Note 15 - Segment Reporting

12 Months Ended

Aug. 31, 2013

Segment Reporting [Abstract]

Segment Reporting Disclosure [Text Block]

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; US Rental and Cleaning, Canadian Rental and Cleaning, Manufacturing (“MFG”), Corporate, Specialty Garments Rental and Cleaning (“Specialty Garments”) and First Aid. The US Rental and Cleaning and Canadian Rental and Cleaning operating segments have been combined to form the US and Canadian Rental and Cleaning reporting segment, and as a result, the Company has five reporting segments.

The US and Canadian Rental and Cleaning reporting segment purchases, rents, cleans, delivers and sells, uniforms and protective clothing and non-garment items in the United States and Canada. The laundry locations of the US 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 solely for the purpose of providing these goods to the US and Canadian Rental and Cleaning reporting segment. MFG revenues are generated when goods are shipped from the Company’s manufacturing facilities, or its subcontract manufacturers, to other Company locations. These revenues are recorded at a transfer price which is typically in excess of the actual manufacturing cost. Products are carried in inventory and subsequently placed in service and 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 US 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, materials management, manufacturing planning, finance, budgeting, 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 US 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 US 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 US 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 limited customer locations. The First Aid operating segment sells first aid cabinet services and other safety supplies as well as maintains wholesale distribution and pill packaging operations.

The Company refers to the US 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):

As of and for the year ended August 31, 2013	US and Canadian Rental and Cleaning			MFG		Net Interco MFG Elim			Corporate			Subtotal Core Laundry Operations			Specialty Garments		First Aid		Total
Revenues	$	1,200,286		$	170,867	$	(170,867	)	$	14,079		$	1,214,365		$	96,688	$	44,462	$	1,355,515
Income (loss) from operations	$	200,852		$	61,896	$	(9,729	)	$	(82,357	)	$	170,662		$	10,539	$	5,002	$	186,203
Interest (income) expense, net	$	(2,944	)	$	—	$	—		$	1,394		$	(1,550	)	$	—	$	—	$	(1,550	)
Income (loss) before taxes	$	203,798		$	61,749	$	(9,729	)	$	(83,783	)	$	172,035		$	10,572	$	5,002	$	187,609
Depreciation and amortization	$	46,793		$	1,033	$	—		$	15,296		$	63,122		$	5,114	$	1,371	$	69,607
Capital expenditures	$	97,519		$	3,559	$	—		$	—		$	101,078		$	1,962	$	486	$	103,526
Total assets	$	1,240,487		$	31,781	$	—		$	—		$	1,272,268		$	79,640	$	21,517	$	1,373,425

As of and for the year ended August 25, 2012	US and Canadian Rental and Cleaning			MFG		Net Interco MFG Elim			Corporate			Subtotal Core Laundry Operations			Specialty Garments		First Aid		Total
Revenues	$	1,099,421		$	160,421	$	(160,421	)	$	12,902		$	1,112,323		$	102,758	$	41,208	$	1,256,289
Income (loss) from operations	$	164,793		$	50,036	$	(5,168	)	$	(76,376	)	$	133,285		$	13,460	$	4,363	$	151,108
Interest (income) expense, net	$	(2,535	)	$	—	$	—		$	1,929		$	(606	)	$	—	$	—	$	(606	)
Income (loss) before taxes	$	167,284		$	50,101	$	(5,168	)	$	(78,345	)	$	133,872		$	12,499	$	4,363	$	150,734
Depreciation and amortization	$	43,501		$	1,133	$	—		$	15,599		$	60,233		$	4,788	$	1,418	$	66,439
Capital expenditures	$	66,526		$	1,306	$	—		$	—		$	67,832		$	6,044	$	673	$	74,549
Total assets	$	1,108,362		$	28,099	$	—		$	—		$	1,136,461		$	83,137	$	20,936	$	1,240,534

As of and for the year ended August 27, 2011	US and Canadian Rental and Cleaning			MFG		Net Interco MFG Elim			Corporate			Subtotal Core Laundry Operations		Specialty Garments		First Aid		Total
Revenues	$	986,028		$	160,042	$	(160,042	)	$	10,929		$	996,957	$	103,322	$	33,847	$	1,134,126
Income (loss) from operations	$	144,431		$	48,839	$	(8,807	)	$	(78,738	)	$	105,725	$	15,292	$	2,956	$	123,973
Interest (income) expense, net	$	(2,307	)	$	—	$	—		$	6,493		$	4,186	$	—	$	—	$	4,186
Income (loss) before taxes	$	146,745		$	48,748	$	(8,807	)	$	(85,146	)	$	101,540	$	16,076	$	2,956	$	120,572
Depreciation and amortization	$	41,322		$	1,194	$	—		$	16,252		$	58,768	$	4,500	$	1,465	$	64,733
Capital expenditures	$	55,799		$	2,653	$	—		$	—		$	58,452	$	5,028	$	367	$	63,847
Total assets	$	1,015,977		$	28,879	$	—		$	—		$	1,044,856	$	76,351	$	20,313	$	1,141,520

The Company’s long-lived assets as of August 31, 2013 and August 25, 2012 and revenues and income before income taxes for the years ended August 31, 2013, August 25, 2012 and August 27, 2011 were attributed to the following countries (in thousands):

Long-lived assets as of:	August 31, 2013		August 25, 2012
United States	$	769,121	$	706,379
Europe, Canada, Mexico and Nicaragua (1)		42,930		46,475
Total	$	812,051	$	752,854

Revenues for the year ended:	August 31, 2013		August 25, 2012		August 27, 2011
United States	$	1,236,414	$	1,144,753	$	1,029,003
Europe and Canada (1)		119,101		111,536		105,123
Total	$	1,355,515	$	1,256,289	$	1,134,126

Income before income taxes for the year ended:	August 31, 2013		August 25, 2012		August 27, 2011
United States	$	171,899	$	134,651	$	105,257
Europe, Canada, Mexico and Nicaragua (1)		15,710		16,083		15,315
Total	$	187,609	$	150,734	$	120,572

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