<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
February 27, 1999 Number 1-8504
UNIFIRST CORPORATION
(Exact name of registrant as specified in its charter)
Massachusetts 04-2103460
(State of Incorporation) (IRS Employer ID Number)
68 Jonspin Road
Wilmington, Massachusetts 01887
(Address of principal executive offices)
Registrant's telephone number: (978) 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 preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X] No [ ]
The number of outstanding shares of the registrant's Common Stock and Class B
Common Stock as of March 31, 1999 were 10,050,934 and 10,269,744 respectively.
<PAGE> 2
PART 1 - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
FORM 10-Q
UNIFIRST CORPORATION AND SUBSIDIARIES
CONDENSED BALANCE SHEETS
(unaudited)
<TABLE>
<CAPTION>
February 27, August 29, February 28,
1999 1998* 1998
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Assets
Current assets:
Cash $ 6,932,000 $ 5,330,000 $ 7,177,000
Receivables 48,242,000 42,127,000 41,718,000
Inventories 29,024,000 24,152,000 20,671,000
Rental merchandise in service 52,372,000 42,971,000 40,518,000
Prepaid expenses 259,000 188,000 147,000
- ----------------------------------------------------------------------------------------------------------------------------
Total current assets 136,829,000 114,768,000 110,231,000
- ----------------------------------------------------------------------------------------------------------------------------
Property and equipment:
Land, buildings and leasehold improvements 165,287,000 150,853,000 145,361,000
Machinery and equipment 179,351,000 165,762,000 155,583,000
Motor vehicles 45,254,000 41,608,000 38,523,000
- ----------------------------------------------------------------------------------------------------------------------------
389,892,000 358,223,000 339,467,000
Less - accumulated depreciation 161,476,000 147,261,000 137,595,000
- ----------------------------------------------------------------------------------------------------------------------------
228,416,000 210,962,000 201,872,000
- ----------------------------------------------------------------------------------------------------------------------------
Other assets 80,452,000 50,400,000 48,336,000
- ----------------------------------------------------------------------------------------------------------------------------
$445,697,000 $376,130,000 $360,439,000
============================================================================================================================
Liabilities and Shareholders' Equity
Current liabilities:
Current maturities of long-term obligations $ 523,000 $ 1,194,000 $ 1,050,000
Notes payable 2,488,000 2,511,000 2,543,000
Accounts payable 18,572,000 14,109,000 14,054,000
Accrued liabilities 50,698,000 45,101,000 49,160,000
Accrued and deferred income taxes 3,865,000 2,540,000 2,189,000
- ----------------------------------------------------------------------------------------------------------------------------
Total current liabilities 76,146,000 65,455,000 68,996,000
- ----------------------------------------------------------------------------------------------------------------------------
Long-term obligations, net of current maturities 88,602,000 45,955,000 43,005,000
Deferred income taxes 19,219,000 18,346,000 17,687,000
- ----------------------------------------------------------------------------------------------------------------------------
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
10,216,234, 10,216,864 and 7,903,864 shares 1,022,000 1,022,000 790,000
Class B Common stock, $.10 par value; 20,000,000
shares authorized; issued
10,283,744, 10,293,744 and 12,606,744 shares 1,028,000 1,029,000 1,261,000
Treasury stock, 255,400 shares, at cost (5,631,000) -- --
Capital surplus 12,464,000 7,078,000 7,078,000
Retained earnings 254,981,000 239,952,000 222,954,000
Accumulated other comprehensive income (2,134,000) (2,707,000) (1,332,000)
- ----------------------------------------------------------------------------------------------------------------------------
Total shareholders' equity 261,730,000 246,374,000 230,751,000
- ----------------------------------------------------------------------------------------------------------------------------
$445,697,000 $376,130,000 $360,439,000
============================================================================================================================
</TABLE>
* Condensed from audited financial statements
The accompanying notes are an integral part of these condensed financial
statements.
<PAGE> 3
FORM 10-Q
UNIFIRST CORPORATION AND SUBSIDIARIES
CONDENSED STATEMENTS OF INCOME
(unaudited)
<TABLE>
<CAPTION>
Twenty-six Twenty-six Thirteen Thirteen
weeks ended weeks ended weeks ended weeks ended
February 27, February 28, February 27, February 28,
1999 1998 1999 1998
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues $236,401,000 $221,746,000 $120,066,000 $109,344,000
- ------------------------------------------------------------------------------------------------------------------------------
Costs and expenses:
Operating costs 140,808,000 135,262,000 74,320,000 68,937,000
Selling and administrative expenses 52,853,000 49,147,000 25,864,000 23,750,000
Depreciation and amortization 15,015,000 12,601,000 7,757,000 6,293,000
- ------------------------------------------------------------------------------------------------------------------------------
208,676,000 197,010,000 107,941,000 98,980,000
- ------------------------------------------------------------------------------------------------------------------------------
Income from operations 27,725,000 24,736,000 12,125,000 10,364,000
- ------------------------------------------------------------------------------------------------------------------------------
Interest expense (income):
Interest expense 1,978,000 1,299,000 1,266,000 648,000
Interest income (86,000) (133,000) (28,000) (63,000)
- ------------------------------------------------------------------------------------------------------------------------------
1,892,000 1,166,000 1,238,000 585,000
- ------------------------------------------------------------------------------------------------------------------------------
Income before income taxes 25,833,000 23,570,000 10,887,000 9,779,000
Provision for income taxes 9,558,000 8,485,000 4,028,000 3,520,000
- ------------------------------------------------------------------------------------------------------------------------------
Net income $ 16,275,000 $ 15,085,000 $ 6,859,000 $ 6,259,000
==============================================================================================================================
Weighted average number of shares outstanding -
basic & diluted 20,653,305 20,510,608 20,691,018 20,510,608
==============================================================================================================================
Net income per share - basic & diluted $ 0.79 $ 0.74 $ 0.33 $ 0.31
==============================================================================================================================
</TABLE>
The accompanying notes are an integral part of these condensed financial
statements.
<PAGE> 4
FORM 10-Q
UNIFIRST CORPORATION AND SUBSIDIARIES
CONDENSED STATEMENTS OF CASH FLOWS
(unaudited)
<TABLE>
<CAPTION>
Twenty-six Twenty-six
weeks ended weeks ended
February 27, February 28,
1999 1998
- ------------------------------------------------------------------------------------------------------
<S> <C> <C>
Cash flows from operating activities:
Net Income $16,275,000 $15,085,000
Adjustments, net of acquisitions:
Depreciation 12,321,000 10,470,000
Amortization of other assets 2,694,000 2,131,000
Receivables (3,068,000) (2,356,000)
Inventories 1,446,000 (1,209,000)
Rental merchandise in service (5,382,000) (566,000)
Prepaid expenses (19,000) 1,000
Accounts payable 3,920,000 942,000
Accrued liabilities 5,363,000 3,553,000
Accrued and deferred income taxes 1,237,000 (343,000)
Deferred income taxes 854,000 594,000
- ------------------------------------------------------------------------------------------------------
Net cash provided by operating activities 35,641,000 28,302,000
- ------------------------------------------------------------------------------------------------------
Cash flows from investing activities:
Acquisition of businesses, net of cash acquired (42,924,000) -
Capital expenditures (19,003,000) (24,335,000)
Other assets, net (6,422,000) (2,332,000)
- ------------------------------------------------------------------------------------------------------
Net cash used in investing activities (68,349,000) (26,667,000)
- ------------------------------------------------------------------------------------------------------
Cash flows from financing activities:
Increase in debt 42,275,000 4,121,000
Reduction of debt (1,088,000) (1,553,000)
Repurchase of common stock (5,631,000) -
Cash dividends paid or payable (1,246,000) (1,080,000)
- ------------------------------------------------------------------------------------------------------
Net cash provided by financing activities 34,310,000 1,488,000
- ------------------------------------------------------------------------------------------------------
Net increase in cash 1,602,000 3,123,000
Cash at beginning of period 5,330,000 4,054,000
- ------------------------------------------------------------------------------------------------------
Cash at end of period $ 6,932,000 $ 7,177,000
======================================================================================================
Supplemental disclosure of cash flow information:
Interest paid $ 1,391,000 $ 1,321,000
Income taxes paid 7,360,000 8,271,000
======================================================================================================
</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 TWENTY-SIX WEEKS ENDED FEBRUARY 27, 1999
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 should be
read in conjunction with the financial statements and the notes thereto
included in the Company's latest annual report on Form 10-K. Results for
an interim period are not indicative of any future interim periods or for
an entire fiscal year.
2. From time to time, the Company is subject to legal proceedings and claims
arising from the conduct of its business operations, including legal
proceedings and claims relating to personal injury, customer contract,
employment 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 financial position or results of
operations of the Company.
3. In the first quarter of fiscal 1999, the Company adopted Statement of
Financial Accounting Standards (SFAS) No. 130, "Reporting Comprehensive
Income". SFAS 130 established new rules for the reporting and display of
comprehensive income and its components. The adoption of SFAS 130 had no
impact on the Company's net income or shareholders' equity, but it requires
the Company's foreign currency translation adjustment, which prior to
adoption was reported separately in shareholders' equity, to be included in
accumulated other comprehensive income. The components of comprehensive
income for the thirteen and twenty-six week periods ended February 27, 1999
and February 28, 1998 were as follows:
<TABLE>
<CAPTION>
Twenty-six Twenty-six Thirteen Thirteen
weeks ended weeks ended weeks ended weeks ended
February 27, February 28, February 27, February 28,
1999 1998 1999 1998
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net income $16,275,000 $15,085,000 $6,859,000 $6,259,000
Other comprehensive income:
Foreign currency translation adjustments 573,000 (446,000) 281,000 (118,000)
---------------------------------------------------------------------------
Comprehensive income $16,848,000 $14,639,000 $7,140,000 $6,141,000
===========================================================================
</TABLE>
4. The Company has completed four acquisitions in fiscal 1999 to date. The
purchase price for these acquisitions was allocated in accordance with
Accounting Principles Board Opinion No. 16, "Business Combinations."
<PAGE> 6
FORM 10-Q
UNIFIRST CORPORATION AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
FOR THE TWENTY-SIX WEEKS ENDED FEBRUARY 27, 1999
RESULTS OF OPERATIONS
- ---------------------
Twenty-Six Weeks of Fiscal 1999 Compared with Twenty-Six Weeks of Fiscal 1998
- -----------------------------------------------------------------------------
REVENUES. Revenues for the first twenty-six weeks of fiscal 1999 increased $14.7
million or 6.6% to $236.4 million as compared with $221.7 million for the first
twenty-six weeks of fiscal 1998. This increase can be attributed to growth from
existing operations (2.5%), acquisitions (3.1%) and price increases (1.0%).
Growth from existing operations was from the conventional uniform rental
business (2.6%), offset by slightly lower revenue from the nuclear garment
services business (-0.1%). The increase in revenues from acquisitions resulted
from two acquisitions made in fiscal 1998 (one in California in March 1998, and
one in Alabama in June 1998) and four acquisitions made in fiscal 1999 (one in
Wisconsin and one in Mississippi, both in October 1998, one in New England and
North Carolina in December 1998 and one in Nevada in January 1999).
OPERATING COSTS. Operating costs increased to $140.8 million for the first half
of fiscal 1999 as compared with $135.3 million for the same period of fiscal
1998 as a result of costs associated with increased revenues, but declined to
59.6% from 61.0% as a percentage of revenues for these periods. In July 1998,
the Company changed the estimated service lives and related amortization periods
for rental merchandise in service, from primarily 12 months to primarily 15
months. This was the primary reason for the improvement in operating costs as a
percentage of revenues. This improvement was offset by the additional costs of
consolidating the Company's regional distribution facilities into its
centralized distribution center in Owensboro, KY.
SELLING AND ADMINISTRATIVE EXPENSES. The Company's selling and administrative
expenses increased to $52.9 million, or 22.4% of revenues, for the first
twenty-six weeks of fiscal 1999 as compared with $49.1 million, or 22.2% of
revenues, for the same period in fiscal 1998. This increase was due primarily to
increased sales personnel and other costs to support the Company's increased
revenues, costs incurred to upgrade its information systems and increased costs
for employee health insurance.
DEPRECIATION AND AMORTIZATION. The Company's depreciation and amortization
expense increased to $15.0 million, or 6.3% of revenues, for the first half of
fiscal 1999 as compared with $12.6 million, or 5.7% of revenues, for the same
period in fiscal 1998. This increase was due primarily to increased capital
expenditures for the Company's new distribution center in Owensboro, KY and
information systems hardware and software to upgrade certain Company-wide
systems.
NET INTEREST EXPENSE. Net interest expense was $1.9 million, or 0.8% of
revenues, for the first twenty-six weeks of fiscal 1999 as compared to $1.2
million, or 0.5% of revenues, for the same period in fiscal 1998. The increase
is primarily attributable to higher debt levels in the first half of fiscal
1999.
INCOME TAXES. The Company's effective income tax rate was 37.0% for the first
half of fiscal 1999 and 36.0% for the same period in fiscal 1998. The increase
is due primarily to reduced benefits from a corporate-owned life insurance
program.
<PAGE> 7
FORM 10-Q
UNIFIRST CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
(continued)
FOR THE TWENTY-SIX WEEKS ENDED FEBRUARY 27, 1999
RESULTS OF OPERATIONS (continued)
- ---------------------------------
Thirteen Weeks ended February 27,1999 Compared to Thirteen Weeks of February 28,
- --------------------------------------------------------------------------------
1998
- ----
REVENUES. Fiscal 1999 second quarter revenues increased $10.7 million or 9.8% to
$120.1 million as compared with $109.3 million for the fiscal 1998 second
quarter. This increase can be attributed to growth from existing operations
(3.4%), acquisitions (5.4%) and price increases (1.0%). Growth from existing
operations was primarily from the conventional uniform rental business (2.9%)
and from the nuclear garment services business (0.5%). The increase in revenues
from acquisitions resulted from two acquisitions made in fiscal 1998 (one in
California in March 1998, and one in Alabama in June 1998) and four acquisitions
made in fiscal 1999 (one in Wisconsin and one in Mississippi, both in October
1998, one in New England and North Carolina in December 1998 and one in Nevada
in January 1999).
OPERATING COSTS. Operating costs increased to $74.3 million for the second
quarter of fiscal 1999 as compared with $68.9 million for the same period of
fiscal 1998 as a result of costs associated with increased revenues, but
declined to 61.9% from 63.0% as a percentage of revenues for these periods. In
July 1998, the Company changed the estimated service lives and related
amortization periods for rental merchandise in service, from primarily 12 months
to primarily 15 months. This was the primary reason for the improvement in
operating costs as a percentage of revenues. This improvement was offset by the
additional costs of consolidating the Company's regional distribution facilities
into its centralized distribution center in Owensboro, KY.
SELLING AND ADMINISTRATIVE EXPENSES. The Company's selling and administrative
expenses increased to $25.9 million, or 21.5% of revenues, for the second
quarter of fiscal 1999 as compared with $23.8 million, or 21.7% of revenues for
the same period in fiscal 1998. This increase was due primarily to increased
sales personnel and other costs to support the Company's increased revenues,
costs incurred to upgrade its information systems and increased costs for
employee health insurance.
DEPRECIATION AND AMORTIZATION. The Company's depreciation and amortization
expense increased to $7.7 million, or 6.4% of revenues, for the second quarter
of fiscal 1999 as compared with $6.3 million, or 5.8% of revenues, for the same
period in fiscal 1998. This increase was due primarily to increased capital
expenditures for the Company's new distribution center in Owensboro, KY and
information systems hardware and software to upgrade certain Company-wide
systems.
NET INTEREST EXPENSE. Net interest expense was $1.2 million, or 1.0% of
revenues, for the second quarter of fiscal 1999 as compared with $0.6 million,
or 0.5% of revenues, for the same period in fiscal 1998. The increase is
primarily attributable to higher debt levels in the fiscal 1999 quarter.
INCOME TAXES. The Company's effective income tax rate was 37.0% for the second
quarter of fiscal 1999 and 36.0% for the same period in fiscal 1998. The
increase is due primarily to reduced benefits from a corporate-owned life
insurance program.
<PAGE> 8
FORM 10-Q
UNIFIRST CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
(continued)
FOR THE TWENTY-SIX WEEKS ENDED FEBRUARY 27, 1999
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
Shareholders' equity at February 27, 1999 was $261.7 million, or 74.6% of total
capitalization.
During the twenty-six weeks ended February 27, 1999 net cash provided by
operating activities ($35.6 million) and additional borrowings ($42.3 million)
was primarily used for the acquisition of four businesses ($42.9 million),
capital expenditures ($19.0 million), repurchase of common stock ($5.6 million),
dividends ($1.2 million) and debt repayment ($1.1 million).
The Company had $6.9 million in cash and $37.5 million available on its $120
million unsecured line of credit with three banks as of February 27, 1999. The
Company believes its generated cash from operations and the Company's borrowing
capacity will adequately cover its foreseeable capital requirements.
SEASONALITY
- -----------
Historically, the Company's revenues and operating results have varied from
quarter to quarter and are expected to continue to fluctuate in the future.
These fluctuations have been due to a number of factors, including: general
economic conditions in the Company's markets; the timing of acquisitions and of
commencing start-up operations and related costs; the effectiveness of
integrating acquired businesses and start-up operations; the timing of nuclear
plant outages; capital expenditures; seasonal rental and purchasing patterns of
the Company's customers; and price changes in response to competitive factors.
In addition, the Company's operating results historically have been lower during
the second and fourth fiscal quarters than during the other quarters of the
fiscal year. The operating results for any historical quarter are not
necessarily indicative of the results to be expected for an entire fiscal year
or any other interim periods.
INFORMATION SYSTEMS; YEAR 2000
- ------------------------------
The statements in this section include "Year 2000 readiness disclosures" within
the meaning of S2392 RS, Year 2000 Information and Readiness Disclosure Act
(September 17, 1998).
The Company has made a substantial investment in its information systems and
intends to spend significant amounts on its information systems in the future.
The Company has evaluated Year 2000 (Y2K) issues concerning the ability of
systems to properly recognize date sensitive information when the year changes
to 2000. Systems that do not properly recognize such information could generate
erroneous data or cause complete system failures.
Based on an assessment conducted in early 1998, a Year 2000 Project leader was
appointed on April 15, 1998. Utilizing internal resources and consultants, the
Project leader manages the projects and reports weekly to the IS director and
Y2K project team.
<PAGE> 9
FORM 10-Q
UNIFIRST CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
(continued)
FOR THE TWENTY-SIX WEEKS ENDED FEBRUARY 27, 1999
INFORMATION SYSTEMS; YEAR 2000 (continued)
- ------------------------------------------
STATE OF READINESS: The Company regularly reviews the status of their active
Year 2000 projects. The Company believes that its recently developed account
management system, which is used primarily for customer billing, accounts
receivable and sales taxes, and the materials management and catalog sales
systems which were installed at its Owensboro, KY facility are Y2K compliant. In
February, 1999 the Company installed a new third party payroll and human
resources system which has been represented to be Y2K compliant. The Company has
grouped the rest of its information systems and technology into 3 categories for
its Y2K program: 1. Information Technology (computer hardware and software,
including financial systems and electronic data interchange (EDI) interfaces);
2. Physical Plant (production equipment and facilities); 3. Extended Enterprise
(suppliers and customers). The Company uses a five-step process to manage its
Y2K program: 1. Inventory (identify items to be assessed for Y2K readiness); 2.
Assessment (prioritize the inventoried items, assess and document their Y2K
readiness and plan corrective actions); 3. Renovation/Upgrade (apply corrective
actions); 4. Testing (verify corrective actions); 5. Implementation (implement
new system). The Company has, at a minimum, reached the renovation/upgrade step
on all projects. Many of the projects are currently being tested and more than
half of the projects have been implemented. The Company expects that all
projects will be completed by the end of August 1999, its fiscal year end.
COSTS: The Company expects that the total cost of its Y2K program will range
from $1.0 to $1.5 million. As of February 27, 1999 the Company had spent
approximately $0.8 million. These costs do not include the account management,
Owensboro, KY and new payroll and human resources systems discussed above.
RISKS OF Y2K ISSUES AND CONTINGENCY PLANS: Since the beginning of its Y2K
program, the Company has focused its resources on the systems which are critical
to its business operations. While the Company believes it is addressing the Y2K
risks within its control, there are other risks, such as utilities and other
suppliers, which are beyond the immediate control of the Company. Based on
current information, the Company believes that the Y2K problem will not have a
material adverse effect on the results of operations of the Company. There can,
however, be no assurances that Y2K remediation by others, including suppliers,
will be properly completed, and failure to do so could have a material adverse
effect on the results of operations of the Company. To date our Extended
Enterprise survey and review of key customers and suppliers has not revealed any
Y2K risk. Contingency plans have been developed and are in the process of being
reviewed for all Y2K projects which are critical to the Company's business
operations. This plan focuses on mission critical systems and puts in place
procedures and leverages resources to maintain our key business processes should
any failures occur.
<PAGE> 10
FORM 10-Q
UNIFIRST CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
(continued)
FOR THE TWENTY-SIX WEEKS ENDED FEBRUARY 27, 1999
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 and
productivity improvements, it has been able to recover increases in costs and
expenses attributable to inflation.
SAFE HARBOR FOR FORWARD LOOKING STATEMENTS
- ------------------------------------------
Forward looking statements contained in this quarterly report 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 those indicated in the section entitled "Risk
Factors" in the Company's Prospectus, dated March 18, 1998, as well as the risks
and uncertainties relating to the centralization of certain of the Company's
operations at its Owensboro, KY distribution facility, the Company's handling of
the Year 2000 issue, and the Company's ability to control manufacturing and
operating costs. When used in this quarterly report, the words "intend,"
"anticipate," "believe," "estimate," and "expect" and similar expressions as
they relate to the Company are included to identify such forward looking
statements.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
- ------------------------------------------------------------------
For information regarding quantitative and qualitative disclosures about market
risk, see the Company's discussion under Item 7A of its Annual Report on Form
10-K for the fiscal year ended August 29, 1998. Between August 29, 1998 and
February 27, 1999, there were no material changes in the Company's market risk.
<PAGE> 11
PART II - OTHER INFORMATION
FORM 10-Q
UNIFIRST CORPORATION AND SUBSIDIARIES
Item 4. Submission of Matters to a Vote of Security Holders
- ------------------------------------------------------------
The Company's Annual Meeting of Shareholders was held on January 12, 1999.
Ronald D. Croatti and Donald J. Evans were reelected to the Board of Directors.
With respect to Mr. Croatti, 8,489,315 shares of Common Stock and 10,292,464
shares of Class B Common Stock were voted for his election and 143,483 shares of
Common Stock were voted against his election. With respect to Mr. Evans,
8,489,315 shares of Common Stock were voted for his election and 143,483 shares
of Common Stock were voted against his election. The terms of office of Ms.
Cynthia Croatti and Messrs. Reynold L. Hoover, Aldo Croatti and Albert Cohen
continued after the meeting.
Item 6. Exhibits and Reports on Form 8-K
- -----------------------------------------
(a) Exhibits:
(27) Financial Data Schedule
(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
/s/ RONALD D. CROATTI
---------------------
Ronald D. Croatti
Vice Chairman, President and
Chief Executive Officer
Date: April 13, 1999
/s/ JOHN B. BARTLETT
--------------------
John B. Bartlett
Senior Vice President
and Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
THE FINANCIAL STATEMENTS OF UNIFIRST CORPORATION FOR THE TWENTY-SIX WEEKS
ENDED FEBRUARY 27, 1999, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> AUG-28-1999
<PERIOD-START> AUG-30-1998
<PERIOD-END> FEB-27-1999
<EXCHANGE-RATE> 1
<CASH> 6,932
<SECURITIES> 0
<RECEIVABLES> 49,967
<ALLOWANCES> 1,725
<INVENTORY> 29,024
<CURRENT-ASSETS> 136,829
<PP&E> 389,892
<DEPRECIATION> 161,476
<TOTAL-ASSETS> 445,697
<CURRENT-LIABILITIES> 76,146
<BONDS> 88,602
0
0
<COMMON> 2,050
<OTHER-SE> 259,680
<TOTAL-LIABILITY-AND-EQUITY> 445,697
<SALES> 236,401
<TOTAL-REVENUES> 236,401
<CGS> 208,676
<TOTAL-COSTS> 208,676
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,892
<INCOME-PRETAX> 25,833
<INCOME-TAX> 9,558
<INCOME-CONTINUING> 16,275
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 16,275
<EPS-PRIMARY> 0.79
<EPS-DILUTED> 0.79
</TABLE>
