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 31, 2010

 

UNIFIRST CORPORATION

(Exact Name of Registrant as Specified in Charter)

 

 

 

 

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:

 

 

 

 

 

 

 

 

 

On March 31, 2010, UniFirst Corporation (the “Company”) issued a press release ("Press Release") announcing financial results for the second quarter and first six months of fiscal 2010 which ended February 27, 2010. 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 (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.

 

 

 

 

 

                

 

                

 

 

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

 

 

 

 

 

EXHIBIT INDEX

 

 

 

 

 

 

 

Exhibit 99

 

 

UNIFIRST ANNOUNCES FINANCIAL RESULTS

FOR THE SECOND QUARTER AND FIRST SIX

MONTHS OF FISCAL 2010

 

Wilmington, MA (March 31, 2010) -- UniFirst Corporation (NYSE: UNF) today announced results for the second quarter and first six months of fiscal 2010, which ended on February 27, 2010.

 

Revenues for the second quarter of fiscal 2010 were $253.6 million, a 1.4% decrease from the previous year’s $257.3 million. Second quarter net income was $16.2 million, or $0.83 per diluted common share, an 11.2% decrease from the second quarter of fiscal 2009, when net income was $18.3 million, or $0.94 per diluted common share.

 

Revenues for the first six months of fiscal 2010 decreased 1.9% compared to the first six months of fiscal 2009. Net income for the first half of fiscal 2010 was $39.8 million or $2.05 per diluted common share, a 7.2% increase from the first half of fiscal 2009, when net income was $37.1 million or $1.92 per diluted common share.

 

Ronald D. Croatti, UniFirst President and Chief Executive Officer said, “Although our overall profits for the quarter were lower than the prior year, they met our expectations and we are pleased with the results. We are also encouraged that our core laundry operations achieved sequential improvements in revenues in both the first and second quarters, which indicates continued stabilization of our customer base.”

 

The Company’s core laundry revenues in the second quarter of 2010 declined 2.8% compared to the same period in fiscal 2009. As a result of the revenue decline, income from operations from the core laundry business was $26.8 million in the quarter compared to $32.1 million a year ago. Although operating expenses were down on a gross dollar basis, lower revenues resulted in higher payroll and payroll related costs, energy and depreciation as a percentage of revenues. These items were partially offset by lower merchandise costs as a percentage of revenues.

 

Revenues in the Company’s Specialty Garments segment, which consists of nuclear decontamination and cleanroom operations, increased 14.7% compared to the second quarter of fiscal 2009. This increase was the result of a larger number of power reactor outages occurring in the second quarter of fiscal 2010 compared to the same period a year ago. As a result of this revenue increase, operating income for this segment increased from $1.7 million in the second quarter of fiscal 2009 to $2.1 million in the second quarter of fiscal 2010.

 

The Company’s effective income tax rate for the quarter was 39.1% compared to 42.7% for the same quarter a year ago. The fiscal 2009 rate was impacted by increases to the Company’s reserves for tax contingencies.

 

UniFirst continues to generate strong cash flows and maintain a solid balance sheet. At the end of the second quarter, the Company had $84.2 million of cash and cash equivalents on hand, up from $60.2 million at the end of fiscal 2009. Cash produced by operating activities for the first six months of fiscal 2010 was up 8.0% to $65.1 million compared to $60.3 million a year earlier. In addition, as of the end of the second quarter, total debt as a percentage of capital declined to 21.3% from 22.5% at the end of fiscal 2009.

 

Mr. Croatti continued, “Although we’re seeing some signs of market stabilization, we continue to expect job growth to lag a broader economic rebound. This will make the recovery of top line growth for UniFirst challenging in the near term. As a result, we will continue to vigilantly focus on cost controls and cash flow generation. We will do so, however, without ever sacrificing our ability to provide top notch service quality to our loyal customer base.”

 

The Company also announced today that it is entering into a long-term employment agreement with Mr. Croatti. Under terms of the agreement, Mr. Croatti will serve as the Company’s chief executive officer for the next six years. Additionally, the agreement provides Mr. Croatti with the ability to earn up to 350,000 shares of common stock over the six year period based on the achievement of certain performance criteria. In addition, the Company has also awarded Mr. Croatti a restricted stock grant for his 2009 performance of 50,000 common shares, which will also vest over the next six years.

 

Donald J. Evans, the Company’s lead director, said “During his 19-year tenure as CEO, Ron has been instrumental in building a company that has surpassed $1 billion in annual revenue and delivered consistent financial results. We are pleased that Mr. Croatti will remain as CEO through 2016 and provide the strong continuity in management we see as essential for continued success. On behalf of the Board and everyone at UniFirst, I want to congratulate Ron on a job well done and look forward to his passion, commitment and enthusiasm going forward.”

 

Conference Call Information

UniFirst will hold a conference call today at 10:00 a.m. (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.

 

About UniFirst Corporation

UniFirst Corporation is one of the largest providers of workplace uniforms, protective clothing, and facility services products in North America. The Company employs nearly 10,000 Team Partners who serve more than 225,000 customer locations in 45 U.S. states, Canada, and Europe from over 200 customer service, distribution, and manufacturing facilities. UniFirst 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.

 

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. 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, but are not limited to, 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, general economic conditions and other factors described under “Item 1A. Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended August 29, 2009 and in other filings with the Securities and Exchange Commission. When used in this public announcement, the words “anticipate,” “optimistic,” “believe,” “estimate,” “expect,” “intend,” and similar expressions as they relate to the Company are included to identify such forward looking statements. The Company undertakes no obligation to update any forward looking statements to reflect events or circumstances arising after the date on which such statements are made.

 

UniFirst Corporation and Subsidiaries

Consolidated Statements of Income

 

 

(1) Exclusive of depreciation on the Company’s property, plant and equipment and amortization on its intangible assets

 

(2) Unaudited

 

UniFirst Corporation and Subsidiaries

Condensed Consolidated Balance Sheets

 

 

(1) Unaudited

 

UniFirst Corporation and Subsidiaries

Detail of Operating Results

 

Revenues

 

 

 

 

Income from Operations

 

 

 

(1) Unaudited

 

UniFirst Corporation and Subsidiaries

Consolidated Statements of Cash Flows

 

 

(1) Unaudited