G&K Services Inc. Reports Unaudited Consolidated Earnings Results for the Third Quarter and Nine Months Ended March 28, 2015; Revised Earnings Guidance for the Fiscal Year 2015
Apr 30 15
G&K Services Inc. reported unaudited consolidated earnings results for the third quarter and nine months ended March 28, 2015. For the quarter, the company's rental and direct sale revenue was $233,514,000 compared to $225,046,000 a year ago. Income from continuing operations was $21,601,000 compared to $18,074,000 a year ago. Income from continuing operations before income taxes was $19,856,000 compared to $16,514,000 a year ago. Net income from continuing operations was $12,429,000 compared to $10,391,000 a year ago. Net income was $12,429,000 compared to $10,210,000 a year ago. Diluted earnings per share from continuing operations was $0.61 compared to $0.51 a year ago. Diluted earnings per common share was $0.61 compared to $0.50 a year ago. Net income from continuing operations available to common stockholders was $12,194,000 compared to $10,249,000 a year ago. Adjusted operating income was $28,101,000 compared to $24,971,000 a year ago. Adjusted net income was $16,498,000 or $0.81 per diluted share compared to $14,688,000 $0.73 per diluted share a year ago. This strong organic growth was partially offset by the negative impact of a lower exchange rate for the Canadian dollar, which reduced total revenue growth by 1.6%.
For the nine months, the company's rental and direct sale revenue was $701,065,000 compared to $671,188,000 a year ago. Income from continuing operations was $77,075,000 compared to $69,339,000 a year ago. Income from continuing operations before income taxes was $71,612,000 compared to $64,632,000 a year ago. Net income from continuing operations was $45,750,000 compared to $40,344,000 a year ago. Net income was $45,750,000 compared to $31,951,000 a year ago. Diluted earnings per share from continuing operations was $2.24 compared to $2.00 a year ago. Diluted earnings per common share was $2.24 compared to $1.58 a year ago. Net income from continuing operations available to common stockholders was $44,979,000 compared to $39,784,000 a year ago. Net cash provided by operating activities was $80,866,000 compared to $42,542,000 a year ago. The increased operating cash flow was primarily due to higher net income, improved working capital management, and lower income tax payments. Capital expenditures was $40,022,000 compared to $23,172,000 a year ago, as the company continued investments in capacity expansion and information technology. Adjusted operating income was $83,575,000 compared to $73,847,000 a year ago. Adjusted net income was $49,819,000 or $2.45 per diluted share compared to $43,129,000 $2.14 per diluted share a year ago. The third quarter organic growth rate, which adjusts for the impact of currency exchange rate differences, acquisitions and divestitures, was 5.4%.
Based on year to date results, the company now expects full year fiscal 2015 revenue in the range of $934 million to $939 million, narrowing its previous range of $930 million to $950 million. Organic revenue growth will continue to be partially offset by the impact of a lower exchange rate for the Canadian dollar, which the company expects will reduce full-year revenue growth by approximately 1.5 percent. The company also narrowed its guidance for full-year adjusted earnings, to a range of $3.24 to $3.30 per diluted share, compared to its previously announced range of $3.20 to $3.30 per share. This guidance excludes the impact of the previously mentioned $0.20 per share charge related to the company's withdrawal from MEPPs. The company now expects full year CapEx will come in slightly above previous forecast of $50 million. The company expects full year interest expense will increase slightly next year as the effective interest rate on new revolver will be slightly higher than the rate on the private placement notes that mature in June. And also, the company expects tax rate will increase to around 38% next year.
G&K Services, Inc. Completes $350 Million Revolving Credit Facility
Apr 16 15
G&K Services Inc. announced the successful refinancing of its unsecured revolving credit facility. The new five-year, $350 million revolving credit facility replaces the company’s existing $250 million revolving credit facility, which was scheduled to expire in March 2017. The prior facility had borrowings of $30 million at the closing of refinancing. The new credit facility was provided by a syndicate of financial institutions and arranged by Wells Fargo Securities, LLC, J.P. Morgan Securities LLC, and Merrill, Lynch, Pierce, Fenner & Smith Incorporated. The facility, which will mature on April 15, 2020, bears interest between 1.00% to 1.75% over LIBOR, depending on the company’s leverage ratio. The new facility can be expanded by $200 million, to a total size of $550 million.