UniFirst Announces Financial Results for the First Quarter of Fiscal 2019 and Board of Directors Authorizes $100.0 Million Share Repurchase Program
The Company's operating income and net income in the quarter benefited from a
Core Laundry revenues in the quarter were
Revenues from our Specialty Garments segment, which consists of nuclear decontamination and cleanroom operations, were
Share Repurchase Program
On
CRM-Related Settlement Agreement
During fiscal 2017,
Outlook
Mr. Sintros continued, “At this time, we continue to expect our fiscal 2019 revenues to be between
Conference Call Information
About
Headquartered in
Forward Looking Statements
This 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,” “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 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 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
Consolidated Statements of Income
(Unaudited)
(In thousands, except per share data) | Thirteen weeks ended November 24, 2018 |
Thirteen weeks ended 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.
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands) | November 24, 2018 |
August 25, 2018 |
||||||
Assets | ||||||||
Current assets: | ||||||||
Cash, cash equivalents and short-term investments | $ | 276,536 | $ | 270,512 | ||||
Receivables, net | 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 | 558,442 | 559,576 | ||||||
Goodwill | 397,296 | 397,422 | ||||||
Customer contracts and other intangible assets, net | 67,536 | 70,904 | ||||||
Deferred income taxes | 423 | 425 | ||||||
Other assets | 74,048 | 30,259 | ||||||
$ | 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 | ||||||
Long-term liabilities: | ||||||||
Accrued liabilities | 104,124 | 105,888 | ||||||
Accrued and deferred income taxes | 86,837 | 74,070 | ||||||
Total long-term liabilities | 190,961 | 179,958 | ||||||
Shareholders’ equity: | ||||||||
Common Stock | 1,543 | 1,543 | ||||||
Class B Common Stock | 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 | ||||||
$ | 1,907,158 | $ | 1,843,386 |
Detail of Operating Results
(Unaudited)
Revenues
(In thousands, except percentages) | Thirteen weeks ended November 24, 2018 |
Thirteen weeks ended 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 | % |
Operating Income
(In thousands, except percentages) | Thirteen weeks ended November 24, 2018 |
Thirteen weeks ended November 25, 2017 |
Dollar Change |
Percent Change |
|||||||||||
Core Laundry Operations | $ | 44,782 | $ | 46,358 | $ | (1,576 | ) | (3.4 | )% | ||||||
Specialty Garments | 4,470 | 4,477 | (7 | ) | (0.2 | )% | |||||||||
First Aid | 1,174 | 1,076 | 98 | 9.1 | % | ||||||||||
Consolidated total | $ | 50,426 | $ | 51,911 | $ | (1,485 | ) | (2.9 | )% |
Consolidated Statements of Cash Flows
(Unaudited)
(In thousands) |
Thirteen weeks ended November 24, 2018 |
Thirteen weeks ended 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 |
CONTACT:
Shane O’Connor
Chief Financial Officer
978-658-8888
Shane_OConnor@unifirst.com
Source: Unifirst Corp.