| Mac-Gray Corporation | |||
| Ticker: | TUC | 22 Water Street | |
| Exchange: | New York Stock Exchange | Cambridge, MA 02141 | |
| Industry: | Service (SIC Code 7215) | (617) 492-4040 | |
| # of Employees: | 274 | ||
| Type of Shares: | Common Shares | Filing Date: | 8/14/97 | |
| U.S. Shares: | 4,000,000 | Offer Date: | 10/16/97 | |
| Non-U.S. Shares: | 0 | Filing Range: | $9.50 - $11.00 | |
| Primary Shares: | 4,000,000 | Offer Price: | $11.00 | |
| Secondary Shares: | 0 | Gross Spread: | $0.77 | |
| Offering Amount: | $41,000,000 | Selling: | $0.46 | |
| Expenses: | - | Reallowance: | $0.10 | |
| Shares Out After: | - |
| Manager | Tier | Phone |
| Salomon Brothers Inc. | Lead Manager | (212) 783-2947 |
| Smith Barney Inc. | Co-manager | (212) 723-7300 |
| Issuer's Law Firm: | Goodwin Procter & Hoar |
| Bank's Law Firm: | Testa, Hurwitz & Thibeault |
| Auditor: | Price Waterhouse |
| Registrar/Transfer Agent: | State Street Bank and Trust Company |
Dollar amounts in U.S. millions except for per share data | |||||
| 6 Month Ending Financials | |||||
| Full Year Audited Income | Latest Unaudited Income | Prior Unaudited Income | Balance Sheet | ||
| 12/31/96 | 6/30/97 | 6/30/96 | 6/30/97 | ||
| Revenue: | $64.43 | $38.29 | $29.02 | Assets: | $68.97 |
| Net Income: | $5.53 | $3.03 | $3.15 | Curr Assets: | $8.65 |
| EPS: | Liabilities: | $46.63 | |||
| Prior EPS: | $3.55 | $5.68 | Curr Liabilities: | $10.87 | |
| Cash Flow/Oper: | $13.65 | $4.23 | $8.70 | Equity: | $22.34 |
| Cash Flow/Fin: | $7.38 | -$7.96 | -$15.80 | Cash: | $2.66 |
| Cash Flow/Inv: | -$22.07 | -$7.96 | Working Cap: | -$2.22 | |
| Business Description |
| The company is among North America's largest suppliers of card and coin operated laundry services in multiple housing facilities such as apartment buildings, colleges and universities and public housing complexes. The Company owns and operates approximately 113,000 card and coin-operated washers and dryers in more than 17,000 multiple housing laundry rooms located in 22 states in the Northeast, Midwest and Southeast regions of the United States. In addition, the Company believes that it is the largest operator of commercial laundry equipment manufactured by The Maytag Corporation ("Maytag"). The Company's revenue, EBITDA and net income, on a pro forma basis, for the twelve months ended June 30, 1997, were approximately $79.2 million, $17.9 million and $4.8 million, respectively. Approximately 90% of the Company's revenue is derived from the operation of washers and dryers in laundry rooms under long-term leases with property owners ("Laundry Route Revenue"). Under these long-term leases, which have an average remaining life of more than seven years, the Company typically receives the exclusive right to operate laundry rooms within a multiple housing property in exchange for a percentage of the revenue collected. The Company's revenue base is well diversified, as no lessor currently represents more than 1% of the Company's machine base. |
| Competition |
| The card and coin-operated laundry services industry is highly competitive. In most of the Company's markets, laundry services may be available through property owners and managers that operate their own laundry rooms ("Self- Owners"), private, family-owned businesses or large regional and national laundry services companies. The Company frequently faces competition in the acquisition of laundry service businesses from a number of other bidders. In the competition to supply services to property owners, local private businesses tend to have long-standing relationships with customers intheir specific geographic market, and the larger companies participating in the industry consolidation tend to have significant operational and managerial resources to devote to expansion and to capture additional market share. Accordingly, there can be no assurance that the Company will be able to compete effectively in any specific geographic location in the business of supplying laundry equipment services to property owners and managers or in the acquisition of other businesses. |
| Business Plan |
| The company's strategic objectives are to (I) grow its revenue and customer base and increase profitability and cash flow by refining and expanding its present operations and (ii) capitalize on the consolidation opportunities that exist in the highly fragmented laundry services industry. In order to achieve these objectives, the company intends to: (I) Expand Customer Base In Existing Markets; (ii) Implement Newly Available Technology; (iii) Pursue Strategic Acquisitions Opportunities; and (iv) Increase Leading Position In College and University Market. |
| Use of Proceeds |
| The proceeds from the proposed offering will be used to repay debt and for general corporate purposes. |
| Name of Shareholder | % Owned Before | % Owned After |
| Sandra E. MacDonald | 46.00% | |
| Daniel W. MacDonald | 30.40% | |
| Stewart Gray MacDonald, Jr. | 27.50% | |
| R. Robert Woodburn, Jr. | 24.40% | |
| Peter C. Bennett | 24.40% | |
| Patrick A. Flanagan | 24.40% | |
| Evelyn C. MacDonald | 24.40% | |
| Cynthia V. Doggett | 20.60% | |
| Jeffrey C. Huenink | 8.80% | |
| Gilbert M. Roddy, Jr. | 8.30% | |
| Richard G. MacDonald | 6.60% |
| Officer Name | Title | Age |
| Stewart Gray MacDonald, Jr. | Chairman, Chief Executive Officer and Director | 47 |
| John S. Olbrych | Chief Financial Officer and Treasurer | 41 |
| Patrick A. Flanagan | Executive Vice President, Mergers and Acquisitions, Secretary and Director | 44 |
| Neil F. MacLellan, III | Executive Vice President, Sales and Marketing | 38 |