Home / Knowledge / News / Apparel/Garments / G&K Services posts 3.5% hike in Q2 FY'14 revenues
G&K Services posts 3.5% hike in Q2 FY'14 revenues
28
Jan '14
G&K Services, Inc. reported operating results for the second quarter of its fiscal year 2014, which ended on December 28, 2013. Revenue from continuing operations grew by 3.5 percent to $225.9 million, up from $218.3 million in last year’s second quarter.

Second quarter adjusted earnings from continuing operations grew 14 percent to a company record $0.75 per diluted share, up from $0.66 per diluted share in the prior year period. Adjusted earnings in the quarter excluded a $0.06 per share benefit from the previously announced change in estimated merchandise amortization lives.

Including this benefit, the company recorded earnings from continuing operations of $0.81 per diluted share. As previously disclosed, the company divested two non-core business units which have been reclassified as discontinued operations in its current and historical financial results.

“This was another strong quarter for G&K, with solid revenue growth, significantly improved margins and record-high earnings per share,” said Douglas A. Milroy, Chief Executive Officer. “The second quarter also marked the full achievement of our 10/10 goals. With adjusted operating margin of 11.5 percent and return on invested capital reaching 10.2 percent, we are already well on the way to delivering our 12+ Plan. This is a tremendous accomplishment for the entire G&K team.”

Income Statement Review

Second quarter revenue grew 3.5 percent to $225.9 million, compared to $218.3 million in the prior-year quarter. This excludes revenue from the divested businesses, which are now classified as discontinued operations. The rental organic growth rate, which adjusts for the impact of currency exchange rate differences, acquisitions and divestitures, was 4.2 percent. The impact of a lower exchange rate for the Canadian dollar decreased revenue growth by 1.0 percent.

Second quarter adjusted operating income from continuing operations grew 16 percent to $25.9 million, compared to $22.3 million in the prior year quarter. This was the highest quarterly operating income in the company’s history. Adjusted operating margin from continuing operations expanded to 11.5 percent, a 130 basis point increase from 10.2 percent in last year’s second quarter.

The improvement in adjusted operating margin was primarily driven by increased operating leverage from revenue growth, productivity improvements in rental operations, and improved gross margins from the recently restructured direct sale catalog business.

These margin gains were partially offset by higher selling costs. Second quarter adjusted operating income and operating margin from continuing operations excluded the previously mentioned benefit from a change in estimated merchandise amortization lives. Including this benefit, operating income from continuing operations was $27.7 million and operating margin was 12.3 percent.

Interest expense in the quarter was $1.6 million, up from $1.1 million in the prior-year quarter, primarily due to a higher effective interest rate, partially offset by lower total debt. The effective tax rate for continuing operations in the quarter was 37.5 percent, compared to 39.2 percent in the second quarter last year, primarily due to lower tax expense on foreign earnings.

Second quarter diluted share count increased to 19.9 million, up from 19.1 million last year, primarily due to gains in the company’s stock price, which led to more stock option exercises and increased the dilutive effect of outstanding stock options.

G&K Services

Must ReadView All

Apparel/Garments | On 25th Jun 2016

AEPC fears Brexit will hurt Indian apparel exports

The Apparel Export Promotion Council (AEPC) expressed its...

Courtesy: ITMF

Textiles | On 25th Jun 2016

Global yarn output up 20% q-o-q in Q1 2016: ITMF

The global yarn production increased by 20 per cent...

Courtesy: Balmain

Fashion | On 25th Jun 2016

Qatari investment fund buys French label Balmain

Mayhoola for Investments, an investment fund backed by the Emir of...

Interviews View All

Amrit Sethia
SOIE

What are the emerging trends in the intimatewear category for women in...

Neel Sawhney
One Friday

‘The share of kidswear segment in the online sector is still small in...

Spokesperson
Hugo Boss

'Hugo Boss works with carefully selected sourcing partners'

Ashok Desai
Bombay Textile Research Association

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

Eamonn Tighe
Nature Works LLC

Eamonn Tighe, Fibres and Nonwovens - Business Development Manager of...

Eric Scholler
Groz-Beckert

The Indian market has huge potential in technical textiles, and by far,...

Bani Batra

Bani Batra’s couture wedding collection is inspired by traditional Indian...

Karan Arora
Karan Arora

Bridal couture created with rich Indian heritage, exquisite craftsmanship...

Pranav Mishra
Huemn

Designers Pranav Mishra and Shyma Shetty’s Huemn is known for its...

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
june 2016

F2F Magazine

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

SUBSCRIBE


Browse Our Archives

GO


Advanced Search