Exhibit 99
| UniFirst Corporation | News Release |
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| 68 Jonspin Road |
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| Wilmington, MA 01887-1086 | contact: | John B. Bartlett |
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| Telephone 978-658-8888 Ext 520 | Senior Vice President |
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| Facsimile 978-988-0659 | jbartlett@unifirst.com | ||||
UNIFIRST ANNOUNCES RECORD FINANCIAL RESULTS
FOR THE FISCAL 2008 FOURTH QUARTER AND FULL YEAR
Wilmington, MA (October 28, 2008) -- UniFirst Corporation (NYSE: UNF) today announced record revenues and earnings for its fiscal fourth quarter and full year which ended August 30, 2008.
Revenues were $251.0 million for the quarter, an increase of 10.3% over the fourth quarter of fiscal 2007. For the full year, revenues increased 13.4% to $1.023 billion from $902.1 million in fiscal 2007. Fiscal 2008 included an extra week compared to fiscal 2007 which accounted for 2.2 percentage points of year over year revenue growth.
Fourth quarter net income increased 13.7% to $12.3 million, or $0.63 per diluted common share, from last year’s fourth quarter net income of $10.8 million, or $0.56 per diluted common share. Net income for the full year increased 34.9% to $61.0 million, or $3.15 per diluted common share, from $45.2 million, or $2.34 per diluted common share for the comparable period in 2007.
Ronald D. Croatti, UniFirst President and Chief Executive Officer, stated, “We are very pleased to report another year of record profits and revenues, one that also saw us achieve our long time goal of becoming a billion dollar company. In addition to strong organic revenue growth, we were able to show significant improvement in the margins of our core laundry operations. I want to thank the entire management team as well as our thousands of employees throughout North America and Europe who worked so hard to achieve these results.”
The primary reason for the Company’s strong full year results was the performance of the Company’s core laundry operations, which makes up approximately 90% of the Company’s revenues. Core laundry revenues increased 10.7% and 13.9%, respectively, for the quarter and full year compared to fiscal 2007. The organic revenue growth for the core laundry business, which excludes the effects of the extra week, acquisitions and fluctuations in the Canadian exchange rate, was 6.6% for the fourth quarter and 7.5% for the full year.
For the full year, the income from operations for the core laundry business as a percentage of revenues increased to 11.3% in fiscal 2008 from 9.7% in fiscal 2007. This improvement was primarily the result of lower merchandise amortization as well as lower payroll and payroll related costs as a percentage of revenues. In addition, the results in 2007 were affected by severance expense and increases to the Company’s environmental reserves that decreased income from operations by $2.3 million. These positive comparisons were partially offset by higher energy costs as a percentage of revenues.
For the fourth quarter, the core laundry income from operations as a percentage of revenues decreased from 10.0% in 2007 to 9.3% in 2008. This drop in margin is due primarily to increases in the cost of energy and other commodities. The cost of gasoline and natural gas increased sharply during the fourth quarter and had a large impact on operating results compared to the same quarter in 2007. In addition, the benefit related to lower merchandise amortization as a percentage of revenues realized throughout the year continued to benefit the fourth quarter, but at a reduced level.
The Company’s Specialty Garments segment improved its fourth quarter performance, increasing its operating results from a loss of $0.8 million in fiscal 2007 to income of $0.4 million in fiscal 2008. The income from operations of the First Aid segment was $0.5 million in both fiscal 2008 and fiscal 2007 fourth quarters.
The Company’s overall results for both the full year as well as the fourth quarter were also positively impacted by lower interest rates on the Company’s variable rate debt as well as lower effective tax rates compared to fiscal 2007.
In looking ahead to fiscal 2009, Mr. Croatti stated, “We currently are operating in very difficult economic conditions. We continue to encounter high levels of headcount reductions throughout our customer base and a more difficult selling environment. Although energy costs have begun to fall recently, we are experiencing higher overall input costs in our business. Despite the challenging economic landscape, the Company’s financial position remains strong and we are excited about building on our fiscal 2008 performance.”
Conference Call Information
The Company will hold a conference call Wednesday, October 29, 2008 at 4:00 PM (EDT) to discuss its quarterly financial results, business highlights and outlook. A simultaneous live webcast of the call will be available over the Internet and can be accessed at www.unifirst.com.
About UniFirst Corporation
UniFirst Corporation is one of the largest providers of workplace uniforms, protective clothing and facility services products in North America. The Company employs over 10,000 team partners who serve over 200,000 customer locations in 46 U.S. states, Canada and Europe from over 200 customer service, distribution, and manufacturing facilities. UniFirst Corporation is a publicly held company traded on the New York Stock Exchange under the symbol UNF and is a component of the Standard & Poor's 600 Small Cap Index.
Forward Looking Statements
This public announcement may contain forward looking statements that reflect the Company’s current views with respect to future events and financial performance. Forward looking statements contained in this public announcement are subject to the safe harbor created by the Private Securities Litigation Reform Act of 1995 and are highly dependent upon a variety of important factors that could cause actual results to differ materially from those reflected in such forward looking statements. Such factors include, but are not limited to, uncertainties regarding the Company’s ability to consummate and successfully integrate acquired businesses, uncertainties regarding any existing or newly-discovered expenses and liabilities related to environmental compliance and remediation, the Company’s ability to compete successfully without any significant degradation in its margin rates, seasonal fluctuations in business levels, uncertainties regarding the price levels of natural gas, electricity, fuel and labor, the impact of negative economic conditions on the Company’s customers and such customers’ workforce, the continuing increase in domestic healthcare costs, demand and prices for the Company’s products and services, additional professional and internal costs necessary for compliance with recent and proposed future changes in Securities and Exchange Commission (including the Sarbanes-Oxley Act of 2002), New York Stock Exchange and accounting rules, strikes and unemployment levels, the Company’s efforts to evaluate and potentially reduce internal costs, economic and other developments associated with the war on terrorism and its impact on the economy and general economic conditions. When used in this public announcement, the words “anticipate,” “optimistic,” “believe,” “estimate,” “expect,” “intend,” and similar expressions as they relate to the Company are included to identify such forward looking statements. The Company undertakes no obligation to update any forward looking statements to reflect events or circumstances arising after the date on which such statements are made.
UniFirst Corporation and Subsidiaries
Consolidated Statements of Income
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| Thirteen |
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| Thirteen |
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| weeks ended |
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| weeks ended |
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| weeks ended |
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| weeks ended |
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| August 30, |
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| August 25, |
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| August 30, |
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| August 25, |
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(In thousands, except share and per share data) |
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| 2008 (2) |
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| 2007 (2) |
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| 2008 |
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| 2007 |
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Revenues |
| $ | 251,010 |
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| $ | 227,509 |
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| $ | 1,023,175 |
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| $ | 902,102 |
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Costs and expenses: |
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Operating costs (1) |
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| 163,089 |
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| 144,855 |
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| 643,886 |
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| 572,221 |
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Selling and administrative expenses (1) |
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| 52,366 |
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| 49,691 |
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| 216,867 |
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| 197,217 |
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Depreciation and amortization |
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| 13,690 |
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|
| 12,786 |
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|
| 53,784 |
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|
| 48,512 |
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|
|
| 229,145 |
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|
| 207,332 |
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|
| 914,537 |
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| 817,950 |
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Income from operations |
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| 21,865 |
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| 20,177 |
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| 108,638 |
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| 84,152 |
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Other expense (income): |
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Interest expense |
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| 2,569 |
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| 3,129 |
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| 11,999 |
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| 12,675 |
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Interest income |
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| (556 | ) |
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| (461 | ) |
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| (2,224 | ) |
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| (1,916 | ) |
Foreign exchange (gain)/loss |
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| 585 |
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|
| (33 | ) |
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| 164 |
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|
| (69 | ) |
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| 2,598 |
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|
| 2,635 |
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| 9,939 |
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| 10,690 |
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Income before income taxes |
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| 19,267 |
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| 17,542 |
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| 98,699 |
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| 73,462 |
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Provision for income taxes |
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| 6,984 |
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| 6,736 |
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| 37,721 |
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| 28,267 |
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Net income |
| $ | 12,283 |
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| $ | 10,806 |
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| $ | 60,978 |
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| $ | 45,195 |
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Income per share – Basic: |
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Common Stock |
| $ | 0.67 |
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| $ | 0.59 |
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| $ | 3.33 |
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| $ | 2.47 |
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Class B Common Stock |
| $ | 0.54 |
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| $ | 0.47 |
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| $ | 2.66 |
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| $ | 1.98 |
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Income per share – Diluted: |
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Common Stock |
| $ | 0.63 |
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| $ | 0.56 |
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| $ | 3.15 |
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| $ | 2.34 |
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Weighted average number of shares outstanding – Basic: |
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Common Stock |
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| 14,380 |
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| 14,343 |
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| 14,363 |
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| 14,325 |
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Class B Common Stock |
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| 4,936 |
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| 4,937 |
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| 4,937 |
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| 4,939 |
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| 19,316 |
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| 19,280 |
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| 19,300 |
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| 19,264 |
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Weighted average number of shares outstanding – Diluted: |
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Common Stock |
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| 19,387 |
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| 19,375 |
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| 19,353 |
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| 19,342 |
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Dividends per share: |
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Common Stock |
| $ | 0.0375 |
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| $ | 0.0375 |
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| $ | 0.1500 |
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| $ | 0.1500 |
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Class B Common Stock |
| $ | 0.0300 |
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| $ | 0.0300 |
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| $ | 0.1200 |
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| $ | 0.1200 |
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| (1) | Exclusive of depreciation on the Company’s fixed assets and amortization on its intangible assets |
| (2) | Unaudited |
UniFirst Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands, except share data) |
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| August 30, 2008 |
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| August 25, 2007 |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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| $ | 25,655 |
| $ | 12,698 |
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Receivables, net |
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| 102,830 |
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| 91,906 |
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Inventories |
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| 46,154 |
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| 44,282 |
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Rental merchandise in service |
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| 92,315 |
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| 86,129 |
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Prepaid and deferred income taxes |
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| 15,431 |
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| 13,399 |
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Prepaid expenses |
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| 1,720 |
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| 1,807 |
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Total current assets |
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| 284,105 |
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| 250,221 |
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Property and equipment: |
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Land, buildings and leasehold improvements |
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| 314,370 |
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| 286,255 |
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Machinery and equipment |
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| 327,705 |
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| 299,831 |
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Motor vehicles |
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| 102,805 |
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| 95,214 |
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|
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| 744,880 |
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| 681,300 |
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Less - accumulated depreciation |
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| 376,319 |
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| 347,233 |
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| 368,561 |
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| 334,067 |
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Goodwill |
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| 258,836 |
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| 224,366 |
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Customer contracts and other intangible assets, net |
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| 67,450 |
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| 62,064 |
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Other assets |
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| 2,715 |
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| 3,746 |
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| $ | 981,667 |
| $ | 874,464 |
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Liabilities and shareholders' equity |
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Current liabilities: |
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Current maturities of long-term obligations |
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| $ | 4,222 |
| $ | 539 |
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Accounts payable |
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| 54,822 |
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| 45,297 |
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Accrued liabilities |
|
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| 91,837 |
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| 86,283 |
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Total current liabilities |
|
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| 150,881 |
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| 132,119 |
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Long-term obligations, net of current maturities |
|
|
| 231,317 |
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| 205,510 |
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Deferred income taxes |
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|
| 42,699 |
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| 39,508 |
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Shareholders' equity: |
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Common Stock |
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|
| 1,438 |
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| 1,435 |
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Class B Common Stock |
|
|
| 494 |
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| 494 |
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Capital surplus |
|
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| 18,240 |
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| 16,332 |
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Retained earnings |
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| 532,164 |
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| 473,934 |
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Accumulated other comprehensive income |
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| 4,434 |
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| 5,132 |
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|
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Total shareholders' equity |
|
|
| 556,770 |
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| 497,327 |
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|
|
|
|
|
|
|
|
|
|
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| $ | 981,667 |
| $ | 874,464 |
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UniFirst Corporation and Subsidiaries
Detail of Operating Results
Revenues
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| Thirteen |
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| Thirteen |
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| weeks ended |
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| weeks ended |
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| August 30, |
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| August 25, |
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| Dollar |
| Percent |
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(In thousands, except percentages) |
| 2008 (1) |
|
| 2007 (1) |
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| Change |
| Change |
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Core Laundry Operations | $ | 226,643 |
| $ | 204,686 |
| $ | 21,957 |
| 10.7 | % |
Specialty Garments |
| 16,854 |
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| 14,492 |
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| 2,362 |
| 16.3 |
|
First Aid |
| 7,513 |
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| 8,331 |
|
| (818 | ) | -9.8 |
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Consolidated total | $ | 251,010 |
| $ | 227,509 |
| $ | 23,501 |
| 10.3 | % |
|
| Fifty-three |
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| Fifty-two |
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| weeks ended |
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| weeks ended |
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| August 30, |
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| August 25, |
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| Dollar |
| Percent |
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(In thousands, except percentages) |
| 2008 |
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| 2007 |
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| Change |
| Change |
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Core Laundry Operations | $ | 919,986 |
| $ | 807,460 |
| $ | 112,526 |
| 13.9 | % |
Specialty Garments |
| 71,637 |
|
| 62,868 |
|
| 8,769 |
| 13.9 |
|
First Aid |
| 31,552 |
|
| 31,774 |
|
| (222 | ) | -0.7 |
|
Consolidated total | $ | 1,023,175 |
| $ | 902,102 |
| $ | 121,073 |
| 13.4 | % |
Income from Operations
|
| Thirteen |
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| Thirteen |
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| weeks ended |
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| weeks ended |
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| August 30, |
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| August 25, |
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| Dollar |
| Percent |
|
(In thousands, except percentages) |
| 2008 (1) |
|
| 2007 (1) |
|
| Change |
| Change |
|
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|
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|
|
|
|
|
|
|
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Core Laundry Operations | $ | 20,968 |
| $ | 20,413 |
| $ | 555 |
| 2.7 | % |
Specialty Garments |
| 364 |
|
| (772 | ) |
| 1,136 |
| 147.1 |
|
First Aid |
| 533 |
|
| 536 |
|
| (3 | ) | -0.5 |
|
Consolidated total | $ | 21,865 |
| $ | 20,177 |
| $ | 1,688 |
| 8.4 | % |
|
| Fifty-three |
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| Fifty-two |
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| weeks ended |
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| weeks ended |
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| August 30, |
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| August 25, |
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| Dollar |
| Percent |
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(In thousands, except percentages) |
| 2008 |
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| 2007 |
|
| Change |
| Change |
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Core Laundry Operations | $ | 103,547 |
| $ | 78,228 |
| $ | 25,319 |
| 32.4 | % |
Specialty Garments |
| 4,204 |
|
| 4,498 |
|
| (294 | ) | -6.5 |
|
First Aid |
| 887 |
|
| 1,426 |
|
| (539 | ) | -37.8 |
|
Consolidated total | $ | 108,638 |
| $ | 84,152 |
| $ | 24,486 |
| 29.1 | % |
(1) Unaudited