EX-99 4 exhibit-99.htm

Exhibit 99

UniFirst Corporation News Release
68 Jonspin Road
Wilmington, MA 01887-1086
Telephone 978-658-8888 Ext 520
Facsimile 978-988-0659
contact:       John B. Bartlett
                     Senior Vice President
                     jbartlett@unifirst.com

UNIFIRST ANNOUNCES FINANCIAL RESULTS
FOR FISCAL 2006 FIRST QUARTER

Wilmington, MA (January 5, 2006) — UniFirst Corporation (NYSE: UNF) today announced its revenues and earnings for its fiscal 2006 first quarter, the thirteen weeks ended November 26, 2005.

Revenues for the quarter were a record $199.3 million, a 5.8% increase from $188.4 million in the same period a year ago. First quarter net income was $11.4 million. This translated to $0.59 per diluted common share compared to last year’s first quarter net income of $13.4 million, or $0.69 per diluted common share.

The primary reason for this $2.0 million decrease in net income was the Company’s Specialty Garments (nuclear and clean room) segment. This segment’s income from operations decreased approximately $3.1 million from the first quarter of fiscal 2005 to the first quarter of fiscal 2006. This decrease in profitability of Specialty Garments is directly attributable to a decrease in revenues of 21.0% between comparable periods due primarily to the conclusion of a significant contract in fiscal 2005. In addition, income from operations for the Company’s First Aid segment decreased approximately $0.6 million from the first quarter of fiscal 2005 to the first quarter of fiscal 2006. Excluding the Company’s Specialty Garments and First Aid segments, revenues and income from operations from the Company’s core laundry business increased 8.6% and 6.2%, respectively.

As a percentage of overall revenues, operating costs increased 1.8% from 61.3% for the first quarter of fiscal 2005 to 63.1% for the first quarter of fiscal 2006. This increase is due primarily to higher fuel and natural gas costs as well as the decrease in Specialty Garments revenues discussed above. In addition, selling costs have increased as a percentage of revenues from fiscal 2005 to fiscal 2006 as the Company has increased its sales force over the last year.

“We are pleased with the revenue and profitability growth we saw in the quarter from our core laundry business. These positive results were achieved despite higher operating costs. As for our nuclear business, it has always been more volatile than our core laundry business due to the narrower focus of its services. We’re optimistic that this segment will begin to replace the revenues lost from the completion of this contract with new sales volume as the year progresses,” said Ronald D. Croatti, UniFirst’s President and Chief Executive Officer.

The Company will hold a conference call today at 4:00 PM (EST) 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.

UniFirst is one of the largest providers of workplace uniforms, protective clothing and facility services products in North America. The Company employs 9,200 team partners who serve approximately 190,000 customer locations in 46 states, Canada and Europe from 179 manufacturing, distribution and customer service facilities.

The Private Securities Litigation Reform Act of 1995 provides a safe harbor for certain 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. These forward-looking statements are subject to certain risks and uncertainties. The words “anticipate” and “should,” and other expressions that indicate future events and trends identify forward-looking statements. Actual future results may differ materially from 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, fuel and labor; the speed of business recovery from recent hurricanes in the southeast; economic and other developments associated with the on-going war on terrorism; strikes and unemployment levels; demand and price for the Company’s products and services; improvement in under performing rental operations; and the outcome of pending and future litigation and environmental matters.

[Tables follow]

UNIFIRST CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME

Thirteen Weeks Ended
(In thousands, except per share data)
November 26,
2005

November 27,
2004

Revenues     $ 199,325   $ 188,434  
Costs and expenses:  
   Operating costs (1)    125,731    115,465  
   Selling and administrative expenses (1)    42,066    39,169  
   Depreciation and amortization    10,932    10,663  


     178,729    165,297  


Income from operations    20,596    23,137  


Other expense (income):  
   Interest expense    2,331    2,191  
   Interest income    (256 )  (369 )
   Interest rate swap income        (223 )


     2,075    1,599  


Income before income taxes    18,521    21,538  
Provision for income taxes    7,131    8,184  


Net income   $ 11,390   $ 13,354  


Income per share - Basic:  
   Common Stock   $ 0.66   $ 0.78  
   Class B Common Stock   $ 0.53   $ 0.62  

Income per share - Diluted:
  
   Common Stock   $ 0.59   $ 0.69  

Weighted average number of shares outstanding - Basic:
  
   Common Stock    9,619    9,281  
   Class B Common Stock    9,620    9,926  


     19,239    19,207  


Weighted average number of shares outstanding - Diluted:  
   Common Stock    19,328    19,277  


Dividends per share:  
  Common Stock   $ 0.0375   $ 0.0375  
  Class B Common Stock   $ 0.0300   $ 0.0300  

    (1)        Exclusive of depreciation and amortization.

UNIFIRST CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)
November 26,
2005

August 27,
2005

Assets            
Current assets:  
   Cash and cash equivalents   $ 3,229   $ 4,704  
   Receivables, net    85,446    78,497  
   Inventories    30,712    31,021  
   Rental merchandise in service    73,369    69,808  
   Deferred income taxes    9,080    8,983  
   Prepaid expenses    3,777    1,492  


      Total current assets    205,613    194,505  


Property and equipment:  
   Land, buildings and leasehold improvements    263,058    260,515  
   Machinery and equipment    272,473    268,272  
   Motor vehicles    78,647    76,147  


     614,178    604,934  
   Less - accumulated depreciation    307,542    299,983  


     306,636    304,951  


Goodwill    188,165    187,793  
Customer contracts and other intangible assets, net    55,140    56,481  
Other assets    8,994    4,575  


    $ 764,548   $ 748,305  


Liabilities and Shareholders' Equity  
Current liabilities:  
   Current maturities of long-term obligations   $ 604   $ 1,084  
   Accounts payable    41,491    36,720  
   Accrued liabilities    74,190    76,141  
   Accrued income taxes    10,578    3,992  


      Total current liabilities    126,863    117,937  


Long-term obligations, net of current maturities    170,764    175,587  
Deferred income taxes    42,538    42,439  

Shareholders' equity:
  
   Common stock    967    960  
   Class B common stock    957    964  
   Capital surplus    13,911    13,462  
   Retained earnings    405,650    394,910  
   Accumulated other comprehensive income    2,898    2,046  


      Total shareholders' equity    424,383    412,342  


    $ 764,548   $ 748,305