WILMINGTON, Mass., Oct. 23, 2024 (GLOBE NEWSWIRE) -- 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%.
- 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.
- 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%.
- 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.
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 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.
- 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.
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.
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 |
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