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Exhibit 99

 

 

   

  January 8, 2014

  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 FINANCIAL RESULTS FOR THE FIRST QUARTER OF FISCAL 2014

 

 

 

Wilmington, MA (January 8, 2014) -- UniFirst Corporation (NYSE: UNF) today announced results for its fiscal 2014 first quarter, which ended November 30, 2013. First quarter revenues were $346.7 million, up 4.3% from $332.6 million in the year ago period. Net income of $34.5 million ($1.71 per diluted share), was 12.0% ahead of the $30.8 million ($1.54 per diluted share) reported in the year ago period.

 

Ronald D. Croatti, UniFirst President and Chief Executive Officer said, “We are very pleased with the results for our first quarter. During the quarter, we experienced positive trends in sales representative productivity and customer retention as well as a slight uptick in the wearer levels at our customers.”

 

Revenues in the Core Laundry Operations were $312.0 million, up 5.9% from those reported in the prior year’s first quarter. Excluding the effect of acquisitions and a weaker Canadian dollar, revenues grew 5.1%. This segment’s income from operations increased 17.6% compared to the first quarter of fiscal 2013, while the operating margin expanded to 16.8% from 15.1%. Merchandise amortization, energy and bad debt expense for the Core Laundry Operations were all lower as a percentage of revenues compared to the prior year. Selling payroll and certain other payroll-related costs were also lower than in the prior year as a percentage of revenues.

 

Revenues for the Specialty Garments’ segment, which consists of nuclear decontamination and cleanroom operations, were $24.4 million, down 12.3% from $27.9 million in the first quarter of fiscal 2013. This decrease was primarily the result of less power reactor business in the U.S. and Canada compared to a year ago. As a result of the revenue decline, this segment’s income from operations for the quarter fell to $2.8 million from $4.7 million in the comparable period in fiscal 2013.

 

UniFirst continues to maintain a solid balance sheet and financial position. Cash provided by operating activities for the quarter was $68.6 million, up 22.2% compared to $56.2 million for the first quarter of fiscal 2013. The improved cash flows were primarily the result of higher earnings as well as the timing of income tax payments compared to the prior year. Cash and cash equivalents at the end of the quarter totaled $141.8 million, down from $197.5 million at the end of fiscal 2013. This decrease was due to the Company’s repayment of $100.0 million in private placement notes that came due in September 2013.

  

 
 

 

 

Outlook

Mr. Croatti continued, “In October, we told investors that we expected fiscal 2014 revenues to be between $1.372 billion and $1.385 billion and full year EPS to be between $5.60 and $5.85. As a reminder, fiscal 2014 will be a 52 week year for the Company compared to fiscal 2013 which was a 53 week year. Based on the first quarter performance, we now anticipate our full year results will be at the higher end of these ranges.”

 

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 11,500 Team Partners who serve more than 250,000 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 turbulent 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, interruptions or failures of our information technology systems, including as a result of cyber-attacks, 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 31, 2013 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

 
(In thousands, except per share data)   

November 30,

2013 (2)

   

November 24,

2012 (2)

 
                 

Revenues

  $ 346,704     $ 332,569  
                 

Operating expenses:

               

Cost of revenues (1)

    208,137       201,551  

Selling and administrative expenses (1)

    65,629       64,288  

Depreciation and amortization

    17,298       16,771  

Total operating expenses

    291,064       282,610  
                 

Income from operations

    55,640       49,959  
                 

Other (income) expense:

               

Interest expense

    208       460  

Interest income

    (765

)

    (767

)

Exchange rate (gain) loss

    (159

)

    (160

)

Total other (income) expense

    (716

)

    (467

)

                 

Income before income taxes

    56,356       50,426  

Provision for income taxes

    21,894       19,666  
                 

Net income

  $ 34,462     $ 30,760  
                 

Income per share – Basic

               

Common Stock

  $ 1.81     $ 1.62  

Class B Common Stock

  $ 1.45     $ 1.30  
                 

Income per share – Diluted

               

Common Stock

  $ 1.71     $ 1.54  
                 

Income allocated to – Basic

               

Common Stock

  $ 27,208     $ 24,191  

Class B Common Stock

  $ 6,798     $ 6,025  
                 

Income allocated to – Diluted

               

Common Stock

  $ 34,031     $ 30,244  
                 

Weighted average number of shares outstanding – Basic

               

Common Stock

    15,029       14,925  

Class B Common Stock

    4,693       4,647  
                 

Weighted average number of shares outstanding – Diluted

               

Common Stock

    19,891       19,693  

 

(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) 

 

November 30,

2013 (1)

   

August 31,

2013

 

Assets

               

Current assets:

               

Cash and cash equivalents

  $ 141,825     $ 197,479  

Receivables, net

    155,283       142,217  

Inventories

    66,038       74,351  

Rental merchandise in service

    138,967       132,630  

Prepaid and deferred income taxes

          7,099  

Prepaid expenses

    9,734       7,618  
                 

Total current assets

    511,847       561,394  
                 

Property, plant and equipment:

               

Land, buildings and leasehold improvements

    385,031       376,222  

Machinery and equipment

    485,034       474,402  

Motor vehicles

    153,610       153,219  
                 
      1,023,675       1,003,843  

Less - accumulated depreciation

    557,668       546,157  
      466,007       457,686  
                 

Goodwill

    302,668       302,363  

Customer contracts and other intangible assets, net

    47,013       49,344  

Deferred income taxes

    1,417       1,417  

Other assets

    2,325       2,658  
                 
    $ 1,331,277     $ 1,374,862  
                 

Liabilities and shareholders' equity

               

Current liabilities:

               

Loans payable and current maturities of long-term debt

  $ 10,481     $ 111,253  

Accounts payable

    60,771       54,221  

Accrued liabilities

    87,520       86,994  

Accrued and deferred income taxes

    25,023       12,506  
                 

Total current liabilities

    183,795       264,974  
                 

Long-term liabilities:

               

Long-term debt, net of current maturities

    155       155  

Accrued liabilities

    45,758       45,037  

Accrued and deferred income taxes

    52,293       51,298  
                 

Total long-term liabilities

    98,206       96,490  
                 

Shareholders' equity:

               

Common Stock

    1,516       1,513  

Class B Common Stock

    487       487  

Capital surplus

    53,780       51,445  

Retained earnings

    992,256       958,508  

Accumulated other comprehensive income

    1,237       1,445  
                 

Total shareholders' equity

    1,049,276       1,013,398  
                 
    $ 1,331,277     $ 1,374,862  

  

(1) Unaudited

 

 
 

 

 

UniFirst Corporation and Subsidiaries

Detail of Operating Results

 

Revenues

 

   

Thirteen weeks ended

                 

(In thousands, except percentages)

 

November 30,

2013 (1)

   

November 24,

2012 (1)

   

Dollar

Change

   

Percent

Change

 
                                 

Core Laundry Operations

  $ 312,006     $ 294,560     $ 17,446       5.9

%

Specialty Garments

    24,443       27,884       (3,441

)

    -12.3  

First Aid

    10,255       10,125       130       1.3  

Consolidated total

  $ 346,704     $ 332,569     $ 14,135       4.3

%

 

 

Income from Operations

 

   

Thirteen weeks ended

                 

(In thousands, except percentages)

 

November 30,

2013 (1)

   

November 24,

2012 (1)

   

Dollar

Change

   

Percent

Change

 
                                 

Core Laundry Operations

  $ 52,372     $ 44,528     $ 7,844       17.6

%

Specialty Garments

    2,759       4,704       (1,945

)

    -41.3  

First Aid

    509       727       (218

)

    -30.0  

Consolidated total

  $ 55,640     $ 49,959     $ 5,681       11.4

%

 

 

(1) Unaudited

 

 

 
 

 

  

UniFirst Corporation and Subsidiaries

Consolidated Statements of Cash Flows

 

Thirteen weeks ended

(In thousands)

 

November 30,

2013 (1)

   

November 24,

2012 (1)

 

Cash flows from operating activities:

               

Net income

  $ 34,462     $ 30,760  

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

               

Depreciation

    14,850       14,305  

Amortization of intangible assets

    2,448       2,466  

Amortization of deferred financing costs

    52       59  

Share-based compensation

    1,483       1,705  

Accretion on environmental contingencies

    179       136  

Accretion on asset retirement obligations

    181       166  

Deferred income taxes

    (195

)

    (18

)

Changes in assets and liabilities, net of acquisitions:

               

Receivables

    (12,978

)

    (18,457

)

Inventories

    8,490       221  

Rental merchandise in service

    (6,409

)

    2,102  

Prepaid expenses

    (2,114

)

    (2,867

)

Accounts payable

    6,532       11,183  

Accrued liabilities

    875       2,373  

Prepaid and accrued income taxes

    20,786       12,033  

Net cash provided by operating activities

    68,642       56,167  
                 

Cash flows from investing activities:

               

Acquisition of businesses

    (495

)

     

Capital expenditures

    (22,796

)

    (25,103

)

Other

    297       (318

)

Net cash used in investing activities

    (22,994

)

    (25,421

)

                 

Cash flows from financing activities:

               

Proceeds from loans payable and long-term debt

    2,935       2,662  

Payments on loans payable and long-term debt

    (103,953

)

    (708

)

Proceeds from exercise of Common Stock options

    854       757  

Payment of cash dividends

    (714

)

    (713

)

Net cash (used in) provided by financing activities

    (100,878

)

    1,998  
                 

Effect of exchange rate changes

    (424

)

    (203

)

                 

Net (decrease) increase in cash and cash equivalents

    (55,654

)

    32,541  

Cash and cash equivalents at beginning of period

    197,479       120,123  
                 

Cash and cash equivalents at end of period

  $ 141,825     $ 152,664  

 

(1) Unaudited