Exhibit 99
UniFirst Corporation | News Release |
|
68 Jonspin Road |
|
|
Wilmington, MA 01887-1086 | contact: | John B. Bartlett |
Telephone 978-658-8888 Ext 520 |
| Senior Vice President |
Facsimile 978-988-0659 |
| jbartlett@unifirst.com |
UNIFIRST ANNOUNCES RECORD FINANCIAL RESULTS
FOR THE FIRST QUARTER OF FISCAL 2008
Wilmington, MA (January 3, 2008) -- UniFirst Corporation (NYSE: UNF) today announced record revenues and earnings for its first quarter of fiscal 2008 which ended November 24, 2007.
Revenues for the first quarter of fiscal 2008 were $247.3 million, an 11.2% increase from the previous year’s first quarter of $222.4 million. First quarter net income for fiscal 2008 was $16.5 million or $0.85 per diluted common share, a 19.9% increase from the first quarter of fiscal 2007, when net income was $13.7 million or $0.71 per diluted common share.
Revenues from the Company’s core laundry operations, which exclude the Company’s Specialty Garments and First Aid segments, grew 12.5% in the first quarter of fiscal 2008 compared to the first quarter of fiscal 2007. Revenues from the core laundry operations increased 8.0% due to internal growth and price increases. The growth from acquisitions was primarily the result of the acquisition of Western Uniform & Towel Service which was completed in September 2007.
Primarily as a result of this revenue growth, the income from operations of the Company’s core laundry business was up 26.1% compared to the first quarter of fiscal 2007. The operating margin for the core laundry business increased from 11.1% in the first quarter of fiscal 2007 to 12.5% in the first quarter of fiscal 2008. In addition to the revenue growth, reductions in merchandise amortization as a percentage of revenues contributed to our improved profitability. These improvements were partially offset by higher selling and health care related costs as a percentage of revenues.
The Company’s Specialty Garments segment, which includes our nuclear and cleanroom operations, had income from operations of $2.1 million for the first quarter of fiscal 2008, down from $2.9 million in the first quarter of fiscal 2007. This decrease was primarily the result of higher merchandise amortization and other costs associated with a number of new customer installations.
The Company’s First Aid segment broke even in the first quarter of fiscal 2008 compared to the first quarter of fiscal 2007 when it generated income from operations of $0.6 million. The decline in profitability is due to higher merchandise costs as well as organizational and operational changes that have resulted in additional costs and minor sales disruptions in the short term.
"We're off to a strong start in fiscal 2008", said UniFirst President and Chief Executive Officer, Ronald D. Croatti. "Our core laundry operations continued to lead the way in generating both revenue and profit growth. In light of the challenging economic conditions, we are very pleased with the results we have been able to achieve thus far.”
The Company will hold a conference call today at 4:00 PM (EST) to discuss its quarterly financial results, business highlights and outlook. A simultaneous live webcast of the call will be available over the Internet and can be accessed atwww.unifirst.com.
About UniFirst Corporation
UniFirst Corporation is one of the largest providers of workplace uniforms, protective clothing and facility services products in North America. The Company employs over 10,000 team partners who serve over 200,000 customer locations in 46 U.S. states, Canada and Europe from approximately 200 customer service, distribution, and manufacturing facilities. UniFirst Corporation is a publicly held company traded on the New York Stock Exchange under the symbol UNF and is a component of the Standard & Poor's 600 Small Cap Index.
Forward Looking Statements
This public announcement may contain forward looking statements that reflect the Company’s current views with respect to future events and financial performance. Forward looking statements contained in this public announcement are subject to the safe harbor created by the Private Securities Litigation Reform Act of 1995 and are highly dependent upon a variety of important factors that could cause actual results to differ materially from those reflected in such forward looking statements. Such factors include, but are not limited to, uncertainties regarding the Company’s ability to consummate and successfully integrate acquired businesses, uncertainties regarding any existing or newly-discovered expenses and liabilities related to environmental compliance and remediation, the Company’s ability to compete successfully without any significant degradation in its margin rates, seasonal fluctuations in business levels, uncertainties regarding the price levels of natural gas, electricity, fuel and labor, the impact of negative economic conditions on the Company’s customers and such customers’ workforce, the continuing increase in domestic healthcare costs, demand and prices for the Company’s products and services, additional professional and internal costs necessary for compliance with recent and proposed future changes in Securities and Exchange Commission (including the Sarbanes-Oxley Act of 2002), New York Stock Exchange and accounting rules, strikes and unemployment levels, the Company’s efforts to evaluate and potentially reduce internal costs, economic and other developments associated with the war on terrorism and its impact on the economy and general economic conditions. When used in this public announcement, the words “anticipate,” “optimistic,” “believe,” “estimate,” “expect,” “intend,” and similar expressions as they relate to the Company are included to identify such forward looking statements. The Company undertakes no obligation to update any forward looking statements to reflect events or circumstances arising after the date on which such statements are made.
UniFirst Corporation and Subsidiaries
Consolidated Statements of Income
(Unaudited)
|
| Thirteen weeks ended | ||||||
|
|
|
|
|
|
|
|
|
|
|
| November 24, |
|
|
| November 25, |
|
(In thousands, except share and per share data) |
|
| 2007 |
|
|
| 2006 |
|
|
|
|
|
|
|
|
|
|
Revenues |
| $ | 247,260 |
|
| $ | 222,377 |
|
|
|
|
|
|
|
|
|
|
Costs and expenses: |
|
|
|
|
|
|
|
|
Operating costs (1) |
|
| 151,147 |
|
|
| 136,919 |
|
Selling and administrative expenses (1) |
|
| 53,548 |
|
|
| 48,390 |
|
Depreciation and amortization |
|
| 12,787 |
|
|
| 11,585 |
|
|
|
| 217,482 |
|
|
| 196,894 |
|
|
|
|
|
|
|
|
|
|
Income from operations |
|
| 29,778 |
|
|
| 25,483 |
|
|
|
|
|
|
|
|
|
|
Other expense (income): |
|
|
|
|
|
|
|
|
Interest expense |
|
| 3,504 |
|
|
| 3,322 |
|
Interest income |
|
| (513 | ) |
|
| (466 | ) |
|
|
| 2,991 |
|
|
| 2,856 |
|
|
|
|
|
|
|
|
|
|
Income before income taxes |
|
| 26,787 |
|
|
| 22,627 |
|
Provision for income taxes |
|
| 10,313 |
|
|
| 8,881 |
|
|
|
|
|
|
|
|
|
|
Net income |
| $ | 16,474 |
|
| $ | 13,746 |
|
|
|
|
|
|
|
|
|
|
Income per share – Basic: |
|
|
|
|
|
|
|
|
Common Stock |
| $ | 0.90 |
|
| $ | 0.75 |
|
Class B Common Stock |
| $ | 0.72 |
|
| $ | 0.60 |
|
|
|
|
|
|
|
|
|
|
Income per share – Diluted: |
|
|
|
|
|
|
|
|
Common Stock |
| $ | 0.85 |
|
| $ | 0.71 |
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares outstanding – Basic: |
|
|
|
|
|
|
|
|
Common Stock |
|
| 14,352 |
|
|
| 14,307 |
|
Class B Common Stock |
|
| 4,937 |
|
|
| 4,941 |
|
|
|
| 19,289 |
|
|
| 19,248 |
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares outstanding – Diluted: |
|
|
|
|
|
|
|
|
Common Stock |
|
| 19,366 |
|
|
| 19,322 |
|
|
|
|
|
|
|
|
|
|
Dividends per share: |
|
|
|
|
|
|
|
|
Common Stock |
| $ | 0.0375 |
|
| $ | 0.0375 |
|
Class B Common Stock |
| $ | 0.0300 |
|
| $ | 0.0300 |
|
(1) Exclusive of depreciation and amortization
UniFirst Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands, except share data) |
|
|
| November 24, 2007 |
|
| August 25, 2007 (a) |
|
Assets |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
| $ | 17,333 |
| $ | 12,698 |
|
Receivables, net |
|
|
| 108,854 |
|
| 91,906 |
|
Inventories |
|
|
| 44,116 |
|
| 44,282 |
|
Rental merchandise in service |
|
|
| 93,003 |
|
| 86,129 |
|
Prepaid and deferred income taxes |
|
|
| 12,793 |
|
| 13,399 |
|
Prepaid expenses |
|
|
| 3,840 |
|
| 1,807 |
|
|
|
|
|
|
|
|
|
|
Total current assets |
|
|
| 279,939 |
|
| 250,221 |
|
|
|
|
|
|
|
|
|
|
Property and equipment: |
|
|
|
|
|
|
|
|
Land, buildings and leasehold improvements |
|
|
| 291,485 |
|
| 286,255 |
|
Machinery and equipment |
|
|
| 308,244 |
|
| 299,831 |
|
Motor vehicles |
|
|
| 98,021 |
|
| 95,214 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 697,750 |
|
| 681,300 |
|
Less - accumulated depreciation |
|
|
| 356,661 |
|
| 347,233 |
|
|
|
|
| 341,089 |
|
| 334,067 |
|
|
|
|
|
|
|
|
|
|
Goodwill |
|
|
| 245,500 |
|
| 224,366 |
|
Customer contracts and other intangible assets, net |
|
|
| 69,109 |
|
| 62,064 |
|
Other assets |
|
|
| 3,517 |
|
| 3,746 |
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 939,154 |
| $ | 874,464 |
|
|
|
|
|
|
|
|
|
|
Liabilities and shareholders' equity |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Current maturities of long-term obligations |
|
| $ | 384 |
| $ | 539 |
|
Accounts payable |
|
|
| 52,531 |
|
| 45,297 |
|
Accrued liabilities |
|
|
| 87,507 |
|
| 86,283 |
|
Accrued income taxes |
|
|
| 8,136 |
|
| — |
|
|
|
|
|
|
|
|
|
|
Total current liabilities |
|
|
| 148,558 |
|
| 132,119 |
|
|
|
|
|
|
|
|
|
|
Long-term obligations, net of current maturities |
|
|
| 234,080 |
|
| 205,510 |
|
Deferred income taxes |
|
|
| 39,782 |
|
| 39,508 |
|
|
|
|
|
|
|
|
|
|
Shareholders' equity: |
|
|
|
|
|
|
|
|
Common Stock |
|
|
| 1,435 |
|
| 1,435 |
|
Class B Common Stock |
|
|
| 494 |
|
| 494 |
|
Capital surplus |
|
|
| 16,534 |
|
| 16,332 |
|
Retained earnings |
|
|
| 489,722 |
|
| 473,934 |
|
Accumulated other comprehensive income |
|
|
| 8,549 |
|
| 5,132 |
|
|
|
|
|
|
|
|
|
|
Total shareholders' equity |
|
|
| 516,734 |
|
| 497,327 |
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 939,154 |
| $ | 874,464 |
|
(a) Derived from audited financial statements
UniFirst Corporation and Subsidiaries
Detail of Operating Results
(Unaudited)
Revenues
|
| November 24, |
|
| November 25, |
|
| Dollar |
| Percent |
|
(In thousands, except percentages) |
| 2007 |
|
| 2006 |
|
| Change |
| Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
Thirteen weeks ending: |
|
|
|
|
|
|
|
|
|
|
|
Core Laundry Operations | $ | 222,112 |
| $ | 197,464 |
| $ | 24,648 |
| 12.5 | % |
Specialty Garments |
| 17,255 |
|
| 17,180 |
|
| 75 |
| 0.4 |
|
First Aid |
| 7,893 |
|
| 7,733 |
|
| 160 |
| 2.1 |
|
Consolidated total | $ | 247,260 |
| $ | 222,377 |
| $ | 24,883 |
| 11.2 | % |
Income from Operations
|
| November 24, |
|
| November 25, |
|
| Dollar |
| Percent |
|
(In thousands, except percentages) |
| 2007 |
|
| 2006 |
|
| Change |
| Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
Thirteen weeks ending: |
|
|
|
|
|
|
|
|
|
|
|
Core Laundry Operations | $ | 27,726 |
| $ | 21,989 |
| $ | 5,737 |
| 26.1 | % |
Specialty Garments |
| 2,055 |
|
| 2,925 |
|
| (870 | ) | -29.7 |
|
First Aid |
| (3 | ) |
| 569 |
|
| (572 | ) | -100.5 |
|
Consolidated total | $ | 29,778 |
| $ | 25,483 |
| $ | 4,295 |
| 16.8 | % |