-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, S0sitwpM/CyPZ5/uInQhyiGib2yoa4gBdsnEc2ig6YERXggCZlOQr2DTqxYSpE1H mzm9HiIY6IyObep+DuE7sQ== 0000950131-97-003858.txt : 19970611 0000950131-97-003858.hdr.sgml : 19970611 ACCESSION NUMBER: 0000950131-97-003858 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970427 FILED AS OF DATE: 19970610 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: UNITOG CO CENTRAL INDEX KEY: 0000101909 STANDARD INDUSTRIAL CLASSIFICATION: APPAREL & OTHER FINISHED PRODS OF FABRICS & SIMILAR MATERIAL [2300] IRS NUMBER: 440529828 STATE OF INCORPORATION: DE FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-06643 FILM NUMBER: 97621440 BUSINESS ADDRESS: STREET 1: 101 W 11TH ST CITY: KANSAS CITY STATE: MO ZIP: 64105 BUSINESS PHONE: 8164747000 MAIL ADDRESS: STREET 1: 101 W 11TH STREET CITY: KANSAS CITY STATE: MO ZIP: 64105 10-Q 1 FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington D.C. 20549 FORM 10-Q (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended April 27, 1997. OR ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________________ to _________________. Commission file number: 0-6643 UNITOG COMPANY - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 44-0529828 - ----------------------------------------- -------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 101 W. 11th Street, Kansas City, MO 64105 - ----------------------------------------- -------------------------------- (Address of principal executive offices) (Zip Code) (816) 474-7000 - -------------------------------------------------------------------------------- (Registrant's telephone number, including area code) Not applicable - -------------------------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No --------- -------- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practical date. As of April 27, 1997, the registrant had 9,644,767 shares of common stock, par value $.01 per share, outstanding. TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION Page Number ITEM 1. Financial Statements (1) Condensed Consolidated Financial Statements (unaudited): Condensed Consolidated Balance Sheets as of April 27, 1997 and January 26, 1997. 3 Condensed Consolidated Statements of Earnings for the Three Months ended April 27, 1997 and April 28, 1996. 4 Condensed Consolidated Statements of Cash Flows for the Three Months ended April 27, 1997 and April 28, 1996. 5 (2) Notes to Condensed Consolidated Financial Statements. 6 ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. 7 PART II. - OTHER INFORMATION ITEM I. Legal Proceedings 9 ITEM 6. Exhibits and Reports on Form 8-K 9
2 PART I - FINANCIAL INFORMATION Item 1. Financial Statements. UNITOG COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS April 27, 1997 and January 26, 1997 (unaudited)
ASSETS April 27, 1997 January 26, 1997 -------------- ---------------- Current assets: Cash and cash equivalents $ 1,269,539 $ 31,307 Accounts receivable, less allowance for doubtful receivables of $1,176,000 and $1,240,000, respectively 28,499,325 28,090,702 Inventories (note 2) 18,201,667 17,525,175 Rental garments in service, net 39,735,870 40,329,880 Prepaid expenses 1,597,919 1,375,210 ------------ ------------ Total current assets 89,304,320 87,352,274 ------------ ------------ Property, plant and equipment, at cost 166,526,922 161,351,786 Less accumulated depreciation 68,558,706 66,554,486 ------------ ------------ Net property, plant and equipment 97,968,216 94,797,300 ------------ ------------ Other assets, net 33,887,537 35,120,442 Excess cost over net assets of businesses acquired, net 37,698,817 37,294,970 ------------ ------------ $258,858,890 $254,564,986 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current installments of long-term debt $ 2,050,072 $ 2,046,821 Accounts payable 14,166,690 13,820,339 Accrued expenses 11,931,018 11,369,557 Accrued and deferred income taxes payable 12,383,586 10,880,382 ------------ ------------ Total current liabilities 40,531,366 38,117,099 ------------ ------------ Long-term debt, less current installments 102,232,750 103,524,014 Deferred income taxes and other liabilities 13,959,120 13,819,237 Stockholders' equity: Common stock of $.01 par value. Authorized 30,000,000 shares; issued and outstanding 9,644,767 shares 96,448 96,439 Additional paid-in capital 41,238,827 41,202,740 Retained earnings 60,800,379 57,805,457 ------------ ------------ Total stockholders' equity 102,135,654 99,104,636 ------------ ------------ $258,858,890 $254,564,986 ============ ============
See accompanying notes to condensed consolidated financial statements. 3 UNITOG COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS Three Months Ended April 27, 1997 and April 28, 1996 (unaudited)
April 27, 1997 April 28, 1996 -------------- -------------- Revenues: Rental operations $54,031,073 $48,430,562 Direct sales 14,878,908 15,504,301 ----------- ----------- Total revenues 68,909,981 63,934,863 ----------- ----------- Operating costs and expenses: Cost of rental operations 43,822,357 39,893,480 Cost of direct sales 12,236,555 12,440,956 Depreciation and amortization 4,158,348 3,650,384 General and adminstrative 2,449,048 2,176,447 ----------- ----------- Total costs and expenses 62,666,308 58,161,267 ----------- ----------- Operating income 6,243,673 5,773,596 Interest expense 1,455,375 1,343,596 Other expense (income), net (47,974) (23,077) ----------- ----------- Earnings before income taxes 4,836,272 4,453,077 Income taxes 1,837,000 1,692,000 ----------- ----------- Net earnings $ 2,999,272 $ 2,761,077 =========== =========== Net earnings per common share $ .31 $ .29 =========== =========== Weighted average common and common equivalent shares outstanding 9,705,987 9,435,093 =========== =========== Dividends per common share (note 3) $ -- $ -- =========== ===========
See accompanying notes to condensed consolidated financial statements. 4 UNITOG COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS Three Months Ended April 27, 1997 and April 28, 1996 (unaudited)
April 27, 1997 April 28, 1996 -------------- -------------- Cash flows from operating activities: Net earnings $ 2,999,272 $ 2,761,077 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 4,158,348 3,650,384 Provision for deferred income taxes 154,000 1,180,000 Disposal of equipment, net of gains and losses 52,852 12,797 Changes in assets and liabilities: Accounts receivable (408,623) 278,219 Inventories (676,492) (1,471,890) Rental garments in service 1 ,058,456 481,963 Prepaid Expenses (222,709) (881,550) Other noncurrent assets 981,886 254,805 Accounts payable 346,351 (1,975,779) Accrued expenses 486,462 (1,362,943) Income taxes payable 1,473,204 320,186 Other noncurrent liabilities 15,883 (119,047) -------------- -------------- Net cash provided by operating activities 10,418,890 3,128,222 -------------- -------------- Cash flows from investing activities: Acquisition of rental operations (2,363,600) (17,052,357) Purchase of property, plant and equipment (5,560,791) (5,302,973) -------------- -------------- Net cash used by investing activities (7,924,391) (22,355,330) -------------- -------------- Cash flows from financing activities: Proceeds from stock issuance 31,746 847,429 Increases in long-term debt -- 19,283,320 Repayments of long-term debt (1,288,013) -- -------------- -------------- Net cash provided by finance activities (1,256,267) 20,130,749 -------------- -------------- Net increase (decrease) in cash and cash equivalents 1,238,232 903,641 Cash and cash equivalents at beginning of period 31,307 28,321 -------------- -------------- Cash and cash equivalents at end of period $ 1,269,539 $ 931,962 ============== ============== Supplemental disclosure of cash flow information: Cash paid during the period for: Interest $ 1,647,000 $ 1,438,000 ============== ============== Income taxes $ 208,183 $ 185,000 ============== ==============
See accompanying notes to condensed consolidated financial statements. 5 UNITOG COMPANY AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements Three Months Ended April 27, 1997 and April 28, 1996 Note 1 - ------ In the opinion of the Company, the accompanying unaudited condensed consolidated financial statements reflect adjustments (consisting of normal recurring accruals) necessary to present fairly the financial position of the Company as of April 27, 1997, and the results of its operations and its cash flows for the three months ended April 27, 1997 and April 28, 1996. The results of operations for the three months ended April 27, 1997 are not necessarily indicative of the results to be expected for the full year. Note 2 Inventories - ------------------- The following is a summary of inventories at April 27, 1997 and January 26, 1997:
April 27, 1997 January 26, 1997 -------------- ---------------- Raw materials $ 3,732,542 $ 3,899,072 Work in progress 2,766,911 1,085,883 Finished goods 15,790,768 16,556,660 ----------- ----------- 22,290,221 21,541,615 Less LIFO allowance (4,088,554) (4,016,440) ----------- ----------- $18,201,667 $17,525,175 =========== ===========
Note 3 Cash Dividend - -------------------- At its May 22, 1997 Board of Directors meeting the Board declared a $.075 per share cash dividend payable on June 24, 1997 to stockholders of record on June 6, 1997. The $.075 per share dividend was a 25% increase over the prior year. Note 4 Acquisitions - ------------------- During the first quarter of fiscal 1998, the Company acquired certain uniform rental routes in Detroit, Michigan for approximately $2.2 million in cash and notes payable. The acquisition was accounted for as a purchase. The operating results of this acquisition have been included in the consolidated results of the Company since the acquisition with an insignificant effect on revenues and net earnings. 6 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. Liquidity and Capital Resources Cash provided by operating activities was $10.4 million for the quarter ended April 27, 1997, an increase of $7.3 million. The increase was principally due to higher net earnings and improved cash and working capital management. Cash and cash equivalents were $1.3 million at April 27, 1997. At April 27, 1997, the Company had $34 million in borrowings outstanding under its foreign and domestic bank credit facilities. The amount of borrowings available under the Company's bank credit facilities was $33 million at April 27, 1997. The Company's capitalization ratio was 50% at April 27, 1997 compared to 51.1% at January 26, 1997. Working capital was $48.8 million at April 27, 1997 compared to $49.2 million at January 26, 1997. Capital expenditures were $5.6 million through April 27, 1997, $258,000 greater than last year. Capital expenditures for fiscal 1998 are expected to approximate $28 million. During the first quarter of fiscal 1998, the Company acquired certain uniform rental routes in Detroit, Michigan for approximately $2.2 million in cash, and notes payable. The acquisition was accounted for as a purchase. The operating results of this acquisitions have been included in the consolidated results of the Company since acquisition with an insignificant effect on revenues and net earnings. The acquisition is expected to add approximately $2 million in annual rental revenues. On May 22, 1997 the Company declared a $.075 per share cash dividend payable on June 24, 1997 to stockholders of record on June 6, 1997. The $.075 per share dividend was 25% greater than the semi-annual dividend paid in the second quarter of last year. Management believes that cash generated from operations and its bank credit facilities will be sufficient to meet its cash requirements for acquisitions and capital expenditures in the foreseeable future. Results of Operations First quarter fiscal 1998 compared to first quarter fiscal 1997 - --------------------------------------------------------------- Revenues for the first quarter of fiscal 1998 were $68.9 million, an increase of $5.0 million or 8% over the comparable period last year. Rental revenues for the quarter were $54.0 million, an increase of $5.6 million or 12% higher than last year. The increase in rental revenues was due to our fiscal 1997 acquisitions and internal growth within our network of existing locations. Direct sales for the first quarter of fiscal 1998 were $14.9 million, a decrease of $625,000 or 4% below the comparable period last year. The decrease in Direct sales was due to fewer implementations of new image programs with national accounts. Depreciation and amortization was $4.2 million, an increase of $508,000 or 14% over the comparable period last year. Amortization of intangible assets from rental acquisitions and capital expenditures created the increase over last year. 7 Operating income for the first quarter of fiscal 1998 was $6.2 million, an increase of $470,000 or 8% over the comparable period last year. Higher operating contribution from Rental operations offset a slight decline in the profitability of the Direct sales business and increased depreciation and amortization. Net earnings for the first quarter of fiscal 1998 were $3.0 million, an increase of $238,000 or 9% over the comparable period last year. Improved operating contribution from Rental operations offset decreased Direct sales' profitability and increased depreciation, amortization and interest costs in comparison to last year. Net earnings per common share for the first quarter of fiscal 1998 were $.31 per share, an increase of $.02 per share or 7% over the comparable period last year. FORWARD LOOKING STATEMENTS -------------------------- The Private Securities Litigation Reform Act of 1995 provides a safe harbor for certain forward-looking statements. This Form 10-Q contains forward-looking statements that reflect the Company's current views with respect to future events and financial performance. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or those anticipated. The words "should," "believe," "expect," "anticipate," "intend," "estimate," and other expressions that indicate future events and trends identify forward-looking statements. Actual future results and trends may differ materially from historical results or those anticipated depending on a variety of factors, including, but not limited to, performance of acquisitions; economic and business changes; fluctuations in the cost of materials; strikes and unemployment levels; demand and price for the Company's products and services; and the outcome of pending and future litigation and environmental matters. 8 PART II - OTHER INFORMATION --------------------------- Item 1. Legal Proceedings ----------------- See the discussion of certain environmental matters in Part I, Item 1 of the Company's Annual Report on Form 10-K for the fiscal year ended January 26, 1997. Item 6. Exhibits and Reports on Form 8-K -------------------------------- (a) Exhibits. 27 Financial Data Schedule for the Quarter ended April 27, 1997. (b) Reports on Form 8-K. Unitog Company did not file any reports on Form 8-K during the quarter ended April 27, 1997. 9 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Unitog Company Dated : June 6, 1997 By: /s/ J. Craig Peterson --------------------- J. Craig Peterson Executive Vice President Chief Administrative and Financial Officer (Duly Authorized Officer) 10 EX-27 2 FINANCIAL DATA SCHEDULE
5 3-MOS JAN-25-1998 APR-26-1997 1,269,539 0 28,499,325 1,176,000 18,201,667 89,304,320 166,526,922 68,558,706 258,858,890 40,531,366 102,232,750 0 0 96,448 102,039,206 258,858,890 14,878,907 68,909,980 12,236,555 60,217,260 0 0 1,455,376 4,836,272 1,837,000 2,999,272 0 0 0 2,999,272 0.31 0.31
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