<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF_
THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended Commission File
November 27, 1993 Number 1-8504
UNIFIRST CORPORATION
(Exact name of registrant as specified in its charter)
Massachusetts 04-2103460
(State of Incorporation) (IRS Employer Identification Number)
68 Jonspin Road
Wilmington, Massachusetts 01887
(Address of principal executive offices)
Registrant's telephone number, including area code: (508) 658-8888
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceeding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days.
Yes [X] No [ ]
The number of outstanding shares of the registrant's Common Stock and Class B
Common Stock as of January 5, 1994 were 7,873,854 and 12,627,954
respectively.
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PART 1 - FINANCIAL INFORMATION
FORM 10-Q
<TABLE>
UNIFIRST CORPORATION AND SUBSIDIARIES
CONDENSED BALANCE SHEETS
(unaudited)
<CAPTION>
November 27, August 28, November 28,
1993 1993* 1992
___________________________________________________________________________________________
<S> <C> <C> <C>
Assets
Current assets:
Cash $ 1,780,000 $ 3,656,000 $ 1,854,000
Receivables 28,674,000 24,849,000 25,501,000
Inventories 11,277,000 11,536,000 11,314,000
Rental merchandise in service 28,773,000 26,565,000 24,528,000
Prepaid expenses 109,000 115,000 153,000
___________________________________________________________________________________________
Total current assets 70,613,000 66,721,000 63,350,000
___________________________________________________________________________________________
Property and equipment:
Land, buildings and leasehold improvements 96,659,000 93,347,000 88,976,000
Machinery and equipment 89,262,000 86,165,000 83,257,000
Motor vehicles 22,332,000 21,899,000 20,308,000
___________________________________________________________________________________________
208,253,000 201,411,000 192,541,000
Less - accumulated depreciation 78,289,000 75,617,000 73,254,000
___________________________________________________________________________________________
129,964,000 125,794,000 119,287,000
___________________________________________________________________________________________
Other assets 29,175,000 26,549,000 28,545,000
___________________________________________________________________________________________
$229,752,000 $219,064,000 $211,182,000
===========================================================================================
Liabilities and Shareholders' Equity
Current liabilities:
Current maturities of long-term
obligations $ 6,570,000 $ 6,055,000 $ 6,037,000
Notes payable 138,000 177,000 198,000
Accounts payable 12,270,000 10,624,000 8,367,000
Accrued liabilities 26,646,000 25,225,000 19,477,000
Accrued and deferred income taxes 6,120,000 5,399,000 9,123,000
___________________________________________________________________________________________
Total current liabilities 51,744,000 47,480,000 43,202,000
___________________________________________________________________________________________
Long-term obligations, net of current maturities 26,814,000 26,176,000 33,447,000
Deferred income taxes 13,256,000 12,685,000 13,189,000
___________________________________________________________________________________________
Shareholders' equity:
Preferred stock, $1.00 par value; 2,000,000
shares authorized, none issued -- -- --
Common stock, $.10 par value; 30,000,000
shares authorized, issued and outstanding
7,873,854 shares 787,000 787,000 2,040,000
Class B Common stock, $.10 par value; 20,000,000
shares authorized, issued and outstanding
12,627,954 shares 1,263,000 1,263,000 --
Capital surplus 7,008,000 7,008,000 6,516,000
Retained earnings 129,086,000 123,793,000 112,669,000
Cumulative translation adjustment (206,000) (128,000) 119,000
___________________________________________________________________________________________
Total shareholders' equity 137,938,000 132,723,000 121,344,000
___________________________________________________________________________________________
$229,752,000 $219,064,000 $211,182,000
===========================================================================================
</TABLE>
* Condensed from audited financial statements
The accompanying notes are an integral part of these condensed financial
statements.
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FORM 10-Q
<TABLE>
UNIFIRST CORPORATION AND SUBSIDIARIES
CONDENSED STATEMENTS OF INCOME
(unaudited)
<CAPTION>
Thirteen Thirteen
weeks ended weeks ended
November 27, November 28,
1993 1992
______________________________________________________________________________
<S> <C> <C>
Revenues $78,107,000 $71,708,000
______________________________________________________________________________
Costs and expenses:
Operating costs 46,072,000 42,694,000
Selling and administrative expenses 18,096,000 16,555,000
Depreciation and amortization 4,259,000 4,086,000
______________________________________________________________________________
68,427,000 63,335,000
______________________________________________________________________________
Income from operations 9,680,000 8,373,000
______________________________________________________________________________
Interest expense (income):
Interest expense 634,000 821,000
Interest income (68,000) (65,000)
______________________________________________________________________________
566,000 756,000
______________________________________________________________________________
Income before income taxes 9,114,000 7,617,000
Provision for income taxes 3,372,000 2,666,000
______________________________________________________________________________
Net income $ 5,742,000 $ 4,951,000
==============================================================================
Weighted average number of shares outstanding 20,508,642 20,457,744
==============================================================================
Net income per share $ 0.28 $ 0.24
==============================================================================
</TABLE>
The accompanying notes are an integral part of these condensed financial
statements.
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FORM 10-Q
<TABLE>
UNIFIRST CORPORATION AND SUBSIDIARIES
CONDENSED STATEMENTS OF CASH FLOWS
(unaudited)
<CAPTION>
Thirteen Thirteen
weeks ended weeks ended
November 27, November 28,
1993 1992
_______________________________________________________________________________________
<S> <C> <C>
Cash flows from operating activities:
Net Income $ 5,742,000 $ 4,951,000
Adjustments:
Depreciation 3,592,000 3,389,000
Amortization of other assets 667,000 697,000
Receivables (3,836,000) (3,175,000)
Inventories 308,000 964,000
Rental merchandise in service (2,219,000) (869,000)
Prepaid expenses 6,000 25,000
Accounts payable 1,337,000 (551,000)
Accrued liabilities 1,428,000 2,224,000
Accrued and deferred income taxes 724,000 2,040,000
Deferred income taxes 573,000 453,000
_______________________________________________________________________________________
Net cash provided by operating activities 8,322,000 10,148,000
_______________________________________________________________________________________
Cash flows from investing activities:
Acquisition of businesses, net of working capital acquired (4,000,000) --
Capital expenditures (6,822,000) (2,631,000)
Other assets, net (43,000) 154,000
_______________________________________________________________________________________
Net cash used in investing activites (10,865,000) (2,477,000)
_______________________________________________________________________________________
Cash flows from financing activities:
Increase (reduction) in debt 1,116,000 (8,892,000)
Proceeds from exercise of stock options -- 105,000
Cash dividends paid or payable (449,000) (306,000)
_______________________________________________________________________________________
Net cash provided by (used in) financing activities 667,000 (9,093,000)
_______________________________________________________________________________________
Net decrease in cash (1,876,000) (1,422,000)
Cash at beginning of period 3,656,000 3,276,000
_______________________________________________________________________________________
Cash at end of period $ 1,780,000 $ 1,854,000
=======================================================================================
Supplemental disclosure of cash flow information:
Interest paid $ 160,000 $ 213,000
Income taxes paid $ 2,080,000 $ 221,000
=======================================================================================
</TABLE>
The accompanying notes are an integral part of these condensed financial
statements.
<PAGE> 5
FORM 10-Q
UNIFIRST CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE THIRTEEN WEEKS ENDED NOVEMBER 27, 1993
1. These condensed financial statements have been prepared by the Company
without audit, pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted pursuant to
such rules and regulations; however, the Company believes that the
information furnished reflects all adjustments which are, in the opinion of
management, necessary to a fair statement of results for the interim
period. It is suggested that these condensed financial statements be read in
conjunction with the financial statements and the notes, thereto, included
in the Company's latest annual report.
2. From time to time, the Company is subject to legal proceedings and
claims arising from the conduct of their business operations, including
personal injury, customer contract, employment claims and environmental
matters. In the opinion of management, such proceedings and claims are not
likely to result in losses which would have a material adverse effect upon
the Company.
3. During 1993 the Company's shareholders voted to amend its Articles of
Organization to increase the number of authorized common shares from
20,000,000 to 30,000,000, and to authorize a new Class B common stock with
20,000,000 authorized shares. The offer to exchange, on a share-for-share
basis, shares of Class B common stock for shares of common stock resulted
in 12,627,954 shares of common stock being exchanged for shares of Class B
common stock.
4. On November 1, 1993 the Company acquired all of the outstanding stock of
Modern Coverall and Uniform Supply, Inc., a garment rental business located
in Los Angeles, CA. This acquisition is expected to add approximately
$3,000,000 in annual revenues.
5. On November 18, 1993 the Company's Board of Directors declared a
two-for-one stock split, to be effected in the form of a stock dividend, on
the Company's Common Stock and Class B Common Stock. The stock dividend
is payable on January 19, 1994 to shareholders of record on January 5,
1994. All references to average number of shares outstanding, per
share data and Shareholders' Equity section in these financial statements
are after giving retroactive effect to the two-for-one split.
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FORM 10-Q
UNIFIRST CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
FOR THE THIRTEEN WEEKS ENDED NOVEMBER 27, 1993
RESULTS OF OPERATIONS
- ---------------------
Thirteen Weeks of Fiscal 1994 compared to Thirteen Weeks of Fiscal 1993
- -----------------------------------------------------------------------
Fiscal 1994 first quarter revenues increased $6,399,000 or 8.9% over the fiscal
1993 first quarter. This increase is primarily attributable to internal growth
and modest price increases. Income from operations as a percentage of revenue
increased to 12.4% in fiscal 1994 from 11.7% in fiscal 1993. The primary
reason for the increase is the result of margin improvements in 1994 from both
the primary rental and nuclear businesses.
Net interest expense (interest expense less interest income) was $566,000 in
fiscal 1994 as compared to $756,000 in fiscal 1993. The decrease is
attributable to less debt and lower interest rates in fiscal 1994.
The provision for income taxes for the current period was 37.0% as compared to
35.0% for the corresponding 1993 period. The increase is due primarily to an
increase in the statutory federal income tax rate in 1994.
CAPITAL RESOURCES AND LIQUIDITY
- -------------------------------
The Company believes that its ability to generate cash from operations will
adequately cover its foreseeable capital requirements.
EFFECTS OF INFLATION
- --------------------
Inflation has had the effect of increasing the reported amounts of the
Company's revenues and costs. The Company uses the last-in, first-out (LIFO)
method to value a significant portion of inventories. This method tends to
reduce the amount of income due to inflation included in the Company's results
of operations. The Company believes that, through increases in its prices, it
has been able to recover increases in costs and expenses attributable to
inflation.
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PART II - OTHER INFORMATION
FORM 10-Q
UNIFIRST CORPORATION AND SUBSIDIARIES
Item 1. Legal Proceedings
- --------------------------
Reference is made to Note 2 of notes to condensed financial statements and to
the discussion under the heading Environmental Matters in the Company's Annual
Report on Form 10-K for the fiscal year ended August 28, 1993.
Item 6. Exhibits and Reports on Form 8-K
- -----------------------------------------
(a) Exhibits: None
(b) Reports on Form 8-K: None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf of the
undersigned thereunto duly authorized.
UNIFIRST CORPORATION
Ronald D. Croatti
_________________
Ronald D. Croatti
Vice Chairman and
Chief Executive Officer
Date: January 10, 1994
John B. Bartlett
________________
John B. Bartlett
Senior Vice President
and Chief Financial Officer
