G&K Services, Inc. (NASDAQ: GK)
announced today that its Board of Directors has declared a quarterly dividend of $0.27 per share, an increase of 38 percent from its previous quarterly dividend of $0.195 per share. The dividend will be payable on September 27, 2013 to shareholders of record at the close of business on September 12, 2013. This marks G&K’s eighth consecutive year with a dividend increase, during which time its quarterly dividend has increased more than fifteen-fold, from $0.0175 per share to $0.27 per share.
“Strong cash flow has always been a hallmark of G&K Services and fiscal 2013 was no exception, as cash flow from operations was the highest in the company’s history,” said Jeffrey L. Wright, Executive Vice President and Chief Financial Officer. “This, together with improved business performance driven by our game plan, gave us the confidence to make another significant dividend increase.”
Mr. Wright continued, “We take a disciplined approach to capital deployment. Our first priority remains investing in high-return opportunities in our business. Second, we will continue to seek acquisitions that complement our business strategy. Finally, we will maintain an efficient capital structure and consistently return excess cash to our shareholders.”
Dividends will remain G&K’s primary means of returning cash to shareholders. The company is targeting a long-term dividend payout ratio in the range of 40 to 45 percent of prior-year net income. The company will also periodically consider special dividends. Additionally, G&K announced that it plans to resume share repurchase activity under its existing authorization, primarily to offset dilution. The company has approximately $58 million remaining under its authorization.
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 nearly 7,800 employees serving approximately 165,000 customers from 160 facilities in North America. G&K Services is a publicly held company traded over the NASDAQ Global Select Market under the symbol GK and is a component of the Standard & Poor’s SmallCap 600 Index. For more information on G&K Services, visit