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Note 13 - Segment Reporting
 3 Months Ended
Nov. 29, 2014
Segment Reporting [Abstract]  
Segment Reporting Disclosure [Text Block]

13. 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 primarily 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. 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 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. 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):


   

US and

                            Subtotal                          
   

Canadian

                           

Core

                         
   

Rental and

           

Net Interco

           

 Laundry

   

Specialty

                 

Thirteen weeks ended

 

Cleaning

   

MFG

   

MFG Elim

   

Corporate

   

Operations

   

Garments

   

First Aid

   

Total

 
                                                                 

November 29, 2014

                                                               

Revenues

  $ 330,901     $ 51,828     $ (51,828

)

  $ 4,946     $ 335,847     $ 22,476     $ 12,038     $ 370,361  
                                                                 

Income (loss) from operations

  $ 63,299     $ 18,231     $ (1,689

)

  $ (22,968

)

  $ 56,873     $ 2,268     $ 1,448     $ 60,589  
                                                                 

Interest (income) expense, net

  $ (770

)

  $ —     $ —     $ 154     $ (616

)

  $ —     $ —     $ (616

)

                                                                 

Income (loss) before taxes

  $ 64,084     $ 18,272     $ (1,689

)

  $ (23,247

)

  $ 57,420     $ 1,966     $ 1,448     $ 60,834  
                                                                 
                                                                 

November 30, 2013

                                                               

Revenues

  $ 308,442     $ 44,233     $ (44,233

)

  $ 3,564     $ 312,006     $ 24,443     $ 10,255     $ 346,704  
                                                                 

Income (loss) from operations

  $ 58,359     $ 15,574     $ (1,264

)

  $ (20,297

)

  $ 52,372     $ 2,759     $ 509     $ 55,640  
                                                                 

Interest (income) expense, net

  $ (730

)

  $ —     $ —     $ 173     $ (557

)

  $ —     $ —     $ (557

)

                                                                 

Income (loss) before taxes

  $ 59,087     $ 15,493     $ (1,264

)

  $ (20,469

)

  $ 52,847     $ 3,000     $ 509     $ 56,356