Exhibit 99
UniFirst Corporation 68 Jonspin Road Wilmington, MA 01887-1086 Telephone 978-658-8888 Ext 520 Facsimile 978-988-0659 | News Release contact: John B. Bartlett Senior Vice President jbartlett@unifirst.com |
UNIFIRST ANNOUNCES RECORD FINANCIAL RESULTS
FOR SECOND QUARTER AND FIRST HALF OF FISCAL 2005
Wilmington, MA (March 30, 2005) — UniFirst Corporation (NYSE: UNF) today announced its revenues and earnings for the second quarter and first half of fiscal 2005, which ended February 26, 2005.
Second quarter net income was $10.1 million ($0.52 per diluted common share), a 52.7% percent increase from last year’s $6.6 million ($0.34 per diluted common share). Revenues for the second quarter of fiscal 2005 were $190.7 million, a 7.5% percent increase from $177.4 million in the same period a year ago.
For the first half of fiscal 2005, net income was $23.4 million ($1.21 per diluted common share), a 45.3% increase from last year’s $16.1 million ($0.84 per diluted common share). Revenues were $379.1 million, a 5.8% increase from $358.3 million for the first half of fiscal 2004.
The primary reason for the significant increase in net income in the second quarter and the first half of fiscal 2005 was a decrease in operating costs as a percentage of revenues. As a percentage of revenues, operating costs for the second quarter decreased 1.3 percentage points from 65.2% for fiscal 2004 to 63.9% for fiscal 2005 and decreased for the first half of the year by 1.6 percentage points from 64.4% for fiscal 2004 to 62.8% for fiscal 2005. This decrease was due to lower merchandise amortization for the locations acquired as part of the Textilease acquisition as well as from cost savings realized from the Company’s manufacturing operations in Mexico and lower industrial laundry production payroll costs as a percentage of revenues. These benefits were somewhat offset by higher energy costs associated with operating industrial laundries as well as in utilizing our fleet of delivery vehicles.
The Company also benefited from lower depreciation and intangible asset amortization expenses due to certain fixed assets and certain intangible assets becoming fully depreciated and amortized in fiscal 2004. In addition, interest expense has decreased during fiscal 2005 due to a reduction in the level of debt outstanding.
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.
UniFirst is one of the largest providers of workplace uniforms, protective clothing and facility services products in North America. The Company employs 9,000 team partners who serve more than 175,000 customer locations in 46 states, Canada and Europe from 175 manufacturing, distribution and customer service facilities.
The Private Securities Litigation Reform Act of 1995 provides a safe harbor for certain 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. These forward-looking statements are subject to certain risks and uncertainties. The words “anticipate” and “should,” and other expressions that indicate future events and trends identify forward-looking statements. Actual future results may differ materially from those anticipated depending on a variety of factors, including, but not limited to, performance of acquisitions; economic and business changes; fluctuations in the cost of materials, fuel and labor; economic and other developments associated with the on-going war on terrorism; strikes and unemployment levels; demand and price for the Company’s products and services; improvement in under performing rental operations; and the outcome of pending and future litigation and environmental matters.
[Tables follow]
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UNIFIRST CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
February 26, | August 28, | |||||||
(In thousands) | 2005 | 2004 (a) | ||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 5,598 | $ | 4,436 | ||||
Receivables, net | 79,105 | 69,471 | ||||||
Inventories | 26,595 | 31,060 | ||||||
Rental merchandise in service | 65,774 | 60,544 | ||||||
Prepaid taxes and deferred tax assets | 4,184 | 2,753 | ||||||
Prepaid expenses | 3,588 | 1,857 | ||||||
Total current assets | 184,844 | 170,121 | ||||||
Property and equipment: | ||||||||
Land, buildings and leasehold improvements | 253,017 | 240,018 | ||||||
Machinery and equipment | 266,442 | 258,736 | ||||||
Motor vehicles | 74,478 | 70,048 | ||||||
593,937 | 568,802 | |||||||
Less — accumulated depreciation | 294,141 | 280,012 | ||||||
299,796 | 288,790 | |||||||
Goodwill | 186,462 | 180,685 | ||||||
Customer contracts and intangible assets, net | 57,600 | 57,873 | ||||||
Other assets | 3,101 | 3,353 | ||||||
$ | 731,803 | $ | 700,822 | |||||
Liabilities and Shareholders’ Equity | ||||||||
Current liabilities: | ||||||||
Current maturities of long-term obligations | $ | 1,195 | $ | 986 | ||||
Accounts payable | 36,770 | 33,754 | ||||||
Accrued liabilities | 73,639 | 72,824 | ||||||
Accrued and deferred income taxes | 6,572 | 5,611 | ||||||
Total current liabilities | 118,176 | 113,175 | ||||||
Long-term obligations, net of current maturities | 179,443 | 177,855 | ||||||
Deferred income taxes | 42,074 | 42,043 | ||||||
Shareholders’ equity: | ||||||||
Common stock | 946 | 928 | ||||||
Class B common stock | 976 | 993 | ||||||
Capital surplus | 13,339 | 13,138 | ||||||
Retained earnings | 375,318 | 353,196 | ||||||
Accumulated other comprehensive income (loss) | 1,531 | (506 | ) | |||||
Total shareholders’ equity | 392,110 | 367,749 | ||||||
$ | 731,803 | $ | 700,822 | |||||
(a) Condensed from audited financial statements |
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UNIFIRST CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
Twenty-six | Twenty-six | Thirteen | Thirteen | |||||||||||||
weeks ended | weeks ended | weeks ended | weeks ended | |||||||||||||
February 26, | February 28, | February 26, | February 28, | |||||||||||||
(In thousands, except per share data) | 2005 | 2004 | 2005 | 2004 | ||||||||||||
Revenues | $ | 379,118 | $ | 358,305 | $ | 190,684 | $ | 177,407 | ||||||||
Costs and expenses: | ||||||||||||||||
Operating costs (1) | 237,955 | 230,801 | 121,922 | 115,713 | ||||||||||||
Selling and administrative expenses (1) | 78,601 | 73,861 | 40,000 | 37,034 | ||||||||||||
Depreciation and amortization | 21,730 | 22,727 | 11,067 | 11,699 | ||||||||||||
338,286 | 327,389 | 172,989 | 164,446 | |||||||||||||
Income from operations | 40,832 | 30,916 | 17,695 | 12,961 | ||||||||||||
Interest expense, net | 3,062 | 4,713 | 1,463 | 2,243 | ||||||||||||
Income before income taxes | 37,770 | 26,203 | 16,232 | 10,718 | ||||||||||||
Provision for income taxes | 14,353 | 10,088 | 6,169 | 4,126 | ||||||||||||
Net income | $ | 23,417 | $ | 16,115 | $ | 10,063 | $ | 6,592 | ||||||||
Weighted average number of shares outstanding: | ||||||||||||||||
Basic-Common Stock | 9,369 | 9,015 | 9,456 | 9,022 | ||||||||||||
Basic-Class B Common Stock | 9,843 | 10,172 | 9,759 | 10,168 | ||||||||||||
Dilutive effect of common stock options | 84 | 62 | 100 | 63 | ||||||||||||
Diluted-Common Stock | 19,296 | 19,249 | 19,315 | 19,253 | ||||||||||||
Net income per share: | ||||||||||||||||
Basic-Common Stock | $ | 1.36 | $ | 0.94 | $ | 0.58 | $ | 0.38 | ||||||||
Basic-Class B Common Stock | 1.09 | 0.75 | 0.47 | 0.31 | ||||||||||||
Diluted-Common Stock | 1.21 | 0.84 | 0.52 | 0.34 | ||||||||||||
Dividends per share: | ||||||||||||||||
Common Stock | $ | 0.0750 | $ | 0.0750 | $ | 0.0375 | $ | 0.0375 | ||||||||
Class B Common Stock | 0.0600 | 0.0600 | 0.0300 | 0.0300 | ||||||||||||
(1) Exclusive of depreciation and amortization |
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