<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
May 29, 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 July 5, 1999 were 10,007,934 and 10,260,744 respectively.
<PAGE> 2
PART 1 - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
FORM 10-Q
UNIFIRST CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
<TABLE>
<CAPTION>
May 29, August 29, May 30,
1999 1998* 1998
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Assets
Current assets:
Cash $ 3,286,000 $ 5,330,000 $ 6,122,000
Receivables 50,823,000 42,127,000 46,282,000
Inventories 27,967,000 24,152,000 22,379,000
Rental merchandise in service 57,256,000 42,971,000 41,045,000
Prepaid expenses 410,000 188,000 143,000
- --------------------------------------------------------------------------------------------------------------------
Total current assets 139,742,000 114,768,000 115,971,000
- --------------------------------------------------------------------------------------------------------------------
Property and equipment:
Land, buildings and leasehold improvements 170,563,000 150,853,000 148,272,000
Machinery and equipment 187,244,000 165,762,000 161,914,000
Motor vehicles 48,003,000 41,608,000 42,191,000
- --------------------------------------------------------------------------------------------------------------------
405,810,000 358,223,000 352,377,000
Less - accumulated depreciation 168,736,000 147,261,000 142,985,000
- --------------------------------------------------------------------------------------------------------------------
237,074,000 210,962,000 209,392,000
- --------------------------------------------------------------------------------------------------------------------
Other assets 79,590,000 50,400,000 50,058,000
- --------------------------------------------------------------------------------------------------------------------
$456,406,000 $376,130,000 $375,421,000
====================================================================================================================
Liabilities and Shareholders' Equity
Current liabilities:
Current maturities of long-term obligations $ 925,000 $ 1,194,000 $ 1,067,000
Notes payable 2,360,000 2,511,000 2,457,000
Accounts payable 16,522,000 14,109,000 13,864,000
Accrued liabilities 49,044,000 45,101,000 45,910,000
Accrued and deferred income taxes 4,143,000 2,540,000 2,131,000
- --------------------------------------------------------------------------------------------------------------------
Total current liabilities 72,994,000 65,455,000 65,429,000
- --------------------------------------------------------------------------------------------------------------------
Long-term obligations, net of current maturities 99,489,000 45,955,000 53,355,000
Deferred income taxes 19,554,000 18,346,000 18,017,000
- --------------------------------------------------------------------------------------------------------------------
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
10,003,934 shares 1,000,000 1,022,000 1,021,000
Class B Common stock, $.10 par value; 20,000,000
shares authorized; issued
10,264,744 shares 1,026,000 1,029,000 1,030,000
Treasury stock, 486,700 shares, at cost (10,485,000) -- --
Capital surplus 12,487,000 7,078,000 7,078,000
Retained earnings 262,025,000 239,952,000 231,117,000
Accumulated other comprehensive income (1,684,000) (2,707,000) (1,626,000)
- --------------------------------------------------------------------------------------------------------------------
Total shareholders' equity 264,369,000 246,374,000 238,620,000
- --------------------------------------------------------------------------------------------------------------------
$456,406,000 $376,130,000 $375,421,000
====================================================================================================================
</TABLE>
* Condensed from audited financial statements
The accompanying notes are an integral part of these condensed consolidated
financial statements.
<PAGE> 3
FORM 10-Q
UNIFIRST CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
<TABLE>
<CAPTION>
Thirty-nine Thirty-nine Thirteen Thirteen
weeks ended weeks ended weeks ended weeks ended
May 29, May 30, May 29, May 30,
1999 1998 1999 1998
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues $362,062,000 $335,812,000 $125,661,000 $114,066,000
- ----------------------------------------------------------------------------------------------------------------------------
Costs and expenses:
Operating costs 215,992,000 204,581,000 75,184,000 69,319,000
Selling and administrative expenses 81,542,000 73,194,000 28,689,000 24,047,000
Depreciation and amortization 23,152,000 19,189,000 8,137,000 6,588,000
- ----------------------------------------------------------------------------------------------------------------------------
320,686,000 296,964,000 112,010,000 99,954,000
- ----------------------------------------------------------------------------------------------------------------------------
Income from operations 41,376,000 38,848,000 13,651,000 14,112,000
- ----------------------------------------------------------------------------------------------------------------------------
Interest expense (income):
Interest expense 3,386,000 1,895,000 1,408,000 596,000
Interest income (107,000) (214,000) (21,000) (81,000)
- ----------------------------------------------------------------------------------------------------------------------------
3,279,000 1,681,000 1,387,000 515,000
- ----------------------------------------------------------------------------------------------------------------------------
Income before income taxes 38,097,000 37,167,000 12,264,000 13,597,000
Provision for income taxes 14,096,000 13,380,000 4,538,000 4,895,000
- ----------------------------------------------------------------------------------------------------------------------------
Net income $24,001,000 $23,787,000 $ 7,726,000 $ 8,702,000
============================================================================================================================
Weighted average number of shares outstanding -
basic & diluted 20,506,420 20,510,608 20,320,212 20,510,608
============================================================================================================================
Net income per share - basic & diluted $1.17 $1.16 $0.38 $0.42
============================================================================================================================
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
<PAGE> 4
FORM 10-Q
UNIFIRST CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
<TABLE>
<CAPTION>
Thirty-nine Thirty-nine
weeks ended weeks ended
May 29, May 30,
1999 1998
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Cash flows from operating activities:
Net Income $ 24,001,000 $ 23,787,000
Adjustments, net of acquisitions:
Depreciation 18,901,000 15,923,000
Amortization of other assets 4,251,000 3,266,000
Receivables (5,237,000) (6,812,000)
Inventories 2,594,000 (2,858,000)
Rental merchandise in service (9,588,000) (831,000)
Prepaid expenses 30,000 5,000
Accounts payable 1,497,000 730,000
Accrued liabilities 3,578,000 318,000
Accrued and deferred income taxes 1,488,000 (382,000)
Deferred income taxes 1,176,000 936,000
- -----------------------------------------------------------------------------------------------------------
Net cash provided by operating activities 42,691,000 34,082,000
- -----------------------------------------------------------------------------------------------------------
Cash flows from investing activities:
Acquisition of businesses, net of cash acquired (45,143,000) (5,041,000)
Capital expenditures (33,343,000) (35,049,000)
Other assets, net (4,022,000) (3,172,000)
- -----------------------------------------------------------------------------------------------------------
Net cash used in investing activities (82,508,000) (43,262,000)
- -----------------------------------------------------------------------------------------------------------
Cash flows from financing activities:
Increase in debt 53,725,000 14,563,000
Reduction of debt (3,538,000) (1,696,000)
Repurchase of common stock (10,485,000) -
Cash dividends paid or payable (1,929,000) (1,619,000)
- -----------------------------------------------------------------------------------------------------------
Net cash provided by financing activities 37,773,000 11,248,000
- -----------------------------------------------------------------------------------------------------------
Net increase (decrease) in cash (2,044,000) 2,068,000
Cash at beginning of period 5,330,000 4,054,000
- -----------------------------------------------------------------------------------------------------------
Cash at end of period $ 3,286,000 $ 6,122,000
===========================================================================================================
Supplemental disclosure of cash flow information:
Interest paid $ 2,624,000 $ 1,918,000
Income taxes paid 11,285,000 12,894,000
===========================================================================================================
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
<PAGE> 5
FORM 10-Q
UNIFIRST CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THIRTY-NINE WEEKS ENDED MAY 29, 1999
1. These condensed consolidated 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 (consisting only of normal recurring 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
consolidated 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 this 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 thirty-nine week periods ended May 29, 1999 and
May 30, 1998 were as follows:
<TABLE>
<CAPTION>
Thirty-nine Thirty-nine Thirteen Thirteen
weeks ended weeks ended weeks ended weeks ended
May 29, May 30, May 29, May 30,
1999 1998 1999 1998
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net income $24,001,000 $23,787,000 $7,726,000 $8,702,000
Other comprehensive income:
Foreign currency translation adjustments 1,023,000 (740,000) 450,000 (294,000)
-------------------------------------------------------------
Comprehensive income $25,024,000 $23,047,000 $8,176,000 $8,408,000
=============================================================
</TABLE>
4. The Company has completed five 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". None
of these acquisitions were significant in relation to the Company's
consolidated financial statements and therefore pro forma financial
information has not been presented.
<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 THIRTY-NINE WEEKS ENDED MAY 29, 1999
RESULTS OF OPERATIONS
Thirty-Nine Weeks of Fiscal 1999 Compared with Thirty-Nine Weeks of Fiscal 1998
Revenues. Revenues for the first thirty-nine weeks of fiscal 1999
increased $26.3 million or 7.8% to $362.1 million as compared with $335.8
million for the first thirty-nine weeks of fiscal 1998. This increase can be
attributed to growth from existing operations (3.4%), acquisitions (3.4%) and
price increases (1.0%). Growth from existing operations was primarily from the
conventional uniform rental business (3.1%), and from the nuclear garment
services business (0.3%). The increase in revenues from acquisitions resulted
from one acquisition made in fiscal 1998 (in Alabama in June 1998) and five
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, one in
Nevada in January 1999 and one in Wisconsin in April 1999).
Operating Costs. Operating costs increased to $216.0 million for the first
thirty-nine weeks of fiscal 1999 as compared with $204.6 million for the same
period of fiscal 1998 as a result of costs associated with increased revenues,
but declined to 59.7% from 60.9% 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, which is more consistent with their respective useful
life (although the Company believes its principal publicly-held competitors
amortize their garments over an average of 15 to 18 months). This was the
primary reason for the improvement in operating costs as a percentage of
revenues.
Selling and Administrative Expenses. The Company's selling and administrative
expenses increased to $81.5 million, or 22.5% of revenues, for the first
thirty-nine weeks of fiscal 1999 as compared with $73.2 million, or 21.8% of
revenues, for the same period in fiscal 1998. This increase was due primarily to
increased costs to support the Company's revenue growth, including professional
sales training, expansion of its national accounts sales department and catalog
and internet sales systems. The Company has also incurred increased costs to
upgrade its information systems and people.
Depreciation and Amortization. The Company's depreciation and amortization
expense increased to $23.2 million, or 6.4% of revenues, for the thirty-nine
weeks of fiscal 1999 as compared with $19.2 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, information systems hardware and software to upgrade certain
Company-wide systems and increased amortization costs due to acquisitions.
Net Interest Expense. Net interest expense was $3.3 million, or 0.9% of
revenues, for the first thirty-nine weeks of fiscal 1999 as compared to $1.7
million, or 0.5% of revenues, for the same period in fiscal 1998. The
increase is primarily attributable to higher debt levels in fiscal 1999.
Income Taxes. The Company's effective income tax rate was 37.0% for the first
thirty-nine weeks 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 THIRTY-NINE WEEKS ENDED MAY 29, 1999
RESULTS OF OPERATIONS (continued)
Thirteen Weeks ended May 29,1999 Compared to Thirteen Weeks ended May 30, 1998
Revenues. Fiscal 1999 third quarter revenues increased $11.6 million or 10.2% to
$125.7 million as compared with $114.1 million for the fiscal 1998 third
quarter. This increase can be attributed to growth from existing operations
(4.4%), acquisitions (4.8%) and price increases (1.0%). Growth from existing
operations was primarily from the conventional uniform rental business (3.4%)
and from the nuclear garment services business (1.0%). The increase in revenues
from acquisitions resulted from one acquisition made in fiscal 1998 (in Alabama
in June 1998) and five 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, one in Nevada in January 1999 and one in Wisconsin in April
1999).
Operating Costs. Operating costs increased to $75.2 million for the third
quarter of fiscal 1999 as compared with $69.3 million for the same period of
fiscal 1998 as a result of costs associated with increased revenues, but
declined to 59.8% from 60.8% 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, which is more consistent with their respective useful
life (although the Company believes its principal publicly-held competitors
amortize their garments over an average of 15 to 18 months). This was the
primary reason for the improvement in operating costs as a percentage of
revenues.
Selling and Administrative Expenses. The Company's selling and administrative
expenses increased to $28.7 million, or 22.8% of revenues, for the third quarter
of fiscal 1999 as compared with $24.0 million, or 21.1% of revenues for the same
period in fiscal 1998. This increase was due primarily to increased costs to
support the Company's revenue growth, including professional sales training,
expansion of its national accounts sales department and catalog and internet
sales systems. The Company has also incurred increased costs to upgrade its
information systems and people.
Depreciation and Amortization. The Company's depreciation and amortization
expense increased to $8.1 million, or 6.5% of revenues, for the third quarter of
fiscal 1999 as compared with $6.6 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,
information systems hardware and software to upgrade certain Company-wide
systems and increased amortization costs due to acquisitions.
Net Interest Expense. Net interest expense was $1.4 million, or 1.1% of
revenues, for the third quarter of fiscal 1999 as compared with $0.5 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 third
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 THIRTY-NINE WEEKS ENDED MAY 29, 1999
LIQUIDITY AND CAPITAL RESOURCES
Shareholders' equity at May 29, 1999 was $264.4 million, or 72.5% of total
capitalization.
During the thirty-nine weeks ended May 29, 1999 net cash provided by operating
activities ($42.7 million) and additional borrowings ($53.7 million) was
primarily used for the acquisition of five businesses ($45.1 million), capital
expenditures ($33.3 million), repurchase of common stock ($10.5 million), debt
repayment ($3.5 million) and dividends ($1.9 million).
The Company had $3.3 million in cash and $26.0 million available on its $120
million unsecured line of credit with three banks as of May 29, 1999. The
Company believes cash generated 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.
<PAGE> 9
FORM 10-Q
UNIFIRST CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
(continued)
FOR THE THIRTY-NINE WEEKS ENDED MAY 29, 1999
INFORMATION SYSTEMS; YEAR 2000 (continued)
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 information
systems director and Y2K project team.
State of Readiness: The Company regularly reviews the status of its active
Year 2000 projects. The Company believes that its 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. Additionally, testing
and review to verify Y2K compliance of these systems has been successful and is
nearing completion. 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, and has
completed the implementation stage on all systems which are critical to its
business operations. Of the remaining projects, many are currently being
tested and well over half 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 May 29, 1999 the Company had spent
approximately $1.0 million. These costs do not include the account management,
materials management, catalog sales 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 the effect that the
Y2K issue may have on 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.
<PAGE> 10
FORM 10-Q
UNIFIRST CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
(continued)
FOR THE THIRTY-NINE WEEKS ENDED MAY 29, 1999
INFORMATION SYSTEMS; YEAR 2000 (continued)
To date our Extended Enterprise survey and review of key customers and suppliers
has not revealed any Y2K risk. Contingency plans for all Y2K projects which are
critical to the Company's business operations have been completed. These plans
put procedures in place which maintain our key business processes should any
failures occur.
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 DISCLOSURE 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 May
29, 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 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: July 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 THIRTY-NINE WEEKS ENDED
MAY 29, 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> 9-MOS
<FISCAL-YEAR-END> AUG-28-1999
<PERIOD-START> AUG-30-1998
<PERIOD-END> MAY-29-1999
<EXCHANGE-RATE> 1
<CASH> 3,286
<SECURITIES> 0
<RECEIVABLES> 52,648
<ALLOWANCES> 1,825
<INVENTORY> 27,967
<CURRENT-ASSETS> 139,742
<PP&E> 405,810
<DEPRECIATION> 168,736
<TOTAL-ASSETS> 456,406
<CURRENT-LIABILITIES> 72,994
<BONDS> 99,489
0
0
<COMMON> 2,026
<OTHER-SE> 262,343
<TOTAL-LIABILITY-AND-EQUITY> 456,406
<SALES> 362,062
<TOTAL-REVENUES> 362,062
<CGS> 320,686
<TOTAL-COSTS> 320,686
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,279
<INCOME-PRETAX> 38,097
<INCOME-TAX> 14,096
<INCOME-CONTINUING> 24,001
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 24,001
<EPS-BASIC> 1.17
<EPS-DILUTED> 1.17
</TABLE>
