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.

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~~July 1, 2022 were ~~15,207,953~~15,093,114 and ~~3,643,009,~~3,626,009, respectively.


(In thousands)	Common Shares			Class B Common Shares		Common Stock			Class B Common Stock		Capital Surplus			Retained Earnings			Accumulated Other Comprehensive Loss			Total Equity			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			15,251			3,643	$	1,525		$	364	$	86,645		$	1,684,565		$	(31,970	)	$	1,741,129
Net income		—			—		—			—		—			41,896			—			41,896			—			—		—			—		—			41,896			—			41,896
Change in fair value of derivatives		—			—		—			—		—			—			(21	)		(21	)		—			—		—			—		—			—			(21	)		(21	)
Foreign currency translation		—			—		—			—		—			—			1,310			1,310			—			—		—			—		—			—			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	)
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	)		(41	)		—		(4	)		—		(223	)		(6,989	)		—			(7,216	)
Share-based compensation, net (1)		—			—		—			—		788			—			—			788			—			—		—			—		788			—			—			788
Share-based awards exercised, net (2)		11			—		1			—		—			—			—			1			11			—		1			—		—			—			—			1
Balance, November 28, 2020		15,221			3,643	$	1,522		$	364	$	87,210		$	1,714,937		$	(30,681	)	$	1,773,352			15,221			3,643	$	1,522		$	364	$	87,210		$	1,714,937		$	(30,681	)	$	1,773,352
Net income																								—			—		—			—		—			32,585			—		$	32,585
Change in fair value of derivatives																								—			—		—			—		—			—			(56	)		(56	)
Foreign currency translation																								—			—		—			—		—			—			2,244			2,244
Dividends declared Common Stock ($0.25 per share)																								—			—		—			—		—			(3,806	)		—			(3,806	)
Dividends declared Class B Common Stock ($0.20 per share)																								—			—		—			—		—			(728	)		—			(728	)
Repurchase of Common Stock																								(12	)		—		(1	)		—		(66	)		(2,251	)		—			(2,318	)
Share-based compensation, net (1)																								—			—		—			—		(165	)		—			—			(165	)
Share-based awards exercised, net (2)																								21			—		2			—		—			—			—			2
Balance, February 27, 2021																								15,230			3,643	$	1,523		$	364	$	86,979		$	1,740,737		$	(28,493	)	$	1,801,110
Net income																								—			—		—			—		—			42,016			—			42,016
Change in fair value of derivatives																								—			—		—			—		—			—			(52	)		(52	)
Foreign currency translation																								—			—		—			—		—			—			6,099			6,099
Dividends declared Common Stock ($0.25 per share)																								—			—		—			—		—			(3,812	)		—			(3,812	)
Dividends declared Class B Common Stock ($0.20 per share)																								—			—		—			—		—			(729	)		—			(729	)
Share-based compensation, net (1)																								—			—		—			—		566			—			—			566
Share-based awards exercised, net (2)																								13			—		1			—		—			—			—			1
Balance, May 29, 2021																								15,243			3,643	$	1,524		$	364	$	87,545		$	1,778,212		$	(22,446	)	$	1,845,199


(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
Net income		—			—			—			—			—			18,451				—			18,451
Change in fair value of derivatives		—			—			—			—			—			—				(55	)		(55	)
Foreign currency translation		—			—			—			—			—			—				1,149			1,149
Dividends declared Common Stock ($0.30 per share)		—			—			—			—			—			(4,561	)			—			(4,561	)
Dividends declared Class B Common Stock ($0.24 per share)		—			—			—			—			—			(870	)			—			(870	)
Repurchase of Common Stock		(53	)		—			(5	)		—			(286	)		(9,704	)			—			(9,995	)
Share-based compensation, net (1)		—			—			—			—			(48	)		—		��		—			(48	)
Share-based awards exercised, net (2)		25			—			3			—			—			—				—			3
Shares converted		17			(17	)		1			(1	)		—			—				—			—
Balance, February 26, 2022		15,209			3,626		$	1,521		$	363		$	90,006		$	1,833,579			$	(26,494	)	$	1,898,975
Net income		—			—			—			—			—			25,067				—			25,067
Change in fair value of derivatives		—			—			—			—			—			—				(14	)		(14	)
Foreign currency translation		—			—			—			—			—			—				(982	)		(982	)
Dividends declared Common Stock ($0.30 per share)		—			—			—			—			—			(4,534	)			—			(4,534	)
Dividends declared Class B Common Stock ($0.24 per share)		—			—			—			—			—			(870	)			—			(870	)
Repurchase of Common Stock		(90	)		—			(9	)		—			(491	)		(15,187	)			—			(15,687	)
Share-based compensation, net (1)		—			—			—			—			2,056							—			2,056
Share-based awards exercised, net (2)		2			—			—			—			—			—				—			—
Balance, May 28, 2022		15,121			3,626		$	1,512		$	363		$	91,571		$	1,838,055			$	(27,490	)	$	1,904,011

(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.

~~(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.~~

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								As of May 28, 2022
	Level 1		Level 2		Level 3		Fair Value		Level 1		Level 2		Level 3		Fair Value
Assets:
Cash equivalents	$	197,019	$	0	$	0	$	197,019	$	197,154	$	0	$	0	$	197,154
Pension plan assets		0		3,718		0		3,718		0		3,432		0		3,432
Foreign currency forward contracts		0		104		0		104		0		13		0		13
Total assets at fair value	$	197,019	$	3,822	$	0	$	200,841	$	197,154	$	3,445	$	0	$	200,599

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	$	0	$	0	$	197,081
Pension plan assets		0		3,795		0		3,795
Foreign currency forward contracts		0		41		0		41
Total assets at fair value	$	197,081	$	3,836	$	0	$	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~~May 28, 2022 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,~~May 28, 2022, the Company had forward contracts with a notional value of approximately ~~11.5~~7.7 million CAD outstanding and recorded the fair value of the contracts of ~~$0.1 million~~a nominal amount in prepaid expenses and other current assets and other long-term assets with a corresponding nominal gain in accumulated other comprehensive loss, ~~of $0.1 million,~~ which was recorded net of tax. During the thirteen and thirty-nine weeks ended ~~November 27, 2021,~~May 28, 2022, 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~~May 28, 2022 is expected to be reclassified to revenues prior to their maturity on ~~February 25, 2022 and~~ August 29, ~~2026, respectively.~~2026.

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,~~May 28, 2022 and May 29, 2021 ~~and November 28, 2020~~ were ~~$5.5~~$4.7 million and ~~$5.8~~$5.1 million, respectively. Contributions charged to expense under the plan for the thirty-nine weeks ended May 28, 2022 and May 29, 2021 were $14.2 million and $15.2 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 1 frozen non-contributory defined benefit pension plan. The amounts charged to expense related to these plans for the thirteen weeks ended ~~November 27,~~May 28, 2022 and May 29, 2021 ~~and November 28, 2020~~ were ~~$0.6~~$0.6 million and ~~$0.8~~$0.8 million, respectively. The amounts charged to expense related to these plans for the thirty-nine weeks ended May 28, 2022 and May 29, 2021 were $1.9 million and $2.3 million, respectively.

Nonqualified Deferred Compensation Plan

The Company adopted the UniFirst Corporation Deferred Compensation Plan (the “NQDC Plan”) effective on February 1, 2022. The NQDC Plan is an unfunded, nonqualified deferred compensation plan that allows eligible participants to voluntarily defer receipt of their salary and annual cash bonuses up to approved limits. In its discretion, the Company may credit one or more additional contributions to participant accounts. NQDC Plan participants who are not accruing benefits under the Supplemental Executive Retirement Plan are eligible to have discretionary annual employer contributions credited to their NQDC Plan accounts. All participants are also eligible to have employer supplemental contributions and employer discretionary contributions credited to their NQDC Plan accounts. The amounts of such contributions may differ from year to year and from participant to participant. There were

1011

UniFirst Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

0 employee or employer contributions charged to expense related to this plan for the thirteen and thirty-nine weeks ended May 28, 2022.

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				Thirty-Nine Weeks Ended
	May 28, 2022		May 29, 2021		May 28, 2022		May 29, 2021
Net income available to shareholders	$	25,067	$	42,016	$	77,223	$	116,497
Allocation of net income for Basic:
Common Stock	$	21,037	$	35,270	$	64,835	$	97,792
Class B Common Stock		4,030		6,746		12,388		18,705
	$	25,067	$	42,016	$	77,223	$	116,497
Weighted average number of shares for Basic:
Common Stock		15,170		15,238		15,211		15,238
Class B Common Stock		3,632		3,643		3,632		3,643
		18,802		18,881		18,843		18,881
Income per share for Basic:
Common Stock	$	1.39	$	2.31	$	4.26	$	6.42
Class B Common Stock	$	1.11	$	1.85	$	3.41	$	5.13

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.

•

~~The treasury stock method; or~~

•

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

For the thirteen and thirty-nine weeks ended ~~November 27,~~May 28, 2022 and May 29, 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 and thirty-nine weeks ended ~~November 27,~~May 28, 2022 and May 29, 2021 ~~and November 28, 2020~~ (in thousands, except per share data):


	Thirteen weeks ended May 28, 2022						Thirty-nine weeks ended May 28, 2022
	Earnings to Common Shareholders		Common Shares		Income Per Share		Earnings to Common Shareholders		Common Shares		Income Per Share
As reported - Basic	$	21,037		15,170	$	1.39	$	64,835		15,211	$	4.26
Add: effect of dilutive potential common shares
Share-Based Awards		0		73				0		115
Class B Common Stock		4,030		3,632				12,388		3,632
As reported – Diluted	$	25,067		18,875	$	1.33	$	77,223		18,958	$	4.07


	Thirteen weeks ended May 29, 2021						Thirty-nine weeks ended May 29, 2021
	Earnings to Common Shareholders		Common Shares		Income Per Share		Earnings to Common Shareholders		Common Shares		Income Per Share
As reported - Basic	$	35,270		15,238	$	2.31	$	97,792		15,238	$	6.42
Add: effect of dilutive potential common shares
Share-Based Awards		0		170				0		160
Class B Common Stock		6,746		3,643				18,705		3,643
As reported – Diluted	$	42,016		19,051	$	2.21	$	116,497		19,041	$	6.12

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

0

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

0

129

Class B Common Stock

6,725

3,643

As reported – Diluted

$
41,896

19,019

$
2.20

1112

UniFirst Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

Share-based awards that would result in the issuance of ~~11,119~~43,246 and 36,373 shares, respectively, of Common Stock were excluded from the calculation of diluted income per share for the thirteen and thirty-nine weeks ended ~~November 27, 2021~~May 28, 2022 because they were anti-dilutive. Share-based awards that would result in the issuance of ~~11,008~~2,189 and 1,770 shares, respectively, of Common Stock were excluded from the calculation of diluted income per share for the thirteen and thirty-nine weeks ended ~~November 28, 2020~~May 29, 2021 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~~May 28, 2022 and August 28, 2021 were as follows (in thousands):


	November 27, 2021		August 28, 2021		May 28, 2022		August 28, 2021
Raw materials	$	24,203	$	24,846	$	28,036	$	24,846
Work in process		2,422		4,703		3,357		4,703
Finished goods		131,486		114,042		120,348		114,042
Total inventories	$	158,111	$	143,591	$	151,741	$	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		$	429,538
Goodwill recorded during the period		—			27,365
Other		(84	)		(93	)
Balance as of November 27, 2021	$	429,454
Balance as of May 28, 2022				$	456,810

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
							Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
May 28, 2022
Customer contracts	$	237,807	$	190,604	$	47,203	$	246,934	$	196,015	$	50,919
Software		75,614		41,836		33,778		78,502		43,911		34,591
Other intangible assets		36,826		35,140		1,686		37,564		35,445		2,119
	$	350,247	$	267,580	$	82,667	$	363,000	$	275,371	$	87,629
August 28, 2021
Customer contracts	$	237,384	$	188,255	$	49,129	$	237,384	$	188,255	$	49,129
Software		74,475		40,763		33,712		74,475		40,763		33,712
Other intangible assets		36,866		35,069		1,797		36,866		35,069		1,797
	$	348,725	$	264,087	$	84,638	$	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

1213

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 2322 years.

A reconciliation of the Company’s asset retirement liability for the ~~thirteen~~thirty-nine weeks ended ~~November 27, 2021~~May 28, 2022 was as follows (in thousands):


	November 27, 2021			May 28, 2022
Beginning balance as of August 28, 2021	$	14,887		$	14,887
Accretion expense		246			732
Effect of exchange rate changes		(144	)		(331	)
Balance as of November 27, 2021	$	14,989
Balance as of May 28, 2022				$	15,288

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~~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~~thirty-nine weeks ended ~~November 27, 2021:~~May 28, 2022:


(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		$	16,199

Operating cash flow impacts
Cash paid for amounts included in the measurement of operating lease liabilities	$	3,701		$	3,444
Operating lease right-of-use assets obtained in exchange for new operating lease liabilities	$	5,539		$	17,565
Weighted-average remaining lease term - operating leases	4.34			4.13
Weighted-average discount rate - operating leases		1.96	%		1.94	%

1314

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:~~May 28, 2022:


(In thousands)
2022 (remaining nine months)	$	2,043
2022 (remaining three months)				$	3,618
2023		14,271			14,376
2024		11,262			11,373
2025		7,631			8,449
2026		5,341			6,490
Thereafter		6,781			8,128
Total payments		47,329			52,434
Less interest		(1,768	)		(1,426	)
Total present value of lease payments	$	45,561		$	51,008

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.

1415

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.

•

~~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%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,~~May 28, 2022, the risk-free interest rates utilized by the Company ranged from ~~0.81%~~2.64% to ~~1.89%~~3.16%.

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~~thirty-nine weeks ended ~~November 27, 2021~~May 28, 2022 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


	May 28, 2022
Balance as of August 28, 2021	$	32,859
Revisions in estimates		—
Costs incurred for which reserves have been provided		(1,205	)
Insurance proceeds		100
Interest accretion		447
Changes in discount rates		(2,692	)
Balance as of May 28, 2022	$	29,509

Anticipated payments and insurance proceeds of currently identified environmental remediation liabilities as of ~~November 27, 2021,~~May 28, 2022, 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			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		$	11,285		$	2,530		$	2,080		$	1,366		$	1,129		$	12,712		$	31,102
Estimated insurance proceeds		(169	)		(159	)		(173	)		(159	)		(173	)		(380	)		(1,213	)		(110	)		(159	)		(173	)		(159	)		(173	)		(380	)		(1,154	)
Net anticipated costs	$	11,947		$	2,371		$	1,907		$	1,207		$	956		$	12,332		$	30,720		$	11,175		$	2,371		$	1,907		$	1,207		$	956		$	12,332		$	29,948
Effect of inflation																				8,061																					8,359
Effect of discounting																				(5,946	)																				(8,798	)
Balance as of November 27, 2021																			$	32,835
Balance as of May 28, 2022																																								$	29,509

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~~$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,~~May 28, 2022, 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~~$4.9 million. Also included in estimated insurance proceeds are amounts the Company is entitled to receive pursuant to legal settlements as reimbursements from 3 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.

1516

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~~May 28, 2022 was ~~24.6%~~25.4% as compared to ~~25.0%~~22.9% for the corresponding period in the prior year. The ~~decrease~~Company’s effective tax rate for the thirty-nine weeks ended May 28, 2022 was 23.6% unchanged from the corresponding period in the prior year.The increase in the effective tax rate for the thirteen weeks ended ~~November 27, 2021~~May 28, 2022 as compared to the corresponding period in the prior year was due primarily to ~~an increased~~the release of certain tax ~~benefit~~reserves and excess tax benefits related to the ~~foreign derived intangible income deduction during~~vesting of stock appreciation rights in the ~~thirteen weeks ended November 27, 2021.~~prior period.

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~~thirty-nine weeks ended ~~November 27, 2021,~~May 28, 2022, there was a net ~~increase~~decrease in unrecognized tax position of ~~$0.5~~$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,~~2014, 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~~$175.0 million unsecured revolving credit agreement (the “2021 Credit Agreement”) with a syndicate of banks, which matures on March 26, ~~2026.~~2026. The 2021 Credit Agreement amended and restated the Company’s prior credit agreement, which was scheduled to mature on April 11, ~~2021.~~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,~~May 28, 2022, the interest rates applicable to the Company’s borrowings under the 2021 Credit Agreement would be calculated as LIBOR plus ~~1.00%~~1.00% at the time of the respective borrowing. As of ~~November 27, 2021,~~May 28, 2022, the Company had 0 outstanding borrowings and had outstanding letters of credit amounting to ~~$67.5~~$60.6 million, leaving ~~$107.5~~$114.4 million available for borrowing under the 2021 Credit Agreement.

As of ~~November 27, 2021,~~May 28, 2022, the Company was in compliance with all covenants under the 2021 Credit Agreement.

1617

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 and thirty-nine weeks ended ~~November 27,~~May 28, 2022 and May 29, 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
)

0

85

(2,714
)
Amounts reclassified from accumulated other
comprehensive loss

0

0

(38
)

(38
)
Net current period other comprehensive (loss) income

(2,799
)

0

47

(2,752
)
Balance as of November 27, 2021

$
(20,600
)

$
(7,066
)

$
78

$
(27,588
)


	Thirteen weeks ended May 28, 2022
	Foreign Currency Translation			Pension- related (1)			Derivative Financial Instruments (1)			Total Accumulated Other Comprehensive Loss
Balance as of February 26, 2022	$	(19,451	)	$	(7,066	)	$	23		$	(26,494	)
Other comprehensive loss before reclassification		(982	)		0			(10	)		(992	)
Amounts reclassified from accumulated other comprehensive loss		0			0			(4	)		(4	)
Net current period other comprehensive loss		(982	)		0			(14	)		(996	)
Balance as of May 28, 2022	$	(20,433	)	$	(7,066	)	$	9		$	(27,490	)


	Thirty-nine weeks ended May 28, 2022
	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		(2,632	)		0			35			(2,597	)
Amounts reclassified from accumulated other comprehensive loss		0			0			(57	)		(57	)
Net current period other comprehensive loss		(2,632	)		0			(22	)		(2,654	)
Balance as of May 28, 2022	$	(20,433	)	$	(7,066	)	$	9		$	(27,490	)


	Thirteen weeks ended May 29, 2021
	Foreign Currency Translation			Pension- related (1)			Derivative Financial Instruments (1)			Total Accumulated Other Comprehensive Loss
Balance as of February 27, 2021	$	(18,455	)	$	(10,026	)	$	(12	)	$	(28,493	)
Other comprehensive (loss) income before reclassification		6,099			0			(91	)		6,008
Amounts reclassified from accumulated other comprehensive loss		0			0			39			39
Net current period other comprehensive (loss) income		6,099			0			(52	)		6,047
Balance as of May 29, 2021	$	(12,356	)	$	(10,026	)	$	(64	)	$	(22,446	)


	Thirty-nine weeks ended May 29, 2021
	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		9,653			0			(158	)		9,495
Amounts reclassified from accumulated other comprehensive loss		0			0			29			29
Net current period other comprehensive (loss) income		9,653			0			(129	)		9,524
Balance as of May 29, 2021	$	(12,356	)	$	(10,026	)	$	(64	)	$	(22,446	)

UniFirst Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

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

0

(10
)

1,300

Amounts reclassified from accumulated other
comprehensive loss

0

0

(11
)

(11
)
Net current period other comprehensive (loss) income

1,310

0

(21
)

1,289

Balance as of November 28, 2020

$
(20,699
)

$
(10,026
)

$
44

$
(30,681
)
(1)

Amounts are shown net of tax

~~(1)~~

~~Amounts are shown net of tax~~

Amounts reclassified from accumulated other comprehensive loss, net of tax, for the thirteen and thirty-nine weeks ended ~~November 27,~~May 28, 2022 and May 29, 2021 ~~and November 28, 2020~~ were as follows (in thousands):


	Thirteen weeks ended						Thirteen weeks ended					Thirty-nine weeks ended
	November 27, 2021			November 28, 2020			May 28, 2022			May 29, 2021		May 28, 2022			May 29, 2021
Derivative financial instruments, net:
Forward contracts (b)	$	(38	)	$	(11	)
Forward contracts (a)							$	(4	)	$	39	$	(57	)	$	29
Total, net of tax		(38	)		(11	)		(4	)		39		(57	)		29

Total amounts reclassified, net of tax	$	(38	)	$	(11	)	$	(4	)	$	39	$	(57	)	$	29

(a)

Amounts included in revenues in the accompanying consolidated statements of income.

~~(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 6 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 5 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.

UniFirst Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

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			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
May 28, 2022
Revenues	$	420,053		$	90,725	$	(90,725	)	$	8,793		$	428,846		$	39,484	$	17,834		$	486,164		$	439,462		$	58,369	$	(58,369	)	$	10,577		$	450,039		$	41,198	$	20,311	$	511,548
Operating income (loss)	$	73,925		$	24,025	$	(7,599	)	$	(53,844	)	$	36,507		$	8,629	$	(346	)	$	44,790		$	75,660		$	12,117	$	4,219		$	(65,565	)	$	26,431		$	7,161	$	105	$	33,697
Interest (income) expense, net	$	(666	)	$	—	$	—		$	18		$	(648	)	$	—	$	—		$	(648	)
Interest income, net																							$	(736	)	$	0	$	0		$	396		$	(340	)	$	0	$	0	$	(340	)
Income (loss) before taxes	$	74,570		$	23,966	$	(7,599	)	$	(53,990	)	$	36,947		$	8,105	$	(350	)	$	44,702		$	76,419		$	12,045	$	4,219		$	(66,362	)	$	26,321		$	7,179	$	106	$	33,606
November 28, 2020
May 29, 2021
Revenues	$	386,158		$	59,082	$	(59,082	)	$	7,032		$	393,190		$	38,134	$	15,529		$	446,853		$	399,500		$	67,573	$	(67,573	)	$	9,531		$	409,031		$	38,236	$	17,056	$	464,323
Operating income (loss)	$	74,840		$	19,810	$	(994	)	$	(44,786	)	$	48,870		$	7,159	$	13		$	56,042		$	75,550		$	17,219	$	(258	)	$	(46,877	)	$	45,634		$	8,300	$	225	$	54,159
Interest (income) expense, net	$	(693	)	$	—	$	—		$	125		$	(568	)	$	—	$	—		$	(568	)
Interest income, net																							$	(675	)	$	—	$	—		$	4		$	(671	)	$	—	$	—	$	(671	)
Income (loss) before taxes	$	75,542		$	19,674	$	(994	)	$	(45,383	)	$	48,839		$	7,008	$	14		$	55,861		$	76,062		$	17,103	$	(258	)	$	(47,573	)	$	45,334		$	8,918	$	230	$	54,482


Thirty-nine weeks ended
May 28, 2022
Revenues	$	1,284,411		$	214,712	$	(214,712	)	$	27,530		$	1,311,941		$	116,220	$	56,247		$	1,484,408
Operating income (loss)	$	209,499		$	50,968	$	(1,835	)	$	(176,949	)	$	81,683		$	19,640	$	(223	)	$	101,100
Interest income, net	$	(2,216	)	$	—	$	—		$	477		$	(1,739	)	$	—	$	—		$	(1,739	)
Income (loss) before taxes	$	211,700		$	50,722	$	(1,835	)	$	(178,419	)	$	82,168		$	19,133	$	(223	)	$	101,078
May 29, 2021
Revenues	$	1,174,285		$	181,204	$	(181,204	)	$	26,171		$	1,200,456		$	111,592	$	48,892		$	1,360,940
Operating income (loss)	$	209,546		$	51,803	$	2,926		$	(134,405	)	$	129,870		$	20,693	$	331		$	150,894
Interest income, net	$	(2,146	)	$	—	$	—		$	44		$	(2,102	)	$	-	$	-		$	(2,102	)
Income (loss) before taxes	$	211,449		$	51,513	$	2,926		$	(136,273	)	$	129,615		$	22,529	$	339		$	152,483

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

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 significant increases in inflation or interest rates 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 or other 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 or additional Securities and Exchange Commission, New York Stock Exchange and 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 and in our other filings with the Securities and Exchange Commission, including, without limitation, under ~~“Part~~Part II, Item 1A. ~~Risk~~"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.

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.”

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”).~~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~~estimates are defined as those that are reflective of significant judgments and uncertainties, the most important and pervasive accounting ~~policies~~estimates 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~~consolidated financial statements presented in this report are described in ~~Management’s~~Part II, Item 7. "Management’s Discussion and Analysis of Financial Condition and Results of ~~Operations~~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. There have been no significant changes in our critical accounting estimates since the year ended August 28, 2021.

~~The~~At times during 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~~our revenues ~~in the first half of fiscal 2021 were~~have been 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. AtIn addition, at times during the pandemic, we have ~~also~~ experienced supply chain disruptions with respect to certain products, including hand sanitizer and masks. ~~Such~~Although there continues to be supply chain disruption that is impacting our operating results, these adverse impacts and disruptions ~~continue to occur but~~ have ~~moderated to some extent more recently.~~declined since the height of the pandemic.

As the COVID-19 pandemic has continued, instances of new COVID-19 cases have risen periodically with the outbreak of various COVID-19 variants, and new COVID-19 variants could emerge and spread in the future and have an adverse impact on our business.

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~~ongoing 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~~Part I, Item 1A. ~~Risk~~"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.

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, including as a result of increased energy costs for our vehicles and our plants, as well as increasing wages in the labor markets in which we compete. We expect that inflation will continue to pressure our margins in future periods. In addition, in response to the concerns over inflation risk in the broader U.S. economy, the U.S. Federal Reserve began to raise interest rates in March 2022 for the first time in over three years and signaled that additional rate increases would continue throughout the year. It is possible that dramatic increases in interest rates may ultimately result in an economic recession, which could have a material adverse impact on our business. Adverse economic conditions resulting from inflationary pressures, U.S. Federal Reserve actions, geopolitical issues or otherwise are difficult to predict. 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 inflation and adverse economic conditions on our business, financial condition and results of operations.

The following table presents certain selected financial data, including the percentage of revenues represented by each item, for the thirteen and thirty-nine weeks ended ~~November 27, 2021~~May 28, 2022 and ~~November 28, 2020.~~May 29, 2021.

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 operating results are also directly impacted by the costs of ~~operations~~the gasoline used to fuel our vehicles and the natural gas used to operate our plants. Our operating margins have been, and may ~~also~~continue to be, adversely impacted by the ~~decline~~recent surge in energy prices. In addition, as described above, the ~~Canadian exchange rate.~~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.

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~~increased automation in servicing our customers. As of ~~November 27, 2021,~~May 28, 2022, we ~~have~~had capitalized ~~$35.9~~$40.0 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~~$0.8 million and $2.3 million of amortization expense during the thirteen and thirty-nine weeks ended ~~November 27, 2021.~~May 28, 2022, respectively.

Over the next few years, we intend to be focused on three discrete strategic initiatives that are critical in our efforts to transform the company in terms of our overall capabilities and competitive positioning. These initiatives are the continued rollout of our new CRM system (discussed above), investments in the UniFirst brand, and a corporate-wide enterprise resource planning (“ERP”) system with a strong focus on supply chain and procurement automation and technology. We refer to these initiatives together as our “Key Initiatives”. For the thirteen and thirty-nine weeks ended May 28, 2022, we incurred $11.4 million and $24.1 million, respectively, of costs directly attributable to our Key Initiatives.

Thirteen weeks ended ~~November 27, 2021~~May 28, 2022 compared with thirteen weeks ended ~~November 28, 2020~~May 29, 2021

Core Laundry Operations’ revenues during the ~~first~~third 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 9.3%. This strong organic growth rate was primarily the result of solid sales performance and improved customer retention as well as efforts to share with our customers the cost increases that we are seeing in our business due to the ongoing inflationary environment.

Specialty Garments revenues in the third quarter of fiscal 2022 increased compared to the prior year comparable period due primarily to growth in our cleanroom 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 third quarter of fiscal 2022 increased compared to the prior year comparable period due primarily to strong revenue growth in the segment's wholesale distribution business.

Core Laundry Operations’ cost of revenues as a percentage of revenues increased in the third quarter of fiscal 2022 as compared to the prior year comparable period. This increase was due primarily to higher merchandise cost, which has increased as a percentage of revenues due to continued normalization of merchandise amortization from depressed levels during the pandemic, ongoing supply chain disruption, the effect of some large national account investments as well as increased activity in our energy-related markets. In addition, we incurred higher energy costs as a percentage of revenues as well as increased input and labor costs due to the inflationary environment and the challenging employment environment.

Specialty Garments cost of revenues as a percentage of revenues increased in the third quarter of fiscal 2022 as compared to the prior year comparable period due primarily to higher merchandise, labor, and energy costs as a percentage of revenues in the third quarter of fiscal 2022.

Our selling and administrative costs increased as a percentage of revenues in the third quarter of fiscal 2022 as compared to the prior year comparable period primarily due to Key Initiative costs as well as higher labor costs as a percentage of revenues responding to the challenging employment environment.

Depreciation and amortization expense remained relatively consistent with the prior year comparable period.

For the thirteen weeks ended May 28, 2022 and May 29, 2021, changes in our revenues and costs as discussed above resulted in the following changes in our operating income and margin:

The increase in other (income) expense, net during the third quarter of fiscal 2022 as compared to the prior year comparable period was due primarily to foreign exchange losses in the current period as compared to foreign exchange gains in the prior year comparable period.

The increase in our effective tax rate for the third quarter of fiscal 2022 as compared to the prior year comparable period was due primarily to the release of certain tax reserves and excess tax benefits related to the vesting of stock appreciation rights recorded in the prior period.

Thirty-nine weeks ended May 28, 2022 compared with thirty-nine weeks ended May 29, 2021

Consolidated revenues during the thirty-nine weeks ended May 28, 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,~~re-openings in fiscal 2021, 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~~ongoing inflationary environment.

Specialty Garments revenues induring the ~~first quarter of fiscal~~thirty-nine weeks ended May 28, 2022 increased compared to the prior year comparable period due primarily to growth in ~~the~~our 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 induring the ~~first quarter of fiscal~~thirty-nine weeks ended May 28, 2022 increased compared to the prior year comparable period due to increased sales in our van business and growth in ~~both~~ our ~~van and~~ wholesale distribution ~~businesses.~~business.

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,~~amortization which continues to normalize from depressed levels during the pandemic as well as the effect of some large national account investments which are providing additional merchandise amortization headwinds. In addition, we incurred higher energy ~~and labor~~ costs as a percentage of ~~revenues. In addition, we had~~revenues and elevated ~~expense related to internal use safety supplies compared~~labor costs responding to the ~~prior year comparable period.~~very challenging employment environment.

Specialty Garments cost of revenues as a percentage of revenues ~~decreased in~~increased during the ~~first quarter of fiscal~~thirty-nine weeks ended May 28, 2022 as compared to the prior year comparable ~~period. This decrease was~~period due primarily to ~~lower merchandise and other production costs as percentages of revenue partially offset by~~ higher ~~production payroll~~labor and transportation costs as ~~percentages~~a percentage of revenues partially offset by lower merchandise costs as a percentage of revenue.

Our selling and administrative costs increased as a percentage of revenues in the ~~first quarter of fiscal~~thirty-nine weeks ended May 28, 2022 as compared to the prior year comparable period primarily due ~~primarily~~ to ~~increased general and administrative payroll~~Key Initiative costs. In addition, we incurred higher labor costs ~~to advance our capabilities and costs directly attributable to our CRM, ERP and branding initiatives. Also contributing~~as a percentage of revenues responding to the ~~increase were increased healthcare claims,~~challenging employment environment and elevated travel ~~costs~~ and ~~indirect taxes.~~

Depreciation and amortization expense increased induring the ~~first quarter of fiscal~~thirty-nine weeks ended May 28, 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.~~

For the ~~thirteen~~thirty-nine weeks ended ~~November 27,~~May 28, 2022 and May 29, 2021, ~~and November 28, 2020,~~ changes in our revenues and costs as discussed above resulted in the following changes in our operating income and operating income margin:

~~Other~~The increase in other (income) expense, net, during the ~~first quarter of fiscal 2022 remained relatively consistent with the prior year comparable period.~~

~~The decrease in our effective tax rate for the first quarter of fiscal~~thirty-nine weeks ended May 28, 2022 as compared to the prior year comparable period was due primarily to higher foreign exchange losses in the ~~impact of an increased~~thirty-nine weeks ended May 28, 2022.

Our effective tax ~~benefit related to~~rate during the ~~foreign derived intangible income deduction.~~thirty-nine weeks ended May 28, 2022 remained consistent with the prior year comparable period.

Cash, cash equivalents and short-term investments totaled ~~$478.1~~$410.6 million as of ~~November 27, 2021, an increase~~May 28, 2022, a decrease of ~~$5.1~~$124.4 million from ~~November 28, 2020~~May 29, 2021 when the amount totaled ~~$473.0~~$535.0 million. Our cash balance decreased primarily as a result of ten acquisitions that we completed during the thirty-nine weeks ended May 28, 2022. We generated ~~$7.8~~$88.8 million and ~~$52.7~~$187.5 million in cash from operating activities in the ~~thirteen~~thirty-nine weeks ended ~~November 27,~~May 28, 2022 and May 29, 2021, ~~and November 28, 2020,~~ respectively.

Pursuant to share repurchase programs approved by our Board of Directors on January 2, 2019 and October ~~18,~~28, 2021, we repurchased ~~22,750~~165,644 shares of our Common Stock for an aggregate of approximately ~~$4.8~~$30.5 million during the ~~thirteen~~thirty-nine weeks ended ~~November 27, 2021, of which $4.6 million was paid during the period.~~May 28, 2022.

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~~thirty-nine weeks ended ~~November 27,~~May 28, 2022 and May 29, 2021, ~~and November 28, 2020,~~ respectively, are summarized as follows:

The net cash provided by operating activities during the ~~thirteen~~thirty-nine weeks ended ~~November 27, 2021~~May 28, 2022 decreased as compared to the prior year comparable period due primarily to lower profitability, which included costs incurred to support our Key Initiatives, a decrease in accrued liabilities and increases in ~~inventories, rental~~accounts receivable, supply inventory and merchandise in ~~service and accounts receivable. Also contributing~~service. The decrease in accrued liabilities was due primarily to the ~~decrease were decreases~~payment of $12.2 million of United States Social Security and Medicare taxes that we deferred under the Coronavirus Air, Relief, and Economic Security Act (the “CARES Act”) in ~~net income~~fiscal years 2020 and ~~accrued liabilities.~~2021. The Company expects to pay the remaining $12.1 million of deferred United State Social Security and Medicare taxes by the end of calendar year 2022. 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 in part 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.

The net ~~decrease~~increase in cash used in investing activities during the ~~thirteen~~thirty-nine weeks ended ~~November 27, 2021~~May 28, 2022 was due primarily to ~~lower capital expenditures and capitalization~~an increase in acquisition related activity of ~~software costs of $10.8 million.~~$35.6 million as compared to the prior year comparable period.

The ~~decrease~~increase in net cash used in financing activities during the thirty-nine weeks ended May 28, 2022 was due primarily to ~~a $2.6 million decrease in the repurchase~~incremental cash used for repurchases of Common Stock of $20.9 million and an increase in ~~the thirteen weeks ended November 27, 2021 compared to the prior year comparable period.~~dividends paid of $1.8 million.

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,~~May 28, 2022, 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,~~May 28, 2022, we had no outstanding borrowings and had outstanding letters of credit amounting to ~~$67.5~~$60.6 million, leaving ~~$107.5~~$114.4 million available for borrowing under the 2021 Credit Agreement.

As of ~~November 27, 2021,~~May 28, 2022, we were in compliance with all covenants under the 2021 Credit Agreement.

In June 2018, we entered into twelve forward contracts to exchange ~~CAD~~Canadian dollars ("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~~were 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~~sold 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. These forward contracts matured on February 25, 2022.

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,~~May 28, 2022, we had forward contracts with a notional value of approximately ~~11.5~~7.7 million CAD outstanding and recorded the fair value of the contracts of ~~$0.1 million~~a nominal amount in prepaid expenses and other current assets and other long-term assets with a corresponding nominal gain in accumulated other comprehensive loss, ~~of $0.1 million,~~ which was recorded net of tax. During the thirteen and thirty-nine weeks ended ~~November 27, 2021,~~May 28, 2022, we reclassified a nominal amount from accumulated other comprehensive ~~income~~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~~May 28, 2022 is expected to be reclassified to revenues prior to their ~~maturities~~maturity on ~~February 25, 2022 and~~ August 29, ~~2026, respectively.~~2026.

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:

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,~~May 28, 2022, the risk-free interest rates we utilized ranged from ~~0.81%~~2.64% to ~~1.89%~~3.16%.

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~~thirty-nine weeks ended ~~November 27, 2021~~May 28, 2022 were as follows (in thousands):

Anticipated payments and insurance proceeds relating to currently identified environmental remediation liabilities as of ~~November 27, 2021,~~May 28, 2022, for the next five fiscal years and thereafter, as measured in current dollars, are reflected below.

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,~~May 28, 2022, 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~~$4.9 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.

~~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.~~

As of ~~November 27, 2021,~~May 28, 2022, 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. As of May 28, 2022, 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.

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.

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%~~7.5% and 8.1%, respectively, of total consolidated revenues for each of the thirteen and thirty-nine weeks ended ~~November 27, 2021.~~May 28, 2022. 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~~May 28, 2022 and August 28, ~~2021.~~2021, respectively. If exchange rates had increased or decreased by 10% from the actual rates in effect during each of the thirteen and thirty-nine weeks ended ~~November 27, 2021,~~May 28, 2022, our revenues would have increased or decreased by approximately ~~$4.1~~$0.1 million and $4.6 million, respectively, and total assets as of ~~November 27, 2021~~May 28, 2022 would have increased or decreased by approximately ~~$16.6~~$16.7 million.

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~~sold 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. These forward contracts matured on February 25, 2022.

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.

derivative financial instruments. The gain on these forward contracts that resulted in a decrease to accumulated other comprehensive loss as of ~~November 27, 2021~~May 28, 2022 is expected to be reclassified to revenues prior to ~~its~~their maturity on ~~February 25, 2022 and~~ August 29, ~~2026, respectively.~~2026.

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 and thirty-nine weeks ended ~~November 27, 2021,~~May 28, 2022, transaction gains of ~~$0.5~~$0.2 million and $1.0 million, respectively, were included in other ~~expense, net.~~income. If exchange rates had increased or decreased by 10% during each of the thirteen and thirty-nine weeks ended ~~November 27, 2021,~~May 28, 2022, we would have recognized exchange gains or losses of approximately $0.2 ~~million.~~million and $0.3 million, respectively.

Please see ~~“Item~~Item 1A. ~~Risk~~"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.

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.

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

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 Part II, Item 1A. ~~Risk Factors~~"Risk Factors" below, for further discussion.

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.

The following table provides information about repurchases of our equity securities during the thirteen weeks ended ~~November 27, 2021:~~May 28, 2022:


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)


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


Part I – FINANCIAL INFORMATION	3

Item 1 – ~~Unaudited~~ Financial Statements (unaudited)	3

Consolidated Statements of Income for the Thirteen and Thirty-nine Weeks ended ~~November 27,~~May 28, 2022 and May 29, 2021 ~~and November 28, 2020~~	3

Consolidated Statements of Comprehensive Income for the Thirteen and Thirty-nine Weeks ended ~~November 27,~~May 28, 2022 and May 29, 2021 ~~and November 28, 2020~~	4

Consolidated Balance Sheets as of ~~November 27, 2021~~May 28, 2022 and A~~ugust~~August 28, 2021	5

Consolidated Statements of Shareholders’ Equity for the Thirteen and Thirty-nine Weeks ended ~~November 27,~~May 28, 2022 and May 29, 2021 ~~and November 28, 2020~~	6

Consolidated Statements of Cash Flows for the ~~Thirteen~~Thirty-nine Weeks ended ~~November 27,~~May 28, 2022 and May 29, 2021 ~~and November 28, 2020~~	78

Notes to Consolidated Financial Statements	89

Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations	2022

Item 3 – Quantitative and Qualitative Disclosures About Market Risk	2932

Item 4 – Controls and Procedures	3033

Part II – OTHER INFORMATION	3134

Item 1 – Legal Proceedings	3134

Item 1A – Risk Factors	3134

Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds	3134

Item 3 – Defaults Upon Senior Securities	3234

Item 4 – Mine Safety Disclosures	3234

Item 5 – Other Information	3234

Item 6 – Exhibits	3335

Signatures	3436

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


(In thousands, except share and par value data)	November 27, 2021			August 28, 2021			May 28, 2022			August 28, 2021
Assets
Current assets:
Cash, cash equivalents and short-term investments	$	478,061		$	512,868		$	410,595		$	512,868
Receivables, less reserves of $12,921 and $11,122		233,576			208,331
Receivables, less reserves of $15,040 and $11,122								241,160			208,331
Inventories		158,111			143,591			151,741			143,591
Rental merchandise in service		189,773			181,531			209,055			181,531
Prepaid taxes		6,537			16,580			11,319			16,580
Prepaid expenses and other current assets		45,588			40,891			45,012			40,891
Total current assets		1,111,646			1,103,792			1,068,882			1,103,792

Property, plant and equipment, net		623,785			617,719			640,810			617,719
Goodwill		429,454			429,538			456,810			429,538
Customer contracts, net		47,203			49,129			50,919			49,129
Other intangible assets, net		35,464			35,509			36,710			35,509
Deferred income taxes		561			580			535			580
Operating lease right-of-use assets, net		44,059			42,115			49,408			42,115
Other assets		105,341			102,683			106,750			102,683
Total assets	$	2,397,513		$	2,381,065		$	2,410,824		$	2,381,065

Liabilities and shareholders’ equity
Current liabilities:
Accounts payable	$	77,919		$	81,356		$	80,341		$	81,356
Accrued liabilities		154,653			159,578			152,381			159,578
Accrued taxes		—			743			0			743
Operating lease liabilities, current		13,441			12,993			13,999			12,993
Total current liabilities		246,013			254,670			246,721			254,670

Accrued liabilities		134,837			134,085			133,195			134,085
Accrued and deferred income taxes		89,642			89,177			89,888			89,177
Operating lease liabilities		32,120			30,181			37,009			30,181
Total liabilities		502,612			508,113			506,813			508,113
Commitments and contingencies (Note 12)
Shareholders’ equity:
Preferred Stock, $1.00 par value; 2,000,000 shares authorized; 0 shares issued and outstanding		0			0
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
Preferred Stock, $1.00 par value; 2,000,000 shares authorized; 0 shares issued and outstanding								0			0
Common Stock, $0.10 par value; 30,000,000 shares authorized; 15,121,143 and 15,235,601 shares issued and outstanding as of May 28, 2022 and August 28, 2021, respectively								1,512			1,524
Class B Common Stock, $0.10 par value; 20,000,000 shares authorized; 3,626,009 and 3,643,009 shares issued and outstanding as of May 28, 2022 and August 28, 2021, respectively								363			364
Capital surplus		90,340			89,257			91,571			89,257
Retained earnings		1,830,263			1,806,643			1,838,055			1,806,643
Accumulated other comprehensive loss		(27,588	)		(24,836	)		(27,490	)		(24,836	)

Total shareholders’ equity		1,894,901			1,872,952			1,904,011			1,872,952

Total liabilities and shareholders’ equity	$	2,397,513		$	2,381,065		$	2,410,824		$	2,381,065

Thirteen weeks ended (In thousands)	November 27, 2021			November 28, 2020

Thirty-nine weeks ended (In thousands)							May 28, 2022			May 29, 2021
Cash flows from operating activities:
Net income	$	33,705		$	41,896		$	77,223		$	116,497
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization		26,856			26,308			80,744			79,178
Amortization of deferred financing costs		41			28			123			85
Loss on sale of property, plant and equipment		—			5
Share-based compensation		1,905			1,622			7,114			5,193
Accretion on environmental contingencies		149			112			447			336
Accretion on asset retirement obligations		246			245			732			740
Deferred income taxes		40			242			1,823			2,025
Other		(6	)		28			(103	)		(199	)
Changes in assets and liabilities, net of acquisitions:
Receivables, less reserves		(25,583	)		(18,875	)		(31,998	)		(7,657	)
Inventories		(14,625	)		1,783			(8,258	)		(13,871	)
Rental merchandise in service		(8,567	)		(684	)		(25,788	)		(12,169	)
Prepaid expenses and other current assets and Other assets		(4,230	)		(2,812	)		3,603			5,433
Accounts payable		(3,556	)		(3,127	)		850			4,019
Accrued liabilities		(8,391	)		2,876			(21,172	)		11,636
Prepaid and accrued income taxes		9,838			3,094			3,498			(3,723	)
Net cash provided by operating activities		7,822			52,741			88,838			187,523

Cash flows from investing activities:
Acquisition of businesses, net of cash acquired		(493	)		(603	)		(42,680	)		(7,128	)
Capital expenditures, including capitalization of software costs		(31,051	)		(41,836	)		(97,259	)		(96,645	)
Proceeds from sale of assets		27			15			133			551
Net cash used in investing activities		(31,517	)		(42,424	)		(139,806	)		(103,222	)

Cash flows from financing activities:
Payment of deferred financing costs								0			(822	)
Proceeds from exercise of share-based awards		—			1			3			3
Taxes withheld and paid related to net share settlement of equity awards		(698	)		(834	)		(3,898	)		(4,003	)
Repurchase of Common Stock		(4,623	)		(7,216	)		(30,453	)		(9,534	)
Payment of cash dividends		(4,537	)		(4,541	)		(15,407	)		(13,610	)
Other								(5	)		—
Net cash used in financing activities		(9,858	)		(12,590	)		(49,760	)		(27,966	)

Effect of exchange rate changes		(1,254	)		445			(1,545	)		3,832

Net decrease in cash, cash equivalents and short-term investments		(34,807	)		(1,828	)
Net increase (decrease) in cash, cash equivalents and short-term investments								(102,273	)		60,167
Cash, cash equivalents and short-term investments at beginning of period		512,868			474,838			512,868			474,838
Cash, cash equivalents and short-term investments at end of period	$	478,061		$	473,010		$	410,595		$	535,005

Supplemental disclosure of cash flow information:
Non-cash capital expenditures	$	6,904		$	5,961		$	4,954		$	5,907


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


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


Large accelerated filer	☒	Accelerated filer	☐

Non-accelerated filer	☐	Smaller Reporting Company	☐

Emerging Growth Company	☐

	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		0		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		0		129
Class B Common Stock		6,725		3,643
As reported – Diluted	$	41,896		19,019	$	2.20


(In thousands, except percentages)	November 27, 2021		November 28, 2020		Dollar Change		Percent Change			May 28, 2022		May 29, 2021		Dollar Change		Percent Change
Core Laundry Operations	$	428,846	$	393,190	$	35,656		9.1	%	$	450,039	$	409,031	$	41,008		10.0	%
Specialty Garments		39,484		38,134		1,350		3.5	%		41,198		38,236		2,962		7.7	%
First Aid		17,834		15,529		2,305		14.8	%		20,311		17,056		3,255		19.1	%
Consolidated total	$	486,164	$	446,853	$	39,311		8.8	%	$	511,548	$	464,323	$	47,225		10.2	%


Period	(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)
February 27, 2022 - March 26, 2022		30,000	$	178.53		30,000	$	81,931,088
March 27, 2022 - April 23, 2022		22,894	$	178.33		22,894	$	77,859,126
April 24, 2022 - May 28, 2022		37,500	$	166.90		37,500	$	71,599,625
Total		90,394				90,394



~~31.1~~

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~~101.SCH		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).


		UniFirst Corporation

~~January 6,~~July 7, 2022	By:	/s/ Steven S. Sintros
		Steven S. Sintros
		President and Chief Executive Officer

~~January 6,~~July 7, 2022	By:	/s/ Shane O’Connor
		Shane O’Connor
		Executive Vice President and Chief Financial Officer