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)
October 31, 2005
UNIFIRST CORPORATION
(Exact
Name of Registrant as Specified in Charter)
| Massachusetts |
1-8504 |
04-2103460 |
| (State or Other Jurisdiction of Incorporation) |
(Commission File Number) | (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:
 |
Written communications
pursuant to Rule 425 under the Securities Act |
| |
Soliciting material
pursuant to Rule 14a-12 under the Exchange Act |
| |
Pre-commencement communications
pursuant to Rule 14d-2(b) under the Exchange Act |
| |
Pre-commencement communications
pursuant to Rule 13e-4(c) under the Exchange Act |
Item 2.02 Results of Operations and Financial Condition.
On October 31, 2005, UniFirst Corporation issued a press release (“Press Release”) announcing financial results for the fiscal fourth quarter and year ended August 27, 2005. A copy of the Press Release is attached as Exhibit 99 to this Current Report and is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(c) Exhibits
| EXHIBIT NO. |
DESCRIPTION |
|---|---|
| 99 | Press release dated October 31, 2005 |
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
| Date: October 31, 2005 | By: /s/ Ronald D. Croatti Name: Ronald D. Croatti Title: Chairman of the Board, Chief Executive Officer and President |
| By: /s/ John B. Bartlett Name: John B. Bartlett Title: Senior Vice President and Chief Financial Officer |
EXHIBIT INDEX
| EXHIBIT NO. |
DESCRIPTION |
|---|---|
| 99 | Press release dated October 31, 2005 |
Exhibit 99
| UniFirst Corporation | News Release |
|---|---|
| 68 Jonspin Road Wilmington, MA 01887-1086 Telephone 978-658-8888 Ext 520 Facsimile 978-988-0659 |
contact: John B. Bartlett Senior Vice President jbartlett@unifirst.com |
UNIFIRST ANNOUNCES
FINANCIAL RESULTS
FOR FISCAL 2005 FOURTH
QUARTER AND FULL YEAR
Wilmington, MA (October 31, 2005) — UniFirst Corporation (NYSE: UNF) today announced its revenues and earnings for its fiscal 2005 fourth quarter and full year.
For fiscal 2005, net income was $43.3 million ($2.24 per diluted common share), a 29.1% increase from last year’s $33.6 million ($1.74 per diluted common share). Revenues for fiscal 2005 were $763.8 million, a 6.2% increase from $719.4 million for fiscal 2004.
Fourth quarter net income was $8.1 million ($0.42 per diluted common share), an 8.1% percent increase from last year’s $7.5 million ($0.39 per diluted common share). Revenues for the fourth quarter of fiscal 2005 were $188.8 million, a 6.0% percent increase from $178.1 million in the same period a year ago.
The primary reason for the significant increase in net income for fiscal 2005 compared to fiscal 2004 was a decrease in operating costs as a percentage of revenues. As a percentage of revenues, operating costs for fiscal 2005 decreased 1.2 percentage points from 64.1% for fiscal 2004 to 62.9% for fiscal 2005. This decrease was due to lower merchandise amortization for the locations acquired as part of the Textilease acquisition as well as from cost savings realized from the Company’s manufacturing operations in Mexico and lower industrial laundry production payroll costs as a percentage of revenues. These benefits were somewhat offset by higher energy costs associated with operating industrial laundries as well as in utilizing our fleet of delivery vehicles and an increase in selling payroll costs as the Company has increased its sales force in fiscal 2005.
During fiscal 2005, the Company also benefited from lower depreciation and intangible asset amortization expense due to certain fixed assets and certain intangible assets becoming fully depreciated and amortized in fiscal 2004. This decrease in depreciation is also due to a $600 thousand pre-tax charge to depreciation taken in fiscal 2004 related to the Company’s decision to close its Richmond facility. In addition, decreased interest expense, on a net basis, was a benefit for the quarter and full year in fiscal 2005 as compared to fiscal 2004 primarily due to a reduction in the average level of debt outstanding.
In the full year and fourth quarter of fiscal 2005, the Company benefited from a $500 thousand credit to income taxes recorded in the fourth quarter of fiscal 2005 related to the reduction of tax-related reserves no longer required. Excluding the favorable impact of this benefit, the Company’s fourth quarter net income was $7.6 million compared to $7.5 million for the fourth quarter of fiscal 2004. The primarily reason that the profit growth in the fourth quarter of fiscal 2005 was not comparable with the full year was the higher losses incurred by the Company’s nuclear business in the fourth quarter of 2005 as compared to the loss incurred in the fourth quarter of 2004. In addition, the Company experienced higher merchandise amortization as well as increased depreciation and intangible asset amortization as a percentage of revenue in the fourth quarter of fiscal 2005 compared to the first nine months of fiscal 2005.
The Company will hold a conference call today at 4:00 PM (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.
UniFirst is one of the largest providers of workplace uniforms, protective clothing and facility services products in North America. The Company employs 9,200 team partners who serve more than 195,000 customer locations in 46 states, Canada and Europe from 179 manufacturing, distribution and customer service facilities.
The Private Securities Litigation Reform Act of 1995 provides a safe harbor for certain 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. These forward-looking statements are subject to certain risks and uncertainties. The words “anticipate” and “should,” and other expressions that indicate future events and trends identify forward-looking statements. Actual future results may differ materially from those anticipated depending on a variety of factors, including, but not limited to, performance of acquisitions; economic and business changes; fluctuations in the cost of materials, fuel and labor; the speed of business recovery from recent hurricanes in the southeast; economic and other developments associated with the on-going war on terrorism; strikes and unemployment levels; demand and price for the Company’s products and services; improvement in under performing rental operations; and the outcome of pending and future litigation and environmental matters.
[Tables follow]
UNIFIRST CORPORATION AND
SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF INCOME
| (In thousands, except per share data) |
Fifty-two weeks ended August 27, 2005 |
Fifty-two weeks ended August 28, 2004 |
Thirteen weeks ended August 27, 2005 |
Thirteen weeks ended August 28, 2004 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenues | $ | 763,842 | $ | 719,356 | $ | 188,767 | $ | 178,066 | ||||||
| Costs and expenses: | ||||||||||||||
| Operating costs (1) | 480,714 | 461,112 | 120,774 | 114,088 | ||||||||||
| Selling and administrative expenses (1) | 163,189 | 149,351 | 42,661 | 38,740 | ||||||||||
| Depreciation and amortization | 43,927 | 44,889 | 11,055 | 10,500 | ||||||||||
| 687,830 | 655,352 | 174,490 | 163,328 | |||||||||||
| Income from operations | 76,012 | 64,004 | 14,277 | 14,738 | ||||||||||
| Other expense (income): | ||||||||||||||
| Interest expense | 8,748 | 12,522 | 2,261 | 3,387 | ||||||||||
| Interest income | (1,684 | ) | (1,135 | ) | (348 | ) | (350 | ) | ||||||
| Interest rate swap income | (223 | ) | (1,981 | ) | -- | (527 | ) | |||||||
| Other expense | 6,841 | 9,406 | 1,913 | 2,510 | ||||||||||
| Income before income taxes | 69,171 | 54,598 | 12,364 | 12,228 | ||||||||||
| Provision for income taxes | 25,823 | 21,020 | 4,235 | 4,708 | ||||||||||
| Net income | $ | 43,348 | $ | 33,578 | $ | 8,129 | $ | 7,520 | ||||||
(1) - Exclusive of depreciation and amortization | ||||||||||||||
| Weighted average number of shares outstanding: | ||||||||||||||
| Basic - Common stock | 9,428 | 9,103 | 9,509 | 9,253 | ||||||||||
| Basic - Class B common stock | 9,791 | 10,091 | 9,723 | 9,950 | ||||||||||
| Dilutive effect of common stock options | 92 | 64 | 113 | 74 | ||||||||||
| Diluted - Common stock | 19,311 | 19,258 | 19,345 | 19,277 | ||||||||||
| Net income per share: | ||||||||||||||
| Basic - Common stock | $ | 2.51 | $ | 1.95 | $ | 0.47 | $ | 0.43 | ||||||
| Basic - Class B common stock | 2.01 | 1.56 | 0.38 | 0.35 | ||||||||||
| Diluted - Common stock | 2.24 | 1.74 | 0.42 | 0.39 | ||||||||||
| Dividends per share: | ||||||||||||||
| Common stock | $ | 0.1500 | $ | 0.1500 | $ | 0.0375 | $ | 0.0375 | ||||||
| Class B common stock | 0.1200 | 0.1200 | 0.0300 | 0.0300 | ||||||||||
UNIFIRST CORPORATION AND
SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
| (In thousands) |
August 27, 2005 |
August 28, 2004 | ||||||
|---|---|---|---|---|---|---|---|---|
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 4,704 | $ | 4,436 | ||||
| Receivables, net | 78,497 | 69,471 | ||||||
| Inventories | 31,021 | 32,604 | ||||||
| Rental merchandise in service | 69,808 | 60,544 | ||||||
| Deferred tax assets | 8,983 | 2,753 | ||||||
| Prepaid expenses | 1,492 | 1,857 | ||||||
| Total current assets | 194,505 | 171,665 | ||||||
| Property and equipment: | ||||||||
| Land, buildings and leasehold improvements | 260,515 | 240,018 | ||||||
| Machinery and equipment | 268,272 | 258,736 | ||||||
| Motor vehicles | 76,147 | 70,048 | ||||||
| 604,934 | 568,802 | |||||||
| Less - accumulated depreciation | 299,983 | 280,012 | ||||||
| 304,951 | 288,790 | |||||||
| Goodwill | 187,793 | 180,685 | ||||||
| Customer contracts and other intangible assets, net | 56,481 | 57,873 | ||||||
| Other assets | 4,575 | 3,353 | ||||||
| $ | 748,305 | $ | 702,366 | |||||
| Liabilities and Shareholders' Equity | ||||||||
| Current liabilities: | ||||||||
| Current maturities of long-term obligations | $ | 1,084 | $ | 986 | ||||
| Accounts payable | 36,720 | 33,754 | ||||||
| Accrued liabilities | 76,141 | 72,824 | ||||||
| Accrued income taxes | 3,992 | 6,197 | ||||||
| Total current liabilities | 117,937 | 113,761 | ||||||
| Long-term obligations, net of current maturities | 175,587 | 177,855 | ||||||
| Deferred income taxes | 42,439 | 42,043 | ||||||
| Shareholders' equity: | ||||||||
| Common stock | 960 | 928 | ||||||
| Class B common stock | 964 | 993 | ||||||
| Capital surplus | 13,462 | 13,138 | ||||||
| Retained earnings | 394,910 | 354,154 | ||||||
| Accumulated other comprehensive income (loss) | 2,046 | (506 | ) | |||||
| Total shareholders' equity | 412,342 | 368,707 | ||||||
| $ | 748,305 | $ | 702,366 | |||||