1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended Commission File
November 26, 1994 Number 1-8504
UNIFIRST CORPORATION
(Exact name of registrant as specified in its charter)
Massachusetts 04-2103460
(State of Incorporation) (IRS Employer Identification Number)
68 Jonspin Road
Wilmington, Massachusetts 01887
(Address of principal executive offices)
Registrant's telephone number, including area code: (508) 658-8888
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceeding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes [X] No [ ]
The number of outstanding shares of the registrant's Common Stock and Class B
Common Stock as of January 4, 1995 were 7,886,644 and 12,623,964 respectively.
2
PART 1 - FINANCIAL INFORMATION
FORM 10-Q
UNIFIRST CORPORATION AND SUBSIDIARIES
CONDENSED BALANCE SHEETS
(unaudited)
November 26, August 27, November 27
1994 1994* 1993
- ------------------------------------------------------------------------------------------------
Assets
Current assets:
Cash $ 4,854,000 $ 4,120,000 $ 1,780,000
Receivables 34,337,000 30,044,000 28,674,000
Inventories 16,636,000 15,409,000 11,277,000
Rental merchandise in service 33,176,000 30,577,000 28,773,000
Prepaid expenses 168,000 109,000 109,000
- ------------------------------------------------------------------------------------------------
Total current assets 89,171,000 80,259,000 70,613,000
- ------------------------------------------------------------------------------------------------
Property and equipment:
Land, buildings and leasehold improvements 104,134,000 101,374,000 96,659,000
Machinery and equipment 103,872,000 99,955,000 89,262,000
Motor vehicles 26,709,000 26,237,000 22,332,000
- ------------------------------------------------------------------------------------------------
234,715,000 227,566,000 208,253,000
Less - accumulated depreciation 94,462,000 89,554,000 78,289,000
- ------------------------------------------------------------------------------------------------
140,253,000 138,012,000 129,964,000
- ------------------------------------------------------------------------------------------------
Other assets 36,126,000 31,889,000 29,175,000
- ------------------------------------------------------------------------------------------------
$265,550,000 $250,160,000 $229,752,000
================================================================================================
Liabilities and Shareholders' Equity
Current liabilities:
Current maturities of long-term obligations $ 6,933,000 $ 6,874,000 $ 6,570,000
Notes payable -- 448,000 138,000
Accounts payable 11,912,000 12,246,000 12,270,000
Accrued liabilities 29,184,000 27,265,000 26,646,000
Accrued and deferred income taxes 8,280,000 5,469,000 6,120,000
- ------------------------------------------------------------------------------------------------
Total current liabilities 56,309,000 52,302,000 51,744,000
- ------------------------------------------------------------------------------------------------
Long-term obligations, net of current maturities 40,509,000 34,728,000 26,814,000
Deferred income taxes 14,203,000 13,658,000 13,256,000
- ------------------------------------------------------------------------------------------------
Shareholders' equity:
Preferred stock, $1.00 par value; 2,000,000
shares authorized; none issued -- -- --
Common stock, $.10 par value; 30,000,000
shares authorized; issued and outstanding
7,886,644 shares 788,000 788,000 787,000
Class B Common stock, $.10 par value; 20,000,000
shares authorized; issued and outstanding
12,623,964 shares 1,263,000 1,263,000 1,263,000
Capital surplus 7,042,000 7,042,000 7,008,000
Retained earnings 145,970,000 140,866,000 129,086,000
Cumulative translation adjustment (534,000) (487,000) (206,000)
- ------------------------------------------------------------------------------------------------
Total shareholders' equity 154,529,000 149,472,000 137,938,000
- ------------------------------------------------------------------------------------------------
$265,550,000 $250,160,000 $229,752,000
================================================================================================
* Condensed from audited financial statements
The accompanying notes are an integral part of these condensed financial
statements.
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FORM 10-Q
UNIFIRST CORPORATION AND SUBSIDIARIES
CONDENSED STATEMENTS OF INCOME
(unaudited)
Thirteen Thirteen
weeks ended weeks ended
November 26, November 27,
1994 1993
- ----------------------------------------------------------------------------
Revenues $86,212,000 $78,107,000
Costs and expenses:
Operating costs 52,270,000 46,072,000
Selling and administrative expenses 19,876,000 18,096,000
Depreciation and amortization 4,777,000 4,259,000
- ----------------------------------------------------------------------------
76,923,000 68,427,000
- ----------------------------------------------------------------------------
Income from operations 9,289,000 9,680,000
- ----------------------------------------------------------------------------
Interest expense (income):
Interest expense 790,000 634,000
Interest income (45,000) (68,000)
- ----------------------------------------------------------------------------
745,000 566,000
- ----------------------------------------------------------------------------
Income before income taxes 8,544,000 9,114,000
Provision for income taxes 2,990,000 3,372,000
- ----------------------------------------------------------------------------
Net income $ 5,554,000 $ 5,742,000
============================================================================
Weighted average number of shares outstanding 20,510,608 20,508,642
============================================================================
Net income per share $0.27 $0.28
============================================================================
The accompanying notes are an integral part of these condensed financial
statements.
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FORM 10-Q
UNIFIRST CORPORATION AND SUBSIDIARIES
CONDENSED STATEMENTS OF CASH FLOWS
(unaudited)
Thirteen Thirteen
weeks ended weeks ended
November 26, November 27,
1994 1993
- -----------------------------------------------------------------------------------------
Cash flows from operating activities:
Net Income $ 5,554,000 $ 5,742,000
Adjustments:
Depreciation 4,043,000 3,592,000
Amortization of other assets 734,000 667,000
Receivables (4,300,000) (3,836,000)
Inventories (1,203,000) 308,000
Rental merchandise in service (2,605,000) (2,219,000)
Prepaid expenses (58,000) 6,000
Accounts payable (294,000) 1,337,000
Accrued liabilities 1,922,000 1,428,000
Accrued and deferred income taxes 2,813,000 724,000
Deferred income taxes 546,000 573,000
- -----------------------------------------------------------------------------------------
Net cash provided by operating activities 7,152,000 8,322,000
- -----------------------------------------------------------------------------------------
Cash flows from investing activities:
Acquisition of businesses, net of working capital acquired (4,029,000) (4,000,000)
Capital expenditures (5,960,000) (6,822,000)
Other assets, net (1,374,000) (43,000)
- -----------------------------------------------------------------------------------------
Net cash used in investing activites (11,363,000) (10,865,000)
- -----------------------------------------------------------------------------------------
Cash flows from financing activities:
Increase in debt 5,395,000 1,116,000
Cash dividends paid or payable (450,000) (449,000)
- -----------------------------------------------------------------------------------------
Net cash provided by financing activities 4,945,000 667,000
- -----------------------------------------------------------------------------------------
Net increase (decrease) in cash 734,000 (1,876,000)
Cash at beginning of period 4,120,000 3,656,000
- -----------------------------------------------------------------------------------------
Cash at end of period $ 4,854,000 $ 1,780,000
=========================================================================================
Supplemental disclosure of cash flow information:
Interest paid $ 451,000 $ 160,000
Income taxes paid $ 15,000 $ 2,080,000
=========================================================================================
The accompanying notes are an integral part of these condensed financial
statements.
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FORM 10-Q
UNIFIRST CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE THIRTEEN WEEKS ENDED NOVEMBER 26, 1994
1. These condensed financial statements have been prepared by the Company
without audit, pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted pursuant to
such rules and regulations; however, the Company believes that the
information furnished reflects all adjustments which are, in the opinion
of management, necessary to a fair statement of results for the interim
period. It is suggested that these condensed financial statements be read
in conjunction with the financial statements and the notes, thereto,
included in the Company's latest annual report.
2. From time to time, the Company is subject to legal proceedings and claims
arising from the conduct of their business operations, including personal
injury, customer contract, employment claims and environmental matters.
In the opinion of management, such proceedings and claims are not likely
to result in losses which would have a material adverse effect upon the
Company.
3. During 1993 the Company's shareholders voted to amend its Articles of
Organization to increase the number of authorized shares of Common Stock
from 20,000,000 to 30,000,000, and to authorize a new Class B Common
Stock with 20,000,000 authorized shares. The Company offered to exchange,
on a share-for-share basis, shares of Class B Common Stock for shares of
Common Stock.
4. On November 18, 1993 the Company's Board of Directors declared a
two-for-one stock split, to be effected in the form of a stock dividend,
on the Company's Common Stock and Class B Common Stock. The stock
dividend was paid on January 19, 1994 to shareholders of record on January
5, 1994. All references to average number of shares outstanding and per
share data in these financial statements reflect the effect of the
two-for-one split.
5. On November 1, 1994 the Company acquired all of the outstanding stock of
Tennessee Uniform & Towel Service, Inc., a garment rental business located
in Nashville, TN.
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FORM 10-Q
UNIFIRST CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
FOR THE THIRTEEN WEEKS ENDED NOVEMBER 26, 1994
RESULTS OF OPERATIONS
- ---------------------
Thirteen Weeks of Fiscal 1995 compared to Thirteen Weeks of Fiscal 1994
- -----------------------------------------------------------------------
Fiscal 1995 first quarter revenues increased $8,105,000 or 10.4% over the
fiscal 1994 first quarter. This increase can be attributed to internal growth
and modest price increases (8.1%) and acquisitions (2.3%). Income from
operations as a percentage of revenue decreased to 10.8% in fiscal 1995 from
12.4% for the fiscal 1994 period. The primary reasons for the decrease are
softness in our specialized nuclear business and the continued impact of higher
garment costs.
Net interest expense (interest expense less interest income) was $745,000 in
fiscal 1995 as compared to $566,000 in fiscal 1994. The increase is
attributable to increased debt levels and higher interest rates in fiscal 1995.
The provision for income taxes for the current period was 35.0% as compared to
37.0% for the corresponding 1994 period. The decrease in 1995 is due primarily
to the favorable impact of a corporate-owned life insurance program and
proportionally more tax-exempt income from Puerto Rico.
CAPITAL RESOURCES AND LIQUIDITY
- -------------------------------
The Company believes that its ability to generate cash from operations will
adequately cover its foreseeable capital requirements.
EFFECTS OF INFLATION
- --------------------
Inflation has had the effect of increasing the reported amounts of the
Company's revenues and costs. The Company uses the last-in, first-out (LIFO)
method to value a significant portion of inventories. This method tends to
reduce the amount of income due to inflation included in the Company's results
of operations. The Company believes that, through increases in its prices, it
has been able to recover increases in costs and expenses attributable to
inflation.
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PART II - OTHER INFORMATION
FORM 10-Q
UNIFIRST CORPORATION AND SUBSIDIARIES
Item 1. Legal Proceedings
- --------------------------
Reference is made to Note 2 of notes to condensed financial statements and to
the discussion under the heading Environmental Matters in the Company's Annual
Report on Form 10-K for the fiscal year ended August 27, 1994.
Item 6. Exhibits and Reports on Form 8-K
- -----------------------------------------
(a) Exhibits:
(27) Financial Data Schedule
(b) Reports on Form 8-K: None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf of the
undersigned thereunto duly authorized.
UNIFIRST CORPORATION
/s/ Ronald D. Croatti
----------------------------
Ronald D. Croatti
Vice Chairman and
Chief Executive Officer
Date: January 10, 1995
/s/ John B. Bartlett
----------------------------
John B. Bartlett
Senior Vice President
and Chief Financial Officer
5
1,000
U.S. DOLLARS
QTR-1
AUG-26-1995
AUG-28-1994
NOV-26-1994
1.
4,854
0
34,837
500
16,636
89,171
234,715
94,462
265,550
56,309
40,509
2,051
0
0
152,478
265,550
86,212
86,212
76,923
76,923
0
0
745
8,544
2,990
5,554
0
0
0
5,554
.27
0
