UniFirst Announces Financial Results For First Quarter Of 2009

Wilmington, MA (CompNewsNetwork) – UniFirst Corporation (NYSE: UNF) today announced revenues and earnings for its first quarter of fiscal 2009 which ended November 29, 2008.

Revenues for the first quarter of fiscal 2009 were $262.6 million, a 6.2% increase from the previous year's first quarter of $247.3 million. First quarter net income for fiscal 2009 was $18.9 million or $0.97 per diluted common share, a 14.5% increase from the first quarter of fiscal 2008, when net income was $16.5 million or $0.85 per diluted common share.

First quarter revenues from the core laundry operations, which exclude the Company's Specialty Garments and First Aid segments, grew 6.9%. Revenues from the core laundry operations, net of the effect of acquisitions and changes in foreign currency increased 6.6%.

Income from operations from the Company's core laundry business was up 17.9% compared to the first quarter of fiscal 2008 as the operating margin increased to 13.7% from 12.4% a year earlier. The improvement is due primarily to lower merchandise amortization and lower payroll costs as a percentage of revenues. The core laundry's operating results in the first quarter also were helped by lower health-care and workers' compensation costs compared to fiscal 2008. These costs fluctuate from quarter to quarter and the Company does not anticipate that this benefit will continue throughout the year.

These benefits were partially offset by higher energy costs and a $1.6 million accounting charge related to environmental obligations. Accounting rules require the discounting of certain liabilities using a risk-free interest rate. The Company's projected liabilities for environmental remediation are discounted in this manner as disclosed in its quarterly financial statements. Due to the significant decline in interest rates during the first fiscal quarter, the Company discounted its liability using a lower interest rate resulting in this non-cash charge to earnings.

The Specialty Garments and First Aid segments' operating results were comparable to the first quarter of fiscal 2008. The Company's overall results benefitted from lower interest expense related to its variable rate debt. However, this benefit was more than offset by foreign exchange losses in the current quarter as well as a higher effective tax rate compared to the first quarter of fiscal 2008. The Company's effective tax rate in the first quarter of fiscal 2009 increased to 39.7% compared to 38.5% in the first quarter of fiscal 2008.

Ronald D. Croatti, UniFirst President and Chief Executive Officer, stated, "Our strong first quarter was the result of a continued focus on maximizing the output of our professional sales and services organizations. In addition, we have intensified our cost control efforts throughout the Company. However, we will need to be even more diligent in these areas going forward. The level of headcount reductions in our customer base has accelerated considerably through November and December and we expect that the general economic weakness will negatively impact our revenues for the balance of our fiscal year. Despite the challenging economic environment, we will continue to focus on factors within our control such as providing superior service and value to our customers."

Conference Call Information

The Company will hold a conference call today at 4:00 PM (EST) to discuss its quarterly financial results, business highlights and outlook. A simultaneous live webcast of the call will be available over the Internet and can be accessed at www.unifirst.com.

About UniFirst Corporation

UniFirst Corporation is one of the largest providers of workplace uniforms, protective clothing and facility services products in North America. The Company employs over 10,000 team partners who serve over 200,000 customer locations in 46 U.S. states, Canada and Europe from over 200 customer service, distribution, and manufacturing facilities. UniFirst Corporation is a publicly held company traded on the New York Stock Exchange under the symbol UNF and is a component of the Standard & Poor's 600 Small Cap Index.

Forward Looking Statements

This public announcement may contain forward looking statements that reflect the Company's current views with respect to future events and financial performance. Forward looking statements contained in this public announcement are subject to the safe harbor created by the Private Securities Litigation Reform Act of 1995 and are highly dependent upon a variety of important factors that could cause actual results to differ materially from those reflected in such forward looking statements. Such factors include, but are not limited to, uncertainties regarding the Company's ability to consummate and successfully integrate acquired businesses, uncertainties regarding any existing or newly-discovered expenses and liabilities related to environmental compliance and remediation, the Company's ability to compete successfully without any significant degradation in its margin rates, seasonal fluctuations in business levels, uncertainties regarding the price levels of natural gas, electricity, fuel and labor, the impact of negative economic conditions on the Company's customers and such customers' workforce, the continuing increase in domestic healthcare costs, demand and prices for the Company's products and services, additional professional and internal costs necessary for compliance with recent and proposed future changes in Securities and Exchange Commission (including the Sarbanes-Oxley Act of 2002), New York Stock Exchange and accounting rules, strikes and unemployment levels, the Company's efforts to evaluate and potentially reduce internal costs, economic and other developments associated with the war on terrorism and its impact on the economy and general economic conditions. When used in this public announcement, the words "anticipate," "optimistic," "believe," "estimate," "expect," "intend," and similar expressions as they relate to the Company are included to identify such forward looking statements. The Company undertakes no obligation to update any forward looking statements to reflect events or circumstances arising after the date on which such statements are made.

UniFirst Corporation and Subsidiaries

Consolidated Statements of Income

                                                 Thirteen weeks ended

                                                 November 29,     November 24,

(In thousands, except share and per share        2008 (2)         2007 (2)

Revenues                                       $ 262,554        $ 247,260

Costs and expenses:

Operating costs (1)                              157,063          151,147

Selling and administrative expenses (1)          57,487           54,019

Depreciation and amortization                    13,703           12,787

                                                 228,253          217,953

Income from operations                           34,301           29,307

Other expense (income):

Interest expense                                 2,591            3,504

Interest income                                  (504    )        (513    )

Foreign exchange loss(gain)                      934              (471    )

                                                 3,021            2,520

Income before income taxes                       31,280           26,787

Provision for income taxes                       12,418           10,313

Net income                                     $ 18,862         $ 16,474

Income per share - Basic:

Common Stock                                   $ 1.03           $ 0.90

Class B Common Stock                           $ 0.82           $ 0.72

Income per share - Diluted:

Common Stock                                   $ 0.97           $ 0.85

Weighted average number of shares outstanding
- Basic:

Common Stock                                     14,384           14,352

Class B Common Stock                             4,935            4,937

                                                 19,319           19,289

Weighted average number of shares outstanding
- Diluted:

Common Stock                                     19,362           19,366

Dividends per share:

Common Stock                                   $ 0.0375         $ 0.0375

Class B Common Stock                           $ 0.0300         $ 0.0300

(1) Exclusive of depreciation on the Company's property and equipment and amortization on its intangible assets

(2) Unaudited

UniFirst Corporation and Subsidiaries

Condensed Consolidated Balance Sheets

                                                    November 29,      August 30,
(In thousands, except share data)
                                                    2008              2008


Current assets:

Cash and cash equivalents                         $ 24,108          $ 25,655

Receivables, net                                    111,394           102,830

Inventories                                         48,566            46,154

Rental merchandise in service                       88,763            92,315

Prepaid and deferred income taxes                   16,246            15,431

Prepaid expenses                                    5,255             1,720

Total current assets                                294,332           284,105

Property and equipment:

Land, buildings and leasehold improvements          312,641           314,370

Machinery and equipment                             331,097           327,705

Motor vehicles                                      107,876           102,805

                                                    751,614           744,880

Less - accumulated depreciation                     379,799           376,319

                                                    371,815           368,561

Goodwill                                            259,091           258,836

Customer contracts and other intangible assets,     65,530            67,450

Other assets                                        2,578             2,715

                                                  $ 993,346         $ 981,667

Liabilities and shareholders' equity

Current liabilities:

Current maturities of long-term obligations       $ 4,191           $ 4,222

Accounts payable                                    52,820            54,822

Accrued liabilities                                 95,154            91,837

Accrued income taxes                                8,942             --

Total current liabilities                           161,107           150,881

Long-term obligations, net of current               227,928           231,317

Deferred income taxes                               42,064            42,699

Shareholders' equity:

Common Stock                                        1,439             1,438

Class B Common Stock                                494               494

Capital surplus                                     18,481            18,240

Retained earnings                                   550,339           532,164

Accumulated other comprehensive (loss) income       (8,506       )    4,434

Total shareholders' equity                          562,247           556,770

                                                  $ 993,346         $ 981,667

UniFirst Corporation and Subsidiaries

Detail of Operating Results


                           Thirteen weeks ended

                           November 29,     November 24,     Dollar    Percent

(In thousands, except      2008 (1)         2007 (1)         Change    Change

Core Laundry Operations  $ 237,504        $ 222,112        $ 15,392    6.9     %

Specialty Garments         17,741           17,255           486       2.8

First Aid                  7,309            7,893            (584   )  -7.4

Consolidated total       $ 262,554        $ 247,260        $ 15,294    6.2     %

Income from Operations

                           Thirteen weeks ended

                           November 29,     November 24,     Dollar    Percent

(In thousands, except      2008 (1)         2007 (1)         Change    Change

Core Laundry Operations  $ 32,604         $ 27,649         $ 4,955     17.9    %

Specialty Garments         1,747            1,661            86        5.2

First Aid                  (50     )        (3      )        (47    )  1529.7

Consolidated total       $ 34,301         $ 29,307         $ 4,994     17.0    %

(1) Unaudited 
  • Read Also

    About The Author

    • WorkersCompensation.com

    Read More

    Request a Demo

    To request a free demo of one of our products, please fill in this form. Our sales team will get back to you shortly.