G&K Services Inc has reported record revenue for the second quarter ended December 31, 2005 of $219.3 million, up 12.4 percent over $195.1 million reported in the second fiscal quarter last year.
Revenue exceeded expectations due to continued improvement in organic rental growth and strong direct sales.
Second quarter earnings also exceeded expectations despite the impact of the hurricanes, higher energy costs, strategic investments and the initial selling costs and merchandise expense associated with accelerated new account growth.
Earnings for both quarters reflect the requirement to expense stock options under SFAS 123(r) "Accounting for Stock-Based Compensation." Under this standard, G&K has elected to use the modified retrospective method for transition. As a result, prior-year financial statements have been adjusted accordingly.
Richard Marcantonio, G&K's Chairman and Chief Executive Officer, said, "We continue to be pleased with the momentum we've created in our organic rental growth over the last six quarters."
"During the second quarter, we recorded the highest level of new sales in the history of the company, a strong testament to the execution of our strategy. We'll continue to make strategic investments to further improve revenue and earnings growth," he added.
For the six months ended December 31, 2005, revenue was $427.3 million compared to $377.6 million during the prior-year period, an increase of 13.2 percent.
marketing@alchempro.com
