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Exhibit 99

 

 

 

October 21, 2015

CONTACT: Steven S. Sintros, Senior 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 FOURTH QUARTER AND FULL YEAR OF FISCAL 2015

 

Wilmington, MA (October 21, 2015) -- UniFirst Corporation (NYSE: UNF) today announced results for its fourth quarter and full year ended August 29, 2015. Revenues for the quarter were $359.2 million, up 2.1% from $352.0 million in the year ago period. Net income was $28.9 million ($1.43 per diluted share) unchanged from the fourth quarter of fiscal 2014. The comparison of net income in the quarter was impacted by a lower effective income tax rate of 37.4% compared to 39.4% in the prior year. For the full year, revenues were $1.457 billion, up 4.4% from fiscal 2014. Net income was $124.3 million ($6.15 per diluted share) up 3.6% from $119.9 million ($5.95 per diluted share) reported in the prior year.

 

Ronald D. Croatti, UniFirst President and Chief Executive Office said, “In our fourth quarter, growth continued to be limited by macroeconomic factors including headcount reductions at many of our energy related customers as well as weaker foreign currency exchange rates adversely affecting our Canadian and European operations. Although we are pleased with our overall results for fiscal 2015, we expect these factors to challenge our top and bottom line results throughout fiscal 2016.”

 

Revenues in the fourth quarter for our Core Laundry Operations were $326.6 million, up 1.8% from those reported in the prior year’s fourth quarter. Adjusting for the effects of acquisitions and a weaker Canadian dollar, revenue grew 2.2%. This segment’s income from operations decreased 6.7% compared to the fourth quarter of fiscal 2014, while the operating margin decreased to 13.1% from 14.3% a year ago. The margin decline reflects higher merchandise costs, selling and administrative expenses and depreciation as a percentage of revenues. These items were partially offset by lower energy, payroll related and legal expenses during the quarter compared to a year ago.

 

Revenues for the Specialty Garments segment, which consists of nuclear decontamination and cleanroom operations, were $20.5 million, up 7.9% from $19.0 million in the fourth quarter of fiscal 2014. Due in part to the improved revenue performance, this segment’s income from operations increased to $1.5 million in the current quarter from $0.1 million in last year’s comparable quarter.

 

UniFirst continues to maintain a solid balance sheet with no long-term debt and increasing cash balances. Net cash provided by operating activities during fiscal 2015 was $226.9 million, up 16.6% from fiscal 2014 and cash and cash equivalents at the end of the fiscal year totaled $276.6 million, up from $191.8 million at the end of fiscal 2014.

 

Outlook

Mr. Croatti continued, “We believe that full year fiscal 2016 revenues will be between $1.460 billion and $1.480 billion. We also believe that full year diluted EPS will be between $5.60 and $5.80. This guidance assumes no significant further deterioration in our wearer base as a result of additional layoffs in energy dependent markets that we service.”

 

 
 

 

  

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, 275,000 customer locations, and 12,000 employee Team Partners, the company outfits more than 1.5 million workers each business day. 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, 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

August 29,

   

Thirteen

weeks ended

August 30,

   

Fifty-two

weeks ended

August 29,

   

Fifty-two

weeks ended

August 30,

 

(In thousands, except per share data)

  2015 (2)     2014 (2)     2015 (2)     2014  
                                 

Revenues

  $ 359,208     $ 351,988     $ 1,456,605     $ 1,394,897  
                                 

Operating expenses:

                               

Cost of revenues (1)

    219,442       217,965       884,664       858,306  

Selling and administrative expenses (1)

    72,612       68,086       294,444       271,564  

Depreciation and amortization

    21,262       18,515       77,113       71,752  

Total operating expenses

    313,316       304,566       1,256,221       1,201,622  
                                 

Income from operations

    45,892       47,422       200,384       193,275  
                                 

Other (income) expense:

                               

Interest expense

    225       239       873       772  

Interest income

    (778

)

    (716

)

    (3,310

)

    (3,131

)

Foreign exchange loss

    230       242       1,553       283  

Total other (income) expense

    (323

)

    (235

)

    (884

)

    (2,076

)

                                 

Income before income taxes

    46,215       47,657       201,268       195,351  

Provision for income taxes

    17,274       18,785       76,969       75,426  
                                 

Net income

  $ 28,941     $ 28,872     $ 124,299     $ 119,925  
                                 

Income per share – Basic

                               

Common Stock

  $ 1.51     $ 1.51     $ 6.50     $ 6.29  

Class B Common Stock

  $ 1.21     $ 1.21     $ 5.20     $ 5.03  
                                 

Income per share – Diluted

                               

Common Stock

  $ 1.43     $ 1.43     $ 6.15     $ 5.95  
                                 

Income allocated to – Basic

                               

Common Stock

  $ 23,011     $ 22,876     $ 98,665     $ 94,849  

Class B Common Stock

  $ 5,803     $ 5,742     $ 24,761     $ 23,705  
                                 

Income allocated to – Diluted

                               

Common Stock

  $ 28,821     $ 28,631     $ 123,472     $ 118,626  
                                 

Weighted average number of shares outstanding – Basic

                               

Common Stock

    15,210       15,113       15,182       15,080  

Class B Common Stock

    4,795       4,741       4,763       4,711  
                                 

Weighted average number of shares outstanding – Diluted

                               

Common Stock

    20,142       20,007       20,079       19,939  

 

(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 29,

2015 (1)

   

August 30,

2014

 

Assets

               

Current assets:

               

Cash and cash equivalents

  $ 276,553     $ 191,769  

Receivables, net

    151,851       152,523  

Inventories

    80,449       78,858  

Rental merchandise in service

    140,384       146,449  

Prepaid and deferred income taxes

    204       13,342  

Prepaid expenses and other current assets

    12,382       6,349  
                 

Total current assets

    661,823       589,290  
                 

Property, plant and equipment:

               

Land, buildings and leasehold improvements

    402,781       393,584  

Machinery and equipment

    535,698       512,842  

Motor vehicles

    193,643       166,573  
                 
      1,132,122       1,072,999  

Less - accumulated depreciation

    618,269       586,717  
      513,853       486,282  
                 

Goodwill

    313,133       303,648  

Customer contracts and other intangible assets, net

    40,049       41,477  

Deferred income taxes

    1,475       1,403  

Other assets

    2,904       2,061  
                 
    $ 1,533,237     $ 1,424,161  
                 

Liabilities and shareholders' equity

               

Current liabilities:

               

Loans payable and current maturities of long-term debt

  $ 1,385     $ 7,704  

Accounts payable

    50,826       59,177  

Accrued liabilities

    113,022       100,818  

Accrued and deferred income taxes

    18,878       23,342  
                 

Total current liabilities

    184,111       191,041  
                 

Long-term liabilities:

               

Long-term debt, net of current maturities

          155  

Accrued liabilities

    54,566       50,235  

Accrued and deferred income taxes

    52,352       48,271  
                 

Total long-term liabilities

    106,918       98,661  
                 

Shareholders' equity:

               

Common Stock

    1,525       1,519  

Class B Common Stock

    485       486  

Capital surplus

    67,611       59,415  

Retained earnings

    1,197,000       1,075,572  

Accumulated other comprehensive (loss) income

    (24,413

)

    (2,533

)

                 

Total shareholders' equity

    1,242,208       1,134,459  
                 
    $ 1,533,237     $ 1,424,161  

  

(1) Unaudited

 

 
 

 

 

UniFirst Corporation and Subsidiaries

Detail of Operating Results

 

Revenues

 

   

Thirteen

weeks ended August 29,

   

Thirteen

weeks ended

August 30,

   

Dollar

   

Percent

 

(In thousands, except percentages)

    2015(1)       2014(1)    

Change

   

Change

 
                                 

Core Laundry Operations

  $ 326,643     $ 320,993     $ 5,650       1.8

%

Specialty Garments

    20,522       19,016       1,506       7.9  

First Aid

    12,043       11,979       64       0.5  

Consolidated total

  $ 359,208     $ 351,988     $ 7,220       2.1

%

 

   

Fifty-two

weeks ended August 29,

   

Fifty-two

weeks ended

August 30,

   

Dollar

   

Percent

 

(In thousands, except percentages)

    2015(1)       2014(1)    

Change

   

Change

 
                                 

Core Laundry Operations

  $ 1,322,328     $ 1,259,485     $ 62,843       5.0

%

Specialty Garments

    87,513       91,484       (3,971

)

    -4.3  

First Aid

    46,764       43,928       2,836       6.5  

Consolidated total

  $ 1,456,605     $ 1,394,897     $ 61,708       4.4

%

  

Income from Operations

 

   

Thirteen

weeks ended August 29,

   

Thirteen

weeks ended

August 30,

   

Dollar

   

Percent

 

(In thousands, except percentages)

    2015(1)       2014(1)    

Change

   

Change

 
                                 

Core Laundry Operations

  $ 42,855     $ 45,937     $ (3,082

)

    -6.7

%

Specialty Garments

    1,490       115       1,375       1,195.7  

First Aid

    1,547       1,370       177       12.9  

Consolidated total

  $ 45,892     $ 47,422     $ (1,530

)

    -3.2

%

 

   

Fifty-two

weeks ended August 29,

   

Fifty-two

weeks ended

August 30,

   

Dollar

   

Percent

 

(In thousands, except percentages)

    2015(1)       2014(1)    

Change

   

Change

 
                                 

Core Laundry Operations

  $ 187,586     $ 182,250     $ 5,336       2.9

%

Specialty Garments

    7,355       7,178       177       2.5  

First Aid

    5,443       3,847       1,596       41.5  

Consolidated total

  $ 200,384     $ 193,275     $ 7,109       3.7

%

 

(1) Unaudited 

 

 
 

 

  

UniFirst Corporation and Subsidiaries

Consolidated Statements of Cash Flows

 

(In thousands)

 

Fifty-two

weeks ended

August 29,

2015 (1)

   

Fifty-two

weeks ended

August 30,

2014

 

Cash flows from operating activities:

               

Net income

  $ 124,299     $ 119,925  

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

               

Depreciation

    68,164       62,791  

Amortization of intangible assets

    8,949       8,961  

Amortization of deferred financing costs

    209       209  

Share-based compensation

    5,366       5,601  

Accretion on environmental contingencies

    603       716  

Accretion on asset retirement obligations

    690       941  

Deferred income taxes

    (3,473

)

    8,439  

Changes in assets and liabilities, net of acquisitions:

               

Receivables

    (3,494

)

    (11,541

)

Inventories

    (2,236

)

    (4,450

)

Rental merchandise in service

    4,900       (14,002

)

Prepaid expenses and other current assets

    (4,005

)

    2,623  

Accounts payable

    (7,648

)

    13,646  

Accrued liabilities

    17,832       6,890  

Prepaid and accrued income taxes

    16,761       (6,130

)

Net cash provided by operating activities

    226,917       194,619  
                 

Cash flows from investing activities:

               

Acquisition of businesses

    (22,359

)

    (3,635

)

Capital expenditures

    (101,163

)

    (91,808

)

Other

    (747

)

    1,269  

Net cash used in investing activities

    (124,269

)

    (94,174

)

                 

Cash flows from financing activities:

               

Proceeds from loans payable and long-term debt

    6,866       9,388  

Payments on loans payable and long-term debt

    (13,055

)

    (113,247

)

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

    7,799       5,899  

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

    (5,002

)

    (3,527

)

Payment of cash dividends

    (2,869

)

    (2,860

)

Net cash used in financing activities

    (6,261

)

    (104,347

)

                 

Effect of exchange rate changes on cash

    (11,603

)

    (1,808

)

                 

Net increase (decrease) in cash and cash equivalents

    84,784       (5,710

)

Cash and cash equivalents at beginning of period

    191,769       197,479  
                 

Cash and cash equivalents at end of period

  $ 276,553     $ 191,769  

 

(1) Unaudited