed to a 13 percent revenue growth rate in the first quarter without the benefit of acquisitions.
 "In Canada," he said, "revenues measured in U.S. dollars were down 8 percent, but in Canadian dollars they were even with the year earlier period. This reflects a strengthened sales and marketing effort as well as a more stabilized economy.
 "Earnings benefited from continued operating improvements at U.S. locations as well as a larger-than-expected gain in Canadian operating income and margins compared with both the year earlier period and with previous quarters. Canadian operating margins are now moving closer to those achieved in our U.S. business." He added that consolidated earnings also benefited from reduced interest costs.
 Commenting on the outlook for the remainder of the year, Fink said, "Based on the current momentum in our U.S. business and the progress we are achieving in Canada, we anticipate a strong fiscal 1994 for G&K."
 G&K Services is one of North America's largest suppliers of uniforms and related textile products. In the United States, the company operates in 24 states, from 21 processing plants and 30 sales and service centers. In Canada, G&K serves customers from 22 locations including eight processing plants in the provinces of Ontario and Quebec. Its stock is traded on the NASDAQ National Market System under the symbol GKSRA.
 To receive the latest information about G&K Services, Inc., via FAX, at no cost, dial 800-PRO-INFO, code 078.
 G&K Services, Inc. and Subsidiaries
 Consolidated Statements of Income
 (In thousands, except per share amounts)
 Oct. 2, 1993
 (Unaudited)
 For the Three Months Ended
 Oct. 2, Sept. 26,
 1993 1992
 REVENUES $53,354 $49,446
 EXPENSES
 Operating 29,104 27,782
 Cost of merchandise sold 1,411 1,237
 Selling and administrative 11,957 11,190
 Depreciation 3,098 2,647
 Amortization of intangibles 760 778
 Total 46,330 43,634
 INCOME FROM OPERATIONS 7,024 5,812
 Interest expense 1,532 1,784
 Interest income (152) (153)
 Other (income) expense, net (134) 45
 INCOME BEFORE INCOME TAXES 5,778 4,136
 Provision for income taxes 2,393 1,708
 NET INCOME $3,385 $2,428
 Weighted average number of
 shares outstanding 13,548 13,502
 NET INCOME PER SHARE $0.25 $0.18
 Dividends per share $0.025 $0.025
 -0- 10/28/93
 /CONTACT: Richard Fink of G&K Services, 612-546-7440; Nick Farina at The Financial Relations Board, 312-266-7800, or Howard Zar, 212-661-8030, for G&K Services/
 (GKSRA)


CO: G&K Services, Inc. ST: Minnesota IN: TEX SU: ERN

DC-IH -- DC013 -- 7900 10/28/93 12:03 EDT
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Publication:PR Newswire
Date:Oct 28, 1993
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