In an effort to reposition its portfolio,
G&K Services, Inc
) recently divested its direct sale program business.
Additionally, the company sold its operation in Ireland. Total
proceeds from the divestiture were $6.6 million.
Since 2009, the company has been making restructuring efforts to
generate better growth opportunities. The company divested
several non-strategic business units that no longer fit its
long-term strategy. Instead, the company focused more on rental
and direct sale catalog operations that offer higher growth
Going forward, these transactions are likely to improve
G&K's overall profit margins and return on invested capital,
and help it achieve its corporate objective. These divestitures
also enhance the company's liquidity and enable it to make more
In the last reported quarter, the rental organic growth rate,
which adjusts for the impact of currency exchange rate
differences, acquisitions and divestitures, was 3.7%. Going
forward, the company expects fiscal 2014 revenues in the range of
$930 million to $950 million, with earnings per share between
$2.80 and $3.00.
G&K Services provides branded uniform and facility services
programs in the United States, Canada, Ireland and the Dominican
Republic. The company's facility-services programs comprise floor
mat offerings, including traction control, logo, message, scraper
and anti-fatigue; towel products, such as shop, kitchen, bar,
bath, dish, continuous roll, and microfiber; dust, microfiber,
and wet mops; fender covers; linen items; and restroom hygiene
G&K Services currently holds a Zacks Rank #3 (Hold). Other
players in the industry worth looking at include
Franklin Covey Co
Huron Consulting Group Inc
), each carrying a Zacks Rank #2 (Buy).
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