As previously disclosed, ARAMARK Corporation (NYSE:RMK), a world leader in providing professional services, has undertaken a review of its Uniform and Career Apparel - Direct Marketing segment in response to weaker performance, particularly in the healthcare apparel direct marketing business.
As a result, the Company expects third quarter operating results will include a charge of about $0.15 per share. The charge will include goodwill impairment estimated at $0.12 per share and adjustments to asset and liability carrying values of about $0.03 per share.
In addition, third quarter results will reflect costs related to the termination of two unprofitable contracts in the U.S. Food and Support Services segment of approximately $0.02 per share and lower operating results in the Uniform and Career Apparel - Direct Marketing segment. As a result, the Company expects fully diluted earnings per share for the third quarter to be between $0.17 and $0.19, and for the fourth quarter to be between $0.48 and $0.52*, reflecting continuing lower Uniform and Career Apparel - Direct Marketing segment results.
"We are proceeding aggressively to address the challenges in the Direct Marketing segment of our uniforms business," said Joseph Neubauer, Chairman and Chief Executive Officer of ARAMARK. "While we expect to experience continued operating challenges in this business in the fourth quarter, we are taking actions over the next several months which we believe will have a positive impact as we move into fiscal 2007."
The Company will provide an update when it reports third quarter financial results on August 9, 2006.
* Before the adoption of FASB Interpretation No. 47, "Accounting for Conditional Asset Retirement Obligations."
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