Labor Ready Announces Record First Quarter Net Income; Net Income Improves 23 Percent

Labor Ready, Inc. (NYSE:LRW) reported revenue for the
first quarter ended March 31, 2006 increased 22.1 percent to $297.1
million compared to revenue of $243.2 million for the first quarter of
2005. Net income for the quarter was $11.5 million or $0.21 per
diluted share, as compared to $9.4 million or $0.19 per diluted share
for the first quarter of 2005. Included in net income for the quarter
is incremental stock-based compensation expense of $0.03 per diluted
share in comparison with the same quarter a year ago.
   "We are pleased with the continued leverage in our operating model
which resulted in net income growth of more than 37 percent excluding
incremental stock-based compensation," said Labor Ready President
Steve Cooper. "During the quarter we achieved same branch revenue
growth of 11 percent, sustained gross profit of 31.3 percent, and
continued our disciplined control of operating expenses."
   CLP Resources, a leading skilled construction trades staffing firm
acquired by Labor Ready in May 2005, provided 11.7 percentage points
of Labor Ready's total revenue growth for the quarter.
   "We are confident we will continue to benefit from our commitment
to growing revenue of existing branches, opening new branches, and
maximizing the potential of our recent acquisitions," said Labor Ready
CEO Joe Sambataro. "These strategies and our ability to serve the
staffing needs of our customers through our family of brands provide a
strong foundation for sustained future growth."
   Labor Ready opened a total of 23 new branches and closed two
branches during the quarter and plans to open approximately 20
additional branches in 2006. The company currently operates 908
branches.
   Labor Ready also announced the company plans to repurchase up to
1.2 million shares of its common stock during the second quarter of
2006 under a program previously approved by its Board of Directors.
   Labor Ready also provided guidance for the second quarter and
updated its outlook for 2006. The company estimates revenue in the
range of $338 million to $343 million and net income per share between
$0.32 and $0.34 for the second quarter of 2006. For the year, the
company currently estimates revenue in the range of $1.38 billion to
$1.40 billion. Net income per share for the year is expected to be
between $1.33 and $1.38. These estimates include incremental
stock-based compensation expense of $0.07 per diluted share for the
year 2006.
   Management will discuss the company's performance with analysts on
a conference call at 8:00 a.m. (PT) Thursday, April 20, 2006. The
conference call will be broadcast live on the Internet at
www.laborready.com and archived later in the day for replay.
   This news release contains forward-looking statements, such as
statements about the ranges of revenues, gross margins and net income
anticipated for future periods, improvements in safety and workers'
compensation claims and costs, strategies for increasing revenue and
net income, and other factors that may affect our financial results
and operations in the future. Our actual results are, however, subject
to a number of risks, including without limitation the following: 1)
national and global economic conditions; 2) our ability to continue to
attract and retain customers and maintain profit margins in the face
of new and existing competition; 3) potential new laws and regulations
that could have a materially adverse effect on our operations and
financial results; 4) significant labor disturbances which could
disrupt industries we serve; 5) increased costs and collateral
requirements in connection with our insurance obligations, including
workers' compensation insurance; 6) the adequacy of our financial
reserves; 7) our continuing ability to comply with financial covenants
in our lines of credit and other financing agreements; 8) our ability
to attract and retain competent employees in key positions; 9) our
ability to successfully complete and integrate acquisitions that we
have made and may make from time to time; and 10) other risks
described in our filings with the Securities and Exchange Commission,
including the Report on Form 10-K filed during 2006.

   About Labor Ready

   Labor Ready is an international provider of temporary employees
for manual labor, light industrial and skilled trades, operating under
the brand names of Labor Ready, Workforce, Spartan Staffing, and CLP
Resources. Labor Ready's customers are primarily small- to mid-sized
businesses in the construction, warehousing, hospitality, landscaping,
transportation, light manufacturing, retail, wholesale, facilities and
sanitation industries. Annually, Labor Ready serves approximately
300,000 customers and puts more than 600,000 people to work through
its more than 900 branch locations in the United States, Canada, and
the United Kingdom. For additional information, visit Labor Ready's
website at www.laborready.com.

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                           LABOR READY, INC.
               SUMMARY CONSOLIDATED STATEMENTS OF INCOME
               (in thousands, except per share amounts)
                              (Unaudited)



                                                  Thirteen Weeks Ended
                                                   March 31,  April 1,
                                                     2006      2005


Revenue from services                              $297,067  $243,216
Cost of services                                    204,150   167,078
Gross profit                                         92,917    76,138
Selling, general and
administrative expenses                              74,224    59,414
Depreciation and amortization                         2,796     2,206
Income from operations                               15,897    14,518
Interest and other income, net                        2,746       475
Income before tax expense                            18,643    14,993
Income tax                                            7,177     5,637
Net income                                          $11,466    $9,356

Net income per common share:
  Basic                                               $0.21     $0.22
  Diluted                                             $0.21     $0.19

Weighted average shares outstanding:
  Basic                                              53,680    42,502
  Diluted                                            54,447    53,256


                           LABOR READY, INC.
                  SUMMARY CONSOLIDATED BALANCE SHEETS


                                                        As of
                                                  March 31,  Dec. 30,
                                                    2006       2005
                                                 (Unaudited)
Assets
 Current assets
  Cash and cash equivalents                       $109,057   $82,155
  Marketable securities                             92,760    93,510
  Accounts receivable, net                         111,369   121,959
  Other current assets                              20,472    21,039
    Total current assets                           333,658   318,663
Property and equipment, net                         28,577    26,615
Other assets                                       237,699   226,798
    Total assets                                  $599,934  $572,076

Liabilities and shareholders' equity
 Current liabilities                              $103,984  $100,014
 Long-term liabilities                             129,501   123,464
    Total liabilities                              233,485   223,478
 Shareholders' equity                              366,449   348,598
    Total liabilities and shareholders' equity    $599,934  $572,076


                           LABOR READY, INC.
                 CONSOLIDATED STATEMENTS OF CASH FLOWS
                             In Thousands
                              (Unaudited)

                                                  Thirteen Weeks Ended
                                                   March 31,  April 1,
                                                      2006      2005
Cash Flows from Operating activities:
Net income                                          $11,466    $9,356
Adjustments to reconcile net income to
  net cash provided by operating activities:
   Depreciation and amortization                      2,611     2,400
   Provision for doubtful accounts                    1,598     1,557
   Deferred income taxes                             (7,763)   (4,385)
   Tax benefit on stock options                           -     1,419
   Excess tax benefits from stock-based compensation (1,877)        -
   Other operating activities                         2,488        31
Changes in operating assets and liabilities:
   Accounts receivable                                8,992     1,125
   Income tax                                        15,160     8,577
   Other assets                                         506      (514)
   Accounts payable                                       6     3,215
   Accrued wages and benefits                        (4,410)   (3,265)
   Workers' compensation claims reserve               5,473     4,189
   Other current liabilities                            (38)      (75)
                                                ----------- ---------
Net cash provided by operating activities            34,212    23,630
                                                ----------- ---------

Cash Flows from Investing activities:
   Capital expenditures                              (3,859)   (1,152)
   Purchases of marketable securities               (11,243)  (35,535)
   Maturities of marketable securities               12,002    34,305
   Increase in restricted
    cash and other assets                            (7,431)  (17,805)
   Other                                                  -        36
                                                ----------- ---------
Net cash used in investing activities               (10,531)  (20,151)
                                                ----------- ---------

Cash Flows from Financing activities:
   Proceeds from sale of stock through options
    and employee benefit plans                        1,335     2,684
   Excess tax benefits from stock-based
   compensation                                       1,877         -
   Payments on debt                                    (193)     (578)
   Checks issued against future deposits                  -     1,143
                                                ----------- ---------
Net cash provided by financing activities             3,019     3,249
                                                ----------- ---------

   Effect of exchange rates on cash                     202      (258)
                                                 ----------- ---------

   Net change in cash and cash equivalents           26,902     6,470

Cash and cash equivalents, beginning of period       82,155    87,555
                                                ----------- ---------
Cash and cash equivalents, end of period           $109,057   $94,025
                                                =========== =========

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