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G&K SERVICES REPORTS HIGHER SECOND QUARTER RESULTS; COMPANY EXPECTS CONTINUED GAINS THROUGH FISCAL 1993

 MINNEAPOLIS, Jan. 26 /PRNewswire/ -- G&K Services, Inc. (NASDAQ-NMS: GKSRA), today said second quarter results reflect strong revenue growth in the United States and further progress in Canada. The company expects continued improvement during the second half of fiscal 1993, according to Richard Fink, chairman and CEO of the Minneapolis- based textile leasing company.
 Revenues for the quarter ended Dec. 26, 1992, reached $50,708,000, a gain of 3 percent from $49,235,000 in the prior year. Net earnings for the current quarter rose 11 percent to $2,519,000, or 19 cents per share, from the $2,269,000, or 17 cents per share, earned in the same period a year ago.
 For the first six months of fiscal 1993, revenues rose 3 percent to $100,154,000 from $97,211,000 in the comparable period last year. Net earnings were $4,947,000, or 37 cents per share, up 6 percent from $4,668,000, or 35 cents per share, earned a year earlier. 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 half was up 12 percent over fiscal 1992.
 Mr. Fink said, "U.S. revenues rose 10 percent from a year ago, the first double-digit increase in seven quarters. The higher growth rate reflects strong new account sales and retention rates, as well as some improvement in the economy.
 "Canadian revenues were down 15.9 percent from the year earlier quarter, but more than half of this decline was due to a sharp swing in the Canadian - U.S. exchange rate from a year ago," Mr. Fink explained.
 "In Canadian dollars, revenues were down 6.3 percent from a year ago. More significantly, revenues in Canadian dollars were up slightly from the first quarter -- the first sequential increase in revenues since we acquired this business in September 1990."
 Operating income in the United States was level with last year, as reductions in processing and delivery expenses were offset by increases in merchandise and administrative costs. In Canada, more efficient operations produced increased operating income and margins when measured in Canadian dollars, but were down from the prior year period when converted to U.S. dollars. Net income was helped by lower interest expense and a lower tax rate.
 In terms of the outlook for the second half of fiscal 1993, Mr. Fink said, "We expect Canadian earnings to show continuing improvement over 1992 levels. Revenues in Canada appear to have stabilized, and we expect them to begin moving up as the year progresses, although we will most likely continue to show year-to-year declines because of currency rate changes since last year. Operating earnings should strengthen as revenues improve and as the changes we've introduced over the past two years continue to pay off. Better results in Canada, combined with further progress from our U.S. operations, should provide strong results through the rest of this fiscal year."
 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 23 states, serving customers from 21 processing plants and 27 sales and service centers. In Canada, G&K serves customers from 22 locations, including nine processing plants in the provinces of Ontario and Quebec.
 G&K SERVICES, INC. AND SUBSIDIARIES
 Consolidated Statements of Income (Unaudited)
 (In thousands, except per share amounts)
 Periods Three Months Six Months
 Ended 12/26/92 12/28/91 12/26/92 12/28/91
 Revenues $50,708 $49,235 $100,154 $97,211
 Expenses:
 Operating 28,435 28,161 56,217 55,713
 Cost of merchandise sold 1,478 1,339 2,715 2,260
 Selling and administrative 11,388 10,257 22,578 20,786
 Depreciation 2,829 2,787 5,476 5,370
 Amortization of intangibles 759 814 1,537 1,586
 Total 44,889 43,358 88,523 85,715
 Income from operations 5,819 5,877 11,631 11,496
 Interest expense 1,749 2,251 3,533 4,363
 Interest income (10) (97) (163) (160)
 Other (income) expense, net 32 (239) 77 (743)
 Income before income taxes 4,048 3,962 8,184 8,036
 Provision for income taxes 1,529 1,693 3,237 3,368
 Net income $ 2,519 $ 2,269 $ 4,947 $ 4,668
 Weighted average number of
 shares outstanding 13,506 13,485 13,504 13,485
 Income per share $0.19 $0.17 $0.37 $0.35
 Dividends per share $0.025 $0.025 $0.050 $0.050
 -0- 1/26/93
 /NOTE TO EDITORS: To receive the latest information about G&K Services, Inc., via FAX, at no cost, dial 1-800-PRO-INFO, code 078/
 /CONTACT: Richard Fink, chairman of G&K Services, 612-546-7440; or Nick Farina, 312-266-7800, or Karen Griffiths, 212-661-8030, both of the Financial Relations Board, for G&K Services/
 (GKSR)


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

GK -- NY103 -- 9249 01/26/93 16:11 EST
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