SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported)
June 27, 2006
UNIFIRST CORPORATION
(Exact Name of Registrant as Specified in Charter)
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Massachusetts |
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1-8504 |
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04-2103460 |
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(State or Other Jurisdiction of Incorporation) |
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(Commission File Number) |
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(IRS Employer Identification No.) |
68 Jonspin Road, Wilmington, Massachusetts 01887
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (978) 658-8888
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
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Item 2.02 |
Results of Operations and Financial Condition. |
On June 27, 2006, UniFirst Corporation issued a press release ("Press Release") announcing financial results for the third quarter and nine months of fiscal 2006, which ended May 27, 2006. A copy of the Press Release is attached as Exhibit 99 to this Current Report and is incorporated herein by reference.
Such information, including the exhibits attached hereto, shall not be deemed filed for any purpose, including for purposes of, Section 18 of the Securities and Exchange Act of 1934 (the "Exchange Act") or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 on the Exchange Act, regardless of any general incorporation language in such filing.
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Item 9.01 |
Financial Statements and Exhibits. |
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(c) Exhibits |
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EXHIBIT NO. |
DESCRIPTION |
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99 |
Press release dated June 27, 2006 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
UNIFIRST CORPORATION
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Date: June 27, 2006 |
By: |
/s/ Ronald D. Croatti |
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Name: |
Ronald D. Croatti |
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Title: |
Chairman of the Board, Chief Executive Officer and President |
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By: |
/s/ John B. Bartlett |
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Name: |
John B. Bartlett |
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Title: |
Senior Vice President and Chief Financial Officer |
EXHIBIT INDEX
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Exhibit No. |
Description |
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99 |
Press release of the Company dated June 27, 2006 |
Exhibit 99
| UniFirst Corporation | News Release |
|---|---|
| 68 Jonspin Road Wilmington, MA 01887-1086 Telephone 978-658-8888 Ext 520 Facsimile 978-988-0659 |
contact: John B. Bartlett Senior Vice President jbartlett@unifirst.com |
UNIFIRST ANNOUNCES FINANCIAL RESULTS
FOR THE THIRD QUARTER AND NINE MONTHS OF FISCAL 2006
Wilmington, MA (June 27, 2006) -- UniFirst Corporation (NYSE: UNF) today announced its revenues and earnings for its third quarter and nine months of fiscal 2006 which ended May 27, 2006.
Revenues were a record $211.9 million and $613.4 million for the third quarter and first nine months of fiscal 2006, respectively. These revenues represent an increase of 8.2% and 6.7%, respectively, from the $196.0 million and $575.1 million in the comparable 2005 periods. This revenue growth was achieved despite a decrease in revenues for the Company’s Specialty Garments (nuclear and clean room) segment of 18.9% and 21.1% for the third quarter and nine month periods, respectively. Revenue from the Company’s core laundry business grew 10.9% and 9.3% in both the quarter and nine month periods as compared to fiscal 2005.
Third quarter net income was $10.9 million or $0.57 per diluted common share compared to last year’s third quarter net income of $11.8 million, or $0.61 per diluted common share. Net income for the first nine months of fiscal 2006 was $28.6 million or $1.48 per diluted common share compared to $35.2 million, or $1.82 per diluted common share for the comparable period in 2005.
Excluding the Company’s Specialty Garments and First Aid segments, income from operations from the Company’s core laundry business increased $2.5 million or 15.5% for the quarterly period and $1.4 million or 2.7% for the nine month period. Both 2006 periods include a $0.6 million gain from the sale of one of the Company’s industrial laundry facilities whose operations were consolidated with another facility. The increase in income from operations in the core laundry business was primarily due to the strong revenue growth which also resulted in decreasing payroll and payroll related costs as a percentage of revenues. The increase was achieved despite energy costs which continue to be higher as a percentage of revenues than fiscal 2005.
The Company’s Specialty Garments segment continues to show unfavorable comparisons to fiscal 2005 with income from operations decreasing approximately $3.5 million and $9.6 million in the comparable quarterly and nine month periods. This decrease in profitability of Specialty Garments is directly attributable to a decrease in revenues between comparable periods primarily due to the completion of a significant contract in fiscal 2005.
“We are pleased by the revenue growth we’re seeing from our core laundry operations” said UniFirst President and Chief Executive Officer, Ron Croatti, “and we continue to be encouraged by general market conditions. We also believe our Specialty Garments segment is starting to get back on track, and that prospects for a return to growth in this business are favorable.”
The Company will hold a conference call today at 4:00 PM (EDT) 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.
UniFirst is one of the largest providers of workplace uniforms, protective clothing and facility services products in North America. The Company employs approximately 9,500 team partners who serve approximately 190,000 customer locations in 46 states, Canada and Europe from 189 manufacturing, distribution and customer service facilities.
The Private Securities Litigation Reform Act of 1995 provides a safe harbor for certain 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. These forward-looking statements are subject to certain risks and uncertainties. The words “anticipate” and “should,” and other expressions that indicate future events and trends identify forward-looking statements. Actual future results may differ materially from those anticipated depending on a variety of factors, including, but not limited to, performance of acquisitions; economic and business changes; fluctuations in the cost of materials, fuel and labor; economic and other developments associated with the on-going war on terrorism; strikes and unemployment levels; demand and price for the Company’s products and services; improvement in under performing rental operations; and the outcome of pending and future litigation and environmental matters.
UNIFIRST CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
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Thirty—nine |
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Thirty—nine |
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Thirteen |
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Thirteen |
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weeks ended |
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weeks ended |
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weeks ended |
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weeks ended |
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May 27, |
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May 28, |
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May 27, |
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May 28, |
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(In thousands, except per share data) |
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2006 |
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2005 |
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2006 |
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2005 |
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Revenues |
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$ |
613,431 |
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$ |
575,075 |
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$ |
211,938 |
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$ |
195,957 |
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Costs and expenses: |
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Operating costs (1) |
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393,981 |
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360,180 |
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135,483 |
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121,985 |
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Selling and administrative expenses (1) |
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131,835 |
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120,288 |
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44,610 |
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41,927 |
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Depreciation and amortization |
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33,725 |
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32,872 |
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11,515 |
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11,142 |
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559,541 |
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513,340 |
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191,608 |
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175,054 |
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Income from operations |
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53,890 |
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61,735 |
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20,330 |
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20,903 |
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Other expense (income): |
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Interest expense |
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7,991 |
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6,487 |
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2,996 |
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2,232 |
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Interest income |
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(1,150 |
) |
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(1,336 |
) |
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(419 |
) |
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(366 |
) |
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Interest rate swap income |
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— |
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(223 |
) |
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— |
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— |
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6,841 |
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4,928 |
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2,577 |
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1,866 |
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Income before income taxes |
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47,049 |
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56,807 |
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17,753 |
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19,037 |
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Provision for income taxes |
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18,414 |
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21,588 |
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6,835 |
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7,235 |
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Net income |
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$ |
28,635 |
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$ |
35,219 |
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$ |
10,918 |
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$ |
11,802 |
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Income per share - Basic: |
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Common Stock |
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$ |
1.65 |
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$ |
2.04 |
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$ |
0.63 |
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$ |
0.68 |
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Class B Common Stock |
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$ |
1.32 |
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$ |
1.63 |
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$ |
0.50 |
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$ |
0.55 |
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Income per share - Diluted: |
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Common Stock |
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$ |
1.48 |
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$ |
1.82 |
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$ |
0.57 |
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$ |
0.61 |
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Weighted average number of shares outstanding - Basic: |
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Common Stock |
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9,726 |
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|
9,401 |
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|
9,814 |
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|
9,467 |
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Class B Common Stock |
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9,515 |
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|
9,814 |
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|
9,429 |
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|
9,758 |
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|
|
|
|
|
|
19,241 |
|
|
19,215 |
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|
19,243 |
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19,225 |
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|
|
|
|
|
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Weighted average number of shares outstanding - Diluted: |
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
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Common Stock |
|
|
|
|
19,315 |
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|
19,304 |
|
|
19,311 |
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|
19,336 |
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|
|
|
|
|
|
|
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Dividends per share: |
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|
|
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|
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|
|
|
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Common Stock |
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$ |
0.1125 |
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$ |
0.1125 |
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$ |
0.0375 |
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$ |
0.0375 |
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Class B Common Stock |
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|
$ |
0.0900 |
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$ |
0.0900 |
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$ |
0.0300 |
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$ |
0.0300 |
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(1) Exclusive of depreciation and amortization.
UNIFIRST CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
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May 27, |
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August 27, |
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(In thousands) |
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2006 |
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2005 |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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$ |
6,289 |
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$ |
4,704 |
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Receivables, net |
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|
87,759 |
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|
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|
78,497 |
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Inventories |
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29,132 |
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31,021 |
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Rental merchandise in service |
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83,628 |
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69,808 |
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Prepaid and deferred income taxes |
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|
|
|
10,634 |
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|
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8,983 |
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Prepaid expenses |
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|
2,169 |
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|
1,492 |
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Total current assets |
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219,611 |
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|
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|
194,505 |
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Property and equipment: |
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Land, buildings and leasehold improvements |
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265,456 |
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260,515 |
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Machinery and equipment |
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279,607 |
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268,272 |
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Motor vehicles |
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|
83,440 |
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|
76,147 |
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|
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|
|
|
|
|
|
|
|
|
|
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|
628,503 |
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|
|
|
604,934 |
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Less - accumulated depreciation |
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|
|
316,717 |
|
|
|
|
299,983 |
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|
|
|
|
|
|
311,786 |
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|
|
|
304,951 |
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|
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|
|
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Goodwill |
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|
208,841 |
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|
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|
187,793 |
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Customer contracts and other intangible assets, net |
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|
62,595 |
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|
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|
56,481 |
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Other assets |
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|
3,607 |
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|
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|
4,575 |
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|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
$ |
806,440 |
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|
|
$ |
748,305 |
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|
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|
|
|
|
|
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Liabilities and Shareholders’ Equity |
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Current liabilities: |
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|
|
|
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Current maturities of long-term obligations |
|
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|
$ |
627 |
|
|
|
$ |
1,084 |
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Accounts payable |
|
|
|
|
40,365 |
|
|
|
|
36,720 |
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|
Accrued liabilities |
|
|
|
|
77,036 |
|
|
|
|
76,141 |
|
|
Accrued income taxes |
|
|
|
|
— |
|
|
|
|
3,992 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities |
|
|
|
|
118,028 |
|
|
|
|
117,937 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term obligations, net of current maturities |
|
|
|
|
203,062 |
|
|
|
|
175,587 |
|
|
Deferred income taxes |
|
|
|
|
42,764 |
|
|
|
|
42,439 |
|
|
Shareholders’ equity: |
|
|
|
|
|
|
|
|
|
|
|
|
Common stock |
|
|
|
|
983 |
|
|
|
|
960 |
|
|
Class B common stock |
|
|
|
|
942 |
|
|
|
|
964 |
|
|
Capital surplus |
|
|
|
|
14,370 |
|
|
|
|
13,462 |
|
|
Retained earnings |
|
|
|
|
421,589 |
|
|
|
|
394,910 |
|
|
Accumulated other comprehensive income |
|
|
|
|
4,702 |
|
|
|
|
2,046 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total shareholders’ equity |
|
|
|
|
442,586 |
|
|
|
|
412,342 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
806,440 |
|
|
|
$ |
748,305 |
|