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)
June 30, 2010
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.)
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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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[ ]
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Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
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[ ]
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
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[ ]
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b))
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[ ]
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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.
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Results of Operations and Financial Condition.
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On June 30, 2010, UniFirst Corporation (the “Company”) issued a press release ("Press Release") announcing financial results for the third quarter and first nine months of fiscal 2010 which ended May 29, 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.
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Financial Statements and Exhibits.
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(d) Exhibits
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EXHIBIT NO.
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DESCRIPTION
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99
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Press release of the Company dated June 30, 2010
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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: June 30, 2010
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By:
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/s/ Ronald D. Croatti | |
| Name: |
Ronald D. Croatti
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||
| Title: |
Chairman of the Board, Chief
Executive Officer and President
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By:
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/s/ Steven S. Sintros | |
| Name: |
Steven S. Sintros
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||
| Title: | Vice President and Chief Financial Officer | ||
EXHIBIT INDEX
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EXHIBIT NO.
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DESCRIPTION
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99
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Press release of the Company dated June 30, 2010
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Exhibit 99
(1) Exclusive of depreciation on the Company’s property, plant and equipment and amortization on its intangible assets
UNIFIRST ANNOUNCES FINANCIAL RESULTS
FOR THE THIRD QUARTER AND FIRST NINE
MONTHS OF FISCAL 2010
Wilmington, MA (June 30, 2010) -- UniFirst Corporation (NYSE: UNF) today announced results for the third quarter and first nine months of fiscal 2010, which ended on May 29, 2010.
Revenues for the third quarter of fiscal 2010 were $261.2 million, up 3.6% compared to $252.1 million for the same period in the prior year. Third quarter net income was $19.3 million ($0.98 per diluted common share), an 11.0% decrease from the third quarter of fiscal 2009 when net income was $21.7 million ($1.12 per diluted common share). For the first nine months of fiscal 2010, revenues were down 0.1% and net income was up 0.5% compared to the first nine months of fiscal 2009.
Ronald D. Croatti, UniFirst President and Chief Executive Officer said, “We are pleased with the Company’s overall results for the third quarter. The performance of our core laundry operations met our expectations and our sales force continues to have success expanding our customer base. In addition, our Specialty Garments segment produced record results for the quarter and likely will end the year with record revenues and profits.”
The Company’s core laundry revenues were $227.8 million in the third quarter of fiscal 2010, up 1.8% from the same period in fiscal 2009. After excluding the impact of acquisitions as well as a stronger Canadian dollar, the Company’s core laundry revenues decreased 1.0% comparing the same periods. Core laundry operating income declined to $26.2 million in the third quarter of fiscal 2010 from $33.3 million for the same period in the prior year and the operating margin fell to 11.5% in the third quarter of fiscal 2010 from 14.9% in the third quarter of fiscal 2009. The margin decline primarily relates to a higher cost of revenues, including energy, payroll and merchandise costs. The Company also incurred higher selling and administrative costs, including stock compensation expense during the quarter w
hich was partially offset by lower costs associated with environmental contingencies compared to the third quarter of fiscal 2009.
The Company’s Specialty Garments segment, which consists of nuclear decontamination and cleanroom operations, increased its revenues $4.6 million or 22.0% compared to the third quarter of 2009. This increase was primarily the result of higher than expected revenues from certain US and Canadian reactor projects. As a result of this increase in revenues, operating income for this segment increased to $5.2 million in the third quarter of fiscal 2010 from $3.0 million in the third quarter of fiscal 2009.
The Company’s decrease in net income was also the result of exchange rate losses of $0.6 million in the third quarter of fiscal 2010 compared to gains of $0.8 million in the third quarter of fiscal 2009.
As expected, the Company’s effective income tax rate for the quarter was lower than the prior year as a result of reductions in tax contingency reserves. The effective income tax rate for the quarter was 35.0% compared to 39.3% for the third quarter of fiscal 2009.
UniFirst continues to generate strong cash flows and maintain a solid balance sheet. At the end of the third quarter, the Company had $104.5 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 nine months of fiscal 2010 was $99.8 million and, as of the end of the third quarter, total debt as a percentage of capital declined to 20.8% from 22.5% at the end of fiscal 2009.
Mr. Croatti continued, “Although improved, economic conditions remain challenging. Nevertheless, our recent performance has allowed us to continue to strengthen our balance sheet and overall financial condition. We feel that we are well positioned both operationally and financially to take advantage of strategic opportunities as they arise.”
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 y
ear 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
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Thirteen weeks ended
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Thirty-nine weeks ended
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|||||||||||||||
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May 29,
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May 30,
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May 29,
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May 30,
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|||||||||||||
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(In thousands, except per share data)
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2010 (2)
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2009 (2)
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2010 (2)
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2009 (2)
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||||||||||||
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Revenues
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$
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261,248
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$
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252,105
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$
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770,989
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$
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771,944
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||||||||
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Operating Expenses:
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||||||||||||||||
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Cost of revenues (1)
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158,563
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148,597
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464,812
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464,632
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||||||||||||
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Selling and administrative expenses (1)
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54,798
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52,152
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158,693
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159,752
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||||||||||||
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Depreciation and amortization
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15,814
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14,641
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45,903
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42,683
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||||||||||||
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Total operating expenses
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229,175
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215,390
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669,408
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667,067
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||||||||||||
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Income from operations
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32,073
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36,715
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101,581
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104,877
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Other expense (income):
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||||||||||||||||
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Interest expense
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2,210
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2,226
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6,579
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7,141
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||||||||||||
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Interest income
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(499
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)
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(441
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)
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(1,568
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)
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(1,492
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)
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||||||||
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Exchange rate loss (gain)
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639
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(789
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)
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1,221
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340
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|||||||||||
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2,350
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996
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6,232
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5,989
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|||||||||||||
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Income before income taxes
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29,723
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35,719
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95,349
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98,888
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||||||||||||
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Provision for income taxes
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10,409
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14,030
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36,233
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40,057
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||||||||||||
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Net income
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$
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19,314
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$
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21,689
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$
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59,116
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$
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58,831
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||||||||
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Income per share – Basic
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||||||||||||||||
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Common Stock
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$
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1.03
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$
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1.18
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$
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3.20
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$
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3.21
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||||||||
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Class B Common Stock
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$
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0.83
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$
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0.95
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$
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2.56
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$
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2.57
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||||||||
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Income per share – Diluted
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||||||||||||||||
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Common Stock
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$
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0.98
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$
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1.12
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$
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3.03
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$
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3.04
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||||||||
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Income allocated to: – Basic
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||||||||||||||||
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Common Stock
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$
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15,145
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$
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17,021
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$
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46,388
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$
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46,165
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||||||||
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Class B Common Stock
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$
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3,949
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$
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4,668
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$
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12,479
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$
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12,666
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||||||||
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Income allocated to: – Diluted
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||||||||||||||||
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Common Stock
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$
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19,106
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$
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21,689
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$
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58,880
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$
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58,831
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||||||||
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Weighted average number of shares outstanding – Basic
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||||||||||||||||
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Common Stock
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14,645
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14,394
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14,510
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14,389
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||||||||||||
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Class B Common Stock
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4,766
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4,935
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4,877
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4,935
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||||||||||||
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Weighted average number of shares outstanding – Diluted
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||||||||||||||||
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Common Stock
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19,490
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19,376
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19,455
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19,371
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||||||||||||
(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
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(In thousands)
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May 29,
2010 (1)
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August 29,
2009
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||||||
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Assets
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||||||||
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Current assets:
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||||||||
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Cash and cash equivalents
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$ | 104,463 | $ | 60,151 | ||||
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Receivables, net
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106,223 | 97,784 | ||||||
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Inventories
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37,934 | 43,586 | ||||||
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Rental merchandise in service
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82,897 | 73,063 | ||||||
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Prepaid and deferred income taxes
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24,789 | 24,901 | ||||||
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Prepaid expenses
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4,276 | 2,889 | ||||||
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Total current assets
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360,582 | 302,374 | ||||||
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Property, plant and equipment:
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||||||||
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Land, buildings and leasehold improvements
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329,022 | 325,034 | ||||||
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Machinery and equipment
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365,997 | 352,511 | ||||||
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Motor vehicles
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121,647 | 113,048 | ||||||
| 816,666 | 790,593 | |||||||
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Less - accumulated depreciation
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435,616 | 407,823 | ||||||
| 381,050 | 382,770 | |||||||
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Goodwill
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270,272 | 261,171 | ||||||
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Customer contracts and other intangible assets, net
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59,392 | 60,054 | ||||||
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Other assets
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2,763 | 2,416 | ||||||
| $ | 1,074,059 | $ | 1,008,785 | |||||
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Liabilities and shareholders' equity
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||||||||
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Current liabilities:
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||||||||
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Current maturities of long-term obligations
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$ | 5,759 | $ | 6,447 | ||||
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Accounts payable
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42,205 | 41,180 | ||||||
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Accrued liabilities
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105,256 | 104,003 | ||||||
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Accrued income taxes
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3,259 | 2,437 | ||||||
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Total current liabilities
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156,479 | 154,067 | ||||||
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Long-term obligations, net of current maturities
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175,358 | 175,568 | ||||||
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Deferred income taxes
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52,343 | 52,115 | ||||||
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Shareholders' equity:
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||||||||
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Common Stock
|
1,491 | 1,443 | ||||||
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Class B Common Stock
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491 | 493 | ||||||
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Capital surplus
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23,301 | 20,137 | ||||||
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Retained earnings
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662,291 | 605,262 | ||||||
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Accumulated other comprehensive income (loss)
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2,305 | (300 | ) | |||||
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Total shareholders' equity
|
689,879 | 627,035 | ||||||
| $ | 1,074,059 | $ | 1,008,785 | |||||
(1) Unaudited
UniFirst Corporation and Subsidiaries
Detail of Operating Results
Revenues
|
Thirteen weeks ended
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||||||||||||||||
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May 29,
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May 30,
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Dollar
|
Percent
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|||||||||||||
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(In thousands, except percentages)
|
2010 (1)
|
2009 (1)
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Change
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Change
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||||||||||||
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Core Laundry Operations
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$ | 227,806 | $ | 223,777 | $ | 4,029 | 1.8 | % | ||||||||
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Specialty Garments
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25,672 | 21,040 | 4,632 | 22.0 | ||||||||||||
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First Aid
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7,770 | 7,288 | 482 | 6.6 | ||||||||||||
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Consolidated total
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$ | 261,248 | $ | 252,105 | $ | 9,143 | 3.6 | % | ||||||||
|
Thirty-nine weeks ended
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||||||||||||||||
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May 29,
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May 30,
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Dollar
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Percent
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|||||||||||||
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(In thousands, except percentages)
|
2010 (1)
|
2009 (1)
|
Change
|
Change
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||||||||||||
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Core Laundry Operations
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$ | 680,874 | $ | 694,994 | $ | (14,120 | ) | -2.0 | % | |||||||
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Specialty Garments
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67,977 | 55,720 | 12,257 | 22.0 | ||||||||||||
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First Aid
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22,138 | 21,230 | 908 | 4.3 | ||||||||||||
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Consolidated total
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$ | 770,989 | $ | 771,944 | $ | (955 | ) | -0.1 | % | |||||||
Income from Operations
|
Thirteen weeks ended
|
||||||||||||||||
|
May 29,
|
May 30,
|
Dollar
|
Percent
|
|||||||||||||
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(In thousands, except percentages)
|
2010 (1)
|
2009 (1)
|
Change
|
Change
|
||||||||||||
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Core Laundry Operations
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$ | 26,210 | $ | 33,260 | $ | (7,050 | ) | -21.2 | % | |||||||
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Specialty Garments
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5,159 | 3,014 | 2,145 | 71.2 | ||||||||||||
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First Aid
|
704 | 441 | 263 | 59.3 | ||||||||||||
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Consolidated total
|
$ | 32,073 | $ | 36,715 | $ | (4,642 | ) | -12.6 | % | |||||||
|
Thirty-nine weeks ended
|
||||||||||||||||
|
May 29,
|
May 30,
|
Dollar
|
Percent
|
|||||||||||||
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(In thousands, except percentages)
|
2010 (1)
|
2009 (1)
|
Change
|
Change
|
||||||||||||
|
Core Laundry Operations
|
$ | 88,392 | $ | 97,931 | $ | (9,539 | ) | -9.7 | % | |||||||
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Specialty Garments
|
11,894 | 6,411 | 5,483 | 85.5 | ||||||||||||
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First Aid
|
1,295 | 535 | 760 | 142.0 | ||||||||||||
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Consolidated total
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$ | 101,581 | $ | 104,877 | $ | (3,296 | ) | -3.1 | % | |||||||
(1) Unaudited
UniFirst Corporation and Subsidiaries
Consolidated Statements of Cash Flows
|
Thirty-nine weeks ended
|
||||||||
|
(In thousands)
|
May 29,
2010 (1)
|
May 30,
2009 (1)
|
||||||
|
Cash flows from operating activities:
|
||||||||
|
Net income
|
$ | 59,116 | $ | 58,831 | ||||
|
Adjustments to reconcile net income to cash provided by operating activities:
|
||||||||
|
Depreciation
|
38,989 | 36,072 | ||||||
|
Amortization of intangible assets
|
6,914 | 6,611 | ||||||
|
Amortization of deferred financing costs
|
200 | 200 | ||||||
|
Share-based compensation
|
2,070 | 761 | ||||||
|
Accretion on environmental contingencies
|
595 | 501 | ||||||
|
Accretion on asset retirement obligations
|
426 | 380 | ||||||
|
Deferred income taxes
|
(314 | ) | (246 | ) | ||||
|
Changes in assets and liabilities, net of acquisitions:
|
||||||||
|
Receivables
|
(7,716 | ) | (1,612 | ) | ||||
|
Inventories
|
5,171 | (1,277 | ) | |||||
|
Rental merchandise in service
|
(8,005 | ) | 15,821 | |||||
|
Prepaid expenses
|
(1,369 | ) | (1,820 | ) | ||||
|
Accounts payable
|
1,148 | (18,119 | ) | |||||
|
Accrued liabilities
|
1,739 | 6,197 | ||||||
|
Accrued income taxes
|
808 | 7,108 | ||||||
|
Net cash provided by operating activities
|
99,772 | 109,408 | ||||||
|
Cash flows from investing activities:
|
||||||||
|
Acquisition of businesses, net of cash acquired
|
(17,801 | ) | (3,434 | ) | ||||
|
Capital expenditures
|
(37,289 | ) | (55,457 | ) | ||||
|
Other
|
(1,331 | ) | 2 | |||||
|
Net cash used in investing activities
|
(56,421 | ) | (58,889 | ) | ||||
|
Cash flows from financing activities:
|
||||||||
|
Proceeds from long-term obligations
|
8,850 | 138,987 | ||||||
|
Payments on long-term obligations
|
(9,060 | ) | (180,638 | ) | ||||
|
Proceeds from exercise of Common Stock options
|
1,140 | 109 | ||||||
|
Payment of cash dividends
|
(2,071 | ) | (2,064 | ) | ||||
|
Net cash used in financing activities
|
(1,141 | ) | (43,606 | ) | ||||
|
Effect of exchange rate changes on cash and cash equivalents
|
2,102 | (187 | ) | |||||
|
Net increase in cash and cash equivalents
|
44,312 | 6,726 | ||||||
|
Cash and cash equivalents at beginning of period
|
60,151 | 25,655 | ||||||
|
Cash and cash equivalents at end of period
|
$ | 104,463 | $ | 32,381 | ||||
(1) Unaudited