Home / Knowledge / News / Apparel/Garments / Revenues rise 4% at G&K Services in Q3 FY'12
Revenues rise 4% at G&K Services in Q3 FY'12
01
May '12
• Adjusted Earnings Per Diluted Share Increase 21 Percent to $0.52
• Company Reports 4.9 Percent Organic Revenue Growth
• Increases Full-Year Earnings Guidance

G&K Services Inc. reported operating results for the third quarter of its fiscal year 2012, which ended on March 31, 2012. Third quarter revenue grew by 4.0 percent to $218.8 million, up from $210.3 million in the prior-year period.

Excluding the impact of foreign currency exchange rate differences, total organic growth was 4.9%. Revenue growth was driven by continued strong new account sales, increased revenue from existing rental customers, improved pricing and increased direct sales volume.

The company reported third quarter adjusted net earnings of $0.52 per diluted share, an increase of 21 percent from earnings of $0.43 per diluted share in the prior-year period. Third quarter adjusted earnings excluded previously announced charges of $0.79 per share for withdrawal from a multi-employer pension plan and associated expenses, and $0.07 per share in connection with an equitable adjustment to outstanding stock options related to the company's recent special dividend.

Third quarter adjusted earnings also excluded a $0.08 per share non-recurring tax benefit. Including these items, the company recorded a net loss of $0.26 per share in the third quarter (see reconciliation table). The adjusted earnings growth in the quarter was driven by lower interest expense, a lower tax rate and increased operating income.

“Our core rental business performed well during the quarter, allowing the company to achieve continued revenue and earnings growth,” said Douglas A. Milroy, Chief Executive Officer. “We took several important actions during the quarter that strengthen the company's ability to deliver improved long-term shareholder returns, and we exited the quarter more confident than ever in our future.”

Income Statement Review
Third quarter revenue from rental operations was $200.2 million, up from $192.8 million in the prior-year quarter. The rental organic growth rate was 4.8 percent. The organic growth rate is calculated using revenue adjusted for foreign currency exchange rate differences, acquisitions and divestitures. Rental organic growth was primarily driven by continued strong new account sales, increased revenue from existing rental customers, and improved pricing. Third quarter direct sales grew by 6.0 percent to $18.6 million, up from $17.5 million in the prior-year. Direct sales growth was driven by the launch of new program business and stronger catalog sales.

Third quarter adjusted operating margin was 7.5 percent, down from an operating margin of 7.6 percent in the prior-year period. The adjusted operating margin excludes the impact of the previously mentioned charges for the pension withdrawal and equitable adjustments to outstanding stock options. Including these charges, the company's operating marginfor the quarter was negative 4.4 percent. The slightly lower adjusted operating margin was primarily due to the expected significant increase in rental merchandise expense and lower gross margin on direct sales. These items were largely offset by revenue growth leveraging fixed costs, lower selling and administrative expenses and efficiency gains in rental production and delivery.

Must ReadView All

President Tsai Ing-wen delivering remarks before boarding her plane bound for Central America. Courtesy: Presdient's office

Textiles | On 16th Jan 2017

‘Textiles at centre of Taiwan’s new trade arrangements’

Textiles should be at the heart of Taiwan’s thinking while developing ...

Apparel/Garments | On 16th Jan 2017

Ralph Lauren develops policy on tracking wood based fabrics

In a bid to trace source of wood based fabrics like viscose and rayon ...

Apparel/Garments | On 16th Jan 2017

EC proposes enhanced market access for Sri Lanka

The European Commission (EC) has proposed that a significant part of...

Interviews View All

Shawn Honeycutt
Bolger & O'Hearn

‘The Indian market is interesting and rather persistent in seeking new...

Nitin Soni
Dolphin Jingwei Machines

Taxation policies need to be made simpler

Sanjay Yagnik
Maa Tex Speciality

‘We suggest reducing dosage of sizing chemicals to reduce sludge...

Iago Castro Asensio
RCfil Distribuciones S.L.

Iago Castro Asensio, International Business Manager of RCfil...

Kai Poehler
Voith Paper GmbH & Co. KG

The glass mat industry is growing by five to eight per cent annually. Kai...

Ashok Desai
Bombay Textile Research Association

Bombay Textile Research Association (BTRA) is a leading name in textile...

Wendell Rodricks
Wendell Rodricks

"We should not compare India and the West. There are things we do that...

Prathyusha Garimella
Prathyusha Garimella

Hyderabad-based designer Prathyusha Garimella is known for blending...

Igor Chapurin
Chapurin

"Now we can see the Russian trend in international fashion. And Russian...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH
January 2017

January 2017

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

SUBSCRIBE


Browse Our Archives

GO


eNEWS
Insights
Subscribe today and get the latest News update in your mail box.
Advanced Search