UniFirst Corporation (NYSE: UNF) (the “Company,” “UniFirst” or
“we”) today reported results for its fourth quarter and full year
ended August 31, 2024, as compared to the corresponding
periods in the prior fiscal year. The fourth quarter as well as the
full year included an extra week compared to the prior year.
Q4 2024 Financial
Highlights
- Consolidated
revenues for the fourth quarter increased 11.9% to $639.9
million.
- The extra week accounted for
revenue growth of approximately 8.0% in the quarter.
- Operating income was $54.0 million,
an increase of 49.8%.
- The quarterly tax rate decreased to
21.8% compared to 24.3% in the prior year.
- Net income increased to $44.6
million, or 61.5%.
- Diluted earnings per share
increased to $2.39 from $1.47 in the prior year, or 62.6%.
- Adjusted EBITDA increased to $95.0
million compared to $71.7 million in the prior year, or 32.5%.
- Cash flow from operating activities
increased to $295.3 million in fiscal 2024, or 36.8%.
The Company’s financial results for the fourth
quarters of fiscal 2024 and 2023 included approximately $1.8
million and $6.1 million, respectively, of costs directly
attributable to its customer relationship management (“CRM”)
computer system and enterprise resource planning (“ERP”) projects.
The Company refers to the CRM and ERP projects together as its “Key
Initiatives” and does not exclude these amounts as part of its
Adjusted EBITDA measure. The effect of these items on the fourth
quarter of fiscal 2024 and 2023 combined to decrease:
- Both operating income and Adjusted
EBITDA by $1.8 million and $6.1 million, respectively.
- Net income by $1.3 million and $5.0
million, respectively.
- Diluted earnings per share by $0.07
and $0.27, respectively.
Fiscal 2024 Financial
Highlights
- Full year
consolidated revenues were $2.427 billion, an increase of
8.7%.
- The extra week accounted for
revenue growth of approximately 2.0% compared to prior year.
- Full year operating income was
$183.6 million, an increase of 37.4%.
- Net income for the year increased
to $145.5 million, or 40.3%.
- Diluted earnings per share
increased to $7.77 from $5.53 in the prior year, or 40.5%.
- Adjusted EBITDA increased to $333.3
million compared to $265.4 million in the prior year, or
25.6%.
The Company’s financial results for the full
years of fiscal 2024 and 2023 included $11.8 million and $33.6
million, respectively, of costs directly attributable to its Key
Initiatives. In addition, the Company incurred costs during the
full year of fiscal 2023 related to the acquisition of Clean
Uniform of approximately $3.0 million. The effect of these items on
the full years of fiscal 2024 and 2023 combined to decrease:
- Operating income
by $11.8 million and $36.6 million, respectively.
- Adjusted EBITDA by $11.8 million
and $33.6 million, respectively.
- Net income by $9.0 million and
$28.0 million, respectively.
- Diluted earnings per share by $0.48
and $1.49, respectively.
Steven Sintros, UniFirst President and Chief
Executive Officer, said, “I am pleased to report that we closed the
year with a strong fourth quarter. We accomplished a lot as a team
in fiscal 2024 that will help strengthen our company as we move
forward, growing our business as well as advancing our technology
and other organizational initiatives. I want to thank our nearly
16,000 Team Partners who continue to Always
Deliver for each other and our customers as we strive
towards our vision of being universally recognized as the best
service provider in the industry.”
Q4 2024 Segment Reporting
Highlights
Core Laundry Operations
- Revenues for the quarter increased
11.7% to $564.1 million.
- Organic growth, which excludes the
effect of acquisitions, fluctuations in the Canadian dollar and the
impact of the extra week, was 3.9%.
- Operating margin increased to 8.0%
from 6.0%.
- Adjusted EBITDA margin increased to
14.9% from 12.7%.
The costs we incurred related to the Key
Initiatives, discussed above, were recorded to the Core Laundry
Operations' segment, and decreased both the Core Laundry
Operations' operating and Adjusted EBITDA margins for the fourth
quarters of fiscal 2024 and 2023 by 0.3% and 1.2%,
respectively.
The segment's operating and Adjusted EBITDA
margin comparisons benefited from the additional week in fiscal
2024, as well as from lower merchandise, payroll and other
operating input costs as a percentage of revenues.
Specialty Garments
- Revenues for the quarter were $46.5
million, an increase of 12.3%. After adjusting for the impact of
the extra week, organic growth was 4.4% primarily due to growth in
the segment's cleanroom operations and stronger results from the
U.S. nuclear operations.
- Operating margin increased to 18.5%
from 16.4% a year ago, primarily due to higher profitability in the
segment's nuclear operations. The nuclear operations' results can
vary significantly due to seasonality and the timing of reactor
outages and projects.
Balance Sheet and Capital
Allocation
- Cash, cash equivalents and
Short-term investments totaled $175.1 million as of August 31,
2024.
- The Company had no long-term debt
outstanding as of August 31, 2024.
- The Company paid dividends to
shareholders of $23.3 million in fiscal 2024, an increase of 5.6%
from the prior year.
- The Company repurchased 45,556
shares of Common Stock for $7.8 million in the fourth quarter of
fiscal 2024. During fiscal 2024, the Company repurchased a total of
139,556 shares of common stock for a total of $23.8 million under
the program. As of August 31, 2024, the Company had $76.2
million remaining under its existing share repurchase
authorization.
Financial Outlook
Mr. Sintros continued, “For fiscal 2025, we
expect our revenues to be between $2.425 billion and $2.445 billion
and fully diluted earnings per share to be between $6.79 and $7.19.
This guidance includes an estimated $16.0 million of costs directly
attributable to our Key Initiatives that we anticipate will be
expensed in fiscal 2025. Please note the following regarding our
guidance:
- Fiscal 2025 has one less week compared to prior year.
- Net income, at the midpoint of the range, is expected to be
$131.0 million.
- Consolidated Adjusted EBITDA, at the midpoint of the range, is
expected to be $330.0 million.
- Core Laundry Operations’ organic revenue growth, at the
midpoint of the range, is expected to be 1.8%.
- Core Laundry Operations’ operating and Adjusted EBITDA margins,
at the midpoint of the range, are expected to be 5.9% and 13.2%,
respectively.
- The Key Initiatives are expected to decrease Core Laundry
Operations’ operating and Adjusted EBITDA margins by 0.7% and EPS
by $0.64.
- The effective tax rate is assumed to be 25.0%.
- Guidance does not include the impact of any future share
buybacks or unexpected events affecting the economy generally.
Conference Call Information
UniFirst Corporation will hold a conference call
today at 9:00 a.m. (ET) to discuss its quarterly and full year
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
Headquartered in Wilmington, Mass., UniFirst
Corporation (NYSE: UNF) is a North American leader in the supply
and servicing of uniform and workwear programs, facility service
products, as well as first aid and safety supplies and services.
Together with its subsidiaries, the Company also manages
specialized garment programs for the cleanroom and nuclear
industries. In addition to partnering with leading brands, UniFirst
manufactures its own branded workwear, protective clothing, and
floorcare products at its five company-owned ISO-9001-certified
manufacturing facilities. With more than 270 service locations,
over 300,000 customer locations, and 16,000-plus employee Team
Partners, the Company outfits more than 2 million workers every
day. For more information, contact UniFirst at 888.296.2740 or
visit UniFirst.com.
Forward-Looking Statements
Disclosure
This public announcement contains
forward-looking statements within the meaning of the federal
securities laws that reflect the Company’s current views with
respect to future events and financial performance, including
projected revenues, operating margin and earnings per share.
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 may be identified by words such
as “guidance,” “outlook,” “estimates,” “anticipates,” “projects,”
“plans,” “expects,” “intends,” “believes,” “seeks,” “could,”
“should,” “may,” “will,” “strategy,” “objective,” “assume,”
“strive,” “design,” “assumption,” “vision” or the negative versions
thereof, and similar expressions and by the context in which they
are used. Such forward-looking statements are based upon our
current expectations and speak only as of the date made. Such
statements are highly dependent upon a variety of risks,
uncertainties and other 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 caused by an economic recession or other
adverse economic conditions, including, without limitation, as a
result of elevated inflation or interest rates or extraordinary
events or circumstances such as geopolitical conflicts like the
conflict between Russia and Ukraine and disruption in the Middle
East or the COVID-19 pandemic, and their impact on our customers’
businesses and workforce levels, disruptions of our business and
operations, including limitations on, or closures of, our
facilities, or the business and operations of our customers or
suppliers in connection with extraordinary events or circumstances
such as the COVID-19 pandemic, uncertainties regarding our ability
to consummate acquisitions and successfully integrate acquired
businesses, and the performance of such businesses, uncertainties
regarding any existing or newly-discovered expenses and liabilities
related to environmental compliance and remediation, any adverse
outcome of pending or future contingencies or claims, our ability
to compete successfully without any significant degradation in our
margin rates, seasonal and quarterly 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,
which such supply could be severely disrupted as a result of
extraordinary events or circumstances such as the conflict between
Russia and Ukraine, any loss of key management or other personnel,
increased costs as a result of any changes in federal, state,
international or other laws, rules and regulations or governmental
interpretation of such laws, rules and regulations, uncertainties
regarding, or adverse impacts from continued high price levels of
natural gas, electricity, fuel and labor or increases in such
costs, the negative effect on our business from sharply depressed
oil and natural gas prices, the continuing increase in domestic
healthcare costs, increased workers’ compensation claim costs,
increased healthcare claim costs, our ability to retain and grow
our customer base, demand and prices for our products and services,
fluctuations in our Specialty Garments business, political or other
instability, supply chain disruption or infection among our
employees in Mexico and Nicaragua where our principal garment
manufacturing plants are located, our ability to properly and
efficiently design, construct, implement and operate a new customer
relationship management computer system, interruptions or failures
of our information technology systems, including as a result of
cyber-attacks, additional professional and internal costs necessary
for compliance with any changes in or additional Securities and
Exchange Commission (the “SEC”), New York Stock Exchange and
accounting or other rules, including, without limitation, recent
rules adopted by the SEC regarding climate-related and
cybersecurity-related disclosures, strikes and unemployment levels,
our efforts to evaluate and potentially reduce internal costs, the
impact of foreign trade policies and tariffs or other impositions
on imported goods on our business, results of operations and
financial condition, our ability to successfully implement our
business strategies and processes, including our capital allocation
strategies, our ability to successfully remediate the material
weakness in internal control over financial reporting disclosed in
our Annual Report on Form 10-K for the year ended August 26,
2023 and the other factors described under Part I, Item 1A. “Risk
Factors” and elsewhere in our Annual Report on Form 10-K for the
year ended August 26, 2023, Part II, Item 1A. “Risk Factors”
and elsewhere in our subsequent Quarterly Reports on Form 10-Q and
in our other filings with the SEC. We undertake no obligation to
update any forward-looking statements to reflect events or
circumstances arising after the date on which they are made.
Consolidated Statements of
Income(Unaudited)
(In thousands, except per share data) |
|
Fourteen weeks ended
August 31, 2024 |
|
|
Thirteen weeks ended
August 26, 2023 |
|
|
Fifty-three weeks ended
August 31, 2024 |
|
|
Fifty-two weeks ended
August 26, 2023 |
|
Revenues |
|
$ |
639,867 |
|
|
$ |
571,890 |
|
|
$ |
2,427,431 |
|
|
$ |
2,233,047 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues (1) |
|
|
408,604 |
|
|
|
378,009 |
|
|
|
1,579,835 |
|
|
|
1,481,296 |
|
Selling and administrative expenses (1) |
|
|
139,236 |
|
|
|
124,685 |
|
|
|
522,586 |
|
|
|
496,915 |
|
Depreciation and amortization |
|
|
37,979 |
|
|
|
33,118 |
|
|
|
141,432 |
|
|
|
121,233 |
|
Total operating expenses |
|
|
585,819 |
|
|
|
535,812 |
|
|
|
2,243,853 |
|
|
|
2,099,444 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
|
54,048 |
|
|
|
36,078 |
|
|
|
183,578 |
|
|
|
133,603 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other (income)
expense: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest income, net |
|
|
(2,652 |
) |
|
|
(385 |
) |
|
|
(7,242 |
) |
|
|
(6,738 |
) |
Other (income) expense, net |
|
|
(372 |
) |
|
|
(22 |
) |
|
|
1,441 |
|
|
|
1,504 |
|
Total other income, net |
|
|
(3,024 |
) |
|
|
(407 |
) |
|
|
(5,801 |
) |
|
|
(5,234 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes |
|
|
57,072 |
|
|
|
36,485 |
|
|
|
189,379 |
|
|
|
138,837 |
|
Provision for income
taxes |
|
|
12,437 |
|
|
|
8,854 |
|
|
|
43,905 |
|
|
|
35,163 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
44,635 |
|
|
$ |
27,631 |
|
|
$ |
145,474 |
|
|
$ |
103,674 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income per share –
Basic: |
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock |
|
$ |
2.50 |
|
|
$ |
1.53 |
|
|
$ |
8.11 |
|
|
$ |
5.77 |
|
Class B Common Stock |
|
$ |
2.00 |
|
|
$ |
1.23 |
|
|
$ |
6.49 |
|
|
$ |
4.62 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income per share –
Diluted: |
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock |
|
$ |
2.39 |
|
|
$ |
1.47 |
|
|
$ |
7.77 |
|
|
$ |
5.53 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income allocated to –
Basic: |
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock |
|
$ |
37,472 |
|
|
$ |
23,222 |
|
|
$ |
122,188 |
|
|
$ |
87,104 |
|
Class B Common Stock |
|
$ |
7,163 |
|
|
$ |
4,409 |
|
|
$ |
23,286 |
|
|
$ |
16,570 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income allocated to –
Diluted: |
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock |
|
$ |
44,635 |
|
|
$ |
27,631 |
|
|
$ |
145,474 |
|
|
$ |
103,674 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding – Basic: |
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock |
|
|
15,018 |
|
|
|
15,133 |
|
|
|
15,073 |
|
|
|
15,098 |
|
Class B Common Stock |
|
|
3,590 |
|
|
|
3,590 |
|
|
|
3,590 |
|
|
|
3,590 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding – Diluted: |
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock |
|
|
18,683 |
|
|
|
18,790 |
|
|
|
18,724 |
|
|
|
18,762 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Exclusive of
depreciation on the Company’s property, plant and equipment and
amortization on its intangible assets.Condensed
Consolidated Balance
Sheets(Unaudited)
(In thousands) |
|
August 31,2024 |
|
|
August 26,2023 |
|
Assets |
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
161,571 |
|
|
$ |
79,443 |
|
Short-term investments |
|
|
13,505 |
|
|
|
10,157 |
|
Receivables, net |
|
|
278,851 |
|
|
|
279,078 |
|
Inventories |
|
|
156,908 |
|
|
|
148,334 |
|
Rental merchandise in service |
|
|
237,969 |
|
|
|
248,323 |
|
Prepaid taxes |
|
|
14,893 |
|
|
|
20,907 |
|
Prepaid expenses and other current assets |
|
|
51,979 |
|
|
|
53,876 |
|
Total current assets |
|
|
915,676 |
|
|
|
840,118 |
|
|
|
|
|
|
|
|
Property, plant and equipment,
net |
|
|
801,612 |
|
|
|
756,540 |
|
Goodwill |
|
|
648,850 |
|
|
|
647,900 |
|
Customer contracts and other
intangible assets, net |
|
|
119,999 |
|
|
|
145,618 |
|
Deferred income taxes |
|
|
833 |
|
|
|
567 |
|
Operating lease right-of-use
assets, net |
|
|
66,682 |
|
|
|
62,565 |
|
Other assets |
|
|
142,761 |
|
|
|
116,667 |
|
Total assets |
|
$ |
2,696,413 |
|
|
$ |
2,569,975 |
|
|
|
|
|
|
|
|
Liabilities and
shareholders’ equity |
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
Accounts payable |
|
$ |
92,509 |
|
|
$ |
92,730 |
|
Accrued liabilities |
|
|
170,240 |
|
|
|
156,408 |
|
Accrued taxes |
|
|
447 |
|
|
|
352 |
|
Operating lease liabilities, current |
|
|
18,241 |
|
|
|
17,739 |
|
Total current liabilities |
|
|
281,437 |
|
|
|
267,229 |
|
Long-term liabilities: |
|
|
|
|
|
|
Accrued liabilities |
|
|
123,401 |
|
|
|
121,682 |
|
Accrued and deferred income taxes |
|
|
132,496 |
|
|
|
130,084 |
|
Operating lease liabilities |
|
|
50,568 |
|
|
|
47,020 |
|
Total long-term liabilities |
|
|
306,465 |
|
|
|
298,786 |
|
Shareholders’ equity: |
|
|
|
|
|
|
Common Stock |
|
|
1,500 |
|
|
|
1,510 |
|
Class B Common Stock |
|
|
359 |
|
|
|
359 |
|
Capital surplus |
|
|
104,791 |
|
|
|
99,303 |
|
Retained earnings |
|
|
2,025,505 |
|
|
|
1,926,549 |
|
Accumulated other comprehensive loss |
|
|
(23,644 |
) |
|
|
(23,761 |
) |
Total shareholders’ equity |
|
|
2,108,511 |
|
|
|
2,003,960 |
|
Total liabilities and shareholders’ equity |
|
$ |
2,696,413 |
|
|
$ |
2,569,975 |
|
Detail of Operating
Results(Unaudited)
|
|
Fourteen weeks ended
August 31, 2024 |
|
|
Thirteen weeks ended
August 26, 2023 |
|
(In
thousands, except percentages) |
|
Core Laundry |
|
|
Specialty |
|
|
First |
|
|
|
|
|
Core Laundry |
|
|
Specialty |
|
|
First |
|
|
|
|
|
Operations |
|
|
Garments |
|
|
Aid |
|
|
Total |
|
|
Operations |
|
|
Garments |
|
|
Aid |
|
|
Total |
|
Revenues |
|
$ |
564,085 |
|
|
$ |
46,499 |
|
|
$ |
29,283 |
|
|
$ |
639,867 |
|
|
$ |
505,022 |
|
|
$ |
41,421 |
|
|
$ |
25,447 |
|
|
$ |
571,890 |
|
Revenue Growth % |
|
|
11.7 |
% |
|
|
12.3 |
% |
|
|
15.1 |
% |
|
|
11.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income (Loss) (1),
(2) |
|
$ |
45,368 |
|
|
$ |
8,585 |
|
|
$ |
95 |
|
|
$ |
54,048 |
|
|
$ |
30,198 |
|
|
$ |
6,805 |
|
|
$ |
(925 |
) |
|
$ |
36,078 |
|
Operating Margin |
|
|
8.0 |
% |
|
|
18.5 |
% |
|
|
0.3 |
% |
|
|
8.4 |
% |
|
|
6.0 |
% |
|
|
16.4 |
% |
|
|
-3.6 |
% |
|
|
6.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA (1), (2) |
|
$ |
83,913 |
|
|
$ |
10,079 |
|
|
$ |
1,035 |
|
|
$ |
95,027 |
|
|
$ |
64,003 |
|
|
$ |
8,000 |
|
|
$ |
(286 |
) |
|
$ |
71,717 |
|
Adjusted EBITDA Margin |
|
|
14.9 |
% |
|
|
21.7 |
% |
|
|
3.5 |
% |
|
|
14.9 |
% |
|
|
12.7 |
% |
|
|
19.3 |
% |
|
|
-1.1 |
% |
|
|
12.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) The Company’s
financial results for the fourth quarters of fiscal 2024 and 2023
included approximately $1.8 million and $6.1 million, respectively,
of costs directly attributable to its Key Initiatives. These costs
were recorded to the Core Laundry
Operations.(2) The Key Initiatives' costs
decreased both Core Laundry Operations' operating and Adjusted
EBITDA margins for the fourth quarters of fiscal 2024 and 2023 by
0.4% and 1.2%, respectively.
|
|
Fifty-three weeks ended
August 31, 2024 |
|
|
Fifty-two weeks ended
August 26, 2023 |
|
(In
thousands, except percentages) |
|
Core Laundry |
|
|
Specialty |
|
|
First |
|
|
|
|
|
Core Laundry |
|
|
Specialty |
|
|
First |
|
|
|
|
|
Operations |
|
|
Garments |
|
|
Aid |
|
|
Total |
|
|
Operations |
|
|
Garments |
|
|
Aid |
|
|
Total |
|
Revenues |
|
$ |
2,138,948 |
|
|
$ |
182,212 |
|
|
$ |
106,271 |
|
|
$ |
2,427,431 |
|
|
$ |
1,961,189 |
|
|
$ |
177,034 |
|
|
$ |
94,824 |
|
|
$ |
2,233,047 |
|
Revenue Growth % |
|
|
9.1 |
% |
|
|
2.9 |
% |
|
|
12.1 |
% |
|
|
8.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income (Loss) (3),
(4) |
|
$ |
143,434 |
|
|
$ |
41,976 |
|
|
$ |
(1,832 |
) |
|
$ |
183,578 |
|
|
$ |
98,666 |
|
|
$ |
37,488 |
|
|
$ |
(2,551 |
) |
|
$ |
133,603 |
|
Operating Margin |
|
|
6.7 |
% |
|
|
23.0 |
% |
|
|
-1.7 |
% |
|
|
7.6 |
% |
|
|
5.0 |
% |
|
|
21.2 |
% |
|
|
-2.7 |
% |
|
|
6.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA (3), (4) |
|
$ |
284,570 |
|
|
$ |
47,062 |
|
|
$ |
1,710 |
|
|
$ |
333,342 |
|
|
$ |
222,800 |
|
|
$ |
42,146 |
|
|
$ |
466 |
|
|
$ |
265,412 |
|
Adjusted EBITDA Margin |
|
|
13.3 |
% |
|
|
25.8 |
% |
|
|
1.6 |
% |
|
|
13.7 |
% |
|
|
11.4 |
% |
|
|
23.8 |
% |
|
|
0.5 |
% |
|
|
11.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3) The Company's
financial results for the full years of fiscal 2024 and 2023
included approximately $11.8 million and $33.6 million,
respectively, of costs directly attributable to its Key
Initiatives. In addition, the Company incurred costs related to the
acquisition of Clean Uniform during the full year of fiscal 2023 of
approximately $3.0 million, which are excluded from Adjusted
EBITDA. These costs were recorded to the Core Laundry Operations.
(4) The Key Initiatives' costs decreased
both Core Laundry Operations' operating and Adjusted EBITDA margins
for the full years of fiscal 2024 and 2023 by 0.6% and 1.7%,
respectively. In addition, Clean Uniform acquisition costs further
decreased Core Laundry Operations' operating margin for the full
year of fiscal 2023 by approximately 0.2%.
Consolidated Statements of Cash
Flows(Unaudited)
(In thousands) |
|
Fifty-three weeks ended
August 31, 2024 |
|
|
Fifty-two weeks ended
August 26, 2023 |
|
Cash flows from operating activities: |
|
|
|
|
|
|
Net income |
|
$ |
145,474 |
|
|
$ |
103,674 |
|
Adjustments to reconcile net
income to cash provided by operating activities: |
|
|
|
|
|
|
Depreciation and amortization (1) |
|
|
141,432 |
|
|
|
121,233 |
|
Share-based compensation |
|
|
9,773 |
|
|
|
9,063 |
|
Accretion on environmental contingencies |
|
|
1,264 |
|
|
|
1,036 |
|
Accretion on asset retirement obligations |
|
|
976 |
|
|
|
923 |
|
Deferred income taxes |
|
|
5,231 |
|
|
|
22,143 |
|
Other |
|
|
1,027 |
|
|
|
1,020 |
|
Changes in assets and
liabilities, net of acquisitions: |
|
|
|
|
|
|
Receivables, less reserves |
|
|
511 |
|
|
|
(21,714 |
) |
Inventories |
|
|
(8,458 |
) |
|
|
4,001 |
|
Rental merchandise in service |
|
|
10,548 |
|
|
|
(20,847 |
) |
Prepaid expenses and other current assets and Other assets |
|
|
(12,582 |
) |
|
|
(7,057 |
) |
Accounts payable |
|
|
(4,069 |
) |
|
|
10,111 |
|
Accrued liabilities |
|
|
(3,021 |
) |
|
|
(12,762 |
) |
Prepaid and accrued income taxes |
|
|
7,163 |
|
|
|
4,938 |
|
Net cash provided by operating
activities |
|
|
295,269 |
|
|
|
215,762 |
|
|
|
|
|
|
|
|
Cash flows from
investing activities: |
|
|
|
|
|
|
Acquisition of businesses, net
of cash acquired |
|
|
(203 |
) |
|
|
(306,193 |
) |
Capital expenditures,
including capitalization of software costs |
|
|
(160,417 |
) |
|
|
(171,991 |
) |
Purchases of investments |
|
|
(24,581 |
) |
|
|
(117,012 |
) |
Maturities of investments |
|
|
21,679 |
|
|
|
107,000 |
|
Proceeds from sale of
assets |
|
|
1,286 |
|
|
|
549 |
|
Net cash used in investing
activities |
|
|
(162,236 |
) |
|
|
(487,647 |
) |
|
|
|
|
|
|
|
Cash flows from
financing activities: |
|
|
|
|
|
|
Payment of deferred financing
costs |
|
|
— |
|
|
|
(851 |
) |
Borrowings under line of
credit |
|
|
— |
|
|
|
80,000 |
|
Repayments under line of
credit |
|
|
— |
|
|
|
(80,000 |
) |
Proceeds from exercise of
share-based awards |
|
|
4 |
|
|
|
3 |
|
Taxes withheld and paid
related to net share settlement of equity awards |
|
|
(3,239 |
) |
|
|
(2,891 |
) |
Repurchase of Common
Stock |
|
|
(23,780 |
) |
|
|
— |
|
Payment of cash dividends |
|
|
(23,345 |
) |
|
|
(22,100 |
) |
Net cash used in financing
activities |
|
|
(50,360 |
) |
|
|
(25,839 |
) |
|
|
|
|
|
|
|
Effect of exchange rate
changes |
|
|
(545 |
) |
|
|
768 |
|
|
|
|
|
|
|
|
Net increase (decrease) in
cash and cash equivalents |
|
|
82,128 |
|
|
|
(296,956 |
) |
Cash and cash equivalents at
beginning of period |
|
|
79,443 |
|
|
|
376,399 |
|
Cash and cash equivalents at
end of period |
|
$ |
161,571 |
|
|
$ |
79,443 |
|
|
|
|
|
|
|
|
|
|
(1) Depreciation and
amortization for the full year of fiscal 2024 and 2023 included
approximately $18.8 million and $14.7 million, respectively, of
non-cash amortization expense recognized on acquisition-related
intangible assets.
Reconciliation of GAAP to Non-GAAP Financial
Measures
The Company reports its consolidated financial
results in accordance with generally accepted accounting principles
(“GAAP”). To supplement the Company’s consolidated financial
results in this press release, the Company also presents Adjusted
EBITDA and Adjusted EBITDA margin, which are non-GAAP financial
measures. The Company defines Adjusted EBITDA as net income before
interest, income taxes, depreciation and amortization, further
adjusted for share-based compensation expense, acquisition costs,
and other items impacting the comparability of the Company’s
underlying operating performance between periods. Adjusted EBITDA
margin is defined as Adjusted EBITDA for a period divided by
revenue for the same period.
The Company believes these non-GAAP financial
measures provide useful supplemental information regarding the
performance of the Company and its segments to both management and
investors. In addition, by excluding certain items, these non-GAAP
financial measures enable management and investors to further
evaluate the underlying operating performance of the Company. The
Company presented EBITDA in recent periods and has presented
Adjusted EBITDA in this press release because the Company believes
that the further adjustments included in Adjusted EBITDA provide
useful supplemental information regarding the underlying operating
performance of the Company by adjusting for items that impact the
comparability of the Company’s operating and financial
performance.
Supplemental reconciliations of the Company’s
consolidated net income on a GAAP basis to Adjusted EBITDA and
Adjusted EBITDA margin, are presented in the following table.
Investors are encouraged to review the reconciliations of the
non-GAAP financial measures to their most directly comparable GAAP
financial measures, which are provided below. Adjusted EBITDA and
Adjusted EBITDA margin should be considered in addition to, and not
as substitutes for, or in isolation from, measures prepared in
accordance with GAAP.
The Company does not allocate its provision for
income taxes to its business segments and as a result, presents it
in a separate column in the following tables:
|
Fourteen weeks ended
August 31, 2024 |
|
|
|
Core Laundry |
|
|
Specialty |
|
|
First |
|
|
|
|
|
|
|
(In thousands, except percentages) |
|
Operations |
|
|
Garments |
|
|
Aid |
|
|
Other |
|
|
Total |
|
Revenue |
|
$ |
564,085 |
|
|
$ |
46,499 |
|
|
$ |
29,283 |
|
|
$ |
— |
|
|
$ |
639,867 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
48,392 |
|
|
$ |
8,585 |
|
|
$ |
95 |
|
|
$ |
(12,437 |
) |
|
$ |
44,635 |
|
Provision for income
taxes |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
12,437 |
|
|
|
12,437 |
|
Interest income, net |
|
|
(2,652 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(2,652 |
) |
Depreciation and
amortization |
|
|
35,755 |
|
|
|
1,311 |
|
|
|
913 |
|
|
|
— |
|
|
|
37,979 |
|
Share-based compensation
expense |
|
|
2,418 |
|
|
|
183 |
|
|
|
27 |
|
|
|
— |
|
|
|
2,628 |
|
Adjusted EBITDA |
|
$ |
83,913 |
|
|
$ |
10,079 |
|
|
$ |
1,035 |
|
|
$ |
— |
|
|
$ |
95,027 |
|
Adjusted EBITDA Margin |
|
|
14.9 |
% |
|
|
21.7 |
% |
|
|
3.5 |
% |
|
|
|
|
|
14.9 |
% |
|
Thirteen weeks ended
August 26, 2023 |
|
|
|
Core Laundry |
|
|
Specialty |
|
|
First |
|
|
|
|
|
|
|
(In thousands, except percentages) |
|
Operations |
|
|
Garments |
|
|
Aid |
|
|
Other |
|
|
Total |
|
Revenue |
|
$ |
505,022 |
|
|
$ |
41,421 |
|
|
$ |
25,447 |
|
|
$ |
— |
|
|
$ |
571,890 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
30,605 |
|
|
$ |
6,805 |
|
|
$ |
(925 |
) |
|
$ |
(8,854 |
) |
|
$ |
27,631 |
|
Provision for income
taxes |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
8,854 |
|
|
|
8,854 |
|
Interest income, net |
|
|
(385 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(385 |
) |
Depreciation and
amortization |
|
|
31,465 |
|
|
|
1,035 |
|
|
|
618 |
|
|
|
— |
|
|
|
33,118 |
|
Share-based compensation
expense |
|
|
2,008 |
|
|
|
160 |
|
|
|
21 |
|
|
|
— |
|
|
|
2,189 |
|
Acquisition costs(1) |
|
|
310 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
310 |
|
Adjusted EBITDA |
|
$ |
64,003 |
|
|
$ |
8,000 |
|
|
$ |
(286 |
) |
|
$ |
— |
|
|
$ |
71,717 |
|
Adjusted EBITDA Margin |
|
|
12.7 |
% |
|
|
19.3 |
% |
|
|
-1.1 |
% |
|
|
|
|
|
12.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Represents costs incurred related to
the acquisition of Clean Uniform. The Company completed the
acquisition on March 13, 2023 during the third quarter of fiscal
2023.
|
Fifty-three weeks ended
August 31, 2024 |
|
|
|
Core Laundry |
|
|
Specialty |
|
|
First |
|
|
|
|
|
|
|
(In thousands, except percentages) |
|
Operations |
|
|
Garments |
|
|
Aid |
|
|
Other |
|
|
Total |
|
Revenue |
|
$ |
2,138,948 |
|
|
$ |
182,212 |
|
|
$ |
106,271 |
|
|
$ |
— |
|
|
$ |
2,427,431 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
149,235 |
|
|
$ |
41,976 |
|
|
$ |
(1,832 |
) |
|
$ |
(43,905 |
) |
|
$ |
145,474 |
|
Provision for income
taxes |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
43,905 |
|
|
|
43,905 |
|
Interest income, net |
|
|
(7,242 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(7,242 |
) |
Depreciation and
amortization |
|
|
133,591 |
|
|
|
4,398 |
|
|
|
3,443 |
|
|
|
— |
|
|
|
141,432 |
|
Share-based compensation
expense |
|
|
8,986 |
|
|
|
688 |
|
|
|
99 |
|
|
|
— |
|
|
|
9,773 |
|
Adjusted EBITDA |
|
$ |
284,570 |
|
|
$ |
47,062 |
|
|
$ |
1,710 |
|
|
$ |
— |
|
|
$ |
333,342 |
|
Adjusted EBITDA Margin |
|
|
13.3 |
% |
|
|
25.8 |
% |
|
|
1.6 |
% |
|
|
|
|
|
13.7 |
% |
|
Fifty-two weeks ended
August 26, 2023 |
|
|
|
Core Laundry |
|
|
Specialty |
|
|
First |
|
|
|
|
|
|
|
(In thousands, except percentages) |
|
Operations |
|
|
Garments |
|
|
Aid |
|
|
Other |
|
|
Total |
|
Revenue |
|
$ |
1,961,189 |
|
|
$ |
177,034 |
|
|
$ |
94,824 |
|
|
$ |
— |
|
|
$ |
2,233,047 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
103,900 |
|
|
$ |
37,488 |
|
|
$ |
(2,551 |
) |
|
$ |
(35,163 |
) |
|
$ |
103,674 |
|
Provision for income
taxes |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
35,163 |
|
|
|
35,163 |
|
Interest income, net |
|
|
(6,738 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(6,738 |
) |
Depreciation and
amortization |
|
|
114,277 |
|
|
|
4,020 |
|
|
|
2,936 |
|
|
|
— |
|
|
|
121,233 |
|
Share-based compensation
expense |
|
|
8,344 |
|
|
|
638 |
|
|
|
81 |
|
|
|
— |
|
|
|
9,063 |
|
Acquisition costs(1) |
|
|
3,017 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
3,017 |
|
Adjusted EBITDA |
|
$ |
222,800 |
|
|
$ |
42,146 |
|
|
$ |
466 |
|
|
$ |
— |
|
|
$ |
265,412 |
|
Adjusted EBITDA Margin |
|
|
11.4 |
% |
|
|
23.8 |
% |
|
|
0.5 |
% |
|
|
|
|
|
11.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Represents costs incurred related to
the acquisition of Clean Uniform. The Company completed the
acquisition on March 13, 2023 during the third quarter of fiscal
2023.
Supplemental reconciliations of the Company’s fiscal 2025
financial outlook for consolidated net income on a GAAP basis to
Adjusted EBITDA and Adjusted EBITDA margin, which are non-GAAP
financial measures, are presented in the following table. In
addition, supplemental reconciliations of the fiscal 2025 financial
outlook for segments’ net income on a GAAP basis to segments’
Adjusted EBITDA and Adjusted EBITDA margin, which are non-GAAP
financial measures, are also presented in the following table.
Investors are encouraged to review the reconciliations of the
outlook for these non-GAAP measures to the outlook for their most
directly comparable GAAP financial measures, which are provided
below. The Company’s outlook contains forward-looking statements
and information. Actual results may differ materially. See
“Forward-Looking Statements Disclosure.”
|
|
Fifty-two weeks ended August 30, 2025
(1) |
|
|
|
|
|
|
|
|
|
Specialty Garments, |
|
|
|
|
|
|
Core Laundry |
|
|
First Aid, and |
|
(In thousands, except percentages) |
|
Consolidated |
|
|
Operations |
|
|
Other |
|
Revenue |
|
$ |
2,435,000 |
|
|
$ |
2,140,000 |
|
|
$ |
295,000 |
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
131,025 |
|
|
$ |
136,200 |
|
|
$ |
(5,175 |
) |
Provision for income
taxes |
|
|
43,675 |
|
|
|
— |
|
|
|
43,675 |
|
Interest income, net |
|
|
(10,500 |
) |
|
|
(10,500 |
) |
|
|
— |
|
Depreciation and
amortization |
|
|
151,500 |
|
|
|
142,600 |
|
|
|
8,900 |
|
Share-based compensation
expense |
|
|
12,300 |
|
|
|
11,500 |
|
|
|
800 |
|
Executive transition
expense(2) |
|
|
2,000 |
|
|
|
2,000 |
|
|
|
— |
|
Adjusted EBITDA |
|
$ |
330,000 |
|
|
$ |
281,800 |
|
|
$ |
48,200 |
|
Adjusted EBITDA Margin |
|
|
13.6 |
% |
|
|
13.2 |
% |
|
|
16.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Amounts represent the
midpoint of the Company’s guidance.(2) Primarily
represent one-time costs expected to be incurred related to
the hiring and on-boarding of the Company's new Chief Operating
Officer, Kelly Rooney, and for the transition of Michael Croatti
from his role as Executive Vice President, Operations. Details on
these leadership changes can be found in the Company's Current
Report on Form 8-K filed with the SEC on September 19, 2024.
Investor Relations ContactShane
O’Connor, Executive Vice President & CFOUniFirst
Corporation 978-658-8888shane_oconnor@unifirst.com
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