WALTHAM, Mass. — Mac-Gray Corp. has announced record revenue gains for the fourth quarter and year ended Dec. 31, 2008.
The company reported fourth-quarter revenue of $95 million, an increase of 20.7% from 2007 fourth-quarter revenue of $78.7 million. Net loss for the quarter was $1.1 million, or $0.08 per share, compared with fourth-quarter 2007 net income of $400,000, or $0.03 per diluted share. Fourth-quarter 2008 and 2007 net income included pre-tax non-cash losses of $1.6 million and $1 million, respectively, on the change in value of derivative instruments. Adjusted net income for the fourth quarter of 2008 was $149,000, or $0.01 per diluted share, compared to adjusted net income of $932,000, or $0.07 per diluted share, for the fourth quarter of 2007.
For the fourth quarter of 2008, Mac-Gray’s earnings before interest expense, provision for income taxes, depreciation and amortization expense (EBITDA) was $17.4 million, compared to $14.9 million in the same quarter of the previous year. EBITDA, adjusted for the items relating to derivative instruments, grew 20% to $19.1 million for the fourth quarter of 2008, compared to $15.9 million in the same quarter the previous year.
“We delivered strong results for the fourth quarter, particularly in light of the recession and the related increasing apartment vacancy rates,” says Stewart G. MacDonald, Mac-Gray chairman and chief executive officer. “Our laundry facilities business generated revenue that was on target with our plan for the quarter, as we benefited from the contributions of the ALC assets we acquired in April and also generated incremental organic growth. Within product sales, we achieved 11.3% combined growth in MicroFridge and commercial laundry equipment sales. Most importantly, and as a result of our fourth-quarter performance, including control over capital spending, we reduced our funded debt in the quarter by approximately $13.6 million, reflecting the inherent ability of our business model to generate free cash flow.”
For the year ended Dec. 31, 2008, the company reported record revenue of $363.6 million, an increase of 23% from revenue of $295.9 million for 2007. Net income for 2008 was $541,000, or $0.04 per diluted share, compared to $2.5 million, or $0.18 per diluted share, for 2007.
For 2008, Mac-Gray’s earnings before interest expense, provision for income taxes, depreciation and amortization expense (EBITDA) was $70.9 million, compared to $56.8 million for 2007. EBITDA, as adjusted for these items, increased 24.6% to $72.9 million for 2008, compared to $58.5 million for 2007. As a percent of revenue, EBITDA, as adjusted, slightly increased in the facilities management business, while decreasing in product sales.
“Although the current economic downturn presents us with challenges, we remain encouraged about the prospects for our laundry facilities management business in 2009 and beyond,” says MacDonald. “In previous recessions, this business has proven to be resilient. We are confident that our diversified footprint will help us mitigate the impact of localized housing market fluctuations. In addition, the density we have achieved in many metropolitan areas has positioned us to emerge as a more efficient competitor and a stronger enterprise when the economy turns around.”