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Unifirst Announces Financial Results for the First Quarter of Fiscal 2025

WILMINGTON, Mass., Jan. 08, 2025 (GLOBE NEWSWIRE) -- UniFirst Corporation (NYSE: UNF) (the 鈥淐ompany,鈥� 鈥淯niFirst鈥� or 鈥渨e鈥�) today reported results for its first quarter ended November 30, 2024 as compared to the corresponding period in the prior fiscal year:

Q1 2025 Financial Highlights

• Consolidated revenues for the first quarter increased 1.9% to $604.9 million.
• Operating income was $55.5 million, an increase of 4.5%.
• The quarterly tax rate increased to 25.6% compared to 23.4% in the prior year.
• Net income increased to $43.1 million from $42.3 million in the prior year, or 1.8%.
• Diluted earnings per share increased to $2.31 from $2.26 in the prior year, or 2.2%.
• Adjusted EBITDA increased to $94.0 million compared to $88.7 million in the prior year, or 5.9%.

The Company's financial results for the first quarter of fiscal 2025 and 2024 included approximately $2.5 million and $2.9 million, respectively, of costs directly attributable to its customer relationship management (鈥淐RM鈥�) computer system and enterprise resource planning (鈥淓RP鈥�) projects. The Company refers to the CRM and ERP projects together as its 鈥淜ey Initiatives鈥�. The effect of these items on the first quarter of fiscal 2025 and 2024 combined to decrease:

• Both operating income and Adjusted EBITDA by $2.5 million and $2.9 million, respectively.
• Net income by $1.8 million and $2.4 million, respectively.
• Diluted earnings per share by $0.09 and $0.12, respectively.

Steven Sintros, UniFirst President and Chief Executive Officer, said, 鈥淲e are pleased with the results from our first quarter, which represent a solid start to our fiscal year.听 I want to sincerely thank all our Team Partners who continue to Always Deliver for each other and our customers as we strive towards our vision of being universally recognized as the best service provider in the industry听 鈥�all while living our mission of Serving the People Who do the Hard Work.鈥�

Segment Reporting Highlights

Core Laundry Operations

• Revenues for the quarter increased 1.7% to $532.7 million.
• Organic growth, which excludes the effect of acquisitions and fluctuations in the Canadian dollar, was 1.7%.
• Operating margin increased to 8.1% from 8.0%.
• Adjusted Core Laundry Operations' EBITDA margin increased to 14.8% from 14.4%.

The costs we incurred related to the Key Initiatives were recorded to the Core Laundry Operations鈥� segment, and decreased both the Core Laundry Operations鈥� operating and Adjusted EBITDA margins for the first quarters of fiscal 2025 and 2024 by 0.5% and 0.6%, respectively.

The segment's operating and Adjusted EBITDA margin increases were primarily due to lower merchandise and other operating input costs as a percentage of revenues. These were partially offset by听higher healthcare, legal and environmental, and selling costs in the first quarter of fiscal 2025 as a percentage of revenues.

Specialty Garments

• Revenues for the quarter were $45.9 million, an increase of 2.9%, which was due primarily to growth in the European and North American nuclear operations. Partially offsetting this growth was a decline in the cleanroom operations.
• Operating margin decreased to 26.5% from 27.1% a year ago, primarily a result of increased merchandise costs, production costs and depreciation expense as a percentage of revenues.
• Specialty Garments consists of nuclear decontamination and cleanroom operations, and its results can vary significantly due to seasonality and the timing of reactor outages and projects.

Balance Sheet and Capital Allocation

• Cash, cash equivalents and Short-term investments totaled $181.0 million as of November 30, 2024.
• The Company had no long-term debt outstanding as of November 30, 2024.
• Cash flow from operating activities increased to $58.1 million in the first three months of fiscal 2025, an increase of 27.3% over the prior year.
• The Company repurchased 33,605 shares of Common Stock for $6.4 million in the first quarter of fiscal 2025. As of November 30, 2024, the Company had $69.8 million remaining under its existing share repurchase authorization.
• Weighted average shares outstanding 鈥� Diluted for the first quarters of fiscal 2025 and fiscal 2024 were 18.7 million and 18.8 million, respectively.

Financial Outlook

Mr. Sintros continued, 鈥淎t this time, we expect our revenues for fiscal 2025 to be between $2.425 billion and $2.440 billion. We continue to expect diluted earnings per share to be between $6.79 and $7.19.听 This outlook continues to include an estimated $16.0 million of costs directly attributable to our Key Initiatives that we anticipate will be expensed in fiscal 2025."

Although there has been a recent decline in the value of the Canadian dollar, this outlook assumes a constant Canadian exchange rate of $0.74, consistent with our original guidance, due to uncertainty in how the foreign currency will fluctuate over the remainder of the year.听

Conference Call Information

UniFirst Corporation will hold a conference call today at 9:00 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 .

About UniFirst Corporation

Headquartered in Wilmington, Mass., UniFirst Corporation (NYSE: UNF) is a North American leader in the supply and servicing of uniform and workwear programs, facility service products, as well as first aid and safety supplies and services. Together with its subsidiaries, the Company also manages specialized garment programs for the cleanroom and nuclear industries. In addition to partnering with leading brands, UniFirst manufactures its own branded workwear, protective clothing, and floorcare products at its five company-owned ISO-9001-certified manufacturing facilities. With more than 270 service locations, over 300,000 customer locations, and 16,000-plus employee Team Partners, the Company outfits more than 2 million workers every day. For more information, contact UniFirst at 888.296.2740 or visit UniFirst.com.

Forward-Looking Statements Disclosure

This public announcement contains forward-looking statements within the meaning of the federal securities laws that reflect the Company's current views with respect to future events and financial performance, including projected revenues, operating margin 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 may be identified by words such as 鈥済uidance,鈥� 鈥渙utlook,鈥� 鈥渆stimates,鈥� 鈥渁nticipates,鈥� 鈥減rojects,鈥� 鈥減lans,鈥� 鈥渆xpects,鈥� 鈥渋ntends,鈥� 鈥渂elieves,鈥� 鈥渟eeks,鈥� 鈥渃ould,鈥� 鈥渟hould,鈥� 鈥渕ay,鈥� 鈥渨ill,鈥� 鈥渟trategy,鈥� 鈥渙bjective,鈥� 鈥渁ssume,鈥� 鈥渟trive,鈥� 鈥渄esign,鈥� 鈥渁ssumption,鈥� 鈥渧ision鈥� or the negative versions thereof, and similar expressions and by the context in which they are used. Such forward-looking statements are based upon our current expectations and speak only as of the date made. Such statements are highly dependent upon a variety of risks, uncertainties and other 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 caused by an economic recession or other adverse economic conditions, including, without limitation, as a result of elevated inflation or interest rates or extraordinary events or circumstances such as geopolitical conflicts like the conflict between Russia and Ukraine and, disruption in the Middle East, and their impact on our customers' businesses and workforce levels, disruptions of our business and operations, including limitations on, or closures of, our facilities, or the business and operations of our customers or suppliers in connection with extraordinary events or circumstances uncertainties regarding our ability to consummate acquisitions and successfully integrate acquired businesses, and the performance of such 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, our ability to compete successfully without any significant degradation in our margin rates, seasonal and quarterly 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, which such supply could be severely disrupted as a result of extraordinary events or circumstances such as the conflict between Russia and Ukraine, any loss of key management or other personnel, increased costs as a result of any changes in federal, state, international or other laws, rules and regulations or governmental interpretation of such laws, rules and regulations, uncertainties regarding, or adverse impacts from continued high price levels of natural gas, electricity, fuel and labor or increases in such costs, the negative effect on our business from sharply depressed oil and natural gas prices, the continuing increase in domestic healthcare costs, increased workers' compensation claim costs, increased healthcare claim costs, our ability to retain and grow our customer base, demand and prices for our products and services, fluctuations in our Specialty Garments business, political or other instability, supply chain disruption or infection among our employees in Mexico and Nicaragua where our principal garment manufacturing plants are located, our ability to properly and efficiently design, construct, implement and operate a new enterprise resource planning 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 any changes in or additional Securities and Exchange Commission (the 鈥淪EC鈥�), New York Stock Exchange and accounting or other rules, including, without limitation, recent rules adopted by the SEC regarding climate-related and cybersecurity-related disclosures, strikes and unemployment levels, our efforts to evaluate and potentially reduce internal costs, the impact of foreign trade policies and tariffs or other impositions on imported goods on our business, results of operations and financial condition, our ability to successfully implement our business strategies and processes, including our capital allocation strategies, our ability to successfully remediate the material weaknesses in internal control over financial reporting disclosed in our Annual Report on Form 10-K for the year ended August 31, 2024 and the other factors described under Part I, Item 1A. 鈥淩isk Factors鈥� and elsewhere in our Annual Report on Form 10-K for the year ended August 31, 2024, Part II, Item 1A. 鈥淩isk Factors鈥� and elsewhere in our subsequent Quarterly Reports on Form 10-Q and in our other filings with the SEC. We undertake no obligation to update any forward-looking statements to reflect events or circumstances arising after the date on which they are made.

Consolidated Statements of Income
(Unaudited)

_{(1)听听听 Exclusive of depreciation on the Company's property, plant and equipment and amortization on its intangible assets.}

Condensed Consolidated Balance Sheets
(Unaudited)

Detail of Operating Results
(Unaudited)

_{(1)听 听听The Company's financial results for the first quarter of fiscal 2025 and 2024 included approximately $2.5 million and $2.9 million, respectively, of costs directly attributable to its Key Initiatives.}

_{(2)听 听听The Key Initiatives' costs and Clean acquisition costs combined to decrease both Core Laundry Operations' operating margin and Adjusted EBITDA margin for the first quarter of fiscal 2025 and 2024 by 0.5% and 0.6%, respectively.}

Consolidated Statements of Cash Flows
(Unaudited)

_{(1)听 听听Depreciation and amortization for the first three months of fiscal 2025 and 2024 included approximately $4.2 million and $4.6 million, respectively, of non-cash amortization expense recognized on acquisition-related intangible assets.}

Reconciliation of GAAP to Non-GAAP Financial Measures

The Company reports its consolidated financial results in accordance with generally accepted accounting principles (鈥淕AAP鈥�). To supplement the Company鈥檚 consolidated financial results in this press release, the Company also presents Adjusted EBITDA and Adjusted EBITDA margin, which are non-GAAP financial measures. The Company defines Adjusted EBITDA as net income before interest, income taxes, depreciation and amortization, further adjusted for share-based compensation expense, acquisition costs, executive transition costs and other items impacting the comparability of the Company鈥檚 underlying operating performance between periods. Adjusted EBITDA margin is defined as Adjusted EBITDA for a period divided by revenue for the same period.听听听听听

The Company believes these non-GAAP financial measures provide useful supplemental information regarding the performance of the Company and its segments to both management and investors. In addition, by excluding certain items, these non-GAAP financial measures enable management and investors to further evaluate the underlying operating performance of the Company.

Supplemental reconciliations of the Company鈥檚 consolidated net income on a GAAP basis to Adjusted EBITDA and Adjusted EBITDA margin, are presented in the following table. Investors are encouraged to review the reconciliations of the non-GAAP financial measures to their most directly comparable GAAP financial measures, which are provided below. Adjusted EBITDA and Adjusted EBITDA margin should be considered in addition to, and not as substitutes for, or in isolation from, measures prepared in accordance with GAAP.

The Company does not allocate its provision for income taxes to its business segments and as a result, presents it in a separate column in the following tables.

Investor Relations Contact
Shane O'Connor, Executive Vice President & CFO
UniFirst Corporation
978-658-8888
shane_oconnor@unifirst.com