G&K Services, Inc. reported operating results for the third quarter of its fiscal year 2014, which ended on March 29, 2014. Revenue from continuing operations grew by 3.4 percent to $225.0 million, up from $217.7 million in last year’s third quarter. Third quarter adjusted earnings from continuing operations grew 6 percent to $0.73 per diluted share, up from $0.69 per diluted share in the prior year period.
Adjusted earnings in the quarter excluded a $0.26 per share charge related to the company’s expected withdrawal from four multi-employer pension plans (MEPPs), which will complete its withdrawal from all MEPPs in the United States.
Adjusted earnings also excluded a $0.04 per share benefit from the previously announced change in estimated merchandise amortization lives. Including these items, the company reported earnings from continuing operations of $0.51 per diluted share.
-Adjusted Operating Income from Continuing Operations Increases 17 Percent to $25 Million
-Adjusted Operating Margin Expands 130 Basis Points to 11.1 Percent
-Adjusted Earnings from Continuing Operations Grow to $0.73 Per Diluted Share
“Our team delivered another quarter of strong operating results,” said Douglas A. Milroy, Chief Executive Officer. “We made continued progress on our 12+ Plan, with solid top-line growth, significant margin expansion, and improved return on invested capital.”
Income Statement Review
Third quarter revenue grew 3.4 percent to $225.0 million, compared to $217.7 million in the prior-year quarter. This excludes revenue from 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 5.3 percent. The impact of a lower exchange rate for the Canadian dollar decreased revenue growth by 1.6 percent.