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 FINANCIAL RESULTS
FOR THE FIRST QUARTER OF FISCAL 2009
Wilmington, MA (January 7, 2009) -- UniFirst Corporation (NYSE: UNF) today announced revenues and earnings for its first quarter of fiscal 2009 which ended November 29, 2008.
Revenues for the first quarter of fiscal 2009 were $262.6 million, a 6.2% increase from the previous year’s first quarter of $247.3 million. First quarter net income for fiscal 2009 was $18.9 million or $0.97 per diluted common share, a 14.5% increase from the first quarter of fiscal 2008, when net income was $16.5 million or $0.85 per diluted common share.
First quarter revenues from the core laundry operations, which exclude the Company’s Specialty Garments and First Aid segments, grew 6.9%. Revenues from the core laundry operations, net of the effect of acquisitions and changes in foreign currency increased 6.6%.
Income from operations from the Company’s core laundry business was up 17.9% compared to the first quarter of fiscal 2008 as the operating margin increased to 13.7% from 12.4% a year earlier. The improvement is due primarily to lower merchandise amortization and lower payroll costs as a percentage of revenues. The core laundry’s operating results in the first quarter also were helped by lower health-care and workers’ compensation costs compared to fiscal 2008. These costs fluctuate from quarter to quarter and the Company does not anticipate that this benefit will continue throughout the year.
These benefits were partially offset by higher energy costs and a $1.6 million accounting charge related to environmental obligations. Accounting rules require the discounting of certain liabilities using a risk-free interest rate. The Company’s projected liabilities for environmental remediation are discounted in this manner as disclosed in its quarterly financial statements. Due to the significant decline in interest rates during the first fiscal quarter, the Company discounted its liability using a lower interest rate resulting in this non-cash charge to earnings.
The Specialty Garments and First Aid segments’ operating results were comparable to the first quarter of fiscal 2008. The Company’s overall results benefitted from lower interest expense related to its variable rate debt. However, this benefit was more than offset by foreign exchange losses in the current quarter as well as a higher effective tax rate compared to the first quarter of fiscal 2008. The Company’s effective tax rate in the first quarter of fiscal 2009 increased to 39.7% compared to 38.5% in the first quarter of fiscal 2008.
Ronald D. Croatti, UniFirst President and Chief Executive Officer, stated, “Our strong first quarter was the result of a continued focus on maximizing the output of our professional sales and services organizations. In addition, we have intensified our cost control efforts throughout the Company. However, we will need to be even more diligent in these areas going forward. The level of headcount reductions in our customer base has accelerated considerably through November and December and we expect that the general economic weakness will negatively impact our revenues for the balance of our fiscal year. Despite the challenging economic environment, we will continue to focus on factors within our control such as providing superior service and value to our customers.”
Conference Call Information
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 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
| | | Thirteen weeks ended | |
| | | | | | | | |
| | | November 29, | | | | November 24, | |
(In thousands, except share and per share data) | | | 2008 (2) | | | | 2007 (2) | |
| | | | | | | | |
Revenues | | $ | 262,554 | | | $ | 247,260 | |
| | | | | | | | |
Costs and expenses: | | | | | | | | |
Operating costs (1) | | | 157,063 | | | | 151,147 | |
Selling and administrative expenses (1) | | | 57,487 | | | | 54,019 | |
Depreciation and amortization | | | 13,703 | | | | 12,787 | |
| | | 228,253 | | | | 217,953 | |
| | | | | | | | |
Income from operations | | | 34,301 | | | | 29,307 | |
| | | | | | | | |
Other expense (income): | | | | | | | | |
Interest expense | | | 2,591 | | | | 3,504 | |
Interest income | | | (504 | ) | | | (513 | ) |
Foreign exchange loss(gain) | | | 934 | | | | (471 | ) |
| | | 3,021 | | | | 2,520 | |
| | | | | | | | |
Income before income taxes | | | 31,280 | | | | 26,787 | |
Provision for income taxes | | | 12,418 | | | | 10,313 | |
| | | | | | | | |
Net income | | $ | 18,862 | | | $ | 16,474 | |
| | | | | | | | |
Income per share – Basic: | | | | | | | | |
Common Stock | | $ | 1.03 | | | $ | 0.90 | |
Class B Common Stock | | $ | 0.82 | | | $ | 0.72 | |
| | | | | | | | |
Income per share – Diluted: | | | | | | | | |
Common Stock | | $ | 0.97 | | | $ | 0.85 | |
| | | | | | | | |
Weighted average number of shares outstanding – Basic: | | | | | | | | |
Common Stock | | | 14,384 | | | | 14,352 | |
Class B Common Stock | | | 4,935 | | | | 4,937 | |
| | | 19,319 | | | | 19,289 | |
| | | | | | | | |
Weighted average number of shares outstanding – Diluted: | | | | | | | | |
Common Stock | | | 19,362 | | | | 19,366 | |
| | | | | | | | |
Dividends per share: | | | | | | | | |
Common Stock | | $ | 0.0375 | | | $ | 0.0375 | |
Class B Common Stock | | $ | 0.0300 | | | $ | 0.0300 | |
(1) Exclusive of depreciation on the Company’s property and equipment and amortization on its intangible assets
(2) Unaudited
UniFirst Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands, except share data) | | | | November 29, 2008 | | | August 30, 2008 | |
Assets | | | | | | | | |
Current assets: | | | | | | | | |
Cash and cash equivalents | | | $ | 24,108 | | $ | 25,655 | |
Receivables, net | | | | 111,394 | | | 102,830 | |
Inventories | | | | 48,566 | | | 46,154 | |
Rental merchandise in service | | | | 88,763 | | | 92,315 | |
Prepaid and deferred income taxes | | | | 16,246 | | | 15,431 | |
Prepaid expenses | | | | 5,255 | | | 1,720 | |
| | | | | | | | |
Total current assets | | | | 294,332 | | | 284,105 | |
| | | | | | | | |
Property and equipment: | | | | | | | | |
Land, buildings and leasehold improvements | | | | 312,641 | | | 314,370 | |
Machinery and equipment | | | | 331,097 | | | 327,705 | |
Motor vehicles | | | | 107,876 | | | 102,805 | |
| | | | | | | | |
| | | | 751,614 | | | 744,880 | |
Less - accumulated depreciation | | | | 379,799 | | | 376,319 | |
| | | | 371,815 | | | 368,561 | |
| | | | | | | | |
Goodwill | | | | 259,091 | | | 258,836 | |
Customer contracts and other intangible assets, net | | | | 65,530 | | | 67,450 | |
Other assets | | | | 2,578 | | | 2,715 | |
| | | | | | | | |
| | | $ | 993,346 | | $ | 981,667 | |
| | | | | | | | |
Liabilities and shareholders' equity | | | | | | | | |
Current liabilities: | | | | | | | | |
Current maturities of long-term obligations | | | $ | 4,191 | | $ | 4,222 | |
Accounts payable | | | | 52,820 | | | 54,822 | |
Accrued liabilities | | | | 95,154 | | | 91,837 | |
Accrued income taxes | | | | 8,942 | | | — | |
| | | | | | | | |
Total current liabilities | | | | 161,107 | | | 150,881 | |
| | | | | | | | |
Long-term obligations, net of current maturities | | | | 227,928 | | | 231,317 | |
Deferred income taxes | | | | 42,064 | | | 42,699 | |
| | | | | | | | |
Shareholders' equity: | | | | | | | | |
Common Stock | | | | 1,439 | | | 1,438 | |
Class B Common Stock | | | | 494 | | | 494 | |
Capital surplus | | | | 18,481 | | | 18,240 | |
Retained earnings | | | | 550,339 | | | 532,164 | |
Accumulated other comprehensive (loss) income | | | | (8,506 | ) | | 4,434 | |
| | | | | | | | |
Total shareholders' equity | | | | 562,247 | | | 556,770 | |
| | | | | | | | |
| | | $ | 993,346 | | $ | 981,667 | |
UniFirst Corporation and Subsidiaries
Detail of Operating Results
Revenues
| | Thirteen weeks ended | | | | | | |
| | | | | | | | | | | |
| | November 29, | | | November 24, | | | Dollar | | Percent | |
(In thousands, except percentages) | | 2008 (1) | | | 2007 (1) | | | Change | | Change | |
| | | | | | | | | | | |
Core Laundry Operations | $ | 237,504 | | $ | 222,112 | | $ | 15,392 | | 6.9 | % |
Specialty Garments | | 17,741 | | | 17,255 | | | 486 | | 2.8 | |
First Aid | | 7,309 | | | 7,893 | | | (584 | ) | -7.4 | |
Consolidated total | $ | 262,554 | | $ | 247,260 | | $ | 15,294 | | 6.2 | % |
Income from Operations
| | Thirteen weeks ended | | | | | | |
| | | | | | | | | | | |
| | November 29, | | | November 24, | | | Dollar | | Percent | |
(In thousands, except percentages) | | 2008 (1) | | | 2007 (1) | | | Change | | Change | |
| | | | | | | | | | | |
Core Laundry Operations | $ | 32,604 | | $ | 27,649 | | $ | 4,955 | | 17.9 | % |
Specialty Garments | | 1,747 | | | 1,661 | | | 86 | | 5.2 | |
First Aid | | (50 | ) | | (3 | ) | | (47 | ) | 1529.7 | |
Consolidated total | $ | 34,301 | | $ | 29,307 | | $ | 4,994 | | 17.0 | % |
(1) Unaudited
