Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Nov. 26, 2022 | Jan. 03, 2023 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Nov. 26, 2022 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Entity Registrant Name | UNIFIRST CORPORATION | |
Entity Central Index Key | 0000717954 | |
Current Fiscal Year End Date | --08-27 | |
Entity Filer Category | Large Accelerated Filer | |
Title of 12(b) Security | Common Stock, $0.10 par value per share | |
Trading Symbol | UNF | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Shell Company | false | |
Entity File Number | 001-08504 | |
Entity Tax Identification Number | 04-2103460 | |
Entity Address, Address Line One | 68 Jonspin Road | |
Entity Address, City or Town | Wilmington | |
Entity Address, State or Province | MA | |
Entity Incorporation, State or Country Code | MA | |
Entity Address, Postal Zip Code | 01887 | |
City Area Code | (978) | |
Local Phone Number | 658-8888 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 15,098,315 | |
Class B Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 3,590,295 |
Consolidated Statements of Inco
Consolidated Statements of Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | ||
Nov. 26, 2022 | Nov. 27, 2021 | ||
Revenues | $ 541,798 | $ 486,164 | |
Operating expenses: | |||
Cost of revenues | [1] | 353,972 | 310,130 |
Selling and administrative expenses | [1] | 117,363 | 104,388 |
Depreciation and amortization | 27,045 | 26,856 | |
Total operating expenses | 498,380 | 441,374 | |
Operating income | 43,418 | 44,790 | |
Other (income) expense: | |||
Interest income, net | (2,769) | (648) | |
Other expense, net | 791 | 736 | |
Total other (income) expenses, net | (1,978) | 88 | |
Income before income taxes | 45,396 | 44,702 | |
Provision for income taxes | 11,439 | 10,997 | |
Net income | $ 33,957 | $ 33,705 | |
Income per share – Diluted: | |||
Common stock (in dollars per share) | $ 1.81 | $ 1.77 | |
Income allocated to – Basic: | |||
Common Stock | $ 33,957 | $ 33,705 | |
Income allocated to – Diluted: | |||
Common stock | $ 33,957 | $ 33,705 | |
Weighted average shares outstanding – Basic: | |||
Common stock (in shares) | 18,672 | 18,872 | |
Weighted average shares outstanding – Diluted: | |||
Common stock (in shares) | 18,754 | 19,026 | |
Common Stock | |||
Income per share – Basic: | |||
Common stock (in dollars per share) | $ 1.89 | $ 1.86 | |
Income allocated to – Basic: | |||
Common Stock | $ 28,525 | $ 28,291 | |
Income allocated to – Diluted: | |||
Common stock | $ 33,957 | $ 33,705 | |
Weighted average shares outstanding – Basic: | |||
Common stock (in shares) | 15,082 | 15,229 | |
Class B Common Stock | |||
Income per share – Basic: | |||
Common stock (in dollars per share) | $ 1.51 | $ 1.49 | |
Income allocated to – Basic: | |||
Common Stock | $ 5,432 | $ 5,414 | |
Weighted average shares outstanding – Basic: | |||
Common stock (in shares) | 3,590 | 3,643 | |
[1] Exclusive of depreciation on the Company’s property, plant and equipment and amortization on its intangible assets. |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Nov. 26, 2022 | Nov. 27, 2021 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 33,957 | $ 33,705 |
Other comprehensive income (loss): | ||
Foreign currency translation adjustments | (1,778) | (2,799) |
Change in fair value of derivatives, net of income taxes | 72 | 85 |
Derivative financial instruments reclassified to earnings | (20) | (38) |
Other comprehensive income (loss) | (1,726) | (2,752) |
Comprehensive income | $ 32,231 | $ 30,953 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Nov. 26, 2022 | Aug. 27, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 244,174 | $ 376,399 |
Short-term investments | 107,000 | 0 |
Receivables, less reserves of $18,613 and $15,605 | 272,836 | 249,198 |
Inventories | 143,430 | 151,459 |
Rental merchandise in service | 232,277 | 219,392 |
Prepaid taxes | 16,591 | 25,523 |
Prepaid expenses and other current assets | 51,305 | 41,921 |
Total current assets | 1,067,613 | 1,063,892 |
Property, plant and equipment, net | 681,099 | 665,119 |
Goodwill | 461,061 | 457,259 |
Customer contracts, net | 48,368 | 49,053 |
Other intangible assets, net | 36,482 | 35,920 |
Deferred income taxes | 514 | 498 |
Operating lease right-of-use assets, net | 47,347 | 50,050 |
Other assets | 108,270 | 106,181 |
Total assets | 2,450,754 | 2,427,972 |
Current liabilities: | ||
Accounts payable | 85,239 | 82,131 |
Accrued liabilities | 143,659 | 146,808 |
Accrued taxes | 0 | 1,204 |
Operating lease liabilities, current | 13,873 | 13,602 |
Total current liabilities | 242,771 | 243,745 |
Accrued liabilities | 123,518 | 123,979 |
Accrued and deferred income taxes | 107,395 | 106,307 |
Operating lease liabilities | 35,104 | 38,070 |
Total liabilities | 508,788 | 512,101 |
Commitments and contingencies (Note 12) | ||
Shareholders’ equity: | ||
Preferred Stock, $1.00 par value; 2,000,000 shares authorized; no shares issued and outstanding | 0 | 0 |
Capital surplus | 92,564 | 93,131 |
Retained earnings | 1,873,550 | 1,845,163 |
Accumulated other comprehensive loss | (26,016) | (24,290) |
Total shareholders’ equity | 1,941,966 | 1,915,871 |
Total liabilities and shareholders’ equity | 2,450,754 | 2,427,972 |
Common Stock | ||
Shareholders’ equity: | ||
Common Stock | 1,509 | 1,508 |
Class B Common Stock | ||
Shareholders’ equity: | ||
Common Stock | $ 359 | $ 359 |
Consolidated Balance Sheets (_2
Consolidated Balance Sheets (Unaudited) - Parenthetical - USD ($) $ in Thousands | Nov. 26, 2022 | Aug. 27, 2022 |
Receivables, reserves | $ 18,613 | $ 15,605 |
Preferred stock, par value (in dollars per share) | $ 1 | $ 1 |
Preferred stock, shares authorized (in shares) | 2,000,000 | 2,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.10 | $ 0.10 |
Common stock, shares authorized (in shares) | 30,000,000 | 30,000,000 |
Common stock, shares issued (in shares) | 15,095,068 | 15,075,425 |
Common stock, shares outstanding (in shares) | 15,095,068 | 15,075,425 |
Class B Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.10 | $ 0.10 |
Common stock, shares authorized (in shares) | 20,000,000 | 20,000,000 |
Common stock, shares issued (in shares) | 3,590,295 | 3,590,295 |
Common stock, shares outstanding (in shares) | 3,590,295 | 3,590,295 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity (Unaudited) - USD ($) shares in Thousands, $ in Thousands | Total | Common Shares | Class B Common Stock | Common Stock Common Shares | Common Stock Class B Common Stock | Capital Surplus | Retained Earnings | Retained Earnings Common Shares | Retained Earnings Class B Common Stock | Accumulated Other Comprehensive Loss | |
Balance at beginning of period at Aug. 28, 2021 | $ 1,872,952 | $ 1,524 | $ 364 | $ 89,257 | $ 1,806,643 | $ (24,836) | |||||
Balance at beginning of period (in shares) at Aug. 28, 2021 | 15,236 | 3,643 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
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 | $ (4,566) | $ (874) | $ (4,566) | $ (874) | |||||||
Repurchase of Common Stock | (4,771) | $ (2) | (124) | (4,645) | |||||||
Repurchase of common stock (in shares) | (23) | ||||||||||
Share-based compensation, net | [1] | 1,207 | 1,207 | ||||||||
Share-based awards exercised, net (in shares) | [2] | 7 | |||||||||
Balance at end of period at Nov. 27, 2021 | 1,894,901 | $ 1,522 | $ 364 | 90,340 | 1,830,263 | (27,588) | |||||
Balance at end of period (in shares) at Nov. 27, 2021 | 15,220 | 3,643 | |||||||||
Balance at beginning of period at Aug. 27, 2022 | 1,915,871 | $ 1,508 | $ 359 | 93,131 | 1,845,163 | (24,290) | |||||
Balance at beginning of period (in shares) at Aug. 27, 2022 | 15,075 | 3,590 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Net income | 33,957 | 33,957 | |||||||||
Change in fair value of derivatives | 52 | 52 | |||||||||
Foreign currency translation | (1,778) | (1,778) | |||||||||
Dividends declared Common Stock | $ (4,680) | $ (890) | $ (4,680) | $ (890) | |||||||
Share-based compensation, net | [1] | (567) | (567) | ||||||||
Share-based awards exercised, net | [2] | 1 | $ 1 | ||||||||
Share-based awards exercised, net (in shares) | [2] | 20 | |||||||||
Balance at end of period at Nov. 26, 2022 | $ 1,941,966 | $ 1,509 | $ 359 | $ 92,564 | $ 1,873,550 | $ (26,016) | |||||
Balance at end of period (in shares) at Nov. 26, 2022 | 15,095 | 3,590 | |||||||||
[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. These amounts are shown net of the effect of income taxes. |
Consolidated Statements of Sh_2
Consolidated Statements of Shareholders' Equity (Unaudited) - Parenthetical - $ / shares | 3 Months Ended | |||
Oct. 25, 2022 | Oct. 20, 2021 | Nov. 26, 2022 | Nov. 27, 2021 | |
Common Shares | ||||
Dividends declared (in dollars per share) | $ 0.31 | $ 0.30 | $ 0.31 | $ 0.25 |
Class B Common Stock | ||||
Dividends declared (in dollars per share) | $ 0.248 | $ 0.24 | $ 0.248 | $ 0.20 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Nov. 26, 2022 | Nov. 27, 2021 | |
Cash flows from operating activities: | ||
Net income | $ 33,957 | $ 33,705 |
Adjustments to reconcile net income to cash provided by operating activities: | ||
Depreciation and amortization | 27,045 | 26,856 |
Share-based compensation | 1,461 | 1,905 |
Accretion on environmental contingencies | 259 | 149 |
Accretion on asset retirement obligations | 227 | 246 |
Deferred income taxes | 765 | 40 |
Other | (42) | 35 |
Changes in assets and liabilities, net of acquisitions: | ||
Receivables, less reserves | (23,675) | (25,583) |
Inventories | 8,154 | (14,625) |
Rental merchandise in service | (12,961) | (8,567) |
Prepaid expenses and other current assets and Other assets | (9,076) | (4,230) |
Accounts payable | 399 | (3,556) |
Accrued liabilities | (6,655) | (8,391) |
Prepaid and accrued income taxes | 7,840 | 9,838 |
Net cash provided by operating activities | 27,698 | 7,822 |
Cash flows from investing activities: | ||
Acquisition of businesses, net of cash acquired | (6,556) | (493) |
Capital expenditures, including capitalization of software costs | (39,044) | (31,051) |
Purchases of investments | (107,000) | 0 |
Proceeds from sale of assets | 240 | 27 |
Net cash used in investing activities | (152,360) | (31,517) |
Cash flows from financing activities: | ||
Proceeds from exercise of share-based awards | 2 | 0 |
Taxes withheld and paid related to net share settlement of equity awards | (2,028) | (698) |
Repurchase of Common Stock | 0 | (4,623) |
Payment of cash dividends | (5,570) | (4,537) |
Net cash used in financing activities | (7,596) | (9,858) |
Effect of exchange rate changes | 33 | (1,254) |
Net decrease in cash and cash equivalents | (132,225) | (34,807) |
Cash and cash equivalents at beginning of period | 376,399 | 512,868 |
Cash and cash equivalents at end of period | 244,174 | 478,061 |
Supplemental disclosure of cash flow information: | ||
Non-cash capital expenditures | $ 11,547 | $ 6,904 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Nov. 26, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | 1. Basis of Presentation These Consolidated Financial Statements of UniFirst Corporation (the “Company”) have been prepared, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) have been condensed or omitted pursuant to such rules and regulations; however, the Company believes that the information furnished reflects all adjustments (consisting only of normal recurring adjustments) which are, in the opinion of management, necessary for a fair statement of results for the interim period. It is suggested that these Consolidated Financial Statements be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended August 27, 2022 . There have been no material changes in the accounting policies followed by the Company during the current fiscal year other than the adoption of recent accounting pronouncements discussed in Note 2. Results for an interim period are not indicative of any future interim periods or for an entire fiscal year. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 3 Months Ended |
Nov. 26, 2022 | |
Accounting Policies [Abstract] | |
Recent Accounting Pronouncements | 2. Recent Accounting Pronouncements In October 2021, the Financial Accounting Standards Board (“FASB”) issued updated guidance to improve the accounting for acquired revenue contracts with customers in a business combination. This guidance will be effective for annual reporting periods, and any interim periods within those annual periods, that begin after December 15, 2023 and will be required to be applied on a prospective basis with early adoption permitted. Accordingly, the standard will be effective for the Company on September 1, 2024. The Company is currently evaluating the impact that this guidance will have on its financial statements and related disclosures. In November 2021, the FASB issued updated guidance to increase the transparency of government assistance, including the disclosure of the types of assistance, an entity’s accounting for the assistance and the effect of the assistance on an entity’s financial statements. This guidance is effective for annual reporting periods that begin after December 15, 2021 and is required to be applied on a prospective basis with early adoption permitted. Accordingly, the standard became effective for the Company on August 28, 2022. The Company's adoption of this standard has not had, and the Company does not expect this standard to have, a material impact on its financial statements. In December 2022, the FASB issued updated guidance to align with the deferral of the cessation date for LIBOR by the United Kingdom's Financial Conduct Authority (“FCA”). The FASB is changing the sunset date for use of LIBOR by all entities from December 31, 2022 to December 31, 2024 to allow for time for modifications to occur after the FCA's cessation date of June 30, 2023 for using LIBOR for overnight through twelve-month tenors. The Company's 2021 Credit Agreement (defined below) includes a provision for the phasing out of LIBOR as described in this report in Note 14, “Long-Term Debt,” and the Company plans to transition out of using LIBOR during fiscal 2023. The Company does not expect this standard to have a material impact on its financial statements. |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Nov. 26, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | 3. Revenue Recognition The following table presents the Company’s revenues for the thirteen weeks ended November 26, 2022 and November 27, 2021, respectively, disaggregated by service type: Thirteen Weeks Ended November 26, 2022 November 27, 2021 (In thousands, except percentages) Revenues % of Revenues % of Core Laundry Operations $ 477,398 88.1 % $ 428,846 88.2 % Specialty Garments 44,079 8.1 % 39,484 8.1 % First Aid 20,321 3.8 % 17,834 3.7 % Total Revenues $ 541,798 100.0 % $ 486,164 100.0 % See Note 16 “Segment Reporting” for additional details of segment definitions. Revenue Recognition Policy During the thirteen weeks ended November 26, 2022 and November 27, 2021, approximately 88.2 % and 91.2 % , respectively, of the Company’s revenues were derived from fees for route servicing of Core Laundry Operations, Specialty Garments, and First Aid segments performed by the Company’s employees at the customer’s location of business. Revenues from the Company’s route servicing customer contracts represent a single performance obligation. The Company recognizes these revenues over time as services are performed based on the nature of services provided and contractual rates (input method). Certain of the Company’s customer contracts, primarily within the Company’s Core Laundry Operations, include pricing terms and conditions that include components of variable consideration. The variable consideration is typically in the form of consideration due to customer-based performance metrics specified within the contract. Specifically, some contracts contain discounts or rebates that the customer can earn through the achievement of specified volume levels. Each component of variable consideration is earned based on the Company’s actual performance during the measurement period specified within the contract. To determine the transaction price, the Company estimates the variable consideration using the most likely amount method, based on the specific contract provisions and known performance results during the relevant measurement period. When determining if variable consideration should be constrained, the Company considers whether factors outside its control could result in a significant reversal of revenue. In making these assessments, the Company considers the likelihood and magnitude of a potential reversal. The Company’s performance period generally corresponds with the monthly invoice period. No significant constraints on the Company’s revenue recognition were applied during the thirteen weeks ended November 26, 2022 and November 27, 2021. The Company reassesses these estimates during each reporting period. The Company maintains a liability for these discounts and rebates within accrued liabilities on the consolidated balance sheets. Variable consideration also includes consideration paid to a customer at the beginning of a contract. The Company capitalizes this consideration and amortizes it over the life of the contract as a reduction to revenue in accordance with the updated accounting guidance for revenue recognition. These assets are included in other assets on the consolidated balance sheets. Costs to Obtain a Contract The Company defers commission expenses paid to its employee-partners when the commissions are deemed to be incremental for obtaining the route servicing customer contract. The deferred commissions are amortized on a straight-line basis over the expected period of benefit. The Company reviews the deferred commission balances for impairment on an ongoing basis. Deferred commissions are classified as current or non-current based on the timing of when the Company expects to recognize the expense. The current portion is included in prepaid expenses and other current assets and the non-current portion is included in other assets on the Company’s consolidated balance sheets. As of November 26, 2022, the current and non-current assets related to deferred commissions totaled $ 15.6 million and $ 67.2 million , respectively. As of August 27, 2022 , the current and non-current assets related to deferred commissions totaled $ 15.2 million and $ 65.1 million, respectively. During the thirteen weeks ended November 26, 2022 and November 27, 2021, the Company recorded $ 4.0 million and $ 3.8 million , respectively, of amortization expense related to deferred commissions. This expense is classified in selling and administrative expenses on the consolidated statements of income. |
Acquisitions
Acquisitions | 3 Months Ended |
Nov. 26, 2022 | |
Business Combinations [Abstract] | |
Acquisitions | 4. Acquisitions During the thirteen weeks ended November 26, 2022, the Company completed two business acquisitions with an aggregate purchase price of approximately $ 6.6 million , which was primarily assigned to goodwill and intangible assets. The initial allocations of the purchase prices are incomplete with respect to certain assets acquired. The amount assigned to intangible assets acquired was based on their respective fair values determined as of the acquisition date. The excess of the purchase price over the tangible and intangible assets was recorded as goodwill. The goodwill recorded was primarily allocated to the U.S. and Canadian Rental and Cleaning segment and is deductible for tax purposes. The results of operations of these acquisitions have been included in the Company’s consolidated financial results since their respective acquisition dates. These acquisitions were not significant in relation to the Company’s consolidated financial results and, therefore, pro-forma financial information has not been presented. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Nov. 26, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 5. Fair Value Measurements The assets measured at fair value on a recurring basis are summarized in the tables below (in thousands): As of November 26, 2022 Level 1 Level 2 Level 3 Fair Value Assets: Cash equivalents $ 121,418 $ — $ — $ 121,418 Short-term investments — 107,000 — 107,000 Pension plan assets — 3,286 — 3,286 Non-qualified deferred compensation plan assets — 1,285 — 1,285 Foreign currency forward contracts — 152 — 152 Total assets at fair value $ 121,418 $ 111,723 $ — $ 233,141 As of August 27, 2022 Level 1 Level 2 Level 3 Fair Value Assets: Cash equivalents $ 197,121 $ — $ — $ 197,121 Pension plan assets — 3,291 — 3,291 Non-qualified deferred compensation plan assets — 1,263 — 1,263 Foreign currency forward contracts — 83 — 83 Total assets at fair value $ 197,121 $ 4,637 $ — $ 201,758 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 short-term investments listed above represent certificates of deposit, which maturities range up to six months at purchase. Such securities are classified as held-to-maturity and are carried at amortized cost, which approximates market value. As such, the Company's short-term investments are included within Level 2 of the fair value hierarchy. 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 26, 2022 and August 27, 2022 . 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. |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | 3 Months Ended |
Nov. 26, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Hedging Activities | 6. Derivative Instruments and Hedging Activities As of November 26, 2022, the Company had forward contracts with a notional value of approximately 6.8 million CAD outstanding and recorded the fair value of the contracts, in the amount of $ 0.2 million , in prepaid expenses and other current assets and other long-term assets with a corresponding $ 0.1 million gain in accumulated other comprehensive loss, which was recorded net of tax. During the thirteen weeks ended November 26, 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 26, 2022 is expected to be reclassified to revenues prior to their maturity on August 29, 2026. |
Employee Benefit Plans
Employee Benefit Plans | 3 Months Ended |
Nov. 26, 2022 | |
Postemployment Benefits [Abstract] | |
Employee Benefit Plans | 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 26, 2022 and November 27, 2021 were $ 5.8 million and $ 5.5 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 one frozen non-contributory defined benefit pension plan. The amounts charged to expense related to these plans for the thirteen weeks ended November 26, 2022 and November 27, 2021 were $ 0.4 million and $ 0.6 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. The amount for employee or employer contributions charged to expense related to the NQDC Plan for the thirteen weeks ended November 26, 2022 was $ 0.1 million . The Company, at its discretion, may also elect to transfer funds to a trust account with the intention to fund the future liability. Total NQDC Plan assets were $ 1.3 million as of November 26, 2022 and are included within other long-term assets on the balance sheet. |
Income Per Share
Income Per Share | 3 Months Ended |
Nov. 26, 2022 | |
Earnings Per Share [Abstract] | |
Income Per Share | 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 November 26, 2022 November 27, 2021 Net income available to shareholders $ 33,957 $ 33,705 Allocation of net income for Basic: Common Stock $ 28,525 $ 28,291 Class B Common Stock 5,432 5,414 $ 33,957 $ 33,705 Weighted average number of shares for Basic: Common Stock 15,082 15,229 Class B Common Stock 3,590 3,643 18,672 18,872 Income per share for Basic: Common Stock $ 1.89 $ 1.86 Class B Common Stock $ 1.51 $ 1.49 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. For the thirteen weeks ended November 26, 2022 and November 27, 2021 , 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 weeks ended November 26, 2022 and November 27, 2021 (in thousands, except per share data): Thirteen weeks ended November 26, 2022 Earnings Common Income As reported - Basic $ 28,525 15,082 $ 1.89 Add: effect of dilutive potential common shares Share-Based Awards — 82 Class B Common Stock 5,432 3,590 As reported – Diluted $ 33,957 18,754 $ 1.81 Thirteen weeks ended November 27, 2021 Earnings Common Income As reported - Basic $ 28,291 15,229 $ 1.86 Add: effect of dilutive potential common shares Share-Based Awards — 154 Class B Common Stock 5,414 3,643 As reported – Diluted $ 33,705 19,026 $ 1.77 Share-based awards that would result in the issuance of 49,246 of Common Stock were excluded from the calculation of diluted income per share for the thirteen weeks ended November 26, 2022 because they were anti-dilutive. Share-based awards that would result in the issuance of 11,119 shares of Common Stock were excluded from the calculation of diluted income per share for the thirteen weeks ended November 27, 2021 because they were anti-dilutive. |
Inventories
Inventories | 3 Months Ended |
Nov. 26, 2022 | |
Inventory Disclosure [Abstract] | |
Inventories | 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 26, 2022 and August 27, 2022 were as follows (in thousands): November 26, 2022 August 27, 2022 Raw materials $ 20,111 $ 25,932 Work in process 4,142 2,876 Finished goods 119,177 122,651 Total inventories $ 143,430 $ 151,459 |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 3 Months Ended |
Nov. 26, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | 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 27, 2022 $ 457,259 Goodwill recorded during the period 3,890 Other ( 88 ) Balance as of November 26, 2022 $ 461,061 Intangible assets, net in the Company’s consolidated balance sheets are as follows (in thousands): Gross Carrying Accumulated Net Carrying November 26, 2022 Customer contracts $ 249,448 $ 201,080 $ 48,368 Software 77,230 42,658 34,572 Other intangible assets 37,480 35,570 1,910 $ 364,158 $ 279,308 $ 84,850 August 27, 2022 Customer contracts $ 247,721 $ 198,668 $ 49,053 Software 75,528 41,637 33,891 Other intangible assets 37,520 35,491 2,029 $ 360,769 $ 275,796 $ 84,973 |
Asset Retirement Obligations
Asset Retirement Obligations | 3 Months Ended |
Nov. 26, 2022 | |
Asset Retirement Obligation Disclosure [Abstract] | |
Asset Retirement Obligations | 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 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 22 years. A reconciliation of the Company’s asset retirement liability for the thirteen weeks ended November 26, 2022 was as follows (in thousands): November 26, 2022 Beginning balance as of August 27, 2022 $ 15,274 Accretion expense 227 Effect of exchange rate changes 140 Balance as of November 26, 2022 $ 15,641 Asset retirement obligations are included in long-term accrued liabilities in the Company’s consolidated balance sheets. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Nov. 26, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 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 terminat e 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 weeks ended November 26, 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 $ 5,686 Operating cash flow impacts Cash paid for amounts included in the measurement of operating lease liabilities $ 3,189 Operating lease right-of-use assets obtained in exchange for new operating lease liabilities $ 322 Weighted-average remaining lease term - operating leases 4.22 Weighted-average discount rate - operating leases 2.03 % The contractual future minimum lease payments of the Company's operating lease liabilities by fiscal year are as follows as of November 26, 2022: (In thousands) 2022 (remaining three months) $ 11,041 2023 12,209 2024 9,189 2025 7,352 2026 5,303 Thereafter 5,286 Total payments 50,380 Less interest ( 1,403 ) Total present value of lease payments $ 48,977 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. 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. 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. 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 % for inflation until the time of expected payment and discounts the cost to present value using current risk-free interest rates. As of November 26, 2022, the risk-free interest rates utilized by the Company ranged from 3.68 % to 4.20 % . 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 weeks ended November 26, 2022 were as follows (in thousands): November 26, 2022 Balance as of August 27, 2022 $ 32,191 Revisions in estimates ( 4 ) Costs incurred for which reserves have been provided ( 379 ) Insurance proceeds 35 Interest accretion 259 Changes in discount rates ( 1,251 ) Balance as of November 26, 2022 $ 30,851 Anticipated payments and insurance proceeds of currently identified environmental remediation liabilities as of November 26, 2022, for the next five fiscal years and thereafter, as measured in current dollars, are reflected below. (In thousands) 2023 2024 2025 2026 2027 Thereafter Total Estimated costs – current dollars $ 11,750 $ 3,051 $ 1,741 $ 1,437 $ 1,250 $ 14,947 $ 34,176 Estimated insurance proceeds ( 137 ) ( 159 ) ( 173 ) ( 159 ) ( 173 ) ( 230 ) ( 1,031 ) Net anticipated costs $ 11,613 $ 2,892 $ 1,568 $ 1,278 $ 1,077 $ 14,717 $ 33,145 Effect of inflation 9,647 Effect of discounting ( 11,941 ) Balance as of November 26, 2022 $ 30,851 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 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 26, 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 $ 4.8 million . Also included in estimated insurance proceeds are amounts the Company is entitled to receive pursuant to legal settlements as reimbursements from three 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. 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. The Company is subject to two actions filed by former employees in September 2022 alleging damages under the Fair Labor Standards Act. The Company believes that it has meritorious defenses to such allegations and intends to defend itself vigorously in such matters. While the Company is unable to ascertain the ultimate outcome of such actions, based on the information currently available, the Company believes that a loss with respect to such matters is neither probable nor remote. Given the uncertainty associated with the ultimate resolution of such matters, the Company is unable to reasonably assess an estimate or range of estimates of any potential losses. In addition, in the fourth quarter of fiscal 2022, the Mexican federal tax authority issued a tax assessment on the Company’s subsidiary in Mexico for fiscal 2016 import taxes, value added taxes and custom processing fees of $ 17.0 million, plus surcharges, fines and penalties of $ 67.7 million for a total assessment of $ 84.7 million. The Company disagrees with such tax assessment and has filed an administrative appeal before the legal division of the Mexican federal tax authority challenging the validity of the tax assessment. While the Company is unable to ascertain the ultimate outcome of this matter, based on the information currently available, the Company believes that a loss with respect to this matter is neither probable nor remote. Given the uncertainty associated with the ultimate resolution of this matter, the Company is unable to reasonably assess an estimate or range of estimates of any potential losses. 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. |
Income Taxes
Income Taxes | 3 Months Ended |
Nov. 26, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 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 26, 2022 was 25.2 % as compared to 24.6 % for the corresponding period in the prior year. The increase in the effective tax rate for the thirteen weeks ended November 26, 2022 as compared to the corresponding period in the prior year was due primarily to higher excess tax benefits on stock appreciation rights during the thirteen weeks ended November 27, 2021. 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 weeks ended November 26, 2022 , there was a net increase in unrecognized tax position of $ 0.1 million related to existing reserves. All U.S. and Canadian federal income tax statutes have lapsed for filings up to and including fiscal years 2017 and 2014, respectively. With a few exceptions, the Company is no longer subject to state and local income tax examinations for periods prior to fiscal 2018. 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. |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Nov. 26, 2022 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | 14. Long-Term Debt On March 26, 2021, the Company 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 the Company’s prior credit agreement, which was scheduled to mature on April 11, 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 26, 2022 , the interest rates applicable to the Company’s borrowings under the 2021 Credit Agreement would be calculated as LIBOR plus 1.00 % at the time of the respective borrowing. The 2021 Credit Agreement includes provisions for the phasing out of LIBOR to the Secured Overnight Financing Rate (“SOFR”). As of November 26, 2022 , the Company had no outstanding borrowings and had outstanding letters of credit amounting to $ 60.8 million , leaving $ 114.2 million available for borrowing under the 2021 Credit Agreement. As of November 26, 2022 , the Company was in compliance with all covenants under the 2021 Credit Agreement. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 3 Months Ended |
Nov. 26, 2022 | |
Stockholders' Equity Note [Abstract] | |
Accumulated Other Comprehensive Loss | 15. Accumulated Other Comprehensive Loss The changes in each component of accumulated other comprehensive loss, net of tax, for the thirteen weeks ended November 26, 2022 and November 27, 2021 were as follows (in thousands): Thirteen weeks ended November 26, 2022 Foreign Pension- Derivative Total Balance as of August 27, 2022 $ ( 24,803 ) $ 452 $ 61 $ ( 24,290 ) Other comprehensive (loss) income before reclassification ( 1,778 ) — 72 ( 1,706 ) Amounts reclassified from accumulated other — — ( 20 ) ( 20 ) Net current period other comprehensive (loss) income ( 1,778 ) — 52 ( 1,726 ) Balance as of November 26, 2022 $ ( 26,581 ) $ 452 $ 113 $ ( 26,016 ) Thirteen weeks ended November 27, 2021 Foreign Pension- Derivative Total Balance as of August 28, 2021 $ ( 17,801 ) $ ( 7,066 ) $ 31 $ ( 24,836 ) Other comprehensive (loss) income before reclassification ( 2,799 ) — 85 ( 2,714 ) Amounts reclassified from accumulated other — — ( 38 ) ( 38 ) Net current period other comprehensive (loss) income ( 2,799 ) — 47 ( 2,752 ) Balance as of November 27, 2021 $ ( 20,600 ) $ ( 7,066 ) $ 78 $ ( 27,588 ) (1) Amounts are shown net of tax Amounts reclassified from accumulated other comprehensive loss, net of tax, for the thirteen weeks ended November 26, 2022 and November 27, 2021 were as follows (in thousands): Thirteen weeks ended November 26, 2022 November 27, 2021 Derivative financial instruments, net: Forward contracts (a) $ ( 20 ) $ ( 38 ) Total, net of tax ( 20 ) ( 38 ) Total amounts reclassified, net of tax $ ( 20 ) $ ( 38 ) (a) Amounts included in revenues in the accompanying consolidated statements of income. |
Segment Reporting
Segment Reporting | 3 Months Ended |
Nov. 26, 2022 | |
Segment Reporting [Abstract] | |
Segment Reporting | 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 six 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 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 five 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. 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 MFG Net Corporate Subtotal Specialty First Aid Total November 26, 2022 Revenues $ 462,824 $ 77,511 $ ( 77,511 ) $ 14,574 $ 477,398 $ 44,079 $ 20,321 $ 541,798 Operating income (loss) $ 82,645 $ 23,302 $ ( 6,783 ) $ ( 65,333 ) $ 33,831 $ 10,183 $ ( 596 ) $ 43,418 Interest income, net $ ( 1,020 ) $ — $ — $ ( 1,749 ) $ ( 2,769 ) $ — $ — $ ( 2,769 ) Income (loss) before taxes $ 83,576 $ 23,204 $ ( 6,783 ) $ ( 64,192 ) $ 35,805 $ 10,190 $ ( 599 ) $ 45,396 November 27, 2021 Revenues $ 420,053 $ 90,725 $ ( 90,725 ) $ 8,793 $ 428,846 $ 39,484 $ 17,834 $ 486,164 Operating income (loss) $ 73,925 $ 24,025 $ ( 7,599 ) $ ( 53,844 ) $ 36,507 $ 8,629 $ ( 346 ) $ 44,790 Interest income, net $ ( 666 ) $ — $ — $ 18 $ ( 648 ) $ — $ — $ ( 648 ) Income (loss) before taxes $ 74,570 $ 23,966 $ ( 7,599 ) $ ( 53,990 ) $ 36,947 $ 8,105 $ ( 350 ) $ 44,702 |
Shares Repurchased and Dividend
Shares Repurchased and Dividends | 3 Months Ended |
Nov. 26, 2022 | |
Equity [Abstract] | |
Shares Repurchased and Dividends | 17. Shares Repurchased and Dividends On October 25, 2022, the Company announced that it would be raising its quarterly dividend to $ 0.31 per share of Common Stock and to $ 0.248 per share of Class B Common Stock, up from $ 0.30 and $ 0.24 per share, respectively. The amount and timing of any dividend payment is subject to the approval of the Board of Directors each quarter. On January 2, 2019, the Company’s Board of Directors approved a share repurchase program authorizing the Company to repurchase from time to time up to $ 100.0 million of its outstanding shares of Common Stock. On October 18, 2021, the Company’s Board of Directors authorized a new share repurchase program to repurchase from time to time up to $ 100.0 million of our outstanding shares of Common Stock, inclusive of the amount which remained available under the existing share repurchase program approved on January 2, 2019. Repurchases made under the new program, if any, will be made in either the open market or in privately negotiated transactions. The timing, manner, price and amount of any repurchases will depend on a variety of factors, including economic and market conditions, the Company stock price, corporate liquidity requirements and priorities, applicable legal requirements and other factors. The share repurchase program has been funded to date with the Company’s available cash and will be funded in the future using the Company's available cash or capacity under its 2021 Credit Agreement and may be suspended or discontinued at any time. During the thirteen weeks ended November 26, 2022 , the Company did no t repurchase any shares. During the thirteen weeks ended November 27, 2021, the Company repurchased 22,750 shares for an average price per share of $ 209.73 under the share repurchase programs. As of November 26, 2022 , the Company had $ 63.6 million remaining to repurchase under the share repurchase program. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 3 Months Ended |
Nov. 26, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Total Revenue Disaggregated by Service Type | The following table presents the Company’s revenues for the thirteen weeks ended November 26, 2022 and November 27, 2021, respectively, disaggregated by service type: Thirteen Weeks Ended November 26, 2022 November 27, 2021 (In thousands, except percentages) Revenues % of Revenues % of Core Laundry Operations $ 477,398 88.1 % $ 428,846 88.2 % Specialty Garments 44,079 8.1 % 39,484 8.1 % First Aid 20,321 3.8 % 17,834 3.7 % Total Revenues $ 541,798 100.0 % $ 486,164 100.0 % |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Nov. 26, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets Measured at Fair Value on a Recurring Basis | The assets measured at fair value on a recurring basis are summarized in the tables below (in thousands): As of November 26, 2022 Level 1 Level 2 Level 3 Fair Value Assets: Cash equivalents $ 121,418 $ — $ — $ 121,418 Short-term investments — 107,000 — 107,000 Pension plan assets — 3,286 — 3,286 Non-qualified deferred compensation plan assets — 1,285 — 1,285 Foreign currency forward contracts — 152 — 152 Total assets at fair value $ 121,418 $ 111,723 $ — $ 233,141 As of August 27, 2022 Level 1 Level 2 Level 3 Fair Value Assets: Cash equivalents $ 197,121 $ — $ — $ 197,121 Pension plan assets — 3,291 — 3,291 Non-qualified deferred compensation plan assets — 1,263 — 1,263 Foreign currency forward contracts — 83 — 83 Total assets at fair value $ 197,121 $ 4,637 $ — $ 201,758 |
Income Per Share (Tables)
Income Per Share (Tables) | 3 Months Ended |
Nov. 26, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Computation of Basic Income Per Share | 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 November 26, 2022 November 27, 2021 Net income available to shareholders $ 33,957 $ 33,705 Allocation of net income for Basic: Common Stock $ 28,525 $ 28,291 Class B Common Stock 5,432 5,414 $ 33,957 $ 33,705 Weighted average number of shares for Basic: Common Stock 15,082 15,229 Class B Common Stock 3,590 3,643 18,672 18,872 Income per share for Basic: Common Stock $ 1.89 $ 1.86 Class B Common Stock $ 1.51 $ 1.49 |
Schedule of Computation of Diluted Income Per Share | The following tables set forth the computation of diluted income per share of Common Stock for the thirteen weeks ended November 26, 2022 and November 27, 2021 (in thousands, except per share data): Thirteen weeks ended November 26, 2022 Earnings Common Income As reported - Basic $ 28,525 15,082 $ 1.89 Add: effect of dilutive potential common shares Share-Based Awards — 82 Class B Common Stock 5,432 3,590 As reported – Diluted $ 33,957 18,754 $ 1.81 Thirteen weeks ended November 27, 2021 Earnings Common Income As reported - Basic $ 28,291 15,229 $ 1.86 Add: effect of dilutive potential common shares Share-Based Awards — 154 Class B Common Stock 5,414 3,643 As reported – Diluted $ 33,705 19,026 $ 1.77 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Nov. 26, 2022 | |
Inventory Disclosure [Abstract] | |
Schedule of Components of Inventory | The components of inventory as of November 26, 2022 and August 27, 2022 were as follows (in thousands): November 26, 2022 August 27, 2022 Raw materials $ 20,111 $ 25,932 Work in process 4,142 2,876 Finished goods 119,177 122,651 Total inventories $ 143,430 $ 151,459 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 3 Months Ended |
Nov. 26, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Changes in Carrying Amount of Goodwill | The changes in the carrying amount of goodwill are as follows (in thousands): Balance as of August 27, 2022 $ 457,259 Goodwill recorded during the period 3,890 Other ( 88 ) Balance as of November 26, 2022 $ 461,061 |
Schedule of Intangible Assets, Net | Intangible assets, net in the Company’s consolidated balance sheets are as follows (in thousands): Gross Carrying Accumulated Net Carrying November 26, 2022 Customer contracts $ 249,448 $ 201,080 $ 48,368 Software 77,230 42,658 34,572 Other intangible assets 37,480 35,570 1,910 $ 364,158 $ 279,308 $ 84,850 August 27, 2022 Customer contracts $ 247,721 $ 198,668 $ 49,053 Software 75,528 41,637 33,891 Other intangible assets 37,520 35,491 2,029 $ 360,769 $ 275,796 $ 84,973 |
Asset Retirement Obligations (T
Asset Retirement Obligations (Tables) | 3 Months Ended |
Nov. 26, 2022 | |
Asset Retirement Obligation Disclosure [Abstract] | |
Reconciliation of Asset Retirement Liability | A reconciliation of the Company’s asset retirement liability for the thirteen weeks ended November 26, 2022 was as follows (in thousands): November 26, 2022 Beginning balance as of August 27, 2022 $ 15,274 Accretion expense 227 Effect of exchange rate changes 140 Balance as of November 26, 2022 $ 15,641 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Nov. 26, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Operating Lease Cost and Information Related to Operating Lease Right-of-use Assets, Net and Operating Lease Liabilities | 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 weeks ended November 26, 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 $ 5,686 Operating cash flow impacts Cash paid for amounts included in the measurement of operating lease liabilities $ 3,189 Operating lease right-of-use assets obtained in exchange for new operating lease liabilities $ 322 Weighted-average remaining lease term - operating leases 4.22 Weighted-average discount rate - operating leases 2.03 % |
Schedule of Contractual Future Minimum Lease Payments of Operating Lease Liabilities | The contractual future minimum lease payments of the Company's operating lease liabilities by fiscal year are as follows as of November 26, 2022: (In thousands) 2022 (remaining three months) $ 11,041 2023 12,209 2024 9,189 2025 7,352 2026 5,303 Thereafter 5,286 Total payments 50,380 Less interest ( 1,403 ) Total present value of lease payments $ 48,977 |
Schedule of Changes to Environmental Liabilities | The changes to the Company’s environmental liabilities for the thirteen weeks ended November 26, 2022 were as follows (in thousands): November 26, 2022 Balance as of August 27, 2022 $ 32,191 Revisions in estimates ( 4 ) Costs incurred for which reserves have been provided ( 379 ) Insurance proceeds 35 Interest accretion 259 Changes in discount rates ( 1,251 ) Balance as of November 26, 2022 $ 30,851 |
Schedule of Anticipated Payments and Insurance Proceeds of Currently Identified Environmental Remediation Liabilities | Anticipated payments and insurance proceeds of currently identified environmental remediation liabilities as of November 26, 2022, for the next five fiscal years and thereafter, as measured in current dollars, are reflected below. (In thousands) 2023 2024 2025 2026 2027 Thereafter Total Estimated costs – current dollars $ 11,750 $ 3,051 $ 1,741 $ 1,437 $ 1,250 $ 14,947 $ 34,176 Estimated insurance proceeds ( 137 ) ( 159 ) ( 173 ) ( 159 ) ( 173 ) ( 230 ) ( 1,031 ) Net anticipated costs $ 11,613 $ 2,892 $ 1,568 $ 1,278 $ 1,077 $ 14,717 $ 33,145 Effect of inflation 9,647 Effect of discounting ( 11,941 ) Balance as of November 26, 2022 $ 30,851 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 3 Months Ended |
Nov. 26, 2022 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Changes in Components of Accumulated Other Comprehensive Loss, Net of Tax | The changes in each component of accumulated other comprehensive loss, net of tax, for the thirteen weeks ended November 26, 2022 and November 27, 2021 were as follows (in thousands): Thirteen weeks ended November 26, 2022 Foreign Pension- Derivative Total Balance as of August 27, 2022 $ ( 24,803 ) $ 452 $ 61 $ ( 24,290 ) Other comprehensive (loss) income before reclassification ( 1,778 ) — 72 ( 1,706 ) Amounts reclassified from accumulated other — — ( 20 ) ( 20 ) Net current period other comprehensive (loss) income ( 1,778 ) — 52 ( 1,726 ) Balance as of November 26, 2022 $ ( 26,581 ) $ 452 $ 113 $ ( 26,016 ) Thirteen weeks ended November 27, 2021 Foreign Pension- Derivative Total Balance as of August 28, 2021 $ ( 17,801 ) $ ( 7,066 ) $ 31 $ ( 24,836 ) Other comprehensive (loss) income before reclassification ( 2,799 ) — 85 ( 2,714 ) Amounts reclassified from accumulated other — — ( 38 ) ( 38 ) Net current period other comprehensive (loss) income ( 2,799 ) — 47 ( 2,752 ) Balance as of November 27, 2021 $ ( 20,600 ) $ ( 7,066 ) $ 78 $ ( 27,588 ) (1) Amounts are shown net of tax |
Schedule of Amounts Reclassified from Accumulated Other Comprehensive Loss, Net of Tax | Amounts reclassified from accumulated other comprehensive loss, net of tax, for the thirteen weeks ended November 26, 2022 and November 27, 2021 were as follows (in thousands): Thirteen weeks ended November 26, 2022 November 27, 2021 Derivative financial instruments, net: Forward contracts (a) $ ( 20 ) $ ( 38 ) Total, net of tax ( 20 ) ( 38 ) Total amounts reclassified, net of tax $ ( 20 ) $ ( 38 ) (a) Amounts included in revenues in the accompanying consolidated statements of income. |
Segment Reporting (Tables)
Segment Reporting (Tables) | 3 Months Ended |
Nov. 26, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information | 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 MFG Net Corporate Subtotal Specialty First Aid Total November 26, 2022 Revenues $ 462,824 $ 77,511 $ ( 77,511 ) $ 14,574 $ 477,398 $ 44,079 $ 20,321 $ 541,798 Operating income (loss) $ 82,645 $ 23,302 $ ( 6,783 ) $ ( 65,333 ) $ 33,831 $ 10,183 $ ( 596 ) $ 43,418 Interest income, net $ ( 1,020 ) $ — $ — $ ( 1,749 ) $ ( 2,769 ) $ — $ — $ ( 2,769 ) Income (loss) before taxes $ 83,576 $ 23,204 $ ( 6,783 ) $ ( 64,192 ) $ 35,805 $ 10,190 $ ( 599 ) $ 45,396 November 27, 2021 Revenues $ 420,053 $ 90,725 $ ( 90,725 ) $ 8,793 $ 428,846 $ 39,484 $ 17,834 $ 486,164 Operating income (loss) $ 73,925 $ 24,025 $ ( 7,599 ) $ ( 53,844 ) $ 36,507 $ 8,629 $ ( 346 ) $ 44,790 Interest income, net $ ( 666 ) $ — $ — $ 18 $ ( 648 ) $ — $ — $ ( 648 ) Income (loss) before taxes $ 74,570 $ 23,966 $ ( 7,599 ) $ ( 53,990 ) $ 36,947 $ 8,105 $ ( 350 ) $ 44,702 |
Revenue Recognition - Schedule
Revenue Recognition - Schedule of Total Revenue Disaggregated by Service Type (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Nov. 26, 2022 | Nov. 27, 2021 | |
Disaggregation of Revenue [Line Items] | ||
Total revenues | $ 541,798 | $ 486,164 |
Revenue | Revenues | ||
Disaggregation of Revenue [Line Items] | ||
Percentage of revenues | 100% | 100% |
Core Laundry Operations | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | $ 477,398 | $ 428,846 |
Core Laundry Operations | Revenue | Revenues | ||
Disaggregation of Revenue [Line Items] | ||
Percentage of revenues | 88.10% | 88.20% |
Specialty Garments | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | $ 44,079 | $ 39,484 |
Specialty Garments | Revenue | Revenues | ||
Disaggregation of Revenue [Line Items] | ||
Percentage of revenues | 8.10% | 8.10% |
First Aid | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | $ 20,321 | $ 17,834 |
First Aid | Revenue | Revenues | ||
Disaggregation of Revenue [Line Items] | ||
Percentage of revenues | 3.80% | 3.70% |
Revenue Recognition - Narrative
Revenue Recognition - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Nov. 26, 2022 | Nov. 27, 2021 | Aug. 27, 2022 | |
Revenue from Contract with Customer [Abstract] | |||
Percentage of revenues derived from route servicing fees | 88.20% | 91.20% | |
Current assets related to deferred commissions | $ 15.6 | $ 15.2 | |
Noncurrent assets related to deferred commissions | 67.2 | $ 65.1 | |
Amortization expense related to deferred commissions | $ 4 | $ 3.8 |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) - Aggregate Information Relating to Acquisition of Businesses $ in Millions | 3 Months Ended |
Nov. 26, 2022 USD ($) Business | |
Business Acquisition [Line Items] | |
Number of business acquired | Business | 2 |
Business acquisitions, aggregate purchase price | $ | $ 6.6 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Assets Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands | Nov. 26, 2022 | Aug. 27, 2022 |
Assets: | ||
Short-term investments | $ 107,000 | $ 0 |
Fair Value, Measurements, Recurring | ||
Assets: | ||
Cash equivalents | 121,418 | 197,121 |
Short-term investments | 107,000 | |
Pension plan assets | 3,286 | 3,291 |
Non-qualified deferred compensation plan assets | 1,285 | 1,263 |
Foreign currency forward contracts | 152 | 83 |
Total assets at fair value | 233,141 | 201,758 |
Fair Value, Measurements, Recurring | Level 1 | ||
Assets: | ||
Cash equivalents | 121,418 | 197,121 |
Short-term investments | 0 | |
Pension plan assets | 0 | 0 |
Non-qualified deferred compensation plan assets | 0 | 0 |
Foreign currency forward contracts | 0 | 0 |
Total assets at fair value | 121,418 | 197,121 |
Fair Value, Measurements, Recurring | Level 2 | ||
Assets: | ||
Cash equivalents | 0 | 0 |
Short-term investments | 107,000 | |
Pension plan assets | 3,286 | 3,291 |
Non-qualified deferred compensation plan assets | 1,285 | 1,263 |
Foreign currency forward contracts | 152 | 83 |
Total assets at fair value | 111,723 | 4,637 |
Fair Value, Measurements, Recurring | Level 3 | ||
Assets: | ||
Cash equivalents | 0 | 0 |
Short-term investments | 0 | |
Pension plan assets | 0 | 0 |
Non-qualified deferred compensation plan assets | 0 | 0 |
Foreign currency forward contracts | 0 | 0 |
Total assets at fair value | $ 0 | $ 0 |
Derivative Instruments and He_2
Derivative Instruments and Hedging Activities - Narrative (Details) $ in Thousands, $ in Millions | Nov. 26, 2022 USD ($) | Nov. 26, 2022 CAD ($) | Aug. 27, 2022 USD ($) |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Amount reclassified gain from accumulated other comprehensive loss | $ (26,016) | $ (24,290) | |
Forward Contracts | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Notional value (CAD) | $ 6.8 | ||
Fair value of the contracts | 200 | ||
Amount reclassified gain from accumulated other comprehensive loss | $ 100 |
Employee Benefit Plans - Narrat
Employee Benefit Plans - Narrative (Details) $ in Millions | 3 Months Ended | |
Nov. 26, 2022 USD ($) RetirementPlan | Nov. 27, 2021 USD ($) | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Contributions charged to expense under the plan | $ 5.8 | $ 5.5 |
Deferred compensation plan, employee or employer contribution charged to expense | $ 0.1 | |
SERP | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Number of frozen non-contributory defined benefit pension plans | RetirementPlan | 1 | |
Amounts charged to expense related to the plans | $ 0.4 | $ 0.6 |
Nonqualified Deferred Compensation Plan Member | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
NQDC Plan assets | $ 1.3 |
Income Per Share - Schedule of
Income Per Share - Schedule of Computation of Basic Income Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Nov. 26, 2022 | Nov. 27, 2021 | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||
Net income available to shareholders | $ 33,957 | $ 33,705 |
Allocation of net income for Basic: | ||
Common Stock | $ 33,957 | $ 33,705 |
Weighted average number of shares for Basic: | ||
Common stock (in shares) | 18,672 | 18,872 |
Common Stock | ||
Allocation of net income for Basic: | ||
Common Stock | $ 28,525 | $ 28,291 |
Weighted average number of shares for Basic: | ||
Common stock (in shares) | 15,082 | 15,229 |
Income per share for Basic: | ||
Common stock (in dollars per share) | $ 1.89 | $ 1.86 |
Class B Common Stock | ||
Allocation of net income for Basic: | ||
Common Stock | $ 5,432 | $ 5,414 |
Weighted average number of shares for Basic: | ||
Common stock (in shares) | 3,590 | 3,643 |
Income per share for Basic: | ||
Common stock (in dollars per share) | $ 1.51 | $ 1.49 |
Income Per Share - Schedule o_2
Income Per Share - Schedule of Computation of Diluted Income Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Nov. 26, 2022 | Nov. 27, 2021 | |
Earnings Per Share Diluted [Line Items] | ||
As reported - Basic | $ 33,957 | $ 33,705 |
As reported - Basic (in shares) | 18,672 | 18,872 |
As reported – Diluted | $ 33,957 | $ 33,705 |
As reported - Diluted (in shares) | 18,754 | 19,026 |
As reported - Diluted (in dollars per share) | $ 1.81 | $ 1.77 |
Common Stock | ||
Earnings Per Share Diluted [Line Items] | ||
As reported - Basic | $ 28,525 | $ 28,291 |
As reported - Basic (in shares) | 15,082 | 15,229 |
As reported - Basic (in dollars per share) | $ 1.89 | $ 1.86 |
Add: effect of dilutive potential common shares | $ 0 | $ 0 |
As reported – Diluted | $ 33,957 | $ 33,705 |
Add: effect of dilutive potential common shares (in shares) | 82 | 154 |
Class B Common Stock | ||
Earnings Per Share Diluted [Line Items] | ||
As reported - Basic | $ 5,432 | $ 5,414 |
As reported - Basic (in shares) | 3,590 | 3,643 |
As reported - Basic (in dollars per share) | $ 1.51 | $ 1.49 |
Income Per Share - Narrative (D
Income Per Share - Narrative (Details) - shares | 3 Months Ended | |
Nov. 26, 2022 | Nov. 27, 2021 | |
Earnings Per Share [Abstract] | ||
Anti-dilutive securities excluded from calculation of diluted earnings per share (in shares) | 49,246 | 11,119 |
Inventories - Schedule of Compo
Inventories - Schedule of Components of Inventory (Details) - USD ($) $ in Thousands | Nov. 26, 2022 | Aug. 27, 2022 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 20,111 | $ 25,932 |
Work in process | 4,142 | 2,876 |
Finished goods | 119,177 | 122,651 |
Total inventories | $ 143,430 | $ 151,459 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets - Schedule of Changes in Carrying Amount of Goodwill (Details) $ in Thousands | 3 Months Ended |
Nov. 26, 2022 USD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Beginning balance | $ 457,259 |
Goodwill recorded during the period | 3,890 |
Other | (88) |
Ending balance | $ 461,061 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Schedule of Intangible Assets, Net (Details) - USD ($) $ in Thousands | Nov. 26, 2022 | Aug. 27, 2022 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 364,158 | $ 360,769 |
Accumulated Amortization | 279,308 | 275,796 |
Net Carrying Amount | 84,850 | 84,973 |
Customer contracts | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 249,448 | 247,721 |
Accumulated Amortization | 201,080 | 198,668 |
Net Carrying Amount | 48,368 | 49,053 |
Software | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 77,230 | 75,528 |
Accumulated Amortization | 42,658 | 41,637 |
Net Carrying Amount | 34,572 | 33,891 |
Other intangible assets | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 37,480 | 37,520 |
Accumulated Amortization | 35,570 | 35,491 |
Net Carrying Amount | $ 1,910 | $ 2,029 |
Asset Retirement Obligations -
Asset Retirement Obligations - Narrative (Details) | 3 Months Ended |
Nov. 26, 2022 | |
Minimum | |
Asset Retirement Obligations [Line Items] | |
Remaining lives | 1 year |
Maximum | |
Asset Retirement Obligations [Line Items] | |
Remaining lives | 22 years |
Asset Retirement Obligations _2
Asset Retirement Obligations - Reconciliation of Asset Retirement Liability (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Nov. 26, 2022 | Nov. 27, 2021 | |
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward] | ||
Beginning balance | $ 15,274 | |
Accretion expense | 227 | $ 246 |
Effect of exchange rate changes | 140 | |
Ending balance | $ 15,641 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) $ in Millions | 3 Months Ended |
Nov. 26, 2022 USD ($) Site Company | |
Gain Contingencies [Line Items] | |
Operating lease, existence of option to extend | true |
Operating lease, existence of option to terminate | true |
Estimated rate of inflation | 3% |
Annual proceeds | $ 0.3 |
Number of sites related to former operations | Site | 2 |
Balance in escrow account | $ 4.8 |
Number of insurance companies | Company | 3 |
Federal | Mexican Tax Authority | Fiscal 2016 Import Taxes | |
Gain Contingencies [Line Items] | |
Tax assessment issued | $ 17 |
Tax assessment issued with surcharges, fines and penalties | 67.7 |
Tax assessment issued amount net | $ 84.7 |
Minimum | |
Gain Contingencies [Line Items] | |
Risk-free interest rates utilized | 3.68% |
Maximum | |
Gain Contingencies [Line Items] | |
Risk-free interest rates utilized | 4.20% |
Commitments and Contingencies_2
Commitments and Contingencies - Schedule of Operating Lease Cost and Information Related to Operating Lease Right-of-use Assets, Net and Operating Lease Liabilities (Details) $ in Thousands | 3 Months Ended |
Nov. 26, 2022 USD ($) | |
Lease cost | |
Operating lease costs including short-term lease expense and variable lease costs, which were immaterial in the period | $ 5,686 |
Operating cash flow impacts | |
Cash paid for amounts included in the measurement of operating lease liabilities | 3,189 |
Operating lease right-of-use assets obtained in exchange for new operating lease liabilities | $ 322 |
Weighted-average remaining lease term - operating leases | 4 years 2 months 19 days |
Weighted-average discount rate - operating leases | 2.03% |
Commitments and Contingencies_3
Commitments and Contingencies - Schedule of Contractual Future Minimum Lease Payments of Operating Lease Liabilities (Details) $ in Thousands | Nov. 26, 2022 USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2022 (remaining three months) | $ 11,041 |
2023 | 12,209 |
2024 | 9,189 |
2025 | 7,352 |
2026 | 5,303 |
Thereafter | 5,286 |
Total payments | 50,380 |
Less interest | (1,403) |
Total present value of lease payments | $ 48,977 |
Commitments and Contingencies_4
Commitments and Contingencies - Changes to Environmental Liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Nov. 26, 2022 | Nov. 27, 2021 | |
Accrual for Environmental Loss Contingencies [Roll Forward] | ||
Beginning balance | $ 32,191 | |
Revisions in estimates | (4) | |
Costs incurred for which reserves have been provided | (379) | |
Insurance proceeds | 35 | |
Interest accretion | 259 | $ 149 |
Changes in discount rates | (1,251) | |
Ending balance | $ 30,851 | |
Environmental Loss Contingency, Statement of Financial Position [Extensible Enumeration] | Accounts Payable and Accrued Liabilities, Noncurrent |
Commitments and Contingencies_5
Commitments and Contingencies - Anticipated Payments and Insurance Proceeds of Identified Environmental Remediation Liabilities (Details) - USD ($) $ in Thousands | Nov. 26, 2022 | Aug. 27, 2022 |
Estimated costs – current dollars | ||
2023 | $ 11,750 | |
2024 | 3,051 | |
2025 | 1,741 | |
2026 | 1,437 | |
2027 | 1,250 | |
Thereafter | 14,947 | |
Total | 34,176 | |
Estimated insurance proceeds | ||
2023 | (137) | |
2024 | (159) | |
2025 | (173) | |
2026 | (159) | |
2027 | (173) | |
Thereafter | (230) | |
Total | (1,031) | |
Net anticipated costs | ||
2023 | 11,613 | |
2024 | 2,892 | |
2025 | 1,568 | |
2026 | 1,278 | |
2027 | 1,077 | |
Thereafter | 14,717 | |
Total | 33,145 | |
Effect of inflation | 9,647 | |
Effect of discounting | (11,941) | |
Balance at end of period | $ 30,851 | $ 32,191 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Nov. 26, 2022 | Nov. 27, 2021 | |
Income Tax Disclosure [Abstract] | ||
Effective income tax rate | 25.20% | 24.60% |
Net increase in unrecognized tax position | $ 0.1 |
Long-Term Debt - Narrative (Det
Long-Term Debt - Narrative (Details) - Revolving Credit Facility - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 26, 2021 | Mar. 25, 2021 | Nov. 26, 2022 | |
2021 Credit Agreement | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | $ 175 | ||
Maturity date | Mar. 26, 2026 | ||
Outstanding borrowings | $ 0 | ||
Outstanding letters of credit | 60.8 | ||
Amount available for borrowing | $ 114.2 | ||
2021 Credit Agreement | LIBOR | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate (as percent) | 1% | ||
Credit Agreement | |||
Debt Instrument [Line Items] | |||
Maturity date | Apr. 11, 2021 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss - Components of Accumulated Other Comprehensive Loss, Net of Tax (Details) - USD ($) | 3 Months Ended | ||
Nov. 26, 2022 | Nov. 27, 2021 | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Balance at beginning of period | $ 1,915,871,000 | $ 1,872,952,000 | |
Other comprehensive income (loss) | (1,726,000) | (2,752,000) | |
Balance at end of period | 1,941,966,000 | 1,894,901,000 | |
Foreign Currency Translation | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Balance at beginning of period | (24,803,000) | (17,801,000) | |
Other comprehensive (loss) income before reclassification | (1,778,000) | (2,799,000) | |
Amounts reclassified from accumulated other comprehensive loss | 0 | 0 | |
Other comprehensive income (loss) | (1,778,000) | (2,799,000) | |
Balance at end of period | (26,581,000) | (20,600,000) | |
Pension-related | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Balance at beginning of period | [1] | (452,000) | (7,066,000) |
Other comprehensive (loss) income before reclassification | [1] | 0 | 0 |
Amounts reclassified from accumulated other comprehensive loss | [1] | 0 | 0 |
Other comprehensive income (loss) | [1] | 0 | 0 |
Balance at end of period | [1] | (452,000) | (7,066,000) |
Derivative Financial Instruments | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Balance at beginning of period | [1] | 61,000 | 31,000 |
Other comprehensive (loss) income before reclassification | [1] | 72,000 | 85,000 |
Amounts reclassified from accumulated other comprehensive loss | [1] | (20,000) | (38,000) |
Other comprehensive income (loss) | [1] | 52,000 | 47,000 |
Balance at end of period | [1] | 113,000 | 78,000 |
Accumulated Other Comprehensive Loss | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Balance at beginning of period | (24,290,000) | (24,836,000) | |
Other comprehensive (loss) income before reclassification | (1,706,000) | (2,714,000) | |
Amounts reclassified from accumulated other comprehensive loss | (20,000) | (38,000) | |
Other comprehensive income (loss) | (1,726,000) | (2,752,000) | |
Balance at end of period | $ (26,016,000) | $ (27,588,000) | |
[1] Amounts are shown net of tax |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Loss - Amounts Reclassified from Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Nov. 26, 2022 | Nov. 27, 2021 | ||
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Net income | $ 33,957 | $ 33,705 | |
Reclassification out of Accumulated Other Comprehensive Income | |||
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Net income | (20) | (38) | |
Derivative Financial Instruments | Reclassification out of Accumulated Other Comprehensive Income | |||
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Net income | (20) | (38) | |
Derivative Financial Instruments | Forward Contracts | Reclassification out of Accumulated Other Comprehensive Income | |||
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Revenues | [1] | $ (20) | $ (38) |
[1] Amounts included in revenues in the accompanying consolidated statements of income. |
Segment Reporting - Narrative (
Segment Reporting - Narrative (Details) | 3 Months Ended |
Nov. 26, 2022 Segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 6 |
Number of reporting segments | 5 |
Segment Reporting - Schedule of
Segment Reporting - Schedule of Segment Reporting Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Nov. 26, 2022 | Nov. 27, 2021 | |
Segment Reporting Information [Line Items] | ||
Revenues | $ 541,798 | $ 486,164 |
Operating income (loss) | 43,418 | 44,790 |
Interest income, net | (2,769) | (648) |
Income (loss) before taxes | 45,396 | 44,702 |
U.S. and Canadian Rental and Cleaning | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Revenues | 462,824 | 420,053 |
Operating income (loss) | 82,645 | 73,925 |
Interest income, net | (1,020) | (666) |
Income (loss) before taxes | 83,576 | 74,570 |
MFG | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Revenues | 77,511 | 90,725 |
Operating income (loss) | 23,302 | 24,025 |
Income (loss) before taxes | 23,204 | 23,966 |
MFG | Net Interco MFG Elim | ||
Segment Reporting Information [Line Items] | ||
Revenues | (77,511) | (90,725) |
Operating income (loss) | (6,783) | (7,599) |
Income (loss) before taxes | (6,783) | (7,599) |
Corporate | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Revenues | 14,574 | 8,793 |
Operating income (loss) | (65,333) | (53,844) |
Interest income, net | (1,749) | 18 |
Income (loss) before taxes | (64,192) | (53,990) |
Subtotal Core Laundry Operations | ||
Segment Reporting Information [Line Items] | ||
Revenues | 477,398 | 428,846 |
Operating income (loss) | 33,831 | 36,507 |
Interest income, net | (2,769) | (648) |
Income (loss) before taxes | 35,805 | 36,947 |
Specialty Garments | ||
Segment Reporting Information [Line Items] | ||
Revenues | 44,079 | 39,484 |
Specialty Garments | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Revenues | 44,079 | 39,484 |
Operating income (loss) | 10,183 | 8,629 |
Income (loss) before taxes | 10,190 | 8,105 |
First Aid | ||
Segment Reporting Information [Line Items] | ||
Revenues | 20,321 | 17,834 |
First Aid | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Revenues | 20,321 | 17,834 |
Operating income (loss) | (596) | (346) |
Income (loss) before taxes | $ (599) | $ (350) |
Shares Repurchased and Divide_2
Shares Repurchased and Dividends - Narrative (Details) - USD ($) | 3 Months Ended | |||||
Oct. 25, 2022 | Oct. 20, 2021 | Nov. 26, 2022 | Nov. 27, 2021 | Oct. 18, 2021 | Jan. 02, 2019 | |
Equity, Class of Treasury Stock [Line Items] | ||||||
Shares repurchased (in shares) | 0 | 22,750 | ||||
Total cost of shares repurchased divided by the total number of shares repurchased | $ 209.73 | |||||
Stock repurchase remaining amount | $ 63,600,000 | |||||
Maximum | ||||||
Equity, Class of Treasury Stock [Line Items] | ||||||
Stock repurchase authorized, Value | $ 100,000,000 | $ 100,000,000 | ||||
Class B Common Stock | ||||||
Equity, Class of Treasury Stock [Line Items] | ||||||
Quarterly dividend amount (in dollars per share) | $ 0.248 | $ 0.24 | $ 0.248 | 0.20 | ||
Common Stock | ||||||
Equity, Class of Treasury Stock [Line Items] | ||||||
Quarterly dividend amount (in dollars per share) | $ 0.31 | $ 0.30 | $ 0.31 | $ 0.25 |