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Exhibit 99

 

 

March 27, 2013

CONTACT: Steven S. Sintros, Vice President & CFO

For Immediate Release

UniFirst Corporation

68 Jonspin Road

Wilmington, MA 01887

Phone: 978- 658-8888

Fax: 978-988-0659

Email: ssintros@UniFirst.com

 

 

 

UNIFIRST ANNOUNCES FISCAL 2013 SECOND QUARTER RESULTS

 

 

Wilmington, MA (March 27, 2013) -- UniFirst Corporation (NYSE: UNF) today announced results for its second fiscal quarter, which ended February 23, 2013. Revenues were $334.3 million, up 7.9% from $310.0 million in the year ago period. Net income was $26.6 million ($1.33 per diluted share), up 38.8% compared to $19.2 million ($0.96 per diluted share) reported in the year ago period.

 

Ronald D. Croatti, UniFirst President and Chief Executive Officer said, “Our excellent results for the first half of the year are due to strong execution in all facets of our operations. We are very pleased with these results, particularly as we have been faced with a challenging economic environment. Businesses remain hesitant to add new costs, including new employees who are potential wearers of our uniforms.”

 

Second quarter revenues in the Core Laundry Operations were $301.6 million, up 8.8% from those reported in the prior year’s second quarter. Excluding the effect of acquisitions and a stronger Canadian dollar, revenues grew 8.3%. Revenues in this segment were positively affected in the period by the impact of a customer related specialty merchandise buyout that added approximately 0.8% to the organic growth. This segment’s income from operations increased 46.9% year to year and its operating margin expanded to 13.4% from 9.9%. Excluding the impact of the merchandise buyout discussed above, this segment’s second quarter operating margin would have been 12.9% and diluted earnings per share would have been $1.27. Increased profitability in this segment was primarily the result of improved operating leverage that came with our strong revenue growth. Expenses related to merchandise, energy, payroll and other costs related to our plant operations were all lower as a percentage of revenue compared to the prior year.

 

Revenues for the Specialty Garments segment, which consists of nuclear decontamination and cleanroom operations, were $22.6 million, down 3.9% from $23.5 million in the second quarter of fiscal 2012. This segment had income from operations for the quarter of $1.3 million down from $2.6 million in the same quarter a year ago. These results were impacted by a weaker than anticipated performance from this segment’s European operations as well as the completion of two large projects in the latter part of fiscal 2012.

 

UniFirst continues to maintain a solid balance sheet and financial position. Cash and cash equivalents at the end of the quarter totaled $163.3 million, up from $120.1 million at the end of fiscal 2012. Cash provided by operating activities for the first half of the year was $92.5 million, up 53.1% compared to $60.4 million for the first half of fiscal 2012. The improved cash flows were primarily the result of higher earnings as well as lower cash outflows related to working capital. At the end of the quarter, total debt was $110.8 million, or 10.4% of total capital.

 

 
 

 

 

Outlook

Mr. Croatti continued, “Based on the strength of the first half and our current outlook for the remainder of the year, we are increasing our previously communicated guidance. We project our fiscal 2013 revenues to be between $1.344 billion and $1.354 billion and diluted earnings per share to be between $5.65 and $5.80. Our guidance assumes no further deterioration of the U.S. economy and also includes one extra week of operations in our fourth quarter due to the timing of our fiscal calendar.”

 

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, any adverse outcome of pending or future contingencies or claims, 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, our ability to properly and efficiently design, construct, implement and operate our new CRM computer system, 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 25, 2012 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

Twenty-six weeks ended

 

February 23,

February 25,

February 23,

February 25,

(In thousands, except per share data)

    2013 (2)     2012 (2)     2013 (2)     2012 (2)
                                 

Revenues

  $ 334,306   $ 309,959   $ 666,875   $ 622,984
                                 

Operating expenses:

                               

Cost of revenues (1)

    208,421     201,437     409,972     396,576

Selling and administrative expenses (1)

    65,817     61,197     130,105     120,321

Depreciation and amortization

    17,179     16,489     33,950     32,897

Total operating expenses

    291,417     279,123     574,027     549,794
                                 

Income from operations

    42,889     30,836     92,848     73,190
                                 

Other (income) expense:

                               

Interest expense

    400     555     860     1,128

Interest income

    (924

)

    (749

)

    (1,691

)

    (1,380

)

Exchange rate loss (gain)

    198     (56

)

    38     571
      (326

)

    (250

)

    (793

)

    319
                                 

Income before income taxes

    43,215     31,086     93,641     72,871

Provision for income taxes

    16,573     11,890     36,239     27,873
                                 

Net income

  $ 26,642   $ 19,196   $ 57,402   $ 44,998
                                 

Income per share – Basic

                               

Common Stock

  $ 1.40   $ 1.01   $ 3.02   $ 2.38

Class B Common Stock

  $ 1.12   $ 0.81   $ 2.42   $ 1.90
                                 

Income per share – Diluted

                               

Common Stock

  $ 1.33   $ 0.96   $ 2.86   $ 2.26
                                 

Income allocated to – Basic

                               

Common Stock

  $ 20,963   $ 15,081   $ 45,155   $ 35,341

Class B Common Stock

  $ 5,209   $ 3,765   $ 11,233   $ 8,832
                                 

Income allocated to – Diluted

                               

Common Stock

  $ 26,196   $ 18,863   $ 56,440   $ 44,213
                                 

Weighted average number of shares outstanding – Basic

                               

Common Stock

    14,962     14,873     14,943     14,856

Class B Common Stock

    4,647     4,640     4,647     4,640
                                 

Weighted average number of shares outstanding – Diluted

                               

Common Stock

    19,747     19,605     19,714     19,575

 

(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)

February 23,

2013 (1)

August 25,

2012

Assets

               

Current assets:

               

Cash and cash equivalents

  $ 163,279   $ 120,123

Receivables, net

    146,368     135,327

Inventories

    74,386     75,420

Rental merchandise in service

    129,697     138,284

Prepaid and deferred income taxes

    12,785     12,785

Prepaid expenses

    8,143     5,741
                 

Total current assets

    534,658     487,680
                 

Property, plant and equipment:

               

Land, buildings and leasehold improvements

    369,819     355,568

Machinery and equipment

    450,767     425,274

Motor vehicles

    145,090     141,370
                 
      965,676     922,212

Less - accumulated depreciation

    532,500     510,008
      433,176     412,204
                 

Goodwill

    288,674     288,137

Customer contracts and other intangible assets, net

    46,101     50,531

Other assets

    2,412     1,982
                 
    $ 1,305,021   $ 1,240,534
                 

Liabilities and shareholders' equity

               

Current liabilities:

               

Loans payable and current maturities of long-term debt

  $ 110,686   $ 6,831

Accounts payable

    49,055     52,340

Accrued liabilities

    84,252     78,174

Accrued income taxes

    5,621     8,180
                 

Total current liabilities

    249,614     145,525
                 

Long-term liabilities:

               

Long-term debt, net of current maturities

    155     100,155

Accrued liabilities

    44,230     43,420

Accrued and deferred income taxes

    54,725     54,509
                 

Total long-term liabilities

    99,110     198,084
                 

Shareholders' equity:

               

Common Stock

    1,512     1,506

Class B Common Stock

    488     488

Capital surplus

    48,814     42,984

Retained earnings

    900,652     844,676

Accumulated other comprehensive income

    4,831     7,271
                 

Total shareholders' equity

    956,297     896,925
                 
    $ 1,305,021   $ 1,240,534

 

(1) Unaudited

 

 
 

 

 

UniFirst Corporation and Subsidiaries

Detail of Operating Results

 

Revenues

 

 

Thirteen weeks ended

               
 

February 23,

February 25,

Dollar

Percent

(In thousands, except percentages)

    2013 (1)     2012 (1)

Change

Change

                                 

Core Laundry Operations

  $ 301,629   $ 277,247   $ 24,382     8.8

%

Specialty Garments

    22,593     23,501     (908

)

    -3.9

First Aid

    10,084     9,211     873     9.5

Consolidated total

  $ 334,306   $ 309,959   $ 24,347     7.9

%

 

 

Twenty-six weeks ended

               
 

February 23,

February 25,

Dollar

Percent

(In thousands, except percentages)

    2013 (1)     2012 (1)

Change

Change

                                 

Core Laundry Operations

  $ 596,189   $ 549,520   $ 46,669     8.5

%

Specialty Garments

    50,477     53,769     (3,292

)

    -6.1

First Aid

    20,209     19,695     514     2.6

Consolidated total

  $ 666,875   $ 622,984   $ 43,891     7.0

%

  

Income from Operations

 

 

Thirteen weeks ended

               
 

February 23,

February 25,

Dollar

Percent

(In thousands, except percentages)

    2013 (1)     2012 (1)

Change

Change

                                 

Core Laundry Operations

  $ 40,327   $ 27,449   $ 12,878     46.9

%

Specialty Garments

    1,275     2,576     (1,301

)

    -50.5

First Aid

    1,287     811     476     58.8

Consolidated total

  $ 42,889   $ 30,836   $ 12,053     39.1

%

 

 

Twenty-six weeks ended

               
 

February 23,

February 25,

Dollar

Percent

(In thousands, except percentages)

    2013 (1)     2012 (1)

Change

Change

                                 

Core Laundry Operations

  $ 84,855   $ 62,431   $ 22,424     35.9

%

Specialty Garments

    5,979     9,142     (3,163

)

    -34.6

First Aid

    2,014     1,617     397     24.6

Consolidated total

  $ 92,848   $ 73,190   $ 19,658     26.9

%

 

(1) Unaudited

 

 
 

 

  

UniFirst Corporation and Subsidiaries

Consolidated Statements of Cash Flows

 

Twenty-six weeks ended

(In thousands)

February 23,

2013 (1)

February 25,

2012 (1)

Cash flows from operating activities:

                 

Net income

  $ 57,402   $ 44,998

Adjustments to reconcile net income to cash provided by operating activities:

                 

Depreciation

    29,000     27,550

Amortization of intangible assets

    4,950     5,347

Amortization of deferred financing costs

    119     119

Share-based compensation

    3,697     3,701

Accretion on environmental contingencies

    271     316

Accretion on asset retirement obligations

    331     316

Deferred income taxes

    77     362

Changes in assets and liabilities, net of acquisitions:

                 

Receivables

    (11,194

)

    (11,698

)

Inventories

    1,108     (1,348

)

Rental merchandise in service

    8,461     (10,246

)

Prepaid expenses

    (2,402

)

    (3,169

)

Accounts payable

    (3,236

)

    (1,699

)

Accrued liabilities

    6,414     1,891

Prepaid and accrued income taxes

    (2,480

)

    4,006

Net cash provided by operating activities

    92,518     60,446
                   

Cash flows from investing activities:

                 

Acquisition of businesses

    (1,550

)

   

Capital expenditures

    (50,756

)

    (34,275

)

Other

    (72

)

    (464

)

Net cash used in investing activities

    (52,378

)

    (34,739

)

                   

Cash flows from financing activities:

                 

Proceeds from loans payable and long-term debt

    4,054     38,910

Payments on loans payable and long-term debt

    (14

)

    (54,325

)

Proceeds from exercise of Common Stock options

    2,140     1,914

Payment of cash dividends

    (1,424

)

    (1,418

)

Net cash provided by (used in) financing activities

    4,756     (14,919

)

                   

Effect of exchange rate changes

    (1,740

)

    (254

)

                   

Net increase in cash and cash equivalents

    43,156     10,534

Cash and cash equivalents at beginning of period

    120,123     48,812
                   

Cash and cash equivalents at end of period

  $ 163,279   $ 59,346

 

(1) Unaudited