This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

G&K Successfully Bargains Out Of Central States Pension Plan At Two Facilities

G&K Services, Inc. (NASDAQ: GKSR) announced today that, in connection with renewing a collective bargaining agreement, the company completed the previously disclosed actions to discontinue its participation in the Central States Pension Plan (the Plan) at two facilities. In addition, consistent with its focus on improving underperforming locations, the company closed two other branch facilities that also participated in the Plan. The company continues to participate in the Plan at three additional locations, although, subject to its good faith bargaining obligations, the company believes it is probable that it will also successfully negotiate withdrawal from the Plan at these locations, thus completely discontinuing its participation in the Plan.

As a result of these combined actions, the company expects that its fiscal year 2012 third quarter results will include pre-tax charges to earnings between $23 million to $25 million ($14 million to $15 million after tax). These charges include the estimated discounted value of the total withdrawal liability, incentives for union participants, strike preparation costs, costs associated with closing the two branch locations and other related costs. G&K estimates that these charges will reduce the company’s diluted earnings per share for the third quarter and full year by $0.75 to $0.81. Excluding the impact of these charges, G&K continues to expect full-year fiscal 2012 earnings per diluted share to be in the previously announced range of $1.85 to $2.05 per share. G&K believes that withdrawal from the Plan will benefit the company because it limits the company’s exposure to increased future liabilities from the Plan, which is significantly underfunded, and ensures a more financially secure retirement plan moving forward for the affected employees.

G&K’s estimated withdrawal liability is based on the most recent information available from the Plan and is subject to change based on many factors, including future market conditions, successfully completing future withdrawal negotiations, employer contributions and benefit levels that will impact the ultimate withdrawal. G&K expects to make payments to the Central States Plan for this withdrawal liability over a period of 20 years.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free


Chart of I:DJI
DOW 17,888.35 +168.43 0.95%
S&P 500 2,102.63 +22.22 1.07%
NASDAQ 5,156.3060 +47.64 0.93%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs