Segment Reporting

12 Months Ended

Aug. 31, 2024

Segment Reporting [Abstract]

Segment Reporting

15. Segment Reporting

Operating segments are identified as components of an enterprise for which separate discrete financial information is available for evaluation by the chief operating decision-maker, or decision-making group, in making decisions on how to allocate resources and assess performance. The Company’s chief operating decision-maker is the Company’s Chief Executive Officer. The Company has six operating segments based on the information reviewed by its Chief Executive Officer: U.S. Rental and Cleaning, Canadian Rental and Cleaning, MFG, Specialty Garments, First Aid and Corporate. The U.S. Rental and Cleaning and Canadian Rental and Cleaning operating segments have been combined to form the U.S. and Canadian Rental and Cleaning reporting segment, and as a result, the Company has five reporting segments.

The U.S. and Canadian Rental and Cleaning reporting segment purchases, rents, cleans, delivers and sells, uniforms and protective clothing and non-garment items in the U.S. and Canada. The laundry locations of the U.S. and Canadian Rental and Cleaning reporting segment are referred to by the Company as “industrial laundries” or “industrial laundry locations.”

The MFG operating segment designs and manufactures uniforms and non-garment items primarily for the purpose of providing these goods to the U.S. and Canadian Rental and Cleaning reporting segment. MFG revenues are primarily generated when goods are shipped from the Company’s manufacturing facilities, or its subcontract manufacturers, to other Company locations. These intercompany revenues are recorded at a transfer price which is typically in excess of the actual manufacturing cost. Manufactured products are carried in inventory until placed in service at which time they are amortized at this transfer price. On a consolidated basis, intercompany revenues and income are eliminated and the carrying value of inventories and rental merchandise in service is reduced to the manufacturing cost. Income before income taxes from MFG net of the intercompany MFG elimination offsets the merchandise amortization costs incurred by the U.S. and Canadian Rental and Cleaning reporting segment as the merchandise costs of this reporting segment are amortized and recognized based on inventories purchased from MFG at the transfer price which is above the Company’s manufacturing cost.

The Corporate operating segment consists of costs associated with the Company’s distribution center, sales and marketing, information systems, engineering, procurement, supply chain, accounting and finance, human resources, other general and administrative costs and interest expense. The revenues generated from the Corporate operating segment represent certain direct sales made by the Company directly from its distribution center. The products sold by this operating segment are the same products rented and sold by the U.S. and Canadian Rental and Cleaning reporting segment. In the table below, no assets or capital expenditures are presented for the Corporate operating segment because no assets are allocated to this operating segment in the information reviewed by the chief executive officer. However, depreciation and amortization expense related to certain assets are reflected in income from operations and income before income taxes for the Corporate operating segment. The assets that give rise to this depreciation and amortization are included in the total assets of the U.S. and Canadian Rental and Cleaning reporting segment as this is how they are tracked and reviewed by the Company. The majority of expenses accounted for within the Corporate segment relate to costs of the U.S. and Canadian Rental and Cleaning segment, with the remainder of the costs relating to the Specialty Garment and First Aid segments.

The Specialty Garments operating segment purchases, rents, cleans, delivers and sells, specialty garments and non-garment items primarily for nuclear and cleanroom applications and provides cleanroom cleaning services at certain customer locations. The First Aid operating segment sells first aid cabinet services and other safety supplies, provides certain safety training and maintains wholesale distribution and pill packaging operations for non-prescription medicines.

The Company refers to the U.S. and Canadian Rental and Cleaning, MFG, and Corporate reporting segments combined as its “Core Laundry Operations,” which is included as a subtotal in the following tables (in thousands):

	Year ended
	2024			2023			2022
Revenues:
U.S. and Canadian Rental and Cleaning	$	2,083,059		$	1,907,765		$	1,733,088
MFG		315,159			297,752			281,112
Net intercompany MFG elimination		(315,159	)		(297,752	)		(281,112	)
Corporate		55,889			53,424			37,414
Subtotal: Core Laundry Operations		2,138,948			1,961,189			1,770,502
Specialty Garments		182,212			177,034			152,885
First Aid		106,271			94,824			77,435
Total consolidated revenues	$	2,427,431		$	2,233,047		$	2,000,822
Operating income (loss):
U.S. and Canadian Rental and Cleaning	$	331,031		$	293,171		$	289,018
MFG		95,072			88,292			64,884
Net intercompany MFG elimination		(9,707	)		(16,717	)		236
Corporate		(272,962	)		(266,080	)		(243,428	)
Subtotal: Core Laundry Operations		143,434			98,666			110,710
Specialty Garments		41,976			37,488			23,658
First Aid		(1,832	)		(2,551	)		(17	)
Total consolidated operating income	$	183,578		$	133,603		$	134,351
Other (income) expense:
Interest income, net	$	(7,242	)	$	(6,738	)	$	(2,851	)
Other expense, net		1,441			1,504			2,877
Total consolidated other (income) expense, net	$	(5,801	)	$	(5,234	)	$	26
Total consolidated income before income taxes	$	189,379		$	138,837		$	134,325

Depreciation and amortization:
U.S. and Canadian Rental and Cleaning	$	105,525	$	86,887	$	75,876
MFG		1,996		2,135		2,251
Net intercompany MFG elimination		—		—		—
Corporate		26,070		25,255		24,075
Subtotal: Core Laundry Operations		133,591		114,277		102,202
Specialty Garments		4,398		4,020		4,097
First Aid		3,443		2,936		2,478
Total consolidated depreciation and amortization	$	141,432	$	121,233	$	108,777
Capital Expenditures:
U.S. and Canadian Rental and Cleaning	$	144,807	$	159,058	$	135,725
MFG		547		78		255
Net intercompany MFG elimination		—		—		—
Corporate		—		—		—
Subtotal: Core Laundry Operations		145,354		159,136		135,980
Specialty Garments		11,894		8,818		7,122
First Aid		3,169		4,037		1,217
Total consolidated capital expenditures	$	160,417	$	171,991	$	144,319
Total Assets:
U.S. and Canadian Rental and Cleaning	$	2,468,973	$	2,347,895	$	2,206,608
MFG		32,075		34,655		35,748
Net intercompany MFG elimination		—		—		—
Corporate		—		—		—
Subtotal: Core Laundry Operations		2,501,048		2,382,550		2,242,356
Specialty Garments		148,001		127,057		135,406
First Aid		47,364		60,368		50,210
Total consolidated assets	$	2,696,413	$	2,569,975	$	2,427,972

The Company’s long-lived assets as of August 31, 2024 and August 26, 2023 and revenues and income before income taxes for fiscal 2024, 2023 and 2022 were attributed to the following countries (in thousands):

Long-lived assets as of:	August 31, 2024		August 26, 2023
U.S.	$	1,696,273	$	1,660,753
Europe, Canada, Mexico and Nicaragua (1)		84,463		69,104
Total	$	1,780,736	$	1,729,857

Revenues for fiscal years:	2024		2023		2022
U.S.	$	2,237,295	$	2,054,601	$	1,831,089
Europe and Canada (1)		190,136		178,446		169,733
Total	$	2,427,431	$	2,233,047	$	2,000,822

Income before income taxes for fiscal years:	2024		2023		2022
U.S.	$	178,895	$	129,997	$	128,567
Europe, Canada, Mexico and Nicaragua (1)		10,484		8,840		5,758
Total	$	189,379	$	138,837	$	134,325

(1)No country other than the U.S. accounts for greater than 10% of total long-lived assets, revenues or income before income taxes.