UniFirst Corporation (NYSE:UNF) today announced results for its
first quarter of fiscal 2017 which ended November 26, 2016.
Revenues for the quarter were $386.1 million, up 3.4% from $373.4
million in the year ago period. Net income was $28.2 million
($1.38 per diluted share), down 21.4% from $35.9 million ($1.78 per
diluted share) in the first quarter of fiscal 2016. Results from
the first quarter include the impact of the Company’s acquisition
of Arrow Uniform (Arrow) which was completed in September 2016.
Ronald D. Croatti, UniFirst President and Chief
Executive Officer said, “First quarter growth was affected by the
loss of uniform wearers and customers in North American
energy-dependent markets. However, we are encouraged by
recent trends in these markets. Wearer levels at the existing
customers have shown improvement which suggests energy-related
headwinds may be subsiding. If these trends continue, our
organic growth rates should improve as fiscal 2017 unfolds.”
Core Laundry revenues in the quarter were $351.8
million, up 5.0% from those in the prior year’s first
quarter. Adjusting for the effect of acquisitions, Core
Laundry revenues grew 0.6%. This segment’s operating income
was $43.7 million, a 17.6% decrease from the prior year. Its
operating margin was 12.4%, down from 15.8% for the same period in
fiscal 2016. The margin decline was primarily the result of
higher costs of revenues and selling and administrative expenses
combined with low organic growth. In addition, the impact of
the acquisition of Arrow, including the effect of non-cash purchase
accounting charges, decreased the Core Laundry operating margin by
approximately 1.1%.
Revenues and operating income from our Specialty
Garments segment, which consists of nuclear decontamination and
cleanroom operations, declined 16.5% and 73.1%, respectively, in
the quarter compared to the same period a year ago. This segment’s
results can vary significantly from period to period due to
seasonality and the timing of reactor outages and projects. The
quarterly results for this segment largely met our expectations and
we currently expect this segment’s full year results will meet or
exceed its fiscal 2016 revenues and operating income.
UniFirst continues to maintain a strong balance
sheet with no long-term debt and significant cash balances.
Excluding the cash expended on Arrow, cash balances increased $42.2
million during the quarter and finished the quarter at $286.1
million.
OutlookMr. Croatti said, “At this time, we
continue to expect that our fiscal 2017 revenues will be between
$1.550 billion and $1.565 billion. We now expect that our full year
diluted EPS will be between $4.85 and $5.00. Although the year is
unfolding mostly as anticipated, certain items, including worker’s
compensation claims and other operating expenses are trending
higher. As a result, we are modifying our full year earnings
expectations.”
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 240 service locations, 300,000 customer locations, and 13,000
employee Team Partners, the company outfits nearly 2 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, contact UniFirst at 800.455.7654 or 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 may be identified by words such
as “estimates,” “anticipates,” “projects,” “plans,” “expects,”
“intends,” “believes,” “seeks,” “could,” “should,” “may,” “will,”
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, our ability to maintain and grow Arrow’s customer base
and enhance its operating margins, our ability to compete
successfully without any significant degradation in our margin
rates, uncertainties caused by the continuing adverse worldwide
economic conditions and their impact on our customers’ businesses
and workforce levels, 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, uncertainties regarding our ability
to consummate and successfully integrate acquired businesses, our
ability to preserve positive labor relationships and avoid becoming
the target of corporate labor unionization campaigns that could
disrupt our business, the continuing increase in domestic
healthcare costs, including the ultimate impact of the Affordable
Care Act, our retention of customers and renewal of customer
contracts, uncertainties regarding the price levels of natural gas,
electricity, fuel and labor, the negative effect on our business
from sharply depressed oil prices, fluctuation on our revenue and
net income from our specialty garments segment, the effect of
currency fluctuations on our results of operations and financial
condition, rampant criminal activity and instability in Mexico
where our principal garment manufacturing plants are located, the
impact on our goodwill and intangibles that might result from
adverse financial and economic changes, our ability to properly and
efficiently design, construct, implement and operate our new
customer relationship management (“CRM”) computer system,
interruptions or failures of our information technology systems,
including as a result of cyber-attacks, failure to comply with
other state and federal regulations that might result in penalties
or costs, seasonal and quarterly fluctuations in business levels,
any loss of key management or other personnel, our dependence
on third parties to supply us with raw materials, 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, demand and prices for our products and services,
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 our Annual Report on Form 10-K for the year ended
August 27, 2016 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.
UniFirst Corporation and
SubsidiariesConsolidated Statements of
Income(Unaudited)
|
|
|
Thirteenweeks
endedNovember 26, |
|
|
|
Thirteenweeks
endedNovember 28, |
|
(In thousands, except per share data) |
|
|
2016 |
|
|
|
2015 |
|
|
|
|
|
|
|
|
|
|
Revenues |
|
$ |
386,108 |
|
|
$ |
373,384 |
|
|
|
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
|
|
Cost of
revenues (1) |
|
|
238,765 |
|
|
|
222,603 |
|
Selling
and administrative expenses (1) |
|
|
79,446 |
|
|
|
72,749 |
|
Depreciation and amortization |
|
|
22,140 |
|
|
|
19,738 |
|
Total
operating expenses |
|
|
340,351 |
|
|
|
315,090 |
|
|
|
|
|
|
|
|
|
|
Income from
operations |
|
|
45,757 |
|
|
|
58,294 |
|
|
|
|
|
|
|
|
|
|
Other (income)
expense: |
|
|
|
|
|
|
|
|
Interest
expense |
|
|
182 |
|
|
|
221 |
|
Interest
income |
|
|
(983 |
) |
|
|
(764 |
) |
Foreign
exchange loss |
|
|
494 |
|
|
|
479 |
|
Total
other (income) expense |
|
|
(307 |
) |
|
|
(64 |
) |
|
|
|
|
|
|
|
|
|
Income before income
taxes |
|
|
46,064 |
|
|
|
58,358 |
|
Provision for income
taxes |
|
|
17,850 |
|
|
|
22,468 |
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
28,214 |
|
|
$ |
35,890 |
|
|
|
|
|
|
|
|
|
|
Income per
share – Basic |
|
|
|
|
|
|
|
|
Common
Stock |
|
$ |
1.46 |
|
|
$ |
1.88 |
|
Class B
Common Stock |
|
$ |
1.17 |
|
|
$ |
1.50 |
|
|
|
|
|
|
|
|
|
|
Income per
share – Diluted |
|
|
|
|
|
|
|
|
Common
Stock |
|
$ |
1.38 |
|
|
$ |
1.78 |
|
|
|
|
|
|
|
|
|
|
Income
allocated to – Basic |
|
|
|
|
|
|
|
|
Common
Stock |
|
$ |
22,342 |
|
|
$ |
28,539 |
|
Class B
Common Stock |
|
$ |
5,668 |
|
|
$ |
7,193 |
|
|
|
|
|
|
|
|
|
|
Income
allocated to – Diluted |
|
|
|
|
|
|
|
|
Common
Stock |
|
$ |
28,020 |
|
|
$ |
35,741 |
|
|
|
|
|
|
|
|
|
|
Weighted
average number of shares outstanding – Basic |
|
|
|
|
|
|
|
|
Common
Stock |
|
|
15,285 |
|
|
|
15,218 |
|
Class B Common Stock |
|
|
4,847 |
|
|
|
4,795 |
|
|
|
|
|
|
|
|
|
|
Weighted
average number of shares outstanding – Diluted |
|
|
|
|
|
|
|
|
Common
Stock |
|
|
20,249 |
|
|
|
20,132 |
|
|
|
|
|
|
|
|
|
|
(1) Exclusive of depreciation on the Company’s property, plant
and equipment and amortization on its intangible assets.
UniFirst Corporation and
SubsidiariesCondensed Consolidated Balance
Sheets(Unaudited)
(In thousands) |
|
|
|
November 26,2016 |
|
|
August 27,2016 |
|
Assets |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash and
cash equivalents |
|
|
$ |
286,119 |
|
$ |
363,795 |
|
Receivables, net |
|
|
|
176,404 |
|
|
156,578 |
|
Inventories |
|
|
|
73,164 |
|
|
78,887 |
|
Rental
merchandise in service |
|
|
|
144,637 |
|
|
138,105 |
|
Prepaid
taxes |
|
|
|
— |
|
|
10,418 |
|
Prepaid
expenses and other current assets |
|
|
|
23,917 |
|
|
29,831 |
|
|
|
|
|
|
|
|
|
|
Total
current assets |
|
|
|
704,241 |
|
|
777,614 |
|
|
|
|
|
|
|
|
|
|
Property, plant and
equipment, net |
|
|
|
541,300 |
|
|
539,818 |
|
|
|
|
|
|
|
|
|
|
Goodwill |
|
|
|
367,663 |
|
|
320,641 |
|
Customer contracts and
other intangible assets, net |
|
|
|
81,329 |
|
|
38,664 |
|
Deferred income
taxes |
|
|
|
338 |
|
|
97 |
|
Other assets |
|
|
|
29,914 |
|
|
25,173 |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
1,724,785 |
|
$ |
1,702,007 |
|
|
|
|
|
|
|
|
|
|
Liabilities and
shareholders' equity |
|
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
|
|
Accounts
payable |
|
|
$ |
49,255 |
|
$ |
50,884 |
|
Accrued
liabilities |
|
|
|
94,202 |
|
|
100,782 |
|
Accrued
taxes |
|
|
|
7,621 |
|
|
969 |
|
|
|
|
|
|
|
|
|
|
Total
current liabilities |
|
|
|
151,078 |
|
|
152,635 |
|
|
|
|
|
|
|
|
|
|
Long-term
liabilities: |
|
|
|
|
|
|
|
|
Accrued
liabilities |
|
|
|
104,193 |
|
|
104,921 |
|
Accrued
and deferred income taxes |
|
|
|
79,742 |
|
|
79,670 |
|
|
|
|
|
|
|
|
|
|
Total
long-term liabilities |
|
|
|
183,935 |
|
|
184,591 |
|
|
|
|
|
|
|
|
|
|
Shareholders'
equity: |
|
|
|
|
|
|
|
|
Common
Stock |
|
|
|
1,543 |
|
|
1,542 |
|
Class B
Common Stock |
|
|
|
485 |
|
|
485 |
|
Capital
surplus |
|
|
|
74,941 |
|
|
72,561 |
|
Retained
earnings |
|
|
|
1,346,633 |
|
|
1,319,142 |
|
Accumulated other comprehensive (loss) income |
|
|
|
(33,830 |
) |
|
(28,949 |
) |
|
|
|
|
|
|
|
|
|
Total
shareholders' equity |
|
|
|
1,389,772 |
|
|
1,364,781 |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
1,724,785 |
|
$ |
1,702,007 |
|
|
|
|
|
|
|
|
|
|
UniFirst Corporation and
SubsidiariesDetail of Operating
Results(Unaudited)
Revenues
|
|
Thirteenweeks ended November
26, |
|
|
Thirteenweeks ended November
28, |
|
|
Dollar |
|
Percent |
|
(In thousands, except percentages) |
|
2016 |
|
|
2015 |
|
|
Change |
|
Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
Core
Laundry Operations |
$ |
351,843 |
|
$ |
335,037 |
|
$ |
16,806 |
|
5.0 |
% |
Specialty
Garments |
|
22,356 |
|
|
26,770 |
|
|
(4,414 |
) |
-16.5 |
|
First
Aid |
|
11,909 |
|
|
11,577 |
|
|
332 |
|
2.9 |
|
Consolidated total |
$ |
386,108 |
|
$ |
373,384 |
|
$ |
12,724 |
|
3.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Income from Operations
|
|
Thirteenweeks ended November
26, |
|
|
Thirteenweeks ended November
28, |
|
|
Dollar |
|
Percent |
|
(In thousands, except percentages) |
|
2016 |
|
|
2015 |
|
|
Change |
|
Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
Core
Laundry Operations |
$ |
43,673 |
|
$ |
52,972 |
|
$ |
(9,299 |
) |
-17.6 |
% |
Specialty
Garments |
|
1,151 |
|
|
4,286 |
|
|
(3,135 |
) |
-73.1 |
|
First
Aid |
|
933 |
|
|
1,036 |
|
|
(103 |
) |
-10.0 |
|
Consolidated total |
$ |
45,757 |
|
$ |
58,294 |
|
$ |
(12,537 |
) |
-21.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
UniFirst Corporation and
SubsidiariesConsolidated Statements of Cash
Flows(Unaudited)
(In
thousands) |
Thirteenweeks
endedNovember
26,2016 |
Thirteenweeks
endedNovember
28,2015 |
Cash flows from
operating activities: |
|
|
|
|
|
|
|
|
Net income |
|
|
$ |
28,214 |
|
$ |
35,890 |
|
Adjustments to
reconcile net income to cash provided by operating activities: |
|
|
|
|
|
|
|
|
Depreciation |
|
|
|
18,500 |
|
|
17,643 |
|
Amortization of intangible assets |
|
|
|
3,640 |
|
|
2,095 |
|
Amortization of deferred financing costs |
|
|
|
28 |
|
|
52 |
|
Share-based compensation |
|
|
|
2,015 |
|
|
1,260 |
|
Accretion
on environmental contingencies |
|
|
|
150 |
|
|
167 |
|
Accretion
on asset retirement obligations |
|
|
|
205 |
|
|
199 |
|
Deferred
income taxes |
|
|
|
(746 |
) |
|
26 |
|
Changes
in assets and liabilities, net of acquisitions: |
|
|
|
|
|
|
|
|
Receivables |
|
|
|
(13,112 |
) |
|
(17,376 |
) |
Inventories |
|
|
|
7,526 |
|
|
3,452 |
|
Rental
merchandise in service |
|
|
|
152 |
|
|
(1,280 |
) |
Prepaid
expenses and other current assets and Other assets |
|
|
|
9,288 |
|
|
(2,286 |
) |
Accounts
payable |
|
|
|
(1,113 |
) |
|
7,913 |
|
Accrued
liabilities |
|
|
|
(8,837 |
) |
|
(4,967 |
) |
Prepaid
and accrued income taxes |
|
|
|
17,589 |
|
|
14,853 |
|
Net cash provided by
operating activities |
|
|
|
63,499 |
|
|
57,641 |
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities: |
|
|
|
|
|
|
|
|
Acquisition of businesses, net of cash acquired |
|
|
|
(120,391 |
) |
|
(73 |
) |
Capital
expenditures |
|
|
|
(18,233 |
) |
|
(21,049 |
) |
Other |
|
|
|
281 |
|
|
223 |
|
Net cash used in
investing activities |
|
|
|
(138,343 |
) |
|
(20,899 |
) |
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities: |
|
|
|
|
|
|
|
|
Payments
on loans payable and long-term debt |
|
|
|
— |
|
|
(764 |
) |
Proceeds
from exercise of Common Stock options, including excess tax
benefits |
|
|
|
929 |
|
|
383 |
|
Taxes
withheld and paid related to net share settlement of equity
awards |
|
|
|
(566 |
) |
|
— |
|
Payment of cash
dividends |
|
|
|
(724 |
) |
|
(717 |
) |
Net cash used in
financing activities |
|
|
|
(361 |
) |
|
(1,098 |
) |
|
|
|
|
|
|
|
|
|
Effect of exchange rate
changes on cash |
|
|
|
(2,471 |
) |
|
(665 |
) |
|
|
|
|
|
|
|
|
|
Net (decrease) increase
in cash and cash equivalents |
|
|
|
(77,676 |
) |
|
34,979 |
|
Cash and cash
equivalents at beginning of period |
|
|
|
363,795 |
|
|
276,553 |
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents at end of period |
|
|
$ |
286,119 |
|
$ |
311,532 |
|
|
|
|
|
|
|
|
|
|
CONTACT: Steven S. Sintros, Senior Vice President & CFO
Phone: 978-658-8888
Fax: 978-988-0659
Email: ssintros@UniFirst.com
UniFirst (NYSE:UNF)
Historical Stock Chart
From Apr 2024 to May 2024
UniFirst (NYSE:UNF)
Historical Stock Chart
From May 2023 to May 2024