UniFirst Earnings 2021-02-27

Balance Sheet	Income Statement	Cash Flow
Assets, Equity	Rev, G Profit, Net Income	Ops, Inv, Fin

unf-10q_20210227.htm

United States

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended February 27, 2021


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 001-08504

UNIFIRST CORPORATION

(Exact name of Registrant as Specified in Its Charter)

Massachusetts	04-2103460
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

68 Jonspin Road, Wilmington, MA	01887
(Address of Principal Executive Offices)	(Zip Code)

(978) 658-8888

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.10 par value per share	UNF	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐

Non-accelerated filer	☐	Smaller Reporting Company	☐

Emerging Growth Company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

The number of outstanding shares of UniFirst Corporation Common Stock and Class B Common Stock at April 2, 2021 were 15,236,807 and 3,643,009, respectively.

UniFirst Corporation

Quarterly Report on Form 10-Q

For the Quarter ended February 27, 2021

Table of Contents

Part I – FINANCIAL INFORMATION	3

Item 1 – Unaudited Financial Statements	3

Consolidated Statements of Income for the Thirteen and Twenty-six Weeks ended February 27, 2021 and February 29, 2020	3

Consolidated Statements of Comprehensive Income for the Thirteen and Twenty-six Weeks ended February 27, 2021 and February 29, 2020	4

Consolidated Balance Sheets as of February 27, 2021 and August 29, 2020	5

Consolidated Statements of Shareholders’ Equity for the Thirteen and Twenty-six Weeks ended February 27, 2021 and February 29, 2020	6

Consolidated Statements of Cash Flows for the Twenty-six Weeks ended February 27, 2021 and February 29, 2020	8

Notes to Consolidated Financial Statements	9

Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations	23

Item 3 – Quantitative and Qualitative Disclosures About Market Risk	35

Item 4 – Controls and Procedures	35

Part II – OTHER INFORMATION	36

Item 1 – Legal Proceedings	36

Item 1A – Risk Factors	36

Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds	36

Item 3 – Defaults Upon Senior Securities	36

Item 4 – Mine Safety Disclosures	36

Item 5 – Other Information	36

Item 6 – Exhibits	37

Signatures	38

Certifications
Ex-31.1 Section 302 Certification of CEO
Ex-31.2 Section 302 Certification of CFO
Ex-32.1 Section 906 Certification of CEO
Ex-32.2 Section 906 Certification of CFO

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Consolidated Statements of Income

UniFirst Corporation and Subsidiaries

(Unaudited)

	Thirteen weeks ended						Twenty-six weeks ended
(In thousands, except per share data)	February 27, 2021			February 29, 2020			February 27, 2021			February 29, 2020
Revenues	$	449,764		$	464,600		$	896,617		$	929,998
Operating expenses:
Cost of revenues (1)		289,455			301,422			565,255			590,738
Selling and administrative expenses (1)		93,329			93,080			182,032			183,608
Depreciation and amortization		26,287			25,971			52,595			51,430
Total operating expenses		409,071			420,473			799,882			825,776

Operating income		40,693			44,127			96,735			104,222
Other (income) expense:
Interest income, net		(863	)		(2,175	)		(1,431	)		(4,536	)
Other (income) expense, net		(584	)		539			165			1,067
Total other income, net		(1,447	)		(1,636	)		(1,266	)		(3,469	)

Income before income taxes		42,140			45,763			98,001			107,691
Provision for income taxes		9,555			11,083			23,520			24,769
Net income	$	32,585		$	34,680		$	74,481		$	82,922
Income per share – Basic:
Common Stock	$	1.80		$	1.90		$	4.10		$	4.55
Class B Common Stock	$	1.44		$	1.52		$	3.28		$	3.64
Income per share – Diluted:
Common Stock	$	1.71		$	1.82		$	3.91		$	4.34
Income allocated to – Basic:
Common Stock	$	27,349		$	29,129		$	62,520		$	69,654
Class B Common Stock	$	5,236		$	5,551		$	11,961		$	13,268
Income allocated to – Diluted:
Common Stock	$	32,585		$	34,680		$	74,481		$	82,922
Weighted average shares outstanding – Basic:
Common Stock		15,223			15,293			15,235			15,300
Class B Common Stock		3,643			3,643			3,643			3,643
Weighted average shares outstanding – Diluted:
Common Stock		19,037			19,105			19,032			19,114

(1)	Exclusive of depreciation on the Company’s property, plant and equipment and amortization on its intangible assets.

The accompanying notes are an integral part of these

Consolidated Financial Statements.

Consolidated Statements of Comprehensive Income

UniFirst Corporation and Subsidiaries

(Unaudited)

	Thirteen weeks ended						Twenty-six weeks ended
(In thousands)	February 27, 2021			February 29, 2020			February 27, 2021			February 29, 2020
Net income	$	32,585		$	34,680		$	74,481		$	82,922
Other comprehensive income (loss):
Foreign currency translation adjustments		2,244			(769	)		3,554			220
Pension benefit liabilities		—			350			—			350
Change in fair value of derivatives, net of income taxes		(58	)		52			(68	)		77
Derivative financial instruments reclassified to earnings		2			(30	)		(9	)		(60	)
Other comprehensive income (loss)		2,188			(397	)		3,477			587
Comprehensive income	$	34,773		$	34,283		$	77,958		$	83,509

The accompanying notes are an integral part of these

Consolidated Financial Statements.

Consolidated Balance Sheets

UniFirst Corporation and Subsidiaries

(Unaudited)

(In thousands, except share and par value data)	February 27, 2021			August 29, 2020
Assets
Current assets:
Cash, cash equivalents and short-term investments	$	509,563		$	474,838
Receivables, less reserves of $14,385 and $12,125		204,068			190,916
Inventories		110,701			106,269
Rental merchandise in service		155,410			154,278
Prepaid taxes		5,263			7,115
Prepaid expenses and other current assets		38,459			35,918
Total current assets		1,023,464			969,334

Property, plant and equipment, net		599,144			582,470
Goodwill		429,511			424,844
Customer contracts, net		53,438			56,946
Other intangible assets, net		31,704			28,590
Deferred income taxes		543			522
Operating lease right-of-use assets, net		41,203			42,710
Other assets		96,751			93,611
Total assets	$	2,275,758		$	2,199,027

Liabilities and shareholders’ equity
Current liabilities:
Accounts payable	$	61,177		$	64,035
Accrued liabilities		152,171			132,965
Accrued taxes		—			527
Operating lease liabilities, current		12,783			12,569
Total current liabilities		226,131			210,096

Accrued liabilities		132,910			132,820
Accrued and deferred income taxes		87,229			85,721
Operating lease liabilities		28,378			29,261
Total liabilities		474,648			457,898
Commitments and contingencies (Note 12)
Shareholders’ equity:
Preferred Stock, $1.00 par value; 2,000,000 shares authorized; no shares issued and outstanding		—			—
Common Stock, $0.10 par value; 30,000,000 shares authorized; 15,230,265 and 15,251,176 shares issued and outstanding as of February 27, 2021 and August 29, 2020, respectively		1,523			1,525
Class B Common Stock, $0.10 par value; 20,000,000 shares authorized; 3,643,009 shares issued and outstanding as of February 27, 2021 and August 29, 2020, respectively		364			364
Capital surplus		86,979			86,645
Retained earnings		1,740,737			1,684,565
Accumulated other comprehensive loss		(28,493	)		(31,970	)

Total shareholders’ equity		1,801,110			1,741,129

Total liabilities and shareholders’ equity	$	2,275,758		$	2,199,027

The accompanying notes are an integral part of these

Consolidated Financial Statements

Consolidated Statements of Shareholders’ Equity

UniFirst Corporation and Subsidiaries

(Unaudited)

(In thousands)	Common Shares			Class B Common Shares		Common Stock			Class B Common Stock		Capital Surplus			Retained Earnings			Accumulated Other Comprehensive Loss			Total Equity
Balance, August 31, 2019		15,333			3,643	$	1,533		$	364	$	84,946		$	1,588,075		$	(33,688	)	$	1,641,230
Net income		—			—		—			—		—			48,242			—			48,242
Change in fair value of derivatives		—			—		—			—		—			—			(5	)		(5	)
Foreign currency translation		—			—		—			—		—			—			989			989
Dividends declared Common Stock ($0.25 per share)		—			—		—			—		—			(3,825	)		—			(3,825	)
Dividends declared Class B Common Stock ($0.20 per share)		—			—		—			—		—			(729	)		—			(729	)
Repurchase of Common Stock		(51	)		—		(5	)		—		(274	)		(9,694	)		—			(9,973	)
Share-based compensation, net (1)		—			—		—			—		77			—			—			77
Share-based awards exercised, net (2)		16			—		2			—		—			—			—			2
Balance, November 30, 2019		15,298			3,643		1,530			364		84,749			1,622,069			(32,704	)		1,676,008
Net income		—			—		—			—		—			34,680			—		$	34,680
Change in fair value of derivatives		—			—		—			—		—			—			22			22
Foreign currency translation		—			—		—			—		—			—			(769	)		(769	)
Pension benefit liabilities, net		—			—		—			—		—			—

Price	171.46	EPS	9
Shares	19	P/E	20
MCap	3,295	P/FCF	13
Net Debt	-349	EBIT	220
TEV	2,946	TEV/EBIT	13
TTM 2019-05-25, in MM, except price, ratios

10-Q	2021-02-27	Filed 2021-04-08
10-Q	2020-11-28	Filed 2021-01-07
10-K	2020-08-29	Filed 2020-10-28
10-Q	2020-05-30	Filed 2020-07-09
10-Q	2020-02-29	Filed 2020-04-06
10-Q	2019-11-30	Filed 2020-01-09
10-K	2019-08-31	Filed 2019-10-30
10-Q	2019-05-25	Filed 2019-07-02
10-Q	2019-02-23	Filed 2019-04-04
10-Q	2018-11-24	Filed 2019-01-03
10-K	2018-08-25	Filed 2018-10-22
10-Q	2018-05-26	Filed 2018-07-03
10-Q	2018-02-24	Filed 2018-04-04
10-Q	2017-11-25	Filed 2018-01-04
10-K	2017-08-26	Filed 2017-10-25
10-Q	2017-05-27	Filed 2017-07-06
10-Q	2017-02-25	Filed 2017-04-06
10-Q	2016-11-26	Filed 2017-01-05
10-K	2016-08-27	Filed 2016-10-26
10-Q	2016-05-28	Filed 2016-07-07
10-Q	2016-02-27	Filed 2016-04-07
10-Q	2015-11-28	Filed 2016-01-07
10-K	2015-08-29	Filed 2015-10-28
10-Q	2015-05-30	Filed 2015-07-09
10-Q	2015-02-28	Filed 2015-04-09
10-Q	2014-11-29	Filed 2015-01-08
10-K	2014-08-30	Filed 2014-10-29
10-Q	2014-03-01	Filed 2014-04-10
10-Q	2013-11-30	Filed 2014-01-09
10-K	2013-08-31	Filed 2013-10-30
10-Q	2013-05-25	Filed 2013-07-03
10-Q	2013-02-23	Filed 2013-04-04
10-Q	2012-11-24	Filed 2013-01-03
10-K	2012-08-25	Filed 2012-10-24
10-Q	2012-05-26	Filed 2012-07-05
10-Q	2012-02-25	Filed 2012-04-05
10-Q	2011-11-26	Filed 2012-01-05
10-K	2011-08-27	Filed 2011-10-26
10-Q	2011-05-28	Filed 2011-07-07
10-Q	2011-02-26	Filed 2011-04-07
10-Q	2010-11-27	Filed 2011-01-06
10-K	2010-08-28	Filed 2010-10-27
10-Q	2010-05-29	Filed 2010-07-08
10-Q	2010-02-27	Filed 2010-04-08
10-Q	2009-11-28	Filed 2010-01-07

8-K	2020-10-21
8-K	2020-07-01
8-K	2020-04-01
8-K	2020-01-14
8-K	2020-01-08
8-K	2019-10-23
8-K	2019-06-26
8-K	2019-03-27
8-K	2019-01-08
8-K	2019-01-03
8-K	2018-10-17
8-K	2018-06-27
8-K	2018-03-28
8-K	2018-01-09
8-K	2018-01-03

EX-31.1	unf-ex311_8.htm
EX-31.2	unf-ex312_7.htm
EX-32.1	unf-ex321_9.htm
EX-32.2	unf-ex322_6.htm

UNF 10Q Quarterly Report

UniFirst Earnings 2021-02-27