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Revenues rise 4% at G&K Services in Q3 FY'12

01 May '12
4 min read

Net earnings also benefited from lower interest expense. Interest expense in the current quarter was $1.5 million, down from $3.0 million in the prior-year period, primarily due to a lower effective interest rate. Adjusted earnings also benefited from a lower adjusted tax rate, which was 34.5 percent, down from 38.7 percent in the prior year quarter.

Balance Sheet and Cash Flow
The company's financial position remains strong. As of March 31, 2012, the company had total debt net of cash of $108.1 million and a debt to capital ratio of 19.4 percent. Total stockholders' equity at the end of the third quarter was $521.9 million.
Cash provided by operating activities for the nine months ended March 31, 2012 was $39.4 million, compared to $49.0 million in the prior year.

The lower operating cash flow was primarily due to increased working capital requirements to support the company's revenue growth. Capital expenditures for the first nine months of the fiscal year were $25.9 million, up from $15.5 million in the prior year period, due to increased investments to enhance productivity and support profitable revenue growth.

Outlook
Based on year to date performance and increased confidence in its outlook, the company is raising the lower-end of its full-year revenue guidance to a range of $860 to $870 million, from the previously announced range of $855 to $870 million. The company is also raising its full-year adjusted earnings guidance to a range of $2.00 to $2.06 per diluted share, up from the previously announced range of $1.85 to $2.05.

About G&K Services, Inc:
G&K Services, Inc. is a service-focused market leader of branded uniform and facility services programs in the United States, and is the largest such provider in Canada. Headquartered in Minneapolis, Minnesota, G&K Services has over 7,500 employees serving approximately 165,000 customers from over 160 facilities in North America.

G&K Services Inc

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