UNIFIRST CORP [UNF] Filings

10-Q 1 unf-20240525.htm 10-Q 10-Q

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 May 25, 2024


☐	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 as of June 28, 2024 were 15,022,850 and 3,590,295, respectively.

UniFirst Corporation

Quarterly Report on Form 10-Q

For the Thirteen and Thirty-Nine Weeks Ended May 25, 2024

Table of Contents


Part I – FINANCIAL INFORMATION	3

Item 1 – Financial Statements (unaudited)	3

Consolidated Statements of Income for the Thirteen and Thirty-Nine Weeks ended May 25, 2024 and May 27, 2023	3

Consolidated Statements of Comprehensive Income for the Thirteen and Thirty-Nine Weeks ended May 25, 2024 and May 27, 2023	4

Consolidated Balance Sheets as of May 25, 2024 and August 26, 2023	5

Consolidated Statements of Shareholders’ Equity for the Thirteen and Thirty-Nine Weeks ended May 25, 2024 and May 27, 2023	6

Consolidated Statements of Cash Flows for the Thirty-Nine Weeks ended May 25, 2024 and May 27, 2023	7

Notes to Consolidated Financial Statements	8

Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations	25

Item 3 – Quantitative and Qualitative Disclosures About Market Risk	37

Item 4 – Controls and Procedures	38

Part II – OTHER INFORMATION	39

Item 1 – Legal Proceedings	39

Item 1A – Risk Factors	39

Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds	39

Item 3 – Defaults Upon Senior Securities	39

Item 4 – Mine Safety Disclosures	39

Item 5 – Other Information	40

Item 6 – Exhibits	41

Signatures	42

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						Thirty-Nine Weeks Ended
(In thousands, except per share data)	May 25, 2024			May 27, 2023			May 25, 2024			May 27, 2023
Revenues	$	603,328		$	576,668		$	1,787,564		$	1,661,157

Operating expenses:
Cost of revenues (1)		391,244			379,419			1,171,231			1,103,287
Selling and administrative expenses (1)		129,074			132,677			383,350			372,230
Depreciation and amortization		34,560			31,175			103,453			88,115
Total operating expenses		554,878			543,271			1,658,034			1,563,632
Operating income		48,450			33,397			129,530			97,525

Other (income) expense:
Interest income, net		(1,406	)		(553	)		(4,590	)		(6,353	)
Other expense, net		522			621			1,813			1,526
Total other (income) expense, net		(884	)		68			(2,777	)		(4,827	)
Income before income taxes		49,334			33,329			132,307			102,352
Provision for income taxes		11,277			9,053			31,468			26,309
Net income	$	38,057		$	24,276		$	100,839		$	76,043

Income per share – Basic:
Common Stock	$	2.12		$	1.35		$	5.61		$	4.23
Class B Common Stock	$	1.70		$	1.08		$	4.49		$	3.39

Income per share – Diluted:
Common Stock	$	2.03		$	1.29		$	5.38		$	4.06

Income allocated to – Basic:
Common Stock	$	31,962		$	20,394		$	84,716		$	63,882
Class B Common Stock	$	6,095		$	3,882		$	16,123		$	12,161

Income allocated to – Diluted:
Common Stock	$	38,057		$	24,276		$	100,839		$	76,043

Weighted average shares outstanding – Basic:
Common Stock		15,062			15,087			15,094			15,084
Class B Common Stock		3,590			3,590			3,590			3,590

Weighted average shares outstanding – Diluted:
Common Stock		18,705			18,748			18,738			18,751

(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					Thirty-Nine Weeks Ended
(In thousands)	May 25, 2024			May 27, 2023		May 25, 2024			May 27, 2023
Net income	$	38,057		$	24,276	$	100,839		$	76,043
Other comprehensive (loss) income:
Foreign currency translation adjustments		(598	)		762		170			(2,489	)
Change in fair value of derivatives, net of income taxes		6			6		(40	)		117
Other comprehensive (loss) income		(592	)		768		130			(2,372	)
Comprehensive income	$	37,465		$	25,044	$	100,969		$	73,671

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)	May 25, 2024			August 26, 2023
Assets
Current assets:
Cash and cash equivalents	$	112,246		$	79,443
Short-term investments		13,186			10,157
Receivables, less reserves of $23,370 and $17,185		284,363			279,078
Inventories		161,487			148,334
Rental merchandise in service		242,971			248,323
Prepaid taxes		13,679			20,907
Prepaid expenses and other current assets		56,457			53,876
Total current assets		884,389			840,118
Property, plant and equipment, net		790,031			756,540
Goodwill		648,795			647,900
Customer contracts, net		90,386			103,452
Other intangible assets, net		35,491			42,166
Deferred income taxes		729			567
Operating lease right-of-use assets, net		66,702			62,565
Other assets		134,895			116,667
Total assets	$	2,651,418		$	2,569,975
Liabilities and shareholders’ equity
Current liabilities:
Accounts payable	$	86,273		$	92,730
Accrued liabilities		165,386			156,408
Accrued taxes		—			352
Operating lease liabilities, current		18,160			17,739
Total current liabilities		269,819			267,229
Accrued liabilities		124,361			121,682
Accrued and deferred income taxes		130,954			130,084
Operating lease liabilities		50,676			47,020
Total liabilities		575,810			566,015
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; 15,040,462 and 15,104,317 shares issued and outstanding as of May 25, 2024 and August 26, 2023, respectively		1,504			1,510
Class B Common Stock, $0.10 par value; 20,000,000 shares authorized; 3,590,295 and 3,590,295 shares issued and outstanding as of May 25, 2024 and August 26, 2023, respectively		359			359
Capital surplus		103,097			99,303
Retained earnings		1,994,279			1,926,549
Accumulated other comprehensive loss		(23,631	)		(23,761	)
Total shareholders’ equity		2,075,608			2,003,960
Total liabilities and shareholders’ equity	$	2,651,418		$	2,569,975

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 as of August 27, 2022		15,075		3,590	$	1,508	$	359	$	93,131		$	1,845,163		$	(24,290	)	$	1,915,871
Net income		—		—		—		—		—			33,957			—			33,957
Change in fair value of derivatives (1)		—		—		—		—		—			—			52			52
Foreign currency translation		—		—		—		—		—			—			(1,778	)		(1,778	)
Dividends declared Common Stock ($0.31 per share)		—		—		—		—		—			(4,680	)		—			(4,680	)
Dividends declared Class B Common Stock ($0.248 per share)		—		—		—		—		—			(890	)		—			(890	)
Share-based compensation, net (2)		—		—		—		—		(567	)		—			—			(567	)
Share-based awards exercised, net (1)		20		—		1		—		—			—			—			1
Balance as of November 26, 2022		15,095		3,590	$	1,509	$	359	$	92,564		$	1,873,550		$	(26,016	)	$	1,941,966
Net income		—		—		—		—		—			17,810			—			17,810
Change in fair value of derivatives (1)		—		—		—		—		—			—			59			59
Foreign currency translation		—		—		—		—		—			—			(1,473	)		(1,473	)
Dividends declared Common Stock ($0.31 per share)		—		—		—		—		—			(4,682	)		—			(4,682	)
Dividends declared Class B Common Stock ($0.248 per share)		—		—		—		—		—			(890	)		—			(890	)
Share-based compensation, net (2)		—		—		—		—		2,297			—			—			2,297
Share-based awards exercised, net (1)		8		—		1		—		—			—			—			1
Balance as of February 25, 2023		15,103		3,590	$	1,510	$	359	$	94,861		$	1,885,788		$	(27,430	)	$	1,955,088
Net income		—		—		—		—		—			24,276			—			24,276
Change in fair value of derivatives (1)		—		—		—		—		—			—			6			6
Foreign currency translation		—		—		—		—		—			—			762			762
Dividends declared Common Stock ($0.31 per share)		—		—		—		—		—			(4,684	)		—			(4,684	)
Dividends declared Class B Common Stock ($0.248 per share)		—		—		—		—		—			(890	)		—			(890	)
Share-based compensation, net (2)		—		—		—		—		2,293			—			—			2,293
Balance as of May 27, 2023		15,103		3,590	$	1,510	$	359	$	97,154		$	1,904,490		$	(26,662	)	$	1,976,851


(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 as of August 26, 2023		15,104			3,590	$	1,510		$	359	$	99,303		$	1,926,549		$	(23,761	)	$	2,003,960
Net income		—			—		—			—		—			42,325			—			42,325
Change in fair value of derivatives (1)		—			—		—			—		—			—			(12	)		(12	)
Foreign currency translation		—			—		—			—		—			—			(151	)		(151	)
Dividends declared Common Stock ($0.33 per share)		—			—		—			—		—			(4,993	)		—			(4,993	)
Dividends declared Class B Common Stock ($0.264 per share)		—			—		—			—		—			(948	)		—			(948	)
Repurchase of Common Stock		(2	)		—		—			—		(10	)		(245	)		—			(255	)
Share-based compensation, net (2)		—			—		—			—		244			—			—			244
Share-based awards exercised, net (1)		26			—		3			—		—			—			—			3
Balance as of November 25, 2023		15,128			3,590	$	1,513		$	359	$	99,537		$	1,962,688		$	(23,924	)	$	2,040,173
Net income		—			—		—			—		—			20,457			—			20,457
Change in fair value of derivatives (1)		—			—		—			—		—			—			(34	)		(34	)
Foreign currency translation		—			—		—			—		—			—			919			919
Dividends declared Common Stock ($0.33 per share)		—			—		—			—		—			(4,976	)		—			(4,976	)
Dividends declared Class B Common Stock ($0.264 per share)		—			—		—			—		—			(948	)		—			(948	)
Repurchase of Common Stock		(45	)		—		(4	)		—		(298	)		(7,562	)		—			(7,864	)
Share-based compensation, net (2)		—			—		—			—		1,958			—			—			1,958
Share-based awards exercised, net (1)		4			—		—			—		—			—			—			—
Balance as of February 24, 2024		15,087			3,590	$	1,509		$	359	$	101,197		$	1,969,659		$	(23,039	)	$	2,049,685
Net income		—			—		—			—		—			38,057			—			38,057
Change in fair value of derivatives		—			—		—			—		—			—			6			6
Foreign currency translation		—			—		—			—		—			—			(598	)		(598	)
Dividends declared Common Stock ($0.33 per share)		—			—		—			—		—			(4,961	)		—			(4,961	)
Dividends declared Class B Common Stock ($0.264 per share)		—			—		—			—		—			(948	)		—			(948	)
Repurchase of Common Stock		(47	)		—		(5	)		—		(311	)		(7,528	)		—			(7,844	)
Share-based compensation, net (2)

UNIFIRST CORP [UNF] Filings
10-Q	[2024-07-03]
10-Q	[2024-04-04]
10-Q	[2024-01-04]
10-K	[2023-10-26]
10-Q	[2023-07-06]
10-Q	[2023-04-06]
10-Q	[2023-01-05]
10-K	[2022-10-26]
10-Q	[2022-07-07]
10-Q	[2022-04-07]
10-Q	[2022-01-06]
10-K	[2021-10-27]
10-Q	[2021-07-06]
10-Q	[2021-04-08]
10-Q	[2021-01-07]
10-K	[2020-10-28]
10-Q	[2020-07-09]
10-Q	[2020-04-06]
10-Q	[2020-01-09]
10-K	[2019-10-30]
10-Q	[2019-07-02]
10-Q	[2019-04-04]
10-Q	[2019-01-03]
10-K	[2018-10-22]
10-Q	[2018-07-03]
10-Q	[2018-04-04]
10-Q	[2018-01-04]
10-K	[2017-10-25]
10-Q	[2017-07-06]
10-Q	[2017-04-06]
10-Q	[2017-01-05]
10-K	[2016-10-26]
10-Q	[2016-07-07]
10-Q	[2016-04-07]
10-Q	[2016-01-07]
10-K	[2015-10-28]
10-Q	[2015-07-09]
10-Q	[2015-04-09]
10-Q	[2015-01-08]
10-K	[2014-10-29]
10-Q	[2014-07-10]
10-Q	[2014-04-10]
10-Q	[2014-01-09]
10-K	[2013-10-30]
10-Q	[2013-07-03]
10-Q	[2013-04-04]
10-Q	[2013-01-03]
10-K	[2012-10-24]
10-Q	[2012-07-05]
10-Q	[2012-04-05]
10-Q	[2012-01-05]