EX-99 2 ex-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 RECORD FINANCIAL RESULTS

FOR THE FIRST QUARTER OF FISCAL 2007

 

Wilmington, MA (January 3, 2007) -- UniFirst Corporation (NYSE: UNF) today announced its revenues and earnings for its first quarter of fiscal 2007 which ended November 25, 2006.

 

Revenues for the first quarter of fiscal 2007 were $222.4 million, an 11.6% increase from the previous year’s first quarter of $199.3 million. First quarter net income was $13.7 million or $0.71 per diluted common share, a 20.7% increase from the first quarter of fiscal 2006, when net income was $11.4 million or $0.59 per diluted common share.

 

Revenues from the Company’s core laundry business (which excludes the Company’s Specialty Garments and First Aid segments) grew 10.5% compared to the first quarter of fiscal 2006. Primarily as a result of this revenue growth, the income from operations of the Company’s core laundry business was up 12.7% from the first quarter of fiscal 2006. In addition to the revenue growth, modest reductions in energy costs, production costs and delivery payroll costs as a percentage of revenues, contributed to the improved profitability. These improvements were partially offset by higher merchandise amortization and selling costs as a percentage of revenues.

 

The Company’s Specialty Garments segment had income from operations of $2.9 million for the first quarter of fiscal 2007, up from $1.1 million in the first quarter of fiscal 2006. This increase was primarily the result of a 28.1% increase in this segment’s revenues as compared to fiscal 2006.

 

The Company’s results were also affected by higher interest expense as compared to fiscal 2006, which was the result of higher average borrowings in fiscal 2007 as well as higher interest rates affecting the Company’s variable rate debt.

 

"Our core laundry business turned in a strong performance in both revenues and profits" said UniFirst President and Chief Executive Officer, Ron Croatti, "and despite the slower economic conditions we're now seeing, we believe our growth prospects heading into the new calendar year remain good."

 

The Company also announced that Dennis Assad, Senior Vice President of Sales and Marketing, left the Company as of December 31, 2006.  The Company expects to enter into a severance arrangement with Mr. Assad shortly.

 

The Company will hold a conference call today at 4:00 PM (EDT) 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 approximately 9,800 team partners who serve nearly 200,000 customer locations in 46 states, Canada and Europe from 189 manufacturing, distribution and customer service facilities.

 

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 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, the Company’s ability to compete successfully without any significant degradation in its margin rates, seasonal fluctuations in business levels, uncertainties regarding the price levels of natural gas, electricity, fuel and labor, the impact of negative economic conditions on the Company’s customers and such customers’ workforce, the continuing increase in domestic healthcare costs, demand and prices for the Company’s products and services, additional professional and internal costs necessary for compliance with recent and proposed future changes in Securities and Exchange Commission (including the Sarbanes-Oxley Act of 2002), 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 and general economic conditions. When used in this public announcement, the words “anticipate,” “believe,” “estimate,” “expect,” “intend,” and similar expressions as they relate to the Company are included to identify such forward looking statements.


UNIFIRST CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

 

(In thousands, except per share data)

 

 

 

Thirteen
weeks ended
November 25,

2006

 

 

Thirteen
weeks ended
November 26,

2005

 

Revenues

 

 

$

222,377

 

$

199,325

 

 

 

 

 

 

 

 

 

 

Cost and expenses:

 

 

 

 

 

 

 

 

Operating costs (1)

 

 

 

136,919

 

 

124,667

 

Selling and administrative expenses (1)

 

 

 

48,390

 

 

43,130

 

Depreciation and amortization

 

 

 

11,585

 

 

10,932

 

 

 

 

 

196,894

 

 

178,729

 

 

 

 

 

 

 

 

 

 

Income from operations

 

 

 

25,483

 

 

20,596

 

 

 

 

 

 

 

 

 

 

Other expense (income):

 

 

 

 

 

 

 

 

Interest expense

 

 

 

3,322

 

 

2,331

 

Interest income

 

 

 

(466

)

 

(256

)

 

 

 

 

 

 

 

 

 

 

 

 

 

2,856

 

 

2,075

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

 

 

22,627

 

 

18,521

 

Provision for income taxes

 

 

 

8,881

 

 

7,131

 

 

 

 

 

 

 

 

 

 

Net income

 

 

$

13,746

 

$

11,390

 

 

 

 

 

 

 

 

 

 

Income per share – Basic:

 

 

 

 

 

 

 

 

Common Stock

 

 

$

0.75

 

$

0.66

 

Class B Common Stock

 

 

$

0.60

 

$

0.53

 

 

 

 

 

 

 

 

 

 

Income per share – Diluted:

 

 

 

 

 

 

 

 

Common Stock

 

 

$

0.71

 

$

0.59

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares outstanding – Basic:

 

 

 

 

 

 

 

 

Common Stock

 

 

 

14,307

 

 

9,619

 

Class B Common Stock

 

 

 

4,941

 

 

9,620

 

 

 

 

 

19,248

 

 

19,239

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares outstanding – Diluted:

 

 

 

 

 

 

 

 

Common Stock

 

 

 

19,322

 

 

19,328

 

 

 

 

 

 

 

 

 

 

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 25,

2006

 

 

August 26,

2006

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

$

8,029

 

$

8,302

 

Receivables, net

 

 

 

98,580

 

 

86,549

 

Inventories

 

 

 

36,890

 

 

36,469

 

Rental merchandise in service

 

 

 

85,561

 

 

85,875

 

Deferred income taxes

 

 

 

10,038

 

 

10,046

 

Prepaid expenses

 

 

 

4,758

 

 

1,672

 

 

 

 

 

 

 

 

 

 

Total current assets

 

 

 

243,856

 

 

228,913

 

 

 

 

 

 

 

 

 

 

Property and equipment:

 

 

 

 

 

 

 

 

Land, buildings and leasehold improvements

 

 

 

274,080

 

 

269,696

 

Machinery and equipment

 

 

 

289,442

 

 

284,619

 

Motor vehicles

 

 

 

85,024

 

 

84,138

 

 

 

 

 

 

 

 

 

 

 

 

 

 

648,546

 

 

638,453

 

Less -- accumulated depreciation

 

 

 

327,729

 

 

319,550

 

 

 

 

 

 

 

 

 

 

 

 

 

 

320,817

 

 

318,903

 

 

 

 

 

 

 

 

 

 

Goodwill

 

 

 

212,923

 

 

211,489

 

Customer contracts and other intangible assets, net

 

 

 

62,796

 

 

64,022

 

Other assets

 

 

 

6,459

 

 

6,375

 

 

 

 

$

846,851

 

$

829,702

 

 

 

 

 

 

 

 

 

 

Liabilities and shareholders' equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Current maturities of long-term obligations

 

 

$

683

 

$

613

 

Accounts payable

 

 

 

43,080

 

 

43,003

 

Accrued liabilities

 

 

 

81,943

 

 

80,580

 

Accrued income taxes

 

 

 

10,197

 

 

3,041

 

 

 

 

 

 

 

 

 

 

Total current liabilities

 

 

 

135,903

 

 

127,237

 

 

 

 

 

 

 

 

 

 

Long-term obligations, net of current maturities

 

 

 

206,116

 

 

209,922

 

Deferred income taxes

 

 

 

39,911

 

 

39,998

 

 

 

 

 

 

 

 

 

 

Shareholders' equity:

 

 

 

 

 

 

 

 

Common stock

 

 

 

1,431

 

 

1,431

 

Class B Common stock

 

 

 

494

 

 

494

 

Capital surplus

 

 

 

14,638

 

 

14,497

 

Retained earnings

 

 

 

444,542

 

 

431,481

 

Accumulated other comprehensive income

 

 

 

3,816

 

 

4,642

 

 

 

 

 

 

 

 

 

 

Total shareholders' equity

 

 

 

464,921

 

 

452,545

 

 

 

 

 

 

 

 

 

 

 

 

 

$

846,851

 

$

829,702