Accessibility Statement Skip Navigation
  • Resources
  • Investor Relations
  • Journalists
  • Agencies
  • Client Login
  • Send a Release
Return to PR Newswire homepage
  • News
  • Products
  • Contact
When typing in this field, a list of search results will appear and be automatically updated as you type.

Searching for your content...

No results found. Please change your search terms and try again.
  • News in Focus
      • Browse News Releases

      • All News Releases
      • All Public Company
      • English-only
      • News Releases Overview

      • Multimedia Gallery

      • All Multimedia
      • All Photos
      • All Videos
      • Multimedia Gallery Overview

      • Trending Topics

      • All Trending Topics
  • Business & Money
      • Auto & Transportation

      • All Automotive & Transportation
      • Aerospace, Defense
      • Air Freight
      • Airlines & Aviation
      • Automotive
      • Maritime & Shipbuilding
      • Railroads and Intermodal Transportation
      • Supply Chain/Logistics
      • Transportation, Trucking & Railroad
      • Travel
      • Trucking and Road Transportation
      • Auto & Transportation Overview

      • View All Auto & Transportation

      • Business Technology

      • All Business Technology
      • Blockchain
      • Broadcast Tech
      • Computer & Electronics
      • Computer Hardware
      • Computer Software
      • Data Analytics
      • Electronic Commerce
      • Electronic Components
      • Electronic Design Automation
      • Financial Technology
      • High Tech Security
      • Internet Technology
      • Nanotechnology
      • Networks
      • Peripherals
      • Semiconductors
      • Business Technology Overview

      • View All Business Technology

      • Entertain­ment & Media

      • All Entertain­ment & Media
      • Advertising
      • Art
      • Books
      • Entertainment
      • Film and Motion Picture
      • Magazines
      • Music
      • Publishing & Information Services
      • Radio & Podcast
      • Television
      • Entertain­ment & Media Overview

      • View All Entertain­ment & Media

      • Financial Services & Investing

      • All Financial Services & Investing
      • Accounting News & Issues
      • Acquisitions, Mergers and Takeovers
      • Banking & Financial Services
      • Bankruptcy
      • Bond & Stock Ratings
      • Conference Call Announcements
      • Contracts
      • Cryptocurrency
      • Dividends
      • Earnings
      • Earnings Forecasts & Projections
      • Financing Agreements
      • Insurance
      • Investments Opinions
      • Joint Ventures
      • Mutual Funds
      • Private Placement
      • Real Estate
      • Restructuring & Recapitalization
      • Sales Reports
      • Shareholder Activism
      • Shareholder Meetings
      • Stock Offering
      • Stock Split
      • Venture Capital
      • Financial Services & Investing Overview

      • View All Financial Services & Investing

      • General Business

      • All General Business
      • Awards
      • Commercial Real Estate
      • Corporate Expansion
      • Earnings
      • Environmental, Social and Governance (ESG)
      • Human Resource & Workforce Management
      • Licensing
      • New Products & Services
      • Obituaries
      • Outsourcing Businesses
      • Overseas Real Estate (non-US)
      • Personnel Announcements
      • Real Estate Transactions
      • Residential Real Estate
      • Small Business Services
      • Socially Responsible Investing
      • Surveys, Polls and Research
      • Trade Show News
      • General Business Overview

      • View All General Business

  • Science & Tech
      • Consumer Technology

      • All Consumer Technology
      • Artificial Intelligence
      • Blockchain
      • Cloud Computing/Internet of Things
      • Computer Electronics
      • Computer Hardware
      • Computer Software
      • Consumer Electronics
      • Cryptocurrency
      • Data Analytics
      • Electronic Commerce
      • Electronic Gaming
      • Financial Technology
      • Mobile Entertainment
      • Multimedia & Internet
      • Peripherals
      • Social Media
      • STEM (Science, Tech, Engineering, Math)
      • Supply Chain/Logistics
      • Wireless Communications
      • Consumer Technology Overview

      • View All Consumer Technology

      • Energy & Natural Resources

      • All Energy
      • Alternative Energies
      • Chemical
      • Electrical Utilities
      • Gas
      • General Manufacturing
      • Mining
      • Mining & Metals
      • Oil & Energy
      • Oil and Gas Discoveries
      • Utilities
      • Water Utilities
      • Energy & Natural Resources Overview

      • View All Energy & Natural Resources

      • Environ­ment

      • All Environ­ment
      • Conservation & Recycling
      • Environmental Issues
      • Environmental Policy
      • Environmental Products & Services
      • Green Technology
      • Natural Disasters
      • Environ­ment Overview

      • View All Environ­ment

      • Heavy Industry & Manufacturing

      • All Heavy Industry & Manufacturing
      • Aerospace & Defense
      • Agriculture
      • Chemical
      • Construction & Building
      • General Manufacturing
      • HVAC (Heating, Ventilation and Air-Conditioning)
      • Machinery
      • Machine Tools, Metalworking and Metallurgy
      • Mining
      • Mining & Metals
      • Paper, Forest Products & Containers
      • Precious Metals
      • Textiles
      • Tobacco
      • Heavy Industry & Manufacturing Overview

      • View All Heavy Industry & Manufacturing

      • Telecomm­unications

      • All Telecomm­unications
      • Carriers and Services
      • Mobile Entertainment
      • Networks
      • Peripherals
      • Telecommunications Equipment
      • Telecommunications Industry
      • VoIP (Voice over Internet Protocol)
      • Wireless Communications
      • Telecomm­unications Overview

      • View All Telecomm­unications

  • Lifestyle & Health
      • Consumer Products & Retail

      • All Consumer Products & Retail
      • Animals & Pets
      • Beers, Wines and Spirits
      • Beverages
      • Bridal Services
      • Cannabis
      • Cosmetics and Personal Care
      • Fashion
      • Food & Beverages
      • Furniture and Furnishings
      • Home Improvement
      • Household, Consumer & Cosmetics
      • Household Products
      • Jewelry
      • Non-Alcoholic Beverages
      • Office Products
      • Organic Food
      • Product Recalls
      • Restaurants
      • Retail
      • Supermarkets
      • Toys
      • Consumer Products & Retail Overview

      • View All Consumer Products & Retail

      • Entertain­ment & Media

      • All Entertain­ment & Media
      • Advertising
      • Art
      • Books
      • Entertainment
      • Film and Motion Picture
      • Magazines
      • Music
      • Publishing & Information Services
      • Radio & Podcast
      • Television
      • Entertain­ment & Media Overview

      • View All Entertain­ment & Media

      • Health

      • All Health
      • Biometrics
      • Biotechnology
      • Clinical Trials & Medical Discoveries
      • Dentistry
      • FDA Approval
      • Fitness/Wellness
      • Health Care & Hospitals
      • Health Insurance
      • Infection Control
      • International Medical Approval
      • Medical Equipment
      • Medical Pharmaceuticals
      • Mental Health
      • Pharmaceuticals
      • Supplementary Medicine
      • Health Overview

      • View All Health

      • Sports

      • All Sports
      • General Sports
      • Outdoors, Camping & Hiking
      • Sporting Events
      • Sports Equipment & Accessories
      • Sports Overview

      • View All Sports

      • Travel

      • All Travel
      • Amusement Parks and Tourist Attractions
      • Gambling & Casinos
      • Hotels and Resorts
      • Leisure & Tourism
      • Outdoors, Camping & Hiking
      • Passenger Aviation
      • Travel Industry
      • Travel Overview

      • View All Travel

  • Policy & Public Interest
      • Policy & Public Interest

      • All Policy & Public Interest
      • Advocacy Group Opinion
      • Animal Welfare
      • Congressional & Presidential Campaigns
      • Corporate Social Responsibility
      • Domestic Policy
      • Economic News, Trends, Analysis
      • Education
      • Environmental
      • European Government
      • FDA Approval
      • Federal and State Legislation
      • Federal Executive Branch & Agency
      • Foreign Policy & International Affairs
      • Homeland Security
      • Labor & Union
      • Legal Issues
      • Natural Disasters
      • Not For Profit
      • Patent Law
      • Public Safety
      • Trade Policy
      • U.S. State Policy
      • Policy & Public Interest Overview

      • View All Policy & Public Interest

  • People & Culture
      • People & Culture

      • All People & Culture
      • Aboriginal, First Nations & Native American
      • African American
      • Asian American
      • Children
      • Diversity, Equity & Inclusion
      • Hispanic
      • Lesbian, Gay & Bisexual
      • Men's Interest
      • People with Disabilities
      • Religion
      • Senior Citizens
      • Veterans
      • Women
      • People & Culture Overview

      • View All People & Culture

      • In-Language News

      • Arabic
      • español
      • português
      • Česko
      • Danmark
      • Deutschland
      • España
      • France
      • Italia
      • Nederland
      • Norge
      • Polska
      • Portugal
      • Россия
      • Slovensko
      • Suomi
      • Sverige
  • Explore Our Platform
  • Plan Campaigns
  • Create with AI
  • Distribute Press Releases
  • Amplify Content
  • All Products
  • General Inquiries
  • Editorial Bureaus
  • Partnerships
  • Media Inquiries
  • Worldwide Offices
  • Hamburger menu
  • PR Newswire: news distribution, targeting and monitoring
  • Send a Release
    • ALL CONTACT INFO
    • Contact Us

      888-776-0942
      from 8 AM - 10 PM ET

  • Send a Release
  • Client Login
  • Resources
  • Blog
  • Journalists
  • RSS
  • News in Focus
    • Browse All News
    • Multimedia Gallery
    • Trending Topics
  • Business & Money
    • Auto & Transportation
    • Business Technology
    • Entertain­ment & Media
    • Financial Services & Investing
    • General Business
  • Science & Tech
    • Consumer Technology
    • Energy & Natural Resources
    • Environ­ment
    • Heavy Industry & Manufacturing
    • Telecomm­unications
  • Lifestyle & Health
    • Consumer Products & Retail
    • Entertain­ment & Media
    • Health
    • Sports
    • Travel
  • Policy & Public Interest
  • People & Culture
    • People & Culture
  • Send a Release
  • Client Login
  • Resources
  • Blog
  • Journalists
  • RSS
  • Explore Our Platform
  • Plan Campaigns
  • Create with AI
  • Distribute Press Releases
  • Amplify Content
  • All Products
  • Send a Release
  • Client Login
  • Resources
  • Blog
  • Journalists
  • RSS
  • General Inquiries
  • Editorial Bureaus
  • Partnerships
  • Media Inquiries
  • Worldwide Offices
  • Send a Release
  • Client Login
  • Resources
  • Blog
  • Journalists
  • RSS

Mac-Gray Corporation Announces First-Quarter 2011 Financial Results

Company Achieves Revenue Growth and Increased Profitability; Confirms 2011 Guidance


News provided by

Mac-Gray Corporation

May 04, 2011, 08:00 ET

Share this article

Share toX

Share this article

Share toX

WALTHAM, Mass., May 4, 2011 /PRNewswire/ -- Mac-Gray Corporation (NYSE: TUC), the nation's premier provider of laundry facilities management services to multi-unit housing locations, today announced its financial results for the quarter ended March 31, 2011.

Mac-Gray reported first-quarter revenue from continuing operations of $82.3 million, compared with $81.5 million in the first quarter of 2010.  Net income from continuing operations for the first quarter of 2011 was $2.1 million, or $0.14 per diluted share, compared with net income from continuing operations of $1.5 million, or $0.11 per diluted share, for the first quarter of 2010.  First-quarter 2011 net income from continuing operations includes a loss of $365,000 related to interest rate derivative instruments and $25,000 in incremental proxy-related costs.  First-quarter 2010 net income from continuing operations includes a loss of $242,000 related to interest rate derivative instruments and $97,000 in incremental proxy-related costs.  Excluding these items from both periods, adjusted net income from continuing operations for the first quarter of 2011 was $2.3 million, or $0.16 per diluted share, compared with adjusted net income from continuing operations of $1.7 million, or $0.12 per diluted share, for the same period of 2010.

Please refer to Table 1, included at the end of this news release, for a reconciliation of net income from continuing operations, as reported, to net income from continuing operations, as adjusted.

For the first quarter of 2011, Mac-Gray's earnings before interest expense, provision for income taxes, depreciation and amortization expense (EBITDA) from continuing operations was $18.1 million, compared with $18.3 million in the year-earlier quarter.  EBITDA from continuing operations, excluding losses relating to interest rate derivative instruments and incremental proxy-related costs, was $18.5 million for the first quarter of 2011, compared with $18.6 million in the year-earlier quarter.

Please refer to Table 2, included at the end of this news release, for a reconciliation of net income from continuing operations to EBITDA from continuing operations and EBITDA from continuing operations, as adjusted.

Comments on the First Quarter  

"We achieved year-over-year growth for the second consecutive quarter, following six quarters of recession-related decline," said Stewart G. MacDonald, Mac-Gray's chief executive officer.  "Our financial performance validates our strategy of allocating more capital resources toward generating profitable growth.  During the past two quarters, we made the decision to increase our investments in sales and marketing and capital spending due to the multi-housing recovery underway in several markets. The national apartment vacancy rate improved in the first quarter from 6.6% to 6.2%, according to REIS (Real Estate Information Services) data.  It was the largest first-quarter improvement in apartment vacancies in more than a decade."

"For the quarter, revenue in our core laundry facilities management business increased 1% overall and 2% on a 'same location' basis. This increase in same location revenue resulted from a combination of higher equipment usage and vend price management. As a result of the improving apartment occupancy picture, we are reinvesting in our core business with renewed confidence.  Our capital expenditures in the quarter mirrored the fourth quarter as we more than doubled our year-over-year spending – investing $8.3 million compared with $3.2 million in the first quarter of 2010.  As usual, the bulk of this spending was targeted at contract renewals, primarily in regions that are the most attractive or where the market dynamics have demonstrated the greatest levels of improvement."

"Our business model continues to generate strong cash flow.  In the first quarter, our net cash flow provided by operating activities was $9.5 million, compared with $9.3 million in the same period a year ago.  Our steady and predictable cash flow was used in the first quarter primarily to fund the increase in capital expenditures and pay down funded debt by $1.4 million. Based on our financial outlook, the Board elected to increase the company's quarterly dividend by 10%, effective with the April 1st payment."  

Outlook

"For the remainder of 2011, we will continue to balance the application of the Company's capital between opportunities for growth and debt reduction.  While certain individual markets are still facing challenges, the overall recovery in the multi-housing market appears to have taken hold.  REIS is predicting that national average vacancy rates will continue to decline throughout the remainder of 2011.  As a result, we will continue to place a greater emphasis on organic growth opportunities."  

"Our competitive advantage in the marketplace has been further enhanced by the recent launch of Change Point® – our newest payment and monitoring system, which is unmatched in the industry.  The early response to the product has been very encouraging, and we continue to expect Change Point® to be a positive contributor for us in the second half of the year," MacDonald concluded.  

Based on current market conditions, the Company reiterated its outlook for 2011 including: revenue in the range of $324 million to $328 million; and capital expenditures in the range of $33 million to $36 million, including laundry facilities management contract incentives.

The foregoing estimates reflect management's view of current and future market conditions, including assumptions with respect to apartment occupancy rates. These estimates may be subject to fluctuations as a result of a number of factors and there can be no assurance that Mac-Gray's actual results will not differ materially from the estimates set forth above.

Conference Call Information

The Company will host a conference call at 10:00 a.m. ET today during which Stewart MacDonald, Mac-Gray's chief executive officer, and Michael Shea, executive vice president and chief financial officer, will summarize the Company's financial results, review business and operating highlights from the quarter, and provide a business and financial outlook.  To hear a live broadcast of the call, visit the "Investor Relations" section of the Company's website at www.macgray.com or dial (877) 407-5790 or (201) 689-8328.  If you are unable to listen to the live call, you can access a replay at www.macgray.com.

About Mac-Gray Corporation

Founded in 1927, Mac-Gray derives its revenue principally through the contracting of debit-card- and coin-operated laundry facilities in multi-unit housing facilities such as apartment buildings, college and university residence halls, condominiums and public housing complexes. Mac-Gray manages approximately 86,000 laundry rooms located in 43 states and the District of Columbia. Mac-Gray also sells and services commercial laundry equipment to retail laundromats and other customers through its product sales division. To learn more about Mac-Gray, visit the Company's website at www.macgray.com.

Safe Harbor Statement

This news release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements regarding the Company's expectations for 2011, including statements regarding its revenue, capital expenditures and Change Point® technology.  The Company intends such forward-looking statements to be covered by the Safe Harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and is including this statement for purposes of complying with these Safe Harbor provisions.  Forward-looking statements, which are based on certain assumptions and describe future plans, strategies and expectations of the Company, may be identified by use of the words "believe," "expect," "intend," "anticipate," "project," or similar expressions.  Investors should not rely on forward-looking statements because they are subject to a variety of risks, uncertainties and other factors that could cause actual results to differ materially from such forward-looking statements.  Certain factors which could cause actual results to differ materially from the forward-looking statements include, but are not limited to, general economic conditions, changes in multi-housing vacancy rates, the Company's ability to renew long-term customer contracts, and those risks set forth in the Company's Annual Report on Form 10-K for the year ended December 31, 2010 under "Risk Factors" and in other reports subsequently filed with the Securities and Exchange Commission.

Important Information

In connection with the solicitation of proxies, on April 21, 2011, Mac-Gray Corporation filed a definitive proxy statement with the Securities and Exchange Commission (the "SEC") in connection with the Company's 2011 Annual Meeting. MAC-GRAY'S STOCKHOLDERS ARE STRONGLY ADVISED TO READ THE DEFINITIVE PROXY MATERIALS AND ANY OTHER RELEVANT SOLICITATION MATERIALS FILED BY MAC-GRAY WITH THE SEC BEFORE MAKING ANY VOTING OR INVESTMENT DECISION BECAUSE THESE DOCUMENTS CONTAIN IMPORTANT INFORMATION. The Company's proxy statement and any other materials filed by the Company with the SEC can be obtained free of charge at the SEC's web site at www.sec.gov. The Company's definitive proxy materials are also available for free from Mac-Gray Corporation at http://www.macgray.com/proxy, by writing to Mac-Gray Corporation, 404 Wyman Street, Suite 400, Waltham, MA 02451, Attention: Secretary, Linda A. Serafini, or by contacting MacKenzie Partners, Inc., by toll-free telephone at 800-322-2885 or by e-mail at [email protected]. The contents of the websites referenced above are not deemed to be incorporated by reference into the proxy statement.

Mac-Gray Corporation and its directors, nominees and executive officers may be deemed to be participants in the solicitation of proxies from the stockholders of Mac-Gray in connection with the Company's 2011 Annual Meeting of Stockholders.  Information concerning the interests of participants in the solicitation of proxies is included in the definitive proxy statement filed by Mac-Gray with the SEC on April 21, 2011 in connection with its 2011 Annual Meeting of Stockholders.

MAC-GRAY CORPORATION

CONDENSED CONSOLIDATED INCOME STATEMENTS

(In thousands, except per share amounts)










Three months ended


March 31,


2010


2011





Revenue from continuing operations

$ 81,503


$ 82,293

Cost of revenue:




    Cost of facilities management revenue

52,415


52,796

    Depreciation and amortization

11,151


11,031

    Cost of products sold

2,552


2,577

         Total cost of revenue

66,118


66,404





Gross margin

15,385


15,889





Operating expenses:




    Selling, general and administration expenses

8,405


8,880

    Gain on sale or disposal of assets, net

(35)


(92)

    Incremental costs of proxy contests

97


25

         Total operating expenses

8,467


8,813





Income from continuing operations

6,918


7,076





Interest expense, including the change in the fair value of non-hedged derivative instruments

4,127


3,598

Income from continuing operations before provision for income taxes

2,791


3,478

Provision for income taxes

1,319


1,412

Income from continuing operations, net

1,472


2,066

Income from discontinued operations, net

44


-

Loss from disposal of discontinued operations, net of taxes of $384

(294)


-

Net income

$   1,222


$   2,066

Earnings per share – basic - continuing operations

$     0.11


$     0.15

Earnings per share – diluted - continuing operations

$     0.11


$     0.14

Loss per share – basic - discontinued operations

$    (0.02)


$           -

Loss per  share – diluted - discontinued operations

$    (0.02)


$           -

Earnings per share – basic

$     0.09


$     0.15

Earnings per  share – diluted

$     0.09


$     0.14

Weighted average common shares outstanding - basic

13,677


14,090

Weighted average common shares outstanding – diluted

14,005


14,825

MAC-GRAY CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except share data)










December 31,


March 31,




2010


2011

Assets




Current assets:





Cash and cash equivalents

$           13,013


$           13,358


Trade receivables, net of allowance for doubtful accounts

6,105


5,541


Inventory of finished goods, net

1,580


1,911


Prepaid expenses, facilities management rent and






other current assets

10,879


10,281



Total current assets

31,577


31,091

Property, plant and equipment, net

128,068


128,083

Goodwill

58,608


58,499

Intangible assets, net

195,144


191,809

Prepaid expenses, facilities management rent and other assets

10,686


11,014



Total assets

$         424,083


$         420,496







Liabilities and Stockholders' Equity




Current liabilities:





Current portion of long-term debt and capital lease obligations

$             4,511


$             4,410


Trade accounts payable and accrued expenses

24,671


18,523


Accrued facilities management rent

21,084


21,612



Total current liabilities

50,266


44,545

Long-term debt and capital lease obligations

221,425


219,866

Deferred income taxes

41,823


42,377

Other liabilities

2,518


2,537



Total liabilities

316,032


309,325

Commitments and contingencies

-


-

Stockholders' equity:





Preferred stock ($.01 par value, 5 million shares authorized






no shares issued or outstanding)

-


-


Common stock ($.01 par value, 30 million shares authorized,






14,026,919 issued and 14,026,743 outstanding






at December 31, 2010, and 14,211,666  issued and






outstanding at March 31, 2011)

140


142


Additional paid in capital

81,296


82,890


Accumulated other comprehensive loss

(1,563)


(1,309)


Retained earnings

28,180


29,448




108,053


111,171


Less: common stock in treasury, at cost (176 shares at






December 31, 2010)

(2)


-



Total stockholders' equity

108,051


111,171

Total liabilities and stockholders' equity

$         424,083


$         420,496







MAC-GRAY CORPORATION

TABLE 1

Reconciliation of Reported Net Income from Continuing Operations to

Adjusted Net Income from Continuing Operations

(In thousands, except  per share amounts)




















Three months ended




March 31,






2010


2011









Income from continuing operations, net, as reported





$       1,472


$       2,066

Loss from discontinued operations, including loss on disposal








of discontinued operations net of taxes of $384





(250)


-

Net income, as reported





$       1,222


$       2,066









Income from continuing operations before provision for income taxes, as reported





$       2,791


$       3,478

Loss related to the change in the fair value of non-hedged derivative instruments (1)





242


365

Incremental costs of proxy contests (2)





97


25

Income from continuing operations before provision for income taxes, as adjusted





3,130


3,868

Provision for income taxes, as adjusted





1,480


1,570









Income from continuing operations, as adjusted





1,650


2,298

Income from discontinued operations





44


-

Loss from disposal of discontinued operations, net of








  taxes of $384





(294)


-

Net income, as adjusted





$       1,400


$       2,298









Diluted earnings per share from continuing operations, as adjusted





$         0.12


$         0.16

Diluted earnings per share, as adjusted





$         0.10


$         0.16









(1) Represents the un-realized gain or loss on change in fair value of interest rate protection contracts, which do not qualify for hedge accounting treatment.

(2) Represents additional costs incurred for legal advice and proxy solicitation in response to proxy contests relating to the Company's 2010 and 2011 annual meetings.

To supplement the Company's unaudited condensed consolidated financial statements presented on a generally accepted accounting principles (GAAP) basis, management has used a non-GAAP measure of net income.  Management believes that the presentation of "Income from continuing operations as adjusted" is useful to investors to enhance an overall understanding of our historical financial performance and future prospects.  Adjusted net income from continuing operations, which is adjusted to exclude certain gains and losses from the comparable GAAP net income from continuing operations is an indication of our baseline performance before gains, losses or other charges that are considered by management to be outside of our core operating results. These non-GAAP results are among the primary indicators management uses as a basis for evaluating the Company's financial performance as well as for forecasting future periods.  Management establishes performance targets, annual budgets and makes critical operating decisions based upon these metrics. Accordingly, disclosure of these non-GAAP measures provides investors with the same information that management uses to understand the Company's true economic performance year over year.  The presentation of this additional information is not meant to be considered in isolation or as a substitute for net income or other measures prepared in accordance with GAAP.

MAC-GRAY CORPORATION

TABLE 2

Reconciliation of Reported Net Income from Continuing Operations to Earnings

Before Interest, Taxes, Depreciation and Amortization ("EBITDA") from Continuing Operations

and EBITDA from Continuing Operations, as adjusted

(In thousands)












Three months ended




March 31,






2010


2011









Income from continuing operations, net





$      1,472


$      2,066









Interest expense





3,885


3,233

Provision for income taxes





1,319


1,412

Depreciation and amortization





11,576


11,421









EBITDA from continuing operations





18,252


18,132









Loss related to the change in the fair value of non-hedged derivative instruments (1)





242


365

Incremental costs of proxy contests (2)





97


25









EBITDA from continuing operations, as adjusted





$    18,591


$    18,522









(1) Represents the un-realized gain or loss on change in fair value of interest rate protection contracts, which do not qualify for hedge accounting treatment.

(2) Represents additional costs incurred for legal advice and proxy solicitation in response to proxy contests relating to the Company's 2010 and 2011 annual meetings.

EBITDA from continuing operations is defined as net income before interest expense, provision for income taxes, and depreciation and amortization expense. Adjusted EBITDA from continuing operations is EBITDA from continuing operations further adjusted to exclude the items described in the table above. We have excluded these items because we believe they are not reflective of our ongoing operating performance. EBITDA from continuing operations and Adjusted EBITDA from continuing operations are not measures of our liquidity or financial performance under GAAP and should not be considered as alternatives to net income or any other performance measure derived in accordance with GAAP, or as an alternative to cash flows from operating activities as a measure of our liquidity.

Our management believes EBITDA from continuing operations and Adjusted EBITDA from continuing operations are useful to investors because they help enable investors to evaluate our business in the same manner as our management.  Management uses EBITDA from continuing operations and Adjusted EBITDA from continuing operations as follows: (a) to evaluate the Company's historical and prospective financial performance, (b) to set internal revenue targets and spending budgets, (c) to measure operational profitability and the accuracy of forecasting, and (d) as an important factor in determining variable compensation for management.  In addition, these measures are frequently used by securities analysts, investors and other interested parties in the evaluation of companies with substantial financial leverage.  Moreover, investors have historically requested and the Company has historically reported these non-GAAP financial measures as a means of providing consistent and comparable information with past reports of financial results.

While management believes that these non-GAAP financial measures provide useful supplemental information to investors, there are limitations associated with the use of these non-GAAP financial measures.  These measures are not prepared in accordance with GAAP and may not be directly comparable to similarly titled measures of other companies due to potential differences in the exact method of calculation.  Further, EBITDA from continuing operations and Adjusted EBITDA from continuing operations exclude interest expense and depreciation and amortization expense, which represent significant and unavoidable operating costs given the level of indebtedness and the capital expenditures needed to maintain our business.  In addition, our measures of EBITDA from continuing operations and Adjusted EBITDA from continuing operations are different from those used in the covenants contained in our senior credit facilities and the indenture governing our 7 5/8% senior notes.  Management compensates for these limitations by relying primarily on our GAAP results and by using EBITDA from continuing operations and Adjusted EBITDA from continuing operations only supplementally and by reviewing the reconciliations of the non-GAAP financial measures to their most comparable GAAP financial measures.

Non-GAAP financial measures are not in accordance with, or an alternative for, generally accepted accounting principles in the United States.  The Company's non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP financial measures, and should be read only in conjunction with the Company's consolidated financial statements prepared in accordance with GAAP.  

Contacts:

Michael J. Shea        
Chief Financial Officer
Mac-Gray Corporation
781-487-7610
Email: [email protected]

Jim Buckley
Executive Vice President
Sharon Merrill Associates, Inc.
617-542-5300
Email: [email protected]

SOURCE Mac-Gray Corporation

WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM?

icon3
440k+
Newsrooms &
Influencers
icon1
9k+
Digital Media
Outlets
icon2
270k+
Journalists
Opted In
GET STARTED

Modal title

Contact PR Newswire

  • Call PR Newswire at 888-776-0942
    from 8 AM - 9 PM ET
  • Chat with an Expert
  • General Inquiries
  • Editorial Bureaus
  • Partnerships
  • Media Inquiries
  • Worldwide Offices

Products

  • For Marketers
  • For Public Relations
  • For IR & Compliance
  • For Agency
  • All Products

About

  • About PR Newswire
  • About Cision
  • Become a Publishing Partner
  • Become a Channel Partner
  • Careers
  • Accessibility Statement
  • APAC
  • APAC - Simplified Chinese
  • APAC - Traditional Chinese
  • Brazil
  • Canada
  • Czech
  • Denmark
  • Finland
  • France
  • Germany
  • India
  • Indonesia
  • Israel
  • Italy
  • Japan
  • Korea
  • Mexico
  • Middle East
  • Middle East - Arabic
  • Netherlands
  • Norway
  • Poland
  • Portugal
  • Russia
  • Slovakia
  • Spain
  • Sweden
  • United Kingdom
  • Vietnam

My Services

  • All New Releases
  • Platform Login
  • ProfNet
  • Data Privacy

Do not sell or share my personal information:

  • Submit via [email protected] 
  • Call Privacy toll-free: 877-297-8921

Contact PR Newswire

Products

About

My Services
  • All News Releases
  • Platform Login
  • ProfNet
Call PR Newswire at
888-776-0942
  • Terms of Use
  • Privacy Policy
  • Information Security Policy
  • Site Map
  • RSS
  • Cookies
Copyright © 2025 Cision US Inc.