WALTHAM, Mass. — Mac-Gray Corp. saw its net revenue for third-quarter 2012 ended Sept. 30 decrease to $77.9 million from $78.5 million for the same period in 2011, according to its latest financial report. Net income increased to $1.5 million compared to $604,000 in 2011.
Adjusted net income for third-quarter 2012—excluding non-cash unrealized gains and losses related to interest rate and fuel commodity derivative instruments—was $1.2 million, compared to $780,000 in 2011.
“Our third-quarter performance closely mirrored what we saw in the second quarter,” says CEO Stewart G. MacDonald. “We again increased profitability despite experiencing a less than 1% decline in total revenue. Laundry facilities management revenue was essentially flat in the quarter, while commercial equipment sales declined 17% due to normal quarterly variability.”
Mac-Gray completed a “successful academic season” by increasing its portfolio by 17 colleges and universities in what MacDonald called a “record year for us.” The increase in the academic segment helped offset a slowdown in Mac-Gray’s multi-housing portfolio.
Hurricane Sandy is having a near-term effect on much of Mac-Gray’s Northeast and mid-Atlantic operations, according to MacDonald. Travel restrictions, power outages and gasoline shortages hampered the efforts of personnel as they tried to visit sites and assess the full extent of the damage to equipment and locations. “Our laundry rooms are typically located at the basement level and can be vulnerable to flooding. We maintain insurance for the equipment at our locations, and will seek recovery, if appropriate, from our insurers.”
Widespread power outages have kept residents in many locations from using Mac-Gray’s equipment, and the CEO expects the storm to have an impact on the company’s fourth-quarter results.
Mac-Gray derives its revenue principally through the contracting of debit-card- and coin-operated laundry facilities in multi-unit housing facilities. The company manages laundry rooms located in 43 states and the District of Columbia. Mac-Gray also sells and services commercial laundry equipment.