10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
	SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended November 24, 2018
	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: 001-08504

UNIFIRST CORPORATION

(Exact name of Registrant as Specified in Its Charter)

Massachusetts	04-2103460
(State or Other Jurisdiction of	(I.R.S. Employer
Incorporation or Organization)	Identification No.)
68 Jonspin Road, Wilmington, MA	01887
(Address of Principal Executive Offices)	(Zip Code)

(978) 658-8888

(Registrant’s Telephone Number, Including Area Code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 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 ☑     No 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).      

Yes ☑     No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☑       Accelerated filer        Smaller Reporting Company       Non-accelerated filer  

Emerging Growth Company  

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes      No ☑ 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

The number of outstanding shares of UniFirst Corporation Common Stock and Class B Common Stock at December 28, 2018 were 15,435,844 and 3,710,009, respectively.

UniFirstCorporation

Quarterly Report on Form 10-Q

For the Quarter endedNovember 24, 2018

Table of Contents

Part I – FINANCIAL INFORMATION	3
Item 1 – Unaudited Financial Statements	3
Consolidated Statements of Income for the Thirteen Weeks ended November 24, 2018 and November 25, 2017	3
Consolidated Statements of Comprehensive Income for the Thirteen Weeks ended November 24, 2018 and November 25, 2017	4
Consolidated Balance Sheets as of November 24, 2018 and August 25, 2018	5
Consolidated Statements of Shareholders' Equity for the Thirteen Weeks ended November 24, 2018 and November 25, 2017	6
Consolidated Statements of Cash Flows for the Thirteen Weeks ended November 24, 2018 and November 25, 2017	7
Notes to Consolidated Financial Statements	8
Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3 – Quantitative and Qualitative Disclosures About Market Risk	34
Item 4 – Controls and Procedures	35
Part II – OTHER INFORMATION	35
Item 1 – Legal Proceedings	35
Item 1A – Risk Factors	35
Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds	35
Item 3 – Defaults Upon Senior Securities	35
Item 4 – Mine Safety Disclosures	36
Item 5 – Other Information	36
Item 6 – Exhibits	37
Signatures	38
Certifications
Ex-31.1 Section 302 Certification of CEO
Ex-31.2 Section 302 Certification of CFO
Ex-32.1 Section 906 Certification of CEO
Ex-32.2 Section 906 Certification of CFO

2

PART I – FINANCIAL INFORMATION

ITEM1. FINANCIAL STATEMENTS

Consolidated Statements of Income

UniFirst Corporation and Subsidiaries

(Unaudited)

Thirteen weeks ended (In thousands, except per share data)	November 24, 2018			November 25, 2017
Revenues	$	438,550		$	415,778
Operating expenses:
Cost of revenues (1)	277,049			253,650
Selling and administrative expenses (1)	85,959			87,510
Depreciation and amortization	25,116			22,707
Total operating expenses	388,124			363,867
Operating income	50,426			51,911
Other (income) expense:
Interest income, net	(1,705		)	(1,276		)
Other expense, net	172			154
Total other income, net	(1,533		)	(1,122		)
Income before income taxes	51,959			53,033
Provision for income taxes	13,639			18,827
Net income	$	38,320		$	34,206
Income per share – Basic:
Common Stock	$	2.08		$	1.77
Class B Common Stock	$	1.67		$	1.42
Income per share – Diluted:
Common Stock	$	1.99		$	1.67
Income allocated to – Basic:
Common Stock	$	32,137		$	27,384
Class B Common Stock	$	6,183		$	6,822
Income allocated to – Diluted:
Common Stock	$	38,320		$	34,206
Weighted average number of shares outstanding – Basic:
Common Stock	15,432			15,462
Class B Common Stock	3,710			4,816
Weighted average number of shares outstanding – Diluted:
Common Stock	19,302			20,434

(1) Exclusive of depreciation on the Company’s property, plant and equipment and amortization on its intangible assets.

The accompanying notes are an integral part of these

Consolidated Financial Statements.

3

Consolidated Statements of Comprehensive Income

UniFirstCorporation and Subsidiaries

(Unaudited)

Thirteen weeks ended (In thousands)	November 24, 2018			November 25, 2017
Net income	$	38,320		$	34,206
Other comprehensive (loss) income:
Foreign currency translation adjustments	(2,282		)	(2,013		)
Change in fair value of derivatives, net of income taxes	132			82
Derivative financial instruments reclassified to earnings	(44		)	4
Other comprehensive loss	(2,194		)	(1,927		)
Comprehensive income	$	36,126		$	32,279

The accompanying notes are an integral part of these

Consolidated Financial Statements.

4

ConsolidatedBalance Sheets

UniFirst Corporation and Subsidiaries

(Unaudited)

(In thousands, except share and par value data)	November 24, 2018			August 25, 2018
Assets
Current assets:
Cash, cash equivalents and short-term investments	$	276,536		$	270,512
Receivables, less reserves of $11,926 and $9,237	212,655			200,797
Inventories	91,154			90,176
Rental merchandise in service	178,636			174,392
Prepaid taxes	11,578			27,024
Prepaid expenses and other current assets	38,854			21,899
Total current assets	809,413			784,800
Property, plant and equipment, net of accumulated depreciation of $767,605 and $751,831	558,442			559,576
Goodwill	397,296			397,422
Customer contracts, net	64,357			67,318
Other intangible assets, net	3,179			3,586
Deferred income taxes	423			425
Other assets	74,048			30,259
Total assets	$	1,907,158		$	1,843,386
Liabilities and shareholders’ equity
Current liabilities:
Accounts payable	$	71,987		$	73,500
Accrued liabilities	104,712			124,225
Accrued taxes	—			736
Total current liabilities	176,699			198,461
Accrued liabilities	104,124			105,888
Accrued and deferred income taxes	86,837			74,070
Total liabilities	367,660			378,419
Commitments and contingencies (Note 12)
Shareholders’ equity:
Preferred Stock, $1.00 par value; 2,000,000 shares authorized; no shares issued and outstanding	—			—
Common Stock, $0.10 par value; 30,000,000 shares authorized; 15,432,728 and 15,431,209 shares issued and outstanding as of November 24, 2018 and August 25, 2018, respectively	1,543			1,543
Class B Common Stock, $0.10 par value; 20,000,000 shares authorized; 3,710,009 shares issued and outstanding as of November 24, 2018 and August 25, 2018	371			371
Capital surplus	84,015			82,973
Retained earnings	1,480,922			1,405,239
Accumulated other comprehensive loss	(27,353		)	(25,159		)
Total shareholders’ equity	1,539,498			1,464,967
Total liabilities and shareholders’ equity	$	1,907,158		$	1,843,386

The accompanying notes are an integral part of these

Consolidated Financial Statements

5

ConsolidatedStatements of Shareholders’ Equity

UniFirst Corporation and Subsidiaries

(In thousands)	Common Shares	Class B Common Shares	Common Stock		Class B Common Stock		Capital Surplus		Retained Earnings			Accumulated Other Comprehensive Loss			Total Equity
Balance, August 26, 2017	15,453	4,815	$	1,545	$	482	$	86,245	$	1,386,438		$	(21,518	)	$	1,453,192
Net income	—	—	—		—		—		34,206			—			34,206
Change in fair value of derivatives	—	—	—		—		—		—			86			86
Foreign currency translation	—	—	—		—		—		—			(2,013		)	(2,013		)
Dividends declared Common Stock ($0.0375 per share)	—	—	—		—		—		(582		)	—			(582		)
Dividends declared Class B Common Stock ($0.0300 per share)									(144		)				(144		)
Share-based compensation, net (2)	—	—	—		—		1,334		(738		)	—			596
Share-based awards exercised, net (1)	16	—	2		—		265		—			—			267
Balance, November 25, 2017	15,469	4,815	$	1,547	$	482	$	87,844	$	1,419,180		$	(23,445	)	$	1,485,608
Balance, August 25, 2018	15,431	3,710	$	1,543	$	371	$	82,973	$	1,405,239		$	(25,159	)	$	1,464,967
Net income	—	—	—		—		—		38,320			—			38,320
Change in fair value of derivatives	—	—	—		—		—		—			88			88
Foreign currency translation	—	—	—		—		—		—			(2,282		)	(2,282		)
Dividends declared Common Stock ($0.1125 per share)	—	—	—		—		—		(1,736		)	—			(1,736		)
Dividends declared Class B Common Stock ($0.0900 per share)									(334		)				(334		)
Share-based compensation, net (2)	—	—	—		—		1,042		—			—			1,042
Share-based awards exercised, net (1)	2	—	—		—		—		—			—			—
Cumulative effect of change in accounting principle, net (3)	—	—	—		—		—		39,433			—			39,433
Balance, November 24, 2018	15,433	3,710	$	1,543	$	371	$	84,015	$	1,480,922		$	(27,353	)	$	1,539,498

(1)These amounts are shown net of the effect of income taxes.

(2)These amounts are shown net of any shares withheld by the Company to satisfy certain tax withholdings obligations in connection with the vesting of certain shares of restricted stock or restricted stock units.

(3)These amounts consist of the cumulative impact of the adoption of the new revenue recognition accounting guidance. See Note 2, “Recent Accounting Pronouncements” in the Company's Consolidated Financial Statements.

The accompanying notes are an integral part of these

Consolidated Financial Statements.

6

ConsolidatedStatements of Cash Flows

UniFirst Corporation and Subsidiaries

(Unaudited)

Thirteen weeks ended (In thousands)	November 24, 2018			November 25, 2017
Cash flows from operating activities:
Net income	$	38,320		$	34,206
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation	21,795			19,540
Amortization of intangible assets	3,321			3,167
Amortization of deferred financing costs	28			28
Gain on sale of assets	(19		)	—
Share-based compensation	1,182			1,114
Accretion on environmental contingencies	189			173
Accretion on asset retirement obligations	220			240
Deferred income taxes	(497		)	2,031
Changes in assets and liabilities, net of acquisitions:
Receivables, less reserves	(12,165		)	(12,879		)
Inventories	(1,061		)	(2,882		)
Rental merchandise in service	(4,513		)	(82		)
Prepaid expenses and other current assets and Other assets	(6,884		)	(4,901		)
Accounts payable	(1,264		)	(1,092		)
Accrued liabilities	(19,651		)	(7,456		)
Prepaid and accrued income taxes	13,256			16,420
Net cash provided by operating activities	32,257			47,627
Cash flows from investing activities:
Acquisition of businesses, net of cash acquired	—			(2,671		)
Capital expenditures	(23,285		)	(19,033		)
Proceeds from sale of assets	90			—
Other	33			318
Net cash used in investing activities	(23,162		)	(21,386		)
Cash flows from financing activities:
Proceeds from exercise of share-based awards	—			267
Taxes withheld and paid related to net share settlement of equity awards	(140		)	(522		)
Payment of cash dividends	(2,070		)	(726		)
Net cash used in financing activities	(2,210		)	(981		)
Effect of exchange rate changes	(861		)	(976		)
Net increase in cash, cash equivalents and short-term investments	6,024			24,284
Cash, cash equivalents and short-term investments at beginning of period	270,512			349,752
Cash, cash equivalents and short-term investments at end of period	$	276,536		$	374,036
Supplemental disclosure of cash flow information:
Non-cash capital expenditures	$	14,894		$	10,994

The accompanying notes are an integral part of these

Consolidated Financial Statements.

7

UniFirst Corporation and Subsidiaries

Notesto Consolidated Financial Statements

1. Basis of Presentation

These Consolidated Financial Statements of UniFirst Corporation (“Company”) have been prepared, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) have been condensed or omitted pursuant to such rules and regulations; however, the Company believes that the information furnished reflects all adjustments (consisting only of normal recurring adjustments) which are, in the opinion of management, necessary for a fair statement of results for the interim period.

It is suggested that these Consolidated Financial Statements be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended August 25, 2018. There have been no material changes in the accounting policies followed by the Company during the current fiscal year other than the adoption of recent accounting pronouncements discussed in Note 2. Results for an interim period are not indicative of any future interim periods or for an entire fiscal year.

2. Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board ("FASB") issued updated accounting guidance for revenue recognition, which it has subsequently modified. This modified update provides a comprehensive new revenue recognition model that requires revenue to be recognized in a manner to depict the transfer of goods or services to a customer at an amount that reflects the consideration expected to be received in exchange for those goods or services. The standard includes cost guidance, whereby all direct and incremental costs to obtain or fulfill a contract will be capitalized and amortized over the corresponding period of benefit, determined on a contract by contract basis. This guidance is also intended to improve disclosure requirements and enhance the comparability of revenue recognition practices. Improved disclosures under the amended guidance relate to the nature, amount, timing and uncertainty of revenue that is recognized from contracts with customers. The Company adopted the standard on August 26, 2018 using the modified retrospective adoption method. Upon adoption of this guidance, the Company recorded an adjustment to the opening balance of retained earnings as of August 26, 2018. The adoption of the standard did not have any material impact to the timing or measurement of revenues. The adjustment to retained earnings relates to the capitalization of certain direct and incremental contract costs required by the new guidance, net of the related income tax effect. Capitalized costs are amortized ratably over the anticipated period of benefit. The Company applied the new guidance to all contracts as of August 26, 2018. Results for reporting periods beginning after August 25, 2018 are presented under the new guidance, while comparative prior period amounts have not been restated and continue to be presented under accounting standards in effect in those periods.

Capitalization of Contract Costs. The Company has elected to apply the guidance, as a practical expedient, to a portfolio of contracts (or performance obligations) with similar characteristics because the Company reasonably expects that the effects on the Consolidated Financial Statements of applying this guidance to the portfolio would not differ materially from applying this guidance to the individual contracts within the portfolio. The Company also continues to expense certain costs to obtain a contract if those costs do not meet the criteria of the new standard or the amortization period of the asset would have been one year or less.

The cumulative effect of applying the new guidance was recorded as an adjustment to retained earnings as of the adoption date. As a result of applying the modified retrospective method to adopt the new revenue guidance, the adjustments set forth in the table below were made to accounts on the consolidated balance sheet as of August 26, 2018:

8

UniFirst Corporation and Subsidiaries

Notesto Consolidated Financial Statements (Continued)

Consolidated Balance Sheet (In thousands)	August 25, 2018		Capitalization of Contract Costs		August 26, 2018
Assets
Prepaid expenses and other current assets	$	21,899	$	10,789	$	32,688
Total current assets	784,800		10,789		795,589
Other assets	30,259		42,405		72,664
Total assets	$	1,843,386	$	53,194	$	1,896,580
Liabilities and shareholders’ equity
Accrued and deferred income taxes	$	74,070	$	13,761	$	87,831
Total liabilities	378,419		13,761		392,180
Retained earnings	1,405,239		39,433		1,444,672
Total shareholders' equity	1,464,967		39,433		1,504,400
Total liabilities and shareholders’ equity	$	1,843,386	$	53,194	$	1,896,580

The impacts of adopting this standard on the first quarter of fiscal 2019 Consolidated Financial Statements are presented in the following tables:

	Thirteen weeks ended November 24, 2018
Consolidated Statement of Income (In thousands, except per share data)	As Reported		Under Historical Guidance		Impact of Adopting New Revenue Standard
Operating expenses:
Selling and administrative expenses	$	85,959	$	86,875	$	(916	)
Total operating expenses	388,124		389,040		(916		)
Operating income	50,426		49,510		916
Income before income taxes	51,959		51,043		916
Provision for income taxes	13,639		13,399		240
Income from continuing operations
Net income	$	38,320	$	37,644	$	676
Income per share – Diluted:	$	1.99	$	1.95	$	0.04

9

UniFirst Corporation and Subsidiaries

Notesto Consolidated Financial Statements (Continued)

	Balance at November 24, 2018
Consolidated Balance Sheet (In thousands)	As Reported		Under Historical Guidance		Impact of Adopting New Revenue Standard
Assets
Prepaid expenses and other current assets	$	38,854	$	28,065	$	10,789
Total current assets	809,413		798,624		10,789
Other assets	74,048		30,727		43,321
Total assets	$	1,907,158	$	1,853,048	$	54,110
Liabilities and shareholders’ equity
Accrued and deferred income taxes	$	86,837	$	72,836	$	14,001
Total liabilities	367,660		353,659		14,001
Retained earnings	1,480,922		1,440,813		40,109
Total shareholders' equity	1,539,498		1,499,389		40,109
Total liabilities and shareholders’ equity	$	1,907,158	$	1,853,048	$	54,110

The adoption of this standard had no impact on the Company's first quarter of fiscal 2019 operating cash flow, and the only impact of the adoption on its fiscal 2019 consolidated statement of comprehensive income was the impact to net income as presented in the table above.

In January 2016, the FASB issued updated guidance for the recognition, measurement, presentation, and disclosure of certain financial assets and liabilities. This guidance is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017, with early adoption permitted. Accordingly, the Company adopted this standard on August 26, 2018. The adoption of this guidance did not have a material impact on the Company's financial statements.

In February 2016, the FASB issued updated guidance which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e., lessees and lessors). The new guidance requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease, respectively. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases. This new guidance is effective for reporting periods beginning after December 15, 2018, however, early adoption is permitted. Entities are required to use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in their financial statements. The Company will adopt the new guidance on September 1, 2019. At August 25, 2018, the Company was contractually obligated to make future payments of $47.1 million under its operating lease obligations in existence as of that date, primarily related to long-term leases. The Company is evaluating the impact that this guidance will have on its financial statements. While the Company is in the early stages of its implementation process of this guidance, and has not yet determined its impact on its consolidated balance sheet or consolidated statement of income, these leases would potentially be required to be presented on the consolidated balance sheet in accordance with the requirements of this guidance.

In August 2016, the FASB issued updated guidance that reduces diversity in how certain cash receipts and cash payments are presented and classified in the Consolidated Statements of Cash Flows. This guidance is effective for annual reporting periods, and any interim periods within those annual periods, that begin after December 15, 2017 and is required to be applied retrospectively, with early adoption permitted. Accordingly, the Company adopted this standard on August 26, 2018. The adoption of this guidance did not have a material impact on its financial statements.

In October 2016, the FASB issued updated guidance to improve the accounting for the income tax consequences of intra-entity transfers of assets other than inventory. This guidance is effective for annual reporting periods, and any interim periods within those annual periods, that begin after December 15, 2017 and is required to be applied on a modified retrospective basis, with

10

UniFirst Corporation and Subsidiaries

Notesto Consolidated Financial Statements (Continued)

early adoption permitted. Accordingly, the Company adopted this standard on August 26, 2018. The adoption of this guidance did not have a material impact on its financial statements.

In March 2017, the FASB issued updated guidance that requires a change in the presentation of net periodic benefit cost on the consolidated statements of operations. Specifically, entities must present the service cost component of net periodic benefit cost in the same financial statement line items as other compensation costs arising from services rendered by the related employees during the period, whereas the non-service components of net periodic benefit cost must be presented separately from the financial statement line items that include service cost and outside of operating income.  The Company’s adoption of this guidance on August 26, 2018 did not have a material impact on its financial statements.

In August 2017, the FASB issued guidance that expands component and fair value hedging, specifies the presentation of the effects of hedging instruments, and eliminates the separate measurement and presentation of hedge ineffectiveness. The accounting update is effective for annual and interim periods beginning after December 15, 2018, with early adoption permitted, and is to be applied on a modified retrospective basis. The Company elected to early adopt this guidance in the first quarter of fiscal 2019. The adoption of this guidance did not have a material impact on its financial statements.

In August 2018, the FASB issued updated guidance to modify the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. This guidance will be effective for annual reporting periods, and any interim periods within those annual periods, ending after December 15, 2020 and will be required to be applied on a retrospective basis, with early adoption permitted. Accordingly, the standard will be effective for the Company on August 30, 2020. The Company is currently evaluating the impact that this guidance will have on its financial statements and related disclosures.

3. Revenue Recognition

The following table presents the Company’s revenues for the thirteen weeks ended November 24, 2018 and November 25, 2017, respectively, disaggregated by service type:

	Thirteen weeks ended
	November 24, 2018				November 25, 2017
(In thousands, except percentages)	Revenues		% of Revenues		Revenues		% of Revenues
Core Laundry Operations	$	390,477	89.0	%	$	373,796	89.9	%
Specialty Garments	34,448		7.9	%	28,427		6.8	%
First Aid	13,625		3.1	%	13,555		3.3	%
Total Revenues	$	438,550	100.0	%	$	415,778	100.0	%

For the thirteen weeks ended November 24, 2018, the percentage of revenue recognized over time as the services are performed was 95.3% of Core Laundry Operations revenues and 83.9%of Specialty Garments revenues. See Note 16 “Segment Reporting” for additional details of segment definitions. During that same period, 4.7% of Core Laundry Operations revenues, 16.1% of Specialty Garments revenues and 100% of First Aid revenues were recognized at a point in time, which generally occurs when the goods are transferred to the customer.

11

UniFirst Corporation and Subsidiaries

Notesto Consolidated Financial Statements (Continued)

Revenue Recognition Policy

Approximately 91.0% of the Company's revenues are derived from fees for route servicing of Core Laundry Operations, Specialty Garments, and First Aid performed by the Company’s employees at the customer's location of business. Revenues from the Company's route servicing customer contracts represent a single-performance obligation. The Company recognizes these revenues over time as services are performed based on the nature of services provided and contractual rates (input method). Certain of the Company's customer contracts, primarily within the Company's Core Laundry Operations, include pricing terms and conditions that include components of variable consideration. The variable consideration is typically in the form of consideration due to a customer based on performance metrics specified within the contract. Specifically, some contracts contain discounts or rebates that the customer can earn through the achievement of specified volume levels. Each component of variable consideration is earned based on the Company's actual performance during the measurement period specified within the contract. To determine the transaction price, the Company estimates the variable consideration using the most likely amount method, based on the specific contract provisions and known performance results during the relevant measurement period. When determining if variable consideration should be constrained, the Company considers whether factors outside its control could result in a significant reversal of revenue. In making these assessments, the Company considers the likelihood and magnitude of a potential reversal. The Company's performance period generally corresponds with the monthly invoice period. No significant constraints on the Company's revenue recognition were applied during the thirteen weeks ended November 24, 2018. The Company reassesses these estimates during each reporting period. The Company maintains a liability for these discounts and rebates within accrued liabilities on the consolidated balance sheets. Variable consideration also includes consideration paid to a customer at the beginning of a contract. The Company capitalizes this consideration and amortizes it over the life of the contract as a reduction to revenue in accordance with the updated accounting guidance for revenue recognition. These assets are included in other assets on the consolidated balance sheets.

Costs to Obtain a Contract

The Company defers commission expenses paid to its employee-partners when the commissions are deemed to be incremental for obtaining the route servicing customer contract. The deferred commissions are amortized on a straight-line basis over the expected period of benefit. The Company reviews the deferred commission balances for impairment on an ongoing basis. Deferred commissions are classified as current or noncurrent based on the timing of when the Company expects to recognize the expense. The current portion is included in prepaid expenses and other current assets and the non-current portion is included in other assets on the Company's consolidated balance sheets. As of November 24, 2018, the current and non-current assets related to deferred commissions totaled $10.8 million and $43.3 million, respectively. During the thirteen weeks ended November 24, 2018, the Company recorded $2.8 million of amortization expense related to deferred commissions. This expense is classified in selling and administrative expense on the consolidated statements of income.

12

UniFirst Corporation and Subsidiaries

Notesto Consolidated Financial Statements (Continued)

4. Business Acquisitions

During the thirteen weeks endedNovember 24, 2018, the Company acquired no businesses. Whenever the Company acquires a business, consistent with current accounting guidance, the results of operations of the acquisition are included in the Company's consolidated financial results from the date of the acquisition.

5. Fair Value Measurements

The assets or liabilities measured at fair value on a recurring basis are summarized in the tables below (in thousands):

	As of November 24, 2018
	Level 1		Level 2		Level 3		Fair Value
Assets:
Cash equivalents	$	143,122	$	—	$	—	$	143,122
Pension plan assets	—		6,137		—		6,137
Foreign currency forward contracts	—		243		—		243
Total assets at fair value	$	143,122	$	6,380	$	—	$	149,502

	As of August 25, 2018
	Level 1		Level 2		Level 3		Fair Value
Assets:
Cash equivalents	$	103,190	$	—	$	—	$	103,190
Pension plan assets	—		6,325		—		6,325
Foreign currency forward contracts	—		127		—		127
Total assets at fair value	$	103,190	$	6,452	$	—	$	109,642

The Company’s cash equivalents listed above represent money market securities and are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices. The Company does not adjust the quoted market price for such financial instruments.

The Company’s pension plan assets listed above represent guaranteed deposit accounts that are maintained and operated by Prudential Retirement Insurance and Annuity Company (“PRIAC”). All assets are merged with the general assets of PRIAC and are invested predominantly in privately placed securities and mortgages. At the beginning of each calendar year, PRIAC notifies the Company of the annual rates of interest which will be applied to the amounts held in the guaranteed deposit account during the next calendar year. In determining the interest rate to be applied, PRIAC considers the investment performance of the underlying assets of the prior year; however, regardless of the investment performance the Company is contractually guaranteed a minimum rate of return. As such, the Company’s pension plan assets are included within Level 2 of the fair value hierarchy.

The Company’s foreign currency forward contracts represent contracts the Company has entered into to exchange Canadian dollars for U.S. dollars at fixed exchange rates in order to manage its exposure related to certain forecasted Canadian dollar denominated sales of one of its subsidiaries. These contracts were included in prepaid expenses and other current assets and other long-term assets as of November 24, 2018 and August 25, 2018. The fair value of the forward contracts is based on similar exchange traded derivatives and are, therefore, included within Level 2 of the fair value hierarchy.

6. Derivative Instruments and Hedging Activities

As of November 24, 2018, the Company had forward contracts with a notional value of approximately 13.4 million CAD outstanding and recorded the fair value of the contracts of $0.2 million in other long-term assets and $0.1 million in prepaid expenses and other current assets with a corresponding decrease in accumulated other comprehensive loss of $0.2 million, which was recorded net of tax. During the thirteen weeks endedNovember 24, 2018, the Company reclassified a nominal amount from accumulated other comprehensive loss to revenue, related to the derivative financial instruments. The gain on these forward contracts that resulted

13

UniFirst Corporation and Subsidiaries

Notesto Consolidated Financial Statements (Continued)

in a decrease to accumulated other comprehensive loss as of November 24, 2018 is expected to be reclassified to revenues prior to its maturity on February 25, 2022.

7. Employee Benefit Plans

Defined Contribution Retirement Savings Plan

The Company has a defined contribution retirement savings plan with a 401(k) feature for all eligible U.S. and Canadian employees not under collective bargaining agreements. The Company matches a portion of the employee’s contribution and may make an additional contribution at its discretion. Contributions charged to expense under the plan for the thirteen weeks ended November 24, 2018 and November 25, 2017 were $4.5 million and $4.1 million, respectively.

Pension Plans and Supplemental Executive Retirement Plans

The Company maintains an unfunded Supplemental Executive Retirement Plan for certain eligible employees of the Company and two frozen non-contributory defined benefit pension plans. The amounts charged to expense related to these plans for the thirteen weeks ended November 24, 2018 and November 25, 2017 were $0.5 million and $0.7 million, respectively.

8.Income Per Share

The Company calculates income per share by allocating income to its unvested participating securities as part of its income per share calculations. The following table sets forth the computation of basic income per share using the two-class method for amounts attributable to the Company’s shares of Common Stock and Class B Common Stock (in thousands, except per share data):

	Thirteen weeks ended
	November 24, 2018		November 25, 2017
Net income available to shareholders	$	38,320	$	34,206
Allocation of net income for Basic:
Common Stock	$	32,137	$	27,384
Class B Common Stock	6,183		6,822
	$	38,320	$	34,206
Weighted average number of shares for Basic:
Common Stock	15,432		15,462
Class B Common Stock	3,710		4,816
	19,142		20,278
Income per share for Basic:
Common Stock	$	2.08	$	1.77
Class B Common Stock	$	1.67	$	1.42

The Company is required to calculate diluted income per share for Common Stock using the more dilutive of the following two methods:

• The treasury stock method; or

• The two-class method assuming a participating security is not exercised or converted.

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Notesto Consolidated Financial Statements (Continued)

For the thirteen weeks ended November 24, 2018 and November 25, 2017, the Company’s diluted income per share assumes the conversion of all vested Class B Common Stock into Common Stock and uses the two-class method for its unvested participating shares. The following table sets forth the computation of diluted income per share of Common Stock for the thirteen weeks endedNovember 24, 2018 and November 25, 2017 (in thousands, except per share data):

	Thirteen weeks ended November 24, 2018					Thirteen weeks ended November 25, 2017
	Earnings to Common Shareholders		Common Shares	Income Per Share		Earnings to Common Shareholders		Common Shares	Income Per Share
As reported - Basic	$	32,137	15,432	$	2.08	$	27,384	15,462	$	1.77
Add: effect of dilutive potential common shares
Share-Based Awards	—		160			—		156
Class B Common Stock	6,183		3,710			6,822		4,816
As reported – Diluted	$	38,320	19,302	$	1.99	$	34,206	20,434	$	1.67

Share-based awards that would result in the issuance of 10,156 shares of Common Stock were excluded from the calculation of diluted income per share for the thirteen weeks ended November 24, 2018 because they were anti-dilutive. Share-based awards that would result in the issuance of 117 shares of Common Stock were excluded from the calculation of diluted income per share for the thirteen weeks ended November 25, 2017 because they were anti-dilutive.

9. Inventories

Inventories are stated at the lower of cost or net realizable value, net of any reserve for excess and obsolete inventory. Work-in-process and finished goods inventories consist of materials, labor and manufacturing overhead. Judgments and estimates are used in determining the likelihood that new goods on hand can be sold to customers or used in rental operations. Historical inventory usage and current revenue trends are considered in estimating both excess and obsolete inventories. If actual product demand and market conditions are less favorable than those projected by management, additional inventory write-downs may be required. The Company uses the first-in, first-out (“FIFO”) method to value its inventories.

The components of inventory as of November 24, 2018 and August 25, 2018 were as follows (in thousands):

	November 24, 2018		August 25, 2018
Raw materials	$	16,419	$	18,508
Work in process	3,707		3,271
Finished goods	71,028		68,397
Total inventories	$	91,154	$	90,176

10. Goodwill and Other Intangible Assets

As discussed in Note 4, “Business Acquisitions”, when the Company acquires a business, the amount assigned to the tangible assets and liabilities and intangible assets acquired is based on their respective fair values determined as of the acquisition date. The excess of the purchase price over the tangible assets and liabilities and intangible assets is recorded as goodwill.

The changes in the carrying amount of goodwill are as follows (in thousands):

Balance as of August 25, 2018	$	397,422
Other	(126		)
Balance as of November 24, 2018	$	397,296

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UniFirst Corporation and Subsidiaries

Notesto Consolidated Financial Statements (Continued)

Intangible assets, net in the Company’s accompanying Consolidated Balance Sheets are as follows (in thousands):

	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
November 24, 2018
Customer contracts	$	220,257	$	155,900	$	64,357
Other intangible assets	34,981		31,802		3,179
	$	255,238	$	187,702	$	67,536
August 25, 2018
Customer contracts	$	220,303	$	152,985	$	67,318
Other intangible assets	35,030		31,444		3,586
	$	255,333	$	184,429	$	70,904

11. Asset Retirement Obligations

The Company recognizes asset retirement obligations in the period in which they are incurred if a reasonable estimate of fair value can be made. The associated asset retirement costs are capitalized as part of the carrying amount of the long-lived asset. The Company continues to depreciate, on a straight-line basis, the amount added to property, plant and equipment and recognizes accretion expense in connection with the discounted liability over the various remaining lives which range from approximately one to twenty-six years.

A reconciliation of the Company’s asset retirement liability for the thirteen weeks endedNovember 24, 2018 was as follows (in thousands):

	November 24, 2018
Beginning balance as of August 25, 2018	$	13,668
Accretion expense	220
Effect of exchange rate changes	(70		)
Change in estimate	(1,705		)
Ending balance as of November 24, 2018	$	12,113

Asset retirement obligations are included in current and long-term accrued liabilities in the accompanying Consolidated Balance Sheets.

12. Commitments and Contingencies

The Company and its operations are subject to various federal, state and local laws and regulations governing, among other things, air emissions, wastewater discharges, and the generation, handling, storage, transportation, treatment and disposal of hazardous wastes and other substances. In particular, industrial laundries currently use and must dispose of detergent waste water and other residues, and, in the past, used perchloroethylene and other dry cleaning solvents. The Company is attentive to the environmental concerns surrounding the disposal of these materials and has, through the years, taken measures to avoid their improper disposal. Over the years, the Company has settled, or contributed to the settlement of, actions or claims brought against the Company relating to the disposal of hazardous materials and there can be no assurance that the Company will not have to expend material amounts to remediate the consequences of any such disposal in the future.

U.S. GAAP requires that a liability for contingencies be recorded when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated. Significant judgment is required to determine the existence of a liability, as well as the amount to be recorded. The Company regularly consults with attorneys and outside consultants in its consideration of the relevant facts and circumstances before recording a contingent liability. Changes in enacted laws, regulatory orders or decrees, management’s estimates of costs, risk-free interest rates, insurance proceeds, participation by other parties, the timing of payments, the input of the Company’s attorneys and outside consultants or other factual circumstances could have a material impact on the amounts recorded for environmental and other contingent liabilities.

16

UniFirst Corporation and Subsidiaries

Notesto Consolidated Financial Statements (Continued)

Under environmental laws, an owner or lessee of real estate may be liable for the costs of removal or remediation of certain hazardous or toxic substances located on, or in, or emanating from, such property, as well as related costs of investigation and property damage. Such laws often impose liability without regard to whether the owner or lessee knew of, or was responsible for the presence of such hazardous or toxic substances. There can be no assurances that acquired or leased locations have been operated in compliance with environmental laws and regulations or that future uses or conditions will not result in the imposition of liability upon the Company under such laws or expose the Company to third-party actions such as tort suits. The Company continues to address environmental conditions under terms of consent orders negotiated with the applicable environmental authorities or otherwise with respect to sites located in or related to Woburn, Massachusetts, Somerville, Massachusetts, Springfield, Massachusetts, Uvalde, Texas, Stockton, California, two sites related to former operations in Williamstown, Vermont, as well as sites located in Goldsboro, North Carolina and Wilmington, North Carolina.

The Company has accrued certain costs related to the sites described above as it has been determined that the costs are probable and can be reasonably estimated. The Company has potential exposure related to a parcel of land (the "Central Area") related to the Woburn, Massachusetts site mentioned above. Currently, the consent decree for the Woburn site does not define or require any remediation work in the Central Area. The United States Environmental Protection Agency (the "EPA") has provided the Company and other signatories to the consent decree with comments on the design and implementation of groundwater and soil remedies at the Woburn site and investigation of environmental conditions in the Central Area. The Company, and other signatories, have implemented and proposed to do additional work at the Woburn site but many of the EPA’s comments remain to be resolved. The Company has accrued costs to perform certain work responsive to EPA's comments. The Company has implemented mitigation measures and continues to monitor environmental conditions at the Somerville, Massachusetts site. In addition, the Company has received demands from the local transit authority for reimbursement of certain costs associated with its construction of a new municipal transit station in the area of the Somerville site. This station is part of the extension of the transit system. The Company has reserved for costs in connection with this matter; however, in light of the uncertainties associated with this matter, these costs and the related reserve may change. The Company has also received notice that the Massachusetts Department of Environmental Protection is conducting an audit of the Company’s investigation and remediation work with respect to the Somerville site.

The Company routinely reviews and evaluates sites that may require remediation and monitoring and determines its estimated costs based on various estimates and assumptions. These estimates are developed using its internal sources or by third party environmental engineers or other service providers. Internally developed estimates are based on:

•Management’s judgment and experience in remediating and monitoring the Company’s sites;

•Information available from regulatory agencies as to costs of remediation and monitoring;

• The number, financial resources and relative degree of responsibility of other potentially responsible parties (“PRPs”) who may be liable for remediation and monitoring of a specific site; and

•The typical allocation of costs among PRPs.

There is usually a range of reasonable estimates of the costs associated with each site. In accordance with U.S. GAAP, the Company’s accruals reflect the amount within the range that it believes is the best estimate or the low end of a range of estimates if no point within the range is a better estimate. Where it believes that both the amount of a particular liability and the timing of the payments are reliably determinable, the Company adjusts the cost in current dollars using a rate of 3% for inflation until the time of expected payment and discounts the cost to present value using current risk-free interest rates. As of November 24, 2018, the risk-free interest rates utilized by the Company ranged from 3.1% to 3.3%.

17

UniFirst Corporation and Subsidiaries

Notesto Consolidated Financial Statements (Continued)

For environmental liabilities that have been discounted, the Company includes interest accretion, based on the effective interest method, in selling and administrative expenses on the Consolidated Statements of Income. The changes to the Company’s environmental liabilities for the thirteen weeks endedNovember 24, 2018 were as follows (in thousands):

	November 24, 2018
Beginning balance as of August 25, 2018	$	25,486
Costs incurred for which reserves had been provided	(195		)
Insurance proceeds	40
Interest accretion	189
Change in discount rates	(699		)
Balance as of November 24, 2018	$	24,821

Anticipated payments and insurance proceeds of currently identified environmental remediation liabilities as of November 24, 2018, for the next five fiscal years and thereafter, as measured in current dollars, are reflected below.

(In thousands)	2019			2020			2021			2022			2023			Thereafter			Total
Estimated costs – current dollars	$	9,299		$	2,122		$	1,635		$	1,272		$	1,175		$	12,137		$	27,640
Estimated insurance proceeds	(133		)	(159		)	(173		)	(159		)	(173		)	(830		)	(1,627		)
Net anticipated costs	$	9,166		$	1,963		$	1,462		$	1,113		$	1,002		$	11,307		$	26,013
Effect of inflation																			7,477
Effect of discounting																			(8,669		)
Balance as of November 24, 2018																			$	24,821

Estimated insurance proceeds are primarily received from an annuity received as part of a legal settlement with an insurance company. Annual proceeds of approximately $0.3 million are deposited into an escrow account which funds remediation and monitoring costs for two sites related to former operations in Williamstown, Vermont. Annual proceeds received but not expended in the current year accumulate in this account and may be used in future years for costs related to this site through the year 2027. As of November 24, 2018, the balance in this escrow account, which is held in a trust and is not recorded in the Company’s accompanying Consolidated Balance Sheet, was approximately $3.8 million. Also included in estimated insurance proceeds are amounts the Company is entitled to receive pursuant to legal settlements as reimbursements from three insurance companies for estimated costs at the site in Uvalde, Texas.

The Company’s nuclear garment decontamination facilities are licensed by the Nuclear Regulatory Commission (“NRC”), or, in certain cases, by the applicable state agency, and are subject to regulation by federal, state and local authorities. The Company also has nuclear garment decontamination facilities in the United Kingdom and the Netherlands. These facilities are licensed and regulated by the respective country’s applicable federal agency. In the past, scrutiny and regulation of nuclear facilities and related services have resulted in the suspension of operations at certain nuclear facilities served by the Company or disruptions in its ability to service such facilities. There can be no assurance that such regulation will not lead to material disruptions in the Company’s garment decontamination business.

From time to time, the Company is also subject to legal proceedings and claims arising from the conduct of its business operations, including personal injury claims, customer contract matters, employment claims and environmental matters as described above.

While it is impossible for the Company to ascertain the ultimate legal and financial liability with respect to contingent liabilities, including lawsuits and environmental contingencies, the Company believes that the aggregate amount of such liabilities, if any, in excess of amounts covered by insurance have been properly accrued in accordance with U.S. GAAP. It is possible, however,

18

UniFirst Corporation and Subsidiaries

Notesto Consolidated Financial Statements (Continued)

that the future financial position and/or results of operations for any particular future period could be materially affected by changes in the Company’s assumptions or strategies related to these contingencies or changes out of the Company’s control.

13. Income Taxes

In accordance with ASC 740, Income Taxes (“ASC 740”), each interim period is considered integral to the annual period and tax expense is measured using an estimated annual effective tax rate. An entity is required to record income tax expense each quarter based on its annual effective tax rate estimated for the full fiscal year and use that rate to provide for income taxes on a current year-to-date basis, adjusted for discrete taxable events that occur during the interim period.

The Company’s effective tax rate for the thirteen weeks ended November 24, 2018 was 26.2% compared to 35.5% for the corresponding period in the prior year. The reduction in the effective tax rates in the thirteen weeks endedNovember 24, 2018 as compared to the corresponding period in the prior year was due primarily to the impact of Tax Cuts and Jobs Act (the “Act”) enacted on December 22, 2017. As a result of the Act, U.S. corporations are subject to lower income tax rates, which also caused the Company to remeasure its U.S. net deferred tax liabilities at the lower rates. Also because of this Act, the Company is subject to a one-time transition tax for the deemed repatriation of its foreign earnings.

U.S. Tax Reform

The Act, among other matters, reduced the U.S. federal corporate income tax rate from 35% to 21%, required companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred, and created new taxes on certain foreign sourced earnings.

As of November 24, 2018, the Company had not completed its accounting for the tax effects of enactment of the Act and is still analyzing certain aspects of the Act and refining its calculations, which could potentially affect the measurement of these balances or potentially give rise to new deferred tax amounts.

On December 22, 2017, the SEC issued Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Act (“SAB 118”) directing SEC registrants to consider the impact of the Act as “provisional” when they do not have the necessary information available, prepared or analyzed (including computations) in reasonable detail to complete their accounting for the change in tax law. In accordance with SAB 118, the amounts recorded related to accounting for the Act represent the Company’s best estimate based on its interpretation of the Act as the Company is still accumulating data to finalize the underlying calculations, or in certain cases, the U.S. Treasury is expected to issue further guidance on the application of certain provisions of the Act. In addition, the Company also used assumptions and estimates that may change as a result of future guidance and interpretation from the Internal Revenue Service, the SEC, the FASB and various other taxing jurisdictions. In particular, the Company anticipates that the U.S. state jurisdictions will continue to determine and announce their conformity or decoupling from the Act, either in its entirety or with respect to specific provisions. All of these potential legislative and interpretive actions could result in adjustments to the Company's provisional estimates when the accounting for the income tax effects of the Act is completed.

Uncertain tax positions

The Company recognizes interest and penalties related to uncertain tax positions as a component of income tax expense which is consistent with the recognition of these items in prior reporting periods. During the thirteen weeks endedNovember 24, 2018, there were no material changes in the amount of unrecognized tax benefits or the amount accrued for interest and penalties.

All U.S. and Canadian federal income tax statutes have lapsed for filings up to and including fiscal years 2013 and 2010, respectively. With a few exceptions, the Company is no longer subject to state and local income tax examinations for periods prior to fiscal 2014. The Company is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change significantly in the next 12 months.

14. Long-Term Debt

The Company has a $250 million unsecured revolving credit agreement (the “Credit Agreement”) with a syndicate of banks, which matures on April 11, 2021. Under the Credit Agreement, the Company is able to borrow funds at variable interest rates based on, at the Company’s election, the Eurodollar rate or a base rate, plus in each case a spread based on the Company’s consolidated funded debt ratio. Availability of credit requires compliance with certain financial and other covenants, including a maximum consolidated funded debt ratio and minimum consolidated interest coverage ratio as defined in the Credit Agreement. The Company tests its compliance with these financial covenants on a fiscal quarterly basis. As of November 24, 2018, the interest rates applicable

19

UniFirst Corporation and Subsidiaries

Notesto Consolidated Financial Statements (Continued)

to the Company’s borrowings under the Credit Agreement would be calculated as LIBOR plus 75 basis points at the time of the respective borrowing. As of November 24, 2018, the Company had no outstanding borrowings and had outstanding letters of credit amounting to $71.4 million, leaving $178.6 million available for borrowing under the Credit Agreement.

As of November 24, 2018, the Company was in compliance with all covenants under the Credit Agreement.

15. Accumulated Other ComprehensiveLoss

The changes in each component of accumulated other comprehensive loss, net of tax, for the thirteen weeks ended November 24, 2018 and November 25, 2017 were as follows (in thousands):

	Thirteen weeks ended November 24, 2018
	Foreign Currency Translation			Pension- related(1)			Derivative Financial Instruments(1)			Total Accumulated Other Comprehensive Loss
Balance as of August 25, 2018	$	(21,116	)	$	(4,135	)	$	92		$	(25,159	)
Other comprehensive (loss) income before reclassification	(2,282		)	—			132			(2,150		)
Amounts reclassified from accumulated other comprehensive loss	—			—			(44		)	(44		)
Net current period other comprehensive (loss) income	(2,282		)	—			88			(2,194		)
Balance as of November 24, 2018	$	(23,398	)	$	(4,135	)	$	180		$	(27,353	)

	Thirteen weeks ended November 25, 2017
	Foreign Currency Translation			Pension- related(1)			Derivative Financial Instruments(1)			Total Accumulated Other Comprehensive (Loss) Income
Balance as of August 26, 2017	$	(15,932	)	$	(5,477	)	$	(109	)	$	(21,518	)
Other comprehensive (loss) income before reclassification	(2,013		)	—			82			(1,931		)
Amounts reclassified from accumulated other comprehensive loss	—			—			4			4
Net current period other comprehensive (loss) income	(2,013		)	—			86			(1,927		)
Balance as of November 25, 2017	$	(17,945	)	$	(5,477	)	$	(23	)	$	(23,445	)

(1)Amounts are shown net of tax.

20

UniFirst Corporation and Subsidiaries

Notesto Consolidated Financial Statements (Continued)

Amounts reclassified from accumulated other comprehensive loss, net of tax, for the thirteen weeks endedNovember 24, 2018 and November 25, 2017 were as follows (in thousands):

	Thirteen weeks ended
	November 24, 2018			November 25, 2017
Derivative financial instruments, net:
Forward contracts (a)	$	(44	)	$	4
Total, net of tax	(44		)	4
Total amounts reclassified, net of tax	$	(44	)	$	4

(a)Amounts included in revenues in the accompanying Consolidated Statements of Income.

16. Segment Reporting

Operating segments are identified as components of an enterprise for which separate discrete financial information is available for evaluation by the chief operating decision-maker, or decision-making group, in making decisions on how to allocate resources and assess performance. The Company’s chief operating decision maker is the Company’s Chief Executive Officer. The Company has six operating segments based on the information reviewed by its Chief Executive Officer: U.S. Rental and Cleaning, Canadian Rental and Cleaning, Manufacturing (“MFG”), Corporate, Specialty Garments Rental and Cleaning (“Specialty Garments”) and First Aid. The U.S. Rental and Cleaning and Canadian Rental and Cleaning operating segments have been combined to form the U.S. and Canadian Rental and Cleaning reporting segment, and as a result, the Company has five reporting segments.

The U.S. and Canadian Rental and Cleaning reporting segment purchases, rents, cleans, delivers and sells, uniforms and protective clothing and non-garment items in the United States and Canada. The laundry locations of the U.S. and Canadian Rental and Cleaning reporting segment are referred to by the Company as “industrial laundries” or “industrial laundry locations.”

The MFG operating segment designs and manufactures uniforms and non-garment items primarily for the purpose of providing these goods to the U.S. and Canadian Rental and Cleaning reporting segment. MFG revenues are generated when goods are shipped from the Company’s manufacturing facilities, or its subcontract manufacturers, to other Company locations. These revenues are recorded at a transfer price which is typically in excess of the actual manufacturing cost. Manufactured products are carried in inventory until placed in service at which time they are amortized at this transfer price. On a consolidated basis, intercompany revenues and income are eliminated and the carrying value of inventories and rental merchandise in service is reduced to the manufacturing cost. Income before income taxes from MFG net of the intercompany MFG elimination offsets the merchandise amortization costs incurred by the U.S. and Canadian Rental and Cleaning reporting segment as the merchandise costs of this reporting segment are amortized and recognized based on inventories purchased from MFG at the transfer price which is above the Company’s manufacturing cost.

The Corporate operating segment consists of costs associated with the Company’s distribution center, sales and marketing, information systems, engineering, materials management, manufacturing planning, finance, budgeting, human resources, other general and administrative costs and interest expense. The revenues generated from the Corporate operating segment represent certain direct sales made by the Company directly from its distribution center. The products sold by this operating segment are the same products rented and sold by the U.S. and Canadian Rental and Cleaning reporting segment. The majority of expenses accounted for within the Corporate segment relate to costs of the U.S. and Canadian Rental and Cleaning segment, with the remainder of the costs relating to the Specialty Garment and First Aid segments.

The Specialty Garments operating segment purchases, rents, cleans, delivers and sells, specialty garments and non-garment items primarily for nuclear and cleanroom applications and provides cleanroom cleaning services at limited customer locations. The First Aid operating segment sells first aid cabinet services and other safety supplies as well as maintains wholesale distribution and pill packaging operations.

The Company refers to the U.S. and Canadian Rental and Cleaning, MFG, and Corporate reporting segments combined as its “Core Laundry Operations,” which is included as a subtotal in the following tables (in thousands):

21

UniFirst Corporation and Subsidiaries

Notesto Consolidated Financial Statements (Continued)

Thirteen weeks ended	U.S. and Canadian Rental and Cleaning			MFG		Net Interco MFG Elim			Corporate			Subtotal Core Laundry Operations			Specialty Garments		First Aid		Total
November 24, 2018
Revenues	$	380,753		$	67,546	$	(67,511	)	$	9,689		$	390,477		$	34,448	$	13,625	$	438,550
Operating income (loss)	$	54,714		$	24,732	$	(3,747	)	$	(30,917	)	$	44,782		$	4,470	$	1,174	$	50,426
Interest income, net	$	(1,047	)	$	—	$	—		$	(658	)	$	(1,705	)	$	—	$	—	$	(1,705	)
Income (loss) before taxes	$	55,752		$	24,840	$	(3,747	)	$	(30,233	)	$	46,612		$	4,173	$	1,174	$	51,959
November 25, 2017
Revenues	$	365,518		$	63,945	$	(63,919	)	$	8,252		$	373,796		$	28,427	$	13,555	$	415,778
Operating income (loss)	$	54,798		$	23,987	$	(4,737	)	$	(27,690	)	$	46,358		$	4,477	$	1,076	$	51,911
Interest income, net	$	(949	)	$	—	$	—		$	(327	)	$	(1,276	)	$	—	$	—	$	(1,276	)
Income (loss) before taxes	$	55,764		$	23,910	$	(4,737	)	$	(27,333	)	$	47,604		$	4,353	$	1,076	$	53,033

17. Shares Repurchased and Dividends

On March 27, 2018, UniFirst repurchased 1.105 million shares of Class B Common Stock and 0.073 million shares of Common Stock for a combined $146.0 million in a private transaction with the Croatti family at a per share price of $124.00.

This opportunity to repurchase shares from the Croatti family was evaluated by an independent special committee of the Board of Directors (the “Special Committee”). The sale of shares by the Croatti family was executed to provide liquidity as well as for estate and family financial planning following the passing of former UniFirst Chief Executive Officer, Ronald D. Croatti.

The Special Committee determined that a repurchase of Croatti family Class B Common Stock at a discount to market was in the best interests of the Company as it is accretive to income per share and addresses uncertainties that may have been created if the Croatti family had pursued other liquidity options.  The Special Committee undertook its evaluation with the assistance of Stifel Financial Corp. (“Stifel”) and received an opinion from Stifel to the effect that, as of March 27, 2018, the $124.00 per share in cash to be paid was fair to the Company, from a financial point of view.  The entire Board of Directors other than Cynthia Croatti, who is affiliated with the selling shareholders and therefore abstained, approved the transaction upon the recommendation of the Special Committee.

On March 28, 2018, the Company announced that it will be raising its quarterly dividend to $0.1125 per share for Common Stock and to $0.09 per share for Class B Common Stock, up from $0.0375 and $0.03 per share, respectively. The amount and timing of any dividend payment is subject to the approval of the Board of Directors each quarter.

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UniFirst Corporation and Subsidiaries

Notesto Consolidated Financial Statements (Continued)

18. Subsequent Events

On January 2, 2019, the Company's Board of Directors approved a share repurchase program authorizing the Company to repurchase from time to time up to $100.0 million of its outstanding shares of common stock.  Repurchases made under the program, if any, will be made in either the open market or in privately negotiated transactions. The timing, manner, price and amount of any repurchases will depend on a variety of factors, including economic and market conditions, the Company stock price, corporate liquidity requirements and priorities, applicable legal requirements and other factors. The share repurchase program will be funded using the Company's available cash or capacity under its Credit Agreement when implemented and may be suspended or discontinued at any time.

During fiscal 2017, the Company recorded a pre-tax non-cash impairment charge of $55.8 million once it was determined that it was not probable that the version of the Customer Relationship Management (“CRM”) system that was being developed would be completed and placed into service. On December 28, 2018, the Company entered into a settlement agreement with its lead contractor for the version of the CRM system with respect to which the Company recorded the impairment charge. As part of the settlement agreement, the Company will record a total gain of $20.3 million during the quarter ending February 23, 2019, which includes the Company’s receipt of a one-time cash payment in the amount of $13.0 million as well as the forgiveness of amounts previously due the contractor.

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ITEM2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

SAFE HARBOR FOR FORWARD LOOKING STATEMENTS

This Quarterly Report on Form 10-Q and any documents incorporated by reference contain forward looking statements within the meaning of the federal securities laws. Forward looking statements contained in this Quarterly Report on Form 10-Q and any documents incorporated by reference are subject to the safe harbor created by the Private Securities Litigation Reform Act of 1995. Forward looking statements may be identified by words such as “estimates,” “anticipates,” “projects,” “plans,” “expects,” “intends,” “believes,” “seeks,” “could,” “should,” “may,” “will,” “strategy,” “objective,” “assume,” or the negative versions thereof, and similar expressions and by the context in which they are used. Such forward looking statements are based upon our current expectations and speak only as of the date made. Such statements are highly dependent upon a variety of risks, uncertainties and other 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, the performance and success of our Chief Executive Officer, uncertainties caused by adverse economic conditions and their impact on our customers’ businesses and workforce levels, uncertainties regarding our 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, our ability to compete successfully without any significant degradation in our margin rates, seasonal and quarterly 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 impact of the recently passed U.S. tax reform on our business, results of operations and financial condition, uncertainties regarding the price levels of natural gas, electricity, fuel and labor, the negative effect on our business from sharply depressed oil and natural gas prices, the continuing increase in domestic healthcare costs, including the ultimate impact of the Affordable Care Act, our ability to retain and grow our customer base, demand and prices for our products and services, fluctuations in our Specialty Garments business, instability in Mexico and Nicaragua where our principal garment manufacturing plants are located, our ability to properly and efficiently design, construct, implement and operate a new customer relationship management (“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 any changes in Securities and Exchange Commission, New York Stock Exchange and accounting rules, strikes and unemployment levels, our 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, our ability to successfully implement our business strategies and processes, including our capital allocation strategies, and other factors described under “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended August 25, 2018 and in our other filings with the Securities and Exchange Commission. We undertake no obligation to update any forward looking statements to reflect events or circumstances arising after the date on which such statements are made.

Business Overview

UniFirst Corporation, together with its subsidiaries, hereunder referred to as “we”, “our”, the “Company”, or “UniFirst”, is one of the largest providers of workplace uniforms and protective work wear clothing in the United States. We design, manufacture, personalize, rent, clean, deliver, and sell a wide range of uniforms and protective clothing, including shirts, pants, jackets, coveralls, lab coats, smocks, aprons and specialized protective wear, such as flame resistant and high visibility garments. We also rent and sell industrial wiping products, floor mats, facility service products and other non-garment items, and provide restroom and cleaning supplies and first aid cabinet services and other safety supplies, to a variety of manufacturers, retailers and service companies.

We serve businesses of all sizes in numerous industry categories. Typical customers include automobile service centers and dealers, delivery services, food and general merchandise retailers, food processors and service operations, light manufacturers, maintenance facilities, restaurants, service companies, soft and durable goods wholesalers, transportation companies, and others who require employee clothing for image, identification, protection or utility purposes. We also provide our customers with restroom and cleaning supplies, including air fresheners, paper products and hand soaps.

At certain specialized facilities, we also decontaminate and clean work clothes and other items that may have been exposed to radioactive materials and service special cleanroom protective wear and facilities. Typical customers for these specialized services include government agencies, research and development laboratories, high technology companies and utilities operating nuclear reactors.

We continue to expand into additional geographic markets through acquisitions and organic growth. We currently service over 300,000 customer locations in the United States, Canada and Europe from over 250 customer service, distribution and manufacturing facilities.

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As mentioned and described in Note 16 to our Consolidated Financial Statements, we have five reporting segments: U.S. and Canadian Rental and Cleaning, MFG, Corporate, Specialty Garments and First Aid. We refer to the laundry locations of the U.S. and Canadian Rental and Cleaning reporting segment as “industrial laundries” or “industrial laundry locations”, and to the U.S. and Canadian Rental and Cleaning, MFG, and Corporate reporting segments combined as our “Core Laundry Operations.”

Critical Accounting Policies and Estimates

The discussion of our financial condition and results of operations is based upon the Consolidated Financial Statements, which have been prepared in conformity with United States generally accepted accounting principles (“U.S. GAAP”). As such, management is required to make certain estimates, judgments and assumptions that are believed to be reasonable based on the information available. These estimates and assumptions affect the reported amount of assets and liabilities, revenues and expenses, and disclosure of contingent assets and liabilities at the date of the financial statements. Actual results may differ from these estimates under different assumptions or conditions.

Critical accounting policies are defined as those that are reflective of significant judgments and uncertainties, the most important and pervasive accounting policies used and areas most sensitive to material changes from external factors. The critical accounting estimates that we believe affect our more significant judgments and estimates used in the preparation of our consolidated financial statements presented in this report are described in Management’s Discussion and Analysis of Financial Condition and Results of Operations and in the Notes to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended August 25, 2018. 

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Results of Operations

The following table presents certain selected financial data, including the percentage of revenues represented by each item, for the thirteen weeks endedNovember 24, 2018 and November 25, 2017.

	Thirteen weeks ended
(In thousands, except percentages)	November 24, 2018			% of Revenues		November 25, 2017			% of Revenues		% Change
Revenues	$	438,550		100.0	%	$	415,778		100.0	%	5.5	%
Operating expenses:
Cost of revenues (1)	277,049			63.2		253,650			61.0		9.2
Selling and administrative expenses (1)	85,959			19.6		87,510			21.0		(1.8	)
Depreciation and amortization	25,116			5.7		22,707			5.5		10.6
Total operating expenses	388,124			88.5		363,867			87.5		6.7
Operating income	50,426			11.5		51,911			12.5		(2.9	)
Other income, net	(1,533		)	(0.3	)	(1,122		)	(0.3	)	36.6
Income before income taxes	51,959			11.8		53,033			12.8		(2.0	)
Provision for income taxes	13,639			3.1		18,827			4.5		(27.6	)
Net income	$	38,320		8.7	%	$	34,206		8.2	%	12.0	%

(1) Exclusive of depreciation on our property, plant and equipment and amortization on our intangible assets.

General

We derive our revenues through the design, manufacture, personalization, rental, cleaning, delivering, and selling of a wide range of uniforms and protective clothing, including shirts, pants, jackets, coveralls, lab coats, smocks and aprons and specialized protective wear, such as flame resistant and high visibility garments. We also rent industrial wiping products, floor mats, facility service products, other non-garment items, and provide restroom and cleaning supplies and first aid cabinet services and other safety supplies, to a variety of manufacturers, retailers and service companies. We have five reporting segments, U.S. and Canadian Rental and Cleaning, MFG, Specialty Garments, First Aid and Corporate. We refer to the U.S. and Canadian Rental and Cleaning, MFG, and Corporate reporting segments combined as our “Core Laundry Operations.”

Cost of revenues include the amortization of rental merchandise in service and merchandise costs related to direct sales as well as labor and other production, service and delivery costs, and distribution costs associated with operating our Core Laundry Operations, Specialty Garments facilities, and First Aid locations. Selling and administrative costs include costs related to our sales and marketing functions as well as general and administrative costs associated with our corporate offices, non-operating environmental sites and operating locations including information systems, engineering, materials management, manufacturing planning, finance, budgeting, and human resources.

We have a substantial number of plants and conduct a significant portion of our business in energy producing regions in the U.S. and Canada. In general, we are relatively more dependent on business in these regions than are many of our competitors. For example, the dramatic decrease in oil prices beginning in 2014 directly affected our customers in the oil industry as they curtailed their level of operations, which also had a corresponding effect on our customers in businesses which service or supply the oil industry as well as our customers in unrelated businesses located in areas which had benefited from the economic expansion generated by the robust growth driven by the higher oil prices in prior years. As a result, our organic growth in periods following this dramatic decrease in oil prices was negatively impacted by elevated headcount reductions in our wearer base as well as increased lost accounts. Recent trends indicate that increased energy prices have resulted in stabilized or improved wearer levels at existing customers in our North American energy-dependent markets. Our operating results are also directly impacted by the costs of the gasoline used to fuel our vehicles and the natural gas used to operate our plants. While it is difficult to quantify the positive and negative impacts on our future financial results from changes in energy prices, in general, we believe that significant decreases in oil and natural gas prices would have an overall negative

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impact on our results due to cutbacks by our customers both in, and dependent upon, the oil and natural gas industries, which would outweigh the benefits in our operating costs from lower energy costs.

The cost of healthcare that we provide to our employees has grown over the last few years at a rate in excess of our revenue growth and as a result, has negatively impacted our operating results. Moreover, it is generally expected that healthcare costs in the United States will increase over the coming years at rates in excess of inflation. As a result of these factors, and depending on the effect of any modifications we have made, and may make in the future, to our employee healthcare plans and enrollment levels in those plans, we expect that our future operating results will continue to be further adversely impacted by increasing healthcare costs.

Our business is subject to various state and federal regulations, including employment laws and regulations, minimum wage requirements, overtime requirements, working condition requirements, citizenship requirements, healthcare insurance mandates and other laws and regulations that impact our labor costs. We expect that our labor costs will rise in fiscal 2019 as a result of increases in state and local minimum wage levels as well as the overall impact of wage pressure as the result of a low unemployment environment.

On January 2, 2019, our Board of Directors approved a share repurchase program authorizing us to repurchase from time to time up to $100.0 million of our outstanding shares of common stock.  Repurchases made under the program, if any, will be made in either the open market or in privately negotiated transactions. The timing, manner, price and amount of any repurchases will depend on a variety of factors, including economic and market conditions, our stock price, corporate liquidity requirements and priorities, applicable legal requirements and other factors. The share repurchase program will be funded using our available cash or capacity under our Credit Agreement when implemented and may be suspended or discontinued at any time.

During fiscal 2017, we recorded a pre-tax non-cash impairment charge of $55.8 million once it was determined that it was not probable that the version of the CRM system that was being developed would be completed and placed into service. On December 28, 2018, we entered into a settlement agreement with our lead contractor for the version of the CRM system with respect to which we recorded the impairment charge. As part of the settlement agreement, we will record a total gain of $20.3 million during the quarter ending February 23, 2019, which includes our receipt of a one-time cash payment in the amount of $13.0 million as well as the forgiveness of amounts previously due the contractor.

In our fourth fiscal quarter of 2018, we initiated a multiyear CRM project to further develop, implement and deploy a third-party application we licensed. This new solution is intended to improve functionality, capability and information flow as well as increase automation in servicing our customers. As of November 24, 2018, we have capitalized $3.8 million related to our new CRM project.

On December 22, 2017, the Tax Cuts and Jobs Act (the “Act”) was enacted, which, among other provisions, reduced the U.S. federal corporate income tax rate effective January 1, 2018 from a 35% rate to a new 21% corporate rate and imposed a one-time transition tax on earnings held outside of the United States. We have made reasonable estimates of the effects of the Act and these estimates could change in future periods as we continue to analyze the effects of the Act (see Note 13, “Income Taxes” to our Consolidated Financial Statements included in this Quarterly Report on Form 10-Q).

A portion of our sales is derived from international markets, including Canada. Revenues denominated in currencies other than the U.S. dollar represented approximately7.9%and8.0%of total consolidated revenues for the thirteen weeks endedNovember 24, 2018 and November 25, 2017, respectively.The operating results of our international subsidiaries are translated into U.S. dollars and such results are affected bymovements in foreign currencies relative to the U.S. dollar. In addition, fluctuations in the Canadian dollar may have an effect on the margins of our Canadian business because a weaker Canadian dollar will increase the cost of merchandise and other operational inputs that are sourced from outside of Canada. Our operating results in future years could be negatively impacted by any devaluation, as compared to the U.S. dollar, of the Canadian dollar or any of the currencies of the other countries in which we operate.

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Thirteen weeks ended November 24, 2018 compared with thirteen weeks ended November 25, 2017

Revenues

(In thousands, except percentages)	November 24, 2018		November 25, 2017		Dollar Change		Percent Change
Core Laundry Operations	$	390,477	$	373,796	$	16,681	4.5	%
Specialty Garments	34,448		28,427		6,021		21.2	%
First Aid	13,625		13,555		70		0.5	%
Consolidated total	$	438,550	$	415,778	$	22,772	5.5	%

The increase in our consolidated revenues was primarily from our Core Laundry Operations. Excluding the positive effect of acquisitions, which we estimate increased our revenues in Core Laundry Operations by approximately 0.7%, as well as a slightly weaker Canadian dollar, which unfavorably impacted our growth by 0.3%, organic growth for our Core Laundry Operations was 4.1%. Organic growth consists primarily of new sales, pricing adjustments, and net changes in the wearer levels at our existing customers, offset by lost accounts.

Specialty Garments’ results are often affected by seasonality and the timing and length of its customers’ power reactor outages as well as its project-based activities. Excluding the positive effect of acquisitions, which we estimate increased our revenues in the Specialty Garments segment by approximately 11.3%, the improvement in results in the Specialty Garments segment in the first quarter of fiscal 2019 compared to the comparable period of fiscal 2018 was primarily due to increased outages and project-based activity at the segment’s Canadian nuclear customers as well as solid growth from the cleanroom division.

Cost of Revenues

(In thousands, except percentages)	November 24, 2018		November 25, 2017		Dollar Change			Percent Change
Cost of revenues
Core Laundry Operations	$	245,178	$	226,856	$	18,322		8.1	%
Specialty Garments	22,756		17,536		5,220			29.8	%
First Aid	9,115		9,258		(143		)	(1.5	)%
Consolidated total	$	277,049	$	253,650	$	23,399		9.2	%
Gross profit
Core Laundry Operations	$	145,299	$	146,940	$	(1,641	)	(1.1	)%
Specialty Garments	$	11,692	$	10,891	$	801		7.4	%
First Aid	$	4,510	$	4,297	$	213		4.9	%
Consolidated total	$	161,501	$	162,128	$	(627	)	(0.4	)%

Cost of revenues as a percentage of revenues was 63.2% in the first quarter of fiscal 2019 as compared to 61.0% in the prior year comparable period.

Our Core Laundry Operations cost of revenues as a percentage of revenues was 62.8% in the first quarter of fiscal 2019 as compared to 60.7% in the prior year comparable period. The increase in cost of revenues was due primarily to higher production and service and delivery payroll costs as well as higher merchandise costs. These increases were partially offset by lower healthcare claims.

Our Specialty Garments costs of revenues as a percentage of revenues was 66.1% in the first quarter of fiscal 2019 as compared to 61.7% in the prior year comparable period. The increase in cost of revenues was due primarily to higher production and merchandise costs as well as higher expenses related to workers' compensation and auto claims.

Selling and Administrative Expenses

(In thousands, except percentages)	November 24, 2018			November 25, 2017			Dollar Change			Percent Change
Selling and administrative expenses	$	85,959		$	87,510		$	(1,551	)	(1.8	)%
% of Revenues	19.6		%	21.0		%

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The decrease in our selling and administrative costs as a percentage of revenues in the thirteen weeks ended November 24, 2018 as compared to the prior year comparable period was due primarily to a gain of $3.0 million from the settlement of environmental litigation in the first quarter of fiscal 2019, lower healthcare claims, and the capitalization of internal labor in the quarter related to the development of the CRM project we initiated in fiscal 2018. The comparison of selling and administrative expenses also benefited from the deferral of commission costs upon the adoption of new revenue accounting guidance in the thirteen weeks ended November 24, 2018. These decreases to selling and administrative costs were partially offset by increases in advertising costs, sales incentive costs and recruitment costs.

Depreciation and Amortization

(In thousands, except percentages)	November 24, 2018			November 25, 2017			Dollar Change		Percent Change
Depreciation and amortization	$	25,116		$	22,707		$	2,409	10.6	%
% of Revenues	5.7		%	5.5		%

Depreciation and amortization expense increased in the thirteen weeks ended November 24, 2018 as compared to the prior year comparable period due primarily to higher capital expenditures placed in service over the past several quarters.

Operating Income

For the thirteen weeks ended November 24, 2018 and November 25, 2017, changes in our revenues and costs as discussed above resulted in the following changes in our operating income and operating margin:

(In thousands, except percentages)	November 24, 2018			November 25, 2017			Dollar Change			Percent Change
Operating income	$	50,426		$	51,911		$	(1,485	)	(2.9	)%
Operating margin	11.5		%	12.5		%

Other Income, net

(In thousands, except percentages)	November 24, 2018			November 25, 2017			Dollar Change			Percent Change
Interest income, net	$	(1,705	)	$	(1,276	)	$	(429	)	33.6	%
Other expense, net	172			154			18			11.7	%
Total other income, net	$	(1,533	)	$	(1,122	)	$	(411	)	36.6	%

The increase in other income, net during the thirteen weeks ended November 24, 2018 as compared to the prior year comparable period was due primarily to an increase in interest income from higher interest rates.

Provision for Income Taxes

(In thousands, except percentages)	November 24, 2018			November 25, 2017			Dollar Change			Percent Change
Provision for income taxes	$	13,639		$	18,827		$	(5,188	)	(27.6	)%
Effective income tax rate	26.2		%	35.5		%

The decrease in our effective tax rate for the thirteen weeks ended November 24, 2018 as compared to the prior year comparable period was due primarily to the impact of the Act, which lowered the U.S. federal corporate income tax rates as of January 1, 2018 to 21.0% from 35.0%.

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Liquidity and Capital Resources

General

Cash, cash equivalents and short-term investments totaled $276.5 million as of November 24, 2018, an increase of $6.0 million from August 25, 2018 when the amount totaled $270.5 million, which includes $45.3 million in cash outside the United States. Our working capital was $632.7 million as of November 24, 2018 compared to $586.3 million as of August 25, 2018. We generated $32.3 million and $230.1 million in cash from operating activities in the thirteen weeks endedNovember 24, 2018 and the full fiscal year ended August 25, 2018, respectively. We believe that our current cash, cash equivalents and short-term investments balances, our cash generated from future operations and amounts available under our Credit Agreement (defined below) will be sufficient to meet our current anticipated working capital and capital expenditure requirements for at least the next 12 months.

Cash flows provided by operating activities have historically been the primary source of our liquidity. We generally use these cash flows to fund most, if not all, of our operations, capital expenditure and acquisition activities as well as dividends on our common stock. We may also use cash flows provided by operating activities, as well as proceeds from loans payable and long-term debt, to fund growth and acquisition opportunities, as well as other cash requirements.

Sources and uses of cash flows for the thirteen weeks ended November 24, 2018 and November 25, 2017, respectively, are summarized as follows:

Thirteen weeks ended (In thousands, except percentages)	November 24, 2018			November 25, 2017			Percent Change
Net cash provided by operating activities	$	32,257		$	47,627		(32.3	)%
Net cash used in investing activities	(23,162		)	(21,386		)	8.3	%
Net cash used in financing activities	(2,210		)	(981		)	125.3	%
Effect of exchange rate changes	$	(861	)	$	(976	)	(11.8	)%
Net increase in cash, cash equivalents and short-term investments	$	6,024		$	24,284		(75.2	)%

CashProvided byOperating Activities

The decrease in cash provided by operating activities was due primarily to the one-time bonus paid to our employees during the first quarter of fiscal 2019, increased merchandise placed in service, and an increase in our sales tax receivables. This decrease was partially offset by cash received of $3.0 million from the settlement of environmental litigation in the first quarter of fiscal 2019.

Cash Used in Investing Activities

The increase in cash used in investing activities was due primarily to an increase in capital expenditures partially offset by a decrease in cash outflows related to business acquisitions.

Cash Used in Financing Activities

The increase in cash used in financing activities was due primarily to an increase in the amount of cash dividends paid as a result of the increase in quarterly dividends paid beginning in the third quarter of fiscal 2018.

Long-Term Debt and Borrowing Capacity

We have a $250 million unsecured revolving credit agreement (the “Credit Agreement”) with a syndicate of banks, which matures on April 11, 2021. Under the Credit Agreement, we are able to borrow funds at variable interest rates based on, at our election, the Eurodollar rate or a base rate, plus in each case a spread based on our consolidated funded debt ratio. Availability of credit requires compliance with certain financial and other covenants, including a maximum consolidated funded debt ratio and minimum consolidated interest coverage ratio as defined in the Credit Agreement. We test our compliance with these financial covenants on a fiscal quarterly basis. As of November 24, 2018, the interest rates applicable to our borrowings under the Credit Agreement would be calculated as LIBOR plus 75 basis points at the time of the respective borrowing. As of November 24, 2018, we had no outstanding borrowings and had outstanding letters of credit amounting to $71.4 million, leaving $178.6 million available for borrowing under the Credit Agreement.

As of November 24, 2018, we were in compliance with all covenants under the Credit Agreement.

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Derivative Instruments and Hedging Activities

In January 2015, we entered into sixteen forward contracts to exchange Canadian dollars (“CAD”) for U.S. dollars at fixed exchange rates in order to manage our exposure related to certain forecasted CAD denominated sales of one of our subsidiaries. The hedged transactions are specified as the first amount of CAD denominated revenues invoiced by one of our domestic subsidiaries each fiscal quarter, beginning in the third fiscal quarter of 2015 and continuing through the second fiscal quarter of 2019. In total, we will sell approximately 31.0 million CAD at an average Canadian-dollar exchange rate of 0.7825 over these quarterly periods. We concluded that the forward contracts met the criteria to qualify as a cash flow hedge under U.S. GAAP. Accordingly, we have reflected all changes in the fair value of the forward contracts in accumulated other comprehensive loss, a component of shareholders’ equity. Upon the maturity of each foreign exchange forward contract, the gain or loss on the contract will be recorded as an adjustment to revenues.

In June 2018, we entered into twelve forward contracts to exchange CAD for U.S. dollars at fixed exchange rates in order to manage our exposure related to certain forecasted CAD denominated sales of one of our subsidiaries. The hedged transactions are specified as the first amount of CAD denominated revenues invoiced by one of our domestic subsidiaries each fiscal quarter, beginning in the third fiscal quarter of 2019 and continuing through the second fiscal quarter of 2022. In total, we will sell approximately 12.1 million CAD at an average Canadian-dollar exchange rate of 0.7814 over these quarterly periods. We concluded that the forward contracts met the criteria to qualify as a cash flow hedge under U.S. GAAP.

As of November 24, 2018, we had forward contracts with a notional value of approximately 13.4 million CAD outstanding and recorded the fair value of the contracts of $0.2 million in other long-term assets and $0.1 million in prepaid expenses and other current assets with a corresponding decrease in accumulated other comprehensive loss of $0.2 million, which was recorded net of tax. During the thirteen weeks endedNovember 24, 2018, we reclassified a nominal amount from accumulated other comprehensive loss to revenue, related to the derivative financial instruments. The gain on these forward contracts that resulted in a decrease to accumulated other comprehensive loss as of November 24, 2018 is expected to be reclassified to revenues prior to its maturity on February 25, 2022.

Commitments and Contingencies

We are subject to various federal, state and local laws and regulations governing, among other things, air emissions, wastewater discharges, and the generation, handling, storage, transportation, treatment and disposal of hazardous wastes and other substances. In particular, industrial laundries currently use and must dispose of detergent waste water and other residues, and, in the past, used perchloroethylene and other dry cleaning solvents. We are attentive to the environmental concerns surrounding the disposal of these materials and have, through the years, taken measures to avoid their improper disposal. Over the years, we have settled, or contributed to the settlement of, actions or claims brought against us relating to the disposal of hazardous materials and there can be no assurance that we will not have to expend material amounts to remediate the consequences of any such disposal in the future.

U.S. GAAP requires that a liability for contingencies be recorded when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated. Significant judgment is required to determine the existence of a liability, as well as the amount to be recorded. We regularly consult with attorneys and outside consultants in our consideration of the relevant facts and circumstances before recording a contingent liability. Changes in enacted laws, regulatory orders or decrees, our estimates of costs, risk-free interest rates, insurance proceeds, participation by other parties, the timing of payments, the input of our attorneys and outside consultants or other factual circumstances could have a material impact on the amounts recorded for our environmental and other contingent liabilities.

Under environmental laws, an owner or lessee of real estate may be liable for the costs of removal or remediation of certain hazardous or toxic substances located on, or in, or emanating from such property, as well as related costs of investigation and property damage. Such laws often impose liability without regard to whether the owner or lessee knew of, or was responsible for, the presence of such hazardous or toxic substances. There can be no assurances that acquired or leased locations have been operated in compliance with environmental laws and regulations or that future uses or conditions will not result in the imposition of liability upon our Company under such laws or expose our Company to third party actions such as tort suits. We continue to address environmental conditions under terms of consent orders negotiated with the applicable environmental authorities or otherwise with respect to sites located in or related to Woburn, Massachusetts, Somerville, Massachusetts, Springfield, Massachusetts, Uvalde, Texas, Stockton, California, two sites related to former operations in Williamstown, Vermont, as well as sites located in Goldsboro, North Carolina and Wilmington, North Carolina.

We have accrued certain costs related to the sites described above as it has been determined that the costs are probable and can be reasonably estimated. We have potential exposure related to a parcel of land (the “Central Area”) related to the Woburn, Massachusetts site mentioned above. Currently, the consent decree for the Woburn site does not define or require any remediation work in the Central Area. The United States Environmental Protection Agency (the “EPA”) has provided us and other signatories to the consent decree with comments on the design and implementation of groundwater and soil remedies at the Woburn site and investigation of environmental conditions in the Central Area. We, and other signatories, have implemented and proposed to do additional work at the Woburn site but many of the EPA’s comments remain to be resolved. We have accrued costs to perform certain work responsive to EPA’s comments. We

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have implemented mitigation measures and continue to monitor environmental conditions at the Somerville, Massachusetts site. In addition, we have received demands from the local transit authority for reimbursement of certain costs associated with its construction of a new municipal transit station in the area of the Somerville site. This station is part of the extension of the transit system. We have reserved for costs in connection with this matter; however, in light of the uncertainties associated with this matter, these costs and the related reserve may change. We have also received notice that the Massachusetts Department of Environmental Protection is conducting an audit of the Company’s investigation and remediation work with respect to the Somerville site.

We routinely review and evaluate sites that may require remediation and monitoring and determine our estimated costs based on various estimates and assumptions. These estimates are developed using our internal sources or by third party environmental engineers or other service providers. Internally developed estimates are based on:

•Management’s judgment and experience in remediating and monitoring our sites;

•Information available from regulatory agencies as to costs of remediation and monitoring;

• The number, financial resources and relative degree of responsibility of other potentially responsible parties (“PRPs”) who may be liable for remediation and monitoring of a specific site; and

•The typical allocation of costs among PRPs.

There is usually a range of reasonable estimates of the costs associated with each site. In accordance with U.S. GAAP, our accruals reflect the amount within the range that we believe is the best estimate or the low end of a range of estimates if no point within the range is a better estimate. Where we believe that both the amount of a particular liability and the timing of the payments are reliably determinable, we adjust the cost in current dollars using a rate of 3% for inflation until the time of expected payment and discount the cost to present value using current risk-free interest rates. As of November 24, 2018, the risk-free interest rates we utilized ranged from 3.1% to 3.3%.

For environmental liabilities that have been discounted, we include interest accretion, based on the effective interest method, in selling and administrative expenses on the Consolidated Statements of Income. The changes to the amounts of our environmental liabilities for the thirteen weeks endedNovember 24, 2018 were as follows (in thousands):

	November 24, 2018
Beginning balance as of August 25, 2018	$	25,486
Costs incurred for which reserves had been provided	(195		)
Insurance proceeds	40
Interest accretion	189
Change in discount rates	(699		)
Balance as of November 24, 2018	$	24,821

Anticipated payments and insurance proceeds relating to currently identified environmental remediation liabilities as of November 24, 2018, for the next five fiscal years and thereafter, as measured in current dollars, are reflected below.

(In thousands)	2019			2020			2021			2022			2023			Thereafter			Total
Estimated costs – current dollars	$	9,299		$	2,122		$	1,635		$	1,272		$	1,175		$	12,137		$	27,640
Estimated insurance proceeds	(133		)	(159		)	(173		)	(159		)	(173		)	(830		)	(1,627		)
Net anticipated costs	$	9,166		$	1,963		$	1,462		$	1,113		$	1,002		$	11,307		$	26,013
Effect of inflation																			7,477
Effect of discounting																			(8,669		)
Balance as of November 24, 2018																			$	24,821

Estimated insurance proceeds are primarily received from an annuity received as part of our legal settlement with an insurance company. Annual proceeds of approximately $0.3 million are deposited into an escrow account which funds remediation and monitoring costs for

32

two sites related to our former operations in Williamstown, Vermont. Annual proceeds received but not expended in the current year accumulate in this account and may be used in future years for costs related to this site through the year 2027. As of November 24, 2018, the balance in this escrow account, which is held in a trust and is not recorded in our Consolidated Balance Sheet, was approximately $3.8 million. Also included in estimated insurance proceeds are amounts we are entitled to receive pursuant to legal settlements as reimbursements from three insurance companies for estimated costs at the site in Uvalde, Texas.

Our nuclear garment decontamination facilities are licensed by the Nuclear Regulatory Commission (“NRC”), or, in certain cases, by the applicable state agency, and are subject to regulation by federal, state and local authorities. We also have nuclear garment decontamination facilities in the United Kingdom and the Netherlands. These facilities are licensed and regulated by the respective country’s applicable federal agency. There can be no assurance that such regulation will not lead to material disruptions in our garment decontamination business.

From time to time, we are also subject to legal proceedings and claims arising from the conduct of our business operations, including personal injury claims, customer contract matters, employment claims and environmental matters as described above.

While it is impossible for us to ascertain the ultimate legal and financial liability with respect to contingent liabilities, including lawsuits and environmental contingencies, we believe that the aggregate amount of such liabilities, if any, in excess of amounts covered by insurance have been properly accrued in accordance with accounting principles generally accepted in the United States. It is possible, however, that the future financial position and/or results of operations for any particular future period could be materially affected by changes in our assumptions or strategies related to these contingencies or changes out of our control.

Off-Balance Sheet Arrangements

As of November 24, 2018, we did not have any off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of Securities and Exchange Commission Regulation S-K.

Seasonality

Historically, our revenues and operating results have varied from quarter to quarter and are expected to continue to fluctuate in the future. These fluctuations have been due to a number of factors, including: general economic conditions in our markets; the timing of acquisitions and of commencing start-up operations and related costs; our effectiveness in integrating acquired businesses and start-up operations; the timing of nuclear plant outages; capital expenditures; seasonal rental and purchasing patterns of our customers; and price changes in response to competitive factors. In addition, our operating results historically have been lower during the second and fourth fiscal quarters than during the other quarters of the fiscal year. The operating results for any historical quarter are not necessarily indicative of the results to be expected for an entire fiscal year or any other interim periods.

Effects of Inflation

In general, we believe that our results of operations are not dependent on moderate changes in the inflation rate. Historically, we have been able to manage the impacts of more significant changes in inflation rates through our customer relationships, customer agreements that generally provide for price increases consistent with the rate of inflation, and continued focus on improvements of operational productivity.

Contractual Obligations and Other Commercial Commitments

As of November 24, 2018, there were no material changes in our contractual obligations that were disclosed in our Annual Report on Form 10-K for the year ended August 25, 2018.

Recent Accounting Pronouncements

See Note 2, “Recent Accounting Pronouncements” to our Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for more information on recently implemented and issued accounting standards.

33

ITEM3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Foreign Currency Exchange Risk

We have determined that all of our foreign subsidiaries operate primarily in local currencies that represent the functional currencies of such subsidiaries. All assets and liabilities of our foreign subsidiaries are translated into U.S. dollars using the exchange rate prevailing at the balance sheet date. The effect of exchange rate fluctuations on the translation of assets and liabilities are recorded as a component of shareholders’ equity. Revenues and expenses are translated at the average exchange rates in effect during each month of the fiscal year. As such, our financial condition and operating results are affected by fluctuations in the value of the U.S. dollar as compared to currencies in foreign countries. Revenues denominated in currencies other than the U.S. dollar represented approximately 7.9% of total consolidated revenues for the thirteen weeks endedNovember 24, 2018, and total assets denominated in currencies other than the U.S. dollar represented approximately 7.4% and 8.0% of total consolidated assets as of November 24, 2018 and August 25, 2018, respectively. If exchange rates had increased or decreased by 10% from the actual rates in effect during the thirteen weeks endedNovember 24, 2018, our revenues would have increased or decreased by approximately $3.4 million and total assets as of November 24, 2018 would have increased or decreased by approximately $14.0 million.

In January 2015, we entered into sixteen forward contracts to exchange Canadian dollars (“CAD”) for U.S. dollars at fixed exchange rates in order to manage our exposure related to certain forecasted CAD denominated sales of one of our subsidiaries. The hedged transactions are specified as the first amount of CAD denominated revenues invoiced by one of our domestic subsidiaries each fiscal quarter, beginning in the third fiscal quarter of 2015 and continuing through the second fiscal quarter of 2019. In total, we will sell approximately 31.0 million CAD at an average Canadian-dollar exchange rate of 0.7825 over these quarterly periods. We concluded that the forward contracts met the criteria to qualify as a cash flow hedge under U.S. GAAP. Accordingly, we have reflected all changes in the fair value of the forward contracts in accumulated other comprehensive loss, a component of shareholders’ equity. Upon the maturity of each foreign exchange forward contract, the gain or loss on the contract will be recorded as an adjustment to revenues.

In June 2018, we entered into twelve forward contracts to exchange CAD for U.S. dollars at fixed exchange rates in order to manage our exposure related to certain forecasted CAD denominated sales of one of our subsidiaries. The hedged transactions are specified as the first amount of CAD denominated revenues invoiced by one of our domestic subsidiaries each fiscal quarter, beginning in the third fiscal quarter of 2019 and continuing through the second fiscal quarter of 2022. In total, we will sell approximately 12.1 million CAD at an average Canadian-dollar exchange rate of 0.7814 over these quarterly periods. We concluded that the forward contracts met the criteria to qualify as a cash flow hedge under U.S. GAAP.

As of November 24, 2018, we had forward contracts with a notional value of approximately 13.4 million CAD outstanding and recorded the fair value of the contracts of $0.2 million in other long-term assets and $0.1 million in prepaid expenses and other current assets with a corresponding decrease in accumulated other comprehensive loss of $0.2 million, which was recorded net of tax. During the thirteen weeks endedNovember 24, 2018, we reclassified a nominal amount from accumulated other comprehensive loss to revenue, related to the derivative financial instruments. The gain on these forward contracts that resulted in a decrease to accumulated other comprehensive loss as of November 24, 2018 is expected to be reclassified to revenues prior to its maturity on February 25, 2022.

Other than the forward contracts, discussed above, we do not operate a hedging program to mitigate the effect of a significant change in the value of our foreign subsidiaries functional currencies, which include the Canadian dollar, euro, British pound, Mexican peso and Nicaraguan cordoba, as compared to the U.S. dollar. Any losses or gains resulting from unhedged foreign currency transactions, including exchange rate fluctuations on intercompany accounts are reported as transaction losses (gains) in our other (income) expense. The intercompany payables and receivables are denominated in Canadian dollars, euros, British pounds, Mexican pesos and Nicaraguan cordobas. During the thirteen weeks endedNovember 24, 2018, transaction losses included in other (income) expense, net were approximately $0.2 million. If exchange rates had increased or decreased by 10% during the thirteen weeks endedNovember 24, 2018, we would have recognized exchange gains or losses of approximately $1.1 million.

34

ITEM4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

As required by Rule 13a-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), we carried out an evaluation under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based upon their evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective to ensure that material information relating to the Company required to be disclosed by the Company in reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms and to ensure that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, our management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurances of achieving the desired control objectives, and management necessarily was required to apply its judgment in designing and evaluating the controls and procedures. We continue to review our disclosure controls and procedures, and our internal control over financial reporting, and may from time to time make changes aimed at enhancing their effectiveness and to ensure that our systems evolve with our business.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the first quarter of fiscal year 2019 that have materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time, we are subject to legal proceedings and claims arising from the current conduct of our business operations, including personal injury, customer contract, employment claims and environmental matters as described in our Consolidated Financial Statements. We maintain insurance coverage providing indemnification against many of such claims, and we do not expect that we will sustain any material loss as a result thereof. Refer to Note 12, “Commitments and Contingencies,” to the Consolidated Financial Statements, as well as Item 1A. Risk Factors below, for further discussion.

ITEM 1A. RISK FACTORS

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended August 25, 2018, which could materially affect our business, financial condition, and future results. The risks described in our Annual Report on Form 10-K are not the only risks that we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition, and operating results. Except to the extent previously updated or to the extent additional factual information disclosed elsewhere in this Quarterly Report on Form 10-Q relates to such risk factors (including, without limitation, the matters discussed in Part I, “Item 2-Management's Discussion and Analysis of Financial Condition and Results of Operations”), there have been no material changes to the risk factors set forth in our Annual Report on Form 10-K for the year ended August 25, 2018.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

35

ITEM 4. MINE SAFETY DISCLOSURES

Not Applicable.

ITEM 5. OTHER INFORMATION

None.

36

ITEM6. EXHIBITS

*	10.1 Form of Restricted Stock Unit Award Agreement under the UniFirst Corporation 2010 Stock Option and Incentive Plan (with respect to performance-based restricted stock unit awards)
*	31.1 Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer
*	31.2 Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer
**	32.1 Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
**	32.2 Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

* 101 The following materials from UniFirst Corporation’s Quarterly Report on Form 10-Q for the quarter ended November 24, 2018, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Statements of Income, (ii) Consolidated Statements of Comprehensive Income, (iii) Consolidated Balance Sheets, (iv) Consolidated Statements of Shareholder's Equity, (v) Consolidated Statements of Cash Flows, and (vi) Notes to Consolidated Financial Statements.

*	Filed herewith
**	Furnished herewith

37

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.

		UniFirst Corporation
January 3, 2019	By:	/s/ Steven S. Sintros Steven S. Sintros President and Chief Executive Officer
January 3, 2019	By:	/s/ Shane O’Connor Shane O’Connor Senior Vice President and Chief Financial Officer

38

EX-10.1

Exhibit 10.1

RESTRICTED STOCK UNIT AWARD AGREEMENT

UNDER THE UNIFIRST CORPORATION

2010 STOCK OPTION AND INCENTIVE PLAN

Name of Grantee:

No of Restricted Stock Units:

Grant Date:

Pursuant to the UniFirst Corporation Amended and Restated 2010 Stock Option and Incentive Plan as amended through the date hereof (the “Plan”), UniFirst Corporation (the “Company”) hereby grants an award of the number of Restricted Stock Units listed above (an “Award”) to the Grantee named above. Each Restricted Stock Unit shall relate to one share of Common Stock, par value $0.10 per share (the “Stock”), of the Company.

1.Restrictions on Transfer of Award. The Grantee shall have no rights with respect to this Award unless Grantee shall have accepted this Award by signing and delivering a copy of this Award Agreement as set forth herein. If this Award is not so accepted within 30 days of the Grant Date, the Grantee shall forfeit the Award in its entirety (regardless of whether vested or unvested). This Award may not be sold, transferred, pledged, assigned or otherwise encumbered or disposed of by the Grantee, and any shares of Stock issuable with respect to the Award may not be sold, transferred, pledged, assigned or otherwise encumbered or disposed of until (i) the Restricted Stock Units have been earned and have vested as provided in Paragraphs 2 and 3 of this Agreement and (ii) shares of Stock have been issued to the Grantee in accordance with the terms of the Plan and this Agreement.

2.Earning of Restricted Stock Units.

(a)The number of Restricted Stock Units to be earned by the Grantee will vary depending upon the Company’s achievement of the Performance Criteria, as set forth below in this Paragraph 2. The number of Restricted Stock Units determined pursuant to this Paragraph 2 shall be deemed earned by the Grantee.

(b)The Performance Criteria for the determination of the number of Restricted Stock Units earned hereunder will be based on the Company’s consolidated revenue adjusted as set forth in Paragraph 2(c) (“Revenue”) and operating margin adjusted as set forth in Paragraph 2(c) (“Operating Margin”) for the Company’s [_____] fiscal year on a cumulative basis (“Fiscal [_____]”). The maximum number of Restricted Stock Units that may be earned on account of the achievement of the Performance Criteria based on the Company’s Revenue is [______] Restricted Stock Units. The maximum number of Restricted Stock Units that may be earned on account of the achievement of the Performance Criteria based on the Company’s Operating Margin is [_____] Restricted Stock Units. Such Performance Criteria and the number of Restricted Stock Units that will be earned upon achievement of such Performance Criteria are as follows:

Fiscal [______]:

	Performance Achieved	Number of Shares Earned
Threshold:
Target:
Maximum:

(c)The Administrator shall certify at its first meeting after the first public release by the Company of its audited financial statements for Fiscal [____]whether the Performance Criteria have been met with respect to such fiscal year (the “Certification Date”).

All determinations regarding satisfaction of the Performance Criteria will be based on the Company’s audited financial statements and its books and records for Fiscal [____]; provided that (1) the Company’s revenues shall be adjusted to reflect the impact of any decrease in the exchange rate of the Canadian dollar to the U.S. dollar from [____] U.S. dollars to [___] Canadian dollars during Fiscal [_____], and (2) the Company’s operating margin shall be adjusted to add back non-cash items, including depreciation, intangibles amortization and stock-based compensation and to reflect the following exclusions: changes in Generally Accepted Accounting Principles impacting operating income, any losses, costs or expenses associated with or

1

arising from any claims, litigation, regulatory investigations, or environmental investigations and remediation which in the aggregate in Fiscal [____]are in excess of $[____]; any losses, costs or expenses associated with or arising from any impairment of tangible or intangible assets; any losses, costs or expenses associated with or arising from any natural catastrophes, war, terrorism, business interruption or similar events; certain gain contingencies determined by the Administrator; and any costs for Fiscal [____]for any outside contractor or consultant, or internal employees (for those individuals hired after [____]), in each case associated with or related to the planning, development, testing, training, transition, or deployment of the UniFirst Billing System which are expensed for financial statement reporting purposes.

3.Vesting of Restricted Stock Units. To the extent the Restricted Stock Units are earned pursuant to and in accordance with Paragraph 2 of this Agreement, the restrictions and conditions of Paragraph 1 of this Agreement shall lapse and the earned Restricted Stock Units shall vest in full on the Certification Date. On or following the Certification Date, the Restricted Stock Units shall be settled as set forth in Paragraph 5 below.

4.Termination of Employment. If the Grantee’s employment with the Company and its Subsidiaries terminates for any reason (including death or disability) prior to the satisfaction of the vesting conditions set forth in Paragraph 3, any Restricted Stock Units that have not vested as of such date shall automatically and without notice terminate and be forfeited, and neither the Grantee nor any of his or her successors, heirs, assigns, or personal representatives will thereafter have any further rights or interests in such unvested Restricted Stock Units.

5.Issuance of Shares of Stock. As soon as practicable on or following the Certification Date (but in no event later than two and one-half months after the end of the year in which the Certification Date occurs), the Company shall issue to the Grantee the number of shares of Stock equal to the aggregate number of Restricted Stock Units that have vested pursuant to Paragraph 3 of this Agreement on such date and the Grantee shall thereafter have all the rights of a stockholder of the Company with respect to such shares.

6.Incorporation of Plan. Notwithstanding anything herein to the contrary, this Agreement shall be subject to and governed by all the terms and conditions of the Plan, including the powers of the Administrator set forth in Section 2(b) of the Plan. Capitalized terms in this Agreement shall have the meaning specified in the Plan, unless a different meaning is specified herein.

7.Tax Withholding. The Grantee shall, not later than the date as of which the receipt of this Award becomes a taxable event for Federal income tax purposes, pay to the Company or make arrangements satisfactory to the Administrator for payment of any Federal, state, and local taxes required by law to be withheld on account of such taxable event. The Company shall have the authority to cause the required minimum tax withholding obligation to be satisfied, in whole or in part, by withholding from shares of Stock to be issued to the Grantee a number of shares of Stock with an aggregate Fair Market Value that would satisfy the withholding amount due.

8.Section 409A of the Code. This Agreement shall be interpreted in such a manner that all provisions relating to the settlement of the Award are exempt from the requirements of Section 409A of the Code as “short-term deferrals” as described in Section 409A of the Code.

9.No Obligation to Continue Employment. Neither the Company nor any Subsidiary is obligated by or as a result of the Plan or this Agreement to continue the Grantee in employment and neither the Plan nor this Agreement shall interfere in any way with the right of the Company or any Subsidiary to terminate the employment of the Grantee at any time.

10.Integration. This Agreement constitutes the entire agreement between the parties with respect to this Award and supersedes all prior agreements and discussions between the parties concerning such subject matter.

11.Data Privacy Consent. In order to administer the Plan and this Agreement and to implement or structure future equity grants, the Company, its subsidiaries and affiliates and certain agents thereof (together, the “Relevant Companies”) may process any and all personal or professional data, including but not limited to Social Security or other identification number, home address and telephone number, date of birth and other information that is necessary or desirable for the administration of the Plan and/or this Agreement (the “Relevant Information”). By entering into this Agreement, the Grantee (i) authorizes the Company to collect, process, register and transfer to the Relevant Companies all Relevant Information; (ii) waives any privacy rights the Grantee may have with respect to the Relevant Information; (iii) authorizes the Relevant Companies to store and transmit such information in electronic form; and (iv) authorizes the transfer of the Relevant Information to any jurisdiction in which the Relevant Companies consider appropriate. The Grantee shall have access to, and the right to change, the Relevant Information. Relevant Information will only be used in accordance with applicable law.

12.Notices. Notices hereunder shall be mailed or delivered to the Company at its principal place of business and shall be mailed or delivered to the Grantee at the address on file with the Company or, in either case, at such other address as one party may subsequently furnish to the other party in writing.

2

UNIFIRST CORPORATION

By:

The foregoing Agreement is hereby accepted and the terms and conditions thereof hereby agreed to by the undersigned. Electronic acceptance of this Agreement pursuant to the Company’s instructions to the Grantee (including through an online acceptance process) is acceptable.    

Dated:
	Grantee’s Signature
	Grantee’s name and address:

3

EX-31.1

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO SECURITIES

EXCHANGE ACT RULE 13a-14(a)/15d-14(a) AS ADOPTED PURSUANT TO SECTION

302 OF THE SARBANES-OXLEY ACT OF 2002

I, Steven S. Sintros, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of UniFirst Corporation;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
4.	The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant, and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5. The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Date: January 3, 2019	By:	/s/ Steven S. Sintros
		Steven S. Sintros
		President and Chief Executive Officer (Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIALOFFICER PURSUANT TO SECURITIES

EXCHANGE ACT RULE 13a-14(a)/15d-14(a) AS ADOPTED PURSUANT TO SECTION

302 OF THE SARBANES-OXLEY ACT OF 2002

I, Shane O’Connor, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of UniFirst Corporation;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
4.	The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant, and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5. The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Date: January 3, 2019	By:	/s/ Shane O’Connor
		Shane O’Connor
		Senior Vice President and Chief Financial Officer (Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION

906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code), I, Steven S. Sintros, President and Chief Executive Officer of UniFirst Corporation (the “Company”), do hereby certify, to the best of my knowledge, that:

(1) The Company’s Quarterly Report on Form 10-Q for the quarter ended November 24, 2018 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: January 3, 2019	By:	/s/ Steven S. Sintros
		Steven S. Sintros
		President and Chief Executive Officer (Principal Executive Officer)

EX-32.2

Exhibit 32.2

CERTIFICATION OF CHIEFFINANCIALOFFICER PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION

906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code), I, Shane O’Connor, Senior Vice President and Chief Financial Officer of UniFirst Corporation (the “Company”), do hereby certify, to the best of my knowledge, that:

(1) The Company’s Quarterly Report on Form 10-Q for the quarter ended November 24, 2018 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: January 3, 2019	By:	/s/ Shane O’Connor
		Shane O’Connor
		Senior Vice President and Chief Financial Officer (Principal Financial Officer)

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Document And Entity Information - shares	3 Months Ended
	Nov. 24, 2018	Dec. 28, 2018
Document Information [Line Items]
Entity Registrant Name	Unifirst Corporation
Entity Central Index Key	0000717954
Trading Symbol	unf
Current Fiscal Year End Date	--08-31
Entity Filer Category	Large Accelerated Filer
Document Type	10-Q
Document Period End Date	Nov. 24, 2018
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q1
Amendment Flag	false
Common Stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		15,435,844
Class B Common Stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		3,710,009

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Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands		3 Months Ended
		Nov. 24, 2018	Nov. 25, 2017
Revenues		$ 438,550	$ 415,778
Operating expenses:
Cost of revenues	[1]	277,049	253,650
Selling and administrative expenses	[1]	85,959	87,510
Depreciation and amortization		25,116	22,707
Total operating expenses		388,124	363,867
Operating income		50,426	51,911
Other (income) expense:
Interest income, net		(1,705)	(1,276)
Other expense, net		172	154
Total other income, net		(1,533)	(1,122)
Income before income taxes		51,959	53,033
Provision for income taxes		13,639	18,827
Net income		$ 38,320	$ 34,206
Income per share – Diluted:
Common stock (in dollars per share)		$ 1.99	$ 1.67
Income allocated to – Basic:
Common stock		$ 38,320	$ 34,206
Income allocated to – Diluted:
Common stock		$ 38,320	$ 34,206
Weighted average number of shares outstanding – Basic:
Common stock (in shares)		19,142	20,278
Weighted average number of shares outstanding – Diluted:
Common stock (in shares)		19,302	20,434
Common Stock
Income per share – Basic:
Common stock (in dollars per share)		$ 2.08	$ 1.77
Income allocated to – Basic:
Common stock		$ 32,137	$ 27,384
Weighted average number of shares outstanding – Basic:
Common stock (in shares)		15,432	15,462
Class B Common Stock
Income per share – Basic:
Common stock (in dollars per share)		$ 1.67	$ 1.42
Income allocated to – Basic:
Common stock		$ 6,183	$ 6,822
Weighted average number of shares outstanding – Basic:
Common stock (in shares)		3,710	4,816

[1] Exclusive of depreciation on the Company’s property, plant and equipment and amortization on its intangible assets.

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Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended
	Nov. 24, 2018	Nov. 25, 2017
Statement of Comprehensive Income [Abstract]
Net income	$ 38,320	$ 34,206
Other comprehensive (loss) income:
Foreign currency translation adjustments	(2,282)	(2,013)
Change in fair value of derivatives, net of income taxes	132	82
Derivative financial instruments reclassified to earnings	(44)	4
Other comprehensive loss	(2,194)	(1,927)
Comprehensive income	$ 36,126	$ 32,279

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Consolidated Balance Sheets - USD ($) $ in Thousands	Nov. 24, 2018	Aug. 25, 2018
Current assets:
Cash, cash equivalents and short-term investments	$ 276,536	$ 270,512
Receivables, less reserves of $11,926 and $9,237	212,655	200,797
Inventories	91,154	90,176
Rental merchandise in service	178,636	174,392
Prepaid taxes	11,578	27,024
Prepaid expenses and other current assets	38,854	21,899
Total current assets	809,413	784,800
Property, plant and equipment, net of accumulated depreciation of $767,605 and $751,831	558,442	559,576
Goodwill	397,296	397,422
Customer contracts, net	64,357	67,318
Other intangible assets, net	3,179	3,586
Deferred income taxes	423	425
Other assets	74,048	30,259
Total assets	1,907,158	1,843,386
Current liabilities:
Accounts payable	71,987	73,500
Accrued liabilities	104,712	124,225
Accrued taxes	0	736
Total current liabilities	176,699	198,461
Accrued liabilities	104,124	105,888
Accrued and deferred income taxes	86,837	74,070
Total liabilities	367,660	378,419
Commitments and contingencies (Note 12)
Shareholders’ equity:
Preferred Stock, $1.00 par value; 2,000,000 shares authorized; no shares issued and outstanding	0	0
Capital surplus	84,015	82,973
Retained earnings	1,480,922	1,405,239
Accumulated other comprehensive loss	(27,353)	(25,159)
Total shareholders’ equity	1,539,498	1,464,967
Total liabilities and shareholders’ equity	1,907,158	1,843,386
Common Stock
Shareholders’ equity:
Common Stock	1,543	1,543
Class B Common Stock
Shareholders’ equity:
Common Stock	$ 371	$ 371

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Consolidated Balance Sheets - Parenthetical - USD ($) $ in Thousands	Nov. 24, 2018	Aug. 25, 2018
Receivables, reserves	$ 11,926	$ 9,237
Accumulated depreciation	$ 767,605	$ 751,831
Preferred stock, par value (in dollars per share)	$ 1.00	$ 1.00
Preferred stock, shares authorized (in shares)	2,000,000	2,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common Stock
Common stock, par value (in dollars per share)	$ 0.10	$ 0.10
Common stock, shares authorized (in shares)	30,000,000	30,000,000
Common stock, shares issued (in shares)	15,432,728	15,431,209
Common stock, shares outstanding (in shares)	15,432,728	15,431,209
Class B Common Stock
Common stock, par value (in dollars per share)	$ 0.10	$ 0.10
Common stock, shares authorized (in shares)	20,000,000	20,000,000
Common stock, shares issued (in shares)	3,710,009	3,710,009
Common stock, shares outstanding (in shares)	3,710,009	3,710,009

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Consolidated Statements of Shareholders' Equity - USD ($) shares in Thousands, $ in Thousands		Total	Common Shares	Class B Common Stock	Common Stock Common Shares	Common Stock Class B Common Stock	Capital Surplus	Retained Earnings	Retained Earnings Common Shares	Retained Earnings Class B Common Stock	Accumulated Other Comprehensive Loss
Balance at beginning of period (in shares) at Aug. 26, 2017					15,453	4,815
Balance at beginning of period at Aug. 26, 2017		$ 1,453,192			$ 1,545	$ 482	$ 86,245	$ 1,386,438			$ (21,518)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income		34,206						34,206
Change in fair value of derivatives		86									86
Foreign currency translation		(2,013)									(2,013)
Dividends declared Common Stock ($0.1125 per share)			$ (582)	$ (144)					$ (582)	$ (144)
Share-based compensation, net	[1]	596					1,334	(738)
Share-based awards exercised, net (in shares)	[2]				16
Share-based awards exercised, net	[2]	267			$ 2		265
Balance at end of period (in shares) at Nov. 25, 2017					15,469	4,815
Balance at end of period at Nov. 25, 2017		1,485,608			$ 1,547	$ 482	87,844	1,419,180			(23,445)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Cumulative effect of change in accounting principle, net	[3]	39,433						39,433
Balance at beginning of period (in shares) at Aug. 25, 2018					15,431	3,710
Balance at beginning of period at Aug. 25, 2018		1,464,967			$ 1,543	$ 371	82,973	1,405,239			(25,159)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income		38,320						38,320
Change in fair value of derivatives		88									88
Foreign currency translation		(2,282)									(2,282)
Dividends declared Common Stock ($0.1125 per share)			$ (1,736)	$ (334)					$ (1,736)	$ (334)
Share-based compensation, net	[1]	1,042					1,042
Share-based awards exercised, net (in shares)	[2]				2
Balance at end of period (in shares) at Nov. 24, 2018					15,433	3,710
Balance at end of period at Nov. 24, 2018		$ 1,539,498			$ 1,543	$ 371	$ 84,015	$ 1,480,922			$ (27,353)

[1] These amounts are shown net of any shares withheld by the Company to satisfy certain tax withholdings obligations in connection with the vesting of certain shares of restricted stock or restricted stock units.

[2] These amounts are shown net of the effect of income taxes.

[3] These amounts consist of the cumulative impact of the adoption of the new revenue recognition accounting guidance. See Note 2, “Recent Accounting Pronouncements” in the Company's Consolidated Financial Statements.

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Consolidated Statements of Shareholders' Equity - Parenthetical - $ / shares			3 Months Ended
	Mar. 28, 2018	Mar. 27, 2018	Nov. 24, 2018	Nov. 25, 2017
Common Stock
Dividends declared (in dollars per share)	$ 0.1125	$ 0.0375	$ 0.1125	$ 0.0375
Class B Common Stock
Dividends declared (in dollars per share)	$ 0.09	$ 0.03	$ 0.0900	$ 0.0300

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Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Nov. 24, 2018	Nov. 25, 2017
Cash flows from operating activities:
Net income	$ 38,320	$ 34,206
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation	21,795	19,540
Amortization of intangible assets	3,321	3,167
Amortization of deferred financing costs	28	28
Gain on sale of assets	(19)	0
Share-based compensation	1,182	1,114
Accretion on environmental contingencies	189	173
Accretion on asset retirement obligations	220	240
Deferred income taxes	(497)	2,031
Changes in assets and liabilities, net of acquisitions:
Receivables, less reserves	(12,165)	(12,879)
Inventories	(1,061)	(2,882)
Rental merchandise in service	(4,513)	(82)
Prepaid expenses and other current assets and Other assets	(6,884)	(4,901)
Accounts payable	(1,264)	(1,092)
Accrued liabilities	(19,651)	(7,456)
Prepaid and accrued income taxes	13,256	16,420
Net cash provided by operating activities	32,257	47,627
Cash flows from investing activities:
Acquisition of businesses, net of cash acquired	0	(2,671)
Capital expenditures	(23,285)	(19,033)
Proceeds from sale of assets	90	0
Other	33	318
Net cash used in investing activities	(23,162)	(21,386)
Cash flows from financing activities:
Proceeds from exercise of share-based awards	0	267
Taxes withheld and paid related to net share settlement of equity awards	(140)	(522)
Payment of cash dividends	(2,070)	(726)
Net cash used in financing activities	(2,210)	(981)
Effect of exchange rate changes	(861)	(976)
Net increase in cash, cash equivalents and short-term investments	6,024	24,284
Cash, cash equivalents and short-term investments at beginning of period	270,512	349,752
Cash, cash equivalents and short-term investments at end of period	276,536	374,036
Supplemental disclosure of cash flow information:
Non-cash capital expenditures	$ 14,894	$ 10,994

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Basis of Presentation

3 Months Ended

Nov. 24, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

Basis of Presentation

These Consolidated Financial Statements of UniFirst Corporation (“Company”) have been prepared, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) have been condensed or omitted pursuant to such rules and regulations; however, the Company believes that the information furnished reflects all adjustments (consisting only of normal recurring adjustments) which are, in the opinion of management, necessary for a fair statement of results for the interim period.

It is suggested that these Consolidated Financial Statements be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended August 25, 2018. There have been no material changes in the accounting policies followed by the Company during the current fiscal year other than the adoption of recent accounting pronouncements discussed in Note 2. Results for an interim period are not indicative of any future interim periods or for an entire fiscal year.

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Recent Accounting Pronouncements

3 Months Ended

Nov. 24, 2018

Accounting Policies [Abstract]

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board ("FASB") issued updated accounting guidance for revenue recognition, which it has subsequently modified. This modified update provides a comprehensive new revenue recognition model that requires revenue to be recognized in a manner to depict the transfer of goods or services to a customer at an amount that reflects the consideration expected to be received in exchange for those goods or services. The standard includes cost guidance, whereby all direct and incremental costs to obtain or fulfill a contract will be capitalized and amortized over the corresponding period of benefit, determined on a contract by contract basis. This guidance is also intended to improve disclosure requirements and enhance the comparability of revenue recognition practices. Improved disclosures under the amended guidance relate to the nature, amount, timing and uncertainty of revenue that is recognized from contracts with customers. The Company adopted the standard on August 26, 2018 using the modified retrospective adoption method. Upon adoption of this guidance, the Company recorded an adjustment to the opening balance of retained earnings as of August 26, 2018. The adoption of the standard did not have any material impact to the timing or measurement of revenues. The adjustment to retained earnings relates to the capitalization of certain direct and incremental contract costs required by the new guidance, net of the related income tax effect. Capitalized costs are amortized ratably over the anticipated period of benefit. The Company applied the new guidance to all contracts as of August 26, 2018. Results for reporting periods beginning after August 25, 2018 are presented under the new guidance, while comparative prior period amounts have not been restated and continue to be presented under accounting standards in effect in those periods.

Capitalization of Contract Costs. The Company has elected to apply the guidance, as a practical expedient, to a portfolio of contracts (or performance obligations) with similar characteristics because the Company reasonably expects that the effects on the Consolidated Financial Statements of applying this guidance to the portfolio would not differ materially from applying this guidance to the individual contracts within the portfolio. The Company also continues to expense certain costs to obtain a contract if those costs do not meet the criteria of the new standard or the amortization period of the asset would have been one year or less.

The cumulative effect of applying the new guidance was recorded as an adjustment to retained earnings as of the adoption date. As a result of applying the modified retrospective method to adopt the new revenue guidance, the adjustments set forth in the table below were made to accounts on the consolidated balance sheet as of August 26, 2018:

Consolidated Balance Sheet (In thousands)	August 25, 2018		Capitalization of Contract Costs		August 26, 2018
Assets
Prepaid expenses and other current assets	$	21,899	$	10,789	$	32,688
Total current assets	784,800		10,789		795,589
Other assets	30,259		42,405		72,664
Total assets	$	1,843,386	$	53,194	$	1,896,580
Liabilities and shareholders’ equity
Accrued and deferred income taxes	$	74,070	$	13,761	$	87,831
Total liabilities	378,419		13,761		392,180
Retained earnings	1,405,239		39,433		1,444,672
Total shareholders' equity	1,464,967		39,433		1,504,400
Total liabilities and shareholders’ equity	$	1,843,386	$	53,194	$	1,896,580

The impacts of adopting this standard on the first quarter of fiscal 2019 Consolidated Financial Statements are presented in the following tables:

	Thirteen weeks ended November 24, 2018
Consolidated Statement of Income (In thousands, except per share data)	As Reported		Under Historical Guidance		Impact of Adopting New Revenue Standard
Operating expenses:
Selling and administrative expenses	$	85,959	$	86,875	$	(916	)
Total operating expenses	388,124		389,040		(916		)
Operating income	50,426		49,510		916
Income before income taxes	51,959		51,043		916
Provision for income taxes	13,639		13,399		240
Income from continuing operations
Net income	$	38,320	$	37,644	$	676
Income per share – Diluted:	$	1.99	$	1.95	$	0.04

	Balance at November 24, 2018
Consolidated Balance Sheet (In thousands)	As Reported		Under Historical Guidance		Impact of Adopting New Revenue Standard
Assets
Prepaid expenses and other current assets	$	38,854	$	28,065	$	10,789
Total current assets	809,413		798,624		10,789
Other assets	74,048		30,727		43,321
Total assets	$	1,907,158	$	1,853,048	$	54,110
Liabilities and shareholders’ equity
Accrued and deferred income taxes	$	86,837	$	72,836	$	14,001
Total liabilities	367,660		353,659		14,001
Retained earnings	1,480,922		1,440,813		40,109
Total shareholders' equity	1,539,498		1,499,389		40,109
Total liabilities and shareholders’ equity	$	1,907,158	$	1,853,048	$	54,110

The adoption of this standard had no impact on the Company's first quarter of fiscal 2019 operating cash flow, and the only impact of the adoption on its fiscal 2019 consolidated statement of comprehensive income was the impact to net income as presented in the table above.

In January 2016, the FASB issued updated guidance for the recognition, measurement, presentation, and disclosure of certain financial assets and liabilities. This guidance is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017, with early adoption permitted. Accordingly, the Company adopted this standard on August 26, 2018. The adoption of this guidance did not have a material impact on the Company's financial statements.

In February 2016, the FASB issued updated guidance which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e., lessees and lessors). The new guidance requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease, respectively. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases. This new guidance is effective for reporting periods beginning after December 15, 2018, however, early adoption is permitted. Entities are required to use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in their financial statements. The Company will adopt the new guidance on September 1, 2019. At August 25, 2018, the Company was contractually obligated to make future payments of $47.1 million under its operating lease obligations in existence as of that date, primarily related to long-term leases. The Company is evaluating the impact that this guidance will have on its financial statements. While the Company is in the early stages of its implementation process of this guidance, and has not yet determined its impact on its consolidated balance sheet or consolidated statement of income, these leases would potentially be required to be presented on the consolidated balance sheet in accordance with the requirements of this guidance.

In August 2016, the FASB issued updated guidance that reduces diversity in how certain cash receipts and cash payments are presented and classified in the Consolidated Statements of Cash Flows. This guidance is effective for annual reporting periods, and any interim periods within those annual periods, that begin after December 15, 2017 and is required to be applied retrospectively, with early adoption permitted. Accordingly, the Company adopted this standard on August 26, 2018. The adoption of this guidance did not have a material impact on its financial statements.

In October 2016, the FASB issued updated guidance to improve the accounting for the income tax consequences of intra-entity transfers of assets other than inventory. This guidance is effective for annual reporting periods, and any interim periods within those annual periods, that begin after December 15, 2017 and is required to be applied on a modified retrospective basis, with early adoption permitted. Accordingly, the Company adopted this standard on August 26, 2018. The adoption of this guidance did not have a material impact on its financial statements.

In March 2017, the FASB issued updated guidance that requires a change in the presentation of net periodic benefit cost on the consolidated statements of operations. Specifically, entities must present the service cost component of net periodic benefit cost in the same financial statement line items as other compensation costs arising from services rendered by the related employees during the period, whereas the non-service components of net periodic benefit cost must be presented separately from the financial statement line items that include service cost and outside of operating income.  The Company’s adoption of this guidance on August 26, 2018 did not have a material impact on its financial statements.

In August 2017, the FASB issued guidance that expands component and fair value hedging, specifies the presentation of the effects of hedging instruments, and eliminates the separate measurement and presentation of hedge ineffectiveness. The accounting update is effective for annual and interim periods beginning after December 15, 2018, with early adoption permitted, and is to be applied on a modified retrospective basis. The Company elected to early adopt this guidance in the first quarter of fiscal 2019. The adoption of this guidance did not have a material impact on its financial statements.

In August 2018, the FASB issued updated guidance to modify the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. This guidance will be effective for annual reporting periods, and any interim periods within those annual periods, ending after December 15, 2020 and will be required to be applied on a retrospective basis, with early adoption permitted. Accordingly, the standard will be effective for the Company on August 30, 2020. The Company is currently evaluating the impact that this guidance will have on its financial statements and related disclosures.

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Revenue Recognition

3 Months Ended

Nov. 24, 2018

Revenue from Contract with Customer [Abstract]

Revenue Recognition

Revenue Recognition

The following table presents the Company’s revenues for the thirteen weeks ended November 24, 2018 and November 25, 2017, respectively, disaggregated by service type:

	Thirteen weeks ended
	November 24, 2018				November 25, 2017
(In thousands, except percentages)	Revenues		% of Revenues		Revenues		% of Revenues
Core Laundry Operations	$	390,477	89.0	%	$	373,796	89.9	%
Specialty Garments	34,448		7.9	%	28,427		6.8	%
First Aid	13,625		3.1	%	13,555		3.3	%
Total Revenues	$	438,550	100.0	%	$	415,778	100.0	%

For the thirteen weeks ended November 24, 2018, the percentage of revenue recognized over time as the services are performed was 95.3% of Core Laundry Operations revenues and 83.9%of Specialty Garments revenues. See Note 16 “Segment Reporting” for additional details of segment definitions. During that same period, 4.7% of Core Laundry Operations revenues, 16.1% of Specialty Garments revenues and 100% of First Aid revenues were recognized at a point in time, which generally occurs when the goods are transferred to the customer.

Revenue Recognition Policy

Approximately 91.0% of the Company's revenues are derived from fees for route servicing of Core Laundry Operations, Specialty Garments, and First Aid performed by the Company’s employees at the customer's location of business. Revenues from the Company's route servicing customer contracts represent a single-performance obligation. The Company recognizes these revenues over time as services are performed based on the nature of services provided and contractual rates (input method). Certain of the Company's customer contracts, primarily within the Company's Core Laundry Operations, include pricing terms and conditions that include components of variable consideration. The variable consideration is typically in the form of consideration due to a customer based on performance metrics specified within the contract. Specifically, some contracts contain discounts or rebates that the customer can earn through the achievement of specified volume levels. Each component of variable consideration is earned based on the Company's actual performance during the measurement period specified within the contract. To determine the transaction price, the Company estimates the variable consideration using the most likely amount method, based on the specific contract provisions and known performance results during the relevant measurement period. When determining if variable consideration should be constrained, the Company considers whether factors outside its control could result in a significant reversal of revenue. In making these assessments, the Company considers the likelihood and magnitude of a potential reversal. The Company's performance period generally corresponds with the monthly invoice period. No significant constraints on the Company's revenue recognition were applied during the thirteen weeks ended November 24, 2018. The Company reassesses these estimates during each reporting period. The Company maintains a liability for these discounts and rebates within accrued liabilities on the consolidated balance sheets. Variable consideration also includes consideration paid to a customer at the beginning of a contract. The Company capitalizes this consideration and amortizes it over the life of the contract as a reduction to revenue in accordance with the updated accounting guidance for revenue recognition. These assets are included in other assets on the consolidated balance sheets.

Costs to Obtain a Contract

The Company defers commission expenses paid to its employee-partners when the commissions are deemed to be incremental for obtaining the route servicing customer contract. The deferred commissions are amortized on a straight-line basis over the expected period of benefit. The Company reviews the deferred commission balances for impairment on an ongoing basis. Deferred commissions are classified as current or noncurrent based on the timing of when the Company expects to recognize the expense. The current portion is included in prepaid expenses and other current assets and the non-current portion is included in other assets on the Company's consolidated balance sheets. As of November 24, 2018, the current and non-current assets related to deferred commissions totaled $10.8 million and $43.3 million, respectively. During the thirteen weeks ended November 24, 2018, the Company recorded $2.8 million of amortization expense related to deferred commissions. This expense is classified in selling and administrative expense on the consolidated statements of income.

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Business Acquisitions

3 Months Ended

Nov. 24, 2018

Business Combinations [Abstract]

Business Acquisitions

Business Acquisitions

During the thirteen weeks endedNovember 24, 2018, the Company acquired no businesses. Whenever the Company acquires a business, consistent with current accounting guidance, the results of operations of the acquisition are included in the Company's consolidated financial results from the date of the acquisition.

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Fair Value Measurements

3 Months Ended

Nov. 24, 2018

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

The assets or liabilities measured at fair value on a recurring basis are summarized in the tables below (in thousands):

	As of November 24, 2018
	Level 1		Level 2		Level 3		Fair Value
Assets:
Cash equivalents	$	143,122	$	—	$	—	$	143,122
Pension plan assets	—		6,137		—		6,137
Foreign currency forward contracts	—		243		—		243
Total assets at fair value	$	143,122	$	6,380	$	—	$	149,502

	As of August 25, 2018
	Level 1		Level 2		Level 3		Fair Value
Assets:
Cash equivalents	$	103,190	$	—	$	—	$	103,190
Pension plan assets	—		6,325		—		6,325
Foreign currency forward contracts	—		127		—		127
Total assets at fair value	$	103,190	$	6,452	$	—	$	109,642

The Company’s cash equivalents listed above represent money market securities and are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices. The Company does not adjust the quoted market price for such financial instruments.

The Company’s pension plan assets listed above represent guaranteed deposit accounts that are maintained and operated by Prudential Retirement Insurance and Annuity Company (“PRIAC”). All assets are merged with the general assets of PRIAC and are invested predominantly in privately placed securities and mortgages. At the beginning of each calendar year, PRIAC notifies the Company of the annual rates of interest which will be applied to the amounts held in the guaranteed deposit account during the next calendar year. In determining the interest rate to be applied, PRIAC considers the investment performance of the underlying assets of the prior year; however, regardless of the investment performance the Company is contractually guaranteed a minimum rate of return. As such, the Company’s pension plan assets are included within Level 2 of the fair value hierarchy.

The Company’s foreign currency forward contracts represent contracts the Company has entered into to exchange Canadian dollars for U.S. dollars at fixed exchange rates in order to manage its exposure related to certain forecasted Canadian dollar denominated sales of one of its subsidiaries. These contracts were included in prepaid expenses and other current assets and other long-term assets as of November 24, 2018 and August 25, 2018. The fair value of the forward contracts is based on similar exchange traded derivatives and are, therefore, included within Level 2 of the fair value hierarchy.

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Derivative Instruments and Hedging Activities

3 Months Ended

Nov. 24, 2018

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments and Hedging Activities

Derivative Instruments and Hedging Activities

As of November 24, 2018, the Company had forward contracts with a notional value of approximately 13.4 million CAD outstanding and recorded the fair value of the contracts of $0.2 million in other long-term assets and $0.1 million in prepaid expenses and other current assets with a corresponding decrease in accumulated other comprehensive loss of $0.2 million, which was recorded net of tax. During the thirteen weeks endedNovember 24, 2018, the Company reclassified a nominal amount from accumulated other comprehensive loss to revenue, related to the derivative financial instruments. The gain on these forward contracts that resulted in a decrease to accumulated other comprehensive loss as of November 24, 2018 is expected to be reclassified to revenues prior to its maturity on February 25, 2022.

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Employee Benefit Plans

3 Months Ended

Nov. 24, 2018

Postemployment Benefits [Abstract]

Employee Benefit Plans

Employee Benefit Plans

Defined Contribution Retirement Savings Plan

The Company has a defined contribution retirement savings plan with a 401(k) feature for all eligible U.S. and Canadian employees not under collective bargaining agreements. The Company matches a portion of the employee’s contribution and may make an additional contribution at its discretion. Contributions charged to expense under the plan for the thirteen weeks ended November 24, 2018 and November 25, 2017 were $4.5 million and $4.1 million, respectively.

Pension Plans and Supplemental Executive Retirement Plans

The Company maintains an unfunded Supplemental Executive Retirement Plan for certain eligible employees of the Company and two frozen non-contributory defined benefit pension plans. The amounts charged to expense related to these plans for the thirteen weeks ended November 24, 2018 and November 25, 2017 were $0.5 million and $0.7 million, respectively.

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Income Per Share

3 Months Ended

Nov. 24, 2018

Earnings Per Share [Abstract]

Income Per Share

Income Per Share

The Company calculates income per share by allocating income to its unvested participating securities as part of its income per share calculations. The following table sets forth the computation of basic income per share using the two-class method for amounts attributable to the Company’s shares of Common Stock and Class B Common Stock (in thousands, except per share data):

	Thirteen weeks ended
	November 24, 2018		November 25, 2017
Net income available to shareholders	$	38,320	$	34,206
Allocation of net income for Basic:
Common Stock	$	32,137	$	27,384
Class B Common Stock	6,183		6,822
	$	38,320	$	34,206
Weighted average number of shares for Basic:
Common Stock	15,432		15,462
Class B Common Stock	3,710		4,816
	19,142		20,278
Income per share for Basic:
Common Stock	$	2.08	$	1.77
Class B Common Stock	$	1.67	$	1.42

The Company is required to calculate diluted income per share for Common Stock using the more dilutive of the following two methods:

• The treasury stock method; or

• The two-class method assuming a participating security is not exercised or converted.

For the thirteen weeks ended November 24, 2018 and November 25, 2017, the Company’s diluted income per share assumes the conversion of all vested Class B Common Stock into Common Stock and uses the two-class method for its unvested participating shares. The following table sets forth the computation of diluted income per share of Common Stock for the thirteen weeks endedNovember 24, 2018 and November 25, 2017 (in thousands, except per share data):

	Thirteen weeks ended November 24, 2018					Thirteen weeks ended November 25, 2017
	Earnings to Common Shareholders		Common Shares	Income Per Share		Earnings to Common Shareholders		Common Shares	Income Per Share
As reported - Basic	$	32,137	15,432	$	2.08	$	27,384	15,462	$	1.77
Add: effect of dilutive potential common shares
Share-Based Awards	—		160			—		156
Class B Common Stock	6,183		3,710			6,822		4,816
As reported – Diluted	$	38,320	19,302	$	1.99	$	34,206	20,434	$	1.67

Share-based awards that would result in the issuance of 10,156 shares of Common Stock were excluded from the calculation of diluted income per share for the thirteen weeks ended November 24, 2018 because they were anti-dilutive. Share-based awards that would result in the issuance of 117 shares of Common Stock were excluded from the calculation of diluted income per share for the thirteen weeks ended November 25, 2017 because they were anti-dilutive.

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Inventories

3 Months Ended

Nov. 24, 2018

Inventory Disclosure [Abstract]

Inventories

Inventories

Inventories are stated at the lower of cost or net realizable value, net of any reserve for excess and obsolete inventory. Work-in-process and finished goods inventories consist of materials, labor and manufacturing overhead. Judgments and estimates are used in determining the likelihood that new goods on hand can be sold to customers or used in rental operations. Historical inventory usage and current revenue trends are considered in estimating both excess and obsolete inventories. If actual product demand and market conditions are less favorable than those projected by management, additional inventory write-downs may be required. The Company uses the first-in, first-out (“FIFO”) method to value its inventories.

The components of inventory as of November 24, 2018 and August 25, 2018 were as follows (in thousands):

	November 24, 2018		August 25, 2018
Raw materials	$	16,419	$	18,508
Work in process	3,707		3,271
Finished goods	71,028		68,397
Total inventories	$	91,154	$	90,176

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Goodwill and Other Intangible Assets

3 Months Ended

Nov. 24, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

Goodwill and Other Intangible Assets

As discussed in Note 4, “Business Acquisitions”, when the Company acquires a business, the amount assigned to the tangible assets and liabilities and intangible assets acquired is based on their respective fair values determined as of the acquisition date. The excess of the purchase price over the tangible assets and liabilities and intangible assets is recorded as goodwill.

The changes in the carrying amount of goodwill are as follows (in thousands):

Balance as of August 25, 2018	$	397,422
Other	(126		)
Balance as of November 24, 2018	$	397,296

Intangible assets, net in the Company’s accompanying Consolidated Balance Sheets are as follows (in thousands):

	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
November 24, 2018
Customer contracts	$	220,257	$	155,900	$	64,357
Other intangible assets	34,981		31,802		3,179
	$	255,238	$	187,702	$	67,536
August 25, 2018
Customer contracts	$	220,303	$	152,985	$	67,318
Other intangible assets	35,030		31,444		3,586
	$	255,333	$	184,429	$	70,904

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Asset Retirement Obligations

3 Months Ended

Nov. 24, 2018

Asset Retirement Obligation Disclosure [Abstract]

Asset Retirement Obligations

Asset Retirement Obligations

The Company recognizes asset retirement obligations in the period in which they are incurred if a reasonable estimate of fair value can be made. The associated asset retirement costs are capitalized as part of the carrying amount of the long-lived asset. The Company continues to depreciate, on a straight-line basis, the amount added to property, plant and equipment and recognizes accretion expense in connection with the discounted liability over the various remaining lives which range from approximately one to twenty-six years.

A reconciliation of the Company’s asset retirement liability for the thirteen weeks endedNovember 24, 2018 was as follows (in thousands):

	November 24, 2018
Beginning balance as of August 25, 2018	$	13,668
Accretion expense	220
Effect of exchange rate changes	(70		)
Change in estimate	(1,705		)
Ending balance as of November 24, 2018	$	12,113

Asset retirement obligations are included in current and long-term accrued liabilities in the accompanying Consolidated Balance Sheets.

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Commitments and Contingencies

3 Months Ended

Nov. 24, 2018

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

The Company and its operations are subject to various federal, state and local laws and regulations governing, among other things, air emissions, wastewater discharges, and the generation, handling, storage, transportation, treatment and disposal of hazardous wastes and other substances. In particular, industrial laundries currently use and must dispose of detergent waste water and other residues, and, in the past, used perchloroethylene and other dry cleaning solvents. The Company is attentive to the environmental concerns surrounding the disposal of these materials and has, through the years, taken measures to avoid their improper disposal. Over the years, the Company has settled, or contributed to the settlement of, actions or claims brought against the Company relating to the disposal of hazardous materials and there can be no assurance that the Company will not have to expend material amounts to remediate the consequences of any such disposal in the future.

U.S. GAAP requires that a liability for contingencies be recorded when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated. Significant judgment is required to determine the existence of a liability, as well as the amount to be recorded. The Company regularly consults with attorneys and outside consultants in its consideration of the relevant facts and circumstances before recording a contingent liability. Changes in enacted laws, regulatory orders or decrees, management’s estimates of costs, risk-free interest rates, insurance proceeds, participation by other parties, the timing of payments, the input of the Company’s attorneys and outside consultants or other factual circumstances could have a material impact on the amounts recorded for environmental and other contingent liabilities.

Under environmental laws, an owner or lessee of real estate may be liable for the costs of removal or remediation of certain hazardous or toxic substances located on, or in, or emanating from, such property, as well as related costs of investigation and property damage. Such laws often impose liability without regard to whether the owner or lessee knew of, or was responsible for the presence of such hazardous or toxic substances. There can be no assurances that acquired or leased locations have been operated in compliance with environmental laws and regulations or that future uses or conditions will not result in the imposition of liability upon the Company under such laws or expose the Company to third-party actions such as tort suits. The Company continues to address environmental conditions under terms of consent orders negotiated with the applicable environmental authorities or otherwise with respect to sites located in or related to Woburn, Massachusetts, Somerville, Massachusetts, Springfield, Massachusetts, Uvalde, Texas, Stockton, California, two sites related to former operations in Williamstown, Vermont, as well as sites located in Goldsboro, North Carolina and Wilmington, North Carolina.

The Company has accrued certain costs related to the sites described above as it has been determined that the costs are probable and can be reasonably estimated. The Company has potential exposure related to a parcel of land (the "Central Area") related to the Woburn, Massachusetts site mentioned above. Currently, the consent decree for the Woburn site does not define or require any remediation work in the Central Area. The United States Environmental Protection Agency (the "EPA") has provided the Company and other signatories to the consent decree with comments on the design and implementation of groundwater and soil remedies at the Woburn site and investigation of environmental conditions in the Central Area. The Company, and other signatories, have implemented and proposed to do additional work at the Woburn site but many of the EPA’s comments remain to be resolved. The Company has accrued costs to perform certain work responsive to EPA's comments. The Company has implemented mitigation measures and continues to monitor environmental conditions at the Somerville, Massachusetts site. In addition, the Company has received demands from the local transit authority for reimbursement of certain costs associated with its construction of a new municipal transit station in the area of the Somerville site. This station is part of the extension of the transit system. The Company has reserved for costs in connection with this matter; however, in light of the uncertainties associated with this matter, these costs and the related reserve may change. The Company has also received notice that the Massachusetts Department of Environmental Protection is conducting an audit of the Company’s investigation and remediation work with respect to the Somerville site.

The Company routinely reviews and evaluates sites that may require remediation and monitoring and determines its estimated costs based on various estimates and assumptions. These estimates are developed using its internal sources or by third party environmental engineers or other service providers. Internally developed estimates are based on:

•Management’s judgment and experience in remediating and monitoring the Company’s sites;

•Information available from regulatory agencies as to costs of remediation and monitoring;

• The number, financial resources and relative degree of responsibility of other potentially responsible parties (“PRPs”) who may be liable for remediation and monitoring of a specific site; and

•The typical allocation of costs among PRPs.

There is usually a range of reasonable estimates of the costs associated with each site. In accordance with U.S. GAAP, the Company’s accruals reflect the amount within the range that it believes is the best estimate or the low end of a range of estimates if no point within the range is a better estimate. Where it believes that both the amount of a particular liability and the timing of the payments are reliably determinable, the Company adjusts the cost in current dollars using a rate of 3% for inflation until the time of expected payment and discounts the cost to present value using current risk-free interest rates. As of November 24, 2018, the risk-free interest rates utilized by the Company ranged from 3.1% to 3.3%.

For environmental liabilities that have been discounted, the Company includes interest accretion, based on the effective interest method, in selling and administrative expenses on the Consolidated Statements of Income. The changes to the Company’s environmental liabilities for the thirteen weeks endedNovember 24, 2018 were as follows (in thousands):

	November 24, 2018
Beginning balance as of August 25, 2018	$	25,486
Costs incurred for which reserves had been provided	(195		)
Insurance proceeds	40
Interest accretion	189
Change in discount rates	(699		)
Balance as of November 24, 2018	$	24,821

Anticipated payments and insurance proceeds of currently identified environmental remediation liabilities as of November 24, 2018, for the next five fiscal years and thereafter, as measured in current dollars, are reflected below.

(In thousands)	2019			2020			2021			2022			2023			Thereafter			Total
Estimated costs – current dollars	$	9,299		$	2,122		$	1,635		$	1,272		$	1,175		$	12,137		$	27,640
Estimated insurance proceeds	(133		)	(159		)	(173		)	(159		)	(173		)	(830		)	(1,627		)
Net anticipated costs	$	9,166		$	1,963		$	1,462		$	1,113		$	1,002		$	11,307		$	26,013
Effect of inflation																			7,477
Effect of discounting																			(8,669		)
Balance as of November 24, 2018																			$	24,821

Estimated insurance proceeds are primarily received from an annuity received as part of a legal settlement with an insurance company. Annual proceeds of approximately $0.3 million are deposited into an escrow account which funds remediation and monitoring costs for two sites related to former operations in Williamstown, Vermont. Annual proceeds received but not expended in the current year accumulate in this account and may be used in future years for costs related to this site through the year 2027. As of November 24, 2018, the balance in this escrow account, which is held in a trust and is not recorded in the Company’s accompanying Consolidated Balance Sheet, was approximately $3.8 million. Also included in estimated insurance proceeds are amounts the Company is entitled to receive pursuant to legal settlements as reimbursements from three insurance companies for estimated costs at the site in Uvalde, Texas.

The Company’s nuclear garment decontamination facilities are licensed by the Nuclear Regulatory Commission (“NRC”), or, in certain cases, by the applicable state agency, and are subject to regulation by federal, state and local authorities. The Company also has nuclear garment decontamination facilities in the United Kingdom and the Netherlands. These facilities are licensed and regulated by the respective country’s applicable federal agency. In the past, scrutiny and regulation of nuclear facilities and related services have resulted in the suspension of operations at certain nuclear facilities served by the Company or disruptions in its ability to service such facilities. There can be no assurance that such regulation will not lead to material disruptions in the Company’s garment decontamination business.

From time to time, the Company is also subject to legal proceedings and claims arising from the conduct of its business operations, including personal injury claims, customer contract matters, employment claims and environmental matters as described above.

While it is impossible for the Company to ascertain the ultimate legal and financial liability with respect to contingent liabilities, including lawsuits and environmental contingencies, the Company believes that the aggregate amount of such liabilities, if any, in excess of amounts covered by insurance have been properly accrued in accordance with U.S. GAAP. It is possible, however, that the future financial position and/or results of operations for any particular future period could be materially affected by changes in the Company’s assumptions or strategies related to these contingencies or changes out of the Company’s control.

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Income Taxes

3 Months Ended

Nov. 24, 2018

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

In accordance with ASC 740, Income Taxes (“ASC 740”), each interim period is considered integral to the annual period and tax expense is measured using an estimated annual effective tax rate. An entity is required to record income tax expense each quarter based on its annual effective tax rate estimated for the full fiscal year and use that rate to provide for income taxes on a current year-to-date basis, adjusted for discrete taxable events that occur during the interim period.

The Company’s effective tax rate for the thirteen weeks ended November 24, 2018 was 26.2% compared to 35.5% for the corresponding period in the prior year. The reduction in the effective tax rates in the thirteen weeks endedNovember 24, 2018 as compared to the corresponding period in the prior year was due primarily to the impact of Tax Cuts and Jobs Act (the “Act”) enacted on December 22, 2017. As a result of the Act, U.S. corporations are subject to lower income tax rates, which also caused the Company to remeasure its U.S. net deferred tax liabilities at the lower rates. Also because of this Act, the Company is subject to a one-time transition tax for the deemed repatriation of its foreign earnings.

U.S. Tax Reform

The Act, among other matters, reduced the U.S. federal corporate income tax rate from 35% to 21%, required companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred, and created new taxes on certain foreign sourced earnings.

As of November 24, 2018, the Company had not completed its accounting for the tax effects of enactment of the Act and is still analyzing certain aspects of the Act and refining its calculations, which could potentially affect the measurement of these balances or potentially give rise to new deferred tax amounts.

On December 22, 2017, the SEC issued Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Act (“SAB 118”) directing SEC registrants to consider the impact of the Act as “provisional” when they do not have the necessary information available, prepared or analyzed (including computations) in reasonable detail to complete their accounting for the change in tax law. In accordance with SAB 118, the amounts recorded related to accounting for the Act represent the Company’s best estimate based on its interpretation of the Act as the Company is still accumulating data to finalize the underlying calculations, or in certain cases, the U.S. Treasury is expected to issue further guidance on the application of certain provisions of the Act. In addition, the Company also used assumptions and estimates that may change as a result of future guidance and interpretation from the Internal Revenue Service, the SEC, the FASB and various other taxing jurisdictions. In particular, the Company anticipates that the U.S. state jurisdictions will continue to determine and announce their conformity or decoupling from the Act, either in its entirety or with respect to specific provisions. All of these potential legislative and interpretive actions could result in adjustments to the Company's provisional estimates when the accounting for the income tax effects of the Act is completed.

Uncertain tax positions

The Company recognizes interest and penalties related to uncertain tax positions as a component of income tax expense which is consistent with the recognition of these items in prior reporting periods. During the thirteen weeks endedNovember 24, 2018, there were no material changes in the amount of unrecognized tax benefits or the amount accrued for interest and penalties.

All U.S. and Canadian federal income tax statutes have lapsed for filings up to and including fiscal years 2013 and 2010, respectively. With a few exceptions, the Company is no longer subject to state and local income tax examinations for periods prior to fiscal 2014. The Company is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change significantly in the next 12 months.

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Long-Term Debt

3 Months Ended

Nov. 24, 2018

Debt Disclosure [Abstract]

Long-Term Debt

Long-Term Debt

The Company has a $250 million unsecured revolving credit agreement (the “Credit Agreement”) with a syndicate of banks, which matures on April 11, 2021. Under the Credit Agreement, the Company is able to borrow funds at variable interest rates based on, at the Company’s election, the Eurodollar rate or a base rate, plus in each case a spread based on the Company’s consolidated funded debt ratio. Availability of credit requires compliance with certain financial and other covenants, including a maximum consolidated funded debt ratio and minimum consolidated interest coverage ratio as defined in the Credit Agreement. The Company tests its compliance with these financial covenants on a fiscal quarterly basis. As of November 24, 2018, the interest rates applicable to the Company’s borrowings under the Credit Agreement would be calculated as LIBOR plus 75 basis points at the time of the respective borrowing. As of November 24, 2018, the Company had no outstanding borrowings and had outstanding letters of credit amounting to $71.4 million, leaving $178.6 million available for borrowing under the Credit Agreement.

As of November 24, 2018, the Company was in compliance with all covenants under the Credit Agreement.

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Accumulated Other Comprehensive Loss

3 Months Ended

Nov. 24, 2018

Stockholders' Equity Note [Abstract]

Accumulated Other Comprehensive Loss

Accumulated Other ComprehensiveLoss

The changes in each component of accumulated other comprehensive loss, net of tax, for the thirteen weeks ended November 24, 2018 and November 25, 2017 were as follows (in thousands):

	Thirteen weeks ended November 24, 2018
	Foreign Currency Translation			Pension- related(1)			Derivative Financial Instruments(1)			Total Accumulated Other Comprehensive Loss
Balance as of August 25, 2018	$	(21,116	)	$	(4,135	)	$	92		$	(25,159	)
Other comprehensive (loss) income before reclassification	(2,282		)	—			132			(2,150		)
Amounts reclassified from accumulated other comprehensive loss	—			—			(44		)	(44		)
Net current period other comprehensive (loss) income	(2,282		)	—			88			(2,194		)
Balance as of November 24, 2018	$	(23,398	)	$	(4,135	)	$	180		$	(27,353	)

	Thirteen weeks ended November 25, 2017
	Foreign Currency Translation			Pension- related(1)			Derivative Financial Instruments(1)			Total Accumulated Other Comprehensive (Loss) Income
Balance as of August 26, 2017	$	(15,932	)	$	(5,477	)	$	(109	)	$	(21,518	)
Other comprehensive (loss) income before reclassification	(2,013		)	—			82			(1,931		)
Amounts reclassified from accumulated other comprehensive loss	—			—			4			4
Net current period other comprehensive (loss) income	(2,013		)	—			86			(1,927		)
Balance as of November 25, 2017	$	(17,945	)	$	(5,477	)	$	(23	)	$	(23,445	)

(1)Amounts are shown net of tax.

Amounts reclassified from accumulated other comprehensive loss, net of tax, for the thirteen weeks endedNovember 24, 2018 and November 25, 2017 were as follows (in thousands):

	Thirteen weeks ended
	November 24, 2018			November 25, 2017
Derivative financial instruments, net:
Forward contracts (a)	$	(44	)	$	4
Total, net of tax	(44		)	4
Total amounts reclassified, net of tax	$	(44	)	$	4

(a)Amounts included in revenues in the accompanying Consolidated Statements of Income.

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Segment Reporting

3 Months Ended

Nov. 24, 2018

Segment Reporting [Abstract]

Segment Reporting

Segment Reporting

Operating segments are identified as components of an enterprise for which separate discrete financial information is available for evaluation by the chief operating decision-maker, or decision-making group, in making decisions on how to allocate resources and assess performance. The Company’s chief operating decision maker is the Company’s Chief Executive Officer. The Company has six operating segments based on the information reviewed by its Chief Executive Officer: U.S. Rental and Cleaning, Canadian Rental and Cleaning, Manufacturing (“MFG”), Corporate, Specialty Garments Rental and Cleaning (“Specialty Garments”) and First Aid. The U.S. Rental and Cleaning and Canadian Rental and Cleaning operating segments have been combined to form the U.S. and Canadian Rental and Cleaning reporting segment, and as a result, the Company has five reporting segments.

The U.S. and Canadian Rental and Cleaning reporting segment purchases, rents, cleans, delivers and sells, uniforms and protective clothing and non-garment items in the United States and Canada. The laundry locations of the U.S. and Canadian Rental and Cleaning reporting segment are referred to by the Company as “industrial laundries” or “industrial laundry locations.”

The MFG operating segment designs and manufactures uniforms and non-garment items primarily for the purpose of providing these goods to the U.S. and Canadian Rental and Cleaning reporting segment. MFG revenues are generated when goods are shipped from the Company’s manufacturing facilities, or its subcontract manufacturers, to other Company locations. These revenues are recorded at a transfer price which is typically in excess of the actual manufacturing cost. Manufactured products are carried in inventory until placed in service at which time they are amortized at this transfer price. On a consolidated basis, intercompany revenues and income are eliminated and the carrying value of inventories and rental merchandise in service is reduced to the manufacturing cost. Income before income taxes from MFG net of the intercompany MFG elimination offsets the merchandise amortization costs incurred by the U.S. and Canadian Rental and Cleaning reporting segment as the merchandise costs of this reporting segment are amortized and recognized based on inventories purchased from MFG at the transfer price which is above the Company’s manufacturing cost.

The Corporate operating segment consists of costs associated with the Company’s distribution center, sales and marketing, information systems, engineering, materials management, manufacturing planning, finance, budgeting, human resources, other general and administrative costs and interest expense. The revenues generated from the Corporate operating segment represent certain direct sales made by the Company directly from its distribution center. The products sold by this operating segment are the same products rented and sold by the U.S. and Canadian Rental and Cleaning reporting segment. The majority of expenses accounted for within the Corporate segment relate to costs of the U.S. and Canadian Rental and Cleaning segment, with the remainder of the costs relating to the Specialty Garment and First Aid segments.

The Specialty Garments operating segment purchases, rents, cleans, delivers and sells, specialty garments and non-garment items primarily for nuclear and cleanroom applications and provides cleanroom cleaning services at limited customer locations. The First Aid operating segment sells first aid cabinet services and other safety supplies as well as maintains wholesale distribution and pill packaging operations.

The Company refers to the U.S. and Canadian Rental and Cleaning, MFG, and Corporate reporting segments combined as its “Core Laundry Operations,” which is included as a subtotal in the following tables (in thousands):

Thirteen weeks ended	U.S. and Canadian Rental and Cleaning			MFG		Net Interco MFG Elim			Corporate			Subtotal Core Laundry Operations			Specialty Garments		First Aid		Total
November 24, 2018
Revenues	$	380,753		$	67,546	$	(67,511	)	$	9,689		$	390,477		$	34,448	$	13,625	$	438,550
Operating income (loss)	$	54,714		$	24,732	$	(3,747	)	$	(30,917	)	$	44,782		$	4,470	$	1,174	$	50,426
Interest income, net	$	(1,047	)	$	—	$	—		$	(658	)	$	(1,705	)	$	—	$	—	$	(1,705	)
Income (loss) before taxes	$	55,752		$	24,840	$	(3,747	)	$	(30,233	)	$	46,612		$	4,173	$	1,174	$	51,959
November 25, 2017
Revenues	$	365,518		$	63,945	$	(63,919	)	$	8,252		$	373,796		$	28,427	$	13,555	$	415,778
Operating income (loss)	$	54,798		$	23,987	$	(4,737	)	$	(27,690	)	$	46,358		$	4,477	$	1,076	$	51,911
Interest income, net	$	(949	)	$	—	$	—		$	(327	)	$	(1,276	)	$	—	$	—	$	(1,276	)
Income (loss) before taxes	$	55,764		$	23,910	$	(4,737	)	$	(27,333	)	$	47,604		$	4,353	$	1,076	$	53,033

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Shares Repurchased and Dividends

3 Months Ended

Nov. 24, 2018

Equity [Abstract]

Shares Repurchased and Dividends

Shares Repurchased and Dividends

On March 27, 2018, UniFirst repurchased 1.105 million shares of Class B Common Stock and 0.073 million shares of Common Stock for a combined $146.0 million in a private transaction with the Croatti family at a per share price of $124.00.

This opportunity to repurchase shares from the Croatti family was evaluated by an independent special committee of the Board of Directors (the “Special Committee”). The sale of shares by the Croatti family was executed to provide liquidity as well as for estate and family financial planning following the passing of former UniFirst Chief Executive Officer, Ronald D. Croatti.

The Special Committee determined that a repurchase of Croatti family Class B Common Stock at a discount to market was in the best interests of the Company as it is accretive to income per share and addresses uncertainties that may have been created if the Croatti family had pursued other liquidity options.  The Special Committee undertook its evaluation with the assistance of Stifel Financial Corp. (“Stifel”) and received an opinion from Stifel to the effect that, as of March 27, 2018, the $124.00 per share in cash to be paid was fair to the Company, from a financial point of view.  The entire Board of Directors other than Cynthia Croatti, who is affiliated with the selling shareholders and therefore abstained, approved the transaction upon the recommendation of the Special Committee.

On March 28, 2018, the Company announced that it will be raising its quarterly dividend to $0.1125 per share for Common Stock and to $0.09 per share for Class B Common Stock, up from $0.0375 and $0.03 per share, respectively. The amount and timing of any dividend payment is subject to the approval of the Board of Directors each quarter.

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Subsequent Events

3 Months Ended

Nov. 24, 2018

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

On January 2, 2019, the Company's Board of Directors approved a share repurchase program authorizing the Company to repurchase from time to time up to $100.0 million of its outstanding shares of common stock.  Repurchases made under the program, if any, will be made in either the open market or in privately negotiated transactions. The timing, manner, price and amount of any repurchases will depend on a variety of factors, including economic and market conditions, the Company stock price, corporate liquidity requirements and priorities, applicable legal requirements and other factors. The share repurchase program will be funded using the Company's available cash or capacity under its Credit Agreement when implemented and may be suspended or discontinued at any time.

During fiscal 2017, the Company recorded a pre-tax non-cash impairment charge of $55.8 million once it was determined that it was not probable that the version of the Customer Relationship Management (“CRM”) system that was being developed would be completed and placed into service. On December 28, 2018, the Company entered into a settlement agreement with its lead contractor for the version of the CRM system with respect to which the Company recorded the impairment charge. As part of the settlement agreement, the Company will record a total gain of $20.3 million during the quarter ending February 23, 2019, which includes the Company’s receipt of a one-time cash payment in the amount of $13.0 million as well as the forgiveness of amounts previously due the contractor.

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Recent Accounting Pronouncements (Policies)

3 Months Ended

Nov. 24, 2018

Accounting Policies [Abstract]

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board ("FASB") issued updated accounting guidance for revenue recognition, which it has subsequently modified. This modified update provides a comprehensive new revenue recognition model that requires revenue to be recognized in a manner to depict the transfer of goods or services to a customer at an amount that reflects the consideration expected to be received in exchange for those goods or services. The standard includes cost guidance, whereby all direct and incremental costs to obtain or fulfill a contract will be capitalized and amortized over the corresponding period of benefit, determined on a contract by contract basis. This guidance is also intended to improve disclosure requirements and enhance the comparability of revenue recognition practices. Improved disclosures under the amended guidance relate to the nature, amount, timing and uncertainty of revenue that is recognized from contracts with customers. The Company adopted the standard on August 26, 2018 using the modified retrospective adoption method. Upon adoption of this guidance, the Company recorded an adjustment to the opening balance of retained earnings as of August 26, 2018. The adoption of the standard did not have any material impact to the timing or measurement of revenues. The adjustment to retained earnings relates to the capitalization of certain direct and incremental contract costs required by the new guidance, net of the related income tax effect. Capitalized costs are amortized ratably over the anticipated period of benefit. The Company applied the new guidance to all contracts as of August 26, 2018. Results for reporting periods beginning after August 25, 2018 are presented under the new guidance, while comparative prior period amounts have not been restated and continue to be presented under accounting standards in effect in those periods.

Capitalization of Contract Costs. The Company has elected to apply the guidance, as a practical expedient, to a portfolio of contracts (or performance obligations) with similar characteristics because the Company reasonably expects that the effects on the Consolidated Financial Statements of applying this guidance to the portfolio would not differ materially from applying this guidance to the individual contracts within the portfolio. The Company also continues to expense certain costs to obtain a contract if those costs do not meet the criteria of the new standard or the amortization period of the asset would have been one year or less.

The cumulative effect of applying the new guidance was recorded as an adjustment to retained earnings as of the adoption date. As a result of applying the modified retrospective method to adopt the new revenue guidance, the adjustments set forth in the table below were made to accounts on the consolidated balance sheet as of August 26, 2018:

Consolidated Balance Sheet (In thousands)	August 25, 2018		Capitalization of Contract Costs		August 26, 2018
Assets
Prepaid expenses and other current assets	$	21,899	$	10,789	$	32,688
Total current assets	784,800		10,789		795,589
Other assets	30,259		42,405		72,664
Total assets	$	1,843,386	$	53,194	$	1,896,580
Liabilities and shareholders’ equity
Accrued and deferred income taxes	$	74,070	$	13,761	$	87,831
Total liabilities	378,419		13,761		392,180
Retained earnings	1,405,239		39,433		1,444,672
Total shareholders' equity	1,464,967		39,433		1,504,400
Total liabilities and shareholders’ equity	$	1,843,386	$	53,194	$	1,896,580

The impacts of adopting this standard on the first quarter of fiscal 2019 Consolidated Financial Statements are presented in the following tables:

	Thirteen weeks ended November 24, 2018
Consolidated Statement of Income (In thousands, except per share data)	As Reported		Under Historical Guidance		Impact of Adopting New Revenue Standard
Operating expenses:
Selling and administrative expenses	$	85,959	$	86,875	$	(916	)
Total operating expenses	388,124		389,040		(916		)
Operating income	50,426		49,510		916
Income before income taxes	51,959		51,043		916
Provision for income taxes	13,639		13,399		240
Income from continuing operations
Net income	$	38,320	$	37,644	$	676
Income per share – Diluted:	$	1.99	$	1.95	$	0.04

	Balance at November 24, 2018
Consolidated Balance Sheet (In thousands)	As Reported		Under Historical Guidance		Impact of Adopting New Revenue Standard
Assets
Prepaid expenses and other current assets	$	38,854	$	28,065	$	10,789
Total current assets	809,413		798,624		10,789
Other assets	74,048		30,727		43,321
Total assets	$	1,907,158	$	1,853,048	$	54,110
Liabilities and shareholders’ equity
Accrued and deferred income taxes	$	86,837	$	72,836	$	14,001
Total liabilities	367,660		353,659		14,001
Retained earnings	1,480,922		1,440,813		40,109
Total shareholders' equity	1,539,498		1,499,389		40,109
Total liabilities and shareholders’ equity	$	1,907,158	$	1,853,048	$	54,110

The adoption of this standard had no impact on the Company's first quarter of fiscal 2019 operating cash flow, and the only impact of the adoption on its fiscal 2019 consolidated statement of comprehensive income was the impact to net income as presented in the table above.

In January 2016, the FASB issued updated guidance for the recognition, measurement, presentation, and disclosure of certain financial assets and liabilities. This guidance is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017, with early adoption permitted. Accordingly, the Company adopted this standard on August 26, 2018. The adoption of this guidance did not have a material impact on the Company's financial statements.

In February 2016, the FASB issued updated guidance which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e., lessees and lessors). The new guidance requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease, respectively. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases. This new guidance is effective for reporting periods beginning after December 15, 2018, however, early adoption is permitted. Entities are required to use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in their financial statements. The Company will adopt the new guidance on September 1, 2019. At August 25, 2018, the Company was contractually obligated to make future payments of $47.1 million under its operating lease obligations in existence as of that date, primarily related to long-term leases. The Company is evaluating the impact that this guidance will have on its financial statements. While the Company is in the early stages of its implementation process of this guidance, and has not yet determined its impact on its consolidated balance sheet or consolidated statement of income, these leases would potentially be required to be presented on the consolidated balance sheet in accordance with the requirements of this guidance.

In August 2016, the FASB issued updated guidance that reduces diversity in how certain cash receipts and cash payments are presented and classified in the Consolidated Statements of Cash Flows. This guidance is effective for annual reporting periods, and any interim periods within those annual periods, that begin after December 15, 2017 and is required to be applied retrospectively, with early adoption permitted. Accordingly, the Company adopted this standard on August 26, 2018. The adoption of this guidance did not have a material impact on its financial statements.

In October 2016, the FASB issued updated guidance to improve the accounting for the income tax consequences of intra-entity transfers of assets other than inventory. This guidance is effective for annual reporting periods, and any interim periods within those annual periods, that begin after December 15, 2017 and is required to be applied on a modified retrospective basis, with early adoption permitted. Accordingly, the Company adopted this standard on August 26, 2018. The adoption of this guidance did not have a material impact on its financial statements.

In March 2017, the FASB issued updated guidance that requires a change in the presentation of net periodic benefit cost on the consolidated statements of operations. Specifically, entities must present the service cost component of net periodic benefit cost in the same financial statement line items as other compensation costs arising from services rendered by the related employees during the period, whereas the non-service components of net periodic benefit cost must be presented separately from the financial statement line items that include service cost and outside of operating income.  The Company’s adoption of this guidance on August 26, 2018 did not have a material impact on its financial statements.

In August 2017, the FASB issued guidance that expands component and fair value hedging, specifies the presentation of the effects of hedging instruments, and eliminates the separate measurement and presentation of hedge ineffectiveness. The accounting update is effective for annual and interim periods beginning after December 15, 2018, with early adoption permitted, and is to be applied on a modified retrospective basis. The Company elected to early adopt this guidance in the first quarter of fiscal 2019. The adoption of this guidance did not have a material impact on its financial statements.

In August 2018, the FASB issued updated guidance to modify the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. This guidance will be effective for annual reporting periods, and any interim periods within those annual periods, ending after December 15, 2020 and will be required to be applied on a retrospective basis, with early adoption permitted. Accordingly, the standard will be effective for the Company on August 30, 2020. The Company is currently evaluating the impact that this guidance will have on its financial statements and related disclosures.

Revenue Recognition Policy

Approximately 91.0% of the Company's revenues are derived from fees for route servicing of Core Laundry Operations, Specialty Garments, and First Aid performed by the Company’s employees at the customer's location of business. Revenues from the Company's route servicing customer contracts represent a single-performance obligation. The Company recognizes these revenues over time as services are performed based on the nature of services provided and contractual rates (input method). Certain of the Company's customer contracts, primarily within the Company's Core Laundry Operations, include pricing terms and conditions that include components of variable consideration. The variable consideration is typically in the form of consideration due to a customer based on performance metrics specified within the contract. Specifically, some contracts contain discounts or rebates that the customer can earn through the achievement of specified volume levels. Each component of variable consideration is earned based on the Company's actual performance during the measurement period specified within the contract. To determine the transaction price, the Company estimates the variable consideration using the most likely amount method, based on the specific contract provisions and known performance results during the relevant measurement period. When determining if variable consideration should be constrained, the Company considers whether factors outside its control could result in a significant reversal of revenue. In making these assessments, the Company considers the likelihood and magnitude of a potential reversal. The Company's performance period generally corresponds with the monthly invoice period. No significant constraints on the Company's revenue recognition were applied during the thirteen weeks ended November 24, 2018. The Company reassesses these estimates during each reporting period. The Company maintains a liability for these discounts and rebates within accrued liabilities on the consolidated balance sheets. Variable consideration also includes consideration paid to a customer at the beginning of a contract. The Company capitalizes this consideration and amortizes it over the life of the contract as a reduction to revenue in accordance with the updated accounting guidance for revenue recognition. These assets are included in other assets on the consolidated balance sheets.

Costs to Obtain a Contract

The Company defers commission expenses paid to its employee-partners when the commissions are deemed to be incremental for obtaining the route servicing customer contract. The deferred commissions are amortized on a straight-line basis over the expected period of benefit. The Company reviews the deferred commission balances for impairment on an ongoing basis. Deferred commissions are classified as current or noncurrent based on the timing of when the Company expects to recognize the expense. The current portion is included in prepaid expenses and other current assets and the non-current portion is included in other assets on the Company's consolidated balance sheets. As of November 24, 2018, the current and non-current assets related to deferred commissions totaled $10.8 million and $43.3 million, respectively. During the thirteen weeks ended November 24, 2018, the Company recorded $2.8 million of amortization expense related to deferred commissions. This expense is classified in selling and administrative expense on the consolidated statements of income.

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Recent Accounting Pronouncements (Tables)

3 Months Ended

Nov. 24, 2018

Accounting Policies [Abstract]

Schedule of Impact of New Accounting Pronouncements

As a result of applying the modified retrospective method to adopt the new revenue guidance, the adjustments set forth in the table below were made to accounts on the consolidated balance sheet as of August 26, 2018:

Consolidated Balance Sheet (In thousands)	August 25, 2018		Capitalization of Contract Costs		August 26, 2018
Assets
Prepaid expenses and other current assets	$	21,899	$	10,789	$	32,688
Total current assets	784,800		10,789		795,589
Other assets	30,259		42,405		72,664
Total assets	$	1,843,386	$	53,194	$	1,896,580
Liabilities and shareholders’ equity
Accrued and deferred income taxes	$	74,070	$	13,761	$	87,831
Total liabilities	378,419		13,761		392,180
Retained earnings	1,405,239		39,433		1,444,672
Total shareholders' equity	1,464,967		39,433		1,504,400
Total liabilities and shareholders’ equity	$	1,843,386	$	53,194	$	1,896,580

The impacts of adopting this standard on the first quarter of fiscal 2019 Consolidated Financial Statements are presented in the following tables:

	Thirteen weeks ended November 24, 2018
Consolidated Statement of Income (In thousands, except per share data)	As Reported		Under Historical Guidance		Impact of Adopting New Revenue Standard
Operating expenses:
Selling and administrative expenses	$	85,959	$	86,875	$	(916	)
Total operating expenses	388,124		389,040		(916		)
Operating income	50,426		49,510		916
Income before income taxes	51,959		51,043		916
Provision for income taxes	13,639		13,399		240
Income from continuing operations
Net income	$	38,320	$	37,644	$	676
Income per share – Diluted:	$	1.99	$	1.95	$	0.04

	Balance at November 24, 2018
Consolidated Balance Sheet (In thousands)	As Reported		Under Historical Guidance		Impact of Adopting New Revenue Standard
Assets
Prepaid expenses and other current assets	$	38,854	$	28,065	$	10,789
Total current assets	809,413		798,624		10,789
Other assets	74,048		30,727		43,321
Total assets	$	1,907,158	$	1,853,048	$	54,110
Liabilities and shareholders’ equity
Accrued and deferred income taxes	$	86,837	$	72,836	$	14,001
Total liabilities	367,660		353,659		14,001
Retained earnings	1,480,922		1,440,813		40,109
Total shareholders' equity	1,539,498		1,499,389		40,109
Total liabilities and shareholders’ equity	$	1,907,158	$	1,853,048	$	54,110

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Revenue Recognition (Tables)

3 Months Ended

Nov. 24, 2018

Revenue from Contract with Customer [Abstract]

Schedule of Total Revenue Disaggregated by Service Type

The following table presents the Company’s revenues for the thirteen weeks ended November 24, 2018 and November 25, 2017, respectively, disaggregated by service type:

	Thirteen weeks ended
	November 24, 2018				November 25, 2017
(In thousands, except percentages)	Revenues		% of Revenues		Revenues		% of Revenues
Core Laundry Operations	$	390,477	89.0	%	$	373,796	89.9	%
Specialty Garments	34,448		7.9	%	28,427		6.8	%
First Aid	13,625		3.1	%	13,555		3.3	%
Total Revenues	$	438,550	100.0	%	$	415,778	100.0	%

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Fair Value Measurements (Tables)

3 Months Ended

Nov. 24, 2018

Fair Value Disclosures [Abstract]

Schedule of Assets or Liabilities Measured at Fair Value on a Recurring Basis

The assets or liabilities measured at fair value on a recurring basis are summarized in the tables below (in thousands):

	As of November 24, 2018
	Level 1		Level 2		Level 3		Fair Value
Assets:
Cash equivalents	$	143,122	$	—	$	—	$	143,122
Pension plan assets	—		6,137		—		6,137
Foreign currency forward contracts	—		243		—		243
Total assets at fair value	$	143,122	$	6,380	$	—	$	149,502

	As of August 25, 2018
	Level 1		Level 2		Level 3		Fair Value
Assets:
Cash equivalents	$	103,190	$	—	$	—	$	103,190
Pension plan assets	—		6,325		—		6,325
Foreign currency forward contracts	—		127		—		127
Total assets at fair value	$	103,190	$	6,452	$	—	$	109,642

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Income Per Share (Tables)

3 Months Ended

Nov. 24, 2018

Earnings Per Share [Abstract]

Schedule of Computation of Basic Income Per Share

The following table sets forth the computation of basic income per share using the two-class method for amounts attributable to the Company’s shares of Common Stock and Class B Common Stock (in thousands, except per share data):

	Thirteen weeks ended
	November 24, 2018		November 25, 2017
Net income available to shareholders	$	38,320	$	34,206
Allocation of net income for Basic:
Common Stock	$	32,137	$	27,384
Class B Common Stock	6,183		6,822
	$	38,320	$	34,206
Weighted average number of shares for Basic:
Common Stock	15,432		15,462
Class B Common Stock	3,710		4,816
	19,142		20,278
Income per share for Basic:
Common Stock	$	2.08	$	1.77
Class B Common Stock	$	1.67	$	1.42

Schedule of Computation of Diluted Income Per Share

The following table sets forth the computation of diluted income per share of Common Stock for the thirteen weeks endedNovember 24, 2018 and November 25, 2017 (in thousands, except per share data):

	Thirteen weeks ended November 24, 2018					Thirteen weeks ended November 25, 2017
	Earnings to Common Shareholders		Common Shares	Income Per Share		Earnings to Common Shareholders		Common Shares	Income Per Share
As reported - Basic	$	32,137	15,432	$	2.08	$	27,384	15,462	$	1.77
Add: effect of dilutive potential common shares
Share-Based Awards	—		160			—		156
Class B Common Stock	6,183		3,710			6,822		4,816
As reported – Diluted	$	38,320	19,302	$	1.99	$	34,206	20,434	$	1.67

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Inventories (Tables)

3 Months Ended

Nov. 24, 2018

Inventory Disclosure [Abstract]

Schedule of Components of Inventory

The components of inventory as of November 24, 2018 and August 25, 2018 were as follows (in thousands):

	November 24, 2018		August 25, 2018
Raw materials	$	16,419	$	18,508
Work in process	3,707		3,271
Finished goods	71,028		68,397
Total inventories	$	91,154	$	90,176

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Goodwill and Other Intangible Assets (Tables)

3 Months Ended

Nov. 24, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Changes in Carrying Amount of Goodwill

The changes in the carrying amount of goodwill are as follows (in thousands):

Balance as of August 25, 2018	$	397,422
Other	(126		)
Balance as of November 24, 2018	$	397,296

Schedule of Intangible Assets, Net

Intangible assets, net in the Company’s accompanying Consolidated Balance Sheets are as follows (in thousands):

	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
November 24, 2018
Customer contracts	$	220,257	$	155,900	$	64,357
Other intangible assets	34,981		31,802		3,179
	$	255,238	$	187,702	$	67,536
August 25, 2018
Customer contracts	$	220,303	$	152,985	$	67,318
Other intangible assets	35,030		31,444		3,586
	$	255,333	$	184,429	$	70,904

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Asset Retirement Obligations (Tables)

3 Months Ended

Nov. 24, 2018

Asset Retirement Obligation Disclosure [Abstract]

Reconciliation of Asset Retirement Liability

A reconciliation of the Company’s asset retirement liability for the thirteen weeks endedNovember 24, 2018 was as follows (in thousands):

	November 24, 2018
Beginning balance as of August 25, 2018	$	13,668
Accretion expense	220
Effect of exchange rate changes	(70		)
Change in estimate	(1,705		)
Ending balance as of November 24, 2018	$	12,113

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Commitments and Contingencies (Tables)

3 Months Ended

Nov. 24, 2018

Commitments and Contingencies Disclosure [Abstract]

Schedule of Changes to Environmental Liabilities

The changes to the Company’s environmental liabilities for the thirteen weeks endedNovember 24, 2018 were as follows (in thousands):

	November 24, 2018
Beginning balance as of August 25, 2018	$	25,486
Costs incurred for which reserves had been provided	(195		)
Insurance proceeds	40
Interest accretion	189
Change in discount rates	(699		)
Balance as of November 24, 2018	$	24,821

Schedule of Anticipated Payments and Insurance Proceeds of Currently Identified Environmental Remediation Liabilities

Anticipated payments and insurance proceeds of currently identified environmental remediation liabilities as of November 24, 2018, for the next five fiscal years and thereafter, as measured in current dollars, are reflected below.

(In thousands)	2019			2020			2021			2022			2023			Thereafter			Total
Estimated costs – current dollars	$	9,299		$	2,122		$	1,635		$	1,272		$	1,175		$	12,137		$	27,640
Estimated insurance proceeds	(133		)	(159		)	(173		)	(159		)	(173		)	(830		)	(1,627		)
Net anticipated costs	$	9,166		$	1,963		$	1,462		$	1,113		$	1,002		$	11,307		$	26,013
Effect of inflation																			7,477
Effect of discounting																			(8,669		)
Balance as of November 24, 2018																			$	24,821

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Accumulated Other Comprehensive Loss (Tables)

3 Months Ended

Nov. 24, 2018

Stockholders' Equity Note [Abstract]

Schedule of Changes in Components of Accumulated Other Comprehensive Loss, Net of Tax

The changes in each component of accumulated other comprehensive loss, net of tax, for the thirteen weeks ended November 24, 2018 and November 25, 2017 were as follows (in thousands):

	Thirteen weeks ended November 24, 2018
	Foreign Currency Translation			Pension- related(1)			Derivative Financial Instruments(1)			Total Accumulated Other Comprehensive Loss
Balance as of August 25, 2018	$	(21,116	)	$	(4,135	)	$	92		$	(25,159	)
Other comprehensive (loss) income before reclassification	(2,282		)	—			132			(2,150		)
Amounts reclassified from accumulated other comprehensive loss	—			—			(44		)	(44		)
Net current period other comprehensive (loss) income	(2,282		)	—			88			(2,194		)
Balance as of November 24, 2018	$	(23,398	)	$	(4,135	)	$	180		$	(27,353	)

	Thirteen weeks ended November 25, 2017
	Foreign Currency Translation			Pension- related(1)			Derivative Financial Instruments(1)			Total Accumulated Other Comprehensive (Loss) Income
Balance as of August 26, 2017	$	(15,932	)	$	(5,477	)	$	(109	)	$	(21,518	)
Other comprehensive (loss) income before reclassification	(2,013		)	—			82			(1,931		)
Amounts reclassified from accumulated other comprehensive loss	—			—			4			4
Net current period other comprehensive (loss) income	(2,013		)	—			86			(1,927		)
Balance as of November 25, 2017	$	(17,945	)	$	(5,477	)	$	(23	)	$	(23,445	)

(1)Amounts are shown net of tax.

Schedule of Amounts Reclassified from Accumulated Other Comprehensive Loss, Net of Tax

Amounts reclassified from accumulated other comprehensive loss, net of tax, for the thirteen weeks endedNovember 24, 2018 and November 25, 2017 were as follows (in thousands):

	Thirteen weeks ended
	November 24, 2018			November 25, 2017
Derivative financial instruments, net:
Forward contracts (a)	$	(44	)	$	4
Total, net of tax	(44		)	4
Total amounts reclassified, net of tax	$	(44	)	$	4

(a)Amounts included in revenues in the accompanying Consolidated Statements of Income.

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Segment Reporting (Tables)

3 Months Ended

Nov. 24, 2018

Segment Reporting [Abstract]

Schedule of Segment Reporting Information

The Company refers to the U.S. and Canadian Rental and Cleaning, MFG, and Corporate reporting segments combined as its “Core Laundry Operations,” which is included as a subtotal in the following tables (in thousands):

Thirteen weeks ended	U.S. and Canadian Rental and Cleaning			MFG		Net Interco MFG Elim			Corporate			Subtotal Core Laundry Operations			Specialty Garments		First Aid		Total
November 24, 2018
Revenues	$	380,753		$	67,546	$	(67,511	)	$	9,689		$	390,477		$	34,448	$	13,625	$	438,550
Operating income (loss)	$	54,714		$	24,732	$	(3,747	)	$	(30,917	)	$	44,782		$	4,470	$	1,174	$	50,426
Interest income, net	$	(1,047	)	$	—	$	—		$	(658	)	$	(1,705	)	$	—	$	—	$	(1,705	)
Income (loss) before taxes	$	55,752		$	24,840	$	(3,747	)	$	(30,233	)	$	46,612		$	4,173	$	1,174	$	51,959
November 25, 2017
Revenues	$	365,518		$	63,945	$	(63,919	)	$	8,252		$	373,796		$	28,427	$	13,555	$	415,778
Operating income (loss)	$	54,798		$	23,987	$	(4,737	)	$	(27,690	)	$	46,358		$	4,477	$	1,076	$	51,911
Interest income, net	$	(949	)	$	—	$	—		$	(327	)	$	(1,276	)	$	—	$	—	$	(1,276	)
Income (loss) before taxes	$	55,764		$	23,910	$	(4,737	)	$	(27,333	)	$	47,604		$	4,353	$	1,076	$	53,033

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Recent Accounting Pronouncements - Schedule of Impacts of New Accounting Pronouncements on Consolidated Balance Sheet (Details) - USD ($) $ in Thousands	Nov. 24, 2018	Aug. 26, 2018	Aug. 25, 2018	Nov. 25, 2017	Aug. 26, 2017
Assets
Prepaid expenses and other current assets	$ 38,854	$ 32,688	$ 21,899
Total current assets	809,413	795,589	784,800
Other assets	74,048	72,664	30,259
Total assets	1,907,158	1,896,580	1,843,386
Liabilities and shareholders’ equity
Accrued and deferred income taxes	86,837	87,831	74,070
Total liabilities	367,660	392,180	378,419
Retained earnings	1,480,922	1,444,672	1,405,239
Total shareholders' equity	1,539,498	1,504,400	1,464,967	$ 1,485,608	$ 1,453,192
Total liabilities and shareholders’ equity	1,907,158	$ 1,896,580	1,843,386
Under Historical Guidance
Assets
Prepaid expenses and other current assets	28,065
Total current assets	798,624
Other assets	30,727
Total assets	1,853,048
Liabilities and shareholders’ equity
Accrued and deferred income taxes	72,836
Total liabilities	353,659
Retained earnings	1,440,813
Total shareholders' equity	1,499,389
Total liabilities and shareholders’ equity	1,853,048
Capitalization of Contract Costs and Impact of Adopting New Revenue Standard | Accounting Standards Update 2014-09
Assets
Prepaid expenses and other current assets	10,789		10,789
Total current assets	10,789		10,789
Other assets	43,321		42,405
Total assets	54,110		53,194
Liabilities and shareholders’ equity
Accrued and deferred income taxes	14,001		13,761
Total liabilities	14,001		13,761
Retained earnings	40,109		39,433
Total shareholders' equity	40,109		39,433
Total liabilities and shareholders’ equity	$ 54,110		$ 53,194

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Recent Accounting Pronouncements - Schedule of Impact of New Accounting Pronouncements on Consolidated Statement of Income (Details) - USD ($) $ / shares in Units, $ in Thousands		3 Months Ended
		Nov. 24, 2018	Nov. 25, 2017
Operating expenses:
Selling and administrative expenses	[1]	$ 85,959	$ 87,510
Total operating expenses		388,124	363,867
Operating income		50,426	51,911
Income before income taxes		51,959	53,033
Provision for income taxes		13,639	18,827
Net income		$ 38,320	$ 34,206
As reported - Diluted (in dollars per share)		$ 1.99	$ 1.67
Under Historical Guidance
Operating expenses:
Selling and administrative expenses		$ 86,875
Total operating expenses		389,040
Operating income		49,510
Income before income taxes		51,043
Provision for income taxes		13,399
Net income		$ 37,644
As reported - Diluted (in dollars per share)		$ 1.95
Impact of Adopting New Revenue Standard | Accounting Standards Update 2014-09
Operating expenses:
Selling and administrative expenses		$ (916)
Total operating expenses		(916)
Operating income		916
Income before income taxes		916
Provision for income taxes		240
Net income		$ 676
As reported - Diluted (in dollars per share)		$ 0.04

[1] Exclusive of depreciation on the Company’s property, plant and equipment and amortization on its intangible assets.

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Recent Accounting Pronouncements - Narrative (Details) $ in Millions	Aug. 25, 2018 USD ($)
Accounting Policies [Abstract]
Future minimum payments due under operating lease	$ 47.1

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Revenue Recognition - Total Revenue Disaggregated by Service Type (Details) - USD ($) $ in Thousands	3 Months Ended
	Nov. 24, 2018	Nov. 25, 2017
Disaggregation of Revenue [Line Items]
Total revenues	$ 438,550	$ 415,778
Revenue | Revenues
Disaggregation of Revenue [Line Items]
Percentage of revenues	100.00%	100.00%
Core Laundry Operations
Disaggregation of Revenue [Line Items]
Total revenues	$ 390,477	$ 373,796
Core Laundry Operations | Revenue | Revenues
Disaggregation of Revenue [Line Items]
Percentage of revenues	89.00%	89.90%
Specialty Garments
Disaggregation of Revenue [Line Items]
Total revenues	$ 34,448	$ 28,427
Specialty Garments | Revenue | Revenues
Disaggregation of Revenue [Line Items]
Percentage of revenues	7.90%	6.80%
First Aid
Disaggregation of Revenue [Line Items]
Total revenues	$ 13,625	$ 13,555
First Aid | Revenue | Revenues
Disaggregation of Revenue [Line Items]
Percentage of revenues	3.10%	3.30%

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Revenue Recognition - Narrative (Details) $ in Millions	3 Months Ended
	Nov. 24, 2018 USD ($)
Disaggregation of Revenue [Line Items]
Percentage of revenues derived from route servicing fees	91.00%
Current assets related to deferred commissions	$ 10.8
Noncurrent assets related to deferred commissions	43.3
Amortization expense related to deferred commissions	$ 2.8
Core Laundry Operations
Disaggregation of Revenue [Line Items]
Percentage of revenues recognized over time	95.30%
Percentage of revenues recognized at a point in time	4.70%
Specialty Garments
Disaggregation of Revenue [Line Items]
Percentage of revenues recognized over time	83.90%
Percentage of revenues recognized at a point in time	16.10%
First Aid
Disaggregation of Revenue [Line Items]
Percentage of revenues recognized at a point in time	100.00%

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Business Acquisitions - Narrative (Details)	3 Months Ended
	Nov. 24, 2018 business
Business Combinations [Abstract]
Number of business acquired	0

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Fair Value Measurements - Summary of Assets and Liabilities Measured on a Recurring Basis (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands	Nov. 24, 2018	Aug. 25, 2018
Assets:
Cash equivalents	$ 143,122	$ 103,190
Pension plan assets	6,137	6,325
Foreign currency forward contracts	243	127
Total assets at fair value	149,502	109,642
Level 1
Assets:
Cash equivalents	143,122	103,190
Pension plan assets	0	0
Foreign currency forward contracts	0	0
Total assets at fair value	143,122	103,190
Level 2
Assets:
Cash equivalents	0	0
Pension plan assets	6,137	6,325
Foreign currency forward contracts	243	127
Total assets at fair value	6,380	6,452
Level 3
Assets:
Cash equivalents	0	0
Pension plan assets	0	0
Foreign currency forward contracts	0	0
Total assets at fair value	$ 0	$ 0

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Derivative Instruments and Hedging Activities - Narrative (Details) $ in Thousands, $ in Millions	Nov. 24, 2018 USD ($)	Nov. 24, 2018 CAD ($)	Aug. 25, 2018 USD ($)
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount reclassified from accumulated other comprehensive loss	$ (27,353)		$ (25,159)
Forward Contracts
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Notional value (CAD)		$ 13.4
Amount reclassified from accumulated other comprehensive loss	200
Other Long-Term Assets | Forward Contracts
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Fair value of the contracts	200
Prepaid Expenses and Other Current Assets | Forward Contracts
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Fair value of the contracts	$ 100

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Employee Benefit Plans - Narrative (Details) $ in Millions	3 Months Ended
	Nov. 24, 2018 USD ($) retirement_plan	Nov. 25, 2017 USD ($)
Postemployment Benefits [Abstract]
Contributions charged to expense under the plan	$ 4.5	$ 4.1
Number of frozen non-contributory defined benefit pension plans | retirement_plan	2
Amounts charged to expense related to the plans	$ 0.5	$ 0.7

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Income Per Share - Schedule of Computation of Basic Income Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Nov. 24, 2018	Nov. 25, 2017
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Net income available to shareholders	$ 38,320	$ 34,206
Allocation of net income for Basic:
Common stock	$ 38,320	$ 34,206
Weighted average number of shares for Basic:
Common stock (in shares)	19,142	20,278
Common Stock
Allocation of net income for Basic:
Common stock	$ 32,137	$ 27,384
Weighted average number of shares for Basic:
Common stock (in shares)	15,432	15,462
Income per share for Basic:
Common stock (in dollars per share)	$ 2.08	$ 1.77
Class B Common Stock
Allocation of net income for Basic:
Common stock	$ 6,183	$ 6,822
Weighted average number of shares for Basic:
Common stock (in shares)	3,710	4,816
Income per share for Basic:
Common stock (in dollars per share)	$ 1.67	$ 1.42

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Income Per Share - Schedule of Computation of Diluted Income Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Nov. 24, 2018	Nov. 25, 2017
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
As reported - Basic	$ 38,320	$ 34,206
As reported - Basic (in shares)	19,142	20,278
As reported – Diluted	$ 38,320	$ 34,206
As reported - Diluted (in shares)	19,302	20,434
As reported - Diluted (in dollars per share)	$ 1.99	$ 1.67
Common Stock
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
As reported - Basic	$ 32,137	$ 27,384
As reported - Basic (in shares)	15,432	15,462
As reported - Basic (in dollars per share)	$ 2.08	$ 1.77
Add: effect of dilutive potential common shares	$ 0	$ 0
Add: effect of dilutive potential common shares (in shares)	160	156
Class B Common Stock
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
As reported - Basic	$ 6,183	$ 6,822
As reported - Basic (in shares)	3,710	4,816
As reported - Basic (in dollars per share)	$ 1.67	$ 1.42
Add: effect of dilutive potential common shares	$ 6,183	$ 6,822
Add: effect of dilutive potential common shares (in shares)	3,710	4,816

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Income Per Share - Narrative (Details) - shares	3 Months Ended
	Nov. 24, 2018	Nov. 25, 2017
Earnings Per Share [Abstract]
Anti-dilutive securities excluded from calculation of diluted earnings per share (in shares)	10,156	117

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Inventories - Components of Inventory (Details) - USD ($) $ in Thousands	Nov. 24, 2018	Aug. 25, 2018
Inventory Disclosure [Abstract]
Raw materials	$ 16,419	$ 18,508
Work in process	3,707	3,271
Finished goods	71,028	68,397
Total inventories	$ 91,154	$ 90,176

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Goodwill and Other Intangible Assets - Summary of Changes in Carrying Amount of Goodwill (Details) $ in Thousands	3 Months Ended
	Nov. 24, 2018 USD ($)
Goodwill [Roll Forward]
Beginning balance	$ 397,422
Other	(126)
Ending balance	$ 397,296

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Goodwill and Other Intangible Assets - Summary of Intangible Assets (Details) - USD ($) $ in Thousands	Nov. 24, 2018	Aug. 25, 2018
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 255,238	$ 255,333
Accumulated Amortization	187,702	184,429
Net Carrying Amount	67,536	70,904
Customer contracts
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	220,257	220,303
Accumulated Amortization	155,900	152,985
Net Carrying Amount	64,357	67,318
Other intangible assets
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	34,981	35,030
Accumulated Amortization	31,802	31,444
Net Carrying Amount	$ 3,179	$ 3,586

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Asset Retirement Obligations - Narrative (Details)	3 Months Ended
	Nov. 24, 2018
Minimum
Asset Retirement Obligations [Line Items]
Remaining lives	1 year
Maximum
Asset Retirement Obligations [Line Items]
Remaining lives	26 years

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Asset Retirement Obligations - Reconciliation of Asset Retirement Liability (Details) - USD ($) $ in Thousands	3 Months Ended
	Nov. 24, 2018	Nov. 25, 2017
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward]
Beginning balance	$ 13,668
Accretion expense	220	$ 240
Effect of exchange rate changes	(70)
Change in estimate	(1,705)
Ending balance	$ 12,113

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Commitments and Contingencies - Narrative (Details) $ in Millions	3 Months Ended
	Nov. 24, 2018 USD ($) site company
Gain Contingencies [Line Items]
Estimated rate of inflation	3.00%
Annual proceeds	$ 0.3
Balance in escrow account	$ 3.8
Number of insurance companies | company	3
Minimum
Gain Contingencies [Line Items]
Risk-free interest rates utilized	3.10%
Maximum
Gain Contingencies [Line Items]
Risk-free interest rates utilized	3.30%
Williamstown, Vermont
Gain Contingencies [Line Items]
Number of sites related to former operations | site	2

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Commitments and Contingencies - Changes to Environmental Liabilities (Details) - USD ($) $ in Thousands	3 Months Ended
	Nov. 24, 2018	Nov. 25, 2017
Accrual for Environmental Loss Contingencies [Roll Forward]
Beginning balance	$ 25,486
Costs incurred for which reserves had been provided	(195)
Insurance proceeds	40
Interest accretion	189	$ 173
Change in discount rates	(699)
Ending balance	$ 24,821

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Commitments and Contingencies - Anticipated Payments and Insurance Proceeds of Identified Environmental Remediation Liabilities (Details) - USD ($) $ in Thousands	Nov. 24, 2018	Aug. 25, 2018
Estimated costs – current dollars
2019	$ 9,299
2020	2,122
2021	1,635
2022	1,272
2023	1,175
Thereafter	12,137
Total	27,640
Estimated insurance proceeds
2019	(133)
2020	(159)
2021	(173)
2022	(159)
2023	(173)
Thereafter	(830)
Total	(1,627)
Net anticipated costs
2019	9,166
2020	1,963
2021	1,462
2022	1,113
2023	1,002
Thereafter	11,307
Total	26,013
Effect of inflation	7,477
Effect of discounting	(8,669)
Balance at end of period	$ 24,821	$ 25,486

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Income Taxes - Narrative (Details)	3 Months Ended
	Nov. 24, 2018	Nov. 25, 2017
Income Tax Disclosure [Abstract]
Effective income tax rate	26.20%	35.50%

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Long-Term Debt - Narrative (Details) - Revolving Credit Facility - Credit Agreement	3 Months Ended
	Nov. 24, 2018 USD ($)
Debt Instrument [Line Items]
Maximum borrowing capacity	$ 250,000,000.0
Maturity date	Apr. 11, 2021
Outstanding borrowings	$ 0
Outstanding letters of credit	71,400,000
Amount available for borrowing	$ 178,600,000
LIBOR
Debt Instrument [Line Items]
Basis points	0.75%

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Accumulated Other Comprehensive Loss - Components of Accumulated Other Comprehensive Loss, Net of Tax (Details) - USD ($) $ in Thousands	3 Months Ended
	Nov. 24, 2018	Nov. 25, 2017
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Balance at beginning of period	$ 1,464,967	$ 1,453,192
Other comprehensive loss	(2,194)	(1,927)
Balance at end of period	1,539,498	1,485,608
Foreign Currency Translation
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Balance at beginning of period	(21,116)	(15,932)
Other comprehensive (loss) income before reclassification	(2,282)	(2,013)
Amounts reclassified from accumulated other comprehensive loss	0	0
Other comprehensive loss	(2,282)	(2,013)
Balance at end of period	(23,398)	(17,945)
Pension-related
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Balance at beginning of period	(4,135)	(5,477)
Other comprehensive (loss) income before reclassification	0	0
Amounts reclassified from accumulated other comprehensive loss	0	0
Other comprehensive loss	0	0
Balance at end of period	(4,135)	(5,477)
Derivative Financial Instruments
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Balance at beginning of period	92	(109)
Other comprehensive (loss) income before reclassification	132	82
Amounts reclassified from accumulated other comprehensive loss	(44)	4
Other comprehensive loss	88	86
Balance at end of period	180	(23)
Total Accumulated Other Comprehensive (Loss) Income
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Balance at beginning of period	(25,159)	(21,518)
Other comprehensive (loss) income before reclassification	(2,150)	(1,931)
Amounts reclassified from accumulated other comprehensive loss	(44)	4
Other comprehensive loss	(2,194)	(1,927)
Balance at end of period	$ (27,353)	$ (23,445)

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Accumulated Other Comprehensive Loss - Amounts Reclassified from Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands	3 Months Ended
	Nov. 24, 2018	Nov. 25, 2017
Accumulated Other Comprehensive Income (Loss) [Line Items]
Net income (loss)	$ (38,320)	$ (34,206)
Total Amounts Reclassified, Net of Tax
Accumulated Other Comprehensive Income (Loss) [Line Items]
Net income (loss)	(44)	4
Derivative Financial Instruments, Net
Accumulated Other Comprehensive Income (Loss) [Line Items]
Net income (loss)	(44)	4
Derivative Financial Instruments, Net | Forward Contracts
Accumulated Other Comprehensive Income (Loss) [Line Items]
Forward contracts	$ (44)	$ 4

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Segment Reporting - Narrative (Details)	3 Months Ended
	Nov. 24, 2018 segment
Segment Reporting [Abstract]
Number of operating segments	6
Number of reporting segments	5

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Segment Reporting - Schedule of Segment Reporting Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Nov. 24, 2018	Nov. 25, 2017
Segment Reporting Information [Line Items]
Revenues	$ 438,550	$ 415,778
Operating income (loss)	50,426	51,911
Interest income, net	(1,705)	(1,276)
Income (loss) before taxes	51,959	53,033
U.S. and Canadian Rental and Cleaning | Operating Segments
Segment Reporting Information [Line Items]
Revenues	380,753	365,518
Operating income (loss)	54,714	54,798
Interest income, net	(1,047)	(949)
Income (loss) before taxes	55,752	55,764
MFG | Operating Segments
Segment Reporting Information [Line Items]
Revenues	67,546	63,945
Operating income (loss)	24,732	23,987
Interest income, net	0	0
Income (loss) before taxes	24,840	23,910
MFG | Net Interco MFG Elim
Segment Reporting Information [Line Items]
Revenues	(67,511)	(63,919)
Operating income (loss)	(3,747)	(4,737)
Interest income, net	0	0
Income (loss) before taxes	(3,747)	(4,737)
Corporate | Operating Segments
Segment Reporting Information [Line Items]
Revenues	9,689	8,252
Operating income (loss)	(30,917)	(27,690)
Interest income, net	(658)	(327)
Income (loss) before taxes	(30,233)	(27,333)
Subtotal Core Laundry Operations
Segment Reporting Information [Line Items]
Revenues	390,477	373,796
Operating income (loss)	44,782	46,358
Interest income, net	(1,705)	(1,276)
Income (loss) before taxes	46,612	47,604
Specialty Garments
Segment Reporting Information [Line Items]
Revenues	34,448	28,427
Specialty Garments | Operating Segments
Segment Reporting Information [Line Items]
Revenues	34,448	28,427
Operating income (loss)	4,470	4,477
Interest income, net	0	0
Income (loss) before taxes	4,173	4,353
First Aid
Segment Reporting Information [Line Items]
Revenues	13,625	13,555
First Aid | Operating Segments
Segment Reporting Information [Line Items]
Revenues	13,625	13,555
Operating income (loss)	1,174	1,076
Interest income, net	0	0
Income (loss) before taxes	$ 1,174	$ 1,076

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Shares Repurchased and Dividends - Narrative (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions			3 Months Ended
	Mar. 28, 2018	Mar. 27, 2018	Nov. 24, 2018	Nov. 25, 2017
Equity, Class of Treasury Stock [Line Items]
Repurchase of common stock, value		$ 146.0
Shares repurchased, average price per share (in dollars per share)		$ 124.00
Class B Common Stock
Equity, Class of Treasury Stock [Line Items]
Shares repurchased (in shares)		1,105
Quarterly dividend amount (in dollars per share)	$ 0.09	$ 0.03	$ 0.0900	$ 0.0300
Common Stock
Equity, Class of Treasury Stock [Line Items]
Shares repurchased (in shares)		73
Quarterly dividend amount (in dollars per share)	$ 0.1125	$ 0.0375	$ 0.1125	$ 0.0375

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Subsequent Events (Details) - USD ($)	3 Months Ended	12 Months Ended
	Feb. 23, 2019	Aug. 26, 2017	Jan. 02, 2019
Customer Relationship Management system
Subsequent Event [Line Items]
Pre-tax non-cash impairment charge		$ 55,800,000
Subsequent Event
Subsequent Event [Line Items]
Authorized stock repurchase			$ 100,000,000.0
Subsequent Event | Scenario, Forecast
Subsequent Event [Line Items]
Gain on sale of CRM system	$ 20,300,000
One-time cash payment received for sale of CRM system	$ 13,000,000