UniFirst Announces Financial Results for the Fourth Quarter and Full Year Fiscal 2012 Business Wire WILMINGTON, Mass. -- October 17, 2012 UniFirst Corporation (NYSE: UNF) today announced results for its fiscal 2012 fourth quarter and full year ended August 25, 2012. Fourth quarter revenues were $312.4 million, up 7.4% from $290.9 million in the year ago period. Net income for the quarter was $22.5 million ($1.13 per diluted share), up 25.1% compared to $18.0 million ($0.90 per diluted share) reported in the year ago period. Full year revenues were $1.256 billion, up 10.8% from $1.134 billion in fiscal 2011. Net income per diluted share for the full year was $4.76 compared to $3.85 in the same period a year ago. Full year results include the positive effect of a settlement related to environmental litigation which resulted in a $6.7 million pre-tax gain in the third quarter. The gain was recorded as a reduction of selling and administrative expenses. Net income per diluted share for the full year, adjusted to eliminate the gain, was $4.55, up 18.2% from the $3.85 in the same period a year ago. Ronald D. Croatti, UniFirst President and Chief Executive Officer said, “Despite the continued worldwide economic volatility, we are very pleased with the efforts of our thousands of employees which helped us achieve double digit percentage growth in both revenues and profits in fiscal 2012. This impressive feat was accomplished while continuing to provide industry leading products and services to our diverse customer base.” Fourth quarter revenues in the Core Laundry Operations were $281.7 million, up 8.6% from those reported in the prior year’s fourth quarter. Excluding the effects of acquisitions and a slightly weaker Canadian dollar, revenues grew 8.9%. This segment’s income from operations increased 34.4% quarter to quarter. The operating margin expanded to 12.3% from 9.9% a year earlier. Increased profitability resulted from improved operating leverage that came with the strong revenue growth. Expenses related to plant operations, depreciation and overall selling and administrative outlays were all lower as a percentage of revenue compared to the prior year. Energy costs also were lower in the fourth quarter compared to a year ago due to lower average costs of fuel and natural gas. This segment’s quarterly results also benefited from a reduction in reserves for worker’s compensation and other insurance related liabilities of approximately $1.9 million due to changes in third-party actuarial estimates. These positive comparisons were partially offset by higher merchandise amortization expense. Revenues for the Specialty Garments segment, which consists of nuclear decontamination and cleanroom operations, were $19.7 million for the fourth quarter of fiscal 2012, down from $23.4 in the fourth quarter of fiscal 2011. This segment had a loss from operations for the quarter of $0.7 million compared to income from operations of $1.8 million in the same quarter a year ago. The decrease in revenues and profits were primarily the result of the completion of two large power reactor rebuild projects and fewer power reactor outages during the quarter. First Aid segment revenues of $11.0 million in the quarter increased 35.5% compared to the fourth quarter of fiscal 2011. Income from operations in this segment also improved to $1.4 million from $0.4 million a year ago. The effective income tax rate for the fourth quarter was 36.5% compared to 35.8% in the same quarter in fiscal 2011. UniFirst continues to maintain a solid balance sheet and overall financial position. Cash and cash equivalents at the end of the quarter totaled $120.1 million, up from $48.8 million at the end of fiscal 2011. Cash provided by operating activities for the full fiscal year was $161.7 million, up 87.6% compared to $86.2 million in fiscal 2011. The improved cash flows were primarily the result of higher earnings as well as lower cash outflows related to working capital. At the end of the year, long-term debt was $104.7 million or 10.5% of total capital. Outlook Mr. Croatti continued, “We move into fiscal 2013 with a high level of uncertainty regarding the trajectory of employment levels and the economy as a whole. We are currently projecting our fiscal 2013 revenues to be between $1.325 billion and $1.338 billion and diluted earnings per share to be between $4.65 and $4.85. Our guidance for fiscal 2013 includes one extra week of operations compared to fiscal 2012 due to the timing of our fiscal calendar. Also embedded in this guidance is a projected decline in the revenues and operating income of our Specialty Garments segment of approximately 10% and 20%, respectively, compared to fiscal 2012. Despite these projected declines, we are optimistic regarding the longer term outlook for this segment.” Conference Call Information UniFirst will hold a conference call today at 10:00 a.m. (ET) 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 approximately 11,000 Team Partners who serve more than 240,000 customer locations in 45 U.S. states, Canada, and Europe from over 200 customer service, distribution, and manufacturing facilities. UniFirst 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, our ability to preserve positive labor relationships and avoid becoming the target of corporate labor unionization campaigns that could disrupt our business, the effect of currency fluctuations on our results of operations and financial condition, our dependence on third parties to supply us with raw materials, any loss of key management or other personnel, increased costs as a result of any future changes in federal or state laws, rules and regulations or governmental interpretation of such laws, rules and regulations, uncertainties regarding the price levels of natural gas, electricity, fuel and labor, the impact of adverse economic conditions and the current tight credit markets on our customers and such customers’ workforce, the level and duration of workforce reductions by our customers, the continuing increase in domestic healthcare costs, demand and prices for our products and services, rampant criminal activity and instability in Mexico where our principal garment manufacturing plants are located, additional professional and internal costs necessary for compliance with recent and proposed future changes in Securities and Exchange Commission, 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, general economic conditions and other factors described under “Item 1A. Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended August 27, 2011 and in other filings with the Securities and Exchange Commission. 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 Fifty-two weeks ended (In thousands, August August August 25, August except per 25, 27, 2012 (2) 27, share data) 2012 (2) 2011 (2) 2011 Revenues $ 312,374 $ 290,874 $ 1,256,289 $ 1,134,126 Operating expenses: Cost of 198,935 187,624 797,944 712,309 revenues (1) Selling and administrative 61,369 58,462 240,798 233,111 expenses (1) Depreciation and 16,824 16,791 66,439 64,733 amortization Total operating 277,128 262,877 1,105,181 1,010,153 expenses Income from 35,246 27,997 151,108 123,973 operations Other (income) expense: Interest 493 747 2,132 6,738 expense Interest income (702 ) (700 ) (2,738 ) (2,552 ) Exchange rate (48 ) (103 ) 980 (785 ) (gain) loss (257 ) (56 ) 374 3,401 Income before 35,503 28,053 150,734 120,572 income taxes Provision for 12,971 10,039 55,745 44,086 income taxes Net income $ 22,532 $ 18,014 $ 94,989 $ 76,486 Income per share – Basic Common Stock $ 1.19 $ 0.95 $ 5.02 $ 4.05 Class B Common $ 0.95 $ 0.76 $ 4.01 $ 3.24 Stock Income per share – Diluted Common Stock $ 1.13 $ 0.90 $ 4.76 $ 3.85 Income allocated to – Basic Common Stock $ 17,717 $ 14,132 $ 74,643 $ 59,944 Class B Common $ 4,416 $ 3,549 $ 18,630 $ 15,104 Stock Income allocated to – Diluted Common Stock $ 22,153 $ 17,698 $ 93,358 $ 75,118 Weighted average number of shares outstanding – Basic Common Stock 14,912 14,822 14,882 14,791 Class B Common 4,647 4,653 4,643 4,658 Stock Weighted average number of shares outstanding – Diluted Common Stock 19,664 19,559 19,616 19,532 (1) Exclusive of depreciation on the Company’s property, plant and equipment and amortization on its intangible assets (2) Unaudited UniFirst Corporation and Subsidiaries Condensed Consolidated Balance Sheets August 25, August 27, (In thousands) 2012 (1) 2011 Assets Current assets: Cash and cash equivalents $ 120,123 $ 48,812 Receivables, net 135,327 128,377 Inventories 75,420 76,460 Rental merchandise in service 138,284 126,536 Prepaid and deferred income taxes 12,785 11,358 Prepaid expenses 5,741 3,647 Total current assets 487,680 395,190 Property, plant and equipment: Land, buildings and leasehold improvements 355,568 346,738 Machinery and equipment 425,274 393,530 Motor vehicles 141,370 129,762 922,212 870,030 Less - accumulated depreciation 510,008 474,963 412,204 395,067 Goodwill 288,137 288,249 Customer contracts and other intangible 50,531 60,905 assets, net Other assets 1,982 2,109 $ 1,240,534 $ 1,141,520 Liabilities and shareholders' equity Current liabilities: Current maturities of long-term debt $ 4,530 $ 20,133 Accounts payable 52,340 56,064 Accrued liabilities 80,475 76,630 Accrued income taxes 8,180 - Total current liabilities 145,525 152,827 Long-term liabilities: Long-term debt, net of current maturities 100,155 100,163 Accrued liabilities 43,420 39,698 Accrued and deferred income taxes 54,509 50,890 Total long-term liabilities 198,084 190,751 Shareholders' equity: Common Stock 1,506 1,499 Class B Common Stock 488 488 Capital surplus 42,984 33,588 Retained earnings 844,676 752,530 Accumulated other comprehensive income 7,271 9,837 Total shareholders' equity 896,925 797,942 $ 1,240,534 $ 1,141,520 (1) Unaudited UniFirst Corporation and Subsidiaries Detail of Operating Results Revenues Thirteen weeks ended (In thousands, August 25, August 27, Dollar Percent except percentages) 2012 (1) 2011 (1) Change Change Core Laundry $ 281,662 $ 259,346 $ 22,316 8.6 % Operations Specialty Garments 19,726 23,420 (3,694 ) -15.8 First Aid 10,986 8,108 2,878 35.5 Consolidated total $ 312,374 $ 290,874 $ 21,500 7.4 % Fifty-two weeks ended (In thousands, August 25, August 27, Dollar Percent except 2012 (1) 2011 Change Change percentages) Core Laundry $ 1,112,323 $ 996,957 $ 115,366 11.6 % Operations Specialty Garments 102,758 103,322 (564 ) -0.5 First Aid 41,208 33,847 7,361 21.7 Consolidated total $ 1,256,289 $ 1,134,126 $ 122,163 10.8 % Income from Operations Thirteen weeks ended (In thousands, August 25, August Dollar Percent except percentages) 2012 (1) 27, Change Change 2011 (1) Core Laundry $ 34,579 $ 25,728 $ 8,851 34.4 % Operations Specialty Garments (715 ) 1,850 (2,565 ) -138.6 First Aid 1,382 419 963 229.6 Consolidated total $ 35,246 $ 27,997 $ 7,249 25.9 % Fifty-two weeks ended (In thousands, August 25, August 27, Dollar Percent except percentages) 2012 (1) 2011 Change Change Core Laundry $ 133,285 $ 105,725 $ 27,560 26.1 % Operations Specialty Garments 13,460 15,292 (1,832 ) -12.0 First Aid 4,363 2,956 1,407 47.6 Consolidated total $ 151,108 $ 123,973 $ 27,135 21.9 % (1) Unaudited UniFirst Corporation and Subsidiaries Consolidated Statements of Cash Flows Fifty-two weeks ended August 25, August 27, (In thousands) 2012 (1) 2011 Cash flows from operating activities: Net income $ 94,989 $ 76,486 Adjustments to reconcile net income to cash provided by operating activities: Depreciation 55,877 54,188 Amortization of intangible assets 10,562 10,545 Amortization of deferred financing costs 238 261 Share-based compensation 6,714 6,732 Accretion on environmental contingencies 631 681 Accretion on asset retirement obligations 632 589 Deferred income taxes (330 ) 13,318 Changes in assets and liabilities, net of acquisitions: Receivables (7,595 ) (20,881 ) Inventories 590 (28,413 ) Rental merchandise in service (12,017 ) (36,369 ) Prepaid expenses (1,763 ) (247 ) Accounts payable (3,688 ) 9,796 Accrued liabilities 5,518 2,654 Prepaid and accrued income taxes 11,360 (3,147 ) Net cash provided by operating activities 161,718 86,193 Cash flows from investing activities: Acquisition of businesses - (32,556 ) Capital expenditures (74,549 ) (63,847 ) Other (508 ) (397 ) Net cash used in investing activities (75,057 ) (96,800 ) Cash flows from financing activities: Proceeds from long-term obligations 40,410 30,000 Payments on long-term obligations (55,851 ) (91,464 ) Payments of deferred financing costs - (975 ) Proceeds from exercise of Common Stock 2,410 1,360 options Payment of cash dividends (2,840 ) (2,830 ) Net cash used in financing activities (15,871 ) (63,909 ) Effect of exchange rate changes 521 2,070 Net increase (decrease) in cash and cash 71,311 (72,446 ) equivalents Cash and cash equivalents at beginning of 48,812 121,258 period Cash and cash equivalents at end of period $ 120,123 $ 48,812 (1) Unaudited Contact: UniFirst Corporation Steven S. Sintros, 978-658-8888 Fax: 978-988-0659 Vice President & CFO ssintros@UniFirst.com
UniFirst Announces Financial Results for the Fourth Quarter and Full Year Fiscal 2012
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