Labor Ready Reports Record Results for 2005; Net Income for the Fourth Quarter 2005 Increased 56 Percent

Labor Ready, Inc. (NYSE: LRW) reported record revenue
for the fourth quarter ended Dec. 30, 2005 of $337.2 million, an
increase of 23.9 percent from $272.1 million for the fourth quarter of
2004. Record net income for the fourth quarter of $15.4 million, or
$0.28 per diluted share, improved 56 percent from $9.9 million, or
$0.20 per diluted share, during the same quarter a year ago.
   Record revenue for 2005 of $1.236 billion increased 18.4 percent
from $1.044 billion in 2004. Record net income of $62.0 million, or
$1.18 per diluted share, improved 71 percent from $36.3 million, or
$0.75 per diluted share, for fiscal 2004.
   "We delivered powerful fourth quarter and year-end results
reflecting the strength of our business model and our ability to
sustain growth," said Labor Ready CEO Joe Sambataro. "We are well
positioned to continue to deliver high value as an international
provider of temporary employees for manual labor, light industrial and
skilled trades with our family of brands, Labor Ready, Workforce,
Spartan Staffing, and CLP Resources."
   Revenue for the quarter from branches open 12 months or longer
grew 9.6 percent over the comparable period a year ago. The CLP
Resources branches Labor Ready acquired during the second quarter of
2005 provided 12.9 percent of additional revenue for the company over
the same quarter a year ago and continued to make a positive
contribution to Labor Ready's quarterly net income results.
   Gross margin for the fourth quarter of 2005 was 32.6 percent
compared to 31.4 percent in the fourth quarter of 2004.
   According to Labor Ready President Steve Cooper, the gross margin
improvement was primarily a result of Labor Ready's continued progress
in reducing overall workers' compensation expense through its safety
and risk management programs.
   Cooper stated, "Claim frequency has decreased by approximately 10
percent over the prior year each of the last three years. We will
continue our diligent focus on improving safety for our employees in
2006."
   Operating expenses for the fourth quarter 2005 increased by 1.0
percentage point of revenue in comparison with the same quarter a year
ago. This increase was primarily due to the company's agreement to
resolve various legal proceedings arising out of events from prior
years.
   Labor Ready closed six branches during the quarter and currently
operates 887 branches. Labor Ready anticipates opening approximately
40 new branch locations in 2006, including 10 Spartan branches, 18
Labor Ready branches in the U.S., and 12 CLP Resources branches.
   For the first quarter of 2006, Labor Ready estimates revenue in
the range of $294 million to $297 million, with net income per diluted
share for the quarter in the range of $0.18 to $0.19. Revenue for the
year 2006 is estimated to be in the range of $1.37 billion to $1.4
billion and net income per diluted share in the range of $1.30 to
$1.35. These estimates include incremental expense of $0.06 per
diluted share for the year 2006 and $0.02 for the first quarter of
2006 in comparison with the same period a year ago related to our
adoption in 2006 of FAS 123R, Share Based Payments.
   Management will discuss fourth quarter 2005 results on a
conference call at 8:00 a.m. (PT) Thursday, Feb. 2, 2006. The
conference call can be accessed on Labor Ready's web site at
www.laborready.com.

   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 Reports on Form 10-Q filed during 2005.

   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 transportation, warehousing, hospitality,
landscaping, construction, 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 887 branch locations in the United States, Canada,
and the United Kingdom. For additional information, visit Labor
Ready's website at www.laborready.com.
-0-
*T
                          LABOR READY, INC.
              SUMMARY CONSOLIDATED STATEMENTS OF INCOME
               (in thousands, except per share amounts)

                           Thirteen Weeks Ended  Fiscal Years Ended
                           Dec. 30,   Dec. 31,  Dec. 30,    Dec. 31,
                             2005       2004      2005        2004


Revenue from services      $337,201  $272,134  $1,236,070  $1,044,236
Cost of services            227,263   186,811     844,448     727,059
Gross profit                109,938    85,323     391,622     317,177
Selling, general and
 administrative expenses     84,302    65,215     286,460     244,606
Depreciation and
 amortization                 2,739     3,588       9,603      10,127
Income from operations       22,897    16,520      95,559      62,444
Interest and other income
 (expense), net               2,029      (562)      4,636      (2,599)
Income before tax expense    24,926    15,958     100,195      59,845
Income tax                    9,497     6,075      38,174      23,532
Net income                 $ 15,429  $  9,883  $   62,021  $   36,313

Net income per common
 share:
 Basic                     $   0.29  $   0.23  $     1.28  $     0.87
 Diluted                   $   0.28  $   0.20  $     1.18  $     0.75

Weighted average shares
 outstanding:
 Basic                       53,327    42,082      48,421      41,674
 Diluted                     54,148    52,827      53,793      52,289


                          LABOR READY, INC.
                 SUMMARY CONSOLIDATED BALANCE SHEETS
                             In Thousands

                                                      As of
                                            December 30,  December 31,
                                                2005          2004
Assets
 Current assets
  Cash and cash equivalents                    $157,197      $128,817
  Marketable securities                          18,468        11,947
  Accounts receivable, net                      121,959        94,313
  Other current assets                           21,039        25,981
   Total current assets                         318,663       261,058
Property and equipment, net                      26,615        25,174
Other assets                                    226,798       157,875
   Total assets                                $572,076      $444,107

Liabilities and shareholders' equity
 Current liabilities                           $100,014       $76,508
 Long-term liabilities                          123,464       165,205
  Total liabilities                             223,478       241,713
 Shareholders' equity                           348,598       202,394
   Total liabilities and shareholders'
    equity                                     $572,076      $444,107


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

                                                Fiscal Years Ended
                                             December 30, December 31,
                                                 2005         2004
Cash Flows from Operating activities:
Net income                                     $ 62,021     $ 36,313
Adjustments to reconcile net income to
 net cash provided by operating activities:
  Depreciation and amortization                  10,087       10,902
  Provision for doubtful accounts                 9,569        9,599
  Deferred income taxes                            (658)      14,168
  Tax benefit on stock options                    6,031        2,471
  Other operating activities                      1,787          317
Changes in operating assets and liabilities,
 exclusive of business acquired:
  Accounts receivable                           (24,173)     (24,292)
  Workers' compensation claims reserve           18,253       23,454
  Income taxes                                   12,314      (14,699)
  Other assets                                   (4,808)         259
  Other current liabilities                      15,019        5,229
                                                --------     --------
Net cash provided by operating activities       105,442       63,721
                                                --------     --------

Cash Flows from Investing activities:
 Capital expenditures                            (5,260)      (5,247)
 Purchases of marketable securities             (41,102)     (15,379)
 Maturities of marketable securities             34,579       28,639
 Purchase of Spartan Staffing, Inc.                   -       (9,890)
 Purchase of CLP, net of cash acquired          (45,963)           -
 Increase in restricted cash and other
  assets                                        (24,072)     (17,805)
 Other                                             (301)        (153)
                                                --------     --------
Net cash used in investing activities           (82,119)     (19,835)
                                                --------     --------

Cash Flows from Financing activities:
  Proceeds from sale of stock through
   options and employee benefit plans             8,649        7,370
  Payments on debt                               (2,327)      (2,750)
  Checks issued against future deposits               -       (4,197)
                                                --------     --------
Net cash provided by financing activities         6,322          423
                                                --------     --------

  Effect of exchange rates on cash               (1,265)       1,396
                                                --------     --------

  Net change in cash and cash equivalents        28,380       45,705

Cash and cash equivalents, beginning of
 period                                         128,817       83,112
                                                --------     --------
Cash and cash equivalents, end of period       $157,197     $128,817
                                                ========     ========
*T