UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
January 6, 2010
UNIFIRST CORPORATION
(Exact Name of Registrant as Specified in Charter)
|
Massachusetts |
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1-8504 |
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04-2103460 |
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(State or Other Jurisdiction of Incorporation) |
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(Commission File Number) |
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(IRS Employer Identification No.) |
68 Jonspin Road, Wilmington, Massachusetts 01887
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (978) 658-8888
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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o |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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o |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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o |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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o |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
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Item 2.02. |
Results of Operations and Financial Condition. |
On January 6, 2010, UniFirst Corporation (the “Company”) issued a press release ("Press Release") announcing financial results for the fiscal first quarter ended November 28, 2009. A copy of the Press Release is attached as Exhibit 99 to this Current Report on Form 8-K and is incorporated herein by reference.
The information in this Item 2.02, including the exhibit attached hereto, shall not be deemed “filed” for any purpose, including for purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange Act") or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, regardless of any general incorporation language in such filing.
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Item 9.01. |
Financial Statements and Exhibits. |
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(d) Exhibits |
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EXHIBIT NO. |
DESCRIPTION |
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99 |
Press release of the Company dated January 6, 2010 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
UNIFIRST CORPORATION
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Date: January 6, 2010 |
By: |
/s/ Ronald D. Croatti |
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Name: |
Ronald D. Croatti |
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Title: |
Chairman of the Board, Chief Executive Officer and President |
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By: |
/s/ Steven S. Sintros |
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Name: |
Steven S. Sintros |
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Title: |
Vice President and Chief Financial Officer |
EXHIBIT INDEX
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EXHIBIT NO. |
DESCRIPTION |
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99 |
Press release of the Company dated January 6, 2010 |
Exhibit 99
UNIFIRST ANNOUNCES FINANCIAL RESULTS
FOR THE FIRST QUARTER OF FISCAL 2010
Wilmington, MA (January 6, 2010) -- UniFirst Corporation (NYSE: UNF) today announced results for the first quarter of fiscal 2010, which ended on November 28, 2009.
Revenues for the first quarter of fiscal 2010 were $256.2 million, a 2.4% decrease from the previous year’s $262.6 million. First quarter net income was $23.6 million or $1.21 per diluted common share, a 25.0% increase from the first quarter of fiscal 2009, when net income was $18.9 million or $0.97 per diluted common share.
“Although our revenues were down compared to the prior year as a result of the impact of millions of U.S. and Canadian job losses, we’re encouraged with the sequential revenue growth achieved in the first quarter,” said Ronald D. Croatti, UniFirst President and Chief Executive Officer. “All of our segments contributed to the growth, with a large portion of the top line improvement coming from the seasonal impact of our Specialty Garments business.”
The Company’s core laundry revenues in the first quarter of 2010 declined 4.9% compared to the same period in fiscal 2009. However, these revenues were up 3.7% when compared to the fourth quarter of fiscal 2009. Income from operations from the core laundry business was up 8.6%, as operating expenses were down $14.5 million compared to the first quarter of 2009.
The decline in our core laundry expenses was primarily the result of lower energy, payroll and merchandise costs. This expense comparison also benefitted from a $1.6 million accounting charge recorded in the first quarter of fiscal 2009 related to a decline in the interest rates used in valuing certain environmental obligations. Other general and administrative expenses, including travel costs, also were lower in fiscal 2010. These benefits were partially offset by higher healthcare costs as well as an increase in depreciation expense.
The Company’s Specialty Garments segment, which consists of nuclear decontamination and cleanroom operations, increased its revenues $5.1 million or 29.0% compared to the first quarter of fiscal 2009. This increase in revenues was the result of a larger number of power reactor outages occurring in the first quarter of fiscal 2010 compared to the same period a year ago. As a result of this revenue increase, operating income for this segment increased from $1.7 million in the first quarter of fiscal 2009 to $4.6 million in the first quarter of fiscal 2010.
The Company’s increase in net income for the first quarter of 2010 was also the result of lower interest expense as well as favorable foreign currency fluctuations during the quarter compared to a year ago.
UniFirst continues to generate strong cash flows and maintain a solid balance sheet. At the end of the first quarter of fiscal 2010, the Company had $79.7 million of cash and cash equivalents on hand. Cash produced by operating activities in the first quarter was $47.5 million compared to $26.0 million a year earlier. In addition, as of the end of the first quarter, total debt as a percentage of capital declined to 21.8% from 22.5% at the end of fiscal 2009.
“We’re very pleased with the results we have been able to achieve during these difficult economic times,” Mr. Croatti said. “Although we believe the worst may be behind us from a job loss perspective, we’re cautious with our near term outlook. Top line growth is going to be challenging as we expect that the weak job market will be very slow to recover. We also anticipate that overall expenses will increase from our first quarter and consequently reduce our margins over the remainder of fiscal 2010. On a positive note, we expect to continue producing strong cash flows which will allow us to take advantage of strategic opportunities should they arise.”
Conference Call Information
UniFirst will hold a conference call today at 10:00 a.m. (EST) to discuss its quarterly financial results, business highlights and outlook. A simultaneous live webcast of the call will be available over the Internet and can be accessed at www.unifirst.com.
About UniFirst Corporation
UniFirst Corporation is one of the largest providers of workplace uniforms, protective clothing, and facility services products in North America. The Company employs nearly 10,000 Team Partners who serve more than 200,000 customer locations in 45 U.S. states, Canada, and Europe from over 200 customer service, distribution, and manufacturing facilities. 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.
Forward Looking Statements
This public announcement may contain forward looking statements that reflect the Company’s current views with respect to future events and financial performance. Forward looking statements contained in this public announcement are subject to the safe harbor created by the Private Securities Litigation Reform Act of 1995 and are highly dependent upon a variety of important factors that could cause actual results to differ materially from those reflected in such forward looking statements. Such factors include, but are not limited to, uncertainties regarding the Company’s ability to consummate and successfully integrate acquired businesses, uncertainties regarding any existing or newly-discovered expenses and liabilities related to environmental compliance and remediation, the Company’s ability to compete successfully without any significant degradation in its margin rates, seasonal fluctuations in business levels, uncertainties regarding the price levels of natural gas, electricity, fuel and labor, the impact of negative economic conditions on the Company’s customers and such customers’ workforce, the continuing increase in domestic healthcare costs, demand and prices for the Company’s products and services, additional professional and internal costs necessary for compliance with recent and proposed future changes in Securities and Exchange Commission (including the Sarbanes-Oxley Act of 2002), New York Stock Exchange and accounting rules, strikes and unemployment levels, the Company’s efforts to evaluate and potentially reduce internal costs, economic and other developments associated with the war on terrorism and its impact on the economy, 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 29, 2009 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
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Thirteen weeks ended |
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November 28, |
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November 29, |
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(In thousands, except per share data) |
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2009 (2) |
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2008 (2) |
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|
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|
|
|
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Revenues |
|
$ |
256,179 |
|
|
$ |
262,554 |
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|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
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|
|
|
|
|
|
|
|
Cost of revenues (1) |
|
|
149,224 |
|
|
|
157,063 |
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|
Selling and administrative expenses (1) |
|
|
51,472 |
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|
|
57,487 |
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|
Depreciation and amortization |
|
|
15,056 |
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|
|
13,703 |
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Total operating expenses |
|
|
215,752 |
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|
|
228,253 |
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|
|
|
|
|
|
|
|
|
|
|
Income from operations |
|
|
40,427 |
|
|
|
34,301 |
|
|
|
|
|
|
|
|
|
|
|
|
Other expense (income): |
|
|
|
|
|
|
|
|
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Interest expense |
|
|
2,184 |
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|
|
2,591 |
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Interest income |
|
|
(524 |
) |
|
|
(504 |
) |
|
Foreign exchange (gain) loss |
|
|
(201 |
) |
|
|
934 |
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|
|
|
|
1,459 |
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|
|
3,021 |
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|
|
|
|
|
|
|
|
|
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Income before income taxes |
|
|
38,968 |
|
|
|
31,280 |
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Provision for income taxes |
|
|
15,392 |
|
|
|
12,418 |
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|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
23,576 |
|
|
$ |
18,862 |
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|
|
|
|
|
|
|
|
|
|
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Income per share – Basic: |
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|
|
|
|
|
|
|
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Common Stock |
|
$ |
1.28 |
|
|
$ |
1.03 |
|
|
Class B Common Stock |
|
$ |
1.03 |
|
|
$ |
0.82 |
|
|
|
|
|
|
|
|
|
|
|
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Income per share – Diluted: |
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|
|
|
|
|
|
|
|
Common Stock |
|
$ |
1.21 |
|
|
$ |
0.97 |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares outstanding – Basic: |
|
|
|
|
|
|
|
|
|
Common Stock |
|
|
14,440 |
|
|
|
14,390 |
|
|
Class B Common Stock |
|
|
4,932 |
|
|
|
4,935 |
|
|
|
|
|
19,372 |
|
|
|
19,325 |
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|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares outstanding – Diluted: |
|
|
|
|
|
|
|
|
|
Common Stock |
|
|
19,434 |
|
|
|
19,362 |
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|
|
|
|
|
|
|
|
|
|
|
Dividends per share: |
|
|
|
|
|
|
|
|
|
Common Stock |
|
$ |
0.0375 |
|
|
$ |
0.0375 |
|
|
Class B Common Stock |
|
$ |
0.0300 |
|
|
$ |
0.0300 |
|
(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) |
|
|
|
November 28, 2009 (1) |
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|
August 29, 2009 |
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Assets |
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|
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|
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Current assets: |
|
|
|
|
|
|
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|
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Cash and cash equivalents |
|
|
$ |
79,708 |
|
$ |
60,151 |
|
|
Receivables, net |
|
|
|
110,574 |
|
|
97,784 |
|
|
Inventories |
|
|
|
39,217 |
|
|
43,586 |
|
|
Rental merchandise in service |
|
|
|
75,820 |
|
|
73,063 |
|
|
Deferred income taxes |
|
|
|
25,017 |
|
|
24,901 |
|
|
Prepaid expenses |
|
|
|
4,989 |
|
|
2,889 |
|
|
|
|
|
|
|
|
|
|
|
|
Total current assets |
|
|
|
335,325 |
|
|
302,374 |
|
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment: |
|
|
|
|
|
|
|
|
|
Land, buildings and leasehold improvements |
|
|
|
327,586 |
|
|
325,034 |
|
|
Machinery and equipment |
|
|
|
358,799 |
|
|
352,511 |
|
|
Motor vehicles |
|
|
|
119,117 |
|
|
113,048 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
805,502 |
|
|
790,593 |
|
|
Less - accumulated depreciation |
|
|
|
418,113 |
|
|
407,823 |
|
|
|
|
|
|
387,389 |
|
|
382,770 |
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill |
|
|
|
265,978 |
|
|
261,171 |
|
|
Customer contracts and other intangible assets, net |
|
|
|
62,986 |
|
|
60,054 |
|
|
Other assets |
|
|
|
2,467 |
|
|
2,416 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
1,054,145 |
|
$ |
1,008,785 |
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and shareholders' equity |
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
|
Current maturities of long-term obligations |
|
|
$ |
6,522 |
|
$ |
6,447 |
|
|
Accounts payable |
|
|
|
46,566 |
|
|
41,180 |
|
|
Accrued liabilities |
|
|
|
106,131 |
|
|
104,003 |
|
|
Accrued income taxes |
|
|
|
14,429 |
|
|
2,437 |
|
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities |
|
|
|
173,648 |
|
|
154,067 |
|
|
|
|
|
|
|
|
|
|
|
|
Long-term obligations, net of current maturities |
|
|
|
175,465 |
|
|
175,568 |
|
|
Deferred income taxes |
|
|
|
52,249 |
|
|
52,115 |
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders' equity: |
|
|
|
|
|
|
|
|
|
Common Stock |
|
|
|
1,444 |
|
|
1,443 |
|
|
Class B Common Stock |
|
|
|
493 |
|
|
493 |
|
|
Capital surplus |
|
|
|
20,736 |
|
|
20,137 |
|
|
Retained earnings |
|
|
|
628,149 |
|
|
605,262 |
|
|
Accumulated other comprehensive income (loss) |
|
|
|
1,961 |
|
|
(300 |
) |
|
|
|
|
|
|
|
|
|
|
|
Total shareholders' equity |
|
|
|
652,783 |
|
|
627,035 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
1,054,145 |
|
$ |
1,008,785 |
|
(1) Unaudited
UniFirst Corporation and Subsidiaries
Detail of Operating Results
Revenues
|
|
|
Thirteen weeks ended |
|
|
|
|
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November 28, |
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November 29, |
|
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Dollar |
|
Percent |
|
|
(In thousands, except percentages) |
|
2009 (1) |
|
|
2008 (1) |
|
|
Change |
|
Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core Laundry Operations |
$ |
225,786 |
|
$ |
237,504 |
|
$ |
(11,718 |
) |
-4.9 |
% |
|
Specialty Garments |
|
22,877 |
|
|
17,741 |
|
|
5,136 |
|
29.0 |
|
|
First Aid |
|
7,516 |
|
|
7,309 |
|
|
207 |
|
2.8 |
|
|
Consolidated total |
$ |
256,179 |
|
$ |
262,554 |
|
$ |
(6,375 |
) |
-2.4 |
% |
Income from Operations
|
|
|
Thirteen weeks ended |
|
|
|
|
|
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
November 28, |
|
|
November 29, |
|
|
Dollar |
|
Percent |
|
|
(In thousands, except percentages) |
|
2009 (1) |
|
|
2008 (1) |
|
|
Change |
|
Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core Laundry Operations |
$ |
35,392 |
|
$ |
32,604 |
|
$ |
2,788 |
|
8.6 |
% |
|
Specialty Garments |
|
4,613 |
|
|
1,747 |
|
|
2,866 |
|
164.0 |
|
|
First Aid |
|
422 |
|
|
(50 |
) |
|
472 |
|
943.0 |
|
|
Consolidated total |
$ |
40,427 |
|
$ |
34,301 |
|
$ |
6,126 |
|
17.9 |
% |
(1) Unaudited
UniFirst Corporation and Subsidiaries
Consolidated Statements of Cash Flows
|
Thirteen weeks ended (In thousands) |
November 28, 2009 (1) |
November 29, 2008 (1) | ||||||
|
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
|
Net income |
|
|
$ |
23,576 |
|
$ |
18,862 |
|
|
Adjustments to reconcile net income to cash provided by operating activities: |
|
|
|
|
|
|
|
|
|
Depreciation |
|
|
|
12,839 |
|
|
11,513 |
|
|
Amortization of intangible assets |
|
|
|
2,217 |
|
|
2,190 |
|
|
Amortization of deferred financing costs |
|
|
|
67 |
|
|
67 |
|
|
Share-based compensation |
|
|
|
359 |
|
|
205 |
|
|
Accretion on asset retirement obligations |
|
|
|
142 |
|
|
127 |
|
|
Deferred income taxes |
|
|
|
(35 |
) |
|
(52 |
) |
|
Changes in assets and liabilities, net of acquisitions: |
|
|
|
|
|
|
|
|
|
Receivables |
|
|
|
(11,741 |
) |
|
(10,827 |
) |
|
Inventories |
|
|
|
4,510 |
|
|
(2,940 |
) |
|
Rental merchandise in service |
|
|
|
(1,534 |
) |
|
2,474 |
|
|
Prepaid expenses |
|
|
|
(2,088 |
) |
|
(3,568 |
) |
|
Accounts payable |
|
|
|
5,229 |
|
|
(1,199 |
) |
|
Accrued liabilities |
|
|
|
1,977 |
|
|
(187 |
) |
|
Accrued income taxes |
|
|
|
11,992 |
|
|
9,296 |
|
|
Net cash provided by operating activities |
|
|
|
47,510 |
|
|
25,961 |
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
|
Acquisition of businesses, net of cash acquired |
|
|
|
(12,206 |
) |
|
(1,519 |
) |
|
Capital expenditures |
|
|
|
(15,796 |
) |
|
(20,532 |
) |
|
Other |
|
|
|
(31 |
) |
|
117 |
|
|
Net cash used in investing activities |
|
|
|
(28,033 |
) |
|
(21,934 |
) |
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
|
Proceeds from long-term obligations |
|
|
|
— |
|
|
29,893 |
|
|
Payments on long-term obligations |
|
|
|
(103 |
) |
|
(32,584 |
) |
|
Proceeds from exercise of Common Stock options |
|
|
|
241 |
|
|
31 |
|
|
Payment of cash dividends |
|
|
|
(689 |
) |
|
(687 |
) |
|
Net cash used in financing activities |
|
|
|
(551 |
) |
|
(3,347 |
) |
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes |
|
|
|
631 |
|
|
(2,227 |
) |
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash and cash equivalents |
|
|
|
19,557 |
|
|
(1,547 |
) |
|
Cash and cash equivalents at beginning of period |
|
|
|
60,151 |
|
|
25,655 |
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of period |
|
|
$ |
79,708 |
|
$ |
24,108 |
|
(1) Unaudited