Stock Market Watch

Mac-Gray Corporation – Fifth consecutive quarter of YOY revenue growth – TUC

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Mac-Gray Corporation (NYSE: TUC), the nation’s premier provider of laundry facilities management services to multi-family housing, today announced its financial results for the quarter and year ended December 31, 2011.

TUC reported fourth quarter of 2011 revenue from continuing operations of $82.7 million, compared with $81.7 million in the fourth quarter of 2010. TUC Net income from continuing operations for the fourth quarter of 2011 was $102,000, or $0.01 per diluted share, compared with a net loss from continuing operations of $698,000, or $0.05 per share, for the fourth quarter of 2010. TUC Fourth-quarter 2011 net income from continuing operations includes a pre-tax unrealized gain of $177,000 related to interest rate derivative instruments, a pre-tax unrealized gain of $99,000 related to fuel commodity derivatives and a loss of $1.9 million related to the early extinguishment of debt. TUC Fourth-quarter 2010 net income from continuing operations included a pre-tax unrealized loss of $1.4 million related to interest rate derivative instruments.

Excluding these items from both periods, adjusted net income from continuing operations for the fourth quarter of 2011 was $1.1 million, or $0.07 per diluted share, compared with adjusted net income from continuing operations of $112,000, or $0.01 per diluted share, for the same period of 2010.


Comments on the Fourth Quarter  

“We concluded 2011 with our fifth consecutive quarter of year-over-year revenue growth,” said Stewart G. MacDonald, Mac-Gray’s chief executive officer.  ”Our results were driven by our sales and marketing efforts, successful vend management, proprietary technologies that continue to be well-received, and the ongoing improvement in apartment occupancy rates in certain markets.  During the quarter, our multi-housing same-location revenue grew by 1%.  Our strategy remains to target organic growth through both new contracts and renewals.  We are focused on increasing margins in markets where occupancy trends are strongest, such as the Northeast.

“As demonstrated in our bottom-line performance, we also improved our margins and profitability in the quarter.  Our gross profit margin increased to 17.7% of revenue from 15.9% a year ago.  Operating income from continuing operations increased as a percentage of revenue in the quarter to 6.5%, compared with 4.8% a year ago.

“Our business model generates stable cash flow and consistent results.  Net cash flow provided by our operating activities in the fourth quarter was $17.4 million.  At the same time, we further reduced our funded debt in the quarter by $10.4 million, while lowering our year-over-year interest expense by 3%, before derivatives and amortization. We recently announced a new and expanded five-year credit agreement with our lenders that has enabled us to redeem the remaining $100 million of our 7.625% senior notes at substantially lower rates, using our revolving credit facility.  We expect the annualized interest expense savings attributable to this transaction to be approximately $5 million, presuming that rates remain near current levels. The expanded facility and lower rates will enable us to pursue our long-term growth strategy on a more effective cost basis.”

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edliston
Post Written By: Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.


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Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing.

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