unf20150630_8k.htm

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)

July 1, 2015

 

 

UNIFIRST CORPORATION

(Exact Name of Registrant as Specified in Charter)

 

 

Massachusetts

 

001-08504

 

04-2103460

(State or Other Jurisdiction of Incorporation)

 

(Commission File Number)

 

(IRS Employer Identification No.)

 

 

68 Jonspin Road, Wilmington, Massachusetts 01887

(Address of Principal Executive Offices) (Zip Code)

 

 

Registrant's telephone number, including area code: (978) 658-8888

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

 

[ ]

Written communications pursuant to Rule 425 under the Securities Act

(17 CFR 230.425)

   

[ ]

Soliciting material pursuant to Rule 14a-12 under the Exchange Act

(17 CFR 240.14a-12)

   

[ ]

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act

(17 CFR 240.14d-2(b))

   

[ ]

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act

(17 CFR 240.13e-4(c))

   

 
 

 

  

Item 2.02.

Results of Operations and Financial Condition.

 

On July 1, 2015, UniFirst Corporation (the “Company”) issued a press release ("Press Release") announcing financial results for the third quarter and first nine months of fiscal 2015, which ended on May 30, 2015. 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.

 

Item 9.01.

Financial Statements and Exhibits.

   

(d) Exhibits

 
   

EXHIBIT NO.

DESCRIPTION

   

99

Press release of the Company dated July 1, 2015

 

 
 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

UNIFIRST CORPORATION

 

 

Date: July 1, 2015

By:

/s/ Ronald D. Croatti

 

Name:

Ronald D. Croatti

 

Title:

Chairman of the Board, Chief

Executive Officer and President

     
 

By:

/s/ Steven S. Sintros

 

Name:

Steven S. Sintros

 

Title:

Senior Vice President and Chief Financial Officer

  

 
 

 

 

EXHIBIT INDEX

 

 

 

EXHIBIT NO.

 

DESCRIPTION

       
  99                     

Press release of the Company dated July 1, 2015

 

 

 

 

 

ex99.htm

Exhibit 99

 

 

 

    

July 1, 2015

CONTACT: Steven S. Sintros, Senior Vice President & CFO

 

For Immediate Release

UniFirst Corporation

68 Jonspin Road

Wilmington, MA 01887

Phone: 978- 658-8888

Fax: 978-988-0659

Email: ssintros@UniFirst.com

 

 

UNIFIRST ANNOUNCES FINANCIAL RESULTS FOR THE THIRD QUARTER OF FISCAL 2015

 

Wilmington, MA (July 1, 2015) -- UniFirst Corporation (NYSE: UNF) today announced results for its fiscal 2015 third quarter ended May 30, 2015. Revenues were $365.6 million, up 3.8% from $352.2 million in the year ago period. Net income was $32.5 million ($1.61 per diluted share), up 5.0% compared to $30.9 million ($1.53 per diluted share) reported a year ago.

 

Ronald D. Croatti, UniFirst President and Chief Executive Officer said, “Our growth continued to be limited by macroeconomic factors including headcount reductions at many of our energy related customers as well as weaker foreign currency exchange rates adversely affecting our Canadian and European operations. Despite these challenges, we are pleased with the results of our third quarter and will continue to focus on factors within our control.”

 

Revenues in the Core Laundry Operations were $327.8 million, up 4.6% from those reported in the prior year’s third quarter. Adjusting for the effects of acquisitions and a weaker Canadian dollar, revenue grew 4.7%. This segment’s income from operations increased 5.5% compared to the third quarter of fiscal 2014, while the operating margin increased slightly to 14.3% from 14.2% a year ago. The margin benefited from lower energy costs during the quarter which were offset partially by higher merchandise costs and administrative expenses as a percentage of revenues.

 

Revenues for the Specialty Garments segment, which consists of nuclear decontamination and cleanroom operations, were $25.9 million, down 6.4% from $27.6 million in the third quarter of fiscal 2014. This decrease in revenues was due primarily to the impact of a weaker Canadian dollar and Euro. This segment reported income from operations of $4.0 million in both the current quarter and last year’s fiscal third quarter. In addition, the Company’s First Aid segment continued to produce strong top and bottom line results.

 

UniFirst continues to maintain a solid balance sheet with no long-term debt and increasing cash balances. Cash and cash equivalents at the end of the quarter totaled $235.7 million, up from $191.8 million at the end of fiscal 2014.

 

Outlook

Mr. Croatti continued, “Based primarily on the effect of these macroeconomic factors, we expect our growth rate to continue to decline in the fourth quarter. As a result, we believe that full year fiscal 2015 revenues will be between $1.452 billion and $1.458 billion. We also believe that full year diluted EPS will be between $5.90 and $6.00. As a reminder, this EPS range includes the impact of the $3.6 million environmental charge incurred during our second quarter.”

 

 
 

 

  

Conference Call Information

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

Headquartered in Wilmington, Mass., UniFirst Corporation is a North American leader in the supply and servicing of uniform and workwear programs, as well as the delivery of facility service programs. Together with its subsidiaries, the company also provides first aid and safety products, and manages specialized garment programs for the cleanroom and nuclear industries. UniFirst manufactures its own branded workwear, protective clothing, and floorcare products, and with over 225 service locations, 275,000 customer locations, and 12,000 employee Team Partners, the company outfits more than 1.5 million workers each business day. 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. For more information visit www.unifirst.com.

 

Forward Looking Statements

This public announcement contains forward looking statements that reflect the Company’s current views with respect to future events and financial performance, including projected revenues and earnings per share. 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, any adverse outcome of pending or future contingencies or claims, the Company’s ability to compete successfully without any significant degradation in its margin rates, seasonal fluctuations in business levels, our ability to preserve positive labor relationships and avoid becoming the target of corporate labor unionization campaigns that could disrupt our business, the effect of currency fluctuations on our results of operations and financial condition, our dependence on third parties to supply us with raw materials, any loss of key management or other personnel, increased costs as a result of any future changes in federal or state laws, rules and regulations or governmental interpretation of such laws, rules and regulations, uncertainties regarding the price levels of natural gas, electricity, fuel and labor, the impact of turbulent economic conditions and the current tight credit markets on our customers and such customers’ workforce, the level and duration of workforce reductions by our customers, the continuing increase in domestic healthcare costs, including the ultimate impact of the Affordable Care Act, demand and prices for our products and services, rampant criminal activity and instability in Mexico where our principal garment manufacturing plants are located, our ability to properly and efficiently design, construct, implement and operate our new CRM computer system, interruptions or failures of our information technology systems, including as a result of cyber-attacks, additional professional and internal costs necessary for compliance with recent and proposed future changes in Securities and Exchange Commission, 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 30, 2014 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

 

   

Thirteen

weeks ended

May 30,

   

Thirteen

weeks ended

May 31,

   

Thirty-nine

weeks ended

May 30,

   

Thirty-nine

weeks ended

May 31,

 

(In thousands, except per share data)

    2015(2)       2014(2)       2015(2)       2014(2)  

Revenues

  $ 365,574     $ 352,238     $ 1,097,397     $ 1,042,909  
                                 

Operating expenses:

                               

Cost of revenues (1)

    221,995       216,644       665,222       640,341  

Selling and administrative expenses (1)

    72,205       67,996       221,832       203,478  

Depreciation and amortization

    19,022       18,109       55,851       53,237  

Total operating expenses

    313,222       302,749       942,905       897,056  
                                 

Income from operations

    52,352       49,489       154,492       145,853  
                                 

Other (income) expense:

                               

Interest expense

    221       109       648       533  

Interest income

    (784

)

    (773

)

    (2,532

)

    (2,415

)

Foreign exchange loss

    72       39       1,323       41  

Total other (income) expense

    (491

)

    (625

)

    (561

)

    (1,841

)

                                 

Income before income taxes

    52,843       50,114       155,053       147,694  

Provision for income taxes

    20,344       19,170       59,695       56,641  
                                 

Net income

  $ 32,499     $ 30,944     $ 95,358     $ 91,053  
                                 

Income per share – Basic

                               

Common Stock

  $ 1.70     $ 1.62     $ 4.99     $ 4.78  

Class B Common Stock

  $ 1.36     $ 1.30     $ 3.99     $ 3.82  
                                 

Income per share – Diluted

                               

Common Stock

  $ 1.61     $ 1.53     $ 4.72     $ 4.52  
                                 

Income allocated to – Basic

                               

Common Stock

  $ 25,817     $ 24,493     $ 75,650     $ 71,971  

Class B Common Stock

  $ 6,483     $ 6,127     $ 18,954     $ 17,962  
                                 

Income allocated to – Diluted

                               

Common Stock

  $ 32,310     $ 30,637     $ 94,644     $ 89,992  
                                 

Weighted average number of shares outstanding – Basic

                               

Common Stock

    15,207       15,102       15,173       15,069  

Class B Common Stock

    4,773       4,722       4,752       4,701  
                                 

Weighted average number of shares outstanding – Diluted

                               

Common Stock

    20,118       19,977       20,057       19,921  

 

(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

 

(In thousands)

 

May 30,

2015 (1)

   

August 30,

2014

 

Assets

               

Current assets:

               

Cash and cash equivalents

  $ 235,672     $ 191,769  

Receivables, net

    157,871       152,523  

Inventories

    83,897       78,858  

Rental merchandise in service

    144,535       146,449  

Prepaid and deferred income taxes

    5,336       13,342  

Prepaid expenses and other current assets

    16,523       6,349  
                 

Total current assets

    643,834       589,290  
                 

Property, plant and equipment:

               

Land, buildings and leasehold improvements

    400,236       393,584  

Machinery and equipment

    534,916       512,842  

Motor vehicles

    192,466       166,573  
                 
      1,127,618       1,072,999  

Less - accumulated depreciation

    612,137       586,717  
      515,481       486,282  
                 

Goodwill

    313,670       303,648  

Customer contracts and other intangible assets, net

    40,316       41,477  

Deferred income taxes

    1,237       1,403  

Other assets

    3,070       2,061  
                 
    $ 1,517,608     $ 1,424,161  
                 

Liabilities and shareholders' equity

               

Current liabilities:

               

Loans payable and current maturities of long-term debt

  $ 3,376     $ 7,704  

Accounts payable

    56,542       59,177  

Accrued liabilities

    105,996       100,818  

Accrued and deferred income taxes

    22,991       23,342  
                 

Total current liabilities

    188,905       191,041  
                 

Long-term liabilities:

               

Long-term debt, net of current maturities

          155  

Accrued liabilities

    57,419       50,235  

Accrued and deferred income taxes

    54,569       48,271  
                 

Total long-term liabilities

    111,988       98,661  
                 

Shareholders' equity:

               

Common Stock

    1,525       1,519  

Class B Common Stock

    485       486  

Capital surplus

    66,912       59,415  

Retained earnings

    1,168,777       1,075,572  

Accumulated other comprehensive (loss) income

    (20,984

)

    (2,533

)

                 

Total shareholders' equity

    1,216,715       1,134,459  
                 
    $ 1,517,608     $ 1,424,161  

  

(1) Unaudited

 

 
 

 

 

UniFirst Corporation and Subsidiaries

Detail of Operating Results

 

Revenues

 

   

Thirteen

weeks ended

May 30,

   

Thirteen

weeks ended

May 31,

   

 

 

Dollar

   

 

 

Percent

 

(In thousands, except percentages)

    2015(1)       2014(1)    

Change

   

Change

 

Core Laundry Operations

  $ 327,770     $ 313,305     $ 14,465       4.6

%

Specialty Garments

    25,854       27,619       (1,765

)

    -6.4  

First Aid

    11,950       11,314       636       5.6  

Consolidated total

  $ 365,574     $ 352,238     $ 13,336       3.8

%

 

   

Thirty-nine

weeks ended

May 30,

   

Thirty-nine

weeks ended

May 31,

   

 

 

Dollar

   

 

 

Percent

 

(In thousands, except percentages)

    2015(1)       2014(1)    

Change

   

Change

 

Core Laundry Operations

  $ 995,685     $ 938,492     $ 57,193       6.1

%

Specialty Garments

    66,991       72,468       (5,477

)

    -7.6  

First Aid

    34,721       31,949       2,772       8.7  

Consolidated total

  $ 1,097,397     $ 1,042,909     $ 54,488       5.2

%

  

 

Income from Operations

 

   

Thirteen

weeks ended

May 30,

   

Thirteen

weeks ended

May 31,

   

 

 

Dollar

   

 

 

Percent

 

(In thousands, except percentages)

    2015(1)       2014(1)    

Change

   

Change

 

Core Laundry Operations

  $ 46,934     $ 44,498     $ 2,436       5.5

%

Specialty Garments

    4,032       3,992       40       1.0  

First Aid

    1,386       999       387       38.7  

Consolidated total

  $ 52,352     $ 49,489     $ 2,863       5.8

%

 

   

Thirty-nine

weeks ended

May 30,

   

Thirty-nine

weeks ended

May 31,

   

 

 

Dollar

   

 

 

Percent

 

(In thousands, except percentages)

    2015(1)       2014(1)    

Change

   

Change

 

Core Laundry Operations

  $ 144,731     $ 136,313     $ 8,418       6.2

%

Specialty Garments

    5,865       7,063       (1,198

)

    -17.0  

First Aid

    3,896       2,477       1,419       57.3  

Consolidated total

  $ 154,492     $ 145,853     $ 8,639       5.9

%

 

(1) Unaudited

 

 
 

 

   

UniFirst Corporation and Subsidiaries

Consolidated Statements of Cash Flows

 

(In thousands)

 

Thirty-nine

weeks ended

May 30,

2015 (1)

   

Thirty-nine

weeks ended

May 31,

2014 (1)

 

Cash flows from operating activities:

               

Net income

  $ 95,358     $ 91,053  

Adjustments to reconcile net income to cash provided by operating activities:

               

Depreciation

    49,270       46,432  

Amortization of intangible assets

    6,581       6,805  

Amortization of deferred financing costs

    156       156  

Share-based compensation

    4,413       4,541  

Accretion on environmental contingencies

    452       537  

Accretion on asset retirement obligations

    503       756  

Deferred income taxes

    6,668       (134

)

Changes in assets and liabilities, net of acquisitions:

               

Receivables

    (9,463

)

    (11,573

)

Inventories

    (5,714

)

    4,550  

Rental merchandise in service

    1,417       (8,882

)

Prepaid expenses and other current assets

    (7,812

)

    (2,108

)

Accounts payable

    (2,106

)

    (11,445

)

Accrued liabilities

    10,283       4,874  

Prepaid and accrued income taxes

    8,408       6,713  

Net cash provided by operating activities

    158,414       132,275  
                 

Cash flows from investing activities:

               

Acquisition of businesses

    (19,815

)

    (841

)

Capital expenditures

    (82,272

)

    (74,466

)

Other

    (1,160

)

    480  

Net cash used in investing activities

    (103,247

)

    (74,827

)

                 

Cash flows from financing activities:

               

Proceeds from loans payable and long-term debt

    5,401       7,107  

Payments on loans payable and long-term debt

    (9,580

)

    (109,383

)

Proceeds from exercise of Common Stock options, including excess tax benefits

    8,055       5,630  

Taxes withheld and paid related to net share settlement of equity awards

    (5,002

)

    (3,527

)

Payment of cash dividends

    (2,151

)

    (2,145

)

Net cash used in financing activities

    (3,277

)

    (102,318

)

                 

Effect of exchange rate changes on cash

    (7,987

)

    (1,588

)

                 

Net increase (decrease) in cash and cash equivalents

    43,903       (46,458

)

Cash and cash equivalents at beginning of period

    191,769       197,479  
                 

Cash and cash equivalents at end of period

  $ 235,672     $ 151,021  

 

(1) Unaudited