G&K Services, Inc. (Nasdaq:GKSRA), today announced the acquisition of the direct sale uniform group and related assets ("Lion Uniform Group") from Lion Apparel, Inc. Based in Dayton, Ohio, Lion Uniform Group is a leading designer, marketer and distributor of customized uniform programs. Lion Uniform Group generated approximately $27 million in revenue in their most recent fiscal year ended September 25, 2004.
"We are extremely pleased to announce the addition of this high-quality business to G&K," said Richard Marcantonio, president and chief executive officer. "This acquisition expands our direct sale business, and more importantly, positions us to pursue greater direct sale growth in this large, fragmented market. The Lion Uniform Group has a high-quality customer base, seasoned management team, key information systems, solid sourcing capabilities and excellent fulfillment center operations."
G&K stated that Lion Apparel, Inc. operates other businesses for fire, rescue, police and military organizations in North America, Europe and Asia which are not part of this transaction.
"As we've discussed over the past several quarters, we see significant growth opportunity across our entire business," Marcantonio said. "We're continuously evaluating alternatives to grow our rental and direct sale businesses through internal initiatives and potential acquisitions. The Lion Uniform Group brings a great portfolio of direct sale customers that depend on their uniform program as a key element of their brand strategy. Their programs are specifically designed to enhance the customer's image in the marketplace which is consistent with G&K's new strategy. Our plans are to leverage their marketing, operational and management expertise to significantly expand our share of this market."
Due to a confidentiality agreement with the sellers, the purchase price was not disclosed. Additional information on Lion Apparel, Inc. can be obtained through their website at www.lionapparel.com.
Safe Harbor for Forward-Looking Statements
The Private Securities Litigation Reform Act of 1995 (the "Act") provides companies with a "safe harbor" when making forward-looking statements as a way of encouraging them to furnish their shareholders with information regarding expected trends in their operating results, anticipated business developments and other prospective information. Statements made in this press release concerning our intentions, expectations or predictions about future results or events are "forward- looking statements" within the meaning of the Act. These statements reflect our current expectations or beliefs, and are subject to risks and uncertainties that could cause actual results or events to vary materially and adversely from stated expectations. Given that circumstances may change, and new risks to the business may emerge from time to time, having the potential to negatively impact our business in ways we could not anticipate at the time of making a forward-looking statement, you are cautioned not to place undue reliance on these statements, and we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Some of the factors that could cause actual results or events to vary from stated expectations include, but are not limited to, the following: acquisition integration costs; the performance of acquired businesses; unforeseen operating risks; the effects of overall economic conditions and employment; fluctuations in costs of insurance and energy; preservation of positive labor relationships; competition, including pricing, within the corporate identity apparel and facility services industry; and the availability of capital to finance planned growth. Additional information concerning potential factors that could affect future financial results is included in our Annual Report on Form 10-K for the fiscal year ended July 3, 2004.
About G&K Services, Inc.
Headquartered in Minneapolis, Minnesota, G&K Services, Inc. is a market leader in branded identity apparel programs and facility services in the United States, and is the largest such provider in Canada. G&K operates over 130 processing facilities and branch offices, serving more than 160,000 customers.