UniFirst Corporation (NYSE: UNF) today announced results for its
fourth quarter and full year ended August 29, 2015. Revenues for
the quarter were $359.2 million, up 2.1% from $352.0 million in the
year ago period. Net income was $28.9 million ($1.43 per diluted
share) unchanged from the fourth quarter of fiscal 2014. The
comparison of net income in the quarter was impacted by a lower
effective income tax rate of 37.4% compared to 39.4% in the prior
year. For the full year, revenues were $1.457 billion, up 4.4% from
fiscal 2014. Net income was $124.3 million ($6.15 per diluted
share) up 3.6% from $119.9 million ($5.95 per diluted share)
reported in the prior year.
Ronald D. Croatti, UniFirst President and Chief Executive Office
said, “In our fourth quarter, growth continued to be limited by
macroeconomic factors including headcount reductions at many of our
energy related customers as well as weaker foreign currency
exchange rates adversely affecting our Canadian and European
operations. Although we are pleased with our overall results for
fiscal 2015, we expect these factors to challenge our top and
bottom line results throughout fiscal 2016.”
Revenues in the fourth quarter for our Core Laundry Operations
were $326.6 million, up 1.8% from those reported in the prior
year’s fourth quarter. Adjusting for the effects of acquisitions
and a weaker Canadian dollar, revenue grew 2.2%. This segment’s
income from operations decreased 6.7% compared to the fourth
quarter of fiscal 2014, while the operating margin decreased to
13.1% from 14.3% a year ago. The margin decline reflects higher
merchandise costs, selling and administrative expenses and
depreciation as a percentage of revenues. These items were
partially offset by lower energy, payroll related and legal
expenses during the quarter compared to a year ago.
Revenues for the Specialty Garments segment, which consists of
nuclear decontamination and cleanroom operations, were $20.5
million, up 7.9% from $19.0 million in the fourth quarter of fiscal
2014. Due in part to the improved revenue performance, this
segment’s income from operations increased to $1.5 million in the
current quarter from $0.1 million in last year’s comparable
quarter.
UniFirst continues to maintain a solid balance sheet with no
long-term debt and increasing cash balances. Net cash provided by
operating activities during fiscal 2015 was $226.9 million, up
16.6% from fiscal 2014 and cash and cash equivalents at the end of
the fiscal year totaled $276.6 million, up from $191.8 million at
the end of fiscal 2014.
OutlookMr. Croatti continued, “We
believe that full year fiscal 2016 revenues will be between $1.460
billion and $1.480 billion. We also believe that full year diluted
EPS will be between $5.60 and $5.80. This guidance assumes no
significant further deterioration in our wearer base as a result of
additional layoffs in energy dependent markets that we
service.”
Conference Call InformationUniFirst
will hold a conference call today at 10:00 a.m. (ET) to discuss its
quarterly financial results, business highlights and outlook. A
simultaneous live webcast of the call will be available over the
Internet and can be accessed at www.unifirst.com.
About UniFirst
CorporationHeadquartered in Wilmington, Mass., UniFirst
Corporation is a North American leader in the supply and servicing
of uniform and workwear programs, as well as the delivery of
facility service programs. Together with its subsidiaries, the
company also provides first aid and safety products, and manages
specialized garment programs for the cleanroom and nuclear
industries. UniFirst manufactures its own branded workwear,
protective clothing, and floorcare products, and with over 225
service locations, 275,000 customer locations, and 12,000 employee
Team Partners, the company outfits more than 1.5 million workers
each business day. UniFirst is a publicly held company traded on
the New York Stock Exchange under the symbol UNF and is a component
of the Standard & Poor's 600 Small Cap Index. For more
information visit www.unifirst.com.
Forward Looking StatementsThis
public announcement contains forward looking statements that
reflect the Company’s current views with respect to future events
and financial performance, including projected revenues and
earnings per share. Forward looking statements contained in this
public announcement are subject to the safe harbor created by the
Private Securities Litigation Reform Act of 1995 and are highly
dependent upon a variety of important factors that could cause
actual results to differ materially from those reflected in such
forward looking statements. Such factors include, but are not
limited to, uncertainties regarding the Company’s ability to
consummate and successfully integrate acquired businesses,
uncertainties regarding any existing or newly-discovered expenses
and liabilities related to environmental compliance and
remediation, any adverse outcome of pending or future contingencies
or claims, the Company’s ability to compete successfully without
any significant degradation in its margin rates, seasonal
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 price
levels of natural gas, electricity, fuel and labor, the impact of
turbulent economic conditions and the current tight credit markets
on our customers and such customers’ workforce, the level and
duration of workforce reductions by our customers, the continuing
increase in domestic healthcare costs, including the ultimate
impact of the Affordable Care Act, demand and prices for our
products and services, rampant criminal activity and instability in
Mexico where our principal garment manufacturing plants are
located, our ability to properly and efficiently design, construct,
implement and operate our new 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 recent and proposed future changes in
Securities and Exchange Commission, New York Stock Exchange and
accounting rules, strikes and unemployment levels, the Company’s
efforts to evaluate and potentially reduce internal costs, economic
and other developments associated with the war on terrorism and its
impact on the economy, general economic conditions and other
factors described under “Item 1A. Risk Factors” in the Company’s
Annual Report on Form 10-K for the year ended August 30, 2014 and
in other filings with the Securities and Exchange Commission. When
used in this public announcement, the words “anticipate,”
“optimistic,” “believe,” “estimate,” “expect,” “intend,” and
similar expressions as they relate to the Company are included to
identify such forward looking statements. The Company undertakes no
obligation to update any forward looking statements to reflect
events or circumstances arising after the date on which such
statements are made.
UniFirst Corporation and
Subsidiaries
Consolidated Statements of Income
Thirteen
weeks ended
August 29,
Thirteen
weeks ended
August 30,
Fifty-two
weeks ended
August 29,
Fifty-two
weeks ended
August 30,
(In thousands, except per share data)
2015 (2)
2014 (2) 2015 (2) 2014 Revenues $
359,208 $ 351,988 $ 1,456,605 $ 1,394,897 Operating
expenses: Cost of revenues (1) 219,442 217,965 884,664 858,306
Selling and administrative expenses (1) 72,612 68,086 294,444
271,564 Depreciation and amortization 21,262 18,515 77,113 71,752
Total operating expenses 313,316 304,566 1,256,221 1,201,622
Income from operations 45,892 47,422 200,384 193,275 Other
(income) expense: Interest expense 225 239 873 772 Interest income
(778 ) (716 ) (3,310 ) (3,131 ) Foreign exchange loss 230 242 1,553
283 Total other (income) expense (323 ) (235 ) (884 ) (2,076 )
Income before income taxes 46,215 47,657 201,268 195,351
Provision for income taxes 17,274 18,785 76,969 75,426 Net
income $ 28,941 $ 28,872 $ 124,299 $ 119,925
Income per
share – Basic Common Stock $ 1.51 $ 1.51 $ 6.50 $ 6.29 Class B
Common Stock $ 1.21 $ 1.21 $ 5.20 $ 5.03
Income per share
– Diluted Common Stock $ 1.43 $ 1.43 $ 6.15 $ 5.95
Income allocated to – Basic Common Stock $ 23,011 $ 22,876 $
98,665 $ 94,849 Class B Common Stock $ 5,803 $ 5,742 $ 24,761 $
23,705
Income allocated to – Diluted Common Stock $
28,821 $ 28,631 $ 123,472 $ 118,626
Weighted average
number of shares outstanding – Basic Common Stock 15,210 15,113
15,182 15,080 Class B Common Stock 4,795 4,741 4,763 4,711
Weighted average number of shares outstanding – Diluted
Common Stock 20,142 20,007 20,079 19,939
(1) Exclusive of depreciation on the Company’s property, plant
and equipment and amortization on its intangible assets
(2) Unaudited
UniFirst Corporation and
Subsidiaries
Condensed Consolidated Balance
Sheets (In thousands) August 29,
2015 (1)
August 30,
2014
Assets Current assets: Cash and cash equivalents $ 276,553 $
191,769 Receivables, net 151,851 152,523 Inventories 80,449 78,858
Rental merchandise in service 140,384 146,449 Prepaid and deferred
income taxes 204 13,342 Prepaid expenses and other current assets
12,382 6,349 Total current assets 661,823 589,290
Property, plant and equipment: Land, buildings and leasehold
improvements 402,781 393,584 Machinery and equipment 535,698
512,842 Motor vehicles 193,643 166,573 1,132,122 1,072,999
Less - accumulated depreciation 618,269 586,717 513,853 486,282
Goodwill 313,133 303,648 Customer contracts and other
intangible assets, net 40,049 41,477 Deferred income taxes 1,475
1,403 Other assets 2,904 2,061 $ 1,533,237 $ 1,424,161
Liabilities and shareholders' equity Current liabilities:
Loans payable and current maturities of long-term debt $ 1,385 $
7,704 Accounts payable 50,826 59,177 Accrued liabilities 113,022
100,818 Accrued and deferred income taxes 18,878 23,342
Total current liabilities 184,111 191,041 Long-term
liabilities: Long-term debt, net of current maturities — 155
Accrued liabilities 54,566 50,235 Accrued and deferred income taxes
52,352 48,271 Total long-term liabilities 106,918 98,661
Shareholders' equity: Common Stock 1,525 1,519 Class B
Common Stock 485 486 Capital surplus 67,611 59,415 Retained
earnings 1,197,000 1,075,572 Accumulated other comprehensive (loss)
income (24,413
)
(2,533
)
Total shareholders' equity 1,242,208 1,134,459 $
1,533,237 $ 1,424,161
(1) Unaudited
UniFirst Corporation and
Subsidiaries
Detail of Operating Results
Revenues
Thirteen
Thirteen
weeks ended weeks ended
August 29, August 30,
Dollar
Percent
(In thousands, except percentages) 2015 (1) 2014
(1) Change Change Core Laundry Operations
$ 326,643 $ 320,993 $ 5,650 1.8 % Specialty Garments 20,522 19,016
1,506 7.9 First Aid 12,043 11,979 64 0.5 Consolidated total $
359,208 $ 351,988 $ 7,220 2.1 %
Fifty-two
Fifty-two weeks
ended weeks ended
August 29, August 30,
Dollar
Percent
(In thousands, except percentages) 2015 (1) 2014
(1) Change Change Core Laundry Operations
$ 1,322,328 $ 1,259,485 $ 62,843 5.0 % Specialty Garments 87,513
91,484 (3,971 ) -4.3 First Aid 46,764 43,928 2,836 6.5 Consolidated
total $ 1,456,605 $ 1,394,897 $ 61,708 4.4 %
Income from Operations
Thirteen
Thirteen weeks ended weeks ended
August 29, August 30,
Dollar
Percent
(In thousands, except percentages) 2015 (1) 2014
(1) Change Change Core Laundry Operations
$ 42,855 $ 45,937 $ (3,082 ) -6.7 % Specialty Garments 1,490 115
1,375 1,195.7 First Aid 1,547 1,370 177 12.9 Consolidated total $
45,892 $ 47,422 $ (1,530 ) -3.2 %
Fifty-two
Fifty-two weeks
ended weeks ended
August 29, August 30,
Dollar
Percent
(In thousands, except percentages) 2015 (1) 2014
(1) Change Change Core Laundry Operations
$ 187,586 $ 182,250 $ 5,336 2.9 % Specialty Garments 7,355 7,178
177 2.5 First Aid 5,443 3,847 1,596 41.5 Consolidated total $
200,384 $ 193,275 $ 7,109 3.7 %
(1) Unaudited
UniFirst Corporation and
Subsidiaries
Consolidated Statements of Cash Flows
Fifty-two Fifty-two weeks ended weeks
ended August 29, August 30, (In thousands)
2015 (1) 2014 Cash flows from operating
activities: Net income $ 124,299 $ 119,925
Adjustments to reconcile net income to cash provided by operating
activities: Depreciation 68,164 62,791 Amortization of intangible
assets 8,949 8,961 Amortization of deferred financing costs 209 209
Share-based compensation 5,366 5,601 Accretion on environmental
contingencies 603 716 Accretion on asset retirement obligations 690
941 Deferred income taxes (3,473 ) 8,439 Changes in assets and
liabilities, net of acquisitions: Receivables (3,494 ) (11,541 )
Inventories (2,236 ) (4,450 ) Rental merchandise in service 4,900
(14,002 ) Prepaid expenses and other current assets (4,005 ) 2,623
Accounts payable (7,648 ) 13,646 Accrued liabilities 17,832 6,890
Prepaid and accrued income taxes 16,761 (6,130 ) Net cash provided
by operating activities 226,917 194,619 Cash flows from
investing activities: Acquisition of businesses (22,359 ) (3,635 )
Capital expenditures (101,163 ) (91,808 ) Other (747 ) 1,269 Net
cash used in investing activities (124,269 ) (94,174 ) Cash
flows from financing activities: Proceeds from loans payable and
long-term debt 6,866 9,388 Payments on loans payable and long-term
debt (13,055 ) (113,247 ) Proceeds from exercise of Common Stock
options, including excess tax benefits 7,799 5,899 Taxes withheld
and paid related to net share settlement of equity awards (5,002 )
(3,527 ) Payment of cash dividends (2,869 ) (2,860 ) Net cash used
in financing activities (6,261 ) (104,347 ) Effect of
exchange rate changes on cash (11,603 ) (1,808 ) Net
increase (decrease) in cash and cash equivalents 84,784 (5,710 )
Cash and cash equivalents at beginning of period 191,769 197,479
Cash and cash equivalents at end of period $ 276,553 $
191,769
(1) Unaudited
View source
version on businesswire.com: http://www.businesswire.com/news/home/20151021005344/en/
UniFirst CorporationSteven S. Sintros, 978-658-8888Senior Vice
President & CFO
UniFirst (NYSE:UNF)
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