UniFirst Announces Financial Results for the First Quarter of Fiscal 2013 Business Wire WILMINGTON, Mass. -- January 3, 2013 UniFirst Corporation (NYSE: UNF) today announced results for its fiscal 2013 first quarter, which ended November 24, 2012. First quarter revenues were $332.6 million, up 6.2% from $313.0 million in the year ago period. Net income for the quarter was $30.8 million ($1.54 per diluted share), up 19.2% compared to $25.8 million ($1.30 per diluted share) reported in the year ago period. Ronald D. Croatti, UniFirst President and Chief Executive Officer said, “We are very pleased with the results of our first fiscal quarter. Although employee levels at our existing customers remained unchanged during the quarter, we were able to deliver profitable growth by continuing to sell the value of our services to current and prospective customers.” First quarter revenues in the Core Laundry Operations were $294.6 million, up 8.2% from those reported in the prior year’s first quarter. Excluding the effect of a stronger Canadian dollar, revenues grew 8.0%. This segment’s income from operations increased 27.3% year to year. The operating margin expanded to 15.1% from 12.8% a year earlier. Increased profitability resulted from improved operating leverage that came with our strong revenue growth. Expenses related to plant operations, depreciation and selling and administrative outlays were all lower as a percentage of revenue compared to the prior year. Lower energy costs also contributed to the improved operating margin. Merchandise amortization was flat as a percentage of revenues compared to the same quarter a year ago. Revenues for the Specialty Garments segment, which consists of nuclear decontamination and cleanroom operations, were $27.9 million for the first quarter of fiscal 2013, down 7.9% from $30.3 million in the first quarter of fiscal 2012. This segment had income from operations for the quarter of $4.7 million down from $6.6 million in the same quarter a year ago. Net income comparisons benefited from exchange rate gains of $0.2 million in the first quarter of fiscal 2013 compared to exchange rate losses of $0.6 million a year ago. The effective income tax rate for the first quarter was 39.0% compared to 38.3% in the same quarter in fiscal 2012. UniFirst continues to maintain a solid balance sheet and financial position. Cash and cash equivalents at the end of the quarter totaled $152.7 million, up from $120.1 million at the end of fiscal 2012. Cash provided by operating activities for the quarter was $56.2 million, up 83.2% compared to $30.7 million for the first quarter of fiscal 2012. 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 quarter, total debt was $109.0 million or 10.5% of total capital. Outlook Mr. Croatti continued, “Based on the strength of our first quarter and our current outlook for the remainder of the year, we are increasing our full year guidance. We are currently projecting our fiscal 2013 revenues to be between $1.335 billion and $1.348 billion and diluted earnings per share to be between $5.10 and $5.25. Our guidance assumes no deterioration of the U.S. economy and also includes one extra week of operations compared to fiscal 2012 due to the timing of our fiscal calendar.” 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, our ability to properly and efficiently design, construct, implement and operate our new CRM computer system, 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 25, 2012 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 November 24, November 26, (In thousands, except per share 2012 (2) 2011 (2) data) Revenues $ 332,569 $ 313,025 Operating expenses: Cost of revenues (1) 201,551 195,139 Selling and administrative expenses 64,288 59,124 (1) Depreciation and amortization 16,771 16,408 Total operating expenses 282,610 270,671 Income from operations 49,959 42,354 Other (income) expense: Interest expense 460 573 Interest income (767 ) (631 ) Exchange rate (gain) loss (160 ) 627 (467 ) 569 Income before income taxes 50,426 41,785 Provision for income taxes 19,666 15,983 Net income $ 30,760 $ 25,802 Income per share – Basic Common Stock $ 1.62 $ 1.37 Class B Common Stock $ 1.30 $ 1.09 Income per share – Diluted Common Stock $ 1.54 $ 1.30 Income allocated to – Basic Common Stock $ 24,191 $ 20,258 Class B Common Stock $ 6,025 $ 5,068 Income allocated to – Diluted Common Stock $ 30,244 $ 25,350 Weighted average number of shares outstanding – Basic Common Stock 14,925 14,838 Class B Common Stock 4,647 4,641 Weighted average number of shares outstanding – Diluted Common Stock 19,693 19,557 (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 (In thousands) November 24, August 25, 2012 (1) 2012 Assets Current assets: Cash and cash equivalents $ 152,664 $ 120,123 Receivables, net 153,899 135,327 Inventories 75,309 75,420 Rental merchandise in service 136,219 138,284 Prepaid and deferred income taxes 12,721 12,785 Prepaid expenses 8,611 5,741 Total current assets 539,423 487,680 Property, plant and equipment: Land, buildings and leasehold 365,575 355,568 improvements Machinery and equipment 437,614 425,274 Motor vehicles 141,978 141,370 945,167 922,212 Less - accumulated depreciation 522,094 510,008 423,073 412,204 Goodwill 288,158 288,137 Customer contracts and other intangible 48,006 50,531 assets, net Other assets 2,596 1,982 $ 1,301,256 $ 1,240,534 Liabilities and shareholders' equity Current liabilities: Loans payable and current maturities of $ 108,847 $ 6,831 long-term debt Accounts payable 63,545 52,340 Accrued liabilities 80,125 78,174 Accrued income taxes 20,142 8,180 Total current liabilities 272,659 145,525 Long-term liabilities: Long-term debt, net of current 155 100,155 maturities Accrued liabilities 44,091 43,420 Accrued and deferred income taxes 54,543 54,509 Total long-term liabilities 98,789 198,084 Shareholders' equity: Common Stock 1,508 1,506 Class B Common Stock 488 488 Capital surplus 45,443 42,984 Retained earnings 874,723 844,676 Accumulated other comprehensive income 7,646 7,271 Total shareholders' equity 929,808 896,925 $ 1,301,256 $ 1,240,534 (1) Unaudited UniFirst Corporation and Subsidiaries Detail of Operating Results Revenues Thirteen weeks ended November 24, November Dollar Percent 26, (In thousands, except 2012 (1) 2011 (1) Change Change percentages) Core Laundry $ 294,560 $ 272,273 $ 22,287 8.2 % Operations Specialty 27,884 30,268 (2,384 ) -7.9 Garments First Aid 10,125 10,484 (359 ) -3.4 Consolidated $ 332,569 $ 313,025 $ 19,544 6.2 % total Income from Operations Thirteen weeks ended November 24, November Dollar Percent 26, (In thousands, except 2012 (1) 2011 (1) Change Change percentages) Core Laundry $ 44,528 $ 34,982 $ 9,546 27.3 % Operations Specialty 4,704 6,566 (1,862 ) -28.3 Garments First Aid 727 806 (79 ) -9.8 Consolidated $ 49,959 $ 42,354 $ 7,605 18.0 % total (1) Unaudited UniFirst Corporation and Subsidiaries Consolidated Statements of Cash Flows Fifty-two weeks ended November 24, November 26, 2012 (1) 2011 (1) (In thousands) Cash flows from operating activities: Net income $ 30,760 $ 25,802 Adjustments to reconcile net income to cash provided by operating activities: Depreciation 14,305 13,727 Amortization of intangible assets 2,466 2,681 Amortization of deferred financing costs 59 59 Share-based compensation 1,705 1,668 Accretion on environmental contingencies 136 158 Accretion on asset retirement obligations 166 158 Deferred income taxes (18 ) 51 Changes in assets and liabilities, net of acquisitions: Receivables (18,457 ) (16,100 ) Inventories 221 2,332 Rental merchandise in service 2,102 (7,505 ) Prepaid expenses (2,867 ) (3,137 ) Accounts payable 11,183 3,529 Accrued liabilities 2,373 623 Prepaid and accrued income taxes 12,033 6,608 Net cash provided by operating activities 56,167 30,654 Cash flows from investing activities: Capital expenditures (25,103 ) (13,966 ) Other (318 ) (118 ) Net cash used in investing activities (25,421 ) (14,084 ) Cash flows from financing activities: Proceeds from long-term obligations - 7,000 Payments on long-term obligations - (15,371 ) Proceeds from exercise of Common Stock options 757 248 Payment of cash dividends (713 ) (709 ) Other 1,954 - Net cash provided by (used in) financing 1,998 (8,832 ) activities Effect of exchange rate changes (203 ) (2,427 ) Net increase in cash and cash equivalents 32,541 5,311 Cash and cash equivalents at beginning of 120,123 48,812 period Cash and cash equivalents at end of period $ 152,664 $ 54,123 (1) Unaudited Contact: UniFirst Corporation Steven S. Sintros, 978-658-8888 Vice President & CFO ssintros@UniFirst.com
UniFirst Announces Financial Results for the First Quarter of Fiscal 2013
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