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 28, 2007
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:
|
o |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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|
o |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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|
o |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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|
o |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
|
Item 2.02. |
Results of Operations and Financial Condition. |
On March 28, 2007, UniFirst Corporation issued a press release ("Press Release") announcing financial results for the second quarter and first half of fiscal 2007, which ended February 24, 2007. A copy of the Press Release is attached as Exhibit 99 to this Current Report on Form 8-K and is incorporated herein by reference.
The information in this Item 2.02, including the exhibit attached hereto, shall not be deemed “filed” for any purpose, including for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, (the "Exchange Act") or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, regardless of any general incorporation language in such filing.
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Item 9.01. |
Financial Statements and Exhibits. |
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|
(d) Exhibits |
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|
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|
EXHIBIT NO. |
DESCRIPTION |
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99 |
Press release of the Company dated March 28, 2007 |
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 28, 2007 |
By: |
/s/ Ronald D. Croatti |
|
|
Name: |
Ronald D. Croatti |
|
|
Title: |
Chairman of the Board, Chief Executive Officer and President |
|
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By: |
/s/ John B. Bartlett |
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Name: |
John B. Bartlett |
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Title: |
Senior Vice President and Chief Financial Officer |
EXHIBIT INDEX
|
EXHIBIT NO. |
DESCRIPTION |
|
|
|
|
99 |
Press release of the Company dated March 28, 2007 |
Exhibit 99
|
UniFirst Corporation |
News Release |
|
68 Jonspin Road |
|
|
|
Wilmington, MA 01887-1086 |
contact: |
John B. Bartlett |
|
Telephone 978-658-8888 Ext 520 |
|
Senior Vice President |
|
Facsimile 978-988-0659 |
|
jbartlett@unifirst.com |
UNIFIRST ANNOUNCES FINANCIAL RESULTS
FOR THE SECOND QUARTER AND FIRST SIX MONTHS OF FISCAL 2007
Wilmington, MA (March 28, 2007) -- UniFirst Corporation (NYSE: UNF) today announced its revenues and earnings for its second quarter and first half of fiscal 2007 which ended February 24, 2007.
Revenues were a record $222.4 million and $444.7 million for the second quarter and first half of fiscal 2007, respectively. These revenues represent an increase of 10.0% and 10.8%, respectively, from the $202.2 million and $401.5 million in the comparable 2006 periods.
Second quarter net income was $7.0 million, or $0.36 per diluted common share, compared to last year’s second quarter net income of $6.3 million, or $0.33 per diluted common share. Net income for the first six months of fiscal 2007 was $20.7 million, or $1.07 per diluted common share, compared to $17.7 million, or $0.92 per diluted common share for the comparable period in 2006. The Company’s second quarter and six month earnings were affected by severance expense related to the departure of the Company’s Senior Vice President of Sales and Marketing as well as by adjustments made to the Company’s environmental reserves. These combined to decrease the Company’s income from operations and net income by approximately $2.3 million and $1.4 million, respectively. Without these adjustments, the Company’s diluted earnings per share for the second quarter and the first six months of fiscal 2007 would have been $0.43 and $1.14, respectively.
Excluding the items discussed above, income from operations from the Company’s core laundry business, which excludes the Company’s Specialty Garments and First Aid segments, increased 20.9% and 15.8% in the second quarter and six month periods as compared to fiscal 2006. These increases were the result of revenue growth of 10.0% and 10.2% in the second quarter and six month periods, respectively, as well as lower operating costs as a percentage of revenues. The revenue growth was primarily due to organic growth, which was 7.3% for both the second quarter and the six month periods. The increase in operating margin was primarily due to a reduction in energy costs, production costs and delivery payroll costs as a percentage of revenues. These improvements continue to be partially offset by higher merchandise costs as a percentage of revenues.
The Company’s results also continue to be affected by higher interest expense as compared to fiscal 2006, which was the result of higher average borrowings in fiscal 2007 as well as higher interest rates affecting the Company’s variable rate debt.
"I continue to be pleased with the strong organic revenue growth in our core laundry operations" said UniFirst President and Chief Executive Officer, Ron Croatti. “Both our professional sales team and our route sales team contributed to these strong results.”
The Company will hold a conference call today at 4:00 PM (EDT) 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 approximately 9,800 team partners who serve nearly 200,000 customer locations in 46 states, Canada and Europe from 189 manufacturing, distribution and customer service facilities. UniFirst Corporation 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.
This public announcement may contain forward looking statements that reflect the Company’s current views with respect to future events and financial performance. 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 are highly dependent upon a variety of important factors that could cause actual results to differ materially from those reflected in such forward looking statements. Such factors include uncertainties regarding the Company’s ability to consummate and successfully integrate acquired businesses, uncertainties regarding any existing or newly-discovered expenses and liabilities related to environmental compliance and remediation, the Company’s ability to compete successfully without any significant degradation in its margin rates, seasonal fluctuations in business levels, uncertainties regarding the price levels of natural gas, electricity, fuel and labor, the impact of negative economic conditions on the Company’s customers and such customers’ workforce, the continuing increase in domestic healthcare costs, demand and prices for the Company’s products and services, additional professional and internal costs necessary for compliance with recent and proposed future changes in Securities and Exchange Commission (including the Sarbanes-Oxley Act of 2002), New York Stock Exchange and accounting rules, strikes and unemployment levels, the Company’s efforts to evaluate and potentially reduce internal costs, economic and other developments associated with the war on terrorism and its impact on the economy and general economic conditions. When used in this public announcement, the words “anticipate,” “believe,” “estimate,” “expect,” “intend,” and similar expressions as they relate to the Company are included to identify such forward looking statements.
UniFirst Corporation and Subsidiaries
Consolidated Statements of Income
|
|
|
|
Twenty-six |
|
|
|
Twenty-six |
|
|
|
Thirteen |
|
|
|
Thirteen |
|
|
|
|
|
February 24, |
|
|
|
February 25, |
|
|
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February 24, |
|
|
|
February 25, |
|
|
(In thousands, except per share data) |
|
|
2007 |
|
|
|
2006 |
|
|
|
2007 |
|
|
|
2006 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
$ |
444,744 |
|
|
$ |
401,493 |
|
|
$ |
222,367 |
|
|
$ |
202,168 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating costs (1) |
|
|
283,109 |
|
|
|
258,498 |
|
|
|
146,190 |
|
|
|
133,831 |
|
|
Selling and administrative expenses (1) |
|
|
98,831 |
|
|
|
87,225 |
|
|
|
50,441 |
|
|
|
44,095 |
|
|
Depreciation and amortization |
|
|
23,404 |
|
|
|
22,210 |
|
|
|
11,819 |
|
|
|
11,278 |
|
|
|
|
|
405,344 |
|
|
|
367,933 |
|
|
|
208,450 |
|
|
|
189,204 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations |
|
|
39,400 |
|
|
|
33,560 |
|
|
|
13,917 |
|
|
|
12,964 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other expense (income): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
6,320 |
|
|
|
4,995 |
|
|
|
2,998 |
|
|
|
2,664 |
|
|
Interest income |
|
|
(1,004 |
) |
|
|
(731 |
) |
|
|
(538 |
) |
|
|
(475 |
) |
|
|
|
|
5,316 |
|
|
|
4,264 |
|
|
|
2,460 |
|
|
|
2,189 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes |
|
|
34,084 |
|
|
|
29,296 |
|
|
|
11,457 |
|
|
|
10,775 |
|
|
Provision for income taxes |
|
|
13,378 |
|
|
|
11,579 |
|
|
|
4,497 |
|
|
|
4,448 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
20,706 |
|
|
$ |
17,717 |
|
|
$ |
6,960 |
|
|
$ |
6,327 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income per share – Basic: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock |
|
$ |
1.13 |
|
|
$ |
1.02 |
|
|
$ |
0.38 |
|
|
$ |
0.36 |
|
|
Class B Common Stock |
|
$ |
0.91 |
|
|
$ |
0.82 |
|
|
$ |
0.30 |
|
|
$ |
0.29 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income per share – Diluted: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock |
|
$ |
1.07 |
|
|
$ |
0.92 |
|
|
$ |
0.36 |
|
|
$ |
0.33 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares outstanding – Basic: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock |
|
|
14,313 |
|
|
|
9,683 |
|
|
|
14,319 |
|
|
|
9,747 |
|
|
Class B Common Stock |
|
|
4,940 |
|
|
|
9,557 |
|
|
|
4,939 |
|
|
|
9,494 |
|
|
|
|
|
19,253 |
|
|
|
19,240 |
|
|
|
19,258 |
|
|
|
19,241 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares outstanding – Diluted: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock |
|
|
19,336 |
|
|
|
19,321 |
|
|
|
19,362 |
|
|
|
19,316 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 24, |
|
|
August 26, 2006 |
|
|
Assets |
|
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
|
$ |
12,159 |
|
$ |
8,302 |
|
|
Receivables, net |
|
|
|
94,399 |
|
|
86,549 |
|
|
Inventories |
|
|
|
39,729 |
|
|
36,469 |
|
|
Rental merchandise in service |
|
|
|
82,198 |
|
|
85,875 |
|
|
Deferred income taxes |
|
|
|
10,964 |
|
|
10,046 |
|
|
Prepaid expenses |
|
|
|
2,841 |
|
|
1,672 |
|
|
|
|
|
|
|
|
|
|
|
|
Total current assets |
|
|
|
242,290 |
|
|
228,913 |
|
|
|
|
|
|
|
|
|
|
|
|
Property and equipment: |
|
|
|
|
|
|
|
|
|
Land, buildings and leasehold improvements |
|
|
|
276,966 |
|
|
269,696 |
|
|
Machinery and equipment |
|
|
|
293,409 |
|
|
284,619 |
|
|
Motor vehicles |
|
|
|
89,182 |
|
|
84,138 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
659,557 |
|
|
638,453 |
|
|
Less - accumulated depreciation |
|
|
|
334,708 |
|
|
319,550 |
|
|
|
|
|
|
324,849 |
|
|
318,903 |
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill |
|
|
|
214,819 |
|
|
211,489 |
|
|
Customer contracts and other intangible assets, net |
|
|
|
61,631 |
|
|
64,022 |
|
|
Other assets |
|
|
|
6,527 |
|
|
6,375 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
850,116 |
|
$ |
829,702 |
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders' Equity |
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
|
Current maturities of long-term obligations |
|
|
$ |
655 |
|
$ |
613 |
|
|
Accounts payable |
|
|
|
42,042 |
|
|
43,003 |
|
|
Accrued liabilities |
|
|
|
87,834 |
|
|
80,580 |
|
|
Accrued income taxes |
|
|
|
— |
|
|
3,041 |
|
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities |
|
|
|
130,531 |
|
|
127,237 |
|
|
|
|
|
|
|
|
|
|
|
|
Long-term obligations, net of current maturities |
|
|
|
208,526 |
|
|
209,922 |
|
|
Deferred income taxes |
|
|
|
39,835 |
|
|
39,998 |
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders' equity: |
|
|
|
|
|
|
|
|
|
Common Stock |
|
|
|
1,433 |
|
|
1,431 |
|
|
Class B Common Stock |
|
|
|
494 |
|
|
494 |
|
|
Capital surplus |
|
|
|
15,474 |
|
|
14,497 |
|
|
Retained earnings |
|
|
|
450,818 |
|
|
431,481 |
|
|
Accumulated other comprehensive income |
|
|
|
3,005 |
|
|
4,642 |
|
|
|
|
|
|
|
|
|
|
|
|
Total shareholders' equity |
|
|
|
471,224 |
|
|
452,545 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
850,116 |
|
$ |
829,702 |
|
UniFirst Corporation and Subsidiaries
Detail of Operating Results
Revenues
|
|
|
February 24, |
|
|
February 25, |
|
|
Dollar |
|
Percent |
|
|
(In thousands, except percentages) |
|
2007 |
|
|
2006 |
|
|
Change |
|
Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twenty-six weeks ending: |
|
|
|
|
|
|
|
|
|
|
|
|
Core Laundry Operations |
$ |
399,514 |
|
$ |
362,500 |
|
$ |
37,014 |
|
10.2 |
% |
|
Specialty Garments |
|
30,104 |
|
|
24,547 |
|
|
5,557 |
|
22.6 |
|
|
First Aid |
|
15,126 |
|
|
14,446 |
|
|
680 |
|
4.7 |
|
|
Consolidated total |
$ |
444,744 |
|
$ |
401,493 |
|
$ |
43,251 |
|
10.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thirteen weeks ending: |
|
|
|
|
|
|
|
|
|
|
|
|
Core Laundry Operations |
$ |
202,050 |
|
$ |
183,719 |
|
$ |
18,331 |
|
10.0 |
% |
|
Specialty Garments |
|
12,924 |
|
|
11,134 |
|
|
1,790 |
|
16.1 |
|
|
First Aid |
|
7,393 |
|
|
7,315 |
|
|
78 |
|
1.1 |
|
|
Consolidated total |
$ |
222,367 |
|
$ |
202,168 |
|
$ |
20,199 |
|
10.0 |
% |
Income from Operations
|
|
|
February 24, |
|
|
February 25, |
|
|
Dollar |
|
Percent |
|
|
(In thousands, except percentages) |
|
2007 |
|
|
2006 |
|
|
Change |
|
Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twenty-six weeks ending: |
|
|
|
|
|
|
|
|
|
|
|
|
Core Laundry Operations |
$ |
36,275 |
|
$ |
33,322 |
|
$ |
2,953 |
|
8.9 |
% |
|
Specialty Garments |
|
2,495 |
|
|
(380 |
) |
|
2,875 |
|
756.6 |
|
|
First Aid |
|
630 |
|
|
618 |
|
|
12 |
|
1.9 |
|
|
Consolidated total |
$ |
39,400 |
|
$ |
33,560 |
|
$ |
5,840 |
|
17.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thirteen weeks ending: |
|
|
|
|
|
|
|
|
|
|
|
|
Core Laundry Operations |
$ |
14,306 |
|
$ |
13,752 |
|
$ |
554 |
|
4.0 |
% |
|
Specialty Garments |
|
(450 |
) |
|
(1,492 |
) |
|
1,042 |
|
69.8 |
|
|
First Aid |
|
61 |
|
|
704 |
|
|
(643 |
) |
-91.3 |
|
|
Consolidated total |
$ |
13,917 |
|
$ |
12,964 |
|
$ |
953 |
|
7.4 |
% |