unf-8k_20220226.htm
false 0000717954 0000717954 2022-02-26 2022-02-26

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 26, 2022

 

UNIFIRST CORPORATION

(Exact name of registrant as specified in its charter)

 

 

Massachusetts

001-08504

04-2103460

(State or other jurisdiction

of incorporation)

(Commission File Number)

(IRS Employer

Identification No.)

 

 

 

68 Jonspin Road, Wilmington, Massachusetts     

01887

(Address of Principal Executive Offices)

(Zip Code)

Registrant’s Telephone Number, Including Area Code: (978) 658-8888

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

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 is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

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. 

 

 

 

 


 

 

Item 2.02 Results of Operations and Financial Condition.

On March 30, 2022, UniFirst Corporation (the “Company”) issued a press release (“Press Release”) announcing financial results for the second quarter of fiscal 2022, which ended on February 26, 2022. A copy of the Press Release is attached as Exhibit 99 to this Current Report on Form 8-K and is incorporated herein by reference.

 

The information in this Item 2.02, including the exhibit attached hereto, shall not be deemed “filed” for any purpose, including for purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange Act") or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, regardless of any general incorporation language in such filing.

 

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

 

Exhibit

Number

 

Description

99

 

Press release of the Company dated March 30, 2022

104

 

Cover Page Interactive Data File (embedded within the Inline XBRL document).

 

 

 

 

 


 

 

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

 

 

 

 

Date: March 30, 2022

 

By:

/s/ Steven S. Sintros

 

 

 

Steven S. Sintros

 

 

 

President and Chief Executive Officer

 

 

 

 

 

 

By:

/s/ Shane O’Connor

 

 

 

Shane O’Connor

 

 

 

Executive Vice President and Chief Financial Officer

 

 

unf-ex99_6.htm

 

 

Exhibit 99

Investor Relations Contact

Shane O’Connor, Executive Vice President & CFO

UniFirst Corporation

978-658-8888

shane_oconnor@unifirst.com

 

FOR IMMEDIATE RELEASE

 

UNIFIRST ANNOUNCES FINANCIAL RESULTS FOR THE SECOND QUARTER OF FISCAL 2022

Wilmington, MA – March 30, 2022 – UniFirst Corporation (NYSE: UNF) (the “Company,” “UniFirst” or “we”) today reported results for its second quarter ended February 26, 2022 as compared to the corresponding period in the prior fiscal year:

Q2 2022 Financial Highlights

 

Consolidated revenues for the second quarter increased 8.2% to $486.7 million.

 

Operating income was $22.6 million, a decrease of 44.4%.

 

The quarterly tax rate decreased to 19.0% compared to 22.7% in the prior year.

 

Net income decreased to $18.5 million, or 43.4%.

 

Diluted earnings per share decreased to $0.97 from $1.71 in the prior year, or 43.3%.

 

The Company’s financial results for the second quarter of fiscal 2022 included $6.7 million of costs directly attributable to its CRM, ERP and branding initiatives (the “Key Initiatives”). Excluding these Key Initiative costs:

 

 

Adjusted operating income was $29.4 million.

 

Adjusted net income was $23.5 million.

 

Adjusted diluted earnings per share was $1.24.

 

 

 

Steven Sintros, UniFirst President and Chief Executive Officer, said, “Our second quarter results reflect a strong top-line performance as well as a margin trend that was largely in-line with our expectations while also reflecting continued inflationary pressure. I want to thank our thousands of Team Partners who, despite a challenging operating environment, continue to Always Deliver for each other and our customers.”

Segment Reporting Highlights

Core Laundry Operations

 

Revenues for the quarter increased 8.7% to $433.1 million.

 

Organic growth, which excludes the effect of acquisitions and fluctuations in the Canadian dollar, was 8.0%

 

Operating margin decreased to 4.3% from 8.9%.

 

The costs incurred during the quarter related to the Key Initiatives, discussed above, were recorded to the Core Laundry Operations’ segment. Excluding these Key Initiative costs:

 

 

Core Laundry adjusted operating margin was 5.9%. The decrease from prior year’s operating margin was primarily due to higher merchandise amortization, energy and travel costs as a percentage of revenues as well as increased costs to hire and retain employees due to the challenging employment environment.

Specialty Garments

 

Revenues for the quarter were $35.5 million, an increase of 0.9%. This increase was driven by growth in the cleanroom and European nuclear operations which was partially offset by higher direct sale activity in the prior year.

 

Operating margin decreased to 10.8% from 14.9% a year ago, primarily due to higher gross margin on its prior year direct sales as well as higher labor costs as a percentage of revenues.

 

Specialty Garments consists of nuclear decontamination and cleanroom operations, and its results can vary significantly due to seasonality and the timing of reactor outages and projects.

Balance Sheet and Capital Allocation

 

Cash, cash equivalents and short-term investments totaled $425.9 million as of February 26, 2022.

 

The Company had no long-term debt outstanding as of February 26, 2022.


 

 

 

 

Under its previously announced stock repurchase authorization, the Company repurchased 52,500 shares of common stock for $10.0 million in the second quarter of fiscal 2022. As of February 26, 2022, the Company has $87.3 million remaining under its current authorization.

 

Weighted average shares outstanding – Diluted for each of the second quarters of fiscal 2022 and fiscal 2021 were 19.0 million.

 

Financial Outlook

 

Mr. Sintros continued, “We now expect revenues for fiscal 2022 to be between $1.967 billion and $1.980 billion. We further expect diluted earnings per share to be between $5.62 and $5.82. This earnings per share guidance assumes an effective tax rate of 24.0% and now includes a revised estimate of $30.0 million of costs directly attributable to our Key Initiatives that will be expensed in fiscal 2022. Please also note the following regarding our guidance:

 

 

Core Laundry Operations’ adjusted operating margin at the midpoint of the range is now 8.6%, which reflects continued pressure from the current inflationary environment including the recent surge in energy prices.

 

Our adjusted tax rate for fiscal 2022 is 24.2%

 

Adjusted diluted earnings per share is now expected to be between $6.80 and $7.00.

 

Guidance does not include the impact of any future share buybacks or potential tax reform.

 

Guidance assumes a stable economic environment with no pandemic-related headwinds.”

 

See “Reconciliation of GAAP to Non-GAAP Financial Measures” below.

 

Conference Call Information

UniFirst Corporation will hold a conference call today at 9:00 a.m. (ET) to discuss its quarterly financial results, business highlights and outlook. A simultaneous live webcast of the call will be available over the Internet and can be accessed at www.unifirst.com.

About UniFirst Corporation

Headquartered in Wilmington, Mass., UniFirst Corporation (NYSE: UNF) is a North American leader in the supply and servicing of uniform and workwear programs, as well as the delivery of facility service programs. Together with its subsidiaries, the Company also provides first aid and safety products, and manages specialized garment programs for the cleanroom and nuclear industries. UniFirst manufactures its own branded workwear, protective clothing, and floorcare products; and with 260 service locations, over 300,000 customer locations, and 14,000-plus employee Team Partners, the Company outfits nearly 2 million workers each business day. For more information, contact UniFirst at 800.455.7654 or visit UniFirst.com.

Forward-Looking Statements Disclosure

This public announcement contains forward-looking statements within the meaning of the federal securities laws that reflect the Company’s current views with respect to future events and financial performance, including projected revenues, operating margin and earnings per share. Forward-looking statements contained in this public announcement are subject to the safe harbor created by the Private Securities Litigation Reform Act of 1995 and may be identified by words such as “guidance,” “outlook,” “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 significant increases in inflation or extraordinary events or circumstances such as geopolitical conflicts like the conflict between Russia and Ukraine or 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, or adverse impacts from increases in, 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 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 or additional Securities and Exchange Commission, New York Stock Exchange, accounting or other rules, including, without limitation, recent rules proposed by the Securities and Exchange Commission regarding climate-related and cybersecurity-related disclosures, 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, “Part II, Item 1.A. Risk Factors” and elsewhere in our subsequent Quarterly Reports on Form 10-Q and in our other filings with the Securities and Exchange Commission. We undertake no obligation to update any forward-looking statements to reflect events or circumstances arising after the date on which they are made.


 

 

 

Consolidated Statements of Income

(Unaudited)

(In thousands, except per share data)

 

Thirteen weeks ended February 26, 2022

 

 

Thirteen weeks ended February 27, 2021

 

 

Twenty-six weeks ended February 26, 2022

 

 

Twenty-six weeks ended February 27, 2021

 

Revenues

 

$

486,696

 

 

$

449,764

 

 

$

972,860

 

 

$

896,617

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenues (1)

 

 

324,816

 

 

 

289,455

 

 

 

634,946

 

 

 

565,255

 

Selling and administrative expenses (1)

 

 

112,406

 

 

 

93,329

 

 

 

216,794

 

 

 

182,032

 

Depreciation and amortization

 

 

26,861

 

 

 

26,287

 

 

 

53,717

 

 

 

52,595

 

Total operating expenses

 

 

464,083

 

 

 

409,071

 

 

 

905,457

 

 

 

799,882

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

 

22,613

 

 

 

40,693

 

 

 

67,403

 

 

 

96,735

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other (income) expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income, net

 

 

(751

)

 

 

(863

)

 

 

(1,399

)

 

 

(1,431

)

Other (income) expense, net

 

 

594

 

 

 

(584

)

 

 

1,330

 

 

 

165

 

Total other income, net

 

 

(157

)

 

 

(1,447

)

 

 

(69

)

 

 

(1,266

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

 

22,770

 

 

 

42,140

 

 

 

67,472

 

 

 

98,001

 

Provision for income taxes

 

 

4,319

 

 

 

9,555

 

 

 

15,316

 

 

 

23,520

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

18,451

 

 

$

32,585

 

 

$

52,156

 

 

$

74,481

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income per share – Basic:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock

 

$

1.02

 

 

$

1.80

 

 

$

2.88

 

 

$

4.10

 

Class B Common Stock

 

$

0.81

 

 

$

1.44

 

 

$

2.30

 

 

$

3.28

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income per share – Diluted:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock

 

$

0.97

 

 

$

1.71

 

 

$

2.75

 

 

$

3.91

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income allocated to – Basic:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock

 

$

15,492

 

 

$

27,349

 

 

$

43,792

 

 

$

62,520

 

Class B Common Stock

 

$

2,959

 

 

$

5,236

 

 

$

8,364

 

 

$

11,961

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income allocated to – Diluted:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock

 

$

18,451

 

 

$

32,585

 

 

$

52,156

 

 

$

74,481

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding – Basic:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock

 

 

15,210

 

 

 

15,223

 

 

 

15,225

 

 

 

15,235

 

Class B Common Stock

 

 

3,635

 

 

 

3,643

 

 

 

3,635

 

 

 

3,643

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding – Diluted:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock

 

 

18,967

 

 

 

19,037

 

 

 

18,999

 

 

 

19,032

 

 

 

(1)

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


 

 

 

Condensed Consolidated Balance Sheets

(Unaudited)

 

(In thousands)

 

February 26, 2022

 

 

August 28, 2021

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash, cash equivalents and short-term investments

 

$

425,887

 

 

$

512,868

 

Receivables, net

 

 

237,237

 

 

 

208,331

 

Inventories

 

 

160,835

 

 

 

143,591

 

Rental merchandise in service

 

 

196,690

 

 

 

181,531

 

Prepaid taxes

 

 

9,475

 

 

 

16,580

 

Prepaid expenses and other current assets

 

 

48,743

 

 

 

40,891

 

 

 

 

 

 

 

 

 

 

Total current assets

 

 

1,078,867

 

 

 

1,103,792

 

 

 

 

 

 

 

 

 

 

Property, plant and equipment, net

 

 

627,924

 

 

 

617,719

 

Goodwill

 

 

457,718

 

 

 

429,538

 

Customer contracts and other intangible assets, net

 

 

90,221

 

 

 

84,638

 

Deferred income taxes

 

 

565

 

 

 

580

 

Operating lease right-of-use assets, net

 

 

51,237

 

 

 

42,115

 

Other assets

 

 

106,064

 

 

 

102,683

 

 

 

 

 

 

 

 

 

 

Total assets

 

$

2,412,596

 

 

$

2,381,065

 

 

 

 

 

 

 

 

 

 

Liabilities and shareholders’ equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

84,517

 

 

$

81,356

 

Accrued liabilities

 

 

151,743

 

 

 

159,578

 

Accrued taxes

 

 

 

 

 

743

 

Operating lease liabilities, current

 

 

13,791

 

 

 

12,993

 

 

 

 

 

 

 

 

 

 

Total current liabilities

 

 

250,051

 

 

 

254,670

 

 

 

 

 

 

 

 

 

 

Long-term liabilities:

 

 

 

 

 

 

 

 

Accrued liabilities

 

 

134,263

 

 

 

134,085

 

Accrued and deferred income taxes

 

 

90,284

 

 

 

89,177

 

Operating lease liabilities

 

 

39,023

 

 

 

30,181

 

 

 

 

 

 

 

 

 

 

Total liabilities

 

 

513,621

 

 

 

508,113

 

 

 

 

 

 

 

 

 

 

Shareholders’ equity:

 

 

 

 

 

 

 

 

Common Stock

 

 

1,521

 

 

 

1,524

 

Class B Common Stock

 

 

363

 

 

 

364

 

Capital surplus

 

 

90,006

 

 

 

89,257

 

Retained earnings

 

 

1,833,579

 

 

 

1,806,643

 

Accumulated other comprehensive loss

 

 

(26,494

)

 

 

(24,836

)

 

 

 

 

 

 

 

 

 

Total shareholders’ equity

 

 

1,898,975

 

 

 

1,872,952

 

 

 

 

 

 

 

 

 

 

Total liabilities and shareholders’ equity

 

$

2,412,596

 

 

$

2,381,065

 

 


 

 

 

Detail of Operating Results

(Unaudited)

 

Revenues

(In thousands, except percentages)

 

Thirteen weeks ended February 26, 2022

 

 

Thirteen weeks ended February 27, 2021

 

 

Dollar

Change

 

 

Percent

Change

 

Core Laundry Operations

 

$

433,056

 

 

$

398,235

 

 

 

34,821

 

 

 

8.7

%

Specialty Garments

 

 

35,538

 

 

 

35,222

 

 

 

316

 

 

 

0.9

%

First Aid

 

 

18,102

 

 

 

16,307

 

 

 

1,795

 

 

 

11.0

%

Consolidated total

 

$

486,696

 

 

$

449,764

 

 

$

36,932

 

 

 

8.2

%

 

(In thousands, except percentages)

 

Twenty-six weeks ended February 26, 2022

 

 

Twenty-six weeks ended February 27, 2021

 

 

Dollar

Change

 

 

Percent

Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Core Laundry Operations

 

$

861,902

 

 

$

791,425

 

 

$

70,477

 

 

 

8.9

%

Specialty Garments

 

 

75,022

 

 

 

73,356

 

 

 

1,666

 

 

 

2.3

%

First Aid

 

 

35,936

 

 

 

31,836

 

 

 

4,100

 

 

 

12.9

%

Consolidated total

 

$

972,860

 

 

$

896,617

 

 

$

76,243

 

 

 

8.5

%

 

Operating Income

(In thousands, except percentages)

 

Thirteen weeks ended February 26, 2022

 

 

Thirteen weeks ended February 27, 2021

 

 

Dollar

Change

 

 

Percent

Change

 

Core Laundry Operations

 

$

18,745

 

 

$

35,366

 

 

$

(16,621

)

 

 

(47.0

)%

Specialty Garments

 

 

3,850

 

 

 

5,234

 

 

 

(1,384

)

 

 

(26.4

)%

First Aid

 

 

18

 

 

 

93

 

 

 

(75

)

 

 

(80.6

)%

Consolidated total

 

$

22,613

 

 

$

40,693

 

 

$

(18,080

)

 

 

(44.4

)%

 

(In thousands, except percentages)

 

Twenty-six weeks ended February 26, 2022

 

 

Twenty-six weeks ended February 27, 2021

 

 

Dollar

Change

 

 

Percent

Change

 

Core Laundry Operations

 

$

55,252

 

 

$

84,236

 

 

$

(28,984

)

 

 

(34.4

)%

Specialty Garments

 

 

12,479

 

 

 

12,393

 

 

 

86

 

 

 

0.7

%

First Aid

 

 

(328

)

 

 

106

 

 

 

(434

)

 

 

(409.4

)%

Consolidated total

 

$

67,403

 

 

$

96,735

 

 

$

(29,332

)

 

 

(30.3

)%

 

Operating Margin

 

 

Thirteen weeks ended February 26, 2022

 

 

Thirteen weeks ended February 27, 2021

 

Core Laundry Operations

 

 

4.3

%

 

 

8.9

%

Specialty Garments

 

 

10.8

%

 

 

14.9

%

First Aid

 

 

0.1

%

 

 

0.6

%

Consolidated total

 

 

4.6

%

 

 

9.0

%

 

 

 

Twenty-six weeks ended February 26, 2022

 

 

Twenty-six weeks ended February 27, 2021

 

Core Laundry Operations

 

 

6.4

%

 

 

10.6

%

Specialty Garments

 

 

16.6

%

 

 

16.9

%

First Aid

 

 

(0.9

)%

 

 

0.3

%

Consolidated total

 

 

6.9

%

 

 

10.8

%

 


 

 

 

Consolidated Statements of Cash Flows

(Unaudited)

 

(In thousands)

 

Twenty-six weeks ended February 26, 2022

 

 

Twenty-six weeks ended February 27, 2021

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net income

 

$

52,156

 

 

$

74,481

 

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

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

53,717

 

 

 

52,595

 

Amortization of deferred financing costs

 

 

82

 

 

 

56

 

Share-based compensation

 

 

4,961

 

 

 

3,266

 

Accretion on environmental contingencies

 

 

298

 

 

 

224

 

Accretion on asset retirement obligations

 

 

491

 

 

 

492

 

Deferred income taxes

 

 

1,733

 

 

 

847

 

Other

 

 

(6

)

 

 

19

 

Changes in assets and liabilities, net of acquisitions:

 

 

 

 

 

 

 

 

Receivables, less reserves

 

 

(27,855

)

 

 

(12,511

)

Inventories

 

 

(17,189

)

 

 

(4,287

)

Rental merchandise in service

 

 

(13,317

)

 

 

(338

)

Prepaid expenses and other current assets and Other assets

 

 

(3,926

)

 

 

2,267

 

Accounts payable

 

 

5,357

 

 

 

(1,923

)

Accrued liabilities

 

 

(16,928

)

 

 

11,460

 

Prepaid and accrued income taxes

 

 

5,319

 

 

 

1,368

 

Net cash provided by operating activities

 

 

44,893

 

 

 

128,016

 

 

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Acquisition of businesses, net of cash acquired

 

 

(42,325

)

 

 

(7,018

)

Capital expenditures, including capitalization of software costs

 

 

(60,178

)

 

 

(66,855

)

Proceeds from sale of assets

 

 

27

 

 

 

281

 

Net cash used in investing activities

 

 

(102,476

)

 

 

(73,592

)

 

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Proceeds from exercise of share-based awards

 

 

3

 

 

 

3

 

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

 

 

(3,803

)

 

 

(2,643

)

Repurchase of Common Stock

 

 

(14,766

)

 

 

(9,534

)

Payment of cash dividends

 

 

(9,976

)

 

 

(9,069

)

Net cash used in financing activities

 

 

(28,542

)

 

 

(21,243

)

 

 

 

 

 

 

 

 

 

Effect of exchange rate changes

 

 

(856

)

 

 

1,544

 

 

 

 

 

 

 

 

 

 

Net increase (decrease) in cash, cash equivalents and short-term investments

 

 

(86,981

)

 

 

34,725

 

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

 

$

425,887

 

 

$

509,563

 

 

 

 

 

 



 

 

 

Reconciliation of GAAP to Non-GAAP Financial Measures

The Company reports its consolidated financial results in accordance with generally accepted accounting principles (“GAAP”). To supplement these consolidated financial results, management believes that certain non-GAAP operating results provide a useful measure on which to evaluate and compare the Company’s results of operations for the periods presented. The Company believes these non-GAAP results provide useful supplemental information regarding the Company’s performance to both management and investors by excluding certain non-recurring amounts that impact the comparability of the results. A supplemental reconciliation of the Company’s consolidated operating income, consolidated net income and diluted earnings per share (“EPS”) on a GAAP basis to adjusted operating income, adjusted net income and adjusted diluted EPS on a non-GAAP basis is presented in the following table. In addition, Core Laundry Operations’ operating income and operating margin on a GAAP basis to adjusted operating income and adjusted operating margin on a non-GAAP basis is also presented in the following table. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measures, which are provided below.

 

 

 

Thirteen weeks ended February 26, 2022

 

 

 

Consolidated

 

 

Core Laundry Operations

 

(In thousands, except percentages)

 

Revenue

 

 

Operating

Income

 

 

Net

Income

 

 

Diluted

EPS

 

 

Revenue

 

 

Operating

Income

 

 

Operating

Margin

 

As reported

 

$

486,696

 

 

$

22,613

 

 

$

18,451

 

 

$

0.97

 

 

$

433,056

 

 

$

18,745

 

 

 

4.3

%

Key Initiatives

 

 

 

 

 

6,739

 

 

 

5,080

 

 

 

0.27

 

 

 

 

 

 

6,739

 

 

 

1.6

%

As adjusted

 

$

486,696

 

 

$

29,352

 

 

$

23,531

 

 

$

1.24

 

 

$

433,056

 

 

$

25,484

 

 

 

5.9

%

 

 

 

Twenty-six weeks ended February 26, 2022

 

 

 

Consolidated

 

 

Core Laundry Operations

 

(In thousands, except percentages)

 

Revenue

 

 

Operating

Income

 

 

Net

Income

 

 

Diluted

EPS

 

 

Revenue

 

 

Operating

Income

 

 

Operating

Margin

 

As reported

 

$

972,860

 

 

$

67,403

 

 

$

52,156

 

 

$

2.75

 

 

$

861,902

 

 

$

55,252

 

 

 

6.4

%

Key Initiatives

 

 

 

 

 

12,661

 

 

 

9,543

 

 

 

0.50

 

 

 

 

 

 

12,661

 

 

 

1.5

%

As adjusted

 

$

972,860

 

 

$

80,064

 

 

$

61,699

 

 

$

3.25

 

 

$

861,902

 

 

$

67,913

 

 

 

7.9

%

 

Supplemental reconciliations of the Company’s fiscal 2022 financial outlook for consolidated operating income, consolidated net income, diluted earnings per share and operating margin on a GAAP basis to adjusted operating income, adjusted net income, adjusted diluted EPS and adjusted operating margin on a non-GAAP basis are presented in the following tables. In addition, a supplemental reconciliation of the fiscal 2022 financial outlook for Core Laundry Operations’ operating income and operating margin on a GAAP basis to adjusted operating income and adjusted operating margin on a non-GAAP basis is also presented in the following table. Investors are encouraged to review the reconciliation of the outlook for these non-GAAP measures to the outlook for their most directly comparable GAAP financial measures, which are provided below. The Company’s outlook contains forward-looking statements and information. Actual results may differ materially. See “Forward-Looking Statements Disclosure.”

 

 

Fifty-two weeks ended August 27, 2022

 

 

 

Consolidated

 

 

Core Laundry Operations

 

(In thousands, except percentages and per share amounts)

 

Guidance - at the midpoint

 

 

Key Initiative Costs

 

 

Adjusted

 

 

Guidance - at the midpoint

 

 

Key Initiative Costs

 

 

Adjusted

 

Revenues

 

$

1,973,500

 

 

$

 

 

$

1,973,500

 

 

$

1,753,500

 

 

$

-

 

 

$

1,753,500

 

Operating income

 

 

142,275

 

 

 

30,000

 

 

 

172,275

 

 

$

121,400

 

 

$

30,000

 

 

$

151,400

 

Operating margin

 

 

7.2

%

 

 

1.5

%

 

 

8.7

%

 

 

6.9

%

 

 

1.7

%

 

 

8.6

%

Income before income taxes

 

 

143,075

 

 

 

30,000

 

 

 

173,075

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for income taxes

 

 

34,338

 

 

 

7,581

 

 

 

41,919

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

108,737

 

 

$

22,419

 

 

$

131,156

 

 

 

 

 

 

 

 

 

 

 

 

 

Effective tax rate

 

 

24.0

%

 

 

25.3

%

 

 

24.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share:

 

Projected

 

 

Key Initiative Costs

 

 

Adjusted

 

 

 

 

 

 

 

 

 

 

 

 

 

Low

 

$

5.62

 

 

$

1.18

 

 

$

6.80

 

 

 

 

 

 

 

 

 

 

 

 

 

High

 

$

5.82

 

 

$

1.18

 

 

$

7.00