"While decisions to eliminate jobs are difficult, we've taken additional actions to further streamline our operating costs," said Richard Marcantonio, G&K's chairman and chief executive officer. "As we've stated before, we continue to manage our cost structure, realign staffing and control non-revenue generating expenditures in advance of increasingly difficult economic conditions. Our strong balance sheet, cash flow and business model, combined with these additional proactive actions, strengthens our position during this economic downturn as we continue to execute our strategic plan to emerge an even stronger company when economic conditions improve."
As a result of the workforce reduction announced today, the company anticipates annual savings of approximately $14.0 million. The company will realize partial savings in its fiscal 2009 third quarter due to reduced compensation costs, offset by severance and outplacement expenses. Moving forward, the company expects to realize the full positive quarterly savings, beginning in its fiscal 2009 fourth quarter.
Today's announcement does not have a financial impact on the company's fiscal 2009 second quarter results ended December 27, 2008. The company's fiscal 2009 second quarter earnings release and conference call are scheduled for Tuesday, January 27, 2009, at which time the company will discuss its financial results for the second quarter and provide further details on today's announcement.
G&K Services Inc is a market leader in branded identity apparel programs and facility services in the United States, and is the largest such provider in Canada. Headquartered in Minneapolis, G&K Services has approximately 9,500 employees serving more than 175,000 customers from over 170 facilities in North America and Europe.
