UniFirst Corporation (NYSE: UNF) (the “Company,” “UniFirst” or
“we”) today reported results for its second quarter ended February
24, 2024 as compared to the corresponding period in the prior
fiscal year:
Q2 2024 Financial
Highlights
- Consolidated revenues for the second quarter increased 8.8% to
$590.7 million.
- Operating income was $27.9 million, an increase of 34.9%.
- The quarterly tax rate increased to 26.2% compared to 24.6% in
the prior year.
- Net income increased to $20.5 million from $17.8 million in the
prior year, or 14.9%.
- Diluted earnings per share increased to $1.09 from $0.95 in the
prior year, or 14.7%.
- EBITDA increased to $62.5 million compared to $50.5 million in
the prior year, or 23.8%.
The Company's financial results for the second
quarter of fiscal 2024 and 2023 included approximately $3.2 million
and $9.1 million, respectively, of costs directly attributable to
its customer relationship management (“CRM”) computer system,
enterprise resource planning (“ERP”) system and branding
initiatives (the “Key Initiatives”). In addition, the Company
incurred costs related to the acquisition of Clean Uniform during
the second quarter of fiscal 2023 of approximately $2.0 million.
The effect of these items on the second quarter of fiscal 2024 and
2023 combined to decrease:
- Both operating income and EBITDA by $3.2 million and $11.1
million, respectively.
- Net income by $2.5 million and $8.3 million, respectively.
- Diluted earnings per share by $0.13 and $0.44,
respectively.
Steven Sintros, UniFirst President and Chief
Executive Officer, said, “We are pleased with the results from our
second quarter which met our expectations and delivered solid
growth in revenues, EBITDA and cash flows from operating
activities. I want to sincerely thank all our Team Partners who
continue to Always Deliver for each other and our
customers as we strive towards our vision of being universally
recognized as the best service provider in the industry. …all while
living our Mission of Serving the People Who do the Hard
Work.”
Segment Reporting
Highlights
Core Laundry Operations
- Revenues for the quarter increased 9.5% to $522.4 million.
- Organic growth, which excludes the effect of acquisitions and
fluctuations in the Canadian dollar, was 4.8%.
- Operating margin increased to 3.6% from 2.9%.
- Core Laundry Operations' EBITDA margin increased to 9.9% from
8.7%.
The costs we incurred related to the Key
Initiatives, discussed above, were recorded to the Core Laundry
Operations' segment, and decreased both the Core Laundry
Operations' operating and EBITDA margin for the second quarters of
fiscal 2024 and 2023 by 0.6% and 2.3%, respectively.
The segment's operating and EBITDA margin
comparisons were also impacted by additional reserves we recorded
related to our legacy environmental sites and investments that we
have made over the last year in our corporate capabilities, which
were partially offset by lower energy costs as a percentage of
revenues. Further impacting the segment’s operating margin was
elevated non-cash acquisition-related intangibles amortization
resulting from the Company's acquisition of Clean Uniform in March
2023.
Specialty Garments
- Revenues for the quarter were $43.5
million, an increase of 3.2%, which was driven by growth in the
segment's cleanroom operations.
- Operating margin increased to 22.8%
from 19.1% a year ago, primarily as a result of improved operating
leverage and lower merchandise expenses in our cleanroom
operations.
- Specialty Garments consists of
nuclear decontamination and cleanroom operations, and its results
can vary significantly due to seasonality and the timing of reactor
outages and projects.
Balance Sheet and Capital
Allocation
- Cash, cash equivalents and
Short-term investments totaled $101.9 million as of February 24,
2024.
- The Company had no long-term debt
outstanding as of February 24, 2024.
- Cash flows from operating
activities increased to $106.7 million in the first half of 2024,
an increase of 66.3% over the prior year.
- The Company repurchased 45,250
shares of Common Stock for $7.9 million in the second quarter of
fiscal 2024. As of February 24, 2024, the Company had $91.9 million
remaining under its existing share repurchase authorization.
- Weighted average shares outstanding
– Diluted for both the second quarter of fiscal 2024 and fiscal
2023 were 18.8 million.
Financial Outlook
Mr. Sintros continued, “At this time, we
continue to expect our revenues for fiscal 2024 to be between
$2.415 billion and $2.425 billion and fully diluted earnings per
share to be between $6.80 and $7.16.” Our guidance for fiscal 2024
continues to include one extra week of operations compared to
fiscal 2023 due to the timing of our fiscal quarter, and
assumes:
- Core Laundry Operations’ operating
and EBITDA margins at the midpoint of the range of 6.5% and 12.6%,
respectively.
- A revised estimate of $12.0 million
of costs directly attributable to our Key Initiatives that will be
expensed in fiscal 2024 and will decrease both the Core Laundry
Operations’ operating and EBITDA margins by 0.6%.
- An effective tax rate of
25.0%.
- No impact from any future share
buybacks or unexpected significantly adverse economic
developments.
Conference Call Information
UniFirst Corporation will hold a conference call
today at 9:00 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 Corporation
Headquartered in Wilmington, Mass., UniFirst
Corporation (NYSE: UNF) is a North American leader in the supply
and servicing of uniform and workwear programs, facility service
products, as well as first aid and safety supplies and services.
Together with its subsidiaries, the Company also manages
specialized garment programs for the cleanroom and nuclear
industries. In addition to partnering with leading brands, UniFirst
manufactures its own branded workwear, protective clothing, and
floorcare products at its five company-owned ISO-9001-certified
manufacturing facilities. With more than 270 service locations,
over 300,000 customer locations, and 16,000-plus employee Team
Partners, the Company outfits more than 2 million workers every
day. For more information, contact UniFirst at 888.296.2740 or
visit UniFirst.com.
Forward-Looking Statements
Disclosure
This public announcement contains
forward-looking statements within the meaning of the federal
securities laws that reflect the Company's current views with
respect to future events and financial performance, including
projected revenues, operating margin 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 “guidance,” “outlook,” “estimates,” “anticipates,” “projects,”
“plans,” “expects,” “intends,” “believes,” “seeks,” “could,”
“should,” “may,” “will,” “strategy,” “objective,” “assume,”
“strive,” “design,” “assumption,” “vision” 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, uncertainties caused by an economic recession or other
adverse economic conditions, including, without limitation, as a
result of continued high inflation rates or further increases in
inflation or interest rates or extraordinary events or
circumstances such as geopolitical conflicts like the conflict
between Russia and Ukraine, disruption in the Middle East or the
COVID-19 pandemic, and their impact on our customers' businesses
and workforce levels, disruptions of our business and operations,
including limitations on, or closures of, our facilities, or the
business and operations of our customers or suppliers in connection
with extraordinary events or circumstances such as the COVID-19
pandemic, uncertainties regarding our ability to consummate
acquisitions and successfully integrate acquired businesses,
including Clean Uniform, and the performance of such 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, which such supply could be severely disrupted
as a result of extraordinary events or circumstances such as the
conflict between Russia and Ukraine, any loss of key management or
other personnel, increased costs as a result of any changes in
federal, state, international or other laws, rules and regulations
or governmental interpretation of such laws, rules and regulations,
uncertainties regarding, or adverse impacts from continued high
price levels of natural gas, electricity, fuel and labor or
increases in such costs, the negative effect on our business from
sharply depressed oil and natural gas prices, the continuing
increase in domestic healthcare costs, increased workers'
compensation claim costs, increased healthcare claim costs, our
ability to retain and grow our customer base, demand and prices for
our products and services, fluctuations in our Specialty Garments
business, political or other instability, supply chain disruption
or infection among our employees 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 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 or additional
Securities and Exchange Commission (the “SEC”), New York Stock
Exchange and accounting or other rules, including, without
limitation, recent rules adopted by the SEC regarding
climate-related and cybersecurity-related disclosures, strikes and
unemployment levels, our efforts to evaluate and potentially reduce
internal costs, the impact of foreign trade policies and tariffs or
other impositions on imported goods on our business, results of
operations and financial condition, our ability to successfully
implement our business strategies and processes, including our
capital allocation strategies, our ability to successfully
remediate the material weakness in internal control over financial
reporting disclosed in our Annual Report on Form 10-K for the year
ended August 26, 2023 and the other factors described under Part I,
Item 1A. “Risk Factors” and elsewhere in our Annual Report on Form
10-K for the year ended August 26, 2023, Part II, Item 1A. “Risk
Factors” and elsewhere in our subsequent Quarterly Reports on Form
10-Q and in our other filings with the SEC. We undertake no
obligation to update any forward-looking statements to reflect
events or circumstances arising after the date on which they are
made.
Consolidated Statements of
Income (Unaudited)
|
|
Thirteen Weeks Ended |
|
|
Twenty-Six Weeks Ended |
|
(In thousands, except per share data) |
|
February 24, 2024 |
|
|
February 25, 2023 |
|
|
February 24, 2024 |
|
|
February 25, 2023 |
|
Revenues |
|
$ |
590,711 |
|
|
$ |
542,691 |
|
|
$ |
1,184,236 |
|
|
$ |
1,084,489 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues (1) |
|
|
396,191 |
|
|
|
369,896 |
|
|
|
779,987 |
|
|
|
723,868 |
|
Selling and administrative expenses (1) |
|
|
131,417 |
|
|
|
122,190 |
|
|
|
254,276 |
|
|
|
239,553 |
|
Depreciation and amortization |
|
|
35,160 |
|
|
|
29,895 |
|
|
|
68,893 |
|
|
|
56,940 |
|
Total operating expenses |
|
|
562,768 |
|
|
|
521,981 |
|
|
|
1,103,156 |
|
|
|
1,020,361 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income |
|
|
27,943 |
|
|
|
20,710 |
|
|
|
81,080 |
|
|
|
64,128 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other expense (income): |
|
|
|
|
|
|
|
|
|
|
|
|
Interest income, net |
|
|
(350 |
) |
|
|
(3,031 |
) |
|
|
(3,184 |
) |
|
|
(5,800 |
) |
Other expense, net |
|
|
575 |
|
|
|
114 |
|
|
|
1,291 |
|
|
|
905 |
|
Total other expense (income), net |
|
|
225 |
|
|
|
(2,917 |
) |
|
|
(1,893 |
) |
|
|
(4,895 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
before income taxes |
|
|
27,718 |
|
|
|
23,627 |
|
|
|
82,973 |
|
|
|
69,023 |
|
Provision
for income taxes |
|
|
7,261 |
|
|
|
5,817 |
|
|
|
20,191 |
|
|
|
17,256 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income |
|
$ |
20,457 |
|
|
$ |
17,810 |
|
|
$ |
62,782 |
|
|
$ |
51,767 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income per share – Basic: |
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock |
|
$ |
1.14 |
|
|
$ |
0.99 |
|
|
$ |
3.49 |
|
|
$ |
2.88 |
|
Class B Common Stock |
|
$ |
0.91 |
|
|
$ |
0.79 |
|
|
$ |
2.79 |
|
|
$ |
2.31 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income per share – Diluted: |
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock |
|
$ |
1.09 |
|
|
$ |
0.95 |
|
|
$ |
3.35 |
|
|
$ |
2.76 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income allocated to – Basic: |
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock |
|
$ |
17,188 |
|
|
$ |
14,962 |
|
|
$ |
52,754 |
|
|
$ |
43,488 |
|
Class B Common Stock |
|
$ |
3,269 |
|
|
$ |
2,848 |
|
|
$ |
10,028 |
|
|
$ |
8,279 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income allocated to – Diluted: |
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock |
|
$ |
20,457 |
|
|
$ |
17,810 |
|
|
$ |
62,782 |
|
|
$ |
51,767 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding – Basic: |
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock |
|
|
15,106 |
|
|
|
15,087 |
|
|
|
15,110 |
|
|
|
15,084 |
|
Class B Common Stock |
|
|
3,590 |
|
|
|
3,590 |
|
|
|
3,590 |
|
|
|
3,590 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding –
Diluted: |
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock |
|
|
18,754 |
|
|
|
18,767 |
|
|
|
18,758 |
|
|
|
18,757 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Exclusive of depreciation on the
Company's property, plant and equipment and amortization on its
intangible assets.
Condensed Consolidated Balance
Sheets (Unaudited)
(In thousands) |
|
February 24, 2024 |
|
|
August 26, 2023 |
|
Assets |
|
|
|
|
|
|
Current
assets: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
90,538 |
|
|
$ |
79,443 |
|
Short-term investments |
|
|
11,392 |
|
|
|
10,157 |
|
Receivables, net |
|
|
291,784 |
|
|
|
279,078 |
|
Inventories |
|
|
158,279 |
|
|
|
148,334 |
|
Rental merchandise in service |
|
|
241,340 |
|
|
|
248,323 |
|
Prepaid taxes |
|
|
9,563 |
|
|
|
20,907 |
|
Prepaid expenses and other current assets |
|
|
61,582 |
|
|
|
53,876 |
|
Total current assets |
|
|
864,478 |
|
|
|
840,118 |
|
Property,
plant and equipment, net |
|
|
772,223 |
|
|
|
756,540 |
|
Goodwill |
|
|
648,829 |
|
|
|
647,900 |
|
Customer
contracts and other intangible assets, net |
|
|
132,478 |
|
|
|
145,618 |
|
Deferred
income taxes |
|
|
617 |
|
|
|
567 |
|
Operating
lease right-of-use assets, net |
|
|
69,726 |
|
|
|
62,565 |
|
Other
assets |
|
|
132,602 |
|
|
|
116,667 |
|
Total assets |
|
$ |
2,620,953 |
|
|
$ |
2,569,975 |
|
Liabilities and shareholders’ equity |
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
Accounts payable |
|
$ |
86,318 |
|
|
$ |
92,730 |
|
Accrued liabilities |
|
|
158,478 |
|
|
|
156,408 |
|
Accrued taxes |
|
|
— |
|
|
|
352 |
|
Operating lease liabilities, current |
|
|
18,068 |
|
|
|
17,739 |
|
Total current liabilities |
|
|
262,864 |
|
|
|
267,229 |
|
Long-term
liabilities: |
|
|
|
|
|
|
Accrued
liabilities |
|
|
123,446 |
|
|
|
121,682 |
|
Accrued and
deferred income taxes |
|
|
131,248 |
|
|
|
130,084 |
|
Operating
lease liabilities |
|
|
53,710 |
|
|
|
47,020 |
|
Total liabilities |
|
|
571,268 |
|
|
|
566,015 |
|
Shareholders’ equity: |
|
|
|
|
|
|
Common Stock |
|
|
1,509 |
|
|
|
1,510 |
|
Class B Common Stock |
|
|
359 |
|
|
|
359 |
|
Capital
surplus |
|
|
101,197 |
|
|
|
99,303 |
|
Retained
earnings |
|
|
1,969,659 |
|
|
|
1,926,549 |
|
Accumulated
other comprehensive loss |
|
|
(23,039 |
) |
|
|
(23,761 |
) |
Total shareholders’ equity |
|
|
2,049,685 |
|
|
|
2,003,960 |
|
Total liabilities and shareholders’ equity |
|
$ |
2,620,953 |
|
|
$ |
2,569,975 |
|
Detail of Operating Results
(Unaudited)
|
|
Thirteen Weeks Ended February 24, 2024 |
|
|
Thirteen Weeks Ended February 25, 2023 |
|
(In thousands, except percentages) |
|
CoreLaundryOperations |
|
SpecialtyGarments |
|
FirstAid |
|
Total |
|
|
CoreLaundryOperations |
|
SpecialtyGarments |
|
FirstAid |
|
Total |
|
Revenues |
|
$ |
522,420 |
|
$ |
43,462 |
|
$ |
24,829 |
|
$ |
590,711 |
|
|
$ |
477,050 |
|
$ |
42,127 |
|
$ |
23,514 |
|
$ |
542,691 |
|
Revenue
Growth % |
|
|
9.5 |
% |
|
3.2 |
% |
|
5.6 |
% |
|
8.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Income (Loss) (1), (2) |
|
$ |
19,046 |
|
$ |
9,901 |
|
$ |
(1,004 |
) |
$ |
27,943 |
|
|
$ |
13,642 |
|
$ |
8,045 |
|
$ |
(977 |
) |
$ |
20,710 |
|
Operating
Margin |
|
|
3.6 |
% |
|
22.8 |
% |
|
-4.0 |
% |
|
4.7 |
% |
|
|
2.9 |
% |
|
19.1 |
% |
|
-4.2 |
% |
|
3.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA (1),
(2) |
|
$ |
51,646 |
|
$ |
10,922 |
|
$ |
(40 |
) |
$ |
62,528 |
|
|
$ |
41,507 |
|
$ |
9,097 |
|
$ |
(113 |
) |
$ |
50,491 |
|
EBITDA
Margin |
|
|
9.9 |
% |
|
25.1 |
% |
|
-0.2 |
% |
|
10.6 |
% |
|
|
8.7 |
% |
|
21.6 |
% |
|
-0.5 |
% |
|
9.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) The Company's
financial results for the second quarter of fiscal 2024 and 2023
included approximately $3.2 million and $9.1 million, respectively,
of costs directly attributable to its Key Initiatives. In addition,
the Company incurred costs related to the acquisition of Clean
Uniform during the second quarter of fiscal 2023 of approximately
$2.0 million. These costs were recorded to the Core Laundry
Operations. (2) The Key Initiatives' costs resulted in a decrease
in both Core Laundry Operations' operating margin and EBITDA margin
for the second quarter of fiscal 2024 and 2023 of 0.6% and 2.3%,
respectively.
|
|
Twenty-Six Weeks Ended February 24, 2024 |
|
|
Twenty-Six Weeks Ended February 25, 2023 |
|
(In thousands, except percentages) |
|
CoreLaundryOperations |
|
SpecialtyGarments |
|
FirstAid |
|
Total |
|
|
CoreLaundryOperations |
|
SpecialtyGarments |
|
FirstAid |
|
Total |
|
Revenues |
|
$ |
1,046,409 |
|
$ |
88,131 |
|
$ |
49,696 |
|
$ |
1,184,236 |
|
|
$ |
954,448 |
|
$ |
86,206 |
|
$ |
43,835 |
|
$ |
1,084,489 |
|
Revenue
Growth % |
|
|
9.6 |
% |
|
2.2 |
% |
|
13.4 |
% |
|
9.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Income (Loss) (3), (4) |
|
$ |
61,137 |
|
$ |
22,018 |
|
$ |
(2,075 |
) |
$ |
81,080 |
|
|
$ |
47,473 |
|
$ |
18,228 |
|
$ |
(1,573 |
) |
$ |
64,128 |
|
Operating
Margin |
|
|
5.8 |
% |
|
25.0 |
% |
|
-4.2 |
% |
|
6.8 |
% |
|
|
5.0 |
% |
|
21.1 |
% |
|
-3.6 |
% |
|
5.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA (3),
(4) |
|
$ |
124,966 |
|
$ |
24,070 |
|
$ |
(354 |
) |
$ |
148,682 |
|
|
$ |
99,942 |
|
$ |
20,268 |
|
$ |
(47 |
) |
$ |
120,163 |
|
EBITDA
Margin |
|
|
11.9 |
% |
|
27.3 |
% |
|
-0.7 |
% |
|
12.6 |
% |
|
|
10.5 |
% |
|
23.5 |
% |
|
-0.1 |
% |
|
11.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3) The Company's
financial results for the first half of fiscal 2024 and 2023
included approximately $6.1 million and $19.1 million,
respectively, of costs directly attributable to its Key
Initiatives. In addition, the Company incurred costs related to the
acquisition of Clean Uniform during the first half of fiscal 2023
of approximately $2.0 million. These costs were recorded to the
Core Laundry Operations. (4) The Key Initiatives' costs resulted in
a decrease in both Core Laundry Operations' operating margin and
EBITDA margin for the first half of fiscal 2024 and 2023 of 0.6%
and 2.2%, respectively.
Consolidated Statements of Cash
Flows (Unaudited)
(In thousands) |
|
February 24, 2024 |
|
|
February 25, 2023 |
|
Cash flows from operating activities: |
|
|
|
|
|
|
Net income |
|
$ |
62,782 |
|
|
$ |
51,767 |
|
Adjustments
to reconcile net income to cash provided by operating
activities: |
|
|
|
|
|
|
Depreciation
and amortization (1) |
|
|
68,893 |
|
|
|
56,940 |
|
Share-based
compensation |
|
|
4,842 |
|
|
|
4,533 |
|
Accretion on
environmental contingencies |
|
|
632 |
|
|
|
518 |
|
Accretion on
asset retirement obligations |
|
|
467 |
|
|
|
458 |
|
Deferred
income taxes |
|
|
897 |
|
|
|
1,080 |
|
Other |
|
|
963 |
|
|
|
119 |
|
Changes in
assets and liabilities, net of acquisitions: |
|
|
|
|
|
|
Receivables, less reserves |
|
|
(12,574 |
) |
|
|
(27,636 |
) |
Inventories |
|
|
(9,935 |
) |
|
|
683 |
|
Rental merchandise in service |
|
|
7,127 |
|
|
|
(13,592 |
) |
Prepaid expenses and other current assets and Other assets |
|
|
(14,036 |
) |
|
|
(4,459 |
) |
Accounts payable |
|
|
(8,035 |
) |
|
|
(900 |
) |
Accrued liabilities |
|
|
(6,205 |
) |
|
|
(17,072 |
) |
Prepaid and accrued income taxes |
|
|
10,907 |
|
|
|
11,730 |
|
Net cash
provided by operating activities |
|
|
106,725 |
|
|
|
64,169 |
|
|
|
|
|
|
|
|
Cash
flows from investing activities: |
|
|
|
|
|
|
Acquisition
of businesses, net of cash acquired |
|
|
— |
|
|
|
(7,059 |
) |
Capital
expenditures, including capitalization of software costs |
|
|
(72,902 |
) |
|
|
(74,847 |
) |
Purchases of
investments |
|
|
(11,394 |
) |
|
|
(107,000 |
) |
Maturities
of investments |
|
|
10,217 |
|
|
|
6,000 |
|
Proceeds
from sale of assets |
|
|
632 |
|
|
|
345 |
|
Net cash
used in investing activities |
|
|
(73,447 |
) |
|
|
(182,561 |
) |
|
|
|
|
|
|
|
Cash
flows from financing activities: |
|
|
|
|
|
|
Proceeds
from exercise of share-based awards |
|
|
3 |
|
|
|
3 |
|
Taxes
withheld and paid related to net share settlement of equity
awards |
|
|
(2,638 |
) |
|
|
(2,802 |
) |
Repurchase
of Common Stock |
|
|
(8,119 |
) |
|
|
— |
|
Payment of
cash dividends |
|
|
(11,512 |
) |
|
|
(10,954 |
) |
Net cash
used in financing activities |
|
|
(22,266 |
) |
|
|
(13,753 |
) |
|
|
|
|
|
|
|
Effect of
exchange rate changes |
|
|
83 |
|
|
|
(156 |
) |
|
|
|
|
|
|
|
Net increase
(decrease) in cash and cash equivalents |
|
|
11,095 |
|
|
|
(132,301 |
) |
Cash and
cash equivalents at beginning of period |
|
|
79,443 |
|
|
|
376,399 |
|
Cash and
cash equivalents at end of period |
|
$ |
90,538 |
|
|
$ |
244,098 |
|
|
(1) Depreciation
and amortization for the first half of fiscal 2024 and 2023
included approximately $9.2 million and $5.1 million, respectively,
of non-cash amortization expense recognized on acquisition-related
intangible assets.
Reconciliation of GAAP to Non-GAAP
Financial Measures
The Company reports its consolidated financial
results in accordance with generally accepted accounting principles
(“GAAP”). To supplement the Company's consolidated financial
results in this press release, the Company also presents EBITDA and
EBITDA margin, which are non-GAAP financial measures. The Company
defines EBITDA as net income before interest, income taxes,
depreciation and amortization. EBITDA margin is defined as EBITDA
for a period divided by revenue for the same period.
The Company believes these non-GAAP financial
measures provide useful supplemental information regarding the
performance of the Company and its segments to both management and
investors. These non-GAAP financial measures exclude certain items
that may impact the comparability of the Company's results. In
addition, by excluding certain items, these non-GAAP financial
measures enable management and investors to further evaluate the
underlying operating performance of the Company.
Supplemental reconciliations of the Company's
consolidated net income on a GAAP basis to EBITDA and EBITDA
margin, which are non-GAAP financial measures, are presented in the
following tables. Investors are encouraged to review the
reconciliations of the non-GAAP financial measures to their most
directly comparable GAAP financial measures, which are provided
below. EBITDA and EBITDA margin should be considered in addition
to, and not as substitutes for, or in isolation from, measures
prepared in accordance with GAAP.
The Company does not allocate its provision for
income taxes to its business segments and as a result, presents it
in a separate column in the following tables.
|
Thirteen Weeks Ended February 24, 2024 |
|
|
|
Core Laundry |
|
|
Specialty |
|
|
First |
|
|
|
|
|
|
|
(In thousands, except percentages) |
|
Operations |
|
|
Garments |
|
|
Aid |
|
|
Other |
|
|
Total |
|
Revenue |
|
$ |
522,420 |
|
|
$ |
43,462 |
|
|
$ |
24,829 |
|
|
$ |
— |
|
|
$ |
590,711 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income |
|
$ |
18,821 |
|
|
$ |
9,901 |
|
|
$ |
(1,004 |
) |
|
$ |
(7,261 |
) |
|
$ |
20,457 |
|
Provision
for income taxes |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
7,261 |
|
|
|
7,261 |
|
Interest
income, net |
|
|
(350 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(350 |
) |
Depreciation
and amortization |
|
|
33,175 |
|
|
|
1,021 |
|
|
|
964 |
|
|
|
— |
|
|
|
35,160 |
|
EBITDA |
|
$ |
51,646 |
|
|
$ |
10,922 |
|
|
$ |
(40 |
) |
|
$ |
— |
|
|
$ |
62,528 |
|
EBITDA
Margin |
|
|
9.9 |
% |
|
|
25.1 |
% |
|
|
-0.2 |
% |
|
|
|
|
|
10.6 |
% |
|
Thirteen Weeks Ended February 25, 2023 |
|
|
|
Core Laundry |
|
|
Specialty |
|
|
First |
|
|
|
|
|
|
|
(In thousands, except percentages) |
|
Operations |
|
|
Garments |
|
|
Aid |
|
|
Other |
|
|
Total |
|
Revenue |
|
$ |
477,050 |
|
|
$ |
42,127 |
|
|
$ |
23,514 |
|
|
$ |
— |
|
|
$ |
542,691 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income |
|
$ |
16,559 |
|
|
$ |
8,045 |
|
|
$ |
(977 |
) |
|
$ |
(5,817 |
) |
|
$ |
17,810 |
|
Provision
for income taxes |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
5,817 |
|
|
|
5,817 |
|
Interest
income, net |
|
|
(3,031 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(3,031 |
) |
Depreciation
and amortization |
|
|
27,979 |
|
|
|
1,052 |
|
|
|
864 |
|
|
|
— |
|
|
|
29,895 |
|
EBITDA |
|
$ |
41,507 |
|
|
$ |
9,097 |
|
|
$ |
(113 |
) |
|
$ |
— |
|
|
$ |
50,491 |
|
EBITDA
Margin |
|
|
8.7 |
% |
|
|
21.6 |
% |
|
|
-0.5 |
% |
|
|
|
|
|
9.3 |
% |
|
Twenty-Six Weeks Ended February 24, 2024 |
|
|
|
Core Laundry |
|
|
Specialty |
|
|
First |
|
|
|
|
|
|
|
(In thousands, except percentages) |
|
Operations |
|
|
Garments |
|
|
Aid |
|
|
Other |
|
|
Total |
|
Revenue |
|
$ |
1,046,409 |
|
|
$ |
88,131 |
|
|
$ |
49,696 |
|
|
$ |
— |
|
|
$ |
1,184,236 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income |
|
$ |
63,030 |
|
|
$ |
22,018 |
|
|
$ |
(2,075 |
) |
|
$ |
(20,191 |
) |
|
$ |
62,782 |
|
Provision
for income taxes |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
20,191 |
|
|
|
20,191 |
|
Interest
income, net |
|
|
(3,184 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(3,184 |
) |
Depreciation
and amortization |
|
|
65,120 |
|
|
|
2,052 |
|
|
|
1,721 |
|
|
|
— |
|
|
|
68,893 |
|
EBITDA |
|
$ |
124,966 |
|
|
$ |
24,070 |
|
|
$ |
(354 |
) |
|
$ |
— |
|
|
$ |
148,682 |
|
EBITDA
Margin |
|
|
11.9 |
% |
|
|
27.3 |
% |
|
|
-0.7 |
% |
|
|
|
|
|
12.6 |
% |
|
Twenty-Six Weeks Ended February 25, 2023 |
|
|
|
Core Laundry |
|
|
Specialty |
|
|
First |
|
|
|
|
|
|
|
(In thousands, except percentages) |
|
Operations |
|
|
Garments |
|
|
Aid |
|
|
Other |
|
|
Total |
|
Revenue |
|
$ |
954,448 |
|
|
$ |
86,206 |
|
|
$ |
43,835 |
|
|
$ |
— |
|
|
$ |
1,084,489 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income |
|
$ |
52,368 |
|
|
$ |
18,228 |
|
|
$ |
(1,573 |
) |
|
$ |
(17,256 |
) |
|
$ |
51,767 |
|
Provision
for income taxes |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
17,256 |
|
|
|
17,256 |
|
Interest
income, net |
|
|
(5,800 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(5,800 |
) |
Depreciation
and amortization |
|
|
53,374 |
|
|
|
2,040 |
|
|
|
1,526 |
|
|
|
— |
|
|
|
56,940 |
|
EBITDA |
|
$ |
99,942 |
|
|
$ |
20,268 |
|
|
$ |
(47 |
) |
|
$ |
— |
|
|
$ |
120,163 |
|
EBITDA
Margin |
|
|
10.5 |
% |
|
|
23.5 |
% |
|
|
-0.1 |
% |
|
|
|
|
|
11.1 |
% |
Supplemental reconciliations of the Company’s
fiscal 2024 financial outlook for consolidated net income on a GAAP
basis to EBITDA and EBITDA margin, which are non-GAAP financial
measures, are presented in the following table. In addition,
supplemental reconciliations of the fiscal 2024 financial outlook
for segments’ net income on a GAAP basis to segments’ EBITDA and
EBITDA margin, which are non-GAAP financial measures, are also
presented in the following table.
Investors are encouraged to review the
reconciliations of the outlook for these non-GAAP measures to the
outlook for their most directly comparable GAAP financial measures,
which are provided below. The Company’s outlook contains
forward-looking statements and information. Actual results may
differ materially. See “Forward-Looking Statements Disclosure.”
|
|
Fifty-three Weeks Ended August 31,
2024(1) |
|
|
|
|
|
|
|
|
|
Specialty Garments, |
|
|
|
|
|
|
Core
Laundry |
|
|
First Aid,
and |
|
(In thousands, except percentages) |
|
Consolidated |
|
|
Operations |
|
|
Other |
|
Revenue |
|
$ |
2,420,000 |
|
|
$ |
2,138,000 |
|
|
$ |
282,000 |
|
|
|
|
|
|
|
|
|
|
|
Net
income |
|
$ |
132,300 |
|
|
$ |
141,400 |
|
|
$ |
(9,100 |
) |
Provision
for income taxes |
|
|
44,100 |
|
|
|
— |
|
|
|
44,100 |
|
Interest
income, net |
|
|
(4,000 |
) |
|
|
(4,000 |
) |
|
|
— |
|
Depreciation
and amortization |
|
|
140,700 |
|
|
|
133,000 |
|
|
|
7,700 |
|
EBITDA |
|
$ |
313,100 |
|
|
$ |
270,400 |
|
|
$ |
42,700 |
|
EBITDA
Margin |
|
|
12.9 |
% |
|
|
12.6 |
% |
|
|
15.1 |
% |
|
(1) Amounts
represent the midpoint of the Company’s guidance.
Investor Relations Contact Shane
O'Connor, Executive Vice President & CFO UniFirst
Corporation
978-658-8888 shane_oconnor@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