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 19, 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 October 19, 2010, UniFirst Corporation (the “Company”) issued a press release ("Press Release") announcing financial results for the fourth quarter and full year fiscal 2010, which ended on August 28, 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 October 19, 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: October 19, 2010
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By:
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/s/ Ronald D. Croatti
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Name:
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Ronald D. Croatti
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Title:
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Chairman of the Board, Chief
Executive Officer and President
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By:
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/s/ Steven S. Sintros
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Name:
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Steven S. Sintros
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Title:
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Vice President and Chief
Financial Officer
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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 October 19, 2010
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Exhibit 99
UNIFIRST ANNOUNCES FINANCIAL RESULTS
FOR THE FOURTH QUARTER AND FULL YEAR
FISCAL 2010
Wilmington, MA (October 19, 2010) -- UniFirst Corporation (NYSE: UNF) today announced results for the fourth quarter and full year of fiscal 2010, which ended on August 28, 2010.
Revenues for the fourth quarter were $255.0 million, up 5.6% compared to $241.5 million for the same period in the prior year. Fourth quarter net income was $17.3 million ($0.87 per diluted common share), a 1.6% increase from net income in the fourth quarter of fiscal 2009 of $17.0 million ($0.88 per diluted common share). For the full fiscal year, revenues were $1.026 billion, up 1.2% from $1.013 billion in fiscal 2009. Net income for the full year was $76.4 million ($3.90 per diluted common share), up 0.7% from $75.9 million ($3.92 per diluted common share) in fiscal 2009.
Ronald D. Croatti, UniFirst President and Chief Executive Officer said, “We are pleased with the Company’s overall results for the fourth quarter as well as our full year performance. The fact that we were able to again achieve record revenues and net income for fiscal 2010 in a very challenging economy is a notable accomplishment and a testament to the hard work and dedication of all of our employees.”
The Company’s core laundry revenues were $227.0 million in the fourth quarter, up 4.3% from those reported in the same period a year ago. After excluding the positive effect of acquisitions as well as a stronger Canadian dollar, the Company’s core laundry revenues increased 2.2% organically. Core laundry operating income declined to $26.0 million in the fourth quarter from $27.5 million for the same period in the prior year. The operating margin fell to 11.4% in the fourth quarter from 12.6% in the fourth quarter of fiscal 2009. The margin decline primarily relates to a higher cost of revenues, including energy, merchandise and payroll. In addition, higher payroll-related costs, including stock compensation expense, also contributed to the margin decline.
The Company’s Specialty Garments segment, which consists of nuclear decontamination and cleanroom operations, continued its strong year, posting revenues of $20.0 million, up 20.5% compared to the fourth quarter of 2009. Operating income for this segment increased to $2.0 million in the fourth quarter of fiscal 2010 from $0.9 million in the fourth quarter of fiscal 2009.
The Company’s increase in fourth quarter net income was helped by exchange rate gains of $0.5 million compared to a $0.1 million gain a year ago. In addition, the 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 37.1% compared to 38.3% for the fourth quarter of fiscal 2009.
UniFirst continues to generate strong cash flows and maintain a solid balance sheet. Cash produced by operating activities for the full fiscal year was $134.0 million. Cash and cash equivalents on hand at year-end was $121.3 million, up from $60.2 million at the end of fiscal 2009. In addition, the year ended with total debt as a percentage of capital of 20.4%, down from 22.5% at the end of fiscal 2009.
Mr. Croatti continued, “The strong results of our Specialty Garments segment were a large contributing factor to our overall success during fiscal 2010. In addition, we are also encouraged that our core laundry operations posted organic growth for the first time in six quarters. Although we believe that a challenging employment environment will be with us for some time, we are confident in our ability to expand our customer base as well as provide the top-notch service necessary to retain our existing customers.”
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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Fifty-two weeks ended
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|||||||||||||||
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August 28,
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August 29,
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August 28,
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August 29,
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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
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Revenues
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$ | 254,950 | $ | 241,472 | $ | 1,025,939 | $ | 1,013,416 | ||||||||
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Operating expenses:
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||||||||||||||||
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Cost of revenues (1)
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155,915 | 144,997 | 620,727 | 609,629 | ||||||||||||
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Selling and administrative expenses (1)
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54,770 | 52,210 | 213,463 | 211,962 | ||||||||||||
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Depreciation and amortization
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15,574 | 15,106 | 61,477 | 57,789 | ||||||||||||
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Total operating expenses
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226,259 | 212,313 | 895,667 | 879,380 | ||||||||||||
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Income from operations
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28,691 | 29,159 | 130,272 | 134,036 | ||||||||||||
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Other expense (income):
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||||||||||||||||
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Interest expense
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2,199 | 2,172 | 8,778 | 9,313 | ||||||||||||
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Interest income
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(536 | ) | (500 | ) | (2,104 | ) | (1,992 | ) | ||||||||
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Exchange rate (gain) loss
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(475 | ) | (90 | ) | 746 | 250 | ||||||||||
| 1,188 | 1,582 | 7,420 | 7,571 | |||||||||||||
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Income before income taxes
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27,503 | 27,577 | 122,852 | 126,465 | ||||||||||||
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Provision for income taxes
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10,211 | 10,556 | 46,444 | 50,613 | ||||||||||||
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Net income
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$ | 17,292 | $ | 17,021 | $ | 76,408 | $ | 75,852 | ||||||||
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Income per share – Basic
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Common Stock
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$ | 0.92 | $ | 0.93 | $ | 4.11 | $ | 4.14 | ||||||||
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Class B Common Stock
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$ | 0.73 | $ | 0.74 | $ | 3.29 | $ | 3.31 | ||||||||
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Income per share – Diluted
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Common Stock
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$ | 0.87 | $ | 0.88 | $ | 3.90 | $ | 3.92 | ||||||||
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Income allocated to – Basic
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||||||||||||||||
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Common Stock
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$ | 13,536 | $ | 13,361 | $ | 59,921 | $ | 59,526 | ||||||||
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Class B Common Stock
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$ | 3,424 | $ | 3,660 | $ | 15,875 | $ | 16,326 | ||||||||
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Income allocated to – Diluted
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Common Stock
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$ | 16,976 | $ | 17,021 | $ | 75,827 | $ | 75,852 | ||||||||
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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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14,751 | 14,408 | 14,570 | 14,394 | ||||||||||||
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Class B Common Stock
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4,663 | 4,933 | 4,823 | 4,935 | ||||||||||||
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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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19,472 | 19,415 | 19,458 | 19,373 | ||||||||||||
(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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August 28,
2010 (1)
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August 29,
2009
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Assets
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Current assets:
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Cash and cash equivalents
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$ | 121,258 | $ | 60,151 | ||||
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Receivables, net
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105,247 | 97,784 | ||||||
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Inventories
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47,630 | 43,586 | ||||||
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Rental merchandise in service
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86,633 | 73,063 | ||||||
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Prepaid and deferred income taxes
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14,252 | 18,215 | ||||||
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Prepaid expenses
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3,004 | 2,889 | ||||||
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Total current assets
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378,024 | 295,688 | ||||||
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Property, plant and equipment:
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Land, buildings and leasehold improvements
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334,037 | 325,034 | ||||||
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Machinery and equipment
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370,088 | 352,511 | ||||||
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Motor vehicles
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121,135 | 113,048 | ||||||
| 825,260 | 790,593 | |||||||
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Less - accumulated depreciation
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444,061 | 407,823 | ||||||
| 381,199 | 382,770 | |||||||
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Goodwill
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271,857 | 261,171 | ||||||
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Customer contracts and other intangible assets, net
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59,037 | 60,054 | ||||||
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Other assets
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2,178 | 2,416 | ||||||
| $ | 1,092,295 | $ | 1,002,099 | |||||
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Liabilities and shareholders' equity
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Current liabilities:
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Current maturities of long-term debt
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$ | 81,160 | $ | 6,447 | ||||
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Accounts payable
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45,931 | 41,180 | ||||||
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Accrued liabilities
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83,804 | 76,885 | ||||||
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Accrued income taxes
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— | 2,437 | ||||||
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Total current liabilities
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210,895 | 126,949 | ||||||
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Long-term liabilities:
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Long-term debt, net of current maturities
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100,304 | 175,568 | ||||||
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Accrued liabilities
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30,290 | 27,118 | ||||||
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Accrued and deferred income taxes
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42,756 | 45,429 | ||||||
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Total long-term liabilities
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173,350 | 248,115 | ||||||
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Shareholders' equity:
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Common Stock
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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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25,329 | 20,137 | ||||||
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Retained earnings
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678,876 | 605,262 | ||||||
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Accumulated other comprehensive income (loss)
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1,863 | (300 | ) | |||||
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Total shareholders' equity
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708,050 | 627,035 | ||||||
| $ | 1,092,295 | $ | 1,002,099 | |||||
(1) Unaudited
UniFirst Corporation and Subsidiaries
Detail of Operating Results
Revenues
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Thirteen weeks ended
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||||||||||||||||
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August 28,
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August 29,
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Dollar
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Percent
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(In thousands, except percentages)
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2010 (1)
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2009 (1)
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Change
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Change
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Core Laundry Operations
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$ | 226,991 | $ | 217,667 | $ | 9,324 | 4.3 | % | ||||||||
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Specialty Garments
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20,024 | 16,620 | 3,404 | 20.5 | ||||||||||||
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First Aid
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7,935 | 7,185 | 750 | 10.5 | ||||||||||||
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Consolidated total
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$ | 254,950 | $ | 241,472 | $ | 13,478 | 5.6 | % | ||||||||
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Fifty-two weeks ended
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||||||||||||||||
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August 28,
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August 29,
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Dollar
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Percent
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|||||||||||||
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(In thousands, except percentages)
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2010 (1)
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2009
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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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$ | 907,865 | $ | 912,661 | $ | (4,796 | ) | -0.5 | % | |||||||
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Specialty Garments
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88,001 | 72,340 | 15,661 | 21.6 | ||||||||||||
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First Aid
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30,073 | 28,415 | 1,658 | 5.8 | ||||||||||||
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Consolidated total
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$ | 1,025,939 | $ | 1,013,416 | $ | 12,523 | 1.2 | % | ||||||||
Income from Operations
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Thirteen weeks ended
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||||||||||||||||
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August 28,
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August 29,
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Dollar
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Percent
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|||||||||||||
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(In thousands, except percentages)
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2010 (1)
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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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$ | 25,954 | $ | 27,462 | $ | (1,508 | ) | -5.5 | % | |||||||
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Specialty Garments
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1,997 | 949 | 1,048 | 110.5 | ||||||||||||
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First Aid
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740 | 748 | (8 | ) | -1.0 | |||||||||||
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Consolidated total
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$ | 28,691 | $ | 29,159 | $ | (468 | ) | -1.6 | % | |||||||
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Fifty-two weeks ended
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||||||||||||||||
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August 28,
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August 29,
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Dollar
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Percent
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|||||||||||||
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(In thousands, except percentages)
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2010 (1)
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2009
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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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$ | 114,346 | $ | 125,393 | $ | (11,047 | ) | -8.8 | % | |||||||
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Specialty Garments
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13,891 | 7,360 | 6,531 | 88.7 | ||||||||||||
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First Aid
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2,035 | 1,283 | 752 | 58.7 | ||||||||||||
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Consolidated total
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$ | 130,272 | $ | 134,036 | $ | (3,764 | ) | -2.8 | % | |||||||
(1) Unaudited
UniFirst Corporation and Subsidiaries
Consolidated Statements of Cash Flows
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Year ended
(In thousands)
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August 28,
2010 (1)
|
August 29,
2009
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||||||
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Cash flows from operating activities:
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||||||||
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Net income
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$ | 76,408 | $ | 75,852 | ||||
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Adjustments to reconcile net income to cash provided by operating activities:
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||||||||
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Depreciation
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52,107 | 48,855 | ||||||
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Amortization of intangible assets
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9,370 | 8,934 | ||||||
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Amortization of deferred financing costs
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267 | 267 | ||||||
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Share-based compensation
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3,662 | 1,025 | ||||||
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Accretion on environmental contingencies
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794 | 668 | ||||||
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Accretion on asset retirement obligations
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568 | 517 | ||||||
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Deferred income taxes
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705 | 1,328 | ||||||
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Changes in assets and liabilities, net of acquisitions:
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||||||||
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Receivables
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(6,308 | ) | 4,079 | |||||
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Inventories
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(4,331 | ) | 2,452 | |||||
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Rental merchandise in service
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(11,451 | ) | 19,334 | |||||
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Prepaid expenses
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(99 | ) | (1,174 | ) | ||||
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Accounts payable
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4,748 | (13,365 | ) | |||||
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Accrued liabilities
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9,257 | 7,556 | ||||||
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Prepaid and accrued income taxes
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(1,724 | ) | 2,867 | |||||
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Net cash provided by operating activities
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133,973 | 159,195 | ||||||
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Cash flows from investing activities:
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||||||||
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Acquisition of businesses
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(20,908 | ) | (4,730 | ) | ||||
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Capital expenditures
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(50,015 | ) | (65,323 | ) | ||||
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Other
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(1,794 | ) | 304 | |||||
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Net cash used in investing activities
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(72,717 | ) | (69,749 | ) | ||||
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Cash flows from financing activities:
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||||||||
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Proceeds from long-term obligations
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8,850 | 140,628 | ||||||
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Payments on long-term obligations
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(9,113 | ) | (193,761 | ) | ||||
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Proceeds from exercise of Common Stock options
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1,177 | 689 | ||||||
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Payment of cash dividends
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(2,777 | ) | (2,754 | ) | ||||
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Net cash used in financing activities
|
(1,863 | ) | (55,198 | ) | ||||
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Effect of exchange rate changes
|
1,714 | 248 | ||||||
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Net increase in cash and cash equivalents
|
61,107 | 34,496 | ||||||
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Cash and cash equivalents at beginning of period
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60,151 | 25,655 | ||||||
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Cash and cash equivalents at end of period
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$ | 121,258 | $ | 60,151 | ||||
(1) Unaudited