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unf-10q_20211127.htm

United States

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended November 27, 2021


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 001-08504

UNIFIRST CORPORATION

(Exact name of Registrant as Specified in Its Charter)

Massachusetts	04-2103460
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

68 Jonspin Road, Wilmington, MA	01887
(Address of Principal Executive Offices)	(Zip Code)

(978) 658-8888

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.10 par value per share	UNF	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐

Non-accelerated filer	☐	Smaller Reporting Company	☐

Emerging Growth Company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

The number of outstanding shares of UniFirst Corporation Common Stock and Class B Common Stock at December 31, 2021 were 15,207,953 and 3,643,009, respectively.

UniFirst Corporation

Quarterly Report on Form 10-Q

For the Quarter ended November 27, 2021

Table of Contents

Part I – FINANCIAL INFORMATION	3

Item 1 – Unaudited Financial Statements	3

Consolidated Statements of Income for the Thirteen Weeks ended November 27, 2021 and November 28, 2020	3

Consolidated Statements of Comprehensive Income for the Thirteen Weeks ended November 27, 2021 and November 28, 2020	4

Consolidated Balance Sheets as of November 27, 2021 and August 28, 2021	5

Consolidated Statements of Shareholders’ Equity for the Thirteen Weeks ended November 27, 2021 and November 28, 2020	6

Consolidated Statements of Cash Flows for the Thirteen Weeks ended November 27, 2021 and November 28, 2020	7

Notes to Consolidated Financial Statements	8

Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations	20

Item 3 – Quantitative and Qualitative Disclosures About Market Risk	29

Item 4 – Controls and Procedures	30

Part II – OTHER INFORMATION	31

Item 1 – Legal Proceedings	31

Item 1A – Risk Factors	31

Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds	31

Item 3 – Defaults Upon Senior Securities	32

Item 4 – Mine Safety Disclosures	32

Item 5 – Other Information	32

Item 6 – Exhibits	33

Signatures	34

Certifications
Ex-31.1 Section 302 Certification of CEO
Ex-31.2 Section 302 Certification of CFO
Ex-32.1 Section 906 Certification of CEO
Ex-32.2 Section 906 Certification of CFO

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Consolidated Statements of Income

UniFirst Corporation and Subsidiaries

(Unaudited)

	Thirteen weeks ended
(In thousands, except per share data)	November 27, 2021			November 28, 2020
Revenues	$	486,164		$	446,853
Operating expenses:
Cost of revenues (1)		310,130			275,800
Selling and administrative expenses (1)		104,388			88,703
Depreciation and amortization		26,856			26,308
Total operating expenses		441,374			390,811

Operating income		44,790			56,042
Other (income) expense:
Interest income, net		(648	)		(568	)
Other expense, net		736			749
Total other expense, net		88			181

Income before income taxes		44,702			55,861
Provision for income taxes		10,997			13,965
Net income	$	33,705		$	41,896
Income per share – Basic:
Common Stock	$	1.86		$	2.31
Class B Common Stock	$	1.49		$	1.85
Income per share – Diluted:
Common Stock	$	1.77		$	2.20
Income allocated to – Basic:
Common Stock	$	28,291		$	35,171
Class B Common Stock	$	5,414		$	6,725
Income allocated to – Diluted:
Common Stock	$	33,705		$	41,896
Weighted average shares outstanding – Basic:
Common Stock		15,229			15,247
Class B Common Stock		3,643			3,643
Weighted average shares outstanding – Diluted:
Common Stock		19,026			19,019

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

The accompanying notes are an integral part of these

Consolidated Financial Statements.

Consolidated Statements of Comprehensive Income

UniFirst Corporation and Subsidiaries

(Unaudited)

	Thirteen weeks ended
(In thousands)	November 27, 2021			November 28, 2020
Net income	$	33,705		$	41,896
Other comprehensive income (loss):
Foreign currency translation adjustments		(2,799	)		1,310
Change in fair value of derivatives, net of income taxes		85			(10	)
Derivative financial instruments reclassified to earnings		(38	)		(11	)
Other comprehensive income (loss)		(2,752	)		1,289
Comprehensive income	$	30,953		$	43,185

The accompanying notes are an integral part of these

Consolidated Financial Statements.

Consolidated Balance Sheets

UniFirst Corporation and Subsidiaries

(Unaudited)

(In thousands, except share and par value data)	November 27, 2021			August 28, 2021
Assets
Current assets:
Cash, cash equivalents and short-term investments	$	478,061		$	512,868
Receivables, less reserves of $12,921 and $11,122		233,576			208,331
Inventories		158,111			143,591
Rental merchandise in service		189,773			181,531
Prepaid taxes		6,537			16,580
Prepaid expenses and other current assets		45,588			40,891
Total current assets		1,111,646			1,103,792

Property, plant and equipment, net		623,785			617,719
Goodwill		429,454			429,538
Customer contracts, net		47,203			49,129
Other intangible assets, net		35,464			35,509
Deferred income taxes		561			580
Operating lease right-of-use assets, net		44,059			42,115
Other assets		105,341			102,683
Total assets	$	2,397,513		$	2,381,065

Liabilities and shareholders’ equity
Current liabilities:
Accounts payable	$	77,919		$	81,356
Accrued liabilities		154,653			159,578
Accrued taxes		—			743
Operating lease liabilities, current		13,441			12,993
Total current liabilities		246,013			254,670

Accrued liabilities		134,837			134,085
Accrued and deferred income taxes		89,642			89,177
Operating lease liabilities		32,120			30,181
Total liabilities		502,612			508,113
Commitments and contingencies (Note 12)
Shareholders’ equity:
Preferred Stock, $1.00 par value; 2,000,000 shares authorized; no shares issued and outstanding		—			—
Common Stock, $0.10 par value; 30,000,000 shares authorized; 15,219,531 and 15,235,601 shares issued and outstanding as of November 27, 2021 and August 28, 2021, respectively		1,522			1,524
Class B Common Stock, $0.10 par value; 20,000,000 shares authorized; 3,643,009 shares issued and outstanding as of November 27, 2021 and August 28, 2021, respectively		364			364
Capital surplus		90,340			89,257
Retained earnings		1,830,263			1,806,643
Accumulated other comprehensive loss		(27,588	)		(24,836	)

Total shareholders’ equity		1,894,901			1,872,952

Total liabilities and shareholders’ equity	$	2,397,513		$	2,381,065

The accompanying notes are an integral part of these

Consolidated Financial Statements

Consolidated Statements of Shareholders’ Equity

UniFirst Corporation and Subsidiaries

(Unaudited)

(In thousands)	Common Shares			Class B Common Shares		Common Stock			Class B Common Stock		Capital Surplus			Retained Earnings			Accumulated Other Comprehensive Loss			Total Equity
Balance, August 29, 2020		15,251			3,643	$	1,525		$	364	$	86,645		$	1,684,565		$	(31,970	)	$	1,741,129
Net income		—			—		—			—		—			41,896			—			41,896
Change in fair value of derivatives		—			—		—			—		—			—			(21	)		(21	)
Foreign currency translation		—			—		—			—		—			—			1,310			1,310
Dividends declared Common Stock ($0.25 per share)		—			—		—			—		—			(3,806	)		—			(3,806	)
Dividends declared Class B Common Stock ($0.20 per share)		—			—		—			—		—			(729	)		—			(729	)
Repurchase of Common Stock		(41	)		—		(4	)		—		(223	)		(6,989	)		—			(7,216	)
Share-based compensation, net (1)		—			—		—			—		788			—			—			788
Share-based awards exercised, net (2)		11			—		1			—		—			—			—			1
Balance, November 28, 2020		15,221			3,643	$	1,522		$	364	$	87,210		$	1,714,937		$	(30,681	)	$	1,773,352

(In thousands)	Common Shares			Class B Common Shares		Common Stock			Class B Common Stock		Capital Surplus			Retained Earnings			Accumulated Other Comprehensive Loss			Total Equity
Balance, August 28, 2021		15,236			3,643	$	1,524		$	364	$	89,257		$	1,806,643		$	(24,836	)	$	1,872,952
Net income		—			—		—			—		—			33,705			—			33,705
Change in fair value of derivatives		—			—		—			—		—			—			47			47
Foreign currency translation		—			—		—			—		—			—			(2,799	)		(2,799	)
Dividends declared Common Stock ($0.30 per share)		—			—		—			—		—			(4,566	)		—			(4,566	)
Dividends declared Class B Common Stock ($0.24 per share)		—			—		—			—		—			(874	)		—			(874	)
Repurchase of Common Stock		(23	)		—		(2	)		—		(124	)		(4,645	)		—			(4,771	)
Share-based compensation, net (1)		—			—		—			—		1,207			—			—			1,207
Share-based awards exercised, net (2)		7			—		—			—		—			—			—			—
Balance, November 27, 2021		15,220			3,643	$	1,522		$	364	$	90,340		$	1,830,263		$	(27,588	)	$	1,894,901

(1)	These amounts are shown net of any shares withheld by the Company to satisfy certain tax withholding obligations in connection with the vesting of certain restricted stock units.

(2)	These amounts are shown net of the effect of income taxes.

The accompanying notes are an integral part of these

Consolidated Financial Statements.

Consolidated Statements of Cash Flows

UniFirst Corporation and Subsidiaries

(Unaudited)

Thirteen weeks ended (In thousands)	November 27, 2021			November 28, 2020
Cash flows from operating activities:
Net income	$	33,705		$	41,896
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization		26,856			26,308
Amortization of deferred financing costs		41			28
Loss on sale of property, plant and equipment		—			5
Share-based compensation		1,905			1,622
Accretion on environmental contingencies		149			112
Accretion on asset retirement obligations		246			245
Deferred income taxes		40			242
Other		(6	)		28
Changes in assets and liabilities, net of acquisitions:
Receivables, less reserves		(25,583	)		(18,875	)
Inventories		(14,625	)		1,783
Rental merchandise in service		(8,567	)		(684	)
Prepaid expenses and other current assets and Other assets		(4,230	)		(2,812	)
Accounts payable		(3,556	)		(3,127	)
Accrued liabilities		(8,391	)		2,876
Prepaid and accrued income taxes		9,838			3,094
Net cash provided by operating activities		7,822			52,741

Cash flows from investing activities:
Acquisition of businesses, net of cash acquired		(493	)		(603	)
Capital expenditures, including capitalization of software costs		(31,051	)		(41,836	)
Proceeds from sale of assets		27			15
Net cash used in investing activities		(31,517	)		(42,424	)

Cash flows from financing activities:
Proceeds from exercise of share-based awards		—			1
Taxes withheld and paid related to net share settlement of equity awards		(698	)		(834	)
Repurchase of Common Stock		(4,623	)		(7,216	)
Payment of cash dividends		(4,537	)		(4,541	)
Net cash used in financing activities		(9,858	)		(12,590	)

Effect of exchange rate changes		(1,254	)		445

Net decrease in cash, cash equivalents and short-term investments		(34,807	)		(1,828	)
Cash, cash equivalents and short-term investments at beginning of period		512,868			474,838
Cash, cash equivalents and short-term investments at end of period	$	478,061		$	473,010

Supplemental disclosure of cash flow information:
Non-cash capital expenditures	$	6,904		$	5,961

The accompanying notes are an integral part of these

Consolidated Financial Statements.

UniFirst Corporation and Subsidiaries

Notes to Consolidated Financial Statements

1. Basis of Presentation

These Consolidated Financial Statements of UniFirst Corporation (the “Company”) have been prepared, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) have been condensed or omitted pursuant to such rules and regulations; however, the Company believes that the information furnished reflects all adjustments (consisting only of normal recurring adjustments) which are, in the opinion of management, necessary for a fair statement of results for the interim period.

It is suggested that these Consolidated Financial Statements be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended August 28, 2021. There have been no material changes in the accounting policies followed by the Company during the current fiscal year other than the adoption of recent accounting pronouncements discussed in Note 2. Results for an interim period are not indicative of any future interim periods or for an entire fiscal year.

2. Recent Accounting Pronouncements

In August 2018, the Financial Accounting Standards Board (“FASB”) issued updated guidance to modify the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. This guidance was effective for annual reporting periods ending after December 15, 2020 and was required to be applied on a retrospective basis with early adoption permitted. Accordingly, the standard was effective for the Company on August 29, 2021. The Company’s adoption of this guidance on August 29, 2021 did not have a material impact on its financial statements or related disclosures.

In December 2019, the FASB issued updated guidance to simplify accounting for income taxes by removing certain exceptions and improving the consistent application of and simplifying U.S. GAAP in other areas of this topic. This guidance is effective for annual reporting periods, and any interim periods within those annual periods, that began after December 15, 2020 with early adoption permitted. The Company’s adoption of this guidance on August 29, 2021 did not have a material impact on its financial statements.

In October 2021, the FASB issued updated guidance to improve the accounting for acquired revenue contracts with customers in a business combination. This guidance will be effective for annual reporting periods, and any interim periods within those annual periods, that begin after December 15, 2023 and will be required to be applied on a prospective basis with early adoption permitted. Accordingly, the standard will be effective for the Company on September 1, 2024. The Company is currently evaluating the impact that this guidance will have on its financial statements and related disclosures.

In November 2021, the FASB issued updated guidance to increase the transparency of government assistance, including the disclosure of the types of assistance, an entity’s accounting for the assistance and the effect of the assistance on an entity’s financial statements. This guidance will be effective for annual reporting periods that begin after December 15, 2021 and will be required to be applied on a prospective basis with early adoption permitted. Accordingly, the standard will be effective for the Company on August 28, 2022. The Company is currently evaluating the impact that this guidance will have on its financial statements and related disclosures.

3. Revenue Recognition

The following table presents the Company’s revenues for the thirteen weeks ended November 27, 2021 and November 28, 2020, respectively, disaggregated by service type:

	Thirteen Weeks Ended
	November 27, 2021					November 28, 2020
(In thousands, except percentages)	Revenues		% of Revenues			Revenues		% of Revenues
Core Laundry Operations	$	428,846		88.2	%	$	393,190		88.0	%
Specialty Garments		39,484		8.1	%		38,134		8.5	%
First Aid		17,834		3.7	%		15,529		3.5	%
Total Revenues	$	486,164		100.0	%	$	446,853		100.0	%

See Note 16 “Segment Reporting” for additional details of segment definitions.

Revenue Recognition Policy

During the thirteen weeks ended November 27, 2021 and November 28, 2020, approximately 91.2% and 91.0%, respectively, of the Company’s revenues were derived from fees for route servicing in our Core Laundry Operations, Specialty Garments, and First Aid segments performed by the Company’s employees at the customer’s location of business. Revenues from the Company’s route

UniFirst Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

servicing customer contracts represent a single performance obligation. The Company recognizes these revenues over time as services are performed based on the nature of services provided and contractual rates (input method). Certain of the Company’s customer contracts, primarily within the Company’s Core Laundry Operations, include pricing terms and conditions that include components of variable consideration. The variable consideration is typically in the form of consideration due to customer-based performance metrics specified within the contract. Specifically, some contracts contain discounts or rebates that the customer can earn through the achievement of specified volume levels. Each component of variable consideration is earned based on the Company’s actual performance during the measurement period specified within the contract. To determine the transaction price, the Company estimates the variable consideration using the most likely amount method, based on the specific contract provisions and known performance results during the relevant measurement period. When determining if variable consideration should be constrained, the Company considers whether factors outside its control could result in a significant reversal of revenue. In making these assessments, the Company considers the likelihood and magnitude of a potential reversal. The Company’s performance period generally corresponds with the monthly invoice period. No significant constraints on the Company’s revenue recognition were applied during the thirteen weeks ended November 27, 2021 and November 28, 2020. The Company reassesses these estimates during each reporting period. The Company maintains a liability for these discounts and rebates within accrued liabilities on the consolidated balance sheets. Variable consideration also includes consideration paid to a customer at the beginning of a contract. The Company capitalizes this consideration and amortizes it over the life of the contract as a reduction to revenue in accordance with the updated accounting guidance for revenue recognition. These assets are included in other assets on the consolidated balance sheets.

Costs to Obtain a Contract

The Company defers commission expenses paid to its employee-partners when the commissions are deemed to be incremental for obtaining the route servicing customer contract. The deferred commissions are amortized on a straight-line basis over the expected period of benefit. The Company reviews the deferred commission balances for impairment on an ongoing basis. Deferred commissions are classified as current or non-current based on the timing of when the Company expects to recognize the expense. The current portion is included in prepaid expenses and other current assets and the non-current portion is included in other assets on the Company’s consolidated balance sheets. As of November 27, 2021, the current and non-current assets related to deferred commissions totaled $14.6 million and $62.6 million, respectively. As of August 28, 2021, the current and non-current assets related to deferred commissions totaled $14.2 million and $60.6 million, respectively. During the thirteen weeks ended November 27, 2021 and November 28, 2020, the Company recorded $3.8 million and $3.5 million, respectively, of amortization expense related to deferred commissions. This expense is classified in selling and administrative expenses on the consolidated statements of income.

4. Acquisitions

During the thirteen weeks ended November 27, 2021, the Company completed four business acquisitions with an aggregate purchase price of approximately $0.5 million, all of which was assigned to intangible assets. The results of operations of these acquisitions have been included in the Company’s consolidated financial results since their respective acquisition dates. These acquisitions were not significant in relation to the Company’s consolidated financial results and, therefore, pro-forma financial information has not been presented.

5. Fair Value Measurements

The assets or liabilities measured at fair value on a recurring basis are summarized in the tables below (in thousands):

	As of November 27, 2021
	Level 1		Level 2		Level 3		Fair Value
Assets:
Cash equivalents	$	197,019	$	—	$	—	$	197,019
Pension plan assets		—		3,718		—		3,718
Foreign currency forward contracts		—		104		—		104
Total assets at fair value	$	197,019	$	3,822	$	—	$	200,841

UniFirst Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

	As of August 28, 2021
	Level 1		Level 2		Level 3		Fair Value
Assets:
Cash equivalents	$	197,081	$	—	$	—	$	197,081
Pension plan assets		—		3,795		—		3,795
Foreign currency forward contracts		—		41		—		41
Total assets at fair value	$	197,081	$	3,836	$	—	$	200,917

The Company’s cash equivalents listed above represent money market securities and are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices. The Company does not adjust the quoted market price for such financial instruments.

The Company’s pension plan assets listed above represent guaranteed deposit accounts that are maintained and operated by Prudential Retirement Insurance and Annuity Company (“PRIAC”). All assets are merged with the general assets of PRIAC and are invested predominantly in privately placed securities and mortgages. At the beginning of each calendar year, PRIAC notifies the Company of the annual rates of interest which will be applied to the amounts held in the guaranteed deposit account during the next calendar year. In determining the interest rate to be applied, PRIAC considers the investment performance of the underlying assets of the prior year; however, regardless of the investment performance, the Company is contractually guaranteed a minimum rate of return. As such, the Company’s pension plan assets are included within Level 2 of the fair value hierarchy.

The Company’s foreign currency forward contracts represent contracts the Company has entered into to exchange Canadian dollars for U.S. dollars at fixed exchange rates in order to manage its exposure related to the certain forecasted Canadian dollar denominated sales of one of its subsidiaries. These contracts are included in prepaid expenses and other current assets and other long-term assets as of November 27, 2021 and August 28, 2021. The fair value of the forward contracts is based on similar exchange traded derivatives and are, therefore, included within Level 2 of the fair value hierarchy.

6. Derivative Instruments and Hedging Activities

As of November 27, 2021, the Company had forward contracts with a notional value of approximately 11.5 million CAD outstanding and recorded the fair value of the contracts of $0.1 million in prepaid expenses and other current assets and other long-term assets with a corresponding gain in accumulated other comprehensive loss of $0.1 million, which was recorded net of tax. During the thirteen weeks ended November 27, 2021, the Company reclassified a nominal amount from accumulated other comprehensive loss to revenue, related to the derivative financial instruments. The gain on these forward contracts that resulted in a decrease to accumulated other comprehensive loss as of November 27, 2021 is expected to be reclassified to revenues prior to their maturity on February 25, 2022 and August 29, 2026, respectively.

7. Employee Benefit Plans

Defined Contribution Retirement Savings Plan

The Company has a defined contribution retirement savings plan with a 401(k) feature for all eligible U.S. and Canadian employees not under collective bargaining agreements. The Company matches a portion of the employee’s contribution and may make an additional contribution at its discretion. Contributions charged to expense under the plan for the thirteen weeks ended November 27, 2021 and November 28, 2020 were $5.5 million and $5.8 million, respectively.

Pension Plans and Supplemental Executive Retirement Plans

The Company maintains an unfunded Supplemental Executive Retirement Plan for certain eligible employees of the Company and one frozen non-contributory defined benefit pension plan. The amounts charged to expense related to these plans for the thirteen weeks ended November 27, 2021 and November 28, 2020 were $0.6 million and $0.8 million, respectively.

UniFirst Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

8. Income Per Share

The Company calculates income per share by allocating income to its unvested participating securities as part of its income per share calculations. The following table sets forth the computation of basic income per share using the two-class method for amounts attributable to the Company’s shares of Common Stock and Class B Common Stock (in thousands, except per share data):

	Thirteen Weeks Ended
	November 27, 2021		November 28, 2020
Net income available to shareholders	$	33,705	$	41,896
Allocation of net income for Basic:
Common Stock	$	28,291	$	35,171
Class B Common Stock		5,414		6,725
	$	33,705	$	41,896
Weighted average number of shares for Basic:
Common Stock		15,229		15,247
Class B Common Stock		3,643		3,643
		18,872		18,890
Income per share for Basic:
Common Stock	$	1.86	$	2.31
Class B Common Stock	$	1.49	$	1.85

The Company is required to calculate diluted income per share for Common Stock using the more dilutive of the following two methods:

•

The treasury stock method; or

•

The two-class method assuming a participating security is not exercised or converted.

For the thirteen weeks ended November 27, 2021 and November 28, 2020, the Company’s diluted income per share assumes the conversion of all vested Class B Common Stock into Common Stock and uses the two-class method for its unvested participating shares. The following tables set forth the computation of diluted income per share of Common Stock for the thirteen weeks ended November 27, 2021 and November 28, 2020 (in thousands, except per share data):

	Thirteen weeks ended November 27, 2021
	Earnings to Common Shareholders		Common Shares		Income Per Share
As reported - Basic	$	28,291		15,229	$	1.86
Add: effect of dilutive potential common shares
Share-Based Awards		—		154
Class B Common Stock		5,414		3,643
As reported – Diluted	$	33,705		19,026	$	1.77

	Thirteen weeks ended November 28, 2020
	Earnings to Common Shareholders		Common Shares		Income Per Share
As reported - Basic	$	35,171		15,247	$	2.31
Add: effect of dilutive potential common shares
Share-Based Awards		—		129
Class B Common Stock		6,725		3,643
As reported – Diluted	$	41,896		19,019	$	2.20

UniFirst Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

Share-based awards that would result in the issuance of 11,119 shares of Common Stock were excluded from the calculation of diluted income per share for the thirteen weeks ended November 27, 2021 because they were anti-dilutive. Share-based awards that would result in the issuance of 11,008 shares of Common Stock were excluded from the calculation of diluted income per share for the thirteen weeks ended November 28, 2020 because they were anti-dilutive.

9. Inventories

Inventories are stated at the lower of cost or net realizable value, net of any reserve for excess and obsolete inventory. Work-in-process and finished goods inventories consist of materials, labor and manufacturing overhead. Judgments and estimates are used in determining the likelihood that new goods on hand can be sold to customers or used in rental operations. Historical inventory usage and current revenue trends are considered in estimating both excess and obsolete inventories. If actual product demand and market conditions are less favorable than those projected by management, additional inventory write-downs may be required. The Company uses the first-in, first-out (“FIFO”) method to value its inventories.

The components of inventory as of November 27, 2021 and August 28, 2021 were as follows (in thousands):

	November 27, 2021		August 28, 2021
Raw materials	$	24,203	$	24,846
Work in process		2,422		4,703
Finished goods		131,486		114,042
Total inventories	$	158,111	$	143,591

10. Goodwill and Other Intangible Assets

When the Company acquires a business, the amount assigned to the tangible assets and liabilities and intangible assets acquired is based on their respective fair values determined as of the acquisition date. The excess of the purchase price over the tangible assets and liabilities and intangible assets is recorded as goodwill.

The changes in the carrying amount of goodwill are as follows (in thousands):

Balance as of August 28, 2021	$	429,538
Goodwill recorded during the period		—
Other		(84	)
Balance as of November 27, 2021	$	429,454

Intangible assets, net in the Company’s consolidated balance sheets are as follows (in thousands):

	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
November 27, 2021
Customer contracts	$	237,807	$	190,604	$	47,203
Software		75,614		41,836		33,778
Other intangible assets		36,826		35,140		1,686
	$	350,247	$	267,580	$	82,667
August 28, 2021
Customer contracts	$	237,384	$	188,255	$	49,129
Software		74,475		40,763		33,712
Other intangible assets		36,866		35,069		1,797
	$	348,725	$	264,087	$	84,638

11. Asset Retirement Obligations

The Company recognizes asset retirement obligations in the period in which they are incurred if a reasonable estimate of fair value can be made. The associated asset retirement costs are capitalized as part of the carrying amount of the long-lived asset. The Company

UniFirst Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

continues to depreciate, on a straight-line basis, the amount added to property, plant and equipment and recognizes accretion expense in connection with the discounted liability over the various remaining lives which range from approximately 1 to 23 years.

A reconciliation of the Company’s asset retirement liability for the thirteen weeks ended November 27, 2021 was as follows (in thousands):

	November 27, 2021
Beginning balance as of August 28, 2021	$	14,887
Accretion expense		246
Effect of exchange rate changes		(144	)
Balance as of November 27, 2021	$	14,989

Asset retirement obligations are included in long-term accrued liabilities in the Company’s consolidated balance sheets.

12. Commitments and Contingencies

Lease Commitments

The Company has operating leases for certain operating facilities, vehicles and equipment, which provide the right to use the underlying asset and require lease payments over the term of the lease. Each new contract is evaluated to determine if an arrangement contains a lease and whether that lease meets the classification criteria of a finance or operating lease. All identified leases are recorded on the consolidated balance sheet with a corresponding operating lease right-of-use asset, net, representing the right to use the underlying asset for the lease term and the operating lease liabilities representing the obligation to make lease payments arising from the lease. Short-term operating leases, which have an initial term of twelve months or less, are not recorded on the consolidated balance sheet.

Operating lease right-of-use assets, net and operating lease liabilities are recognized at the commencement date of the lease based on the present value of lease payments over the lease term and include options to extend or terminate the lease when they are reasonably certain to be exercised. The present value of lease payments is determined primarily using the incremental borrowing rate based on the information available as of the lease commencement date. Lease expense for operating leases is recorded on a straight-line basis over the lease term and variable lease costs are recorded as incurred. Both lease expense and variable lease costs are primarily recorded in cost of revenues on the Company's consolidated statements of income. The Company's lease agreements do not contain any material residual value guarantees or material restrictive covenants.

The following table presents the operating lease cost and information related to the operating lease right-of-use assets, net and operating lease liabilities for the thirteen weeks ended November 27, 2021:

(In thousands, except lease term and discount rate)
Lease cost
Operating lease costs including short-term lease expense and variable lease costs, which were immaterial in the period	$	5,237

Operating cash flow impacts
Cash paid for amounts included in the measurement of operating lease liabilities	$	3,701
Operating lease right-of-use assets obtained in exchange for new operating lease liabilities	$	5,539
Weighted-average remaining lease term - operating leases	4.34
Weighted-average discount rate - operating leases		1.96	%

UniFirst Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

The contractual future minimum lease payments of the Company's operating lease liabilities by fiscal year are as follows as of November 27, 2021:

(In thousands)
2022 (remaining nine months)	$	2,043
2023		14,271
2024		11,262
2025		7,631
2026		5,341
Thereafter		6,781
Total payments		47,329
Less interest		(1,768	)
Total present value of lease payments	$	45,561

Environmental and Legal Contingencies

The Company and its operations are subject to various federal, state and local laws and regulations governing, among other things, air emissions, wastewater discharges, and the generation, handling, storage, transportation, treatment and disposal of hazardous wastes and other substances. In particular, industrial laundries currently use and must dispose of detergent wastewater and other residues, and, in the past, used perchloroethylene and other dry-cleaning solvents. The Company is attentive to the environmental concerns surrounding the disposal of these materials and has, through the years, taken measures to avoid their improper disposal. The Company has settled, or contributed to the settlement of, past actions or claims brought against the Company relating to the disposal of hazardous materials at several sites and there can be no assurance that the Company will not have to expend material amounts to remediate the consequences of any such disposal in the future.

U.S. GAAP requires that a liability for contingencies be recorded when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated. Significant judgment is required to determine the existence of a liability, as well as the amount to be recorded. The Company regularly consults with attorneys and outside consultants in its consideration of the relevant facts and circumstances before recording a contingent liability. Changes in enacted laws, regulatory orders or decrees, management’s estimates of costs, risk-free interest rates, insurance proceeds, participation by other parties, the timing of payments, the input of the Company’s attorneys and outside consultants or other factual circumstances could have a material impact on the amounts recorded for environmental and other contingent liabilities.

Under environmental laws, an owner or lessee of real estate may be liable for the costs of removal or remediation of certain hazardous or toxic substances located on, or in, or emanating from, such property, as well as related costs of investigation and property damage. Such laws often impose liability without regard to whether the owner or lessee knew of, or was responsible for the presence of such hazardous or toxic substances. There can be no assurances that acquired or leased locations have been operated in compliance with environmental laws and regulations or that future uses or conditions will not result in the imposition of liability upon the Company under such laws or expose the Company to third-party actions such as tort suits. The Company continues to address environmental conditions under terms of consent orders negotiated with the applicable environmental authorities or otherwise with respect to certain sites.

The Company has accrued certain costs related to certain sites, including but not limited to sites in Woburn and Somerville, Massachusetts, as it has been determined that the costs are probable and can be reasonably estimated. The Company, together with multiple other companies, is party to a consent decree related to its property and parcels of land (the “Central Area”) at a site in Woburn, Massachusetts. The United States Environmental Protection Agency (the “EPA”) has provided the Company and other signatories to the consent decree with comments on the design and implementation of groundwater and soil remedies at the Woburn site and investigation of environmental conditions in the Central Area. The consent decree does not address any remediation work that may be required in the Central Area. The Company, and other signatories, have implemented and proposed to do additional work at the Woburn site but many of the EPA’s comments remain to be resolved. The Company has accrued costs to perform certain work responsive to the EPA’s comments. Additionally, the Company has implemented mitigation measures and continues to monitor environmental conditions at the Somerville, Massachusetts site. The Company has agreed to undertake additional actions responsive to a notice of audit findings from the Massachusetts Department of Environmental Protection concerning a regulatory submittal that the Company made in 2009 for a portion of the site. The Company has received demands from the local transit authority for reimbursement of certain costs associated with its construction of a new municipal transit station in the area of the Somerville site. This station is part of an ongoing extension of the transit system. The Company has reserved for costs in connection with this matter; however, in light of the uncertainties associated with this matter, these costs and the related reserve may change.

UniFirst Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

The Company routinely reviews and evaluates sites that may require remediation and monitoring and determines its estimated costs based on various estimates and assumptions. These estimates are developed using its internal sources or by third party environmental engineers or other service providers. Internally developed estimates are based on:

•

Management’s judgment and experience in remediating and monitoring the Company’s sites;

•

Information available from regulatory agencies as to costs of remediation and monitoring;

•

The number, financial resources and relative degree of responsibility of other potentially responsible parties (“PRPs”) who may be liable for remediation and monitoring of a specific site; and

•

The typical allocation of costs among PRPs.

There is usually a range of reasonable estimates of the costs associated with each site. In accordance with U.S. GAAP, the Company’s accruals reflect the amount within the range that it believes is the best estimate or the low end of a range of estimates if no point within the range is a better estimate. Where it believes that both the amount of a particular liability and the timing of the payments are reliably determinable, the Company adjusts the cost in current dollars using a rate of 3% for inflation until the time of expected payment and discounts the cost to present value using current risk-free interest rates. As of November 27, 2021, the risk-free interest rates utilized by the Company ranged from 0.81% to 1.89%.

For environmental liabilities that have been discounted, the Company includes interest accretion, based on the effective interest method, in selling and administrative expenses on the Company’s consolidated statements of income. The changes to the Company’s environmental liabilities for the thirteen weeks ended November 27, 2021 were as follows (in thousands):

	November 27, 2021
Balance as of August 28, 2021	$	32,859
Revisions in estimates		—
Costs incurred for which reserves have been provided		(374	)
Insurance proceeds		41
Interest accretion		149
Changes in discount rates		160
Balance as of November 27, 2021	$	32,835

Anticipated payments and insurance proceeds of currently identified environmental remediation liabilities as of November 27, 2021, for the next five fiscal years and thereafter, as measured in current dollars, are reflected below.

(In thousands)	2022			2023			2024			2025			2026			Thereafter			Total
Estimated costs – current dollars	$	12,116		$	2,530		$	2,080		$	1,366		$	1,129		$	12,712		$	31,933
Estimated insurance proceeds		(169	)		(159	)		(173	)		(159	)		(173	)		(380	)		(1,213	)
Net anticipated costs	$	11,947		$	2,371		$	1,907		$	1,207		$	956		$	12,332		$	30,720
Effect of inflation																				8,061
Effect of discounting																				(5,946	)
Balance as of November 27, 2021																			$	32,835

Estimated insurance proceeds are primarily received from an annuity received as part of a legal settlement with an insurance company. Annual proceeds of approximately $0.3 million are deposited into an escrow account which funds remediation and monitoring costs for two sites related to former operations in Williamstown, Vermont. Annual proceeds received but not expended in the current year accumulate in this account and may be used in future years for costs related to this site through the year 2027. As of November 27, 2021, the balance in this escrow account, which is held in a trust and is not recorded in the Company’s consolidated balance sheet, was approximately $4.7 million. Also included in estimated insurance proceeds are amounts the Company is entitled to receive pursuant to legal settlements as reimbursements from three insurance companies for estimated costs at the site in Uvalde, Texas.

The Company’s nuclear garment decontamination facilities are licensed by respective state agencies, as delegated authority by the Nuclear Regulatory Commission (the “NRC”) pursuant to the NRC’s Agreement State program and are subject to applicable federal and state radioactive material regulations. In addition, the Company’s international locations (Canada, the United Kingdom and the European Union) are regulated by equivalent respective jurisdictional authorities. There can be no assurance that such regulation will not lead to material disruptions in the Company’s garment decontamination business.

UniFirst Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

From time to time, the Company is also subject to legal proceedings and claims arising from the conduct of its business operations, including personal injury claims, customer contract matters, employment claims and environmental matters as described above.

While it is impossible for the Company to ascertain the ultimate legal and financial liability with respect to contingent liabilities, including lawsuits and environmental contingencies, the Company believes that the aggregate amount of such liabilities, if any, in excess of amounts covered by insurance have been properly accrued in accordance with U.S. GAAP. It is possible, however, that the future financial position and/or results of operations for any particular future period could be materially affected by changes in the Company’s assumptions or strategies related to these contingencies or changes out of the Company’s control.

13. Income Taxes

In accordance with ASC 740, Income Taxes (“ASC 740”), each interim period is considered integral to the annual period and tax expense is measured using an estimated annual effective tax rate. An entity is required to record income tax expense each quarter based on its annual effective tax rate estimated for the full fiscal year and use that rate to provide for income taxes on a current year-to-date basis, adjusted for discrete taxable events that occur during the interim period.

Effective tax rate

The Company’s effective tax rate for the thirteen weeks ended November 27, 2021 was 24.6% as compared to 25.0% for the corresponding period in the prior year. The decrease in the effective tax rate for the thirteen weeks ended November 27, 2021 as compared to the corresponding period in the prior year was due primarily to an increased tax benefit related to the foreign derived intangible income deduction during the thirteen weeks ended November 27, 2021.

Uncertain tax positions

The Company recognizes interest and penalties related to uncertain tax positions as a component of income tax expense, which is consistent with the recognition of these items in prior reporting periods. During the thirteen weeks ended November 27, 2021, there was a net increase in unrecognized tax position of $0.5 million related to existing reserves.

All U.S. and Canadian federal income tax statutes have lapsed for filings up to and including fiscal years 2015 and 2013, respectively. With a few exceptions, the Company is no longer subject to state and local income tax examinations for periods prior to fiscal 2016. The Company is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change significantly in the next 12 months.

14. Long-Term Debt

On March 26, 2021, the Company entered into an amended and restated $175.0 million unsecured revolving credit agreement (the “2021 Credit Agreement”) with a syndicate of banks, which matures on March 26, 2026. The 2021 Credit Agreement amended and restated the Company’s prior credit agreement, which was scheduled to mature on April 11, 2021. Under the 2021 Credit Agreement, the Company is able to borrow funds at variable interest rates based on, at the Company’s election, the Eurodollar rate or a base rate, plus in each case a spread based on the Company’s consolidated funded debt ratio. Availability of credit requires compliance with certain financial and other covenants, including a maximum consolidated funded debt ratio and minimum consolidated interest coverage ratio as defined in the 2021 Credit Agreement. The Company tests its compliance with these financial covenants on a fiscal quarterly basis. As of November 27, 2021, the interest rates applicable to the Company’s borrowings under the 2021 Credit Agreement would be calculated as LIBOR plus 1.00% at the time of the respective borrowing. As of November 27, 2021, the Company had no outstanding borrowings and had outstanding letters of credit amounting to $67.5 million, leaving $107.5 million available for borrowing under the 2021 Credit Agreement.

As of November 27, 2021, the Company was in compliance with all covenants under the 2021 Credit Agreement.

UniFirst Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

15. Accumulated Other Comprehensive Loss

The changes in each component of accumulated other comprehensive loss, net of tax, for the thirteen weeks ended November 27, 2021 and November 28, 2020 were as follows (in thousands):

	Thirteen weeks ended November 27, 2021
	Foreign Currency Translation			Pension- related (1)			Derivative Financial Instruments (1)			Total Accumulated Other Comprehensive Loss
Balance as of August 28, 2021	$	(17,801	)	$	(7,066	)	$	31		$	(24,836	)
Other comprehensive income (loss) before reclassification		(2,799	)		—			85			(2,714	)
Amounts reclassified from accumulated other comprehensive loss		—			—			(38	)		(38	)
Net current period other comprehensive (loss) income		(2,799	)		—			47			(2,752	)
Balance as of November 27, 2021	$	(20,600	)	$	(7,066	)	$	78		$	(27,588	)

	Thirteen weeks ended November 28, 2020
	Foreign Currency Translation			Pension- related (1)			Derivative Financial Instruments (1)			Total Accumulated Other Comprehensive Loss
Balance as of August 29, 2020	$	(22,009	)	$	(10,026	)	$	65		$	(31,970	)
Other comprehensive income (loss) before reclassification		1,310			—			(10	)		1,300
Amounts reclassified from accumulated other comprehensive loss		—			—			(11	)		(11	)
Net current period other comprehensive (loss) income		1,310			—			(21	)		1,289
Balance as of November 28, 2020	$	(20,699	)	$	(10,026	)	$	44		$	(30,681	)

(1)

Amounts are shown net of tax

Amounts reclassified from accumulated other comprehensive loss, net of tax, for the thirteen weeks ended November 27, 2021 and November 28, 2020 were as follows (in thousands):

	Thirteen weeks ended
	November 27, 2021			November 28, 2020
Derivative financial instruments, net:
Forward contracts (b)	$	(38	)	$	(11	)
Total, net of tax		(38	)		(11	)

Total amounts reclassified, net of tax	$	(38	)	$	(11	)

(a)

Amounts included in selling and administrative expenses in the consolidated statements of income.

(b)

Amounts included in revenues in the consolidated statements of income.

16. Segment Reporting

Operating segments are identified as components of an enterprise for which separate discrete financial information is available for evaluation by the chief operating decision-maker, or decision-making group, in making decisions on how to allocate resources and assess performance. The Company’s chief operating decision maker is the Company’s chief executive officer. The Company has six operating segments based on the information reviewed by its chief executive officer: U.S. Rental and Cleaning, Canadian Rental and Cleaning, Manufacturing (“MFG”), Corporate, Specialty Garments and First Aid. The U.S. Rental and Cleaning and Canadian Rental

UniFirst Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

and Cleaning operating segments have been combined to form the U.S. and Canadian Rental and Cleaning reporting segment, and as a result, the Company has five reporting segments.

The U.S. and Canadian Rental and Cleaning reporting segment purchases, rents, cleans, delivers and sells uniforms and protective clothing and non-garment items in the United States and Canada. The laundry locations of the U.S. and Canadian Rental and Cleaning reporting segment are referred to by the Company as “industrial laundries” or “industrial laundry locations.”

The MFG operating segment designs and manufactures uniforms and non-garment items primarily for the purpose of providing these goods to the U.S. and Canadian Rental and Cleaning reporting segment. MFG revenues are primarily generated when goods are shipped from the Company’s manufacturing facilities, or its subcontract manufacturers, to other Company locations. These intercompany revenues are recorded at a transfer price which is typically in excess of the actual manufacturing cost. Manufactured products are carried in inventory until placed in service at which time they are amortized at this transfer price. On a consolidated basis, intercompany revenues and income are eliminated and the carrying value of inventories and rental merchandise in service is reduced to the manufacturing cost. Income before income taxes from MFG net of the intercompany MFG elimination offsets the merchandise amortization costs incurred by the U.S. and Canadian Rental and Cleaning reporting segment as the merchandise costs of this reporting segment are amortized and recognized based on inventories purchased from MFG at the transfer price which is above the Company’s manufacturing cost.

The Corporate operating segment consists of costs associated with the Company’s distribution center, sales and marketing, information systems, engineering, procurement, supply chain, accounting and finance, human resources, other general and administrative costs and interest expense. The revenues generated from the Corporate operating segment represent certain direct sales made by the Company directly from its distribution center. The products sold by this operating segment are the same products rented and sold by the U.S. and Canadian Rental and Cleaning reporting segment. No assets or capital expenditures are allocated to this operating segment in the information reviewed by the chief executive officer. However, depreciation and amortization expense related to certain assets are reflected in operating income and income before income taxes for the Corporate operating segment. The assets that give rise to this depreciation and amortization are included in the total assets of the U.S. and Canadian Rental and Cleaning reporting segment as this is how they are tracked and reviewed by the Company. The majority of expenses accounted for within the Corporate segment relate to costs of the U.S. and Canadian Rental and Cleaning segment, with the remainder of the costs relating to the Specialty Garment and First Aid segments.

The Specialty Garments operating segment purchases, rents, cleans, delivers and sells, specialty garments and non-garment items primarily for nuclear and cleanroom applications and provides cleanroom cleaning services at limited customer locations. The First Aid operating segment sells first aid cabinet services and other safety supplies, provides certain safety training, as well as maintains wholesale distribution and pill packaging operations.

The Company refers to the U.S. and Canadian Rental and Cleaning, MFG, and Corporate reporting segments combined as its “Core Laundry Operations,” which is included as a subtotal in the following table (in thousands):

Thirteen weeks ended	U.S. and Canadian Rental and Cleaning			MFG		Net Interco MFG Elim			Corporate			Subtotal Core Laundry Operations			Specialty Garments		First Aid			Total
November 27, 2021
Revenues	$	420,053		$	90,725	$	(90,725	)	$	8,793		$	428,846		$	39,484	$	17,834		$	486,164
Operating income (loss)	$	73,925		$	24,025	$	(7,599	)	$	(53,844	)	$	36,507		$	8,629	$	(346	)	$	44,790
Interest (income) expense, net	$	(666	)	$	—	$	—		$	18		$	(648	)	$	—	$	—		$	(648	)
Income (loss) before taxes	$	74,570		$	23,966	$	(7,599	)	$	(53,990	)	$	36,947		$	8,105	$	(350	)	$	44,702
November 28, 2020
Revenues	$	386,158		$	59,082	$	(59,082	)	$	7,032		$	393,190		$	38,134	$	15,529		$	446,853
Operating income (loss)	$	74,840		$	19,810	$	(994	)	$	(44,786	)	$	48,870		$	7,159	$	13		$	56,042
Interest (income) expense, net	$	(693	)	$	—	$	—		$	125		$	(568	)	$	—	$	—		$	(568	)
Income (loss) before taxes	$	75,542		$	19,674	$	(994	)	$	(45,383	)	$	48,839		$	7,008	$	14		$	55,861

UniFirst Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

17. Shares Repurchased and Dividends

On October 20, 2021, the Company announced that it would be raising its quarterly dividend to $0.30 per share for Common Stock and to $0.24 per share for Class B Common Stock, up from $0.25 and $0.20 per share, respectively. The amount and timing of any future dividend payment is subject to the approval of the Board of Directors each quarter.

On January 2, 2019, the Company’s Board of Directors approved a share repurchase program (the “2019 Share Repurchase Program”) authorizing the Company to repurchase from time to time up to $100.0 million of its outstanding shares of Common Stock. On October 18, 2021, the Company’s Board of Directors authorized a new share repurchase program (the “2021 Share Repurchase Program” and, together with the 2019 Share Repurchase Program, the “Share Repurchase Programs”) to repurchase from time to time up to $100.0 million of our outstanding shares of Common Stock, inclusive of the amount which remained available under the existing share repurchase program approved on January 2, 2019. Repurchases made under the new program, if any, will be made in either the open market or in privately negotiated transactions. The timing, manner, price and amount of any repurchases will depend on a variety of factors, including economic and market conditions, the Company stock price, corporate liquidity requirements and priorities, applicable legal requirements and other factors. The share repurchase program will be funded using the Company’s available cash or capacity under its 2021 Credit Agreement and may be suspended or discontinued at any time. During the thirteen weeks ended November 27, 2021, the Company repurchased 22,750 shares for an average price per share of $209.73 under the Share Repurchase Programs. During the thirteen weeks ended November 28, 2020, the Company repurchased 41,000 shares for an average price per share of $176.01 under the 2019 Share Repurchase Program. As of November 27, 2021, the Company had $97.3 million remaining to repurchase under the 2021 Share Repurchase Program.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

SAFE HARBOR FOR FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q and any documents incorporated by reference may contain forward-looking statements within the meaning of the federal securities laws. Forward-looking statements contained in this Quarterly Report on Form 10-Q and any documents incorporated by reference are subject to the safe harbor created by the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by words such as “estimates,” “anticipates,” “projects,” “plans,” “expects,” “intends,” “believes,” “seeks,” “could,” “should,” “may,” “will,” “strategy,” “objective,” “assume,” “strive,” or the negative versions thereof, and similar expressions and by the context in which they are used. Such forward-looking statements are based upon our current expectations and speak only as of the date made. Such statements are highly dependent upon a variety of risks, uncertainties and other 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 caused by adverse economic conditions, including, without limitation, as a result of extraordinary events or circumstances such as the COVID-19 pandemic, and their impact on our customers’ businesses and workforce levels, disruptions of our business and operations, including limitations on, or closures of, our facilities, or the business and operations of our customers or suppliers in connection with extraordinary events or circumstances such as the COVID-19 pandemic, uncertainties regarding our 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, our ability to compete successfully without any significant degradation in our margin rates, seasonal and quarterly 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, which such supply could be severely disrupted as a result of extraordinary events or circumstances such as the COVID-19 pandemic, any loss of key management or other personnel, increased costs as a result of any 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 negative effect on our business from sharply depressed oil and natural gas prices, including, without limitation, as a result of extraordinary events or circumstances such as the COVID-19 pandemic, the continuing increase in domestic healthcare costs, increased workers’ compensation claim costs, increased healthcare claim costs, including as a result of extraordinary events or circumstances such as the COVID-19 pandemic, our ability to retain and grow our customer base, demand and prices for our products and services, fluctuations in our Specialty Garments business, political instability, supply chain disruption or infection among our employees in Mexico and Nicaragua where our principal garment manufacturing plants are located, including, without limitation, as a result of extraordinary events or circumstances such as the COVID-19 pandemic, our ability to properly and efficiently design, construct, implement and operate a new customer relationship management (“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 any changes in Securities and Exchange Commission, New York Stock Exchange and accounting rules, strikes and unemployment levels, our efforts to evaluate and potentially reduce internal costs, economic and other developments associated with the war on terrorism and its impact on the economy, the impact of foreign trade policies and tariffs or other impositions on imported goods on our business, results of operations and financial condition, general economic conditions, our ability to successfully implement our business strategies and processes, including our capital allocation strategies and the other factors described under “Part I, Item 1A. Risk Factors” and elsewhere in our Annual Report on Form 10-K for the year ended August 28, 2021 and in our other filings with the Securities and Exchange Commission, including, without limitation, under “Part II, Item 1A. Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q. We undertake no obligation to update any forward-looking statements to reflect events or circumstances arising after the date on which they are made.

Business Overview

UniFirst Corporation, together with its subsidiaries, hereunder referred to as “we”, “our”, the “Company”, or “UniFirst”, is one of the largest providers of workplace uniforms and protective work wear clothing in the United States. We design, manufacture, personalize, rent, clean, deliver, and sell a wide range of uniforms and protective clothing, including shirts, pants, jackets, coveralls, lab coats, smocks, aprons and specialized protective wear, such as flame resistant and high visibility garments. We also rent and sell industrial wiping products, floor mats, facility service products and other non-garment items, and provide restroom and cleaning supplies and first aid cabinet services and other safety supplies as well as provide certain safety training to a variety of manufacturers, retailers and service companies.

We serve businesses of all sizes in numerous industry categories. Typical customers include automobile service centers and dealers, delivery services, food and general merchandise retailers, food processors and service operations, light manufacturers, maintenance facilities, restaurants, service companies, soft and durable goods wholesalers, transportation companies, healthcare providers and others who require employee clothing for image, identification, protection or utility purposes. We also provide our customers with restroom and cleaning supplies, including air fresheners, paper products and hand soaps.

At certain specialized facilities, we also decontaminate and clean work clothes and other items that may have been exposed to radioactive materials and service special cleanroom protective wear and facilities. Typical customers for these specialized services include government agencies, research and development laboratories, high technology companies and utilities operating nuclear reactors.

We continue to expand into additional geographic markets through acquisitions and organic growth. We currently service over 300,000 customer locations in the United States, Canada and Europe from over 260 customer service, distribution and manufacturing facilities.

As mentioned and described in Note 16 to our Consolidated Financial Statements, we have five reporting segments: U.S. and Canadian Rental and Cleaning, MFG, Corporate, Specialty Garments and First Aid. We refer to the laundry locations of the U.S. and Canadian Rental and Cleaning reporting segment as “industrial laundries” or “industrial laundry locations”, and to the U.S. and Canadian Rental and Cleaning, MFG, and Corporate reporting segments combined as our “Core Laundry Operations.”

Critical Accounting Policies and Estimates

The discussion of our financial condition and results of operations is based upon the Consolidated Financial Statements, which have been prepared in conformity with United States generally accepted accounting principles (“U.S. GAAP”). As such, management is required to make certain estimates, judgments and assumptions that are believed to be reasonable based on the information available. These estimates and assumptions affect the reported amount of assets and liabilities, revenues and expenses, and disclosure of contingent assets and liabilities at the date of the financial statements. Actual results may differ from these estimates under different assumptions or conditions.

Critical accounting policies are defined as those that are reflective of significant judgments and uncertainties, the most important and pervasive accounting policies used and areas most sensitive to material changes from external factors. The critical accounting estimates that we believe affect our more significant judgments and estimates used in the preparation of our Consolidated Financial Statements presented in this report are described in Management’s Discussion and Analysis of Financial Condition and Results of Operations and in the Notes to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended August 28, 2021.

COVID-19 Assessment

The global COVID-19 pandemic continues to impact the countries in which we operate. Developments continue to occur rapidly, including the recent emergence and spread of new COVID-19 variants. Our revenues in the first half of fiscal 2021 were significantly adversely impacted as a result of many customers closing their businesses or operating at limited capacities. If customers were to again be forced to close or limit operations as new COVID-19 outbreaks occur, any such closures or reductions in operating levels could have a significant adverse impact on our business. At times during the pandemic, we have also experienced supply chain disruptions with respect to certain products, including hand sanitizer and masks. Such disruptions continue to occur but have moderated to some extent more recently.

We remain focused on the safety and well-being of our team partners and on the service of our customers. We will continue to review and assess the rapidly-changing COVID-19 pandemic and its impacts on our team partners, our customers, our suppliers and our business so that we can seek to address the impacts on our business and service our customers.

We have assessed the current impact of COVID-19 on our consolidated financial condition, results of operations, and cash flows, as well as our estimates and accounting policies. We have made additional disclosures of these assessments, as necessary. Given the unprecedented nature of this situation, including the emergence of new COVID-19 variants, we cannot reasonably estimate the full extent or duration of the impact COVID-19 will have on our consolidated financial condition, results of operations, and cash flows in the foreseeable future. The ultimate impact of COVID-19 on the Company is highly uncertain and will depend on future developments, and such impacts could exist for an extended period of time, even after the COVID-19 pandemic subsides.

As of November 27, 2021, our cash, cash equivalents, and short-term investments were $478.1 million. We also have access to significant borrowing capacity under our unsecured revolving credit facility, which we believe, together with our cash balances, will continue to help us manage the impacts of the COVID-19 pandemic on our business and address related liquidity needs.

Please see “Part I, Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended August 28, 2021 for an additional discussion of risks and potential risks of the COVID-19 pandemic on our business, financial condition and results of operations.

Results of Operations

The following table presents certain selected financial data, including the percentage of revenues represented by each item, for the thirteen weeks ended November 27, 2021 and November 28, 2020.

	Thirteen weeks ended
(In thousands, except percentages)	November 27, 2021		% of Revenues			November 28, 2020		% of Revenues			% Change
Revenues	$	486,164		100.0	%	$	446,853		100.0	%		8.8	%
Operating expenses:
Cost of revenues (1)		310,130		63.8			275,800		61.7			12.4
Selling and administrative expenses (1)		104,388		21.5			88,703		19.9			17.7
Depreciation and amortization		26,856		5.5			26,308		5.9			2.1
Total operating expenses		441,374		90.8			390,811		87.5			12.9
Operating income		44,790		9.2			56,042		12.5			(20.1	)
Other expense, net		88		0.0			181		0.0			(51.4	)
Income before income taxes		44,702		9.2			55,861		12.5			(20.0	)
Provision for income taxes		10,997		2.3			13,965		3.1			(21.3	)
Net income	$	33,705		6.9	%	$	41,896		9.4	%		(19.6	)%

(1)	Exclusive of depreciation on our property, plant and equipment and amortization on our intangible assets.

General

We derive our revenues through the design, manufacture, personalization, rental, cleaning, delivering, and selling of a wide range of uniforms and protective clothing, including shirts, pants, jackets, coveralls, lab coats, smocks and aprons and specialized protective wear, such as flame resistant and high visibility garments. We also rent industrial wiping products, floor mats, facility service products, other non-garment items, and provide restroom and cleaning supplies and first aid cabinet services and other safety supplies, to a variety of manufacturers, retailers and service companies. We have five reporting segments, U.S. and Canadian Rental and Cleaning, MFG, Specialty Garments, First Aid and Corporate. We refer to the U.S. and Canadian Rental and Cleaning, MFG, and Corporate reporting segments combined as our “Core Laundry Operations.”

Cost of revenues include the amortization of rental merchandise in service and merchandise costs related to direct sales as well as labor and other production, service and delivery costs and distribution costs associated with operating our Core Laundry Operations, Specialty Garments facilities and First Aid locations. Selling and administrative costs include costs related to our sales and marketing functions as well as general and administrative costs associated with our corporate offices, non-operating environmental sites and operating locations including information systems, engineering, materials management, manufacturing planning, finance, budgeting and human resources.

Our results of operations may also be adversely impacted by the decline in the Canadian exchange rate.

Our business is subject to various state and federal regulations, including employment laws and regulations, minimum wage requirements, overtime requirements, working condition requirements, citizenship requirements, healthcare insurance mandates and other laws and regulations that impact our labor costs. Labor costs have increased recently as a result of increases in state and local minimum wage levels as well as the overall impact of wage pressure as the result of a low unemployment environment.

In fiscal 2018, we initiated a multiyear CRM project to further develop, implement and deploy a third-party application we licensed. This new solution improves functionality, capability and information flow as well as increases automation in servicing our customers. As of November 27, 2021, we have capitalized $35.9 million related to this CRM project. We began deployment of our new CRM project during the second half of fiscal 2021 and anticipate this will continue through fiscal 2022 and 2023. We are depreciating this system over a 10-year life and recognized $0.7 million of amortization expense during the thirteen weeks ended November 27, 2021.

Thirteen weeks ended November 27, 2021 compared with thirteen weeks ended November 28, 2020

Revenues

(In thousands, except percentages)	November 27, 2021		November 28, 2020		Dollar Change		Percent Change
Core Laundry Operations	$	428,846	$	393,190	$	35,656		9.1	%
Specialty Garments		39,484		38,134		1,350		3.5	%
First Aid		17,834		15,529		2,305		14.8	%
Consolidated total	$	486,164	$	446,853	$	39,311		8.8	%

Core Laundry Operations’ revenues during the first quarter of fiscal 2022 increased compared to the prior year comparable period. Core Laundry Operations’ organic growth, which adjusts for the estimated effect of acquisitions as well as fluctuations in the Canadian dollar, was 8.6%. This strong organic growth rate was primarily the result of customer reopenings, solid sales performance and improved customer retention in the first quarter of fiscal 2022 as well as efforts to share with our customers the cost increases that we are seeing in our business due to the current inflationary environment.

Specialty Garments revenues in the first quarter of fiscal 2022 increased compared to the prior year comparable period due primarily to growth in the cleanroom and European nuclear operations partially offset by a decrease in the US nuclear operations. Specialty Garments’ results are often affected by seasonality and the timing and length of its customers’ power reactor outages as well as its project-based activities.

First Aid revenues in the first quarter of fiscal 2022 increased compared to the prior year comparable period due to growth in both our van and wholesale distribution businesses.

Cost of Revenues

(In thousands, except percentages)

November 27, 2021

November 28, 2020

Dollar

Change

Percent

Change

Cost of revenues

310,130

275,800

34,330

12.4

% of Revenues

63.8

61.7

Core Laundry Operations’ cost of revenues as a percentage of revenues increased in the first quarter of fiscal 2022 as compared to the prior year comparable period. This increase was due primarily to higher merchandise, production payroll, energy and labor costs as a percentage of revenues. In addition, we had elevated expense related to internal use safety supplies compared to the prior year comparable period.

Specialty Garments cost of revenues as a percentage of revenues decreased in the first quarter of fiscal 2022 as compared to the prior year comparable period. This decrease was due primarily to lower merchandise and other production costs as percentages of revenue partially offset by higher production payroll and transportation costs as percentages of revenue.

Selling and Administrative Expenses

(In thousands, except percentages)

November 27, 2021

November 28, 2020

Dollar

Change

Percent

Change

Selling and administrative expenses

104,388

88,703

15,685

17.7

% of Revenues

21.5

19.9

Our selling and administrative costs increased as a percentage of revenues in the first quarter of fiscal 2022 as compared to the prior year comparable period due primarily to increased general and administrative payroll costs to advance our capabilities and costs directly attributable to our CRM, ERP and branding initiatives. Also contributing to the increase were increased healthcare claims, travel costs and indirect taxes.

Depreciation and Amortization

(In thousands, except percentages)

November 27, 2021

November 28, 2020

Dollar

Change

Percent

Change

Depreciation and amortization

26,856

26,308

548

2.1

% of Revenues

5.5

5.9

Depreciation and amortization expense increased in the first quarter of fiscal 2022 as compared to the prior year comparable period due primarily to continued investment in our infrastructure as well as our key technology initiatives. The higher expense includes amortization of $0.7 million for our new CRM project that we began to deploy in the second half of fiscal 2021.

Operating Income

For the thirteen weeks ended November 27, 2021 and November 28, 2020, changes in our revenues and costs as discussed above resulted in the following changes in our operating income and margin:

(In thousands, except percentages)	November 27, 2021			November 28, 2020			Dollar Change			Percent Change
Core Laundry Operations	$	36,507		$	48,870		$	(12,363	)		(25.3	)%
Specialty Garments		8,629			7,159			1,470			20.5	%
First Aid		(346	)		13			(359	)		(2761.5	)%
Operating income	$	44,790		$	56,042		$	(11,252	)		(20.1	)%
Operating income margin		9.2	%		12.5	%

Other Expense, net

(In thousands, except percentages)	November 27, 2021			November 28, 2020			Dollar Change			Percent Change
Interest income, net	$	(648	)	$	(568	)	$	(80	)		14.1	%
Other expense, net		736			749			(13	)		(1.7	)%
Total other expense, net	$	88		$	181		$	(93	)		(51.4	)%

Other expense, net during the first quarter of fiscal 2022 remained relatively consistent with the prior year comparable period.

Provision for Income Taxes

(In thousands, except percentages)

November 27, 2021

November 28, 2020

Dollar

Change

Percent

Change

Provision for income taxes

10,997

13,965

(2,968

)

(21.3

Effective income tax rate

24.6

25.0

The decrease in our effective tax rate for the first quarter of fiscal 2022 as compared to the prior year comparable period was due primarily to the impact of an increased tax benefit related to the foreign derived intangible income deduction.

Liquidity and Capital Resources

General

Cash, cash equivalents and short-term investments totaled $478.1 million as of November 27, 2021, an increase of $5.1 million from November 28, 2020 when the amount totaled $473.0 million. We generated $7.8 million and $52.7 million in cash from operating activities in the thirteen weeks ended November 27, 2021 and November 28, 2020, respectively.

Pursuant to share repurchase programs approved by our Board of Directors on January 2, 2019 and October 18, 2021, we repurchased 22,750 shares of our Common Stock for an aggregate of approximately $4.8 million during the thirteen weeks ended November 27, 2021, of which $4.6 million was paid during the period.

We believe, although there can be no assurance, that our current cash, cash equivalents and short-term investments balances, our cash generated from future operations and amounts available under our 2021 Credit Agreement (defined below) will be sufficient to meet our current anticipated working capital and capital expenditure requirements for at least the next 12 months and will help us manage the impacts of the COVID-19 pandemic on our business and address related liquidity needs.

Cash flows provided by operating activities have historically been the primary source of our liquidity. We generally use these cash flows to fund most, if not all, of our operations, capital expenditure and acquisition activities as well as dividends on our common stock and stock repurchases. We may also use cash flows provided by operating activities, as well as proceeds from loans payable and long-term debt, to fund growth and acquisition opportunities, as well as other cash requirements.

Sources and uses of cash flows for the thirteen weeks ended November 27, 2021 and November 28, 2020, respectively, are summarized as follows:

(In thousands, except percentages)	November 27, 2021			November 28, 2020			Percent Change
Net cash provided by operating activities	$	7,822		$	52,741			(85.2	)%
Net cash used in investing activities		(31,517	)		(42,424	)		(25.7	)%
Net cash used in financing activities		(9,858	)		(12,590	)		(21.7	)%
Effect of exchange rate changes		(1,254	)		445			(381.8	)%
Net decrease in cash, cash equivalents and short-term investments	$	(34,807	)	$	(1,828	)		1804.1	%

Net Cash Provided by Operating Activities

The net cash provided by operating activities during the thirteen weeks ended November 27, 2021 decreased as compared to the prior year comparable period due primarily to increases in inventories, rental merchandise in service and accounts receivable. Also contributing to the decrease were decreases in net income and accrued liabilities. The elevated inventories related to the ongoing supply chain disruption and the increased merchandise in service are attributable to our balance sheet position continuing to normalize coming out of the COVID-19 pandemic impacted period. The increase in rental merchandise in service and accounts receivable was due to the increased revenue from the economic recovery from the earlier impacts of the COVID-19 pandemic. The decrease in accrued liabilities was due primarily to $7.9 million of the employer portion of U.S. social security taxes that we elected to defer paying in the first quarter of fiscal 2021 under the U.S. CARES Act. These items causing a decrease to the net cash provided by operating activities were partially offset by a decrease in prepaid and accrued income taxes due primarily to overpayments of taxes made in fiscal 2021 that were applied to estimated tax payments in the first quarter of fiscal 2022.

Net Cash Used in Investing Activities

The net decrease in cash used in investing activities during the thirteen weeks ended November 27, 2021 was due primarily to lower capital expenditures and capitalization of software costs of $10.8 million.

Net Cash Used in Financing Activities

The decrease in net cash used in financing activities was due primarily to a $2.6 million decrease in the repurchase of Common Stock in the thirteen weeks ended November 27, 2021 compared to the prior year comparable period.

Long-Term Debt and Borrowing Capacity

On March 26, 2021, we entered into an amended and restated $175.0 million unsecured revolving credit agreement (the “2021 Credit Agreement”) with a syndicate of banks, which matures on March 26, 2026. The 2021 Credit Agreement amended and restated our prior credit agreement, which was scheduled to mature on April 11, 2021. Under the 2021 Credit Agreement, we are able to borrow funds at variable interest rates based on, at our election, the Eurodollar rate or a base rate, plus in each case a spread based on our consolidated funded debt ratio. Availability of credit requires compliance with certain financial and other covenants, including a maximum consolidated funded debt ratio and minimum consolidated interest coverage ratio as defined in the 2021 Credit Agreement. We test our compliance with these financial covenants on a fiscal quarterly basis. As of November 27, 2021, the interest rates applicable to our borrowings under the 2021 Credit Agreement would be calculated as LIBOR plus 1.00% at the time of the respective borrowing. As of November 27, 2021, we had no outstanding borrowings and had outstanding letters of credit amounting to $67.5 million, leaving $107.5 million available for borrowing under the 2021 Credit Agreement.

As of November 27, 2021, we were in compliance with all covenants under the 2021 Credit Agreement.

Derivative Instruments and Hedging Activities

In June 2018, we entered into twelve forward contracts to exchange CAD for U.S. dollars at fixed exchange rates in order to manage our exposure related to the certain forecasted CAD denominated sales of one of our subsidiaries. The hedged transactions are specified as the first amount of CAD denominated revenues invoiced by one of our domestic subsidiaries each fiscal quarter, beginning in the third fiscal quarter of 2019 and continuing through the second fiscal quarter of 2022. In total, we will sell approximately 12.1 million CAD at an average Canadian-dollar exchange rate of 0.7814 over these quarterly periods. We concluded that the forward contracts met the criteria to qualify as a cash flow hedge under U.S. GAAP.

In August 2021, we entered into twenty forward contracts to exchange CAD for U.S. dollars at fixed exchange rates in order to manage our exposure related to certain forecasted CAD denominated sales of one of our subsidiaries. The hedged transactions are specified as the first amount of CAD denominated revenues invoiced by one of our domestic subsidiaries each fiscal quarter, beginning in the first fiscal quarter of 2022 and continuing through the fourth fiscal quarter of 2026. In total, we will sell approximately 14.1 million CAD at an average Canadian-dollar exchange rate of 0.7861 over these quarterly periods. We concluded that the forward contracts met the criteria to qualify as a cash flow hedge under U.S. GAAP.

As of November 27, 2021, we had forward contracts with a notional value of approximately 11.5 million CAD outstanding and recorded the fair value of the contracts of $0.1 million in prepaid expenses and other current assets and other long-term assets with a corresponding gain in accumulated other comprehensive loss of $0.1 million, which was recorded net of tax. During the thirteen weeks ended November 27, 2021, we reclassified a nominal amount from accumulated other comprehensive income to revenue, related to the derivative financial instruments. The gain on these forward contracts that resulted in a decrease to accumulated other comprehensive loss as of November 27, 2021 is expected to be reclassified to revenues prior to their maturities on February 25, 2022 and August 29, 2026, respectively.

Commitments and Contingencies

We are subject to various federal, state and local laws and regulations governing, among other things, air emissions, wastewater discharges, and the generation, handling, storage, transportation, treatment and disposal of hazardous wastes and other substances. In particular, industrial laundries currently use and must dispose of detergent wastewater and other residues, and, in the past, used perchloroethylene and other dry-cleaning solvents. We are attentive to the environmental concerns surrounding the disposal of these materials and have, through the years, taken measures to avoid their improper disposal. We have settled, or contributed to the settlement of, past actions or claims brought against us relating to the disposal of hazardous materials at several sites and there can be no assurance that we will not have to expend material amounts to remediate the consequences of any such disposal in the future.

U.S. GAAP requires that a liability for contingencies be recorded when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated. Significant judgment is required to determine the existence of a liability, as well as the amount to be recorded. We regularly consult with attorneys and outside consultants in our consideration of the relevant facts and circumstances before recording a contingent liability. Changes in enacted laws, regulatory orders or decrees, our estimates of costs, risk-free interest rates, insurance proceeds, participation by other parties, the timing of payments, the input of our attorneys and outside consultants or other factual circumstances could have a material impact on the amounts recorded for environmental and other contingent liabilities.

Under environmental laws, an owner or lessee of real estate may be liable for the costs of removal or remediation of certain hazardous or toxic substances located on, or in, or emanating from, such property, as well as related costs of investigation and property damage. Such laws often impose liability without regard to whether the owner or lessee knew of, or was responsible for the presence of such hazardous or toxic substances. There can be no assurances that acquired or leased locations have been operated in compliance with environmental laws and regulations or that future uses or conditions will not result in the imposition of liability upon our Company under such laws or expose our Company to third-party actions such as tort suits. We continue to address environmental conditions under terms of consent orders negotiated with the applicable environmental authorities or otherwise with respect to certain sites.

We have accrued certain costs related to certain sites, including but not limited to sites in Woburn and Somerville, Massachusetts, as it has been determined that the costs are probable and can be reasonably estimated. We, together with multiple other companies, are party to a consent decree related to our property and other parcels of land (the “Central Area”) at a site in Woburn, Massachusetts. The United States Environmental Protection Agency (the “EPA”) has provided us and other signatories to the consent decree with comments on the design and implementation of groundwater and soil remedies at the Woburn site and investigation of environmental conditions in the Central Area. The consent decree does not address any remediation work that may be required in the Central Area. We, and other signatories, have implemented and proposed to do additional work at the Woburn site but many of the EPA’s comments remain to be resolved. We have accrued costs to perform certain work responsive to the EPA’s comments. Additionally, we have implemented mitigation measures and continue to monitor environmental conditions at the Somerville, Massachusetts site. We have agreed to undertake additional actions responsive to a notice of audit findings from the Massachusetts Department of Environmental

Protection concerning a regulatory submittal that we made in 2009 for a portion of the site. We have received demands from the local transit authority for reimbursement of certain costs associated with its construction of a new municipal transit station in the area of the Somerville site. This station is part of an ongoing extension of the transit system. We have reserved for costs in connection with this matter; however, in light of the uncertainties associated with this matter, these costs and the related reserve may change.

We routinely review and evaluate sites that may require remediation and monitoring and determine our estimated costs based on various estimates and assumptions. These estimates are developed using our internal sources or by third party environmental engineers or other service providers. Internally developed estimates are based on:

•

Management’s judgment and experience in remediating and monitoring our sites;

•

Information available from regulatory agencies as to costs of remediation and monitoring;

•

The number, financial resources and relative degree of responsibility of other potentially responsible parties (“PRPs”) who may be liable for remediation and monitoring of a specific site; and

•

The typical allocation of costs among PRPs.

There is usually a range of reasonable estimates of the costs associated with each site. In accordance with U.S. GAAP, our accruals represent the amount within the range that we believe is the best estimate or the low end of a range of estimates if no point within the range is a better estimate. When we believe that both the amount of a particular liability and the timing of the payments are reliably determinable, we adjust the cost in current dollars using a rate of 3% for inflation until the time of expected payment and discount the cost to present value using current risk-free interest rates. As of November 27, 2021, the risk-free interest rates we utilized ranged from 0.81% to 1.89%.

For environmental liabilities that have been discounted, we include interest accretion, based on the effective interest method, in selling and administrative expenses on the accompanying Consolidated Statements of Income. The changes to the amounts of our environmental liabilities for the thirteen weeks ended November 27, 2021 were as follows (in thousands):

	November 27, 2021
Balance as of August 28, 2021	$	32,859
Costs incurred for which reserves have been provided		(374	)
Insurance proceeds		41
Interest accretion		149
Changes in discount rates		160
Balance as of November 27, 2021	$	32,835

Anticipated payments and insurance proceeds relating to currently identified environmental remediation liabilities as of November 27, 2021, for the next five fiscal years and thereafter, as measured in current dollars, are reflected below.

(In thousands)	2022			2023			2024			2025			2026			Thereafter			Total
Estimated costs – current dollars	$	12,116		$	2,530		$	2,080		$	1,366		$	1,129		$	12,712		$	31,933
Estimated insurance proceeds		(169	)		(159	)		(173	)		(159	)		(173	)		(380	)		(1,213	)
Net anticipated costs	$	11,947		$	2,371		$	1,907		$	1,207		$	956		$	12,332		$	30,720
Effect of inflation																				8,061
Effect of discounting																				(5,946	)
Balance as of November 27, 2021																			$	32,835

Estimated insurance proceeds are primarily received from an annuity received as part of our legal settlement with an insurance company. Annual proceeds of approximately $0.3 million are deposited into an escrow account which funds remediation and monitoring costs for two sites related to our former operations in Williamstown, Vermont. Annual proceeds received but not expended in the current year accumulate in this account and may be used in future years for costs related to this site through the year 2027. As of November 27, 2021, the balance in this escrow account, which is held in a trust and is not recorded in our Consolidated Balance Sheet, was approximately $4.7 million. Also included in estimated insurance proceeds are amounts we are entitled to receive pursuant to legal settlements as reimbursements from three insurance companies for estimated costs at the site in Uvalde, Texas.

Our nuclear garment decontamination facilities are licensed by respective state agencies, as delegated authority by the Nuclear Regulatory Commission (the “NRC”) pursuant to the NRC’s Agreement State program and are subject to applicable federal and state radioactive material regulations. In addition, our international locations (Canada, the United Kingdom and the European Union) are

regulated by equivalent respective jurisdictional authorities. There can be no assurance that such regulation will not lead to material disruptions in the Company’s garment decontamination business.

From time to time, we are also subject to legal proceedings and claims arising from the conduct of our business operations, including personal injury claims, customer contract matters, employment claims and environmental matters as described above.

While it is impossible for us to ascertain the ultimate legal and financial liability with respect to contingent liabilities, including lawsuits and environmental contingencies, we believe that the aggregate amount of such liabilities, if any, in excess of amounts covered by insurance have been properly accrued in accordance with accounting principles generally accepted in the United States. It is possible, however, that the future financial position and/or results of operations for any particular future period could be materially affected by changes in our assumptions or strategies related to these contingencies or changes out of our control.

Off-Balance Sheet Arrangements

As of November 27, 2021, we did not have any off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of Securities and Exchange Commission Regulation S-K.

Effects of Inflation

In general, we believe that our results of operations are not dependent on moderate changes in the inflation rate. Historically, we have been able to manage the impacts of more significant changes in inflation rates through our customer relationships, customer agreements that generally provide for price increases consistent with the rate of inflation and continued focus on improvements of operational productivity. However, the current inflationary environment has had a negative impact on our margins and we expect that it will continue to pressure our margins in future periods.

Contractual Obligations and Other Commercial Commitments

As of November 27, 2021, there were no material changes to our contractual obligations that were disclosed in our Annual Report on Form 10-K for the year ended August 28, 2021.

Recent Accounting Pronouncements

See Note 2, “Recent Accounting Pronouncements” to our Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for more information on recently implemented and issued accounting standards.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Foreign Currency Exchange Risk

We have determined that all of our foreign subsidiaries operate primarily in local currencies that represent the functional currencies of such subsidiaries. All assets and liabilities of our foreign subsidiaries are translated into U.S. dollars using the exchange rate prevailing at the balance sheet date. The effects of exchange rate fluctuations on the translation of assets and liabilities are recorded as a component of shareholders’ equity. Revenues and expenses are translated at the average exchange rates in effect during each month of the fiscal year. As such, our financial condition and operating results are affected by fluctuations in the value of the U.S. dollar as compared to currencies in foreign countries. Revenues denominated in currencies other than the U.S. dollar represented approximately 8.4% of total consolidated revenues for the thirteen weeks ended November 27, 2021. Total assets denominated in currencies other than the U.S. dollar represented approximately 6.9% and 7.0% of total consolidated assets as of November 27, 2021 and August 28, 2021. If exchange rates had increased or decreased by 10% from the actual rates in effect during the thirteen weeks ended November 27, 2021, our revenues would have increased or decreased by approximately $4.1 million and, respectively, and total assets as of November 27, 2021 would have increased or decreased by approximately $16.6 million.

In August 2021, we entered into twenty forward contracts to exchange CAD for U.S. dollars at fixed exchange rates in order to manage its exposure related to certain forecasted CAD denominated sales of one of its subsidiaries. The hedged transactions are specified as the first amount of CAD denominated revenues invoiced by one of the Company’s domestic subsidiaries each fiscal quarter, beginning in the first fiscal quarter of 2022 and continuing through the fourth fiscal quarter of 2026. In total, the Company will sell approximately 14.1 million CAD at an average Canadian-dollar exchange rate of 0.7861 over these quarterly periods. The Company concluded that the forward contracts met the criteria to qualify as a cash flow hedge under U.S. GAAP.

As of November 27, 2021, we had forward contracts with a notional value of approximately 11.5 million CAD outstanding and recorded the fair value of the contracts of $0.1 million in prepaid expenses and other current assets and other long-term assets with a corresponding gain in accumulated other comprehensive loss of $0.1 million, which was recorded net of tax. During the thirteen weeks ended November 27, 2021, we reclassified a nominal amount from accumulated other comprehensive income to revenue, related to the derivative financial instruments. The gain on these forward contracts that resulted in a decrease to accumulated other comprehensive loss as of November 27, 2021 is expected to be reclassified to revenues prior to its maturity on February 25, 2022 and August 29, 2026, respectively.

Other than the forward contracts, discussed above, we do not operate a hedging program to mitigate the effect of a significant change in the value of the functional currencies of our foreign subsidiaries, which include the Canadian dollar, euro, British pound, Mexican peso and Nicaraguan cordoba, as compared to the U.S. dollar. Any losses or gains resulting from unhedged foreign currency transactions, including exchange rate fluctuations on intercompany accounts are reported as transaction losses (gains) in our other income, net. The intercompany payables and receivables are denominated in Canadian dollars, euros, British pounds, Mexican pesos and Nicaraguan cordobas. During the thirteen weeks ended November 27, 2021, transaction gains of $0.5 million were included in other expense, net. If exchange rates had increased or decreased by 10% during the thirteen weeks ended November 27, 2021, we would have recognized exchange gains or losses of approximately $0.2 million.

Please see “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended August 28, 2021 for an additional discussion of risks and potential risks of the COVID-19 pandemic on our business, financial performance and the market price of our Common Stock.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

As required by Rule 13a-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), we carried out an evaluation under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based upon their evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective to ensure that material information relating to the Company required to be disclosed by the Company in reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms and to ensure that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, our management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurances of achieving the desired control objectives, and management necessarily was required to apply its judgment in designing and evaluating the controls and procedures. We continue to review our disclosure controls and procedures, and our internal control over financial reporting, and may from time to time make changes aimed at enhancing their effectiveness and to ensure that our systems evolve with our business.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the first quarter of fiscal year 2022 that have materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time, we are subject to legal proceedings and claims arising from the current conduct of our business operations, including personal injury, customer contract, employment claims and environmental matters as described in our Consolidated Financial Statements. We maintain insurance coverage providing indemnification against many of such claims, and we do not expect that we will sustain any material loss as a result thereof. Refer to Note 12, “Commitments and Contingencies,” to the Consolidated Financial Statements, as well as Item 1A. Risk Factors below, for further discussion.

ITEM 1A. RISK FACTORS

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended August 28, 2021, which could materially affect our business, financial condition, and future results. The risks described in our Annual Report on Form 10-K are not the only risks that we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition, and operating results. Except to the extent previously updated or to the extent additional factual information disclosed elsewhere in this Quarterly Report on Form 10-Q relates to such risk factors (including, without limitation, the matters discussed in Part I, Item 2 – “Management’s Discussion and Analysis of Financial Condition and Results of Operations”), there have been no material changes to the risk factors set forth in our Annual Report on Form 10-K for the year ended August 28, 2021.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table provides information about repurchases of our equity securities during the thirteen weeks ended November 27, 2021:

	(a) Total Number of Shares of Stock Purchased(1)		(b) Average Price Paid per Share(1)		(c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(1)		(d) Maximum Number (or Approximate Dollar Value) of Shares that May Yet be Purchased Under the Plans or Programs(1)
August 29, 2021-September 25, 2021		4,750	$	224.33		4,750	$	35,448,704
September 26, 2021 - October 23, 2021		5,000	$	218.49		5,000	$	99,894,783
October 24, 2021 - November 27, 2021		13,000	$	185.00		13,000	$	97,281,704
		22,750				22,750

(1)

On January 2, 2019, our Board of Directors approved a share repurchase program authorizing the Company to repurchase from time to time up to $100.0 million of our outstanding shares of common stock. On October 18, 2021, the Company’s Board of Directors authorized a new share repurchase program to repurchase from time to time up to $100.0 million of our outstanding shares of Common Stock, inclusive of the amount which remained available under the existing share repurchase program approved on January 2, 2019. Repurchases made under the new program, if any, will be made in either the open market or in privately negotiated transactions. The timing, manner, price and amount of any repurchase will depend on a variety of factors, including economic and market conditions, the Company stock price, corporate liquidity requirements and priorities, applicable legal requirements and other factors. The share repurchase program has been funded to date using our available cash and may be suspended or discontinued at any time.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not Applicable.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS



31.1		Rule 13a-14(a)/15d-14(a) Certification of Steven S. Sintros (filed herewith).

31.2		Rule 13a-14(a)/15d-14(a) Certification of Shane O’Connor (filed herewith).

32.1		Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).

32.2		Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).

99.1		Form of Stock Appreciation Right Award for eligible participants under the UniFirst Corporation Executive Employment Plan pursuant to the UniFirst Corporation Amended and Restated 2010 Stock Option and Incentive Plan (filed herewith).

99.2		Form of Restricted Stock Unit Award for eligible participants under the UniFirst Corporation Executive Employment Plan pursuant to the UniFirst Corporation Amended and Restated 2010 Stock Option and Incentive Plan (filed herewith).

99.3		Form of Stock Appreciation Right Award for employees (filed herewith).

99.4		Form of Restricted Stock Unit Award for employees (filed herewith).

99.5		Form of Stock Appreciation Right Award for Directors (filed herewith).

101.SCH		Inline XBRL Taxonomy Extension Schema Document (filed herewith).

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document (filed herewith).

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document (filed herewith).

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document (filed herewith).

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document (filed herewith).

104		Cover Page Interactive Data File (formatted as Inline XBRL with applicable taxonomy extension information contained in Exhibits 101) (filed herewith).

SIGNATURES

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


		UniFirst Corporation

January 6, 2022	By:	/s/ Steven S. Sintros
		Steven S. Sintros
		President and Chief Executive Officer

January 6, 2022	By:	/s/ Shane O’Connor
		Shane O’Connor
		Executive Vice President and Chief Financial Officer

unf-ex311_9.htm

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO SECURITIES

EXCHANGE ACT RULE 13a-14(a)/15d-14(a) AS ADOPTED PURSUANT TO SECTION

302 OF THE SARBANES-OXLEY ACT OF 2002

I, Steven S. Sintros, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of UniFirst Corporation;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant, and have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)

Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)

Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5.	The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.


Date: January 6, 2022	By:	/s/ Steven S. Sintros
		Steven S. Sintros
		President and Chief Executive Officer (Principal Executive Officer)

unf-ex312_6.htm

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO SECURITIES

EXCHANGE ACT RULE 13a-14(a)/15d-14(a) AS ADOPTED PURSUANT TO SECTION

302 OF THE SARBANES-OXLEY ACT OF 2002

I, Shane O’Connor, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of UniFirst Corporation;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

(a)

(b)

(c)

(d)

5.	The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):

(a)

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.


Date: January 6, 2022	By:	/s/ Shane O’Connor
		Shane O’Connor
		Executive Vice President and Chief Financial Officer
		(Principal Financial Officer)

unf-ex321_7.htm

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION

906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code), I, Steven S. Sintros, President and Chief Executive Officer of UniFirst Corporation (the “Company”), and the Company’s Principal Executive Officer, do hereby certify, to the best of my knowledge, that:

(1)

The Company’s Quarterly Report on Form 10-Q for the quarter ended November 27, 2021 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


Date: January 6, 2022	By:	/s/ Steven S. Sintros
		Steven S. Sintros
		President and Chief Executive Officer (Principal Executive Officer)

unf-ex322_8.htm

Exhibit 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION

906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code), I, Shane O’Connor, Executive Vice President and Chief Financial Officer of UniFirst Corporation (the “Company”), do hereby certify, to the best of my knowledge, that:

(1)

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


Date: January 6, 2022	By:	/s/ Shane O’Connor
		Shane O’Connor
		Executive Vice President and Chief Financial Officer (Principal Financial Officer)

unf-ex991_84.htm

Exhibit 99.1

UniFirst UNIFIRST CORPORATION STOCK APPRECIATION RIGHT GRANTED UNDER THE UNIFIRST CORPORATION 2010 STOCK OPTION and INCENTIVE PLAN Name of Grantee: No. of Shares Subject to Stock Appreciation Right: Exercise Price per Share: $ Grant Date: Expiration Date: Pursuant to the UniFirst Corporation 2010 Stock Option and Incentive Plan as amended through the date hereof (the “Plan”), UniFirst Corporation (the “Company”) hereby grants to the Grantee named above, during the period commencing on the Grant Date and ending on the Expiration Date, a Stock Appreciation Right (the “Stock Appreciation Right”) with respect to the number of shares of Common Stock, par value $0.10 per share (the “Stock”) of the Company specified above at the Exercise Price per Share specified above subject to the terms and conditions set forth herein and in the Plan. This Stock Appreciation Right entitles the Grantee to the right to receive from the Company shares of Stock having a value equal to the excess of the Fair Market Value of the Stock on the date of exercise over the Exercise Price multiplied by the number of shares of Stock with respect to which the Stock Appreciation Right shall have been exercised, rounded down to the nearest whole share. 1. Vesting Schedule. No portion of this Stock Appreciation Right may be exercised until such portion shall have become vested and exercisable. Except as set forth below, and subject to the discretion of the Administrator (as defined in Section 2 of the Plan) to accelerate the exercisability schedule hereunder, this Stock Appreciation Right shall be exercisable with respect to the following number of shares of Stock subject to this Stock Appreciation Right as follows: 20 percent of the shares of Stock subject to this Stock Appreciation Right shall be vested and exercisable on October 31, 2022 and 20 percent of the shares of Stock subject to this Stock Appreciation Right shall be vested and exercisable on each of the first, second, third and fourth anniversaries of October 31, 2022, in all cases subject to the Grantee’s continued employment with the Company or a Subsidiary through such date. Once exercisable, this Stock Appreciation Right shall continue to be exercisable at any time or times prior to the close of business on the Expiration Date, subject to the provisions hereof and of the Plan. 2. Manner of Exercise. (a) The Grantee may exercise this Stock Appreciation Right by giving notice of exercise to the Company pursuant to the Company’s procedures then in effect specifying the number of shares of Stock underlying this Stock Appreciation Right to be exercised. The Grantee shall thereupon be entitled to receive, subject to Section 6 hereof, the largest whole number of shares of Stock with a value closest to, but not in excess of, the product of (i) the Fair Market Value of a share of Stock on the date of exercise less the Exercise Price per share, multiplied by (ii) the number of shares of Stock underlying the Stock Appreciation Right that is being exercised. The transfer to the Grantee on the records of the Company or of the transfer agent of such Shares of Stock will be contingent upon (i) the fulfillment of any other requirements contained herein or in the Plan or in any other agreement or provision of laws, and (ii) the receipt by the Company of any agreement, statement or other evidence that the Company may require to satisfy itself that the issuance of Stock pursuant to the exercise of Stock Appreciation Rights under the Plan and any subsequent resale of the shares of Stock will be in compliance with applicable laws and regulations. (b) The shares of Stock issued upon exercise of this Stock Appreciation Right shall be transferred to the Grantee on the records of the Company or of the transfer agent upon compliance to the satisfaction of the Administrator with all requirements under applicable laws or regulations in connection with such issuance and with the requirements hereof and of the Plan. The determination of the Administrator as to such compliance shall be final and binding on the Grantee. The Grantee shall not be deemed to be the holder of, or to have any of the rights of a holder with respect to, any shares of Stock to be issued upon exercise of to this Stock Appreciation Right unless and until this Stock Appreciation Right shall have been

exercised pursuant to the terms hereof, the Company or the transfer agent shall have transferred the shares to the Grantee, and the Grantee’s name shall have been entered as the stockholder of record on the books of the Company. Thereupon, the Grantee shall have full voting, dividend and other ownership rights with respect to the shares of Stock so issued. (c) If any portion of this Stock Appreciation Right remains outstanding immediately prior to the close of business on the Expiration Date and provided that the Fair Market Value of a share of Stock immediately prior to the close of business on the Expiration Date exceeds the Exercise Price per share, any such portion of this Stock Appreciation Right shall be automatically exercised pursuant to this Section 2 as of the time that is immediately prior to the close of business on the Expiration Date. Notwithstanding any other provision hereof or of the Plan, no portion of this Stock Appreciation Right shall be exercisable after the Expiration Date hereof. 3. Termination of Employment. If the Grantee’s employment by the Company or a Subsidiary is terminated, the period within which to exercise the Stock Appreciation Right may be subject to earlier termination as set forth below. (a) Termination Due to Death. If the Grantee’s employment terminates by reason of the Grantee’s death, this Stock Appreciation Right shall become fully vested and exercisable as of the date of death, whether or not this Stock Appreciation Right or any portion hereof was otherwise vested and exercisable at the date of death. To the extent that this Stock Appreciation Right is or becomes vested and exercisable as of the date of death, this Stock Appreciation Right may thereafter be exercised by the Grantee’s legal representative or legatee for a period of 12 months from the date of death or until the Expiration Date, if earlier. (b) Termination Due to Disability. If the Grantee’s employment terminates by reason of the Grantee’s Disability (as determined by the Administrator), this Stock Appreciation Right shall continue to vest pursuant to the vesting schedule set forth in Section 1 hereof. (c) Termination Due to Retirement on or after the Retirement Date. If the Grantee’s employment terminates by reason of the Grantee’s retirement on or after the date (the “Retirement Date”) on which (i) the Grantee has reached the age of 64, (ii) the sum of the Grantee’s age plus length of employment with the Company equals or exceeds 79 years and (iii) any portion of this Stock Appreciation Right has been outstanding for more than one year from the Grant Date, this Stock Appreciation Right shall be deemed to be fully vested and exercisable as of the date of such retirement and shall continue to be exercisable until the Expiration Date. (d) Termination for Cause. If the Grantee’s employment terminates for Cause, any portion of this Stock Appreciation Right outstanding on such date shall terminate immediately and be of no further force and effect. (e) Termination in connection with a Sale Event. If the Grantee’s employment is terminated (i) by the Company for any reason other than for Cause, death, disability or retirement or (ii) by the Grantee for Good Reason (as defined in the UniFirst Corporation Executive Employment Plan (the “Employment Plan”)), and such termination occurs during a Change in Control (as defined in the Employment Plan), this Stock Appreciation Right, subject to the satisfaction of the Grantee’s Release Requirement (as defined in Employment Plan), shall become fully vested and exercisable as of the date of termination, whether or not this Stock Appreciation Right or any portion hereof is otherwise vested and exercisable at such time. (f) Other Termination. If the Grantee’s employment terminates for any reason other than the Grantee’s death, Disability, for Cause, the Grantee’s retirement on or after the Retirement Date or a termination meeting the requirements for acceleration in Section 3(e) above, each pursuant to the terms above, and unless otherwise determined by the Administrator, any portion of this Stock Appreciation Right outstanding on such date may be exercised, to the extent exercisable on the date of termination, for a period of 90 days from the date of termination or until the Expiration Date, if earlier. Any portion of this Stock Appreciation Right that is not exercisable on the date of termination shall terminate immediately and be of no further force or effect. For the avoidance of doubt, this Stock Appreciation Right shall not become vested and exercisable upon the occurrence of a Sale Event in the absence of a termination of the Grantee’s employment during a Change in Control Period (as defined in the Employment Plan) as required pursuant to Section 3(e) hereof. The Administrator’s determination of the reason for termination of the Grantee’s employment shall be conclusive and binding on the Grantee and his or her representatives or legatees. 4. Incorporation of Plan. Notwithstanding anything herein to the contrary, this Stock Appreciation Right shall be subject to and governed by all the terms and conditions of the Plan, including the powers of the Administrator set forth UniFirst

UniFirst in Section 2(b) of the Plan. Capitalized terms herein shall have the meaning specified in the Plan, unless a different meaning is specified herein. 5. Transferability. This Stock Appreciation Right is personal to the Grantee, is non-assignable and is not transferable in any manner, by operation of law or otherwise, other than by will or the laws of descent and distribution. This Stock Appreciation Right is exercisable, during the Grantee’s lifetime, only by the Grantee, and thereafter, only by the Grantee’s legal representative or legatee. 6. Tax Withholding. The Grantee shall, not later than the date as of which the exercise of this Stock Appreciation Right becomes a taxable event for Federal income tax purposes, pay to the Company or make arrangements satisfactory to the Administrator for payment of any Federal, state, and local taxes required by law to be withheld on account of such taxable event. The Company shall have the authority to cause the required tax withholding obligation to be satisfied, in whole or in part, by withholding from shares of Stock to be issued to the Grantee a number of shares of Stock with an aggregate Fair Market Value that would satisfy the withholding amount due. 7. No Obligation to Continue Employment. Neither the Company nor any Subsidiary is obligated by or as a result of the Plan or this Stock Appreciation Right to continue the Grantee in employment and neither the Plan nor this Stock Appreciation Right shall interfere in any way with the right of the Company or any Subsidiary to terminate the employment of the Grantee at any time. 8. Integration. This Stock Appreciation Right document constitutes the entire agreement between the parties with respect to this Stock Appreciation Right and supersedes all prior agreements and discussions between the parties concerning such subject matter 9. Data Privacy Consent. In order to administer the Plan and this Stock Appreciation Right and to implement or structure future equity grants, the Company, its subsidiaries and affiliates and certain agents thereof (together, the “Relevant Companies”) may process any and all personal or professional data, including but not limited to Social Security or other identification number, home address and telephone number, date of birth and other information that is necessary or desirable for the administration of the Plan and/or this Stock Appreciation Right (the “Relevant Information”). By receiving this Stock Appreciation Right, the Grantee (i) authorizes the Company to collect, process, register and transfer to the Relevant Companies all Relevant Information; (ii) waives any privacy rights the Grantee may have with respect to the Relevant Information; (iii) authorizes the Relevant Companies to store and transmit such information in electronic form; and (iv) authorizes the transfer of the Relevant Information to any jurisdiction in which the Relevant Companies consider appropriate. The Grantee shall have access to, and the right to change, the Relevant Information. Relevant Information will only be used in accordance with applicable law. 10. Notices. Notices hereunder shall be mailed or delivered to the Company at its principal place of business and shall be mailed or delivered to the Grantee at the address on file with the Company or, in either case, at such other address as one party may subsequently furnish to the other party in writing. UNIFIRST CORPORATION By: Title: STEVEN S. SINTROS Chief Executive Officer

unf-ex992_83.htm

Exhibit 99.2

UNIFIRST CORPORATION RESTRICTED STOCK UNIT AWARD GRANTED UNDER THE UNIFIRST CORPORATION 2010 STOCK OPTION and INCENTIVE PLAN Name of Grantee: No. of Restricted Stock Units: Grant Date: Pursuant to the UniFirst Corporation 2010 Stock Option and Incentive Plan as amended through the date hereof (the “Plan”), UniFirst Corporation (the “Company”) hereby grants an award of the number of Restricted Stock Units listed above (an “Award”) to the Grantee named above. Each Restricted Stock Unit shall relate to one share of Common Stock, par value $0.10 per share (the “Stock”), of the Company. 1. Vesting Schedule. Except as set forth below, and subject to the discretion of the Administrator (as defined in Section 2 of the Plan) to accelerate the vesting schedule hereunder, the restrictions and conditions of Paragraph 5 of this Award shall lapse on the following vesting dates: 20 percent of the Restricted Stock Units shall vest on October 31, 2022 and 20 percent of the Restricted Stock Units shall vest on each of the first, second, third and fourth anniversaries of October 31, 2022, in all cases subject to the Grantee’s continued employment with the Company or a Subsidiary through such date. 2. Issuance of Shares of Stock. As soon as practicable following each vesting date (but in no event later than two and one-half months after the end of the year in which the vesting date occurs), the Company shall issue to the Grantee the number of shares of Stock equal to the aggregate number of Restricted Stock Units that have vested pursuant to Paragraph 1 of this Award on such date and the Grantee shall thereafter have all the rights of a stockholder of the Company with respect to such shares. 3. Termination of Employment. If the Grantee’s employment by the Company or a Subsidiary is terminated under certain circumstances as set forth below, any Restricted Stock Units that have not vested as of such date may be subject to termination without notice and be forfeited as set forth below. In the case of termination and forfeiture, neither the Grantee nor any of his or her successors, heirs, assigns, or personal representatives will thereafter have any further rights or interests in such unvested Restricted Stock Units. (a) Termination Due to Death. If the Grantee’s employment terminates by reason of the Grantee’s death, any Restricted Stock Units which have not vested shall become fully vested as of the date of death. (b) Termination Due to Disability. If the Grantee’s employment terminates by reason of the Grantee’s Disability (as determined by the Administrator), any Restricted Stock Units which have not vested shall continue to vest pursuant to the vesting schedule set forth in Section 1 hereof. (c) Termination Due to Retirement on or after the Retirement Date. If the Grantee’s employment terminates by reason of the Grantee’s retirement on or after the date (the “Retirement Date”) on which (i) the Grantee has reached the age of 64, (ii) the sum of the Grantee’s age plus length of employment with the Company equals or exceeds 79 years and (iii) any of the Restricted Stock Units have been outstanding for more than one year from the Grant Date, any Restricted Stock Units which have not vested shall be deemed to be fully vested as of the date of such retirement. (d) Termination for Cause. If the Grantee’s employment terminates for Cause, any Restricted Stock Units which have not vested shall be immediately terminated and forfeited. (e) Termination in Connection with a Sale Event. If the Grantee’s employment is terminated (i) by the Company for any reason other than for Cause, death, disability or retirement or (ii) by the Grantee for Good Reason (as defined in the UniFirst Corporation Executive Employment Plan (the “Employment Plan”)), and such termination occurs during a Change in Control Period (as defined in the Employment Plan), any Restricted Stock Units which have not vested, subject to the satisfaction of the Grantee’s Release Requirement (as defined in the Employment Plan), shall become fully vested as of the date of termination.

UNIFIRST (f) Other Termination. If the Grantee’s employment terminates for any reason other than the Grantee’s death, Disability, for Cause, the Grantee’s retirement on or after the Retirement Date or a termination meeting the requirements of Section 3(e) above, each pursuant to the terms above, and unless otherwise determined by the Administrator, any unvested Restricted Stock Units shall be immediately terminated and forfeited. For the avoidance of doubt, any unvested Restricted Stock Units shall not become vested upon the occurrence of a Sale Event in the absence of a termination of the Grantee’s employment during a Change in Control Period (as defined in the Employment Plan) as required pursuant to Section 3(e) hereof. The Administrator’s determination of the reason for termination of the Grantee’s employment shall be conclusive and binding on the Grantee and his or her representatives or legatees. 4. Incorporation of Plan. Notwithstanding anything herein to the contrary, this Award shall be subject to and governed by all the terms and conditions of the Plan, including the powers of the Administrator set forth in Section 2(b) of the Plan. Capitalized terms in this Award shall have the meaning specified in the Plan, unless a different meaning is specified herein. 5. Restrictions on Transfer of Award. This Award may not be sold, transferred, pledged, assigned or otherwise encumbered or disposed of by the Grantee, and any shares of Stock issuable with respect to the Award may not be sold, transferred, pledged, assigned or otherwise encumbered or disposed of until (i) the Restricted Stock Units have vested as provided in Paragraph 1 of this Award and (ii) shares of Stock have been issued to the Grantee in accordance with the terms of the Plan and this Award. 6. Tax Withholding. The Grantee shall, not later than the date as of which the receipt of this Award becomes a taxable event for Federal income tax purposes, pay to the Company or make arrangements satisfactory to the Administrator for payment of any Federal, state, and local taxes required by law to be withheld on account of such taxable event. The Company shall have the authority to cause the required tax withholding obligation to be satisfied, in whole or in part, by withholding from shares of Stock to be issued to the Grantee a number of shares of Stock with an aggregate Fair Market Value that would satisfy the withholding amount due. 7. Section 409A of the Code. This Award shall be interpreted in such a manner that all provisions relating to the settlement of the Award are exempt from the requirements of Section 409A of the Code as “short-term deferrals” as described in Section 409A of the Code. 8. No Obligation to Continue Employment. Neither the Company nor any Subsidiary is obligated by or as a result of the Plan or this Award to continue the Grantee in employment and neither the Plan nor this Award shall interfere in any way with the right of the Company or any Subsidiary to terminate the employment of the Grantee at any time. 9. Integration. This Award document constitutes the entire agreement between the parties with respect to this Award and supersedes all prior agreements and discussions between the parties concerning such subject matter. 10. Data Privacy Consent. In order to administer the Plan and this Award and to implement or structure future equity grants, the Company, its subsidiaries and affiliates and certain agents thereof (together, the “Relevant Companies”) may process any and all personal or professional data, including but not limited to Social Security or other identification number, home address and telephone number, date of birth and other information that is necessary or desirable for the administration of the Plan and/or this Award (the “Relevant Information”). By receiving this Award, the Grantee (i) authorizes the Company to collect, process, register and transfer to the Relevant Companies all Relevant Information; (ii) waives any privacy rights the Grantee may have with respect to the Relevant Information; (iii) authorizes the Relevant Companies to store and transmit such information in electronic form; and (iv) authorizes the transfer of the Relevant Information to any jurisdiction in which the Relevant Companies consider appropriate. The Grantee shall have access to, and the right to change, the Relevant Information. Relevant Information will only be used in accordance with applicable law. 11. Notices. Notices hereunder shall be mailed or delivered to the Company at its principal place of business and shall be mailed or delivered to the Grantee at the address on file with the Company or, in either case, at such other address as one party may subsequently furnish to the other party in writing.

UNIFIRST CORPORATION By: STEVEN S. SINTROS Title: Chief Executive Officer

unf-ex993_82.htm

Exhibit 99.3

Unifirst UNIFIRST CORPORATION RESTRICTED STOCK UNIT AWARD GRANTED UNDER THE UNIFIRST CORPORATION 2010 STOCK OPTION and INCENTIVE PLAN Name of Grantee: No. of Shares Subject to Stock Appreciation Right: Exercise Price per Share: $ Grant Date: Expiration Date: Pursuant to the UniFirst Corporation 2010 Stock Option and Incentive Plan as amended through the date hereof (the “Plan”), UniFirst Corporation (the “Company”) hereby grants to the Grantee named above, during the period commencing on the Grant Date and ending on the Expiration Date, a Stock Appreciation Right (the “Stock Appreciation Right”) with respect to the number of shares of Common Stock, par value $0.10 per share (the “Stock”) of the Company specified above at the Exercise Price per Share specified above subject to the terms and conditions set forth herein and in the Plan. This Stock Appreciation Right entitles the Grantee to the right to receive from the Company shares of Stock having a value equal to the excess of the Fair Market Value of the Stock on the date of exercise over the Exercise Price multiplied by the number of shares of Stock with respect to which the Stock Appreciation Right shall have been exercised, rounded down to the nearest whole share. 1. Vesting Schedule. No portion of this Stock Appreciation Right may be exercised until such portion shall have become vested and exercisable. Except as set forth below, and subject to the discretion of the Administrator (as defined in Section 2 of the Plan) to accelerate the exercisability schedule hereunder, this Stock Appreciation Right shall be exercisable with respect to the following number of shares of Stock subject to this Stock Appreciation Right as follows: 20 percent of the shares of Stock subject to this Stock Appreciation Right shall be vested and exercisable on the first anniversary of the Grant Date and 20 percent of the shares of Stock subject to this Stock Appreciation Right shall be vested and exercisable on each of the second, third, fourth and fifth anniversaries of the Grant Date, in each case subject to the Grantee’s continued employment with the Company or a Subsidiary through such date. Once exercisable, this Stock Appreciation Right shall continue to be exercisable at any time or times prior to the close of business on the Expiration Date, subject to the provisions hereof and of the Plan. Upon the occurrence of a Sale Event of the Company, this Stock Appreciation Right shall become fully vested and exercisable, whether or not this Stock Appreciation Right or any portion hereof is otherwise vested and exercisable at such time. 2. Manner of Exercise. (a) The Grantee may exercise this Stock Appreciation Right by giving notice of exercise to the Company pursuant to the Company’s procedures then in effect specifying the number of shares of Stock underlying this Stock Appreciation Right to be exercised. The Grantee shall thereupon be entitled to receive, subject to Section 6 hereof, the largest whole number of shares of Stock with a value closest to, but not in excess of, the product of (i) the Fair Market Value of a share of Stock on the date of exercise less the Exercise Price per share, multiplied by (ii) the number of shares of Stock underlying the Stock Appreciation Right that is being exercised. The transfer to the Grantee on the records of the Company or of the transfer agent of such Shares of Stock will be contingent upon (i) the fulfillment of any other requirements contained herein or in the Plan or in any other agreement or provision of laws, and (ii) the receipt by the Company of any agreement, statement or other evidence that the Company may require to satisfy itself that the issuance of Stock pursuant to the exercise of Stock Appreciation Rights under the Plan and any subsequent resale of the shares of Stock will be in compliance with applicable laws and regulations. (b) The shares of Stock issued upon exercise of this Stock Appreciation Right shall be transferred to the Grantee on the records of the Company or of the transfer agent upon compliance to the satisfaction of the Administrator with all requirements under applicable laws or regulations in connection with such issuance and with the requirements hereof and of the Plan. The determination of the Administrator as to such compliance shall be final and binding on the Grantee. The Grantee shall not be deemed to be the holder of, or to have any of the rights of a holder with respect to, any shares of Stock to be issued upon exercise of to this Stock Appreciation Right unless and until this Stock Appreciation Right shall have been exercised pursuant to the terms hereof, the Company or the transfer agent shall have transferred the shares to the

Grantee, and the Grantee’s name shall have been entered as the stockholder of record on the books of the Company. Thereupon, the Grantee shall have full voting, dividend and other ownership rights with respect to the shares of Stock so issued. Unifirst (c) If any portion of this Stock Appreciation Right remains outstanding immediately prior to the close of business on the Expiration Date and provided that the Fair Market Value of a share of Stock immediately prior to the close of business on the Expiration Date exceeds the Exercise Price per share, any such portion of this Stock Appreciation Right shall be automatically exercised pursuant to this Section 2 as of the time that is immediately prior to the close of business on the Expiration Date. Notwithstanding any other provision hereof or of the Plan, no portion of this Stock Appreciation Right shall be exercisable after the Expiration Date hereof. 3. Termination of Employment. If the Grantee’s employment by the Company or a Subsidiary is terminated, the period within which to exercise the Stock Appreciation Right may be subject to earlier termination as set forth below. (a) Termination Due to Death. If the Grantee’s employment terminates by reason of the Grantee’s death and the Grantee has not reached the Grantee’s Retirement Date (as defined below), any portion of this Stock Appreciation Right which was vested and exercisable at the date of death may thereafter be exercised by the Grantee’s legal representative or legatee for a period of 12 months from the date of death or until the Expiration Date, if earlier. (b) Termination Due to Disability. If the Grantee’s employment terminates by reason of the Grantee’s Disability (as determined by the Administrator), any portion of this Stock Appreciation Right which was vested and exercisable at the time of such termination may thereafter be exercised by the Grantee for a period of 12 months from the date of termination or until the Expiration Date, if earlier. (c) Termination Due to Retirement or Death on or after Retirement Date. If the Grantee’s employment terminates by reason of the Grantee’s retirement or death on or after the date (the “Retirement Date”) on which (i) the Grantee has reached the age of 64, (ii) the sum of the Grantee’s age plus length of employment with the Company equals or exceeds 79 years and (iii) any portion of this Stock Appreciation Right has been outstanding for more than one year from the Grant Date, this Stock Appreciation Right shall be deemed to be fully vested and exercisable as of the date of such retirement or death, as applicable, and shall continue to be exercisable until the Expiration Date. (d) Termination for Cause. If the Grantee’s employment terminates for Cause, any portion of this Stock Appreciation Right outstanding on such date shall terminate immediately and be of no further force and effect. (e) Other Termination. If the Grantee’s employment terminates for any reason other than the Grantee’s death, the Grantee’s Disability, the Grantee’s retirement or death on or after the Retirement Date or Cause, each pursuant to the terms above, and unless otherwise determined by the Administrator, any portion of this Stock Appreciation Right outstanding on such date may be exercised, to the extent exercisable on the date of termination, for a period of 90 days from the date of termination or until the Expiration Date, if earlier. Any portion of this Stock Appreciation Right that is not exercisable on the date of termination shall terminate immediately and be of no further force or effect. The Administrator’s determination of the reason for termination of the Grantee’s employment shall be conclusive and binding on the Grantee and his or her representatives or legatees. 4. Incorporation of Plan. Notwithstanding anything herein to the contrary, this Stock Appreciation Right shall be subject to and governed by all the terms and conditions of the Plan, including the powers of the Administrator set forth in Section 2(b) of the Plan. Capitalized terms herein shall have the meaning specified in the Plan, unless a different meaning is specified herein. 5. Transferability. This Stock Appreciation Right is personal to the Grantee, is non-assignable and is not transferable in any manner, by operation of law or otherwise, other than by will or the laws of descent and distribution. This Stock Appreciation Right is exercisable, during the Grantee’s lifetime, only by the Grantee, and thereafter, only by the Grantee’s legal representative or legatee. Unifirst

Unifirst 6. Tax Withholding. The Grantee shall, not later than the date as of which the exercise of this Stock Appreciation Right becomes a taxable event for Federal income tax purposes, pay to the Company or make arrangements satisfactory to the Administrator for payment of any Federal, state, and local taxes required by law to be withheld on account of such taxable event. The Company shall have the authority to cause the minimum required tax withholding obligation to be satisfied, in whole or in part, by withholding from shares of Stock to be issued to the Grantee a number of shares of Stock with an aggregate Fair Market Value that would satisfy the withholding amount due. 7. No Obligation to Continue Employment. Neither the Company nor any Subsidiary is obligated by or as a result of the Plan or this Stock Appreciation Right to continue the Grantee in employment and neither the Plan nor this Stock Appreciation Right shall interfere in any way with the right of the Company or any Subsidiary to terminate the employment of the Grantee at any time. 8. Integration. This Stock Appreciation Right document constitutes the entire agreement between the parties with respect to this Stock Appreciation Right and supersedes all prior agreements and discussions between the parties concerning such subject matter 9. Data Privacy Consent. In order to administer the Plan and this Stock Appreciation Right and to implement or structure future equity grants, the Company, its subsidiaries and affiliates and certain agents thereof (together, the “Relevant Companies”) may process any and all personal or professional data, including but not limited to Social Security or other identification number, home address and telephone number, date of birth and other information that is necessary or desirable for the administration of the Plan and/or this Stock Appreciation Right (the “Relevant Information”). By receiving this Stock Appreciation Right, the Grantee (i) authorizes the Company to collect, process, register and transfer to the Relevant Companies all Relevant Information; (ii) waives any privacy rights the Grantee may have with respect to the Relevant Information; (iii) authorizes the Relevant Companies to store and transmit such information in electronic form; and (iv) authorizes the transfer of the Relevant Information to any jurisdiction in which the Relevant Companies consider appropriate. The Grantee shall have access to, and the right to change, the Relevant Information. Relevant Information will only be used in accordance with applicable law. 10. Notices. Notices hereunder shall be mailed or delivered to the Company at its principal place of business and shall be mailed or delivered to the Grantee at the address on file with the Company or, in either case, at such other address as one party may subsequently furnish to the other party in writing. UNIFIRST CORPORATION By: STEVEN S. SINTROS Title: Chief Executive Officer

unf-ex994_81.htm

Exhibit 99.4

UniFirst UNIFIRST CORPORATION RESTRICTED STOCK UNIT AWARD GRANTED UNDER THE UNIFIRST CORPORATION 2010 STOCK OPTION and INCENTIVE PLAN. Name of Grantee: No. of Restricted Stock Units: Grant Date: Pursuant to the UniFirst Corporation Amended and Restated 2010 Stock Option and Incentive Plan as amended through the date hereof (the “Plan”), UniFirst Corporation (the “Company”) hereby grants an award of the number of Restricted Stock Units listed above (an “Award”) to the Grantee named above. Each Restricted Stock Unit shall relate to one share of Common Stock, par value $0.10 per share (the “Stock”), of the Company. 1. Vesting Schedule. Except as set forth below, and subject to the discretion of the Administrator (as defined in Section 2 of the Plan) to accelerate the vesting schedule hereunder, the restrictions and conditions of Paragraph 5 of this Award shall lapse on the following vesting dates: 20 percent of the Restricted Stock Units shall vest on the first anniversary of the Grant Date and 20 percent of the Restricted Stock Units shall vest on each of the second, third, fourth and fifth anniversaries of the Grant Date, in each case subject to the Grantee’s continued employment with the Company or a Subsidiary through such date. Upon the occurrence of a Sale Event of the Company, this Award shall become fully vested, whether or not this Award or any portion hereof has otherwise vested at such time. 2. Issuance of Shares of Stock. As soon as practicable following each vesting date (but in no event later than two and one-half months after the end of the year in which the vesting date occurs), the Company shall issue to the Grantee the number of shares of Stock equal to the aggregate number of Restricted Stock Units that have vested pursuant to Paragraph 1 of this Award on such date and the Grantee shall thereafter have all the rights of a stockholder of the Company with respect to such shares. 3. Termination of Employment. If the Grantee’s employment by the Company or a Subsidiary is terminated, any Restricted Stock Units that have not vested as of such date may be subject to termination without notice and be forfeited as set forth below. In the case of termination and forfeiture, neither the Grantee nor any of his or her successors, heirs, assigns, or personal representatives will thereafter have any further rights or interests in such unvested Restricted Stock Units. (a) Termination Due to Death. If the Grantee’s employment terminates by reason of the Grantee’s death and the Grantee has not reached the Grantee’s Retirement Date (as defined below), any Restricted Stock Units which have not vested shall be immediately terminated and forfeited. (b) Termination Due to Disability. If the Grantee’s employment terminates by reason of the Grantee’s Disability (as determined by the Administrator), any Restricted Stock Units which have not vested shall be immediately terminated and forfeited. (c) Termination Due to Retirement or Death on or after the Retirement Date. If the Grantee’s employment terminates by reason of the Grantee’s retirement or death on or after the date (the “Retirement Date”) on which (i) the Grantee has reached the age of 64, (ii) the sum of the Grantee’s age plus length of employment with the Company equals or exceeds 79 years and (iii) any of the Restricted Stock Units have been outstanding for more than one year from the Grant Date, any Restricted Stock Units which have not vested shall be deemed to be fully vested as of the date of such retirement or death, as applicable. (d) Termination for Cause. If the Grantee’s employment terminates for Cause, any Restricted Stock Units which have not vested shall be immediately terminated and forfeited. (e) Other Termination. If the Grantee’s employment terminates for any reason other than the Grantee’s death, the Grantee’s Disability, the Grantee’s retirement or death on or after the Retirement Date or Cause, each pursuant to the

UniFirst terms above, and unless otherwise determined by the Administrator, any unvested Restricted Stock Units which have not vested shall be immediately terminated and forfeited. The Administrator’s determination of the reason for termination of the Grantee’s employment shall be conclusive and binding on the Grantee and his or her representatives or legatees. 4. Incorporation of Plan. Notwithstanding anything herein to the contrary, this Award shall be subject to and governed by all the terms and conditions of the Plan, including the powers of the Administrator set forth in Section 2(b) of the Plan. Capitalized terms in this Award shall have the meaning specified in the Plan, unless a different meaning is specified herein. 5. Restrictions on Transfer of Award. This Award may not be sold, transferred, pledged, assigned or otherwise encumbered or disposed of by the Grantee, and any shares of Stock issuable with respect to the Award may not be sold, transferred, pledged, assigned or otherwise encumbered or disposed of until (i) the Restricted Stock Units have vested as provided in Paragraph 1 of this Award and (ii) shares of Stock have been issued to the Grantee in accordance with the terms of the Plan and this Award. 6. Tax Withholding. The Grantee shall, not later than the date as of which the receipt of this Award becomes a taxable event for Federal income tax purposes, pay to the Company or make arrangements satisfactory to the Administrator for payment of any Federal, state, and local taxes required by law to be withheld on account of such taxable event. The Company shall have the authority to cause the required minimum tax withholding obligation to be satisfied, in whole or in part, by withholding from shares of Stock to be issued to the Grantee a number of shares of Stock with an aggregate Fair Market Value that would satisfy the withholding amount due. 7. Section 409A of the Code. This Award shall be interpreted in such a manner that all provisions relating to the settlement of the Award are exempt from the requirements of Section 409A of the Code as “short-term deferrals” as described in Section 409A of the Code. 8. No Obligation to Continue Employment. Neither the Company nor any Subsidiary is obligated by or as a result of the Plan or this Award to continue the Grantee in employment and neither the Plan nor this Award shall interfere in any way with the right of the Company or any Subsidiary to terminate the employment of the Grantee at any time. 9. Integration. This Award document constitutes the entire agreement between the parties with respect to this Award and supersedes all prior agreements and discussions between the parties concerning such subject matter. 10. Data Privacy Consent. In order to administer the Plan and this Award and to implement or structure future equity grants, the Company, its subsidiaries and affiliates and certain agents thereof (together, the “Relevant Companies”) may process any and all personal or professional data, including but not limited to Social Security or other identification number, home address and telephone number, date of birth and other information that is necessary or desirable for the administration of the Plan and/or this Award (the “Relevant Information”). By receiving this Award, the Grantee (i) authorizes the Company to collect, process, register and transfer to the Relevant Companies all Relevant Information; (ii) waives any privacy rights the Grantee may have with respect to the Relevant Information; (iii) authorizes the Relevant Companies to store and transmit such information in electronic form; and (iv) authorizes the transfer of the Relevant Information to any jurisdiction in which the Relevant Companies consider appropriate. The Grantee shall have access to, and the right to change, the Relevant Information. Relevant Information will only be used in accordance with applicable law. 11. Notices. Notices hereunder shall be mailed or delivered to the Company at its principal place of business and shall be mailed or delivered to the Grantee at the address on file with the Company or, in either case, at such other address as one party may subsequently furnish to the other party in writing. UNIFIRST CORPORATION By: STEVEN S. SINTROS Title: Chief Executive Officer

unf-ex995_80.htm

Exhibit 99.5

UNIFIRST CORPORATION STOCK APPRECIATION RIGHT GRANTED UNDER THE UNIFIRST CORPORATION 2010 STOCK OPTION and INCENTIVE PLAN Name of Grantee: No. of Shares Subject to Stock Appreciation Right: Exercise Price per Share: $ Grant Date: Expiration Date: Pursuant to the UniFirst Corporation 2010 Stock Option and Incentive Plan as amended through the date hereof (the “Plan”), UniFirst Corporation (the “Company”) hereby grants to the Grantee named above, during the period commencing on the Grant Date and ending on the earlier of the Expiration Date or the second anniversary of the date the Grantee ceases to be a member of the Company’s Board of Directors, a Stock Appreciation Right (the “Stock Appreciation Right”) with respect to the number of shares of Common Stock, par value $0.10 per share (the “Stock”) of the Company specified above at the Exercise Price per Share specified above subject to the terms and conditions set forth herein and in the Plan. This Stock Appreciation Right entitles the Grantee to the right to receive from the Company shares of Stock having a value equal to the excess of the Fair Market Value of the Stock on the date of exercise over the Exercise Price multiplied by the number of shares of Stock with respect to which the Stock Appreciation Right shall have been exercised, rounded down to the nearest whole share. 1. Exercisability. This Stock Appreciation Right shall be exercisable in full on the Grant Date. Once exercisable, this Stock Appreciation Right shall continue to be exercisable at any time or times prior to the close of business on the earlier of the Expiration Date or the second anniversary of the date the Grantee ceases to be a member of the Company’s Board of Directors, subject to the provisions hereof and of the Plan. 2. Manner of Exercise. (a) The Grantee may exercise this Stock Appreciation Right by giving notice of exercise to the Company pursuant to the Company’s procedures then in effect specifying the number of shares of Stock underlying this Stock Appreciation Right to be exercised. The Grantee shall thereupon be entitled to receive the largest whole number of shares of Stock with a value closest to, but not in excess of, the product of (i) the Fair Market Value of a share of Stock on the date of exercise less the Exercise Price per share, multiplied by (ii) the number of shares of Stock underlying the Stock Appreciation Right that is being exercised. The transfer to the Grantee on the records of the Company or of the transfer agent of such Shares of Stock will be contingent upon (i) the fulfillment of any other requirements contained herein or in the Plan or in any other agreement or provision of laws, and (ii) the receipt by the Company of any agreement, statement or other evidence that the Company may require to satisfy itself that the issuance of Stock pursuant to the exercise of Stock Appreciation Rights under the Plan and any subsequent resale of the shares of Stock will be in compliance with applicable laws and regulations. (b) The shares of Stock issued upon exercise of this Stock Appreciation Right shall be transferred to the Grantee on the records of the Company or of the transfer agent upon compliance to the satisfaction of the Administrator with all requirements under applicable laws or regulations in connection with such issuance and with the requirements hereof and of the Plan. The determination of the Administrator as to such compliance shall be final and binding on the Grantee. The Grantee shall not be deemed to be the holder of, or to have any of the rights of a holder with respect to, any shares of Stock to be issued upon exercise of to this Stock Appreciation Right unless and until this Stock Appreciation Right shall have been exercised pursuant to the terms hereof, the Company or the transfer agent shall have transferred the shares to the

Unifirst Grantee, and the Grantee’s name shall have been entered as the stockholder of record on the books of the Company. Thereupon, the Grantee shall have full voting, dividend and other ownership rights with respect to the shares of Stock so issued. (c) If any portion of this Stock Appreciation Right remains outstanding immediately prior to the close of business on the Expiration Date and provided that the Fair Market Value of a share of Stock immediately prior to the close of business on the Expiration Date exceeds the Exercise Price per share, any such portion of this Stock Appreciation Right shall be automatically exercised pursuant to this Section 2 as of the time that is immediately prior to the close of business on the Expiration Date. Notwithstanding any other provision hereof or of the Plan, no portion of this Stock Appreciation Right shall be exercisable after the Expiration Date hereof. 3. Incorporation of Plan. Notwithstanding anything herein to the contrary, this Stock Appreciation Right shall be subject to and governed by all the terms and conditions of the Plan, including the powers of the Administrator set forth in Section 2(b) of the Plan. Capitalized terms herein shall have the meaning specified in the Plan, unless a different meaning is specified herein. 4. Transferability. This Stock Appreciation Right is personal to the Grantee, is non-assignable and is not transferable in any manner, by operation of law or otherwise, other than by will or the laws of descent and distribution. This Stock Appreciation Right is exercisable, during the Grantee’s lifetime, only by the Grantee, and thereafter, only by the Grantee’s legal representative or legatee. 5. No Obligation to Continue as a Director. Neither the Plan nor this Stock Appreciation Right confers upon the Grantee any rights with respect to continuance as a Director. 6. Integration. This Stock Appreciation Right document constitutes the entire agreement between the parties with respect to this Stock Appreciation Right and supersedes all prior agreements and discussions between the parties concerning such subject matter 7. Data Privacy Consent. In order to administer the Plan and this Stock Appreciation Right and to implement or structure future equity grants, the Company, its subsidiaries and affiliates and certain agents thereof (together, the “Relevant Companies”) may process any and all personal or professional data, including but not limited to Social Security or other identification number, home address and telephone number, date of birth and other information that is necessary or desirable for the administration of the Plan and/or this Stock Appreciation Right (the “Relevant Information”). By receiving this Stock Appreciation Right, the Grantee (i) authorizes the Company to collect, process, register and transfer to the Relevant Companies all Relevant Information; (ii) waives any privacy rights the Grantee may have with respect to the Relevant Information; (iii) authorizes the Relevant Companies to store and transmit such information in electronic form; and (iv) authorizes the transfer of the Relevant Information to any jurisdiction in which the Relevant Companies consider appropriate. The Grantee shall have access to, and the right to change, the Relevant Information. Relevant Information will only be used in accordance with applicable law. 8. Notices. Notices hereunder shall be mailed or delivered to the Company at its principal place of business and shall be mailed or delivered to the Grantee at the address on file with the Company or, in either case, at such other address as one party may subsequently furnish to the other party in writing. UNIFIRST CORPORATION By: STEVEN S. SINTROS Title: Chief Executive Officer