This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
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
TheStreet Open House

G&K Services Reports Fiscal 2013 Fourth Quarter Results

Stocks in this article: GK

G&K Services, Inc. (NASDAQ: GK) today reported operating results for the fourth quarter of its fiscal year 2013, which ended on June 29, 2013. Revenue in the quarter grew by 2.3 percent to $229.5 million, up from $224.3 million in last year’s fourth quarter, driven by growth in rental operations, partially offset by lower revenue from direct sales.

Fourth quarter adjusted earnings per diluted share grew 12 percent to $0.66, up from $0.59 per diluted share in the prior year period. Adjusted earnings in the quarter excluded net charges of $0.26 per share (see reconciliation table for details). Including these charges, the company recorded net earnings per diluted share of $0.40.

For the fiscal year ended June 29, 2013, revenue was $907.7 million, a 4.3 percent increase from the prior fiscal year. Full year adjusted operating margin improved to 9.5 percent, up 170 basis points from 7.8 percent in fiscal 2012, and adjusted earnings per diluted share grew 29 percent, to $2.65, compared to adjusted earnings of $2.06 per share in the prior year (see reconciliation table).

“Our team delivered truly outstanding results in fiscal 2013,” said Douglas A. Milroy, Chief Executive Officer. “G&K is clearly a much stronger, more capable company than when we initiated our game plan four years ago. The improvements we’ve made in our business give us the confidence to again set new, challenging financial goals, targeting continued gains in margins and returns, and an increased focus on profitable top-line growth.”

Income Statement Review Fourth quarter revenue from rental operations grew 3.8 percent to $211.8 million, up from $204.1 million in the prior-year quarter. The rental organic growth rate, which adjusts for the impact of currency exchange rate differences, acquisitions and divestitures, was 3.2 percent. Fourth quarter revenue from direct sales decreased to $17.7 million, from $20.2 million in the prior-year, with lower sales of both program and catalog products.

Fourth quarter adjusted operating margin expanded to 9.8 percent, a 110 basis point increase from 8.7 percent in the prior year quarter. The improvement in adjusted operating margin was primarily driven by increased operating leverage from revenue growth, productivity improvements in rental production, and lower health insurance costs. Fourth quarter adjusted operating margin excluded the impact of the previously mentioned net charges. These charges were primarily related to a plant closure in the rental business, restructuring the company’s direct sale catalog and direct sale program businesses, and an increase to the company’s estimated multi-employer pension plan withdrawal liability, partially offset by the benefit from a change in estimated merchandise amortization lives. Including these items, operating margin in the fourth quarter was 6.2 percent (see reconciliation table).

1 of 4

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, 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
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,461.32 -153.49 -0.92%
S&P 500 1,927.11 -14.17 -0.73%
NASDAQ 4,382.8470 -36.6310 -0.83%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs