8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 20, 2021

UNIFIRST CORPORATION

(Exact name of registrant as specified in its charter)

Massachusetts	001-08504		04-2103460
(State or other jurisdiction of incorporation)	(Commission File Number)		(IRS Employer Identification No.)
68 Jonspin Road, Wilmington, Massachusetts		01887
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s Telephone Number, Including Area Code: (978) 658-8888

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock, $0.10 par value per share	UNF	New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02 Results of Operations and Financial Condition.

On October 20, 2021, UniFirst Corporation (the “Company”) issued a press release (“Press Release”) announcing financial results for the fourth quarter and full year of fiscal 2021, which ended on August 28, 2021. A copy of the Press Release is attached as Exhibit 99 to this Current Report on Form 8-K and is incorporated herein by reference.

The information in this Item 2.02, including the exhibit attached hereto, shall not be deemed “filed” for any purpose, including for purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange Act") or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, regardless of any general incorporation language in such filing.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

Exhibit Number	Description
99	Press release of the Company dated October 20, 2021
104	Cover Page Interactive Data File (embedded within the Inline XBRL document).

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 by the undersigned thereunto duly authorized.

	UNIFIRST CORPORATION
Date: October 20, 2021	By:	/s/ Steven S. Sintros
		Steven S. Sintros
		President and Chief Executive Officer
	By:	/s/ Shane O’Connor
		Shane O’Connor
		Executive Vice President and Chief Financial Officer

EX-99

Exhibit 99

Investor Relations Contact

Shane O’Connor, Executive Vice President & CFO

UniFirst Corporation

978-658-8888

shane_oconnor@unifirst.com

FOR IMMEDIATE RELEASE

UNIFIRST ANNOUNCES FINANCIAL RESULTS FOR THE FOURTH QUARTER AND FULL YEAR OF FISCAL 2021; QUARTERLY DIVIDEND INCREASE; NEW $100 MILLION SHARE REPURCHASE AUTHORIZATION

Wilmington, MA – October 20, 2021 – UniFirst Corporation (NYSE: UNF) (the “Company,” “UniFirst” or “we”) today reported results for its fourth quarter and full year ended August 28, 2021 as compared to the corresponding periods in its prior fiscal year:

Q4 2021 Financial Highlights

• Consolidated revenues for the fourth quarter increased 8.5% to $465.3 million.

• Operating income was $44.9 million, an increase of 10.1%.

• The quarterly tax rate decreased to 22.0% compared to 26.6% in the prior year.

• Net income increased to $34.6 million, or 9.7%.

• Diluted earnings per share increased to $1.82 from $1.66, or 9.6%.

Fiscal 2021 Financial Highlights

• Full year consolidated revenues were $1.826 billion, an increase of 1.2%.

• Full year operating income was $195.8 million, an increase of 13.4%.

• Net income for the year increased to $151.1 million, or 11.3%.

• Diluted earnings per share increased to $7.94 from $7.13, or 11.4%.

Steven Sintros, UniFirst President and Chief Executive Officer, said, “We were very pleased with our financial performance for fiscal 2021. We were proud that through the solid execution of our Team Partners we were able to continue our long track record of growing our annual revenues despite the lingering effects of the pandemic.”

Segment Reporting Highlights for Q4 2021

Core Laundry Operations

• Revenues for the quarter increased 7.9% to $415.1 million primarily driven by the COVID-19 pandemic significantly impacting our customers’ operations and wearer levels in the prior year comparable period as well as solid sales performance and improved customer retention in fiscal 2021.

• Operating margin increased to 10.1% from 9.9%. During the quarter, the Company’s margins were pressured by the current inflationary environment as well as a rebound of certain costs that trended lower during the pandemic, including merchandise amortization expense, energy, travel and healthcare claims costs.

Specialty Garments

• Revenues for the quarter were $33.9 million, an increase of 22.5%. This increase was primarily due to growth in our cleanroom operations as well as growth in our U.S. and European nuclear operations.

• Operating margin increased to 12.1% from 7.1% a year ago. This increase was primarily due to the segment’s top-line performance in the quarter resulting in strong operating leverage as well as lower casualty claims expense as a percentage of revenue. These benefits were partially offset by higher merchandise costs as a percentage of revenue.

• 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 $512.9 million as of August 28, 2021.

• The Company had no long-term debt outstanding as of August 28, 2021.

• Under its previously announced $100.0 million share repurchase program, the Company repurchased 7,750 shares of common stock for a total of $1.7 million during the fourth quarter of fiscal 2021. As of August 28, 2021, the Company had repurchased a total of 375,867 shares of common stock for a total of $63.5 million under the program.

• Weighted average shares outstanding – Diluted for the fourth quarter of fiscal 2021 and fiscal 2020 were each 19.0 million shares.

Quarterly Dividend Increase

UniFirst announced today that its Board of Directors approved a quarterly dividend of $0.30 per share on the Company’s Common Stock and $0.24 per share on the Company’s Class B Common Stock. This represents a 20.0% increase over the Company’s previous quarterly dividend. Both dividends are payable on January 4, 2022, to shareholders of record on December 7, 2021.

Mr. Sintros continued, “Given UniFirst’s strong financial position and history of strong free cash flow generation, we are pleased to announce an increase in our quarterly dividend. As part of the Board of Director’s regular evaluation of the Company’s capital allocation, we continue to seek to deliver additional value for our shareholders. At this time, we believe that a continued annual increase to our dividend which over time expands commensurate with our free cash flow generation will be a foundational piece to our capital allocation strategy.”

The amount and timing of any future dividend payment is subject to the approval of the Board of Directors.

New Share Repurchase Authorization

UniFirst also announced today that its Board of Directors authorized a new share repurchase program allowing the Company to repurchase up to $100.0 million of its outstanding common shares, inclusive of the amount which remained available under the existing share repurchase program approved in January 2019. Repurchases made under the new program, if any, will continue to be made in either the open market or in privately negotiated transactions, subject to market conditions, applicable legal requirements, and other relevant factors. The timing, manner, price and amount of any repurchases will depend on a variety of factors and may be suspended or discontinued at any time.

Financial Outlook

Mr. Sintros continued, “For fiscal 2022, we expect our revenues to be between $1.920 billion and $1.945 billion and fully diluted earnings per share to be between $5.70 and $6.10, which, at the midpoint, assumes an operating margin in our Core Laundry Operations of 7.3%. However, this guidance includes $38 million of transitionary investment costs directly attributable to key initiatives. Excluding these initiative costs, our Core Laundry Operations adjusted operating margin assumption would be 9.5%. This adjusted operating margin reflects continued pressure from costs that had trended lower during the pandemic, the current inflationary environment, as well as additional investments the Company continues to make in building its capabilities for the future. This guidance further assumes an effective tax rate of 24%, no future share buybacks or potential tax reform, and a stable economic environment with no pandemic-related headwinds.”

Conference Call Information

UniFirst Corporation will hold a conference call today at 9:00 a.m. (ET) to discuss its quarterly and annual financial results, business highlights and outlook. A simultaneous live webcast of the call will be available over the Internet and can be accessed at www.unifirst.com.

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, as well as the delivery of facility service programs. Together with its subsidiaries, the Company also provides first aid and safety products, and manages specialized garment programs for the cleanroom and nuclear industries. UniFirst manufactures its own branded workwear, protective clothing, and floorcare products; and with 260 service locations, over 300,000 customer locations, and 14,000-plus employee Team Partners, the Company outfits nearly 2 million workers each business day. For more information, contact UniFirst at 800.455.7654 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 “guidance,” “outlook,” “estimates,” “anticipates,” “projects,” “plans,” “expects,” “intends,” “believes,” “seeks,” “could,” “should,” “may,” “will,” “strategy,” “objective,”

“assume,” “strive,” 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 adverse economic conditions, including, without limitation, as a result of extraordinary events or circumstances such as the COVID-19 pandemic, 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 such as the COVID-19 pandemic, uncertainties regarding our ability to consummate and successfully integrate acquired 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 COVID-19 pandemic, any loss of key management or other personnel, increased costs as a result of any changes in federal or state laws, rules and regulations or governmental interpretation of such laws, rules and regulations, uncertainties regarding the price levels of natural gas, electricity, fuel and labor, the negative effect on our business from sharply depressed oil and natural gas prices, including, without limitation, as a result of extraordinary events or circumstances such as the COVID-19 pandemic, the continuing increase in domestic healthcare costs, increased workers’ compensation claim costs, increased healthcare claim costs, including as a result of extraordinary events or circumstances such as the COVID-19 pandemic, our ability to retain and grow our customer base, demand and prices for our products and services, fluctuations in our Specialty Garments business, political instability, supply chain disruption or infection among our employees in Mexico and Nicaragua where our principal garment manufacturing plants are located, including, without limitation, as a result of extraordinary events or circumstances such as the COVID-19 pandemic, our ability to properly and efficiently design, construct, implement and operate a new customer relationship management 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 Securities and Exchange Commission, New York Stock Exchange and accounting rules, strikes and unemployment levels, our efforts to evaluate and potentially reduce internal costs, economic and other developments associated with the war on terrorism and its impact on the economy, the impact of foreign trade policies and tariffs or other impositions on imported goods on our business, results of operations and financial condition, general economic conditions, our ability to successfully implement our business strategies and processes, including our capital allocation strategies and the other factors described under “Part I, Item 1A. Risk Factors” and elsewhere in our Annual Report on Form 10-K for the year ended August 29, 2020, “Part II, Item 1.A. Risk Factors” and elsewhere in our subsequent Quarterly Reports on Form 10-Q and in our other filings with the Securities and Exchange Commission. 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)

(In thousands, except per share data)	Thirteen weeks ended August 28, 2021			Thirteen weeks ended August 29, 2020			Fifty-two weeks ended August 28, 2021			Fifty-two weeks ended August 29, 2020
Revenues	$	465,276		$	428,643		$	1,826,216		$	1,804,159
Operating expenses:
Cost of revenues (1)		289,415			270,971			1,141,275			1,164,932
Selling and administrative expenses (1)		104,153			89,788			383,161			361,801
Depreciation and amortization		26,777			27,085			105,955			104,697
Total operating expenses		420,345			387,844			1,630,391			1,631,430
Operating income		44,931			40,799			195,825			172,729
Other (income) expense:
Interest income, net		(466	)		(792	)		(2,568	)		(6,382	)
Other (income) expense, net		1,009			(1,400	)		1,522			1,223
Total other (income) expense, net		543			(2,192	)		(1,046	)		(5,159	)
Income before income taxes		44,388			42,991			196,871			177,888
Provision for income taxes		9,774			11,428			45,760			42,118
Net income	$	34,614		$	31,563		$	151,111		$	135,770
Income per share – Basic:
Common Stock	$	1.91		$	1.74		$	8.32		$	7.46
Class B Common Stock	$	1.53		$	1.39		$	6.66		$	5.97
Income per share – Diluted:
Common Stock	$	1.82		$	1.66		$	7.94		$	7.13
Income allocated to – Basic:
Common Stock	$	29,058		$	26,499		$	126,848		$	114,017
Class B Common Stock	$	5,556		$	5,064		$	24,263		$	21,753
Income allocated to – Diluted:
Common Stock	$	34,614		$	31,563		$	151,111		$	135,770
Weighted average shares outstanding – Basic:
Common Stock		15,241			15,250			15,237			15,276
Class B Common Stock		3,643			3,643			3,643			3,643
Weighted average shares outstanding – Diluted:
Common Stock		19,049			19,019			19,038			19,042

(1) Exclusive of depreciation on the Company’s property, plant and equipment and amortization on its intangible assets.

Condensed Consolidated Balance Sheets

(Unaudited)

(In thousands)	August 28, 2021			August 29, 2020
Assets
Current assets:
Cash, cash equivalents and short-term investments	$	512,868		$	474,838
Receivables, net		208,331			190,916
Inventories		143,591			106,269
Rental merchandise in service		181,531			154,278
Prepaid taxes		16,580			7,115
Prepaid expenses and other current assets		40,891			35,918
Total current assets		1,103,792			969,334
Property, plant and equipment, net		617,719			582,470
Goodwill		429,538			424,844
Customer contracts and other intangible assets, net		84,638			85,536
Deferred income taxes		580			522
Operating lease right-of-use assets, net		42,115			42,710
Other assets		102,683			93,611
Total assets	$	2,381,065		$	2,199,027
Liabilities and shareholders’ equity
Current liabilities:
Accounts payable	$	81,356		$	64,035
Accrued liabilities		159,578			132,965
Accrued taxes		743			527
Operating lease liabilities, current		12,993			12,569
Total current liabilities		254,670			210,096
Long-term liabilities:
Accrued liabilities		134,085			132,820
Accrued and deferred income taxes		89,177			85,721
Operating lease liabilities		30,181			29,261
Total long-term liabilities		253,443			247,802
Shareholders’ equity:
Common Stock		1,524			1,525
Class B Common Stock		364			364
Capital surplus		89,257			86,645
Retained earnings		1,806,643			1,684,565
Accumulated other comprehensive loss		(24,836	)		(31,970	)
Total shareholders’ equity		1,872,952			1,741,129
Total liabilities and shareholders’ equity	$	2,381,065		$	2,199,027

Detail of Operating Results

(Unaudited)

Revenues

(In thousands, except percentages)	Thirteen weeks ended August 28, 2021		Thirteen weeks ended August 29, 2020		Dollar Change			Percent Change
Core Laundry Operations	$	415,104	$	384,584	$	30,520			7.9	%
Specialty Garments		33,862		27,640		6,222			22.5	%
First Aid		16,310		16,419		(109	)		(0.7	)%
Consolidated total	$	465,276	$	428,643	$	36,633			8.5	%

(In thousands, except percentages)	Fifty-two weeks ended August 28, 2021		Fifty-two weeks ended August 29, 2020		Dollar Change			Percent Change
Core Laundry Operations	$	1,615,560	$	1,601,485	$	14,075			0.9	%
Specialty Garments		145,454		133,185		12,269			9.2	%
First Aid		65,202		69,489		(4,287	)		(6.2	)%
Consolidated total	$	1,826,216	$	1,804,159	$	22,057			1.2	%

Operating Income

(In thousands, except percentages)	Thirteen weeks ended August 28, 2021			Thirteen weeks ended August 29, 2020		Dollar Change			Percent Change
Core Laundry Operations	$	41,847		$	38,131	$	3,716			9.7	%
Specialty Garments		4,108			1,959		2,149			109.7	%
First Aid		(1,024	)		709		(1,733	)		(244.4	)%
Consolidated total	$	44,931		$	40,799	$	4,132			10.1	%

(In thousands, except percentages)	Fifty-two weeks ended August 28, 2021			Fifty-two weeks ended August 29, 2020		Dollar Change			Percent Change
Core Laundry Operations	$	171,717		$	149,987	$	21,730			14.5	%
Specialty Garments		24,801			17,845		6,956			39.0	%
First Aid		(693	)		4,897		(5,590	)		(114.2	)%
Consolidated total	$	195,825		$	172,729	$	23,096			13.4	%

Operating Margin

	Thirteen weeks ended August 28, 2021			Thirteen weeks ended August 29, 2020
Core Laundry Operations		10.1	%		9.9	%
Specialty Garments		12.1	%		7.1	%
First Aid		-6.3	%		4.3	%
Consolidated		9.7	%		9.5	%

	Fifty-two weeks ended August 28, 2021			Fifty-two weeks ended August 29, 2020
Core Laundry Operations		10.6	%		9.4	%
Specialty Garments		17.1	%		13.4	%
First Aid		-1.1	%		7.0	%
Consolidated		10.7	%		9.6	%

Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)	Fifty-two weeks ended August 28, 2021			Fifty-two weeks ended August 29, 2020
Cash flows from operating activities:
Net income	$	151,111		$	135,770
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization		105,955			104,697
Amortization of deferred financing costs		147			112
Share-based compensation		7,011			5,999
Accretion on environmental contingencies		448			537
Accretion on asset retirement obligations		985			929
Deferred income taxes		300			(12,152	)
Other		391			2,524
Changes in assets and liabilities, net of acquisitions:
Receivables, less reserves		(16,685	)		14,589
Inventories		(37,213	)		(5,066	)
Rental merchandise in service		(26,323	)		32,262
Prepaid expenses and other current assets and Other assets		5,015			840
Accounts payable		15,136			(10,702	)
Accrued liabilities		16,446			19,866
Prepaid and accrued income taxes		(10,422	)		(3,521	)
Net cash provided by operating activities		212,302			286,684
Cash flows from investing activities:
Acquisition of businesses, net of cash acquired		(8,443	)		(41,221	)
Capital expenditures, including capitalization of software costs		(133,639	)		(116,717	)
Proceeds from sale of assets		617			322
Net cash used in investing activities		(141,465	)		(157,616	)
Cash flows from financing activities:
Payment of deferred financing costs		(822	)		—
Proceeds from exercise of share-based awards		4			73
Taxes withheld and paid related to net share settlement of equity awards		(4,068	)		(3,731	)
Repurchase of Common Stock		(11,222	)		(21,745	)
Payment of cash dividends		(18,147	)		(15,700	)
Net cash used in financing activities		(34,255	)		(41,103	)
Effect of exchange rate changes		1,448			1,532
Net increase in cash, cash equivalents and short-term investments		38,030			89,497
Cash, cash equivalents and short-term investments at beginning of period		474,838			385,341
Cash, cash equivalents and short-term investments at end of period	$	512,868		$	474,838

Reconciliation of GAAP to Non-GAAP Financial Measures

The Company reports its consolidated financial results in accordance with generally accepted accounting principles (“GAAP”). To supplement these consolidated financial results, management believes that certain non-GAAP operating results provide a useful measure on which to evaluate and compare the Company’s results of operations for the periods presented. The Company believes these non-GAAP results provide useful supplemental information regarding the Company’s performance to both management and investors by excluding certain non-recurring amounts that impact the comparability of the results. A supplemental reconciliation of the Company’s fiscal 2022 financial outlook for consolidated operating income on a GAAP basis to adjusted operating income on a non-GAAP basis is presented in the following table. In addition, a supplemental reconciliation of the fiscal 2022 financial outlook for Core Laundry Operations operating income and operating margin on a GAAP basis to adjusted operating income and adjusted operating margin on a non-GAAP basis is also presented in the following table. Investors are encouraged to review the reconciliation of the outlook for these non-GAAP measures to the outlook for their most directly comparable GAAP financial measures, which is provided below. The Company’s outlook contains forward-looking statements and information. Actual results may differ materially. See “Forward-Looking Statements Disclosure.”

	Fifty-two weeks ended August 27, 2022
	Consolidated				Core Laundry Operations
(In thousands, except percentages)	Revenue		Operating Income		Revenue		Operating Income		Operating Margin
Guidance - at the midpoint	$	1,932,500	$	148,000	$	1,716,000	$	125,000		7.3	%
Key Initiatives		—		38,000		—		38,000		2.2	%
As adjusted	$	1,932,500	$	186,000	$	1,716,000	$	163,000		9.5	%

XML

Document and Entity Information	Oct. 20, 2021
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Oct. 20, 2021
Entity Registrant Name	UNIFIRST CORP
Entity Central Index Key	0000717954
Entity Emerging Growth Company	false
Entity File Number	001-08504
Entity Incorporation, State or Country Code	MA
Entity Tax Identification Number	04-2103460
Entity Address, Address Line One	68 Jonspin Road
Entity Address, City or Town	Wilmington
Entity Address, State or Province	MA
Entity Address Postal Zip Code	01887
City Area Code	978
Local Phone Number	658-8888
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of each class	Common Stock, $0.10 par value per share
Trading symbol	UNF
Name of each exchange on which registered	NYSE