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UniFirst Corporation$150.71$.77.51%

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 UniFirst Announces Financial Results for the Fourth Quarter and Full Year of Fiscal 2015
   Wednesday, October 21, 2015 8:00:07 AM ET

UniFirst Corporation (UNF ) today announced results for its fourth quarter and full year ended August 29, 2015. Revenues for the quarter were $359.2 million, up 2.1% from $352.0 million in the year ago period. Net income was $28.9 million ($1.43 per diluted share) unchanged from the fourth quarter of fiscal 2014. The comparison of net income in the quarter was impacted by a lower effective income tax rate of 37.4% compared to 39.4% in the prior year. For the full year, revenues were $1.457 billion, up 4.4% from fiscal 2014. Net income was $124.3 million ($6.15 per diluted share) up 3.6% from $119.9 million ($5.95 per diluted share) reported in the prior year.

Ronald D. Croatti, UniFirst President and Chief Executive Office said, "In our fourth quarter, growth continued to be limited by macroeconomic factors including headcount reductions at many of our energy related customers as well as weaker foreign currency exchange rates adversely affecting our Canadian and European operations. Although we are pleased with our overall results for fiscal 2015, we expect these factors to challenge our top and bottom line results throughout fiscal 2016."

Revenues in the fourth quarter for our Core Laundry Operations were $326.6 million, up 1.8% from those reported in the prior year’s fourth quarter. Adjusting for the effects of acquisitions and a weaker Canadian dollar, revenue grew 2.2%. This segment’s income from operations decreased 6.7% compared to the fourth quarter of fiscal 2014, while the operating margin decreased to 13.1% from 14.3% a year ago. The margin decline reflects higher merchandise costs, selling and administrative expenses and depreciation as a percentage of revenues. These items were partially offset by lower energy, payroll related and legal expenses during the quarter compared to a year ago.

Revenues for the Specialty Garments segment, which consists of nuclear decontamination and cleanroom operations, were $20.5 million, up 7.9% from $19.0 million in the fourth quarter of fiscal 2014. Due in part to the improved revenue performance, this segment’s income from operations increased to $1.5 million in the current quarter from $0.1 million in last year’s comparable quarter.

UniFirst continues to maintain a solid balance sheet with no long-term debt and increasing cash balances. Net cash provided by operating activities during fiscal 2015 was $226.9 million, up 16.6% from fiscal 2014 and cash and cash equivalents at the end of the fiscal year totaled $276.6 million, up from $191.8 million at the end of fiscal 2014.

Outlook Mr. Croatti continued, "We believe that full year fiscal 2016 revenues will be between $1.460 billion and $1.480 billion. We also believe that full year diluted EPS will be between $5.60 and $5.80. This guidance assumes no significant further deterioration in our wearer base as a result of additional layoffs in energy dependent markets that we service."

Conference Call Information UniFirst will hold a conference call today at 10:00 a.m. (ET) 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.

About UniFirst Corporation Headquartered in Wilmington, Mass., UniFirst Corporation is a North American leader in the supply and servicing of uniform and workwear programs, as well as the delivery of facility service programs. Together with its subsidiaries, the company also provides first aid and safety products, and manages specialized garment programs for the cleanroom and nuclear industries. UniFirst manufactures its own branded workwear, protective clothing, and floorcare products, and with over 225 service locations, 275,000 customer locations, and 12,000 employee Team Partners, the company outfits more than 1.5 million workers each business day. UniFirst is a publicly held company traded on the New York Stock Exchange under the symbol UNF and is a component of the Standard & Poor’s 600 Small Cap Index. For more information visit www.unifirst.com.

Forward Looking Statements This public announcement contains forward looking statements that reflect the Company’s current views with respect to future events and financial performance, including projected revenues 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 are highly dependent upon a variety of 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 regarding the Company’s ability to consummate and successfully integrate acquired 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, the Company’s ability to compete successfully without any significant degradation in its margin rates, seasonal 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, any loss of key management or other personnel, increased costs as a result of any future changes in federal or state laws, rules and regulations or governmental interpretation of such laws, rules and regulations, uncertainties regarding the price levels of natural gas, electricity, fuel and labor, the impact of turbulent economic conditions and the current tight credit markets on our customers and such customers’ workforce, the level and duration of workforce reductions by our customers, the continuing increase in domestic healthcare costs, including the ultimate impact of the Affordable Care Act, demand and prices for our products and services, rampant criminal activity and instability in Mexico where our principal garment manufacturing plants are located, our ability to properly and efficiently design, construct, implement and operate our new CRM 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 recent and proposed future changes in Securities and Exchange Commission, New York Stock Exchange and accounting rules, strikes and unemployment levels, the Company’s efforts to evaluate and potentially reduce internal costs, economic and other developments associated with the war on terrorism and its impact on the economy, general economic conditions and other factors described under "Item 1A. Risk Factors" in the Company’s Annual Report on Form 10-K for the year ended August 30, 2014 and in other filings with the Securities and Exchange Commission. When used in this public announcement, the words "anticipate," "optimistic," "believe," "estimate," "expect," "intend," and similar expressions as they relate to the Company are included to identify such forward looking statements. The Company undertakes no obligation to update any forward looking statements to reflect events or circumstances arising after the date on which such statements are made.

UniFirst Corporation and Subsidiaries                                                                                               
Consolidated Statements of Income
                                                                                                                                                                                                                                                                                                              
                                                                                                                   Thirteen                                                  Thirteen                                                  Fifty-two                                                 Fifty-two
                                                                                                                  weeks ended                                               weeks ended                                               weeks ended                                               weeks ended
                                                                                                                  August 29,                                                August 30,                                                August 29,                                                August 30,
(In thousands, except per share data)                                                                              2015 (2)                                                  2014 (2)                                                  2015 (2)                                                    2014
--------------------------------------------------------------------                                             -----------                                               -----------                                               -----------                                               -----------
                                                                                                                                                                                                                                                                                                              
Revenues                                                                                                       $     359,208                                             $     351,988                                             $   1,456,605                                             $   1,394,897
                                                                                                                                                                                                                                                                                                              
Operating expenses:
   Cost of revenues (1)                                                                                              219,442                                                   217,965                                                   884,664                                                   858,306
   Selling and administrative expenses (1)                                                                            72,612                                                    68,086                                                   294,444                                                   271,564
   Depreciation and amortization                                                                                      21,262                                                    18,515                                                    77,113                                                    71,752
                                                                                                                 -----------                                               -----------                                               -----------                                               -----------
      Total operating expenses                                                                                       313,316                                                   304,566                                                 1,256,221                                                 1,201,622
                                                                                                                 -----------                                               -----------                                               -----------                                               -----------
                                                                                                                                                                                                                                                                                                              
Income from operations                                                                                                45,892                                                    47,422                                                   200,384                                                   193,275
                                                                                                                 -----------                                               -----------                                               -----------                                               -----------
                                                                                                                                                                                                                                                                                                              
Other (income) expense:
   Interest expense                                                                                                      225                                                       239                                                       873                                                       772
   Interest income                                                                                                      (778 )                                                    (716 )                                                  (3,310 )                                                  (3,131 )
   Foreign exchange loss                                                                                                 230                                                       242                                                     1,553                                                       283
                                                                                                                 -----------                                               -----------                                               -----------                                               -----------
      Total other (income) expense                                                                                      (323 )                                                    (235 )                                                    (884 )                                                  (2,076 )
                                                                                                                 -----------                                               -----------                                               -----------                                               -----------
                                                                                                                                                                                                                                                                                                              
Income before income taxes                                                                                            46,215                                                    47,657                                                   201,268                                                   195,351
Provision for income taxes                                                                                            17,274                                                    18,785                                                    76,969                                                    75,426
                                                                                                                 -----------                                               -----------                                               -----------                                               -----------
                                                                                                                                                                                                                                                                                                              
Net income                                                                                                     $      28,941                                             $      28,872                                             $     124,299                                             $     119,925
                                                                                                                 ===========                                               ===========                                               ===========                                               ===========
                                                                                                                                                                                                                                                                                                              
Income per share - Basic
   Common Stock                                                                                                $        1.51                                             $        1.51                                             $        6.50                                             $        6.29
   Class B Common Stock                                                                                        $        1.21                                             $        1.21                                             $        5.20                                             $        5.03
                                                                                                                                                                                                                                                                                                              
Income per share - Diluted
   Common Stock                                                                                                $        1.43                                             $        1.43                                             $        6.15                                             $        5.95
                                                                                                                                                                                                                                                                                                              
Income allocated to - Basic
   Common Stock                                                                                                $      23,011                                             $      22,876                                             $      98,665                                             $      94,849
   Class B Common Stock                                                                                        $       5,803                                             $       5,742                                             $      24,761                                             $      23,705
                                                                                                                                                                                                                                                                                                              
Income allocated to - Diluted
   Common Stock                                                                                                $      28,821                                             $      28,631                                             $     123,472                                             $     118,626
                                                                                                                                                                                                                                                                                                              
Weighted average number of shares outstanding - Basic
   Common Stock                                                                                                       15,210                                                    15,113                                                    15,182                                                    15,080
   Class B Common Stock                                                                                                4,795                                                     4,741                                                     4,763                                                     4,711
                                                                                                                                                                                                                                                                                                              
Weighted average number of shares outstanding - Diluted
   Common Stock                                                                                                       20,142                                                    20,007                                                    20,079                                                    19,939

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

(2) Unaudited

UniFirst Corporation and Subsidiaries                                               
Condensed Consolidated Balance Sheets
                                                                                                                                                                                                    
(In thousands)                                                                                                               August 29,                            August 30,
                                                                                                                              2015 (1)                                2014
---------------------------------------------------------                                                                  --------------                          ----------
Assets
Current assets:
   Cash and cash equivalents                                                                                             $        276,553                        $    191,769
   Receivables, net                                                                                                               151,851                             152,523
   Inventories                                                                                                                     80,449                              78,858
   Rental merchandise in service                                                                                                  140,384                             146,449
   Prepaid and deferred income taxes                                                                                                  204                              13,342
   Prepaid expenses and other current assets                                                                                       12,382                               6,349
                                                                                                                           --------------                          ----------
                                                                                                                                                                                                    
      Total current assets                                                                                                        661,823                             589,290
                                                                                                                           --------------                          ----------
                                                                                                                                                                                                    
Property, plant and equipment:
   Land, buildings and leasehold improvements                                                                                     402,781                             393,584
   Machinery and equipment                                                                                                        535,698                             512,842
   Motor vehicles                                                                                                                 193,643                             166,573
                                                                                                                           --------------                          ----------
                                                                                                                                                                                                    
                                                                                                                                1,132,122                           1,072,999
   Less - accumulated depreciation                                                                                                618,269                             586,717
                                                                                                                           --------------                          ----------
                                                                                                                                  513,853                             486,282
                                                                                                                           --------------                          ----------
                                                                                                                                                                                                    
Goodwill                                                                                                                          313,133                             303,648
Customer contracts and other intangible assets, net                                                                                40,049                              41,477
Deferred income taxes                                                                                                               1,475                               1,403
Other assets                                                                                                                        2,904                               2,061
                                                                                                                           --------------                          ----------
                                                                                                                                                                                                    
                                                                                                                         $      1,533,237                        $  1,424,161
                                                                                                                           ==============                          ==========
                                                                                                                                                                                                    
Liabilities and shareholders’ equity
Current liabilities:
   Loans payable and current maturities of long-term debt                                                                $          1,385                        $      7,704
   Accounts payable                                                                                                                50,826                              59,177
   Accrued liabilities                                                                                                            113,022                             100,818
   Accrued and deferred income taxes                                                                                               18,878                              23,342
                                                                                                                           --------------                          ----------
                                                                                                                                                                                                    
      Total current liabilities                                                                                                   184,111                             191,041
                                                                                                                           --------------                          ----------
                                                                                                                                                                                                    
Long-term liabilities:
   Long-term debt, net of current maturities                                                                               --                                 155  
   Accrued liabilities                                                                                                             54,566                              50,235
   Accrued and deferred income taxes                                                                                               52,352                              48,271
                                                                                                                           --------------                          ----------
                                                                                                                                                                                                    
      Total long-term liabilities                                                                                                 106,918                              98,661
                                                                                                                           --------------                          ----------
                                                                                                                                                                                                    
Shareholders’ equity:
   Common Stock                                                                                                                     1,525                               1,519
   Class B Common Stock                                                                                                               485                                 486
   Capital surplus                                                                                                                 67,611                              59,415
   Retained earnings                                                                                                            1,197,000                           1,075,572
   Accumulated other comprehensive (loss) income                                                                                  (24,413 )                            (2,533 )
                                                                                                                           --------------                          ----------
                                                                                                                                                                                                    
      Total shareholders’ equity                                                                                                1,242,208                           1,134,459
                                                                                                                           --------------                          ----------
                                                                                                                                                                                                    
                                                                                                                         $      1,533,237                        $  1,424,161
                                                                                                                           ==============                          ==========
                                                                                                                                                                                                    

(1) Unaudited

UniFirst Corporation and Subsidiaries                                                                                 
Detail of Operating Results         
 
Revenues
                                                                                                                                                                                                                                                                 
                                                            Thirteen                                                Thirteen
                                                           weeks ended                                             weeks ended                                                                                         
                                                           August 29,                                              August 30,                                                    Dollar                                                         Percent
(In thousands, except percentages)                          2015 (1)                                                2014 (1)                                                     Change                                                         Change
----------------------------------                        -----------                                             -----------                                             --------------------                                           --------------------
                                                                                                                                                                                                                                                                 
   Core Laundry Operations                              $     326,643                                           $     320,993                                           $                5,650                                                            1.8 %
   Specialty Garments                                          20,522                                                  19,016                                                            1,506                                                            7.9
   First Aid                                                   12,043                                                  11,979                                                               64                                                            0.5
                                                          -----------                                             -----------                                             --------------------
Consolidated total                                      $     359,208                                           $     351,988                                           $                7,220                                                            2.1 %
                                                          ===========                                             ===========                                             ====================
                                                                                                                                                                                                                                                                 
                                         Fifty-two         Fifty-two                               
                                                           weeks ended                                             weeks ended                                                                      
                                                           August 29,                                              August 30,                                                    Dollar                                      Percent
(In thousands, except percentages)                          2015 (1)                                                2014 (1)                                                     Change                                      Change
----------------------------------                        -----------                                             -----------                                             --------------------                        --------------------
                                                                                                                                                                                                                                              
   Core Laundry Operations                              $   1,322,328                                           $   1,259,485                                           $               62,843                                         5.0 %
   Specialty Garments                                          87,513                                                  91,484                                                           (3,971 )                                      -4.3
   First Aid                                                   46,764                                                  43,928                                                            2,836                                         6.5
                                                          -----------                                             -----------                                             --------------------
Consolidated total                                      $   1,456,605                                           $   1,394,897                                           $               61,708                                         4.4 %
                                                          ===========                                             ===========                                             ====================
                                                                                                                                                                                                                                              
Income from Operations                                                                             
                                                                                                                                                                                                                                              
                                                            Thirteen                                                Thirteen
                                                           weeks ended                                             weeks ended                                                                      
                                                           August 29,                                              August 30,                                                    Dollar                                      Percent
(In thousands, except percentages)                          2015 (1)                                                2014 (1)                                                     Change                                      Change
----------------------------------                        -----------                                             -----------                                             --------------------                        --------------------
                                                                                                                                                                                                                                              
   Core Laundry Operations                              $      42,855                                           $      45,937                                           $               (3,082 )                                      -6.7 %
   Specialty Garments                                           1,490                                                     115                                                            1,375                                     1,195.7
   First Aid                                                    1,547                                                   1,370                                                              177                                        12.9
                                                          -----------                                             -----------                                             --------------------
Consolidated total                                      $      45,892                                           $      47,422                                           $               (1,530 )                                      -3.2 %
                                                          ===========                                             ===========                                             ====================
                                                                                                                                                                                                                                              
                                         Fifty-two         Fifty-two                               
                                                           weeks ended                                             weeks ended                                                                                         
                                                           August 29,                                              August 30,                                                    Dollar                                                         Percent
(In thousands, except percentages)                          2015 (1)                                                2014 (1)                                                     Change                                                         Change
----------------------------------                        -----------                                             -----------                                             --------------------                                           --------------------
                                                                                                                                                                                                                                                                 
   Core Laundry Operations                              $     187,586                                           $     182,250                                           $                5,336                                                            2.9 %
   Specialty Garments                                           7,355                                                   7,178                                                              177                                                            2.5
   First Aid                                                    5,443                                                   3,847                                                            1,596                                                           41.5
                                                          -----------                                             -----------                                             --------------------
Consolidated total                                      $     200,384                                           $     193,275                                           $                7,109                                                            3.7 %
                                                          ===========                                             ===========                                             ====================
                                                                                                                                                                                                                                                                 

(1) Unaudited

UniFirst Corporation and Subsidiaries                                                                                                                      
Consolidated Statements of Cash Flows
                                                                                                                                                                                                                    
                                                                                                                                           Fifty-two                                                  Fifty-two
                                                                                                                                          weeks ended                                                weeks ended
                                                                                                                                          August 29,                                                 August 30,
(In thousands)                                                                                                                             2015 (1)               2014
---------------------------------------------------------------------------------------------------------------------------------------------------------------------------- -------------------- -----------------
Cash flows from operating activities:                                       
Net income                                                                                                                               $  124,299                                                 $  119,925
Adjustments to reconcile net income to cash provided by operating
activities:
  Depreciation                                                                                                                               68,164                                                     62,791
  Amortization of intangible assets                                                                                                           8,949                                                      8,961
  Amortization of deferred financing costs                                                                                                      209                                                        209
  Share-based compensation                                                                                                                    5,366                                                      5,601
  Accretion on environmental contingencies                                                                                                      603                                                        716
  Accretion on asset retirement obligations                                                                                                     690                                                        941
  Deferred income taxes                                                                                                                      (3,473 )                                                    8,439
  Changes in assets and liabilities, net of acquisitions:
     Receivables                                                                                                                             (3,494 )                                                  (11,541 )
     Inventories                                                                                                                             (2,236 )                                                   (4,450 )
     Rental merchandise in service                                                                                                            4,900                                                    (14,002 )
     Prepaid expenses and other current assets                                                                                               (4,005 )                                                    2,623
     Accounts payable                                                                                                                        (7,648 )                                                   13,646
     Accrued liabilities                                                                                                                     17,832                                                      6,890
     Prepaid and accrued income taxes                                                                                                        16,761                                                     (6,130 )
                                                                                                                                           --------                                                   --------
Net cash provided by operating activities                                                                                                   226,917                                                    194,619
                                                                                                                                           --------                                                   --------
                                                                                                                                                                                                                    
Cash flows from investing activities:
  Acquisition of businesses                                                                                                                 (22,359 )                                                   (3,635 )
  Capital expenditures                                                                                                                     (101,163 )                                                  (91,808 )
  Other                                                                                                                                        (747 )                                                    1,269
                                                                                                                                           --------                                                   --------
Net cash used in investing activities                                                                                                      (124,269 )                                                  (94,174 )
                                                                                                                                           --------                                                   --------
                                                                                                                                                                                                                    
Cash flows from financing activities:
  Proceeds from loans payable and long-term debt                                                                                              6,866                                                      9,388
  Payments on loans payable and long-term debt                                                                                              (13,055 )                                                 (113,247 )
  Proceeds from exercise of Common Stock options, including excess tax                                                                        7,799                                                      5,899
  benefits
  Taxes withheld and paid related to net share settlement of equity                                                                          (5,002 )                                                   (3,527 )
  awards
  Payment of cash dividends                                                                                                                  (2,869 )                                                   (2,860 )
                                                                                                                                           --------                                                   --------
Net cash used in financing activities                                                                                                        (6,261 )                                                 (104,347 )
                                                                                                                                           --------                                                   --------
                                                                                                                                                                                                                    
Effect of exchange rate changes on cash                                                                                                     (11,603 )                                                   (1,808 )
                                                                                                                                           --------                                                   --------
                                                                                                                                                                                                                    
Net increase (decrease) in cash and cash equivalents                                                                                         84,784                                                     (5,710 )
Cash and cash equivalents at beginning of period                                                                                            191,769                                                    197,479
                                                                                                                                           --------                                                   --------
                                                                                                                                                                                                                    
Cash and cash equivalents at end of period                                                                                               $  276,553                                                 $  191,769
                                                                                                                                           ========                                                   ========
                                                                                                                                                                                                                    

(1) Unaudited

http://cts.businesswire.com/ct/CT?id=bwnews&sty=20151021005344r1&sid=cmtx6&distro=nx&lang=en

View source version on businesswire.com: http://www.businesswire.com/news/home/20151021005344/en/

SOURCE: UniFirst Corporation

UniFirst Corporation 
Steven S. Sintros, 978-658-8888 
Senior Vice President & CFO


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