WILMINGTON, Mass., June 28, 2017 (GLOBE NEWSWIRE) -- UniFirst Corporation (NYSE:UNF) today announced results for its third quarter of fiscal 2017 which ended May 27, 2017. Revenues for the quarter were $409.8 million, up 11.4% from $367.8 million in the year ago period.  Net income was $24.4 million ($1.19 per diluted share), down 19.2% from $30.1 million ($1.49 per diluted share) in the third quarter of fiscal 2016. The recent quarter's results include the effect of the Company’s acquisition of Arrow Uniform (Arrow) which was completed in September 2016.

The Company's third quarter results include $6.5 million of stock compensation expense related to the April 2016 restricted stock grant to its former Chief Executive Officer, Ronald Croatti. Of this expense, $5.4 million was a result of the accelerated vesting of certain shares upon his death. Excluding the effect of the accelerated vesting, adjusted net income was $27.7 million ($1.36 per diluted share) down 8.1% from a year ago. (See reconciliation table for details)

Steven S. Sintros, UniFirst Senior Vice President and Chief Financial Officer said, “The flags at UniFirst continue to be flown at half-mast as we mourn the passing of our long-time President and CEO, Ron Croatti. But our company’s unwavering customer focus and commitment to our existing business philosophies remain clear. Our top priorities continue to include providing superior value-based services to our existing customer base and continuing to add new customers.”

Core Laundry revenues in the quarter were $367.1 million, up 10.8% from those in the prior year’s third quarter.  Adjusting for the estimated effect of acquisitions as well as a weaker Canadian dollar compared to a year ago, Core Laundry revenues grew 4.8%.  Core Laundry operating income adjusted to exclude the effect of the accelerated vesting of restricted stock discussed above, was $38.9 million during the quarter, a 9.2% decrease from the prior year. This segment's adjusted operating margin was 10.6%, compared to 12.9% for the same period in fiscal 2016. The most significant drivers of this year-to-year margin decline were atypically high levels of claims for healthcare, workers' compensation and auto liability. In addition, the impact of the acquisition of Arrow Uniform, higher selling and administrative payroll costs and higher energy costs also contributed to the margin decline.  Higher selling and administrative payroll costs are partially being driven by increases in headcount to support the Company's delayed CRM systems project as well as other sales and technology initiatives. These items were partially offset by lower merchandise costs as a percentage of revenues. 

Revenues from our Specialty Garments segment, which consists of nuclear decontamination and cleanroom operations, increased 24.0% to $29.9 million in the quarter compared to the same period a year ago, and operating income was $4.2 million compared to $3.6 million in the prior year third quarter. The improvement in results during the quarter was due to increased outage and project-based activity in this segment’s US and Canadian nuclear operations. This segment’s results can vary significantly from period to period due to seasonality and the timing of reactor outages and projects.

UniFirst continues to maintain a strong balance sheet with no long-term debt and significant cash balances. Excluding the $119.9 million cash purchase price paid for the Arrow acquisition, cash and cash equivalents increased $68.8 million during the first nine months of the year.  As of May 27, 2017, our cash and cash equivalents were $312.7 million.

Outlook
Mr. Sintros said, “Based on the stronger than expected top line results to date, we now expect our full year revenues for fiscal 2017 will be between $1.573 billion and $1.580 billion.  We also expect full year diluted earnings per share will be between $4.85 and $5.00.  This earning guidance includes the impact of $5.4 million of additional stock compensation expense discussed above.”

Conference Call Information
UniFirst 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 Corporation
Headquartered 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 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,” 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 recent passing of our Chairman, Chief Executive Officer and President and the successful transition of his management responsibilities, 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 Subsidiaries
Consolidated Statements of Income
(Unaudited)         

UniFirst Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
(Unaudited)

UniFirst Corporation and Subsidiaries
Detail of Operating Results
(Unaudited)

Revenues

Income from Operations

UniFirst Corporation and Subsidiaries
Consolidated Statements of Cash Flows
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UniFirst Corporation and Subsidiaries
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 these consolidated financial results, management believes that certain non-GAAP operating results provide a more meaningful measure on which to compare the Company’s results of operations for the periods presented. The Company believes these non-GAAP results provide useful supplemental information regarding the Company’s performance to both management and investors by excluding certain non-recurring amounts that impact the comparability of the results. Supplemental reconciliations of consolidated operating income, net income and earnings per diluted share on a GAAP basis to adjusted operating income, net income and earnings per diluted share on a non-GAAP basis are presented in the following tables. In addition, Core Laundry Operations operating income and operating margin on a GAAP basis to adjusted operating income and adjusted operating margin on a non-GAAP basis are presented in the following tables.

These non-GAAP measures are not in accordance with, or an alternative for measures prepared in accordance with, GAAP and may be different from non-GAAP measures used by other companies. Investors should consider non-GAAP measures in addition to, and not as a substitute for, or superior to, financial performance measures prepared in accordance with GAAP.

CONTACT: Steven S. Sintros, Senior Vice President & CFO

UniFirst Corporation68 Jonspin RoadWilmington, MA 01887
Phone: 978- 658-8888
Fax: 978-988-0659
Email: ssintros@UniFirst.com

Unifirst Corp.