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 24, 2007
UNIFIRST CORPORATION
(Exact Name of Registrant as Specified in Charter)
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Massachusetts |
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1-8504 |
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04-2103460 |
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(State or Other Jurisdiction of Incorporation) |
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(Commission File Number) |
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(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:
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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)) |
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Item 2.02 |
Results of Operations and Financial Condition. |
On October 24, 2007, UniFirst Corporation issued a press release ("Press Release") announcing financial results for the fiscal fourth quarter and year ended August 25, 2007. A copy of the Press Release is attached as Exhibit 99 to this Current Report and is incorporated herein by reference.
Such information, including the exhibits attached hereto, shall not be deemed filed for any purpose, including for purposes of, Section 18 of the Securities and Exchange Act of 1934 (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 on 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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(c) Exhibits |
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EXHIBIT NO. |
DESCRIPTION |
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99 |
Press release dated October 24, 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
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Date: October 24, 2007 |
By: |
/s/ Ronald D. Croatti |
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Name: |
Ronald D. Croatti |
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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
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Exhibit No. |
Description |
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99 |
Press release of the Company dated October 24, 2007 |
Exhibit 99
|
UniFirst Corporation |
News Release |
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68 Jonspin Road |
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Wilmington, MA 01887-1086 |
contact: |
John B. Bartlett |
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Telephone 978-658-8888 Ext 520 |
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Senior Vice President |
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Facsimile 978-988-0659 |
|
jbartlett@unifirst.com |
UNIFIRST ANNOUNCES RECORD FINANCIAL RESULTS
FOR THE FISCAL 2007 FOURTH QUARTER AND FULL YEAR
Wilmington, MA (October 24, 2007) -- UniFirst Corporation (NYSE: UNF) today announced record revenues and earnings for its fiscal 2007 fourth quarter and full year which ended August 25, 2007.
Revenues were $227.5 million and $902.1 million for the fourth quarter and full year of fiscal 2007, respectively. These revenues represent an increase of 9.6% and 9.9%, respectively, from the $207.5 million and $821.0 million in the comparable 2006 periods.
Fourth quarter net income was $10.8 million, or $0.56 per diluted common share, compared to net income of $10.6 million, or $0.55 per diluted common share in the fourth quarter of fiscal 2006. The Company’s earnings in the fourth quarter of fiscal 2006 were affected by certain adjustments which combined to increase the Company’s net income by approximately $0.8 million. Excluding these adjustments, the Company’s net income increased from $9.8 million in the fourth quarter of fiscal 2006 to $10.8 million in fiscal 2007, or 10.6%.
Net income for the full year increased 15.3% to $45.2 million, or $2.34 per diluted common share, compared to $39.2 million, or $2.03 per diluted common share for fiscal 2006. The Company’s full year 2007 results were affected by severance expense as well as by adjustments made to the Company’s environmental reserves in the second quarter of fiscal 2007. 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 fiscal 2007 would have been $2.41.
The increase in the Company’s earnings is the result of strong performance in the Company’s core laundry operations, which excludes the Specialty Garments and First Aid segments, as well as the improved profitability of the Company’s Specialty Garments segment. Excluding the items discussed above, income from operations from the Company’s core laundry operations increased 15.1% in the fourth quarter and full fiscal year compared to fiscal 2006. These increases were the result of strong revenue growth of 8.6% and 9.2% in the fourth quarter and full fiscal year, respectively, as well as lower operating costs as a percentage of revenues. The Company’s revenue growth was primarily due to organic growth, which was 6.3% and 6.6% for the fourth quarter and full fiscal year, respectively. The Company’s operating margin for the full fiscal year benefited from modest reductions in energy, production and delivery costs as a percentage of revenues. In addition, merchandise costs as a percentage of revenues were lower in the fourth quarter of fiscal 2007 compared to fiscal 2006.
The Company’s Specialty Garments segment had income from operations in fiscal 2007 of $4.8 million compared to $0.4 million in fiscal 2006. This increase is the result of a 21.9% increase in revenues for the full year compared to fiscal 2006 which was primarily due to strong growth in the segment’s Canadian and European business.
"We are pleased with the results of another record year for UniFirst", said UniFirst CEO, Ronald Croatti. "Despite the challenge posed by a slow growth economy, our core laundry operations delivered solid results. Professional rep sales held up well throughout the year, with overall performance benefiting from increased headcount, better productivity and reduced turnover."
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 Corporation is one of the largest providers of workplace uniforms, protective clothing and facility services products in North America. The Company employs over 10,000 team partners who serve over 200,000 customer locations in 46 US states, Canada and Europe from 193 customer service, distribution, and manufacturing 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
|
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Thirteen weeks ended |
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Fifty-two weeks ended | ||||||||||||
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August 25, |
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August 26, |
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August 25, |
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August 26, |
|
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(In thousands, except share and per share data) |
|
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2007 |
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2006 |
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2007 |
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2006 |
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Revenues |
|
$ |
227,509 |
|
|
$ |
207,541 |
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$ |
902,102 |
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$ |
820,972 |
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|
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Costs and expenses: |
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|
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Operating costs (1) |
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144,855 |
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|
|
131,813 |
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572,221 |
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|
524,694 |
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Selling and administrative expenses (1) |
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|
49,658 |
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|
|
44,232 |
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|
|
197,148 |
|
|
|
177,167 |
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Depreciation and amortization |
|
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12,786 |
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|
|
11,585 |
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|
48,512 |
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|
|
45,310 |
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|
|
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207,299 |
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|
187,630 |
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817,881 |
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747,171 |
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Income from operations |
|
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20,210 |
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|
|
19,911 |
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|
|
84,221 |
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|
|
73,801 |
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|
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Other expense (income): |
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|
|
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|
|
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|
|
|
|
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Interest expense |
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3,129 |
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|
3,128 |
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|
12,675 |
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|
|
11,119 |
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Interest income |
|
|
(461 |
) |
|
|
(425 |
) |
|
|
(1,916 |
) |
|
|
(1,575 |
) |
|
|
|
|
2,668 |
|
|
|
2,703 |
|
|
|
10,759 |
|
|
|
9,544 |
|
|
|
|
|
|
|
|
|
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|
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|
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Income before income taxes |
|
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17,542 |
|
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|
17,208 |
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73,462 |
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|
64,257 |
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Provision for income taxes |
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|
6,736 |
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|
6,635 |
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28,267 |
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25,049 |
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Net income |
|
$ |
10,806 |
|
|
$ |
10,573 |
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$ |
45,195 |
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$ |
39,208 |
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Income per share – Basic: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Common Stock |
|
$ |
0.59 |
|
|
$ |
0.60 |
|
|
$ |
2.47 |
|
|
$ |
2.25 |
|
|
Class B Common Stock |
|
$ |
0.47 |
|
|
$ |
0.48 |
|
|
$ |
1.98 |
|
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$ |
1.80 |
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Income per share – Diluted: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock |
|
$ |
0.56 |
|
|
$ |
0.55 |
|
|
$ |
2.34 |
|
|
$ |
2.03 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
Weighted average number of shares outstanding – Basic: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock |
|
|
14,343 |
|
|
|
11,406 |
|
|
|
14,325 |
|
|
|
10,146 |
|
|
Class B Common Stock |
|
|
4,937 |
|
|
|
7,842 |
|
|
|
4,939 |
|
|
|
9,096 |
|
|
|
|
|
19,280 |
|
|
|
19,248 |
|
|
|
19,264 |
|
|
|
19,242 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares outstanding – Diluted: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock |
|
|
19,375 |
|
|
|
19,313 |
|
|
|
19,342 |
|
|
|
19,313 |
|
|
|
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|
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Dividends per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock |
|
$ |
0.0375 |
|
|
$ |
0.0375 |
|
|
$ |
0.1500 |
|
|
$ |
0.1500 |
|
|
Class B Common Stock |
|
$ |
0.0300 |
|
|
$ |
0.0300 |
|
|
$ |
0.1200 |
|
|
$ |
0.1200 |
|
(1) Exclusive of depreciation and amortization
UniFirst Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
|
(In thousands, except share data) |
|
|
|
August 25, 2007 |
|
|
August 26, 2006 |
|
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Assets |
|
|
|
|
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Current assets: |
|
|
|
|
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Cash and cash equivalents |
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|
$ |
12,698 |
|
$ |
8,302 |
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Receivables, net |
|
|
|
91,906 |
|
|
86,549 |
|
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Inventories |
|
|
|
44,282 |
|
|
36,469 |
|
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Rental merchandise in service |
|
|
|
86,129 |
|
|
85,875 |
|
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Prepaid and deferred income taxes |
|
|
|
13,399 |
|
|
10,046 |
|
|
Prepaid expenses |
|
|
|
1,807 |
|
|
1,672 |
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|
|
|
|
|
|
|
|
|
|
|
Total current assets |
|
|
|
250,221 |
|
|
228,913 |
|
|
|
|
|
|
|
|
|
|
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Property and equipment: |
|
|
|
|
|
|
|
|
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Land, buildings and leasehold improvements |
|
|
|
286,255 |
|
|
269,696 |
|
|
Machinery and equipment |
|
|
|
299,831 |
|
|
284,619 |
|
|
Motor vehicles |
|
|
|
95,214 |
|
|
84,138 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
681,300 |
|
|
638,453 |
|
|
Less - accumulated depreciation |
|
|
|
347,233 |
|
|
319,550 |
|
|
|
|
|
|
334,067 |
|
|
318,903 |
|
|
|
|
|
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|
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Goodwill |
|
|
|
224,366 |
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|
211,489 |
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Customer contracts and other intangible assets, net |
|
|
|
62,064 |
|
|
64,022 |
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Other assets |
|
|
|
3,746 |
|
|
6,375 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
874,464 |
|
$ |
829,702 |
|
|
|
|
|
|
|
|
|
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|
Liabilities and shareholders' equity |
|
|
|
|
|
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Current liabilities: |
|
|
|
|
|
|
|
|
|
Current maturities of long-term obligations |
|
|
$ |
539 |
|
$ |
613 |
|
|
Accounts payable |
|
|
|
45,297 |
|
|
43,003 |
|
|
Accrued liabilities |
|
|
|
86,283 |
|
|
80,580 |
|
|
Accrued income taxes |
|
|
|
— |
|
|
3,041 |
|
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities |
|
|
|
132,119 |
|
|
127,237 |
|
|
|
|
|
|
|
|
|
|
|
|
Long-term obligations, net of current maturities |
|
|
|
205,510 |
|
|
209,922 |
|
|
Deferred income taxes |
|
|
|
39,508 |
|
|
39,998 |
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders' equity: |
|
|
|
|
|
|
|
|
|
Common Stock |
|
|
|
1,435 |
|
|
1,431 |
|
|
Class B Common Stock |
|
|
|
494 |
|
|
494 |
|
|
Capital surplus |
|
|
|
16,332 |
|
|
14,497 |
|
|
Retained earnings |
|
|
|
473,934 |
|
|
431,481 |
|
|
Accumulated other comprehensive income |
|
|
|
5,132 |
|
|
4,642 |
|
|
|
|
|
|
|
|
|
|
|
|
Total shareholders' equity |
|
|
|
497,327 |
|
|
452,545 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
874,464 |
|
$ |
829,702 |
|
UniFirst Corporation and Subsidiaries
Detail of Operating Results
Revenues
|
|
|
August 25, |
|
|
August 26, |
|
|
Dollar |
|
Percent |
|
|
(In thousands, except percentages) |
|
2007 |
|
|
2006 |
|
|
Change |
|
Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thirteen weeks ending: |
|
|
|
|
|
|
|
|
|
|
|
|
Core Laundry Operations |
$ |
204,687 |
|
$ |
188,397 |
|
$ |
16,290 |
|
8.6 |
% |
|
Specialty Garments |
|
14,492 |
|
|
11,552 |
|
|
2,940 |
|
25.5 |
|
|
First Aid |
|
8,330 |
|
|
7,592 |
|
|
738 |
|
9.7 |
|
|
Consolidated total |
$ |
227,509 |
|
$ |
207,541 |
|
$ |
19,968 |
|
9.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fifty-two weeks ending: |
|
|
|
|
|
|
|
|
|
|
|
|
Core Laundry Operations |
$ |
807,460 |
|
$ |
739,155 |
|
$ |
68,305 |
|
9.2 |
% |
|
Specialty Garments |
|
62,868 |
|
|
51,553 |
|
|
11,315 |
|
21.9 |
|
|
First Aid |
|
31,774 |
|
|
30,264 |
|
|
1,510 |
|
5.0 |
|
|
Consolidated total |
$ |
902,102 |
|
$ |
820,972 |
|
$ |
81,130 |
|
9.9 |
% |
Income from Operations
|
|
|
August 25, |
|
|
August 26, |
|
|
Dollar |
|
Percent |
|
|
(In thousands, except percentages) |
|
2007 |
|
|
2006 |
|
|
Change |
|
Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thirteen weeks ending: |
|
|
|
|
|
|
|
|
|
|
|
|
Core Laundry Operations |
$ |
20,362 |
|
$ |
18,992 |
|
$ |
1,370 |
|
7.2 |
% |
|
Specialty Garments |
|
(688 |
) |
|
(86 |
) |
|
(602 |
) |
-700.0 |
|
|
First Aid |
|
536 |
|
|
1,005 |
|
|
(469 |
) |
-46.7 |
|
|
Consolidated total |
$ |
20,210 |
|
$ |
19,911 |
|
$ |
299 |
|
1.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fifty-two weeks ending: |
|
|
|
|
|
|
|
|
|
|
|
|
Core Laundry Operations |
$ |
77,982 |
|
$ |
71,071 |
|
$ |
6,911 |
|
9.7 |
% |
|
Specialty Garments |
|
4,813 |
|
|
368 |
|
|
4,445 |
|
1,207.9 |
|
|
First Aid |
|
1,426 |
|
|
2,362 |
|
|
(936 |
) |
-39.6 |
|
|
Consolidated total |
$ |
84,221 |
|
$ |
73,801 |
|
$ |
10,420 |
|
14.1 |
% |