Article Excerpt:
TWST: What is Mac-Gray Corporation?Mr. Shea: Mac-Gray is the second largest provider in the US of card- and coin- operated laundry facilities management services in multi-housing facilities and the largest provider of laundry facilities management services to the college and university market. Essentially, we are a 79-year old company that specializes in providing laundry facilities management services to multi-housing units. The best example of that is apartment buildings or colleges that have decided to outsource their laundry room facilities. We negotiate with these establishments and sign long-term contracts. We then will install, service, and collect the money that the equipment generates over the life of the contract, and in return we pay the landlord a percentage of the revenue that we collect. For instance, if you live in an apartment building or on a college campus, you go to the laundry room and you insert the coins into the machine or you swipe a student card or debit card. These washers and dryers are owned, operated, and serviced by Mac-Gray. The revenue from each machine is collected and accounted for by Mac-Gray. At the end of the month, the landlord gets his commission payment, which is on average approximately 50%. An average contract for Mac-Gray with a building landlord or a school is approximately seven years long. We've grown extensively since January 2004 when we completed the first of two large acquisitions, and revenue has grown 75% in the last three years due to a combination of acquisitions and strong organic growth. Today, approximately 85% of our business is from our laundry facility management business. In addition, we sell laundry equipment, primarily to laundromats and institutional users. We also sell a line of refrigerators/freezers/microwave ovens called MicroFridge. Combined, these two businesses account for the remaining 15% of our total business.
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