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)
March 30, 2006
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 March 30, 2006, UniFirst Corporation issued a press release (“Press Release”) announcing financial results for its fiscal 2006 second quarter and first half of fiscal 2006 which ended February 25, 2006. 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 March 30, 2006 |
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: March 30, 2006 | 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 March 30, 2006 |
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 THE SECOND QUARTER
AND FIRST HALF OF FISCAL 2006
Wilmington, MA (March 30, 2006) — UniFirst Corporation (NYSE: UNF) today announced its revenues and earnings for its fiscal 2006 second quarter and first half of fiscal 2006 which ended February 25, 2006.
Revenues were a record $202.2 million and $401.5 million for the second quarter and first half of fiscal 2006, respectively. These revenues represent an increase of 6.0% and 5.9%, respectively, from the $190.7 million and $379.1 million in the comparable 2005 periods. This revenue growth was achieved despite a decrease in revenues for the Company’s Specialty Garments (nuclear and clean room) segment of 24.0% and 22.4% for the quarter and six month periods, respectively. Revenue from the Company’s core laundry business grew 8.5% in both the quarter and six month periods as compared to fiscal 2005.
Second quarter net income was $6.3 million or $0.33 per diluted common share compared to last year’s second quarter net income of $10.1 million, or $0.52 per diluted common share. Net income for the first six months of fiscal 2006 was $17.7 million or $0.92 per diluted common share compared to $23.4 million, or $1.21 per diluted common share for the comparable period in 2005.
The primary reason for this decrease in net income was the Company’s Specialty Garments segment. This segment’s income from operations decreased approximately $2.8 million and $5.9 million in the comparable quarterly and six month periods. This decrease in profitability of Specialty Garments is directly attributable to a decrease in revenues between comparable periods.
Excluding the Company’s Specialty Garments and First Aid segments, income from operations from the Company’s core laundry business decreased 15.9% and 4.2% in the comparable quarterly and six month periods. The primary reasons for the decline in the core laundry business’ profitability were increased natural gas, fuel and merchandise costs. Selling costs also continue to be high as a percentage of revenues compared to fiscal 2005 due to a conscious effort to increase the size of the Company’s sales force. In addition, the core laundry operations profitability was impacted in the quarter by higher than expected employee related costs, including healthcare claims.
“We are encouraged by the growth within our core laundry operations and remain optimistic that our results for the remainder of the fiscal year will compare favorably to 2005”, said Ronald D. Croatti, UniFirst’s President and Chief Executive Officer. “We also continue to be positive about the longer term prospects of the Specialty Garments segment.”
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 approximately 190,000 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) |
Twenty-six weeks ended February 25, 2006 |
Twenty-six weeks ended February 26, 2005 |
Thirteen weeks ended February 25, 2006 |
Thirteen weeks ended February 26, 2005 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenues | $ | 401,493 | $ | 379,118 | $ | 202,168 | $ | 190,684 | ||||||
| Costs and expenses: | ||||||||||||||
| Operating costs (1) | 258,498 | 238,195 | 132,767 | 122,730 | ||||||||||
| Selling and administrative expenses (1) | 87,225 | 78,361 | 45,159 | 39,192 | ||||||||||
| Depreciation and amortization | 22,210 | 21,730 | 11,278 | 11,067 | ||||||||||
| 367,933 | 338,286 | 189,204 | 172,989 | |||||||||||
| Income from operations | 33,560 | 40,832 | 12,964 | 17,695 | ||||||||||
| Other expense (income): | ||||||||||||||
| Interest expense | 4,995 | 4,255 | 2,664 | 2,064 | ||||||||||
| Interest income | (731 | ) | (970 | ) | (475 | ) | (601 | ) | ||||||
| Interest rate swap income | -- | (223 | ) | -- | -- | |||||||||
| 4,264 | 3,062 | 2,189 | 1,463 | |||||||||||
| Income before income taxes | 29,296 | 37,770 | 10,775 | 16,232 | ||||||||||
| Provision for income taxes | 11,579 | 14,353 | 4,448 | 6,169 | ||||||||||
| Net income | $ | 17,717 | $ | 23,417 | $ | 6,327 | $ | 10,063 | ||||||
| Income per share - Basic: | ||||||||||||||
| Common Stock | $ | 1.02 | $ | 1.36 | $ | 0.36 | $ | 0.58 | ||||||
| Class B Common Stock | $ | 0.82 | $ | 1.09 | $ | 0.29 | $ | 0.47 | ||||||
Income per share - Diluted: | ||||||||||||||
| Common Stock | $ | 0.92 | $ | 1.21 | $ | 0.33 | $ | 0.52 | ||||||
Weighted average number of shares outstanding - Basic: | ||||||||||||||
| Common Stock | 9,683 | 9,369 | 9,747 | 9,456 | ||||||||||
| Class B Common Stock | 9,557 | 9,843 | 9,494 | 9,759 | ||||||||||
| 19,240 | 19,212 | 19,241 | 19,215 | |||||||||||
Weighted average number of shares outstanding - Diluted: | ||||||||||||||
| Common Stock | 19,321 | 19,296 | 19,316 | 19,315 | ||||||||||
Dividends per share: | ||||||||||||||
| Common Stock | $ | 0.0750 | $ | 0.0750 | $ | 0.0375 | $ | 0.0375 | ||||||
| Class B Common Stock | $ | 0.0600 | $ | 0.0600 | $ | 0.0300 | $ | 0.0300 | ||||||
(1) Exclusive of depreciation and amortization.
UNIFIRST CORPORATION AND
SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
| (In thousands) |
February 25, 2006 |
August 27, 2005 | ||||||
|---|---|---|---|---|---|---|---|---|
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 4,358 | $ | 4,704 | ||||
| Receivables, net | 86,415 | 78,497 | ||||||
| Inventories | 30,731 | 31,021 | ||||||
| Rental merchandise in service | 76,796 | 69,808 | ||||||
| Prepaid and deferred income taxes | 10,652 | 8,983 | ||||||
| Prepaid expenses | 2,732 | 1,492 | ||||||
| Total current assets | 211,684 | 194,505 | ||||||
| Property and equipment: | ||||||||
| Land, buildings and leasehold improvements | 265,182 | 260,515 | ||||||
| Machinery and equipment | 277,500 | 268,272 | ||||||
| Motor vehicles | 81,639 | 76,147 | ||||||
| 624,321 | 604,934 | |||||||
| Less - accumulated depreciation | 314,678 | 299,983 | ||||||
| 309,643 | 304,951 | |||||||
| Goodwill | 195,969 | 187,793 | ||||||
| Customer contracts and other intangible assets, net | 57,733 | 56,481 | ||||||
| Other assets | 4,732 | 4,575 | ||||||
| $ | 779,761 | $ | 748,305 | |||||
| Liabilities and Shareholders' Equity | ||||||||
| Current liabilities: | ||||||||
| Current maturities of long-term obligations | $ | 612 | $ | 1,084 | ||||
| Accounts payable | 36,673 | 36,720 | ||||||
| Accrued liabilities | 76,103 | 76,141 | ||||||
| Accrued income taxes | -- | 3,992 | ||||||
| Total current liabilities | 113,388 | 117,937 | ||||||
| Long-term obligations, net of current maturities | 192,690 | 175,587 | ||||||
| Deferred income taxes | 42,610 | 42,439 | ||||||
| Shareholders' equity: | ||||||||
| Common stock | 978 | 960 | ||||||
| Class B common stock | 946 | 964 | ||||||
| Capital surplus | 14,161 | 13,462 | ||||||
| Retained earnings | 411,326 | 394,910 | ||||||
| Accumulated other comprehensive income | 3,662 | 2,046 | ||||||
| Total shareholders' equity | 431,073 | 412,342 | ||||||
| $ | 779,761 | $ | 748,305 | |||||