EX-99 2 ex-99.htm

Exhibit 99

 

UniFirst Corporation

News Release

 

 

68 Jonspin Road

 

 

Wilmington, MA 01887-1086

contact:

John B. Bartlett

 

 

Telephone 978-658-8888 Ext 520

Senior Vice President

 

 

Facsimile 978-988-0659

jbartlett@unifirst.com

 


UNIFIRST ANNOUNCES RECORD FINANCIAL RESULTS

FOR THE FISCAL 2008 FOURTH QUARTER AND FULL YEAR

 

Wilmington, MA (October 28, 2008) -- UniFirst Corporation (NYSE: UNF) today announced record revenues and earnings for its fiscal fourth quarter and full year which ended August 30, 2008.

 

Revenues were $251.0 million for the quarter, an increase of 10.3% over the fourth quarter of fiscal 2007. For the full year, revenues increased 13.4% to $1.023 billion from $902.1 million in fiscal 2007. Fiscal 2008 included an extra week compared to fiscal 2007 which accounted for 2.2 percentage points of year over year revenue growth.

 

Fourth quarter net income increased 13.7% to $12.3 million, or $0.63 per diluted common share, from last year’s fourth quarter net income of $10.8 million, or $0.56 per diluted common share. Net income for the full year increased 34.9% to $61.0 million, or $3.15 per diluted common share, from $45.2 million, or $2.34 per diluted common share for the comparable period in 2007.

 

Ronald D. Croatti, UniFirst President and Chief Executive Officer, stated, “We are very pleased to report another year of record profits and revenues, one that also saw us achieve our long time goal of becoming a billion dollar company. In addition to strong organic revenue growth, we were able to show significant improvement in the margins of our core laundry operations. I want to thank the entire management team as well as our thousands of employees throughout North America and Europe who worked so hard to achieve these results.”

 

The primary reason for the Company’s strong full year results was the performance of the Company’s core laundry operations, which makes up approximately 90% of the Company’s revenues. Core laundry revenues increased 10.7% and 13.9%, respectively, for the quarter and full year compared to fiscal 2007. The organic revenue growth for the core laundry business, which excludes the effects of the extra week, acquisitions and fluctuations in the Canadian exchange rate, was 6.6% for the fourth quarter and 7.5% for the full year.

 

For the full year, the income from operations for the core laundry business as a percentage of revenues increased to 11.3% in fiscal 2008 from 9.7% in fiscal 2007. This improvement was primarily the result of lower merchandise amortization as well as lower payroll and payroll related costs as a percentage of revenues. In addition, the results in 2007 were affected by severance expense and increases to the Company’s environmental reserves that decreased income from operations by $2.3 million. These positive comparisons were partially offset by higher energy costs as a percentage of revenues.

 

For the fourth quarter, the core laundry income from operations as a percentage of revenues decreased from 10.0% in 2007 to 9.3% in 2008. This drop in margin is due primarily to increases in the cost of energy and other commodities. The cost of gasoline and natural gas increased sharply during the fourth quarter and had a large impact on operating results compared to the same quarter in 2007. In addition, the benefit related to lower merchandise amortization as a percentage of revenues realized throughout the year continued to benefit the fourth quarter, but at a reduced level.

 

The Company’s Specialty Garments segment improved its fourth quarter performance, increasing its operating results from a loss of $0.8 million in fiscal 2007 to income of $0.4 million in fiscal 2008. The income from operations of the First Aid segment was $0.5 million in both fiscal 2008 and fiscal 2007 fourth quarters.

 

The Company’s overall results for both the full year as well as the fourth quarter were also positively impacted by lower interest rates on the Company’s variable rate debt as well as lower effective tax rates compared to fiscal 2007.

 

In looking ahead to fiscal 2009, Mr. Croatti stated, “We currently are operating in very difficult economic conditions. We continue to encounter high levels of headcount reductions throughout our customer base and a more difficult selling environment. Although energy costs have begun to fall recently, we are experiencing higher overall input costs in our business. Despite the challenging economic landscape, the Company’s financial position remains strong and we are excited about building on our fiscal 2008 performance.”

 

Conference Call Information

The Company will hold a conference call Wednesday, October 29, 2008 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.

 

About UniFirst Corporation

UniFirst Corporation is one of the largest providers of workplace uniforms, protective clothing and facility services products in North America. The Company employs over 10,000 team partners who serve over 200,000 customer locations in 46 U.S. states, Canada and Europe from over 200 customer service, distribution, and manufacturing facilities. UniFirst Corporation 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.

 

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. 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, 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,” “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

 

 

 

Thirteen

 

 

 

Fifty-three

 

 

 

Fifty-two

 

 

 

 

weeks ended

 

 

 

weeks ended

 

 

 

weeks ended

 

 

 

weeks ended

 

 

 

 

August 30,

 

 

 

August 25,

 

 

 

August 30,

 

 

 

August 25,

 

(In thousands, except share and per share data)

 

 

2008 (2)

 

 

 

2007 (2)

 

 

 

2008

 

 

 

2007

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

$

251,010

 

 

$

227,509

 

 

$

1,023,175

 

 

$

902,102

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating costs (1)

 

 

163,089

 

 

 

144,855

 

 

 

643,886

 

 

 

572,221

 

Selling and administrative expenses (1)

 

 

52,366

 

 

 

49,691

 

 

 

216,867

 

 

 

197,217

 

Depreciation and amortization

 

 

13,690

 

 

 

12,786

 

 

 

53,784

 

 

 

48,512

 

 

 

 

229,145

 

 

 

207,332

 

 

 

914,537

 

 

 

817,950

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from operations

 

 

21,865

 

 

 

20,177

 

 

 

108,638

 

 

 

84,152

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other expense (income):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

2,569

 

 

 

3,129

 

 

 

11,999

 

 

 

12,675

 

Interest income

 

 

(556

)

 

 

(461

)

 

 

(2,224

)

 

 

(1,916

)

Foreign exchange (gain)/loss

 

 

585

 

 

 

(33

)

 

 

164

 

 

 

(69

)

 

 

 

2,598

 

 

 

2,635

 

 

 

9,939

 

 

 

10,690

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

 

19,267

 

 

 

17,542

 

 

 

98,699

 

 

 

73,462

 

Provision for income taxes

 

 

6,984

 

 

 

6,736

 

 

 

37,721

 

 

 

28,267

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

12,283

 

 

$

10,806

 

 

$

60,978

 

 

$

45,195

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income per share – Basic:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock

 

$

0.67

 

 

$ 

0.59

 

 

$

3.33

 

 

$

2.47

 

Class B Common Stock

 

$

0.54

 

 

$ 

0.47

 

 

$

2.66

 

 

$

1.98

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income per share – Diluted:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock

 

$

0.63

 

 

$

0.56

 

 

$

3.15

 

 

$

2.34

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares outstanding – Basic:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock

 

 

14,380

 

 

 

14,343

 

 

 

14,363

 

 

 

14,325

 

Class B Common Stock

 

 

4,936

 

 

 

4,937

 

 

 

4,937

 

 

 

4,939

 

 

 

 

19,316

 

 

 

19,280

 

 

 

19,300

 

 

 

19,264

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares outstanding – Diluted:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock

 

 

19,387

 

 

 

19,375

 

 

 

19,353

 

 

 

19,342

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock

 

$

0.0375

 

 

$

0.0375

 

 

$

0.1500

 

 

$

0.1500

 

Class B Common Stock

 

$

0.0300

 

 

$

0.0300

 

 

$

0.1200

 

 

$

0.1200

 

 

 

(1)

Exclusive of depreciation on the Company’s fixed assets and amortization on its intangible assets

 

(2)

Unaudited

 

UniFirst Corporation and Subsidiaries

Condensed Consolidated Balance Sheets

 

(In thousands, except share data)

 

 

 

August 30,

2008

 

 

August 25,

2007

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

$

25,655

 

$

12,698

 

Receivables, net

 

 

 

102,830

 

 

91,906

 

Inventories

 

 

 

46,154

 

 

44,282

 

Rental merchandise in service

 

 

 

92,315

 

 

86,129

 

Prepaid and deferred income taxes

 

 

 

15,431

 

 

13,399

 

Prepaid expenses

 

 

 

1,720

 

 

1,807

 

 

 

 

 

 

 

 

 

 

Total current assets

 

 

 

284,105

 

 

250,221

 

 

 

 

 

 

 

 

 

 

Property and equipment:

 

 

 

 

 

 

 

 

Land, buildings and leasehold improvements

 

 

 

314,370

 

 

286,255

 

Machinery and equipment

 

 

 

327,705

 

 

299,831

 

Motor vehicles

 

 

 

102,805

 

 

95,214

 

 

 

 

 

 

 

 

 

 

 

 

 

 

744,880

 

 

681,300

 

Less - accumulated depreciation

 

 

 

376,319

 

 

347,233

 

 

 

 

 

368,561

 

 

334,067

 

 

 

 

 

 

 

 

 

 

Goodwill

 

 

 

258,836

 

 

224,366

 

Customer contracts and other intangible assets, net

 

 

 

67,450

 

 

62,064

 

Other assets

 

 

 

2,715

 

 

3,746

 

 

 

 

 

 

 

 

 

 

 

 

 

$

981,667

 

$

874,464

 

 

 

 

 

 

 

 

 

 

Liabilities and shareholders' equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Current maturities of long-term obligations

 

 

$

4,222

 

$

539

 

Accounts payable

 

 

 

54,822

 

 

45,297

 

Accrued liabilities

 

 

 

91,837

 

 

86,283

 

 

 

 

 

 

 

 

 

 

Total current liabilities

 

 

 

150,881

 

 

132,119

 

 

 

 

 

 

 

 

 

 

Long-term obligations, net of current maturities

 

 

 

231,317

 

 

205,510

 

Deferred income taxes

 

 

 

42,699

 

 

39,508

 

 

 

 

 

 

 

 

 

 

Shareholders' equity:

 

 

 

 

 

 

 

 

Common Stock

 

 

 

1,438

 

 

1,435

 

Class B Common Stock

 

 

 

494

 

 

494

 

Capital surplus

 

 

 

18,240

 

 

16,332

 

Retained earnings

 

 

 

532,164

 

 

473,934

 

Accumulated other comprehensive income

 

 

 

4,434

 

 

5,132

 

 

 

 

 

 

 

 

 

 

Total shareholders' equity

 

 

 

556,770

 

 

497,327

 

 

 

 

 

 

 

 

 

 

 

 

 

$

981,667

 

$

874,464

 

 

UniFirst Corporation and Subsidiaries

Detail of Operating Results

 

Revenues

 

 

 

Thirteen

 

 

Thirteen

 

 

 

 

 

 

 

 

weeks ended

 

 

weeks ended

 

 

 

 

 

 

 

 

August 30,

 

 

August 25,

 

 

Dollar

 

Percent

 

(In thousands, except percentages)

 

2008 (1)

 

 

2007 (1)

 

 

Change

 

Change

 

 

 

 

 

 

 

 

 

 

 

 

 

Core Laundry Operations

$

226,643

 

$

204,686

 

$

21,957

 

10.7

%

Specialty Garments

 

16,854

 

 

14,492

 

 

2,362

 

16.3

 

First Aid

 

7,513

 

 

8,331

 

 

(818

)

-9.8

 

Consolidated total

$

251,010

 

$

227,509

 

$

23,501

 

10.3

%

 

 

 

Fifty-three

 

 

Fifty-two

 

 

 

 

 

 

 

 

weeks ended

 

 

weeks ended

 

 

 

 

 

 

 

 

August 30,

 

 

August 25,

 

 

Dollar

 

Percent

 

(In thousands, except percentages)

 

2008

 

 

2007

 

 

Change

 

Change

 

 

 

 

 

 

 

 

 

 

 

 

 

Core Laundry Operations

$

919,986

 

$

807,460

 

$

112,526

 

13.9

%

Specialty Garments

 

71,637

 

 

62,868

 

 

8,769

 

13.9

 

First Aid

 

31,552

 

 

31,774

 

 

(222

)

-0.7

 

Consolidated total

$

1,023,175

 

$

902,102

 

$

121,073

 

13.4

%

 

 

Income from Operations

 

 

 

Thirteen

 

 

Thirteen

 

 

 

 

 

 

 

 

weeks ended

 

 

weeks ended

 

 

 

 

 

 

 

 

August 30,

 

 

August 25,

 

 

Dollar

 

Percent

 

(In thousands, except percentages)

 

2008 (1)

 

 

2007 (1)

 

 

Change

 

Change

 

 

 

 

 

 

 

 

 

 

 

 

 

Core Laundry Operations

$

20,968

 

$

20,413

 

$

555

 

2.7

%

Specialty Garments

 

364

 

 

(772

)

 

1,136

 

147.1

 

First Aid

 

533

 

 

536

 

 

(3

)

-0.5

 

Consolidated total

$

21,865

 

$

20,177

 

$

1,688

 

8.4

%

 

 

 

Fifty-three

 

 

Fifty-two

 

 

 

 

 

 

 

 

weeks ended

 

 

weeks ended

 

 

 

 

 

 

 

 

August 30,

 

 

August 25,

 

 

Dollar

 

Percent

 

(In thousands, except percentages)

 

2008

 

 

2007

 

 

Change

 

Change

 

 

 

 

 

 

 

 

 

 

 

 

 

Core Laundry Operations

$

103,547

 

$

78,228

 

$

25,319

 

32.4

%

Specialty Garments

 

4,204

 

 

4,498

 

 

(294

)

-6.5

 

First Aid

 

887

 

 

1,426

 

 

(539

)

-37.8

 

Consolidated total

$

108,638

 

$

84,152

 

$

24,486

 

29.1

%

 

 

(1) Unaudited