8-K
0000717954false00007179542024-03-272024-03-27

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): March 27, 2024

https://cdn.kscope.io/dbde4e0d18a79c955a33fef836ce7849-img19629416_0.jpg 

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 27, 2024, UniFirst Corporation (the Company) issued a press release (Press Release) announcing financial results for the second quarter of fiscal 2024, which ended on February 24, 2024. 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 27, 2024

 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 27, 2024

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

 


EX-99

 

 

Exhibit 99

Investor Relations Contact

Shane O'Connor, Executive Vice President & CFO

UniFirst Corporation

978-658-8888

shane_oconnor@unifirst.com

 

 

 

UNIFIRST ANNOUNCES FINANCIAL RESULTS FOR THE SECOND QUARTER OF FISCAL 2024

Wilmington, MA – March 27, 2024 – UniFirst Corporation (NYSE: UNF) (the “Company,” “UniFirst” or “we”) today reported results for its second quarter ended February 24, 2024 as compared to the corresponding period in the prior fiscal year:

Q2 2024 Financial Highlights

Consolidated revenues for the second quarter increased 8.8% to $590.7 million.
Operating income was $27.9 million, an increase of 34.9%.
The quarterly tax rate increased to 26.2% compared to 24.6% in the prior year.
Net income increased to $20.5 million from $17.8 million in the prior year, or 14.9%.
Diluted earnings per share increased to $1.09 from $0.95 in the prior year, or 14.7%.
EBITDA increased to $62.5 million compared to $50.5 million in the prior year, or 23.8%.

 

The Company's financial results for the second quarter of fiscal 2024 and 2023 included approximately $3.2 million and $9.1 million, respectively, of costs directly attributable to its customer relationship management (“CRM”) computer system, enterprise resource planning (“ERP”) system and branding initiatives (the “Key Initiatives”). In addition, the Company incurred costs related to the acquisition of Clean Uniform during the second quarter of fiscal 2023 of approximately $2.0 million. The effect of these items on the second quarter of fiscal 2024 and 2023 combined to decrease:

Both operating income and EBITDA by $3.2 million and $11.1 million, respectively.
Net income by $2.5 million and $8.3 million, respectively.
Diluted earnings per share by $0.13 and $0.44, respectively.

 

Steven Sintros, UniFirst President and Chief Executive Officer, said, “We are pleased with the results from our second quarter which met our expectations and delivered solid growth in revenues, EBITDA and cash flows from operating activities. I want to sincerely thank all our Team Partners who continue to Always Deliver for each other and our customers as we strive towards our vision of being universally recognized as the best service provider in the industry. …all while living our Mission of Serving the People Who do the Hard Work.

Segment Reporting Highlights

Core Laundry Operations

 

Revenues for the quarter increased 9.5% to $522.4 million.
Organic growth, which excludes the effect of acquisitions and fluctuations in the Canadian dollar, was 4.8%.
Operating margin increased to 3.6% from 2.9%.
Core Laundry Operations' EBITDA margin increased to 9.9% from 8.7%.

 

The costs we incurred related to the Key Initiatives, discussed above, were recorded to the Core Laundry Operations' segment, and decreased both the Core Laundry Operations' operating and EBITDA margin for the second quarters of fiscal 2024 and 2023 by 0.6% and 2.3%, respectively.

 

The segment's operating and EBITDA margin comparisons were also impacted by additional reserves we recorded related to our legacy environmental sites and investments that we have made over the last year in our corporate capabilities, which were partially offset by lower energy costs as a percentage of revenues. Further impacting the segment’s operating margin was elevated non-cash acquisition-related intangibles amortization resulting from the Company's acquisition of Clean Uniform in March 2023.

 


 

 

Specialty Garments

 

Revenues for the quarter were $43.5 million, an increase of 3.2%, which was driven by growth in the segment's cleanroom operations.
Operating margin increased to 22.8% from 19.1% a year ago, primarily as a result of improved operating leverage and lower merchandise expenses in our cleanroom operations.
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 $101.9 million as of February 24, 2024.
The Company had no long-term debt outstanding as of February 24, 2024.
Cash flows from operating activities increased to $106.7 million in the first half of 2024, an increase of 66.3% over the prior year.
The Company repurchased 45,250 shares of Common Stock for $7.9 million in the second quarter of fiscal 2024. As of February 24, 2024, the Company had $91.9 million remaining under its existing share repurchase authorization.
Weighted average shares outstanding – Diluted for both the second quarter of fiscal 2024 and fiscal 2023 were 18.8 million.

 

Financial Outlook

 

Mr. Sintros continued, “At this time, we continue to expect our revenues for fiscal 2024 to be between $2.415 billion and $2.425 billion and fully diluted earnings per share to be between $6.80 and $7.16.” Our guidance for fiscal 2024 continues to include one extra week of operations compared to fiscal 2023 due to the timing of our fiscal quarter, and assumes:

Core Laundry Operations’ operating and EBITDA margins at the midpoint of the range of 6.5% and 12.6%, respectively.
A revised estimate of $12.0 million of costs directly attributable to our Key Initiatives that will be expensed in fiscal 2024 and will decrease both the Core Laundry Operations’ operating and EBITDA margins by 0.6%.
An effective tax rate of 25.0%.
No impact from any future share buybacks or unexpected significantly adverse economic developments.

 

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, facility service products, as well as first aid and safety supplies and services. Together with its subsidiaries, the Company also manages specialized garment programs for the cleanroom and nuclear industries. In addition to partnering with leading brands, UniFirst manufactures its own branded workwear, protective clothing, and floorcare products at its five company-owned ISO-9001-certified manufacturing facilities. With more than 270 service locations, over 300,000 customer locations, and 16,000-plus employee Team Partners, the Company outfits more than 2 million workers every day. For more information, contact UniFirst at 888.296.2740 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,” “design,” “assumption,” “vision” 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 an economic recession or other adverse economic conditions, including, without limitation, as a result of continued high inflation rates or further increases in inflation or interest rates or extraordinary events or circumstances such as geopolitical conflicts like the conflict between Russia and Ukraine, disruption in the Middle East 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 acquisitions and successfully integrate acquired businesses, including Clean Uniform, and the performance of such 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 conflict between Russia and Ukraine, any loss of key management or other personnel, increased costs as a result of any changes in federal, state, international or other laws, rules and regulations or governmental interpretation of such laws, rules and regulations, uncertainties regarding, or adverse impacts from continued high price levels of natural gas, electricity, fuel and labor or increases in such costs, the negative effect on our business from sharply depressed oil and natural gas prices, the continuing increase in domestic healthcare costs, increased workers' compensation claim costs, increased healthcare claim costs, our ability to retain and grow our customer base, demand and prices for our products and services, fluctuations in our Specialty Garments business, political or other instability, supply chain disruption or infection among our employees in Mexico and Nicaragua where our principal garment manufacturing plants are located, 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 (the “SEC”), New York Stock Exchange and accounting or other rules, including, without limitation, recent rules adopted by the SEC regarding climate-related and cybersecurity-related disclosures, strikes and unemployment levels, our efforts to evaluate and potentially reduce internal costs, the impact of foreign trade policies and tariffs or other impositions on imported goods on our business, results of operations and financial condition, our ability to successfully implement our business strategies and processes, including our capital allocation strategies, our ability to successfully remediate the material weakness in internal control over financial reporting disclosed in our Annual Report on Form 10-K for the year ended August 26, 2023 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 26, 2023, Part II, Item 1A. “Risk Factors” and elsewhere in our subsequent Quarterly Reports on Form 10-Q and in our other filings with the SEC. 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)

 

 

 

Thirteen Weeks Ended

 

 

Twenty-Six Weeks Ended

 

(In thousands, except per share data)

 

February 24, 2024

 

 

February 25, 2023

 

 

February 24, 2024

 

 

February 25, 2023

 

Revenues

 

$

590,711

 

 

$

542,691

 

 

$

1,184,236

 

 

$

1,084,489

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenues (1)

 

 

396,191

 

 

 

369,896

 

 

 

779,987

 

 

 

723,868

 

Selling and administrative expenses (1)

 

 

131,417

 

 

 

122,190

 

 

 

254,276

 

 

 

239,553

 

Depreciation and amortization

 

 

35,160

 

 

 

29,895

 

 

 

68,893

 

 

 

56,940

 

Total operating expenses

 

 

562,768

 

 

 

521,981

 

 

 

1,103,156

 

 

 

1,020,361

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

 

27,943

 

 

 

20,710

 

 

 

81,080

 

 

 

64,128

 

 

 

 

 

 

 

 

 

 

 

 

 

Other expense (income):

 

 

 

 

 

 

 

 

 

 

 

 

Interest income, net

 

 

(350

)

 

 

(3,031

)

 

 

(3,184

)

 

 

(5,800

)

Other expense, net

 

 

575

 

 

 

114

 

 

 

1,291

 

 

 

905

 

Total other expense (income), net

 

 

225

 

 

 

(2,917

)

 

 

(1,893

)

 

 

(4,895

)

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

 

27,718

 

 

 

23,627

 

 

 

82,973

 

 

 

69,023

 

Provision for income taxes

 

 

7,261

 

 

 

5,817

 

 

 

20,191

 

 

 

17,256

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

20,457

 

 

$

17,810

 

 

$

62,782

 

 

$

51,767

 

 

 

 

 

 

 

 

 

 

 

 

 

Income per share – Basic:

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock

 

$

1.14

 

 

$

0.99

 

 

$

3.49

 

 

$

2.88

 

Class B Common Stock

 

$

0.91

 

 

$

0.79

 

 

$

2.79

 

 

$

2.31

 

 

 

 

 

 

 

 

 

 

 

 

 

Income per share – Diluted:

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock

 

$

1.09

 

 

$

0.95

 

 

$

3.35

 

 

$

2.76

 

 

 

 

 

 

 

 

 

 

 

 

 

Income allocated to – Basic:

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock

 

$

17,188

 

 

$

14,962

 

 

$

52,754

 

 

$

43,488

 

Class B Common Stock

 

$

3,269

 

 

$

2,848

 

 

$

10,028

 

 

$

8,279

 

 

 

 

 

 

 

 

 

 

 

 

 

Income allocated to – Diluted:

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock

 

$

20,457

 

 

$

17,810

 

 

$

62,782

 

 

$

51,767

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding – Basic:

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock

 

 

15,106

 

 

 

15,087

 

 

 

15,110

 

 

 

15,084

 

Class B Common Stock

 

 

3,590

 

 

 

3,590

 

 

 

3,590

 

 

 

3,590

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding – Diluted:

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock

 

 

18,754

 

 

 

18,767

 

 

 

18,758

 

 

 

18,757

 

 

(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 24, 2024

 

 

August 26, 2023

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

90,538

 

 

$

79,443

 

Short-term investments

 

 

11,392

 

 

 

10,157

 

Receivables, net

 

 

291,784

 

 

 

279,078

 

Inventories

 

 

158,279

 

 

 

148,334

 

Rental merchandise in service

 

 

241,340

 

 

 

248,323

 

Prepaid taxes

 

 

9,563

 

 

 

20,907

 

Prepaid expenses and other current assets

 

 

61,582

 

 

 

53,876

 

Total current assets

 

 

864,478

 

 

 

840,118

 

Property, plant and equipment, net

 

 

772,223

 

 

 

756,540

 

Goodwill

 

 

648,829

 

 

 

647,900

 

Customer contracts and other intangible assets, net

 

 

132,478

 

 

 

145,618

 

Deferred income taxes

 

 

617

 

 

 

567

 

Operating lease right-of-use assets, net

 

 

69,726

 

 

 

62,565

 

Other assets

 

 

132,602

 

 

 

116,667

 

Total assets

 

$

2,620,953

 

 

$

2,569,975

 

Liabilities and shareholders’ equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

86,318

 

 

$

92,730

 

Accrued liabilities

 

 

158,478

 

 

 

156,408

 

Accrued taxes

 

 

 

 

 

352

 

Operating lease liabilities, current

 

 

18,068

 

 

 

17,739

 

Total current liabilities

 

 

262,864

 

 

 

267,229

 

Long-term liabilities:

 

 

 

 

 

 

Accrued liabilities

 

 

123,446

 

 

 

121,682

 

Accrued and deferred income taxes

 

 

131,248

 

 

 

130,084

 

Operating lease liabilities

 

 

53,710

 

 

 

47,020

 

Total liabilities

 

 

571,268

 

 

 

566,015

 

Shareholders’ equity:

 

 

 

 

 

 

Common Stock

 

 

1,509

 

 

 

1,510

 

Class B Common Stock

 

 

359

 

 

 

359

 

Capital surplus

 

 

101,197

 

 

 

99,303

 

Retained earnings

 

 

1,969,659

 

 

 

1,926,549

 

Accumulated other comprehensive loss

 

 

(23,039

)

 

 

(23,761

)

       Total shareholders’ equity

 

 

2,049,685

 

 

 

2,003,960

 

           Total liabilities and shareholders’ equity

 

$

2,620,953

 

 

$

2,569,975

 

 

 

 


 

 

Detail of Operating Results

(Unaudited)

 

 

 

Thirteen Weeks Ended February 24, 2024

 

 

Thirteen Weeks Ended February 25, 2023

 

 

 

Core Laundry

 

Specialty

 

First

 

 

 

 

Core Laundry

 

Specialty

 

First

 

 

 

(In thousands, except percentages)

 

Operations

 

Garments

 

Aid

 

Total

 

 

Operations

 

Garments

 

Aid

 

Total

 

Revenues

 

$

522,420

 

$

43,462

 

$

24,829

 

$

590,711

 

 

$

477,050

 

$

42,127

 

$

23,514

 

$

542,691

 

Revenue Growth %

 

 

9.5

%

 

3.2

%

 

5.6

%

 

8.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Income (Loss) (1), (2)

 

$

19,046

 

$

9,901

 

$

(1,004

)

$

27,943

 

 

$

13,642

 

$

8,045

 

$

(977

)

$

20,710

 

Operating Margin

 

 

3.6

%

 

22.8

%

 

-4.0

%

 

4.7

%

 

 

2.9

%

 

19.1

%

 

-4.2

%

 

3.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA (1), (2)

 

$

51,646

 

$

10,922

 

$

(40

)

$

62,528

 

 

$

41,507

 

$

9,097

 

$

(113

)

$

50,491

 

EBITDA Margin

 

 

9.9

%

 

25.1

%

 

-0.2

%

 

10.6

%

 

 

8.7

%

 

21.6

%

 

-0.5

%

 

9.3

%

 

(1)
The Company's financial results for the second quarter of fiscal 2024 and 2023 included approximately $3.2 million and $9.1 million, respectively, of costs directly attributable to its Key Initiatives. In addition, the Company incurred costs related to the acquisition of Clean Uniform during the second quarter of fiscal 2023 of approximately $2.0 million. These costs were recorded to the Core Laundry Operations.
(2)
The Key Initiatives' costs resulted in a decrease in both Core Laundry Operations' operating margin and EBITDA margin for the second quarter of fiscal 2024 and 2023 of 0.6% and 2.3%, respectively.

 

 

 

Twenty-Six Weeks Ended February 24, 2024

 

 

Twenty-Six Weeks Ended February 25, 2023

 

 

 

Core Laundry

 

Specialty

 

First

 

 

 

 

Core Laundry

 

Specialty

 

First

 

 

 

(In thousands, except percentages)

 

Operations

 

Garments

 

Aid

 

Total

 

 

Operations

 

Garments

 

Aid

 

Total

 

Revenues

 

$

1,046,409

 

$

88,131

 

$

49,696

 

$

1,184,236

 

 

$

954,448

 

$

86,206

 

$

43,835

 

$

1,084,489

 

Revenue Growth %

 

 

9.6

%

 

2.2

%

 

13.4

%

 

9.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Income (Loss) (3), (4)

 

$

61,137

 

$

22,018

 

$

(2,075

)

$

81,080

 

 

$

47,473

 

$

18,228

 

$

(1,573

)

$

64,128

 

Operating Margin

 

 

5.8

%

 

25.0

%

 

-4.2

%

 

6.8

%

 

 

5.0

%

 

21.1

%

 

-3.6

%

 

5.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA (3), (4)

 

$

124,966

 

$

24,070

 

$

(354

)

$

148,682

 

 

$

99,942

 

$

20,268

 

$

(47

)

$

120,163

 

EBITDA Margin

 

 

11.9

%

 

27.3

%

 

-0.7

%

 

12.6

%

 

 

10.5

%

 

23.5

%

 

-0.1

%

 

11.1

%

 

(3)
The Company's financial results for the first half of fiscal 2024 and 2023 included approximately $6.1 million and $19.1 million, respectively, of costs directly attributable to its Key Initiatives. In addition, the Company incurred costs related to the acquisition of Clean Uniform during the first half of fiscal 2023 of approximately $2.0 million. These costs were recorded to the Core Laundry Operations.
(4)
The Key Initiatives' costs resulted in a decrease in both Core Laundry Operations' operating margin and EBITDA margin for the first half of fiscal 2024 and 2023 of 0.6% and 2.2%, respectively.

 

 

 

 


 

 

Consolidated Statements of Cash Flows

(Unaudited)

 

(In thousands)

 

February 24, 2024

 

 

February 25, 2023

 

Cash flows from operating activities:

 

 

 

 

 

 

Net income

 

$

62,782

 

 

$

51,767

 

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

 

 

 

 

 

 

Depreciation and amortization (1)

 

 

68,893

 

 

 

56,940

 

Share-based compensation

 

 

4,842

 

 

 

4,533

 

Accretion on environmental contingencies

 

 

632

 

 

 

518

 

Accretion on asset retirement obligations

 

 

467

 

 

 

458

 

Deferred income taxes

 

 

897

 

 

 

1,080

 

Other

 

 

963

 

 

 

119

 

Changes in assets and liabilities, net of acquisitions:

 

 

 

 

 

 

    Receivables, less reserves

 

 

(12,574

)

 

 

(27,636

)

    Inventories

 

 

(9,935

)

 

 

683

 

    Rental merchandise in service

 

 

7,127

 

 

 

(13,592

)

    Prepaid expenses and other current assets and Other assets

 

 

(14,036

)

 

 

(4,459

)

    Accounts payable

 

 

(8,035

)

 

 

(900

)

    Accrued liabilities

 

 

(6,205

)

 

 

(17,072

)

    Prepaid and accrued income taxes

 

 

10,907

 

 

 

11,730

 

Net cash provided by operating activities

 

 

106,725

 

 

 

64,169

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

Acquisition of businesses, net of cash acquired

 

 

 

 

 

(7,059

)

Capital expenditures, including capitalization of software costs

 

 

(72,902

)

 

 

(74,847

)

Purchases of investments

 

 

(11,394

)

 

 

(107,000

)

Maturities of investments

 

 

10,217

 

 

 

6,000

 

Proceeds from sale of assets

 

 

632

 

 

 

345

 

Net cash used in investing activities

 

 

(73,447

)

 

 

(182,561

)

 

 

 

 

 

 

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

 

 

(2,638

)

 

 

(2,802

)

Repurchase of Common Stock

 

 

(8,119

)

 

 

 

Payment of cash dividends

 

 

(11,512

)

 

 

(10,954

)

Net cash used in financing activities

 

 

(22,266

)

 

 

(13,753

)

 

 

 

 

 

 

Effect of exchange rate changes

 

 

83

 

 

 

(156

)

 

 

 

 

 

 

Net increase (decrease) in cash and cash equivalents

 

 

11,095

 

 

 

(132,301

)

Cash and cash equivalents at beginning of period

 

 

79,443

 

 

 

376,399

 

Cash and cash equivalents at end of period

 

$

90,538

 

 

$

244,098

 

(1)
Depreciation and amortization for the first half of fiscal 2024 and 2023 included approximately $9.2 million and $5.1 million, respectively, of non-cash amortization expense recognized on acquisition-related intangible assets.

 

 


 

 

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 the Company's consolidated financial results in this press release, the Company also presents EBITDA and EBITDA margin, which are non-GAAP financial measures. The Company defines EBITDA as net income before interest, income taxes, depreciation and amortization. EBITDA margin is defined as EBITDA for a period divided by revenue for the same period.

 

The Company believes these non-GAAP financial measures provide useful supplemental information regarding the performance of the Company and its segments to both management and investors. These non-GAAP financial measures exclude certain items that may impact the comparability of the Company's results. In addition, by excluding certain items, these non-GAAP financial measures enable management and investors to further evaluate the underlying operating performance of the Company.

 

Supplemental reconciliations of the Company's consolidated net income on a GAAP basis to EBITDA and EBITDA margin, which are non-GAAP financial measures, are presented in the following tables. Investors are encouraged to review the reconciliations of the non-GAAP financial measures to their most directly comparable GAAP financial measures, which are provided below. EBITDA and EBITDA margin should be considered in addition to, and not as substitutes for, or in isolation from, measures prepared in accordance with GAAP.

 

The Company does not allocate its provision for income taxes to its business segments and as a result, presents it in a separate column in the following tables.

 

Thirteen Weeks Ended February 24, 2024

 

 

 

Core Laundry

 

 

Specialty

 

 

First

 

 

 

 

 

 

 

(In thousands, except percentages)

 

Operations

 

 

Garments

 

 

Aid

 

 

Other

 

 

Total

 

Revenue

 

$

522,420

 

 

$

43,462

 

 

$

24,829

 

 

$

 

 

$

590,711

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

18,821

 

 

$

9,901

 

 

$

(1,004

)

 

$

(7,261

)

 

$

20,457

 

Provision for income taxes

 

 

 

 

 

 

 

 

 

 

 

7,261

 

 

 

7,261

 

Interest income, net

 

 

(350

)

 

 

 

 

 

 

 

 

 

 

 

(350

)

Depreciation and amortization

 

 

33,175

 

 

 

1,021

 

 

 

964

 

 

 

 

 

 

35,160

 

EBITDA

 

$

51,646

 

 

$

10,922

 

 

$

(40

)

 

$

 

 

$

62,528

 

EBITDA Margin

 

 

9.9

%

 

 

25.1

%

 

 

-0.2

%

 

 

 

 

 

10.6

%

 

 

Thirteen Weeks Ended February 25, 2023

 

 

 

Core Laundry

 

 

Specialty

 

 

First

 

 

 

 

 

 

 

(In thousands, except percentages)

 

Operations

 

 

Garments

 

 

Aid

 

 

Other

 

 

Total

 

Revenue

 

$

477,050

 

 

$

42,127

 

 

$

23,514

 

 

$

 

 

$

542,691

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

16,559

 

 

$

8,045

 

 

$

(977

)

 

$

(5,817

)

 

$

17,810

 

Provision for income taxes

 

 

 

 

 

 

 

 

 

 

 

5,817

 

 

 

5,817

 

Interest income, net

 

 

(3,031

)

 

 

 

 

 

 

 

 

 

 

 

(3,031

)

Depreciation and amortization

 

 

27,979

 

 

 

1,052

 

 

 

864

 

 

 

 

 

 

29,895

 

EBITDA

 

$

41,507

 

 

$

9,097

 

 

$

(113

)

 

$

 

 

$

50,491

 

EBITDA Margin

 

 

8.7

%

 

 

21.6

%

 

 

-0.5

%

 

 

 

 

 

9.3

%

 

 

Twenty-Six Weeks Ended February 24, 2024

 

 

 

Core Laundry

 

 

Specialty

 

 

First

 

 

 

 

 

 

 

(In thousands, except percentages)

 

Operations

 

 

Garments

 

 

Aid

 

 

Other

 

 

Total

 

Revenue

 

$

1,046,409

 

 

$

88,131

 

 

$

49,696

 

 

$

 

 

$

1,184,236

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

63,030

 

 

$

22,018

 

 

$

(2,075

)

 

$

(20,191

)

 

$

62,782

 

Provision for income taxes

 

 

 

 

 

 

 

 

 

 

 

20,191

 

 

 

20,191

 

Interest income, net

 

 

(3,184

)

 

 

 

 

 

 

 

 

 

 

 

(3,184

)

Depreciation and amortization

 

 

65,120

 

 

 

2,052

 

 

 

1,721

 

 

 

 

 

 

68,893

 

EBITDA

 

$

124,966

 

 

$

24,070

 

 

$

(354

)

 

$

 

 

$

148,682

 

EBITDA Margin

 

 

11.9

%

 

 

27.3

%

 

 

-0.7

%

 

 

 

 

 

12.6

%

 


 

 

 

Twenty-Six Weeks Ended February 25, 2023

 

 

 

Core Laundry

 

 

Specialty

 

 

First

 

 

 

 

 

 

 

(In thousands, except percentages)

 

Operations

 

 

Garments

 

 

Aid

 

 

Other

 

 

Total

 

Revenue

 

$

954,448

 

 

$

86,206

 

 

$

43,835

 

 

$

 

 

$

1,084,489

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

52,368

 

 

$

18,228

 

 

$

(1,573

)

 

$

(17,256

)

 

$

51,767

 

Provision for income taxes

 

 

 

 

 

 

 

 

 

 

 

17,256

 

 

 

17,256

 

Interest income, net

 

 

(5,800

)

 

 

 

 

 

 

 

 

 

 

 

(5,800

)

Depreciation and amortization

 

 

53,374

 

 

 

2,040

 

 

 

1,526

 

 

 

 

 

 

56,940

 

EBITDA

 

$

99,942

 

 

$

20,268

 

 

$

(47

)

 

$

 

 

$

120,163

 

EBITDA Margin

 

 

10.5

%

 

 

23.5

%

 

 

-0.1

%

 

 

 

 

 

11.1

%

 

Supplemental reconciliations of the Company’s fiscal 2024 financial outlook for consolidated net income on a GAAP basis to EBITDA and EBITDA margin, which are non-GAAP financial measures, are presented in the following table. In addition, supplemental reconciliations of the fiscal 2024 financial outlook for segments’ net income on a GAAP basis to segments’ EBITDA and EBITDA margin, which are non-GAAP financial measures, are also presented in the following table.

 

Investors are encouraged to review the reconciliations 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-three Weeks Ended August 31, 2024 (1)

 

 

 

 

 

 

 

 

 

Specialty Garments,

 

 

 

 

 

 

Core Laundry

 

 

First Aid, and

 

(In thousands, except percentages)

 

Consolidated

 

 

Operations

 

 

Other

 

Revenue

 

$

2,420,000

 

 

$

2,138,000

 

 

$

282,000

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

132,300

 

 

$

141,400

 

 

$

(9,100

)

Provision for income taxes

 

 

44,100

 

 

 

 

 

 

44,100

 

Interest income, net

 

 

(4,000

)

 

 

(4,000

)

 

 

 

Depreciation and amortization

 

 

140,700

 

 

 

133,000

 

 

 

7,700

 

EBITDA

 

$

313,100

 

 

$

270,400

 

 

$

42,700

 

EBITDA Margin

 

 

12.9

%

 

 

12.6

%

 

 

15.1

%

 

(1)
Amounts represent the midpoint of the Company’s guidance.