Attached files
| file | filename |
|---|---|
| 8-K - UNIFIRST CORP | form8k-3q2012.htm |
Exhibit 99
UNIFIRST ANNOUNCES FINANCIAL RESULTS FOR THE THIRD QUARTER AND FIRST NINE MONTHS OF FISCAL 2012
Wilmington, MA (June 27, 2012) -- UniFirst Corporation (NYSE: UNF) today announced results for its third quarter of fiscal 2012, which ended on May 26, 2012. Revenues were $320.9 million, up 10.1% from $291.6 million for the third quarter a year ago.
Net income for the quarter was $27.5 million ($1.37 per diluted share) compared to $18.4 million ($0.93 per diluted share) reported in the year ago period. Third quarter results include the positive effect of a settlement related to environmental litigation that the Company entered into during the quarter. The settlement resulted in a $6.7 million gain which was recorded as a reduction of selling and administrative expenses. Diluted earnings per share for the quarter, adjusted to eliminate the effect of the gain, was $1.16, up 24.7% from the $0.93 reported in the same period a year ago.
Revenues for the first nine months of fiscal 2012 were $943.9 million, up 11.9% from $843.3 million in the first nine months of fiscal 2011. Net income per diluted share for the first nine months of fiscal 2012 was $3.63, compared to $2.94 in the same period a year ago.
Ronald D. Croatti, UniFirst President and Chief Executive Officer said, “We are very pleased with the results of our third fiscal quarter. Although the employment situation remains sluggish, we continue to focus on areas within our control. Our success continues to be the result of strong execution from our sales and service organizations.”
Revenues for the third quarter of fiscal 2012 in the Core Laundry Operations were $281.1 million, up 11.5% from those reported in the prior year’s third quarter. Excluding the effects of acquisitions and a slightly weaker Canadian dollar, revenues grew 10.9%. Segment income from operations adjusted to eliminate the $6.7 million gain referred to above increased 31.4% year to year. The adjusted operating margin expanded to 10.5% from 8.9% a year earlier. Increased profitability arose from improved operating leverage that came with strong revenue growth. Expenses related to plant operations, depreciation, energy and overall selling and administrative outlays were all lower as a percentage of revenue compared to the prior year. These improvements were partially offset by higher merchandise costs and expenses associated with the Company’s initiative to update its customer service systems.
Revenues for the Specialty Garments segment, which consists of nuclear decontamination and cleanroom operations, were $29.3 million for the third quarter of fiscal 2012, down from a record $30.6 in the third quarter of fiscal 2011. Income from operations for this segment also decreased to $5.0 million in the quarter compared to $5.7 million in the same quarter a year ago.
The net income comparison for the quarter benefited from a decrease in net interest expense of $1.1 million from the third quarter of fiscal 2011. The decrease was due to the expiration of an interest rate swap in March 2011 and the repayment of $75.0 million in private placement notes that came due in June 2011.
UniFirst continues to maintain a solid balance sheet and overall financial position. Cash and cash equivalents at the end of the quarter totaled $78.8 million. Cash provided by operating activities year to date was $106.8 million, up 90.9% compared to $56.0 million in the first nine months of fiscal 2011. The improved cash flows were primarily the result of higher earnings as well as lower cash outflows related to working capital compared to a year ago. At the end of the quarter, long term debt, including current maturities was $104.6 million or 10.7% of total capital.
Outlook
Mr. Croatti continued, “Based on the strength of our year to date results and our outlook for the fourth quarter, we are raising our full year guidance. We now project fiscal 2012 revenues to be between $1.252 billion and $1.257 billion and diluted earnings per share to be between $4.60 and $4.70.”
Conference Call Information
UniFirst will hold a conference call today at 10:00 a.m. (ET) to discuss its quarterly financial results, business highlights and outlook. A simultaneous live webcast of the call will be available over the Internet and can be accessed at www.unifirst.com.
About UniFirst Corporation
UniFirst Corporation is one of the largest providers of workplace uniforms, protective clothing, and facility services products in North America. The Company employs approximately 11,000 Team Partners who serve more than 240,000 customer locations in 45 U.S. states, Canada, and Europe from over 200 customer service, distribution, and manufacturing facilities. UniFirst is a publicly held company traded on the New York Stock Exchange under the symbol UNF and is a component of the Standard & Poor's 600 Small Cap Index.
Forward Looking Statements
This public announcement may contain forward looking statements that reflect the Company’s current views with respect to future events and financial performance. Forward looking statements contained in this public announcement are subject to the safe harbor created by the Private Securities Litigation Reform Act of 1995 and are highly dependent upon a variety of important factors that could cause actual results to differ materially from those reflected in such forward looking statements. Such factors include, but are not limited to, uncertainties regarding the Company’s ability to consummate and successfully integrate acquired businesses, uncertainties regarding any existing or newly-discovered expenses and liabilities related to environmental compliance and remediation, the Company’s ability to compete successfully without any significant degradation in its margin rates, seasonal fluctuations in business levels, our ability to preserve positive labor relationships and avoid becoming the target of corporate labor unionization campaigns that could disrupt our business, the effect of currency fluctuations on our results of operations and financial condition, our dependence on third parties to supply us with raw materials, any loss of key management or other personnel, increased costs as a result of any future changes in federal or state laws, rules and regulations or governmental interpretation of such laws, rules and regulations, uncertainties regarding the price levels of natural gas, electricity, fuel and labor, the impact of adverse economic conditions and the current tight credit markets on our customers and such customers’ workforce, the level and duration of workforce reductions by our customers, the continuing increase in domestic healthcare costs, demand and prices for our products and services, rampant criminal activity and instability in Mexico where our principal garment manufacturing plants are located, additional professional and internal costs necessary for compliance with recent and proposed future changes in Securities and Exchange Commission, New York Stock Exchange and accounting rules, strikes and unemployment levels, the Company’s efforts to evaluate and potentially reduce internal costs, economic and other developments associated with the war on terrorism and its impact on the economy, general economic conditions and other factors described under “Item 1A. Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended August 27, 2011 and in other filings with the Securities and Exchange Commission. When used in this public announcement, the words “anticipate,” “optimistic,” “believe,” “estimate,” “expect,” “intend,” and similar expressions as they relate to the Company are included to identify such forward looking statements. The Company undertakes no obligation to update any forward looking statements to reflect events or circumstances arising after the date on which such statements are made.
UniFirst Corporation and Subsidiaries
Consolidated Statements of Income
|
Thirteen weeks ended
|
Thirty-nine weeks ended
|
|||||||||||||||
|
May 26,
|
May 28,
|
May 26,
|
May 28,
|
|||||||||||||
|
(In thousands, except per share data)
|
2012 (2)
|
2011 (2)
|
2012 (2)
|
2011 (2)
|
||||||||||||
|
Revenues
|
$
|
320,931
|
$
|
291,567
|
$
|
943,915
|
$
|
843,252
|
||||||||
|
Operating expenses:
|
||||||||||||||||
|
Cost of revenues (1)
|
202,433
|
185,217
|
599,009
|
524,685
|
||||||||||||
|
Selling and administrative expenses (1)
|
59,108
|
60,852
|
179,429
|
174,649
|
||||||||||||
|
Depreciation and amortization
|
16,718
|
16,365
|
49,615
|
47,942
|
||||||||||||
|
Total operating expenses
|
278,259
|
262,434
|
828,053
|
747,276
|
||||||||||||
|
Income from operations
|
42,672
|
29,133
|
115,862
|
95,976
|
||||||||||||
|
Other expense (income):
|
||||||||||||||||
|
Interest expense
|
511
|
1,586
|
1,639
|
5,991
|
||||||||||||
|
Interest income
|
(656
|
)
|
(616
|
)
|
(2,036
|
)
|
(1,852
|
)
|
||||||||
|
Exchange rate loss (gain)
|
457
|
(291
|
)
|
1,028
|
(682
|
)
|
||||||||||
|
312
|
679
|
631
|
3,457
|
|||||||||||||
|
Income before income taxes
|
42,360
|
28,454
|
115,231
|
92,519
|
||||||||||||
|
Provision for income taxes
|
14,901
|
10,023
|
42,774
|
34,047
|
||||||||||||
|
Net income
|
$
|
27,459
|
$
|
18,431
|
$
|
72,457
|
$
|
58,472
|
||||||||
|
Income per share – Basic
|
||||||||||||||||
|
Common Stock
|
$
|
1.45
|
$
|
0.98
|
$
|
3.83
|
$
|
3.10
|
||||||||
|
Class B Common Stock
|
$
|
1.16
|
$
|
0.78
|
$
|
3.06
|
$
|
2.48
|
||||||||
|
Income per share – Diluted
|
||||||||||||||||
|
Common Stock
|
$
|
1.37
|
$
|
0.93
|
$
|
3.63
|
$
|
2.94
|
||||||||
|
Income allocated to – Basic
|
||||||||||||||||
|
Common Stock
|
$
|
21,587
|
$
|
14,453
|
$
|
59,926
|
$
|
45,810
|
||||||||
|
Class B Common Stock
|
$
|
5,381
|
$
|
3,635
|
$
|
14,214
|
$
|
11,555
|
||||||||
|
Income allocated to – Diluted
|
||||||||||||||||
|
Common Stock
|
$
|
26,993
|
$
|
18,105
|
$
|
71,205
|
$
|
57,420
|
||||||||
|
Weighted average number of shares outstanding – Basic
|
||||||||||||||||
|
Common Stock
|
14,905
|
14,810
|
14,872
|
14,780
|
||||||||||||
|
Class B Common Stock
|
4,644
|
4,656
|
4,642
|
4,660
|
||||||||||||
|
Weighted average number of shares outstanding – Diluted
|
||||||||||||||||
|
Common Stock
|
19,646
|
19,549
|
19,600
|
19,522
|
||||||||||||
(1) Exclusive of depreciation on the Company’s property, plant and equipment and amortization on its intangible assets
(2) Unaudited
UniFirst Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
|
(In thousands)
|
May 26,
2012 (1)
|
August 27,
2011
|
||||||
|
Assets
|
||||||||
|
Current assets:
|
||||||||
|
Cash and cash equivalents
|
$ | 78,821 | $ | 48,812 | ||||
|
Receivables, net
|
140,140 | 128,377 | ||||||
|
Inventories
|
76,291 | 76,460 | ||||||
|
Rental merchandise in service
|
140,327 | 126,536 | ||||||
|
Prepaid and deferred income taxes
|
7,232 | 11,358 | ||||||
|
Prepaid expenses
|
8,506 | 3,647 | ||||||
|
Total current assets
|
451,317 | 395,190 | ||||||
|
Property, plant and equipment:
|
||||||||
|
Land, buildings and leasehold improvements
|
350,698 | 346,738 | ||||||
|
Machinery and equipment
|
419,581 | 393,530 | ||||||
|
Motor vehicles
|
140,975 | 129,762 | ||||||
| 911,254 | 870,030 | |||||||
|
Less - accumulated depreciation
|
501,206 | 474,963 | ||||||
| 410,048 | 395,067 | |||||||
|
Goodwill
|
287,982 | 288,249 | ||||||
|
Customer contracts and other intangible assets, net
|
52,888 | 60,905 | ||||||
|
Other assets
|
2,178 | 2,109 | ||||||
| $ | 1,204,413 | $ | 1,141,520 | |||||
|
Liabilities and shareholders' equity
|
||||||||
|
Current liabilities:
|
||||||||
|
Current maturities of long-term debt
|
$ | 4,492 | $ | 20,133 | ||||
|
Accounts payable
|
58,492 | 56,064 | ||||||
|
Accrued liabilities
|
76,328 | 76,630 | ||||||
|
Accrued income taxes
|
2,569 | - | ||||||
|
Total current liabilities
|
141,881 | 152,827 | ||||||
|
Long-term liabilities:
|
||||||||
|
Long-term debt, net of current maturities
|
100,157 | 100,163 | ||||||
|
Accrued liabilities
|
43,124 | 39,698 | ||||||
|
Accrued and deferred income taxes
|
50,198 | 50,890 | ||||||
|
Total long-term liabilities
|
193,479 | 190,751 | ||||||
|
Shareholders' equity:
|
||||||||
|
Common Stock
|
1,505 | 1,499 | ||||||
|
Class B Common Stock
|
488 | 488 | ||||||
|
Capital surplus
|
40,648 | 33,588 | ||||||
|
Retained earnings
|
822,856 | 752,530 | ||||||
|
Accumulated other comprehensive income
|
3,556 | 9,837 | ||||||
|
Total shareholders' equity
|
869,053 | 797,942 | ||||||
| $ | 1,204,413 | $ | 1,141,520 | |||||
(1) Unaudited
UniFirst Corporation and Subsidiaries
Detail of Operating Results
Revenues
|
Thirteen weeks ended
|
||||||||||||||||
|
May 26,
|
May 28,
|
Dollar
|
Percent
|
|||||||||||||
|
(In thousands, except percentages)
|
2012 (1)
|
2011 (1)
|
Change
|
Change
|
||||||||||||
|
Core Laundry Operations
|
$ | 281,141 | $ | 252,052 | $ | 29,089 | 11.5 | % | ||||||||
|
Specialty Garments
|
29,263 | 30,575 | (1,312 | ) | -4.3 | |||||||||||
|
First Aid
|
10,527 | 8,940 | 1,587 | 17.7 | ||||||||||||
|
Consolidated total
|
$ | 320,931 | $ | 291,567 | $ | 29,364 | 10.1 | % | ||||||||
|
Thirty-nine weeks ended
|
||||||||||||||||
|
May 26,
|
May 28,
|
Dollar
|
Percent
|
|||||||||||||
|
(In thousands, except percentages)
|
2012 (1)
|
2011 (1)
|
Change
|
Change
|
||||||||||||
|
Core Laundry Operations
|
$ | 830,661 | $ | 737,611 | $ | 93,050 | 12.6 | % | ||||||||
|
Specialty Garments
|
83,032 | 79,902 | 3,130 | 3.9 | ||||||||||||
|
First Aid
|
30,222 | 25,739 | 4,483 | 17.4 | ||||||||||||
|
Consolidated total
|
$ | 943,915 | $ | 843,252 | $ | 100,663 | 11.9 | % | ||||||||
Income from Operations
|
Thirteen weeks ended
|
||||||||||||||||
|
May 26,
|
May 28,
|
Dollar
|
Percent
|
|||||||||||||
|
(In thousands, except percentages)
|
2012 (1)
|
2011 (1)
|
Change
|
Change
|
||||||||||||
|
Core Laundry Operations
|
$ | 36,275 | $ | 22,505 | $ | 13,770 | 61.2 | % | ||||||||
|
Specialty Garments
|
5,033 | 5,685 | (652 | ) | -11.5 | |||||||||||
|
First Aid
|
1,364 | 943 | 421 | 44.7 | ||||||||||||
|
Consolidated total
|
$ | 42,672 | $ | 29,133 | $ | 13,539 | 46.5 | % | ||||||||
|
Thirty-nine weeks ended
|
||||||||||||||||
|
May 26,
|
May 28,
|
Dollar
|
Percent
|
|||||||||||||
|
(In thousands, except percentages)
|
2012 (1)
|
2011 (1)
|
Change
|
Change
|
||||||||||||
|
Core Laundry Operations
|
$ | 98,706 | $ | 79,997 | $ | 18,709 | 23.4 | % | ||||||||
|
Specialty Garments
|
14,175 | 13,442 | 733 | 5.4 | ||||||||||||
|
First Aid
|
2,981 | 2,537 | 444 | 17.5 | ||||||||||||
|
Consolidated total
|
$ | 115,862 | $ | 95,976 | $ | 19,886 | 20.7 | % | ||||||||
(1) Unaudited
UniFirst Corporation and Subsidiaries
Consolidated Statements of Cash Flows
|
Thirty-nine weeks ended
(In thousands)
|
May 26,
2012 (1)
|
May 28,
2011 (1)
|
||||||
|
Cash flows from operating activities:
|
||||||||
|
Net income
|
$ | 72,457 | $ | 58,472 | ||||
|
Adjustments to reconcile net income to cash provided by operating activities:
|
||||||||
|
Depreciation
|
41,644 | 40,171 | ||||||
|
Amortization of intangible assets
|
7,971 | 7,771 | ||||||
|
Amortization of deferred financing costs
|
178 | 202 | ||||||
|
Share-based compensation
|
5,202 | 5,180 | ||||||
|
Accretion on environmental contingencies
|
474 | 511 | ||||||
|
Accretion on asset retirement obligations
|
473 | 442 | ||||||
|
Deferred income taxes
|
362 | 5,598 | ||||||
|
Changes in assets and liabilities, net of acquisitions:
|
||||||||
|
Receivables
|
(12,985 | ) | (20,434 | ) | ||||
|
Inventories
|
(320 | ) | (18,835 | ) | ||||
|
Rental merchandise in service
|
(14,475 | ) | (25,653 | ) | ||||
|
Prepaid expenses
|
(4,870 | ) | (2,416 | ) | ||||
|
Accounts payable
|
2,629 | 4,264 | ||||||
|
Accrued liabilities
|
2,411 | 4,398 | ||||||
|
Prepaid and accrued income taxes
|
5,666 | (3,718 | ) | |||||
|
Net cash provided by operating activities
|
106,817 | 55,953 | ||||||
|
Cash flows from investing activities:
|
||||||||
|
Acquisition of businesses
|
- | (17,317 | ) | |||||
|
Capital expenditures
|
(59,325 | ) | (49,416 | ) | ||||
|
Other
|
(436 | ) | (544 | ) | ||||
|
Net cash used in investing activities
|
(59,761 | ) | (67,277 | ) | ||||
|
Cash flows from financing activities:
|
||||||||
|
Proceeds from long-term debt
|
40,410 | - | ||||||
|
Payments on long-term debt
|
(55,845 | ) | (1,404 | ) | ||||
|
Payments of deferred financing costs
|
- | (975 | ) | |||||
|
Proceeds from exercise of Common Stock options
|
2,000 | 1,164 | ||||||
|
Payment of cash dividends
|
(2,129 | ) | (2,122 | ) | ||||
|
Net cash used in financing activities
|
(15,564 | ) | (3,337 | ) | ||||
|
Effect of exchange rate changes
|
(1,483 | ) | 2,411 | |||||
|
Net increase (decrease) in cash and cash equivalents
|
30,009 | (12,250 | ) | |||||
|
Cash and cash equivalents at beginning of period
|
48,812 | 121,258 | ||||||
|
Cash and cash equivalents at end of period
|
$ | 78,821 | $ | 109,008 | ||||
(1) Unaudited