Attached files

file filename
8-K - FORM 8-K - UNIFIRST CORPunf20131022_8k.htm

Exhibit 99

  

 

 

 

 

For Immediate Release

 

UniFirst Corporation

 

68 Jonspin Road

 

Wilmington, MA 01887

 

Phone: 978- 658-8888

October 23, 2013

Fax: 978-988-0659

CONTACT: Steven S. Sintros, Vice President & CFO

Email: ssintros@UniFirst.com

 

UNIFIRST ANNOUNCES FISCAL 2013 FOURTH QUARTER AND FULL YEAR RESULTS

 

Wilmington, MA (October 23, 2013) -- UniFirst Corporation (NYSE: UNF) today announced results for its fourth fiscal quarter ended August 31, 2013. Revenues were $352.9 million, up 13.0% from $312.4 million in the year ago period. Net income was $30.6 million ($1.52 per diluted share), compared to $22.5 million ($1.13 per diluted share) reported in the year ago period.

 

The fourth quarter as well as the full fiscal year included an extra week of operations compared to fiscal 2012 as fiscal 2013 was a 53 week year for the Company. The extra week in fiscal 2013 accounted for revenue growth of approximately 8.1% and 2.0% compared to the fourth quarter and full year of fiscal 2012, respectively.

 

Full year revenues were $1.356 billion, up 7.9% from $1.256 billion in fiscal 2012. Net income per diluted share for the full year was $5.81 compared to $4.76 in the same period a year ago. Full year results in fiscal 2012 included an environmental litigation settlement which resulted in a $6.7 million pre-tax gain in the third quarter of fiscal 2012. The gain was recorded as a reduction of selling and administrative expenses. Diluted earnings per share for fiscal 2012 adjusted to eliminate the effect of the gain were $4.55. Fiscal 2013 diluted earnings per share increased 27.7% compared to the adjusted earnings from a year ago.

 

Ronald D. Croatti, UniFirst President and Chief Executive Officer said, “We are very pleased with our results for the quarter and the full fiscal year which saw the company once again reach new heights for revenues and profits. Our success continues to be the result of the teamwork and execution by our thousands of employees who provide what we believe are industry leading products and service.”

 

Fourth quarter revenues in the Core Laundry Operations were $320.4 million, up 13.8% from those reported in the prior year’s fourth quarter. Excluding the impact of the extra week of operations, acquisitions and a slightly weaker Canadian dollar, revenues grew 5.3%. Operating margin in the Core Laundry Operations for the quarter was 14.2% compared to 12.3% a year ago. This increase in the quarterly operating margin was primarily the result of lower merchandise amortization, plant labor and bad debt expense as a percentage of revenues compared to the prior year. These favorable comparisons were partially offset by higher health care claims and other payroll related costs as a percentage of revenues.

 

Both the fourth quarter of fiscal 2013 and fiscal 2012 also benefited from reductions in reserves for worker’s compensation and other insurance related liabilities of approximately $2.3 million and $1.9 million, respectively, based on changes in third-party actuarial estimates.

  

 
 

 

 

Revenues for the Specialty Garments segment, which consists of nuclear decontamination and cleanroom operations, were $19.9 million, up slightly from $19.7 million in the fourth quarter of fiscal 2012. This segment had income from operations for the quarter of $1.0 million, compared to a loss from operations of $0.7 million in the same quarter a year ago. This improvement in profitability was primarily the result of several non-recurring expense items in the fourth quarter of fiscal 2012.

 

The effective income tax rate was 36.5% for both the fourth quarter of fiscal 2013 and fiscal 2012.

 

UniFirst continues to maintain a solid balance sheet and financial position. Cash and cash equivalents at year end totaled $197.5 million, up from $120.1 million at the end of fiscal 2012. Cash provided by operating activities for fiscal 2013 was $211.6 million, up 30.8% compared to $161.7 million for fiscal 2012. The improved cash flows were primarily the result of higher earnings as well as lower cash outflows related to merchandise in service investments. In addition, the Company’s cash position also benefited from a change in tax regulations impacting the timing of deductions allowable for certain merchandise in service. Subsequent to the fiscal year end, the Company used cash on hand to pay down $100 million in private placement notes that came due during September.

 

Outlook 

Mr. Croatti continued, “As we look towards fiscal 2014, we continue to experience economic uncertainty as well as prospective customers that are hesitant to make new buying decisions. Based on the current environment, we expect 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. This guidance assumes a further decline in our Specialty Garments’ revenues and operating income of 9% and 15%, respectively, as well as no deterioration in the U.S. economy.”

 

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 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 

 

   

Fourteen

   

Thirteen

   

Fifty-three

   

Fifty-two

 
   

weeks ended

   

weeks ended

   

weeks ended

   

weeks ended

 
   

August 31,

   

August 25,

   

August 31,

   

August 25,

 

(In thousands, except per share data)

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

Revenues

  $ 352,876     $ 312,374     $ 1,355,515     $ 1,256,289  
                                 

Operating expenses:

                               

Cost of revenues (1)

    218,136       198,935       836,174       797,944  

Selling and administrative expenses (1)

    68,640       61,369       263,531       240,798  

Depreciation and amortization

    18,542       16,824       69,607       66,439  

Total operating expenses

    305,318       277,128       1,169,312       1,105,181  
                                 

Income from operations

    47,558       35,246       186,203       151,108  
                                 

Other (income) expense:

                               

Interest expense

    327       493       1,651       2,132  

Interest income

    (729

)

    (702

)

    (3,201

)

    (2,738

)

Exchange rate (gain) loss

    (177

)

    (48

)

    144       980  
      (579

)

    (257

)

    (1,406

)

    374  
                                 

Income before income taxes

    48,137       35,503       187,609       150,734  

Provision for income taxes

    17,576       12,971       70,924       55,745  
                                 

Net income

  $ 30,561     $ 22,532     $ 116,685     $ 94,989  
                                 

Income per share – Basic

                               

Common Stock

  $ 1.61     $ 1.19     $ 6.14     $ 5.02  

Class B Common Stock

  $ 1.29     $ 0.95     $ 4.91     $ 4.01  
                                 

Income per share – Diluted

                               

Common Stock

  $ 1.52     $ 1.13     $ 5.81     $ 4.76  
                                 

Income allocated to – Basic

                               

Common Stock

  $ 24,123     $ 17,717     $ 91,916     $ 74,643  

Class B Common Stock

  $ 6,033     $ 4,416     $ 22,913     $ 18,630  
                                 

Income allocated to – Diluted

                               

Common Stock

  $ 30,178     $ 22,153     $ 114,927     $ 93,358  
                                 

Weighted average number of shares outstanding – Basic

                               

Common Stock

    15,017       14,912       14,975       14,882  

Class B Common Stock

    4,694       4,647       4,666       4,643  
                                 

Weighted average number of shares outstanding – Diluted

                               

Common Stock

    19,882       19,664       19,789       19,616  

 

(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)

 

August 31,

2013 (1)

   

August 25,

2012

 

Assets

               

Current assets:

               

Cash and cash equivalents

  $ 197,479     $ 120,123  

Receivables, net

    142,217       135,327  

Inventories

    74,351       75,420  

Rental merchandise in service

    132,630       138,284  

Prepaid and deferred income taxes

    7,079       12,785  

Prepaid expenses

    7,618       5,741  
                 

Total current assets

    561,374       487,680  
                 

Property, plant and equipment:

               

Land, buildings and leasehold improvements

    376,222       355,568  

Machinery and equipment

    474,402       425,274  

Motor vehicles

    153,219       141,370  
                 
      1,003,843       922,212  

Less - accumulated depreciation

    546,157       510,008  
      457,686       412,204  
                 

Goodwill

    302,363       288,137  

Customer contracts and other intangible assets, net

    49,344       50,531  

Other assets

    2,658       1,982  
                 
    $ 1,373,425     $ 1,240,534  
                 

Liabilities and shareholders' equity

               

Current liabilities:

               

Loans payable and current maturities of long-term debt

  $ 111,253     $ 6,831  

Accounts payable

    54,221       52,340  

Accrued liabilities

    86,994       78,174  

Accrued and deferred income taxes

    6,421       8,180  
                 

Total current liabilities

    258,889       145,525  
                 

Long-term liabilities:

               

Long-term debt, net of current maturities

    155       100,155  

Accrued liabilities

    45,037       43,420  

Accrued and deferred income taxes

    55,946       54,509  
                 

Total long-term liabilities

    101,138       198,084  
                 

Shareholders' equity:

               

Common Stock

    1,513       1,506  

Class B Common Stock

    487       488  

Capital surplus

    51,445       42,984  

Retained earnings

    958,508       844,676  

Accumulated other comprehensive income

    1,445       7,271  
                 

Total shareholders' equity

    1,013,398       896,925  
                 
    $ 1,373,425     $ 1,240,534  

 

 

(1) Unaudited

 

 
 

 

 

UniFirst Corporation and Subsidiaries 

Detail of Operating Results 

 

Revenues 

 

   

Fourteen

   

Thirteen

                 
   

weeks ended

   

weeks ended

                 
   

August 31,

   

August 25,

   

Dollar

   

Percent

 

(In thousands, except percentages)

  2013 (1)     2012 (1)    

Change

   

Change

 
                                 

Core Laundry Operations

  $ 320,447     $ 281,662     $ 38,785       13.8

%

Specialty Garments

    19,884       19,726       158       0.8  

First Aid

    12,545       10,986       1,559       14.2  

Consolidated total

  $ 352,876     $ 312,374     $ 40,502       13.0

%

 

   

Fifty-three

   

Fifty-two

                 
   

weeks ended

   

weeks ended

                 
   

August 31,

   

August 25,

   

Dollar

   

Percent

 

(In thousands, except percentages)

  2013 (1)     2012    

Change

   

Change

 
                                 

Core Laundry Operations

  $ 1,214,365     $ 1,112,323     $ 102,042       9.2

%

Specialty Garments

    96,688       102,758       (6,070

)

    -5.9  

First Aid

    44,462       41,208       3,254       7.9  

Consolidated total

  $ 1,355,515     $ 1,256,289     $ 99,226       7.9

%

 

 

Income from Operations 

 

   

Fourteen

   

Thirteen

                 
   

weeks ended

   

weeks ended

                 
   

August 31,

   

August 25,

   

Dollar

   

Percent

 

(In thousands, except percentages)

  2013 (1)     2012 (1)    

Change

   

Change

 
                                 

Core Laundry Operations

  $ 45,451     $ 34,579     $ 10,872       31.4

%

Specialty Garments

    984       (715

)

    1,699       237.6  

First Aid

    1,123       1,382       (259

)

    -18.7  

Consolidated total

  $ 47,558     $ 35,246     $ 12,312       34.9

%

 

   

Fifty-three

   

Fifty-two

                 
   

weeks ended

   

weeks ended

                 
   

August 31,

   

August 25,

   

Dollar

   

Percent

 

(In thousands, except percentages)

  2013 (1)     2012    

Change

   

Change

 
                                 

Core Laundry Operations

  $ 170,662     $ 133,285     $ 37,377       28.0

%

Specialty Garments

    10,539       13,460       (2,921

)

    -21.7  

First Aid

    5,002       4,363       639       14.6  

Consolidated total

  $ 186,203     $ 151,108     $ 35,095       23.2

%

 

(1) Unaudited

  

 
 

 

  

UniFirst Corporation and Subsidiaries 

Consolidated Statements of Cash Flows 

 

   

Fifty-three

   

Fifty-two

 
   

weeks ended

   

weeks ended

 

(In thousands)

 

August 31,

2013 (1)

   

August 25,

2012

 

Cash flows from operating activities:

               

Net income

  $ 116,685     $ 94,989  

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

               

Depreciation

    59,810       55,877  

Amortization of intangible assets

    9,797       10,562  

Amortization of deferred financing costs

    238       238  

Share-based compensation

    6,315       6,714  

Accretion on environmental contingencies

    542       631  

Accretion on asset retirement obligations

    676       632  

Deferred income taxes

    20,666       (330

)

Changes in assets and liabilities, net of acquisitions:

               

Receivables

    (6,666

)

    (7,595

)

Inventories

    1,146       590  

Rental merchandise in service

    7,079       (12,017

)

Prepaid expenses

    (939

)

    (1,763

)

Accounts payable

    2,130       (3,688

)

Accrued liabilities

    9,452       5,518  

Prepaid and accrued income taxes

    (15,360

)

    11,360  

Net cash provided by operating activities

    211,571       161,718  
                 

Cash flows from investing activities:

               

Acquisition of businesses

    (30,714

)

     

Capital expenditures

    (103,526

)

    (74,549

)

Other

    54       (508

)

Net cash used in investing activities

    (134,186

)

    (75,057

)

                 

Cash flows from financing activities:

               

Proceeds from loans payable and long-term obligations

    4,533       40,410  

Payments on loans payable and long-term obligations

    (24

)

    (55,851

)

Proceeds from exercise of Common Stock options, including excess tax benefits

    5,488       2,410  

Taxes withheld and paid related to net share settlement of equity awards

    (3,332

)

     

Payment of cash dividends

    (2,851

)

    (2,840

)

Net cash provided by (used in) financing activities

    3,814       (15,871

)

                 

Effect of exchange rate changes

    (3,843

)

    521  
                 

Net increase in cash and cash equivalents

    77,356       71,311  

Cash and cash equivalents at beginning of period

    120,123       48,812  
                 

Cash and cash equivalents at end of period

  $ 197,479     $ 120,123  

 

(1) Unaudited