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 25, 1995 Number 1-8504
UNIFIRST CORPORATION
(Exact name of registrant as specified in its charter)
Massachusetts 04-2103460
(State of Incorporation) (IRS Employer ID Number)
68 Jonspin Road
Wilmington, Massachusetts 01887
(Address of principal executive offices)
Registrant's telephone number: (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 3, 1996 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 25, August 26, November 26,
1995 1995* 1994
- --------------------------------------------------------------------------------------------
Assets
Current assets:
Cash $ 2,991,000 $ 5,889,000 $ 4,854,000
Receivables 40,072,000 33,420,000 34,337,000
Inventories 16,592,000 16,484,000 16,636,000
Rental merchandise in service 33,364,000 32,731,000 33,176,000
Prepaid expenses 128,000 118,000 168,000
- --------------------------------------------------------------------------------------------
Total current assets 93,147,000 88,642,000 89,171,000
- --------------------------------------------------------------------------------------------
Property and equipment:
Land, buildings and leasehold improvements 113,567,000 111,148,000 104,134,000
Machinery and equipment 112,583,000 109,538,000 103,872,000
Motor vehicles 29,143,000 28,816,000 26,709,000
- --------------------------------------------------------------------------------------------
255,293,000 249,502,000 234,715,000
Less - accumulated depreciation 105,088,000 101,428,000 94,462,000
- --------------------------------------------------------------------------------------------
150,205,000 148,074,000 140,253,000
- --------------------------------------------------------------------------------------------
Other assets 36,878,000 35,975,000 36,126,000
- --------------------------------------------------------------------------------------------
$280,230,000 $272,691,000 $265,550,000
============================================================================================
Liabilities and Shareholders' Equity
Current liabilities:
Current maturities of long-term obligations $ 4,044,000 $ 4,015,000 $ 6,933,000
Notes payable 695,000 882,000 --
Accounts payable 13,358,000 12,992,000 11,912,000
Accrued liabilities 36,877,000 35,370,000 29,184,000
Accrued and deferred income taxes 7,217,000 3,882,000 8,280,000
- --------------------------------------------------------------------------------------------
Total current liabilities 62,191,000 57,141,000 56,309,000
- --------------------------------------------------------------------------------------------
Long-term obligations, net of current maturities 28,315,000 32,361,000 40,509,000
Deferred income taxes 14,819,000 14,593,000 14,203,000
- --------------------------------------------------------------------------------------------
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 789,000 789,000 788,000
Class B Common stock, $.10 par value; 20,000,000
shares authorized; issued and outstanding
12,623,964 shares 1,262,000 1,262,000 1,263,000
Capital surplus 7,078,000 7,078,000 7,042,000
Retained earnings 166,021,000 159,701,000 145,970,000
Cumulative translation adjustment (245,000) (234,000) (534,000)
- --------------------------------------------------------------------------------------------
Total shareholders' equity 174,905,000 168,596,000 154,529,000
- --------------------------------------------------------------------------------------------
$280,230,000 $272,691,000 $265,550,000
============================================================================================
* 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 25, November 26,
1995 1994
- -----------------------------------------------------------------------
Revenues $95,413,000 $86,212,000
- -----------------------------------------------------------------------
Costs and expenses:
Operating costs 57,577,000 52,270,000
Selling and administrative expenses 21,754,000 19,876,000
Depreciation and amortization 4,905,000 4,777,000
- -----------------------------------------------------------------------
84,236,000 76,923,000
- -----------------------------------------------------------------------
Income from operations 11,177,000 9,289,000
- -----------------------------------------------------------------------
Interest expense (income):
Interest expense 665,000 790,000
Interest income (66,000) (45,000)
- -----------------------------------------------------------------------
599,000 745,000
- -----------------------------------------------------------------------
Income before income taxes 10,578,000 8,544,000
Provision for income taxes 3,808,000 2,990,000
- -----------------------------------------------------------------------
Net income $ 6,770,000 $ 5,554,000
=======================================================================
Weighted average number of shares outstanding 20,510,608 20,510,608
=======================================================================
Net income per share $ 0.33 $ 0.27
=======================================================================
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 25, November 26,
1995 1994
- ----------------------------------------------------------------------------------
Cash flows from operating activities:
Net Income $ 6,770,000 $ 5,554,000
Adjustments:
Depreciation 4,110,000 4,043,000
Amortization of other assets 795,000 734,000
Receivables (6,664,000) (3,943,000)
Inventories (126,000) (1,112,000)
Rental merchandise in service (644,000) (1,825,000)
Prepaid expenses (11,000) (35,000)
Accounts payable 450,000 (604,000)
Accrued liabilities 1,513,000 1,799,000
Accrued and deferred income taxes 3,340,000 2,835,000
Deferred income taxes 229,000 517,000
- ----------------------------------------------------------------------------------
Net cash provided by operating activities 9,762,000 7,963,000
- ----------------------------------------------------------------------------------
Cash flows from investing activities:
Acquisition of businesses, net of cash acquired -- (5,676,000)
Capital expenditures (6,293,000) (5,856,000)
Other assets, net (1,719,000) (642,000)
- -----------------------------------------------------------------------------------
Net cash used in investing activites (8,012,000) (12,174,000)
- -----------------------------------------------------------------------------------
Cash flows from financing activities:
Increase in debt 1,657,000 5,891,000
Reduction of debt (5,855,000) (496,000)
Cash dividends paid or payable (450,000) (450,000)
- ----------------------------------------------------------------------------------
Net cash provided by (used in) financing activities (4,648,000) 4,945,000
- ----------------------------------------------------------------------------------
Net increase (decrease) in cash (2,898,000) 734,000
Cash at beginning of period 5,889,000 4,120,000
- ----------------------------------------------------------------------------------
Cash at end of period $ 2,991,000 $ 4,854,000
==================================================================================
Supplemental disclosure of cash flow information:
Interest paid $ 518,000 $ 451,000
Income taxes paid $ 435,000 $ 15,000
==================================================================================
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 25, 1995
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.
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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 25, 1995
RESULTS OF OPERATIONS
- ---------------------
Thirteen Weeks of Fiscal 1996 compared to Thirteen Weeks of Fiscal 1995
- -----------------------------------------------------------------------
Fiscal 1996 first quarter revenues increased $9,201,000 or 10.7% over the
fiscal 1995 first quarter. This increase can be attributed to acquisitions
(1.3%), price increases (1.0%) and growth from existing operations (8.4%).
Income from operations as a percentage of revenue increased to 11.7% in fiscal
1996 from 10.8% for the fiscal 1995 period. The main reason for the increase
is improved profit margins in our primary rental business. This resulted
primarily from restructuring in the sales and service departments. Also,
depreciation expense as a percent of revenues improved .4% compared to the
prior period.
Net interest expense (interest expense less interest income) was $599,000 in
fiscal 1996 as compared to $745,000 in fiscal 1995. The decrease is
attributable to lower debt levels in fiscal 1996.
The provision for income taxes for the current period was 36.0% as compared to
35.0% for the corresponding 1995 period. The increase in 1996 is due primarily
to higher state income taxes.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
During the thirteen weeks ended November 25, 1995 net cash provided by
operating activities, $9,762,000, and additional borrowings of $1,657,000 were
primarily used for capital expenditures, $6,293,000 and debt repayment,
$5,855,000.
Shareholders' equity as a percent of total capital has increased from 71.1% at
August 29, 1992 to 84.4% at November 25, 1995, indicating the improvement in
the overall strength of the Company's balance sheet.
The Company had $2,991,000 in cash and $33,550,000 available on its $50,000,000
line of credit as of November 25, 1995. The Company believes 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 and
productivity improvements, 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 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, President and
Chief Executive Officer
Date: January 9, 1996
/s/ JOHN B. BARTLETT
------------------------
John B. Bartlett
Senior Vice President
and Chief Financial Officer
5
1,000
U.S. DOLLARS
3-MOS
AUG-31-1996
AUG-27-1995
NOV-25-1995
1.
2,991
0
40,672
600
16,592
93,147
255,293
105,088
280,230
62,191
28,315
2,051
0
0
172,854
280,230
95,413
95,413
84,236
84,236
0
0
599
10,578
3,808
6,770
0
0
0
6,770
0.33
0
