Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Sep. 26, 2015 | Oct. 22, 2015 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 26, 2015 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | GK | |
Entity Registrant Name | G&K SERVICES INC | |
Entity Central Index Key | 39,648 | |
Current Fiscal Year End Date | --07-02 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 20,018,777 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 26, 2015 | Jun. 27, 2015 |
Current Assets | ||
Cash and cash equivalents | $ 18,501 | $ 16,235 |
Accounts receivable, less allowance for doubtful accounts of $3,768 and $3,469 | 103,101 | 100,402 |
Inventory | 40,205 | 36,258 |
Merchandise in service, net | 134,653 | 133,942 |
Other current assets | 25,491 | 30,383 |
Total current assets | 321,951 | 317,220 |
Property, plant and equipment, less accumulated depreciation of $384,645 and $382,297 | 224,717 | 222,056 |
Goodwill | 322,694 | 325,183 |
Other noncurrent assets | 58,184 | 64,406 |
Total assets | 927,546 | 928,865 |
Current Liabilities | ||
Accounts payable | 52,100 | 51,616 |
Accrued expenses and other current liabilities | 62,869 | 71,739 |
Deferred income taxes | 33,362 | 31,097 |
Current maturities of long-term debt | 5 | 169 |
Total current liabilities | 148,336 | 154,621 |
Long-term debt, net of current maturities | 257,054 | 243,600 |
Deferred income taxes | 27,569 | 28,851 |
Other noncurrent liabilities | 105,000 | 107,443 |
Total liabilities | 537,959 | 534,515 |
Stockholders' Equity | ||
Common stock, $0.50 par value | 10,015 | 9,976 |
Additional paid-in capital | 79,476 | 78,342 |
Retained earnings | 317,973 | 314,976 |
Accumulated other comprehensive loss | (17,877) | (8,944) |
Total stockholders' equity | 389,587 | 394,350 |
Total liabilities and stockholders' equity | $ 927,546 | $ 928,865 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 26, 2015 | Jun. 27, 2015 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 3,768 | $ 3,469 |
Accumulated depreciation | $ 384,645 | $ 382,297 |
Common stock, par value (in dollars per share) | $ 0.5 | $ 0.5 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Sep. 26, 2015 | Sep. 27, 2014 | |
Revenues | ||
Rental and direct sale revenue | $ 237,171 | $ 230,242 |
Operating Expenses | ||
Cost of rental and direct sale revenue | 156,088 | 151,452 |
Selling and administrative | 53,205 | 51,940 |
Total operating expenses | 209,293 | 203,392 |
Income from Operations | 27,878 | 26,850 |
Interest expense | 1,627 | 1,795 |
Income before Income Taxes | 26,251 | 25,055 |
Provision for income taxes | 9,988 | 8,687 |
Net Income | $ 16,263 | $ 16,368 |
Basic earnings per common share from continuing operations (in dollars per share) | $ 0.81 | $ 0.82 |
Diluted earnings per common share from continuing operations (in dollars per share) | $ 0.80 | $ 0.81 |
Weighted average number of shares outstanding, basic (in shares) | 19,727 | 19,628 |
Weighted average number of shares outstanding, diluted (in shares) | 20,001 | 19,999 |
Dividends declared per share (in dollars per share) | $ 0.37 | $ 0.31 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 26, 2015 | Sep. 27, 2014 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 16,263 | $ 16,368 |
Other comprehensive income (loss): | ||
Foreign currency translation adjustments | (7,902) | (6,370) |
Change in pension benefit liabilities recognized | 677 | 609 |
Derivative financial instruments unrecognized loss | (4,626) | (9) |
Derivative financial instruments loss reclassified | (53) | 138 |
Other comprehensive loss before income taxes | (11,904) | (5,632) |
Income tax benefit | 2,971 | 705 |
Other comprehensive loss, net of taxes | (8,933) | (4,927) |
Total comprehensive income | $ 7,330 | $ 11,441 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - 3 months ended Sep. 26, 2015 - USD ($) | Total | Class A Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) |
Beginning balance (shares) at Jun. 27, 2015 | 19,953,000 | ||||
Balance June 27, 2015 at Jun. 27, 2015 | $ 394,350,000 | $ 9,976,000 | $ 78,342,000 | $ 314,976,000 | $ (8,944,000) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Total comprehensive income (loss) | $ 7,330,000 | 16,263,000 | (8,933,000) | ||
Proceeds from issuance of common stock under stock plans (shares) | 206,000 | ||||
Proceeds from issuance of common stock under stock plans | $ 456,000 | $ 103,000 | 353,000 | ||
Share-based compensation | 1,941,000 | 1,941,000 | |||
Shares withheld for taxes under our equity compensation plans (shares) | (42,000) | ||||
Shares withheld for taxes under equity compensation plans | $ (2,983,000) | $ (21,000) | (2,962,000) | ||
Repurchase of common stock (shares) | (86,196) | (86,000) | |||
Repurchase of common stock | $ (5,882,000) | $ (43,000) | (5,839,000) | ||
Excess tax benefit from share-based compensation | 1,802,000 | 1,802,000 | |||
Cash dividends declared ($0.37 per share) | (7,427,000) | (7,427,000) | |||
Ending balance (shares) at Sep. 26, 2015 | 20,031,000 | ||||
Balance September 26, 2015 at Sep. 26, 2015 | $ 389,587,000 | $ 10,015,000 | $ 79,476,000 | $ 317,973,000 | $ (17,877,000) |
CONDENSED CONSOLIDATED STATEME7
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (PARENTHETICAL) | 3 Months Ended |
Sep. 26, 2015$ / shares | |
Statement of Stockholders' Equity [Abstract] | |
Cash dividends ($0.37 per share) | $ 0.37 |
CONDENSED CONSOLIDATED STATEME8
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 26, 2015 | Sep. 27, 2014 | |
Operating Activities: | ||
Net income | $ 16,263 | $ 16,368 |
Adjustments to reconcile net income to net cash provided by operating activities - | ||
Depreciation and amortization | 8,455 | 7,891 |
Deferred income taxes | 4,155 | 1,224 |
Share-based compensation | 1,941 | 1,773 |
Changes in operating items, exclusive of acquisitions and divestitures - | ||
Accounts receivable | (3,969) | (70) |
Inventory and merchandise in service | (5,269) | (3,535) |
Accounts payable | 1,734 | 4,222 |
Other current assets and liabilities | (4,072) | (5,299) |
Other | 206 | (791) |
Net cash provided by operating activities | 19,444 | 21,783 |
Investing Activities: | ||
Capital expenditures | (13,785) | (12,498) |
Acquisition of business | (1,944) | 0 |
Net cash used for investing activities | (15,729) | (12,498) |
Financing Activities: | ||
Repayments of long-term debt | (108) | (339) |
Proceeds from revolving credit facilities, net | 13,400 | 3,075 |
Cash dividends paid | (7,427) | (6,182) |
Proceeds from issuance of common stock under stock option plans | 456 | 1,328 |
Repurchase of common stock | (5,882) | (3,641) |
Shares withheld for taxes under equity compensation plans | (2,983) | (1,562) |
Excess tax benefit from share-based compensation | 1,802 | 1,099 |
Net cash used for financing activities | (742) | (6,222) |
Effect of Exchange Rates on Cash | (707) | (1,504) |
Increase in Cash and Cash Equivalents | 2,266 | 1,559 |
Cash and Cash Equivalents: | ||
Beginning of period | 16,235 | 37,118 |
End of period | 18,501 | 38,677 |
Cash received (paid) for - | ||
Interest | (750) | (333) |
Income taxes | 434 | (720) |
Supplemental Non-cash Investing Information: | ||
Capital expenditures included in accounts payable | $ 2,730 | $ 500 |
Basis of Presentation for Inter
Basis of Presentation for Interim Financial Statements | 3 Months Ended |
Sep. 26, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation for Interim Financial Statements | Basis of Presentation for Interim Financial Statements The Condensed Consolidated Financial Statements of G&K Services, Inc. (the "Company" or "G&K") as set forth in this quarterly report have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission for interim reporting. As permitted under those rules, certain footnotes and other financial information that are normally required by accounting principles generally accepted in the United States can be condensed or omitted. Our accounting policies are described in "Notes to the Consolidated Financial Statements" in our Annual Report on Form 10-K for the fiscal year ended June 27, 2015 ("fiscal 2015 "). Management is responsible for the unaudited Condensed Consolidated Financial Statements included in this document. The Condensed Consolidated Financial Statements included in this document are unaudited but, in the opinion of management, include all adjustments (consisting of only normal recurring adjustments) necessary for a fair presentation of our financial position as of September 26, 2015 , and the results of our operations for the three months ended September 26, 2015 and September 27, 2014 and our cash flows for the three months ended September 26, 2015 and September 27, 2014 . The results of operations for the three month periods ended September 26, 2015 and September 27, 2014 are not necessarily indicative of the results to be expected for the full year. This Quarterly Report on Form 10-Q should be read in conjunction with our Consolidated Financial Statements and notes included in our fiscal 2015 Annual Report on Form 10-K. |
Contingent Liabilities
Contingent Liabilities | 3 Months Ended |
Sep. 26, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingent Liabilities | Contingent Liabilities Environmental Matters From time-to-time, we are involved in environmental-related proceedings by certain governmental agencies, which relate primarily to allegedly operating certain facilities in noncompliance with required permits. In addition to these proceedings, in the normal course of our business, we are subject to, among other things, periodic inspections by regulatory agencies. We also are involved in various property remediation efforts. In particular, we have four projects nearing completion, which we expect will be completed within previously established reserves. We also have four other projects on which we are currently working. Historically, with respect to remediation projects, we have borne our costs as part of our ongoing operations. As part of the second set of projects mentioned above, in the fourth quarter of fiscal year 2015, we determined it was likely that the parties that are contractually obligated to remediate PCE contamination at three of our previously purchased locations would not be able to continue to meet these obligations because of their respective financial condition. These acquisitions date as far back as the 1970s; the most recent one was in 2007. As a result of the foregoing, as of September 26, 2015 and June 27, 2015 , we had remediation-related reserves of approximately $4,659 and $4,711 respectively, related to these matters. There was $52 and $205 of expense for these matters for the three months ended September 26, 2015 and September 27, 2014 , respectively. In order to determine whether any additional exposure for PCE remediation exists, we are assessing six additional sites which we acquired that had historical dry cleaning operations. With respect to these sites, while we believe costs are probable, they are not yet reasonably estimable. Therefore, beyond amounts to cover the preliminary assessments, we have not recorded any reserve for these properties. While such charges may be material, including with respect to reported operating results in a particular period, we believe the likelihood that any charges will have a material adverse effect on our results of ongoing operations or financial position is remote. Legal Matters As part of routine audits, the United States Office of Federal Contract Compliance Programs, or OFCCP, previously conducted a review of our employment practices at certain of our locations. The OFCCP previously issued Notice of Violations to four of our facilities. Audits of eight other facilities, where the OFCCP may claim there are similar alleged violations, are ongoing. We have been engaged in discussions with the OFCCP and believe that our practices are lawful and without bias. We are negotiating, on a global basis, to settle with the OFCCP all previously issued Notices of Violations and to resolve all open audits. We believe that all payments to be made pursuant to this agreement will be within previously established reserves. |
New Accounting Pronouncements
New Accounting Pronouncements | 3 Months Ended |
Sep. 26, 2015 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
New Accounting Pronouncements | New Accounting Pronouncements In May 2014, the Financial Accounting Standards Board ("FASB") issued updated guidance to clarify revenue recognition principles. This guidance is intended to improve disclosure requirements and enhance the comparability of revenue recognition practices. Improved disclosures under the amended guidance relate to the nature, amount, timing and uncertainty of revenue that is recognized from contracts with customers. This guidance will be effective for us beginning in the first quarter of fiscal year 2019. We are currently evaluating the impact this new guidance will have on our Consolidated Financial Statements. In April 2015, the FASB issued updated guidance which changes the presentation of debt issuance costs in financial statements to present such costs in the balance sheet as a direct deduction from the related debt liability rather than as an asset. Amortization of the costs is reported as interest expense. This guidance will be effective for us beginning in the first quarter of fiscal year 2017. We anticipate the implementation of this guidance will not have a material impact on the presentation of our financial position and no impact on our results of operations or cash flows. In May 2015, the FASB issued updated guidance to remove the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the net asset value per share practical expedient. This guidance also removes the requirement to make certain disclosures for all investments that are eligible to be measured at fair value using the net asset value per share practical expedient. These amendments are effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years, with retrospective presentation applied to all periods. Earlier application is permitted. This guidance will be effective for us beginning in the first quarter of fiscal year 2017. We anticipate the implementation of this guidance will not have a material impact on the presentation of our financial position and no impact on our results of operations or cash flows. In July 2015, the FASB issued updated guidance to simplify the measurement of inventory at the lower of cost or net realizable value. This guidance will be effective for us beginning in the first quarter of fiscal year 2018. We anticipate the implementation of this guidance will not have a material impact on the presentation of our financial position, results of operations or cash flows. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Sep. 26, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Generally accepted accounting principles ("GAAP") defines fair value, establishes a framework for measuring fair value and establishes disclosure requirements about fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. We considered non-performance risk when determining fair value of our derivative financial instruments. The fair value hierarchy prescribed under GAAP contains the following three levels: Level 1 — unadjusted quoted prices that are available in active markets for the identical assets or liabilities at the measurement date. Level 2 — other observable inputs available at the measurement date, other than quoted prices included in Level 1, either directly or indirectly, including: -quoted prices for similar assets or liabilities in active markets; -quoted prices for identical or similar assets in non-active markets; -inputs other than quoted prices that are observable for the asset or liability; and -inputs that are derived principally from or corroborated by other observable market data. Level 3 — unobservable inputs that cannot be corroborated by observable market data and reflect the use of significant management judgment. These values are generally determined using pricing models for which the assumptions utilize management’s estimates of market participant assumptions. We do not have any Level 3 assets or liabilities and we have not transferred any items between fair value levels during the first quarter of fiscal years 2015 or 2016 . The following tables summarize the assets and liabilities measured at fair value on a recurring basis as of September 26, 2015 and June 27, 2015 : As of September 26, 2015 Fair Value Measurements Using Inputs Considered as Level 1 Level 2 Total Other assets: Money market mutual funds $ 5,968 $ — $ 5,968 Equity and fixed income mutual funds 27,233 — 27,233 Cash surrender value of life insurance policies — 14,562 14,562 Derivative financial instruments — 568 568 Total assets $ 33,201 $ 15,130 $ 48,331 Accrued expenses: Derivative financial instruments $ — $ 337 $ 337 Total liabilities $ — $ 337 $ 337 As of June 27, 2015 Fair Value Measurements Using Inputs Considered as Level 1 Level 2 Total Other assets: Money market mutual funds $ 4,637 $ — $ 4,637 Equity and fixed income mutual funds 29,777 — 29,777 Cash surrender value of life insurance policies — 14,659 14,659 Derivative financial instruments — 4,857 4,857 Total assets $ 34,414 $ 19,516 $ 53,930 Accrued expenses: Derivative financial instruments $ — $ 188 $ 188 Total liabilities $ — $ 188 $ 188 The cash surrender value of life insurance policies are primarily investments established to fund the obligations of the Company's non-qualified, non-contributory supplemental executive retirement plan ("SERP"). The money market, equity and fixed income mutual funds are investments established to fund the obligations of the Company's non-qualified deferred compensation plan. The following tables summarize the fair value of assets and liabilities that are recorded at historical cost as of September 26, 2015 and June 27, 2015 : As of September 26, 2015 Fair Value Measurements Using Inputs Considered as Level 1 Level 2 Total Cash and cash equivalents $ 18,501 $ — $ 18,501 Total assets $ 18,501 $ — $ 18,501 Current maturities of long-term debt $ — $ 5 $ 5 Long-term debt, net of current maturities $ — $ 257,529 $ 257,529 Total liabilities $ — $ 257,534 $ 257,534 As of June 27, 2015 Fair Value Measurements Using Inputs Considered as Level 1 Level 2 Total Cash and cash equivalents $ 16,235 $ — $ 16,235 Total assets $ 16,235 $ — $ 16,235 Current maturities of long-term debt $ — $ 169 $ 169 Long-term debt, net of current maturities — 241,589 241,589 Total liabilities $ — $ 241,758 $ 241,758 |
Derivative Financial Instrument
Derivative Financial Instruments | 3 Months Ended |
Sep. 26, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | Derivative Financial Instruments In the ordinary course of business, we are exposed to market risks. We utilize derivative financial instruments to manage interest rate risk and manage the total debt that is subject to variable and fixed interest rates. These interest rate swap contracts modify our exposure to interest rate risk by converting variable rate debt to a fixed rate or by locking in the benchmark interest rate on forecasted issuances of fixed rate debt. For derivative financial instruments that are designated and qualify as cash flow hedges, the effective portion of the change in fair value on the derivative financial instrument is reported as a component of "Accumulated other comprehensive income" and reclassified into the "Interest expense" line item in the Condensed Consolidated Statements of Operations in the same period as the expenses from the cash flows of the interest expense is recognized. Cash payments or receipts are included in "Net cash provided by operating activities" in the Condensed Consolidated Statements of Cash Flows in the same period as the cash is settled. We perform an assessment at the inception of the hedge and on a quarterly basis thereafter, to determine whether our derivatives are highly effective in offsetting changes in the value of the hedged items. Any change in the fair value resulting from hedge ineffectiveness is immediately recognized as income or expense. We do not have any derivative financial instruments that have been designated as either a fair value hedge, a hedge of a net investment in a foreign operation, or that are held for trading or speculative purposes. Cash flows associated with derivative financial instruments are classified in the same category as the cash flows hedged in the Condensed Consolidated Statements of Cash Flows. On April 1, 2015, we entered into a long-term interest rate swap for $75,000 which will limit our exposure to interest rate risk and pursuant to which we will pay fixed rates of interest and receive variable rates of interest based on the one-month London Interbank Offered Rate (" LIBOR ") and will have an effective interest rate of 2.35% . The 15 year swap contract has a forward start date of July 1, 2016 and is a highly effective cash flow hedge. As of September 26, 2015 we had a $568 asset and a $337 liability and as of June 27, 2015 we had a $4,857 asset and a $188 liability on interest rate swap contracts that are classified as "Other noncurrent assets" or "Accrued expenses and other current liabilities" in the Condensed Consolidated Balance Sheets. Of the $1,482 net gain deferred in accumulated other comprehensive income as of September 26, 2015 , a $191 loss is expected to be reclassified to interest expense in the next 12 months. As of September 26, 2015 and June 27, 2015 , all derivative financial instruments were designated as hedging instruments. |
Income Taxes
Income Taxes | 3 Months Ended |
Sep. 26, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Our effective tax rate increased to 38.0% in the three months ended September 26, 2015 from 34.7% in the three months ended September 27, 2014 . The current period tax rate is higher than the prior year period due to the expiration of certain tax statutes in the prior year. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Sep. 26, 2015 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Accounting guidance for participating securities and the two-class method, addresses whether awards granted in unvested share-based payment transactions that contain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and therefore are included in computing earnings per share under the two-class method. Participating securities are securities that may participate in dividends with common stock and the two-class method is an earnings allocation formula that treats a participating security as having rights to earnings that would otherwise have been available to common shareholders. Under the two-class method, earnings for the period are allocated between common shareholders and other shareholders, based on their respective rights to receive dividends. Certain restricted stock awards granted under our equity plans are considered participating securities as these awards receive non-forfeitable dividends at the same rate as common stock. The computations of our basic and diluted earnings per share for the three months ended September 26, 2015 and September 27, 2014 are as follows: Three Months Ended September 26, September 27, Net income $ 16,263 $ 16,368 Less: Income allocable to participating securities (227 ) (233 ) Net income available to common stockholders $ 16,036 $ 16,135 Basic earnings per share (shares in thousands): Weighted average number of shares outstanding, basic 19,727 19,628 Basic earnings per common share: Basic earnings per share $ 0.81 $ 0.82 Diluted earnings per share (shares in thousands): Weighted average number of shares outstanding, basic 19,727 19,628 Weighted average effect of non-vested restricted stock grants and assumed exercise of stock options 274 371 Weighted average number of shares outstanding, diluted 20,001 19,999 Diluted earnings per common share: Diluted earnings per share $ 0.80 $ 0.81 We excluded potential common shares related to our outstanding equity compensation grants of 125,000 and 246,000 for the three months ended September 26, 2015 and September 27, 2014 , respectively, from the computation of diluted earnings per share. Inclusion of these shares would have been anti-dilutive. |
Inventory and Merchandise in Se
Inventory and Merchandise in Service | 3 Months Ended |
Sep. 26, 2015 | |
Inventory Disclosure [Abstract] | |
Inventory and Merchandise in Service | Inventory and Merchandise in Service The components of inventory as of September 26, 2015 and June 27, 2015 are as follows: September 26, June 27, Raw Materials $ 9,783 $ 6,368 Work in Process 1,235 975 Finished Goods 29,187 28,915 Inventory $ 40,205 $ 36,258 Merchandise in service, net 134,653 133,942 We review the estimated useful lives of our merchandise in service assets on a periodic basis or when trends in our business indicate that the useful lives for certain products might have changed. The selection of estimated useful lives is a sensitive estimate in which a change in lives can have a material impact on our results of operations. There were no changes to the estimated periods in which the assets will be in service for the three months ended September 26, 2015 and September 27, 2014 . |
Goodwill
Goodwill | 3 Months Ended |
Sep. 26, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Goodwill Goodwill by segment is as follows: United States Canada Total Balance as of June 27, 2015 $ 270,045 $ 55,138 $ 325,183 Acquisitions — 1,199 1,199 Foreign currency translation and other — (3,688 ) (3,688 ) Balance as of September 26, 2015 $ 270,045 $ 52,649 $ 322,694 |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Sep. 26, 2015 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt Long-term debt as of September 26, 2015 and June 27, 2015 consists of the following: September 26, 2015 June 27, 2015 Borrowings under Unsecured Revolver $ 128,900 $ 40,500 Borrowings under Variable Rate Notes — 75,000 Borrowings under A/R Line 28,100 28,100 Borrowings under Fixed Rate Notes 100,000 100,000 Capital leases and other 59 169 257,059 243,769 Less current maturities (5 ) (169 ) Total long-term debt $ 257,054 $ 243,600 We have a $350,000 , unsecured revolving credit facility ("Unsecured Revolver") with a syndicate of banks, which expires on April 15, 2020 . Borrowings in U.S. dollars under this credit facility generally bear interest at the adjusted LIBOR for specified interest periods plus a margin, which can range from 1.00% to 1.75% , depending on our consolidated leverage ratio. As of September 26, 2015 , there was $128,900 outstanding under this facility. The unused portion of the revolver may be used for general corporate purposes, acquisitions, share repurchases, dividends, working capital needs and to provide up to $45,000 in letters of credit. As of September 26, 2015 , letters of credit outstanding under this facility totaled $636 and primarily related to our property and casualty insurance programs. No amounts have been drawn upon these letters of credit. As of September 26, 2015 , there is a fee of 0.175% of the unused daily balance of this facility. Availability of credit under this facility requires that we maintain compliance with certain covenants. The covenants under this facility are the most restrictive when compared to our other credit facilities. The following table illustrates compliance with regard to the material covenants required by the terms of this facility as of September 26, 2015 : Required Actual Maximum Leverage Ratio (Debt/EBITDA) 3.50 1.89 Minimum Interest Coverage Ratio (EBITDA/Interest Expense) 3.00 21.23 Our maximum leverage ratio and minimum interest coverage ratio covenants are calculated by adding back certain non-cash charges, as defined in our credit facility. Borrowings outstanding as of September 26, 2015 under this facility bear interest at a weighted average effective rate of 1.44% . At June 27, 2015 we had $75,000 of variable rate unsecured private placement notes ("Variable Rate Notes") that matured on June 30, 2015 and were paid using our Unsecured Revolver. We maintain a $50,000 accounts receivable securitization facility ("A/R Line"), which expires on September 27, 2016 . Under the terms of the facility, we pay interest at a rate per annum equal to LIBOR plus a margin of 0.75% . The facility is subject to customary fees, including a rate per annum equal to 0.80% for the issuance of letters of credit and 0.26% for any unused portion of the facility. As is customary with transactions of this nature, our eligible accounts receivable are sold to a consolidated subsidiary. As of September 26, 2015 , there was $28,100 outstanding under this securitization facility and there were $21,900 of letters of credit outstanding, primarily related to our property and casualty insurance programs. Borrowings outstanding as of September 26, 2015 under this facility bear interest at an average effective interest rate of 0.95% . We have $100,000 of fixed rate unsecured senior notes ("Fixed Rate Notes") with $50,000 of the notes bearing interest at a fixed interest rate of 3.73% per annum maturing April 15, 2023 and $50,000 of the notes bearing interest at a fixed interest rate of 3.88% per annum maturing April 15, 2025 . Interest on the notes is payable semiannually. As of September 26, 2015 , the outstanding balance of the notes was $100,000 at an effective rate of 3.81% . See Note 5, "Derivative Financial Instruments," of "Notes to the Condensed Consolidated Financial Statements" for details of our interest rate swap and hedging activities related to our outstanding debt. |
Other Assets and Other Noncurre
Other Assets and Other Noncurrent Liabilities | 3 Months Ended |
Sep. 26, 2015 | |
Other Liabilities, Noncurrent [Abstract] | |
Other Assets and Other Noncurrent Liabilities | Other Assets and Other Noncurrent Liabilities Other assets as of September 26, 2015 and June 27, 2015 included the following: September 26, 2015 June 27, 2015 Executive deferred compensation assets 33,201 34,414 Cash surrender value of life insurance policies 14,562 14,659 Derivative financial instruments 568 4,857 Customer contracts and non-competition agreements, net 4,505 4,544 Other assets 7,672 7,854 Less: portion classified as current assets (2,324 ) (1,922 ) Total other noncurrent assets 58,184 64,406 The customer contracts include the combined value of the written service agreements and the related customer relationship. Customer contracts are amortized over a weighted average life of approximately ten years and are as follows: September 26, 2015 June 27, 2015 Customer contracts and non-competition agreements $ 15,261 $ 20,244 Accumulated amortization (10,756 ) (15,700 ) Net $ 4,505 $ 4,544 Amortization expense was $378 and $563 for the three months ended September 26, 2015 and September 27, 2014 , respectively. Estimated amortization expense for each of the next five fiscal years based on the intangible assets as of September 26, 2015 is as follows: 2016 remaining $ 1,020 2017 1,234 2018 452 2019 219 2020 206 Thereafter 1,344 Other noncurrent liabilities as of September 26, 2015 and June 27, 2015 included the following: September 26, 2015 June 27, 2015 Multi-employer pension withdrawal liability $ 9,250 $ 9,329 Pension plan liability 20,119 20,188 Executive deferred compensation plan liability 33,297 34,529 Supplemental executive retirement plan liability 16,554 16,686 Accrued income taxes 8,189 8,294 Workers' compensation liability 19,153 18,577 Other liabilities 6,664 7,659 Less: Portion classified as current liabilities (8,226 ) (7,819 ) Total other noncurrent liabilities $ 105,000 $ 107,443 |
Share-Based Compensation
Share-Based Compensation | 3 Months Ended |
Sep. 26, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-Based Compensation | Share-Based Compensation Compensation cost for share-based compensation plans is recognized on a straight-line basis over the requisite service period of the award. The share-based compensation reflects estimated forfeitures adjusted for actual forfeiture experience. We grant share-based awards, primarily consisting of restricted stock and options to purchase our common stock. Stock options are granted to employees and directors for a fixed number of shares with an exercise price equal to the fair value of the shares at the date of grant. Share-based compensation is recognized in the Condensed Consolidated Statements of Operations and was $1,941 and $1,773 for the three months ended September 26, 2015 and September 27, 2014 , respectively. As share-based compensation expense is recognized, a deferred tax asset is recorded that represents an estimate of the future tax deduction from the exercise of stock options or release of restrictions on the restricted stock. At the time share-based awards are exercised, canceled, expire or restrictions lapse, we recognize adjustments to additional paid-in capital or income tax expense. No amount of share-based compensation expense was capitalized during the periods presented. The number of options exercised and restricted stock vested since June 27, 2015 , was 129,000 shares. |
Employee Benefit Plans
Employee Benefit Plans | 3 Months Ended |
Sep. 26, 2015 | |
Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract] | |
Employee Benefit Plans | Employee Benefit Plans Defined Benefit Pension Plan On December 31, 2006 , we froze our pension and SERP plans for all participants. The components of net periodic pension cost for these plans for the three months ended September 26, 2015 and September 27, 2014 are as follows: Pension Plan SERP Three Months Ended Three Months Ended September 26, September 27, September 26, September 27, Interest cost $ 943 $ 1,012 $ 148 $ 185 Expected return on assets (1,068 ) (1,226 ) — — Amortization of net loss 608 504 60 98 Net periodic pension cost $ 483 $ 290 $ 208 $ 283 During the first quarter of fiscal year 2016 , we contributed approximately $40 to the pension plan. Multi-Employer Pension Plans Historically, we participated in a number of collectively bargained, union sponsored multi-employer pension plans ("MEPPs"). Consistent with the accounting for defined contribution plans, we previously recorded the required cash contributions to the MEPPs as an expense in the period incurred and recognized a liability for any contributions due and unpaid. In addition, we are responsible for our proportional share of any unfunded vested benefits related to the MEPPs. An employer's accounting for MEPPs provides that a withdrawal liability should be recorded if circumstances that give rise to an obligation become probable and estimable. We no longer participate in any MEPPs in the United States. During the three months ended September 26, 2015 and September 27, 2014 , we made total payments related to our MEPP liabilities of $297 and $871 , respectively. Total remaining reserves for all MEPPs as of September 26, 2015 are $9,250 . As previously disclosed, we have received formal demand notices from certain MEPPs to which we previously contributed. Internally and with outside experts, we evaluated each of the demand notices to determine the appropriateness thereof. We have determined that the demanded amounts are appropriate for all but one of the MEPPs. In the case of the MEPP for which we have been unable to verify the amount demanded, we have requested additional information from the MEPP to ascertain the validity and accuracy of the payment demands and accuracy of the assumptions used. To the extent we deem as accurate the information we receive from this MEPP, we expect that we will resolve this matter. To the extent we deem such information as inaccurate, it is likely that we will file an arbitration against this MEPP to resolve this matter. In either case, we believe that resolution of this matter will be within previously established reserves. |
Segment Information
Segment Information | 3 Months Ended |
Sep. 26, 2015 | |
Segment Reporting, Measurement Disclosures [Abstract] | |
Segment Information | Segment Information We have two operating segments, United States (includes our Dominican Republic operations) and Canada, which have been identified as components of our organization that are reviewed by our Chief Executive Officer to determine resource allocation and evaluate performance. Each operating segment derives revenues from the branded uniform and facility services programs. Our largest customer represents approximately 2.0% of our total revenues. All of our customers are in the United States and Canada. We evaluate performance based on income from operations. Financial information by segment for the three month periods ended September 26, 2015 and September 27, 2014 is as follows: For the Three Months Ended United States Canada Elimination Total September 26, 2015 Revenues $ 205,052 $ 32,119 $ — $ 237,171 Income from operations 23,924 3,954 — 27,878 Total assets 895,470 126,034 (93,958 ) 927,546 Depreciation and amortization expense 7,605 850 — 8,455 September 27, 2014 Revenues $ 194,397 $ 35,845 $ — $ 230,242 Income from operations 22,806 4,044 — 26,850 Total assets 867,757 164,244 (109,830 ) 922,171 Depreciation and amortization expense 6,895 996 — 7,891 |
Share Repurchase
Share Repurchase | 3 Months Ended |
Sep. 26, 2015 | |
Disclosure Share Repurchase Additional Information [Abstract] | |
Share Repurchase | Share Repurchase As of September 26, 2015 , we have a $275,000 share repurchase program which was originally authorized by our Board of Directors in May 2007 for $100,000 and was increased to $175,000 in May 2008 and to $275,000 in August 2015. Under this repurchase program, we repurchased 86,196 shares in open market transactions totaling $5,882 for the three months ended September 26, 2015 and 65,200 shares totaling $3,641 for the three months ended September 27, 2014 . As of September 26, 2015 , we had $122,686 remaining under this authorization. |
Other Comprehensive Income
Other Comprehensive Income | 3 Months Ended |
Sep. 26, 2015 | |
Other Comprehensive Income [Abstract] | |
Other Comprehensive Income | Other Comprehensive Income Changes in accumulated other comprehensive income, net of tax, for the three months ended September 26, 2015 and September 27, 2014 were as follows: Three Months Ended September 26, 2015 Foreign currency translation adjustment Pension benefit liabilities Derivative financial instruments Total Accumulated other comprehensive income (loss) at June 27, 2015 $ 7,914 $ (21,272 ) $ 4,414 $ (8,944 ) Other comprehensive income (loss) before reclassifications (6,424 ) — (2,899 ) (9,323 ) Reclassifications from net accumulated other comprehensive income (loss) — 423 (33 ) 390 Net current period other comprehensive income (loss) (6,424 ) 423 (2,932 ) (8,933 ) Accumulated other comprehensive income (loss) at September 26, 2015 $ 1,490 $ (20,849 ) $ 1,482 $ (17,877 ) Three Months Ended September 27, 2014 Foreign currency translation adjustment Pension benefit liabilities Derivative financial instruments Total Accumulated other comprehensive income (loss) as of June 28, 2014 $ 22,682 $ (19,748 ) $ 1,053 $ 3,987 Other comprehensive loss before reclassifications (5,388 ) — (5 ) (5,393 ) Reclassifications from net accumulated other comprehensive income (loss) — 381 85 466 Net current period other comprehensive income (loss) (5,388 ) 381 80 (4,927 ) Accumulated other comprehensive income (loss) at September 27, 2014 $ 17,294 $ (19,367 ) $ 1,133 $ (940 ) Amounts reclassified from accumulated other comprehensive income (loss) for the three months ended September 26, 2015 and September 27, 2014 are as follows: Three Months Ended September 26, 2015 September 27, 2014 Losses on derivative financial instruments: Interest rate swap contracts $ (53 ) $ 138 (a) Tax benefit (expense) 20 (53 ) Total, net of tax (33 ) 85 Pension benefit liabilities: Amortization of net loss 677 609 (b) Tax benefit (expense) (254 ) (228 ) Total, net of tax 423 381 Total amounts reclassified, net of tax $ 390 $ 466 (a) Included in interest expense. (b) Included in the computation of net periodic pension cost, which is included in cost of rental and direct sale and selling and administrative. This amount includes a pension plan which is not included in the net periodic pension cost in Note 13 because it is individually immaterial. See Note 13 for details regarding the pension plans. Income tax benefit (expense) for each component of other comprehensive income were as follows: Three Months Ended September 26, 2015 September 27, 2014 Foreign currency translation adjustments $ 1,478 $ 982 Change in pension benefit liabilities recognized (254 ) (228 ) Derivative financial instruments unrecognized gain (loss) 20 (53 ) Derivative financial instruments loss reclassified 1,727 4 Income tax benefit $ 2,971 $ 705 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Sep. 26, 2015 | |
Fair Value Disclosures [Abstract] | |
Assets and liabilities measured at fair value on recurring basis | The following tables summarize the assets and liabilities measured at fair value on a recurring basis as of September 26, 2015 and June 27, 2015 : As of September 26, 2015 Fair Value Measurements Using Inputs Considered as Level 1 Level 2 Total Other assets: Money market mutual funds $ 5,968 $ — $ 5,968 Equity and fixed income mutual funds 27,233 — 27,233 Cash surrender value of life insurance policies — 14,562 14,562 Derivative financial instruments — 568 568 Total assets $ 33,201 $ 15,130 $ 48,331 Accrued expenses: Derivative financial instruments $ — $ 337 $ 337 Total liabilities $ — $ 337 $ 337 As of June 27, 2015 Fair Value Measurements Using Inputs Considered as Level 1 Level 2 Total Other assets: Money market mutual funds $ 4,637 $ — $ 4,637 Equity and fixed income mutual funds 29,777 — 29,777 Cash surrender value of life insurance policies — 14,659 14,659 Derivative financial instruments — 4,857 4,857 Total assets $ 34,414 $ 19,516 $ 53,930 Accrued expenses: Derivative financial instruments $ — $ 188 $ 188 Total liabilities $ — $ 188 $ 188 |
Summary of assets and liabilities at fair value | The following tables summarize the fair value of assets and liabilities that are recorded at historical cost as of September 26, 2015 and June 27, 2015 : As of September 26, 2015 Fair Value Measurements Using Inputs Considered as Level 1 Level 2 Total Cash and cash equivalents $ 18,501 $ — $ 18,501 Total assets $ 18,501 $ — $ 18,501 Current maturities of long-term debt $ — $ 5 $ 5 Long-term debt, net of current maturities $ — $ 257,529 $ 257,529 Total liabilities $ — $ 257,534 $ 257,534 As of June 27, 2015 Fair Value Measurements Using Inputs Considered as Level 1 Level 2 Total Cash and cash equivalents $ 16,235 $ — $ 16,235 Total assets $ 16,235 $ — $ 16,235 Current maturities of long-term debt $ — $ 169 $ 169 Long-term debt, net of current maturities — 241,589 241,589 Total liabilities $ — $ 241,758 $ 241,758 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Sep. 26, 2015 | |
Earnings Per Share [Abstract] | |
Computations of basic and diluted earnings per share | The computations of our basic and diluted earnings per share for the three months ended September 26, 2015 and September 27, 2014 are as follows: Three Months Ended September 26, September 27, Net income $ 16,263 $ 16,368 Less: Income allocable to participating securities (227 ) (233 ) Net income available to common stockholders $ 16,036 $ 16,135 Basic earnings per share (shares in thousands): Weighted average number of shares outstanding, basic 19,727 19,628 Basic earnings per common share: Basic earnings per share $ 0.81 $ 0.82 Diluted earnings per share (shares in thousands): Weighted average number of shares outstanding, basic 19,727 19,628 Weighted average effect of non-vested restricted stock grants and assumed exercise of stock options 274 371 Weighted average number of shares outstanding, diluted 20,001 19,999 Diluted earnings per common share: Diluted earnings per share $ 0.80 $ 0.81 |
Inventory and Merchandise in 27
Inventory and Merchandise in Service (Tables) | 3 Months Ended |
Sep. 26, 2015 | |
Inventory Disclosure [Abstract] | |
Components of Inventory | The components of inventory as of September 26, 2015 and June 27, 2015 are as follows: September 26, June 27, Raw Materials $ 9,783 $ 6,368 Work in Process 1,235 975 Finished Goods 29,187 28,915 Inventory $ 40,205 $ 36,258 Merchandise in service, net 134,653 133,942 |
Goodwill (Tables)
Goodwill (Tables) | 3 Months Ended |
Sep. 26, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill by Segment | Goodwill by segment is as follows: United States Canada Total Balance as of June 27, 2015 $ 270,045 $ 55,138 $ 325,183 Acquisitions — 1,199 1,199 Foreign currency translation and other — (3,688 ) (3,688 ) Balance as of September 26, 2015 $ 270,045 $ 52,649 $ 322,694 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 3 Months Ended |
Sep. 26, 2015 | |
Debt Disclosure [Abstract] | |
Amount of long-term debt | Long-term debt as of September 26, 2015 and June 27, 2015 consists of the following: September 26, 2015 June 27, 2015 Borrowings under Unsecured Revolver $ 128,900 $ 40,500 Borrowings under Variable Rate Notes — 75,000 Borrowings under A/R Line 28,100 28,100 Borrowings under Fixed Rate Notes 100,000 100,000 Capital leases and other 59 169 257,059 243,769 Less current maturities (5 ) (169 ) Total long-term debt $ 257,054 $ 243,600 |
Material covenants required by terms of this facility | The following table illustrates compliance with regard to the material covenants required by the terms of this facility as of September 26, 2015 : Required Actual Maximum Leverage Ratio (Debt/EBITDA) 3.50 1.89 Minimum Interest Coverage Ratio (EBITDA/Interest Expense) 3.00 21.23 |
Other Assets and Other Noncur30
Other Assets and Other Noncurrent Liabilities (Tables) | 3 Months Ended |
Sep. 26, 2015 | |
Other Liabilities, Noncurrent [Abstract] | |
Schedule of Other Assets | Other assets as of September 26, 2015 and June 27, 2015 included the following: September 26, 2015 June 27, 2015 Executive deferred compensation assets 33,201 34,414 Cash surrender value of life insurance policies 14,562 14,659 Derivative financial instruments 568 4,857 Customer contracts and non-competition agreements, net 4,505 4,544 Other assets 7,672 7,854 Less: portion classified as current assets (2,324 ) (1,922 ) Total other noncurrent assets 58,184 64,406 |
Schedule of Finite-Lived Intangible Assets | Customer contracts are amortized over a weighted average life of approximately ten years and are as follows: September 26, 2015 June 27, 2015 Customer contracts and non-competition agreements $ 15,261 $ 20,244 Accumulated amortization (10,756 ) (15,700 ) Net $ 4,505 $ 4,544 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Estimated amortization expense for each of the next five fiscal years based on the intangible assets as of September 26, 2015 is as follows: 2016 remaining $ 1,020 2017 1,234 2018 452 2019 219 2020 206 Thereafter 1,344 |
Schedule of Other Noncurrent Liabilities | Other noncurrent liabilities as of September 26, 2015 and June 27, 2015 included the following: September 26, 2015 June 27, 2015 Multi-employer pension withdrawal liability $ 9,250 $ 9,329 Pension plan liability 20,119 20,188 Executive deferred compensation plan liability 33,297 34,529 Supplemental executive retirement plan liability 16,554 16,686 Accrued income taxes 8,189 8,294 Workers' compensation liability 19,153 18,577 Other liabilities 6,664 7,659 Less: Portion classified as current liabilities (8,226 ) (7,819 ) Total other noncurrent liabilities $ 105,000 $ 107,443 |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 3 Months Ended |
Sep. 26, 2015 | |
Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract] | |
Components of net periodic benefit cost | The components of net periodic pension cost for these plans for the three months ended September 26, 2015 and September 27, 2014 are as follows: Pension Plan SERP Three Months Ended Three Months Ended September 26, September 27, September 26, September 27, Interest cost $ 943 $ 1,012 $ 148 $ 185 Expected return on assets (1,068 ) (1,226 ) — — Amortization of net loss 608 504 60 98 Net periodic pension cost $ 483 $ 290 $ 208 $ 283 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Sep. 26, 2015 | |
Segment Reporting, Measurement Disclosures [Abstract] | |
Financial Information by Segment | Financial information by segment for the three month periods ended September 26, 2015 and September 27, 2014 is as follows: For the Three Months Ended United States Canada Elimination Total September 26, 2015 Revenues $ 205,052 $ 32,119 $ — $ 237,171 Income from operations 23,924 3,954 — 27,878 Total assets 895,470 126,034 (93,958 ) 927,546 Depreciation and amortization expense 7,605 850 — 8,455 September 27, 2014 Revenues $ 194,397 $ 35,845 $ — $ 230,242 Income from operations 22,806 4,044 — 26,850 Total assets 867,757 164,244 (109,830 ) 922,171 Depreciation and amortization expense 6,895 996 — 7,891 |
Other Comprehensive Income (Tab
Other Comprehensive Income (Tables) | 3 Months Ended |
Sep. 26, 2015 | |
Other Comprehensive Income [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | Changes in accumulated other comprehensive income, net of tax, for the three months ended September 26, 2015 and September 27, 2014 were as follows: Three Months Ended September 26, 2015 Foreign currency translation adjustment Pension benefit liabilities Derivative financial instruments Total Accumulated other comprehensive income (loss) at June 27, 2015 $ 7,914 $ (21,272 ) $ 4,414 $ (8,944 ) Other comprehensive income (loss) before reclassifications (6,424 ) — (2,899 ) (9,323 ) Reclassifications from net accumulated other comprehensive income (loss) — 423 (33 ) 390 Net current period other comprehensive income (loss) (6,424 ) 423 (2,932 ) (8,933 ) Accumulated other comprehensive income (loss) at September 26, 2015 $ 1,490 $ (20,849 ) $ 1,482 $ (17,877 ) Three Months Ended September 27, 2014 Foreign currency translation adjustment Pension benefit liabilities Derivative financial instruments Total Accumulated other comprehensive income (loss) as of June 28, 2014 $ 22,682 $ (19,748 ) $ 1,053 $ 3,987 Other comprehensive loss before reclassifications (5,388 ) — (5 ) (5,393 ) Reclassifications from net accumulated other comprehensive income (loss) — 381 85 466 Net current period other comprehensive income (loss) (5,388 ) 381 80 (4,927 ) Accumulated other comprehensive income (loss) at September 27, 2014 $ 17,294 $ (19,367 ) $ 1,133 $ (940 ) |
Reclassification out of Accumulated Other Comprehensive Income | Three Months Ended September 26, 2015 September 27, 2014 Losses on derivative financial instruments: Interest rate swap contracts $ (53 ) $ 138 (a) Tax benefit (expense) 20 (53 ) Total, net of tax (33 ) 85 Pension benefit liabilities: Amortization of net loss 677 609 (b) Tax benefit (expense) (254 ) (228 ) Total, net of tax 423 381 Total amounts reclassified, net of tax $ 390 $ 466 (a) Included in interest expense. (b) Included in the computation of net periodic pension cost, which is included in cost of rental and direct sale and selling and administrative. This amount includes a pension plan which is not included in the net periodic pension cost in Note 13 because it is individually immaterial. See Note 13 for details regarding the pension plans. |
Schedule of income tax for each component of other comprehensive income | Income tax benefit (expense) for each component of other comprehensive income were as follows: Three Months Ended September 26, 2015 September 27, 2014 Foreign currency translation adjustments $ 1,478 $ 982 Change in pension benefit liabilities recognized (254 ) (228 ) Derivative financial instruments unrecognized gain (loss) 20 (53 ) Derivative financial instruments loss reclassified 1,727 4 Income tax benefit $ 2,971 $ 705 |
Contingent Liabilities - Additi
Contingent Liabilities - Additional Information (Detail) $ in Thousands | 3 Months Ended | ||
Sep. 26, 2015USD ($)FacilityprojectLocation | Sep. 27, 2014USD ($) | Jun. 27, 2015USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |||
Environmental remediation contingency, project nearing completion | project | 4 | ||
Reserves related to environmental matters | $ | $ 4,659 | $ 4,711 | |
Expenses related to environmental matters | $ | $ 52 | $ 205 | |
Environmental remediation contingency, project in process | project | 4 | ||
Environmental remediation contingency, previously purchased locations | Location | 3 | ||
Environmental remediation contingency, number of sites for environmental assessments | 6 | ||
Locations with Violations | Location | 4 | ||
Loss contingency, preliminary allegation, locations | 8 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - USD ($) $ in Thousands | Sep. 26, 2015 | Jun. 27, 2015 |
Other assets: | ||
Derivative financial instruments | $ 568 | $ 4,857 |
Total assets | 18,501 | 16,235 |
Accrued expenses: | ||
Total liabilities | 257,534 | 241,758 |
Fair Value, Measurements, Recurring | ||
Other assets: | ||
Money market mutual funds | 5,968 | 4,637 |
Equity and fixed income mutual funds | 27,233 | 29,777 |
Cash surrender value of life insurance policies | 14,562 | 14,659 |
Derivative financial instruments | 568 | 4,857 |
Total assets | 48,331 | 53,930 |
Accrued expenses: | ||
Derivative financial instruments | 337 | 188 |
Total liabilities | 337 | 188 |
Level 1 | ||
Other assets: | ||
Total assets | 18,501 | 16,235 |
Accrued expenses: | ||
Total liabilities | 0 | 0 |
Level 1 | Fair Value, Measurements, Recurring | ||
Other assets: | ||
Money market mutual funds | 5,968 | 4,637 |
Equity and fixed income mutual funds | 27,233 | 29,777 |
Cash surrender value of life insurance policies | 0 | 0 |
Derivative financial instruments | 0 | 0 |
Total assets | 33,201 | 34,414 |
Accrued expenses: | ||
Derivative financial instruments | 0 | 0 |
Total liabilities | 0 | 0 |
Level 2 | ||
Other assets: | ||
Total assets | 0 | 0 |
Accrued expenses: | ||
Total liabilities | 257,534 | 241,758 |
Level 2 | Fair Value, Measurements, Recurring | ||
Other assets: | ||
Money market mutual funds | 0 | 0 |
Equity and fixed income mutual funds | 0 | 0 |
Cash surrender value of life insurance policies | 14,562 | 14,659 |
Derivative financial instruments | 568 | 4,857 |
Total assets | 15,130 | 19,516 |
Accrued expenses: | ||
Derivative financial instruments | 337 | 188 |
Total liabilities | $ 337 | $ 188 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Assets and Liabilities at Fair Value (Detail) - USD ($) $ in Thousands | Sep. 26, 2015 | Jun. 27, 2015 |
Fair Value Inputs Assets Liabilities Quantitative Information [Line Items] | ||
Cash and cash equivalents | $ 18,501 | $ 16,235 |
Total assets | 18,501 | 16,235 |
Current maturities of long-term debt | 5 | 169 |
Long-term debt, net of current maturities | 257,529 | 241,589 |
Total liabilities | 257,534 | 241,758 |
Level 1 | ||
Fair Value Inputs Assets Liabilities Quantitative Information [Line Items] | ||
Cash and cash equivalents | 18,501 | 16,235 |
Total assets | 18,501 | 16,235 |
Current maturities of long-term debt | 0 | 0 |
Long-term debt, net of current maturities | 0 | 0 |
Total liabilities | 0 | 0 |
Level 2 | ||
Fair Value Inputs Assets Liabilities Quantitative Information [Line Items] | ||
Cash and cash equivalents | 0 | 0 |
Total assets | 0 | 0 |
Current maturities of long-term debt | 5 | 169 |
Long-term debt, net of current maturities | 257,529 | 241,589 |
Total liabilities | $ 257,534 | $ 241,758 |
Derivative Financial Instrume37
Derivative Financial Instruments - Additional Information (Detail) - USD ($) | Apr. 01, 2015 | Sep. 26, 2015 | Jun. 27, 2015 |
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative financial instruments | $ 568,000 | $ 4,857,000 | |
Net gain deferred in accumulated other comprehensive income | 1,482,000 | ||
Loss expected to be reclassified to interest expense | 191,000 | ||
Interest rate swap contracts | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Notional amount of interest rate swap contracts | $ 75,000,000 | ||
Average rate on interest rate swap contracts | 2.35% | ||
Derivative, term of contract | 15 years | ||
Interest rate swap contracts | Accrued Expenses | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Liabilities on interest rate swap contracts | 337,000 | 188,000 | |
Fair Value, Measurements, Recurring | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative financial instruments | 568,000 | 4,857,000 | |
Liabilities on interest rate swap contracts | 337,000 | 188,000 | |
Level 2 | Fair Value, Measurements, Recurring | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative financial instruments | 568,000 | 4,857,000 | |
Liabilities on interest rate swap contracts | $ 337,000 | $ 188,000 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) | 3 Months Ended | |
Sep. 26, 2015 | Sep. 27, 2014 | |
Income Tax Disclosure [Abstract] | ||
Effective tax rate (in percent) | 38.00% | 34.70% |
Earnings Per Share - Computatio
Earnings Per Share - Computations of Basic and Diluted Earnings Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Sep. 26, 2015 | Sep. 27, 2014 | |
Earnings Per Share [Abstract] | ||
Net income | $ 16,263 | $ 16,368 |
Less: Income allocable to participating securities | (227) | (233) |
Net income available to common stockholders | $ 16,036 | $ 16,135 |
Basic earnings per share: | ||
Weighted average shares outstanding, basic (in shares) | 19,727 | 19,628 |
Basic earnings per common share from continuing operations (in dollars per share) | $ 0.81 | $ 0.82 |
Diluted earnings per share: | ||
Weighted average shares outstanding, basic (in shares) | 19,727 | 19,628 |
Weighted average effect of non-vested restricted stock grants and assumed exercise of stock options (in shares) | 274 | 371 |
Weighted average shares outstanding, diluted (In shares) | 20,001 | 19,999 |
Diluted earnings per common share from continuing operations (in dollars per share) | $ 0.80 | $ 0.81 |
Shares excluded from computation of diluted earnings per share (in shares) | 125 | 246 |
Inventory and Merchandise in 40
Inventory and Merchandise in Service - Components of Inventory (Detail) - USD ($) $ in Thousands | Sep. 26, 2015 | Jun. 27, 2015 |
Inventory Disclosure [Abstract] | ||
Raw Materials | $ 9,783 | $ 6,368 |
Work in Process | 1,235 | 975 |
Finished Goods | 29,187 | 28,915 |
Inventory | 40,205 | 36,258 |
Merchandise in service, net | $ 134,653 | $ 133,942 |
Goodwill - Schedule of Goodwill
Goodwill - Schedule of Goodwill by Segment (Detail) $ in Thousands | 3 Months Ended |
Sep. 26, 2015USD ($) | |
Goodwill [Roll Forward] | |
Balance as of June 27, 2015 | $ 325,183 |
Acquisitions | 1,199 |
Foreign currency translation and other | (3,688) |
Balance as of September 26, 2015 | 322,694 |
United States | |
Goodwill [Roll Forward] | |
Balance as of June 27, 2015 | 270,045 |
Acquisitions | 0 |
Foreign currency translation and other | 0 |
Balance as of September 26, 2015 | 270,045 |
Canada | |
Goodwill [Roll Forward] | |
Balance as of June 27, 2015 | 55,138 |
Acquisitions | 1,199 |
Foreign currency translation and other | (3,688) |
Balance as of September 26, 2015 | $ 52,649 |
Long-Term Debt - Amount of Long
Long-Term Debt - Amount of Long-Term Debt (Detail) - USD ($) $ in Thousands | Sep. 26, 2015 | Jun. 27, 2015 |
Debt Instrument [Line Items] | ||
Borrowings under Unsecured Revolver | $ 128,900 | $ 40,500 |
Borrowings under A/R Line | 28,100 | 28,100 |
Capital leases and other | 59 | 169 |
Long-term debt including current maturities | 257,059 | 243,769 |
Less current maturities | (5) | (169) |
Total long-term debt | 257,054 | 243,600 |
Unsecured Debt | ||
Debt Instrument [Line Items] | ||
Notes payable | 0 | 75,000 |
Senior Notes [Member] | ||
Debt Instrument [Line Items] | ||
Senior Notes | $ 100,000 | $ 100,000 |
Long-Term Debt - Material Coven
Long-Term Debt - Material Covenants Required by Terms of This Facility (Detail) - Revolving Credit Facility | 3 Months Ended |
Sep. 26, 2015 | |
Debt Instrument [Line Items] | |
Maximum Leverage Ratio (Debt/EBITDA), Required (ratio) | 3.5 |
Maximum Leverage Ratio (Debt/EBITADA), Actual | 1.89 |
Minimum Interest Coverage Ratio (EBITDA/Interest Expense), Required (ratio) | 3 |
Minimum Interest Coverage Ratio (EBITDA/Interest Expense), Actual | 21.23 |
Long-Term Debt - Additional Inf
Long-Term Debt - Additional Information (Detail) - USD ($) | 3 Months Ended | |
Sep. 26, 2015 | Jun. 27, 2015 | |
Line of Credit Facility [Line Items] | ||
Borrowings outstanding under the revolving credit facility | $ 128,900,000 | $ 40,500,000 |
Unsecured Debt | ||
Line of Credit Facility [Line Items] | ||
Effective interest rate (in percent) | 3.81% | |
Notes payable | $ 0 | $ 75,000,000 |
Long-term debt, notes | 100,000,000 | |
Outstanding balance, notes | 100,000,000 | |
Unsecured revolving credit facility | ||
Line of Credit Facility [Line Items] | ||
Revolving credit facility | 350,000,000 | |
Borrowings outstanding under the revolving credit facility | 128,900,000 | |
Letters of credit sub-limit | 45,000,000 | |
Letters of credit outstanding | $ 636,000 | |
Fee payment on unused credit balances, percentage | 0.175% | |
Effective interest rate (in percent) | 1.44% | |
Secured revolving credit facility | ||
Line of Credit Facility [Line Items] | ||
Revolving credit facility | $ 50,000,000 | |
Interest rate spread on notes (in percent) | 0.75% | |
Borrowings outstanding under the revolving credit facility | $ 28,100,000 | |
Letters of credit outstanding | $ 21,900,000 | |
Fee payment on unused credit balances, percentage | 0.26% | |
Interest rate on letters of credit outstanding | 0.80% | |
Effective interest rate (in percent) | 0.95% | |
Minimum | Unsecured revolving credit facility | ||
Line of Credit Facility [Line Items] | ||
Interest rate spread on notes (in percent) | 1.00% | |
Maximum | Unsecured revolving credit facility | ||
Line of Credit Facility [Line Items] | ||
Interest rate spread on notes (in percent) | 1.75% | |
Unsecured Senior Notes 1 | Unsecured Debt | ||
Line of Credit Facility [Line Items] | ||
Long-term debt, notes | $ 50,000,000 | |
Debt instrument, interest rate, stated percentage | 3.73% | |
Unsecured Senior Notes 2 | Unsecured Debt | ||
Line of Credit Facility [Line Items] | ||
Long-term debt, notes | $ 50,000,000 | |
Debt instrument, interest rate, stated percentage | 3.88% |
Other Assets and Other Noncur45
Other Assets and Other Noncurrent Liabilities - Other Assets (Details) - USD ($) $ in Thousands | Sep. 26, 2015 | Jun. 27, 2015 |
Other Assets [Abstract] | ||
Executive deferred compensation assets | $ 33,201 | $ 34,414 |
Cash surrender value of life insurance policies | 14,562 | 14,659 |
Derivative financial instruments | 568 | 4,857 |
Customer contracts and non-competition agreements, net | 4,505 | 4,544 |
Other assets | 7,672 | 7,854 |
Less: portion classified as current assets | (2,324) | (1,922) |
Total other noncurrent assets | $ 58,184 | $ 64,406 |
Other Assets and Other Noncur46
Other Assets and Other Noncurrent Liabilities - Other Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 26, 2015 | Jun. 27, 2015 | |
Finite-Lived Intangible Assets, Net [Abstract] | ||
Customer contracts, useful life, weighted average | 10 years | |
Customer contracts and non-competition agreements | $ 15,261 | $ 20,244 |
Accumulated amortization | (10,756) | (15,700) |
Net | $ 4,505 | $ 4,544 |
Other Assets and Other Noncur47
Other Assets and Other Noncurrent Liabilities - Estimated Amortization Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 26, 2015 | Sep. 27, 2014 | |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
Amortization expense | $ 378 | $ 563 |
2016 remaining | 1,020 | |
2,017 | 1,234 | |
2,018 | 452 | |
2,019 | 219 | |
2,020 | 206 | |
Thereafter | $ 1,344 |
Other Assets and Other Noncur48
Other Assets and Other Noncurrent Liabilities - Other Noncurrent Liabilities (Details) - USD ($) $ in Thousands | Sep. 26, 2015 | Jun. 27, 2015 |
Other Liabilities, Noncurrent [Abstract] | ||
Multi-employer pension withdrawal liability | $ 9,250 | $ 9,329 |
Pension plan liability | 20,119 | 20,188 |
Executive deferred compensation plan liability | 33,297 | 34,529 |
Supplemental executive retirement plan liability | 16,554 | 16,686 |
Accrued income taxes | 8,189 | 8,294 |
Workers' compensation liability | 19,153 | 18,577 |
Other liabilities | 6,664 | 7,659 |
Less: Portion classified as current liabilities | (8,226) | (7,819) |
Total other noncurrent liabilities | $ 105,000 | $ 107,443 |
Share-Based Compensation - Addi
Share-Based Compensation - Additional Information (Detail) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Sep. 26, 2015 | Sep. 27, 2014 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Total compensation expense related to share-based awards | $ 1,941 | $ 1,773 |
Number of options exercised and restricted stock vested (in shares) | 129 |
Employee Benefit Plans - Compon
Employee Benefit Plans - Components of Net Periodic Benefit Cost (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 26, 2015 | Sep. 27, 2014 | |
Pension Plan | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Interest cost | $ 943 | $ 1,012 |
Expected return on assets | (1,068) | (1,226) |
Amortization of net loss | 608 | 504 |
Net periodic pension cost | 483 | 290 |
SERP | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Interest cost | 148 | 185 |
Expected return on assets | 0 | 0 |
Amortization of net loss | 60 | 98 |
Net periodic pension cost | $ 208 | $ 283 |
Employee Benefit Plans - Additi
Employee Benefit Plans - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 26, 2015 | Sep. 27, 2014 | |
Multiemployer Plans [Abstract] | ||
Employer contribution for pension plan | $ 40 | |
Multiemployer pension payments | 297 | $ 871 |
Multi-employer plan withdrawal liability | $ 9,250 |
Segment Information - Additiona
Segment Information - Additional Information (Detail) | 3 Months Ended |
Sep. 26, 2015Segment | |
Segment Reporting, Measurement Disclosures [Abstract] | |
Number of operating segments (in numbers) | 2 |
Maximum percentage of revenue from one single customer (in percent) | 2.00% |
Segment Information - Financial
Segment Information - Financial Information by Segment (Detail) - USD ($) $ in Thousands | 3 Months Ended | ||
Sep. 26, 2015 | Sep. 27, 2014 | Jun. 27, 2015 | |
Segment Reporting Information [Line Items] | |||
Revenues | $ 237,171 | $ 230,242 | |
Income from operations | 27,878 | 26,850 | |
Total assets | 927,546 | 922,171 | $ 928,865 |
Depreciation and amortization expense | 8,455 | 7,891 | |
United States | |||
Segment Reporting Information [Line Items] | |||
Revenues | 205,052 | 194,397 | |
Income from operations | 23,924 | 22,806 | |
Total assets | 895,470 | 867,757 | |
Depreciation and amortization expense | 7,605 | 6,895 | |
Canada | |||
Segment Reporting Information [Line Items] | |||
Revenues | 32,119 | 35,845 | |
Income from operations | 3,954 | 4,044 | |
Total assets | 126,034 | 164,244 | |
Depreciation and amortization expense | 850 | 996 | |
Elimination | |||
Segment Reporting Information [Line Items] | |||
Revenues | 0 | 0 | |
Income from operations | 0 | 0 | |
Total assets | (93,958) | (109,830) | |
Depreciation and amortization expense | $ 0 | $ 0 |
Share Repurchase - Additional I
Share Repurchase - Additional Information (Detail) - USD ($) | 3 Months Ended | ||||
Sep. 26, 2015 | Sep. 27, 2014 | Aug. 31, 2015 | May. 31, 2008 | May. 31, 2007 | |
Disclosure Share Repurchase Additional Information [Abstract] | |||||
Stock repurchase program, authorized amount | $ 275,000,000 | $ 175,000,000 | $ 100,000,000 | ||
Stock repurchase program, shares repurchased | 86,196 | 65,200 | |||
Stock repurchase program, repurchased amount | $ 5,882,000 | $ 3,641,000 | |||
Stock repurchase program, remaining authorized repurchase amount | $ 122,686,000 |
Other Comprehensive Income - Ch
Other Comprehensive Income - Changes in accumulated other comprehensive income, net of tax (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 26, 2015 | Sep. 27, 2014 | |
Accumulated Other Comprehensive Income Loss [Roll Forward] | ||
Accumulated other comprehensive income (loss) beginning balance | $ (8,944) | $ 3,987 |
Other comprehensive income (loss) before reclassifications | (9,323) | (5,393) |
Reclassifications from net accumulated other comprehensive income | 390 | 466 |
Net current period other comprehensive income (loss) | (8,933) | (4,927) |
Accumulated other comprehensive income (loss) ending balance | (17,877) | (940) |
Foreign currency translation adjustment | ||
Accumulated Other Comprehensive Income Loss [Roll Forward] | ||
Accumulated other comprehensive income (loss) beginning balance | 7,914 | 22,682 |
Other comprehensive income (loss) before reclassifications | (6,424) | (5,388) |
Reclassifications from net accumulated other comprehensive income | 0 | 0 |
Net current period other comprehensive income (loss) | (6,424) | (5,388) |
Accumulated other comprehensive income (loss) ending balance | 1,490 | 17,294 |
Pension benefit liability | ||
Accumulated Other Comprehensive Income Loss [Roll Forward] | ||
Accumulated other comprehensive income (loss) beginning balance | (21,272) | (19,748) |
Other comprehensive income (loss) before reclassifications | 0 | 0 |
Reclassifications from net accumulated other comprehensive income | 423 | 381 |
Net current period other comprehensive income (loss) | 423 | 381 |
Accumulated other comprehensive income (loss) ending balance | (20,849) | (19,367) |
Derivative financial instruments | ||
Accumulated Other Comprehensive Income Loss [Roll Forward] | ||
Accumulated other comprehensive income (loss) beginning balance | 4,414 | 1,053 |
Other comprehensive income (loss) before reclassifications | (2,899) | (5) |
Reclassifications from net accumulated other comprehensive income | (33) | 85 |
Net current period other comprehensive income (loss) | (2,932) | 80 |
Accumulated other comprehensive income (loss) ending balance | $ 1,482 | $ 1,133 |
Other Comprehensive Income - Re
Other Comprehensive Income - Reclassification from accumulated other comprehensive income (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 26, 2015 | Sep. 27, 2014 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Interest rate swap contracts | $ (1,627) | $ (1,795) |
Tax benefit (expense) | (9,988) | (8,687) |
Reclassification out of accumulated other comprehensive income | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Total amounts reclassified, net of tax | 390 | 466 |
Pension benefit liability | Reclassification out of accumulated other comprehensive income | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Tax benefit (expense) | (254) | (228) |
Amortization of net loss | 677 | 609 |
Total amounts reclassified, net of tax | 423 | 381 |
Interest rate swap | Derivative financial instruments | Reclassification out of accumulated other comprehensive income | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Interest rate swap contracts | (53) | 138 |
Tax benefit (expense) | 20 | (53) |
Total amounts reclassified, net of tax | $ (33) | $ 85 |
Other Comprehensive Income - Sc
Other Comprehensive Income - Schedule of income tax for each component of other comprehensive income (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 26, 2015 | Sep. 27, 2014 | |
Statement of Comprehensive Income [Abstract] | ||
Foreign currency translation adjustments | $ 1,478 | $ 982 |
Change in pension benefit liabilities recognized | (254) | (228) |
Derivative financial instruments unrecognized gain (loss) | 20 | (53) |
Derivative financial instruments loss reclassified | 1,727 | 4 |
Income tax benefit | $ 2,971 | $ 705 |