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8-K - FORM 8-K - UNIFIRST CORPunf20150106_8k.htm

Exhibit 99

 

   
   
 

For Immediate Release

 

UniFirst Corporation

 

68 Jonspin Road

 

Wilmington, MA 01887

 

Phone: 978- 658-8888

January 7, 2015

Fax: 978-988-0659

CONTACT: Steven S. Sintros, Senior Vice President & CFO

Email: ssintros@UniFirst.com

  

 

UNIFIRST ANNOUNCES FINANCIAL RESULTS FOR THE FIRST QUARTER OF FISCAL 2015

 

Wilmington, MA (January 7, 2015) -- UniFirst Corporation (NYSE: UNF) today announced results for its fiscal 2015 first quarter, which ended November 29, 2014. Revenues were $370.4 million, up 6.8% from $346.7 million in the year ago period. Net income of $37.4 million ($1.85 per diluted share), was 8.6% ahead of the $34.5 million ($1.71 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.  Our ongoing commitment to customer service and our goal of creating ‘Customers for Life’ has, and will continue to be, an integral part of achieving profitable growth.”

 

Revenues in the Core Laundry Operations were $335.8 million, up 7.6% from those reported in the prior year’s first quarter. Excluding the effect of acquisitions and a weaker Canadian dollar, revenues grew 7.8%. This segment’s income from operations increased 8.6% compared to the first quarter of fiscal 2014, while the operating margin expanded slightly to 16.9% from 16.8%. Costs of revenues for the Core Laundry Operations were lower as a percentage of revenues compared to the prior year primarily due to reductions in payroll, energy and merchandise amortization. These benefits were partially offset by higher legal costs as well as costs related to the update of our IT systems.

 

Revenues for the Specialty Garments segment, which consists of nuclear decontamination and cleanroom operations, were $22.5 million, down 8.0% from $24.4 million in the first quarter of fiscal 2014. This decrease was primarily the result of reduced power reactor business in North America compared to a year ago. As a result of the revenue decline, this segment’s income from operations for the quarter fell to $2.3 million from $2.8 million in the comparable period in fiscal 2014. This decline was offset by a strong performance from our First Aid segment which grew its revenues 17.4% from the prior year first quarter and generated $1.4 million in operating income compared to $0.5 million a year ago.

 

UniFirst continues to maintain a solid balance sheet with no long term debt and increasing cash balances. Cash and cash equivalents at the end of the quarter totaled $213.0 million, up from $191.8 million three month earlier.

 

Outlook

Mr. Croatti continued, “The fiscal year is off to a strong start. We continue to believe that our full year fiscal 2015 revenues will be between $1.450 billion and $1.470 billion and that full year diluted EPS will be between $5.75 and $6.00 per share as communicated in October. We are cautious in our outlook as a result of our significant presence in energy producing regions in the U.S. and Canada. We believe that if oil prices remain depressed, our operating results will be negatively impacted.”

 

 
 

 

 

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

Headquartered in Wilmington, Mass., UniFirst Corporation is a North American leader in the supply and servicing of uniform and workwear programs, as well as the delivery of facility service programs. Together with its subsidiaries, the company also provides first aid and safety products, and manages specialized garment programs for the cleanroom and nuclear industries. UniFirst manufactures its own branded workwear, protective clothing, and floorcare products, and with over 225 service locations, 260,000 customer locations, and approximately 12,000 employee Team Partners. 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. For more information visit www.unifirst.com.

 

Forward Looking Statements

This public announcement contains forward looking statements that reflect the Company’s current views with respect to future events and financial performance, including projected revenues and earnings per share. 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, including suits relating to the New England Compounding Center matter, 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, including the ultimate impact of the Affordable Care Act, 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 30, 2014 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

 
   

November 29,

   

November 30,

 

(In thousands, except per share data)

 

2014 (2)

   

2013 (2)

 
                 

Revenues

  $ 370,361     $ 346,704  
                 

Operating expenses:

               

Cost of revenues (1)

    219,353       208,137  

Selling and administrative expenses (1)

    72,382       65,629  

Depreciation and amortization

    18,037       17,298  

Total operating expenses

    309,772       291,064  
                 

Income from operations

    60,589       55,640  
                 

Other (income) expense:

               

Interest expense

    188       208  

Interest income

    (804

)

    (765

)

Exchange rate (gain) loss

    371       (159

)

Total other (income) expense

    (245

)

    (716

)

                 

Income before income taxes

    60,834       56,356  

Provision for income taxes

    23,421       21,894  
                 

Net income

  $ 37,413     $ 34,462  
                 

Income per share – Basic

               

Common Stock

  $ 1.96     $ 1.81  

Class B Common Stock

  $ 1.57     $ 1.45  
                 

Income per share – Diluted

               

Common Stock

  $ 1.85     $ 1.71  
                 

Income allocated to – Basic

               

Common Stock

  $ 29,649     $ 27,208  

Class B Common Stock

  $ 7,434     $ 6,798  
                 

Income allocated to – Diluted

               

Common Stock

  $ 37,101     $ 34,031  
                 

Weighted average number of shares outstanding – Basic

               

Common Stock

    15,128       15,029  

Class B Common Stock

    4,741       4,693  
                 

Weighted average number of shares outstanding – Diluted

               

Common Stock

    20,008       19,891  

 

(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 29,

2014 (1)

   

August 30,

2014

 

Assets

               

Current assets:

               

Cash and cash equivalents

  $ 212,974     $ 191,769  

Receivables, net

    168,161       152,523  

Inventories

    77,963       78,858  

Rental merchandise in service

    148,267       146,449  

Prepaid and deferred income taxes

          13,342  

Prepaid expenses

    13,067       6,349  
                 

Total current assets

    620,432       589,290  
                 

Property, plant and equipment:

               

Land, buildings and leasehold improvements

    395,459       393,584  

Machinery and equipment

    520,447       512,842  

Motor vehicles

    165,506       166,573  
                 
      1,081,412       1,072,999  

Less - accumulated depreciation

    595,583       586,717  
      485,829       486,282  
                 

Goodwill

    309,578       303,648  

Customer contracts and other intangible assets, net

    42,323       41,477  

Deferred income taxes

    1,334       1,403  

Other assets

    2,310       2,061  
                 
    $ 1,461,806     $ 1,424,161  
                 

Liabilities and shareholders' equity

               

Current liabilities:

               

Loans payable and current maturities of long-term debt

  $ 6,138     $ 7,704  

Accounts payable

    59,548       59,177  

Accrued liabilities

    96,572       100,818  

Accrued and deferred income taxes

    31,440       23,342  
                 

Total current liabilities

    193,698       191,041  
                 

Long-term liabilities:

               

Long-term debt, net of current maturities

          155  

Accrued liabilities

    53,654       50,235  

Accrued and deferred income taxes

    47,487       48,271  
                 

Total long-term liabilities

    101,141       98,661  
                 

Shareholders' equity:

               

Common Stock

    1,524       1,519  

Class B Common Stock

    486       486  

Capital surplus

    62,811       59,415  

Retained earnings

    1,112,268       1,075,572  

Accumulated other comprehensive income

    (10,122

)

    (2,533

)

                 

Total shareholders' equity

    1,166,967       1,134,459  
                 
    $ 1,461,806     $ 1,424,161  

 

(1)

Unaudited

 

 
 

 

 

UniFirst Corporation and Subsidiaries

Detail of Operating Results

 

Revenues

 

   

Thirteen weeks ended

                 
   

November 29,

   

November 30,

   

Dollar

   

Percent

 

(In thousands, except percentages)

 

2014 (1)

   

2013 (1)

   

Change

   

Change

 
                                 

Core Laundry Operations

  $ 335,847     $ 312,006     $ 23,841       7.6

%

Specialty Garments

    22,476       24,443       (1,967

)

    -8.0  

First Aid

    12,038       10,255       1,783       17.4  

Consolidated total

  $ 370,361     $ 346,704     $ 23,657       6.8

%

 

 

Income from Operations

 

   

Thirteen weeks ended

                 
   

November 29,

   

November 30,

   

Dollar

   

Percent

 

(In thousands, except percentages)

 

2014 (1)

   

2013 (1)

   

Change

   

Change

 
                                 

Core Laundry Operations

  $ 56,873     $ 52,372     $ 4,501       8.6

%

Specialty Garments

    2,268       2,759       (491

)

    -17.8  

First Aid

    1,448       509       939       184.6  

Consolidated total

  $ 60,589     $ 55,640     $ 4,949       8.9

%

 

 

(1)

Unaudited

 

 
 

 

 

UniFirst Corporation and Subsidiaries

Consolidated Statements of Cash Flows

 

Thirteen weeks ended

(In thousands)

 

November 29,

2014 (1)

   

November 30,

2013 (1)

 

Cash flows from operating activities:

               

Net income

  $ 37,413     $ 34,462  

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

               

Depreciation

    15,865       14,850  

Amortization of intangible assets

    2,172       2,448  

Amortization of deferred financing costs

    52       52  

Share-based compensation

    1,615       1,483  

Accretion on environmental contingencies

    151       179  

Accretion on asset retirement obligations

    194       181  

Deferred income taxes

    21       (195

)

Changes in assets and liabilities, net of acquisitions:

               

Receivables

    (16,039

)

    (12,951

)

Inventories

    645       8,490  

Rental merchandise in service

    (1,744

)

    (6,409

)

Prepaid expenses

    (6,847

)

    (2,141

)

Accounts payable

    559       9,490  

Accrued liabilities

    (2,796

)

    (2,083

)

Prepaid and accrued income taxes

    21,587       20,786  

Net cash provided by operating activities

    52,848       68,642  
                 

Cash flows from investing activities:

               

Acquisition of businesses

    (10,846

)

    (495

)

Capital expenditures

    (17,453

)

    (22,796

)

Other

    100       297  

Net cash used in investing activities

    (28,199

)

    (22,994

)

                 

Cash flows from financing activities:

               

Proceeds from loans payable and long-term debt

    2,008       2,935  

Payments on loans payable and long-term debt

    (3,508

)

    (103,953

)

Proceeds from exercise of Common Stock options

    1,750       854  

Payment of cash dividends

    (715

)

    (714

)

Net cash used in financing activities

    (465

)

    (100,878

)

                 

Effect of exchange rate changes

    (2,979

)

    (424

)

                 

Net increase (decrease) in cash and cash equivalents

    21,205       (55,654

)

Cash and cash equivalents at beginning of period

    191,769       197,479  
                 

Cash and cash equivalents at end of period

  $ 212,974     $ 141,825  

 

(1)

Unaudited