WILMINGTON, Mass.--(BUSINESS WIRE)-- UniFirst Corporation (UNF) today announced results for its third quarter of fiscal 2012, which ended on May 26, 2012. Revenues were $320.9 million, up 10.1% from $291.6 million for the third quarter a year ago.

Net income for the quarter was $27.5 million ($1.37 per diluted share) compared to $18.4 million ($0.93 per diluted share) reported in the year ago period. Third quarter results include the positive effect of a settlement related to environmental litigation that the Company entered into during the quarter. The settlement resulted in a $6.7 million gain which was recorded as a reduction of selling and administrative expenses. Diluted earnings per share for the quarter, adjusted to eliminate the effect of the gain, was $1.16, up 24.7% from the $0.93 reported in the same period a year ago.

Revenues for the first nine months of fiscal 2012 were $943.9 million, up 11.9% from $843.3 million in the first nine months of fiscal 2011. Net income per diluted share for the first nine months of fiscal 2012 was $3.63, compared to $2.94 in the same period a year ago.

Ronald D. Croatti, UniFirst President and Chief Executive Officer said, We are very pleased with the results of our third fiscal quarter. Although the employment situation remains sluggish, we continue to focus on areas within our control. Our success continues to be the result of strong execution from our sales and service organizations.

Revenues for the third quarter of fiscal 2012 in the Core Laundry Operations were $281.1 million, up 11.5% from those reported in the prior years third quarter. Excluding the effects of acquisitions and a slightly weaker Canadian dollar, revenues grew 10.9%. Segment income from operations adjusted to eliminate the $6.7 million gain referred to above increased 31.4% year to year. The adjusted operating margin expanded to 10.5% from 8.9% a year earlier. Increased profitability arose from improved operating leverage that came with strong revenue growth. Expenses related to plant operations, depreciation, energy and overall selling and administrative outlays were all lower as a percentage of revenue compared to the prior year. These improvements were partially offset by higher merchandise costs and expenses associated with the Companys initiative to update its customer service systems.

Revenues for the Specialty Garments segment, which consists of nuclear decontamination and cleanroom operations, were $29.3 million for the third quarter of fiscal 2012, down from a record $30.6 in the third quarter of fiscal 2011. Income from operations for this segment also decreased to $5.0 million in the quarter compared to $5.7 million in the same quarter a year ago.

The net income comparison for the quarter benefited from a decrease in net interest expense of $1.1 million from the third quarter of fiscal 2011. The decrease was due to the expiration of an interest rate swap in March 2011 and the repayment of $75.0 million in private placement notes that came due in June 2011.

UniFirst continues to maintain a solid balance sheet and overall financial position. Cash and cash equivalents at the end of the quarter totaled $78.8 million. Cash provided by operating activities year to date was $106.8 million, up 90.9% compared to $56.0 million in the first nine months of fiscal 2011. The improved cash flows were primarily the result of higher earnings as well as lower cash outflows related to working capital compared to a year ago. At the end of the quarter, long term debt, including current maturities was $104.6 million or 10.7% of total capital.

Outlook
Mr. Croatti continued, Based on the strength of our year to date results and our outlook for the fourth quarter, we are raising our full year guidance. We now project fiscal 2012 revenues to be between $1.252 billion and $1.257 billion and diluted earnings per share to be between $4.60 and $4.70.

Conference Call Information
UniFirst will hold a conference call today at 10:00 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 www.unifirst.com.

About UniFirst Corporation
UniFirst Corporation is one of the largest providers of workplace uniforms, protective clothing, and facility services products in North America. The Company employs approximately 11,000 Team Partners who serve more than 240,000 customer locations in 45 U.S. states, Canada, and Europe from over 200 customer service, distribution, and manufacturing facilities. UniFirst is a publicly held company traded on the New York Stock Exchange under the symbol UNF and is a component of the Standard & Poor's 600 Small Cap Index.

Forward Looking Statements
This public announcement may contain forward looking statements that reflect the Companys current views with respect to future events and financial performance. 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 are highly dependent upon a variety of 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 regarding the Companys ability to consummate and successfully integrate acquired businesses, uncertainties regarding any existing or newly-discovered expenses and liabilities related to environmental compliance and remediation, the Companys ability to compete successfully without any significant degradation in its margin rates, seasonal 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, any loss of key management or other personnel, increased costs as a result of any future 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 impact of adverse economic conditions and the current tight credit markets on our customers and such customers workforce, the level and duration of workforce reductions by our customers, the continuing increase in domestic healthcare costs, demand and prices for our products and services, rampant criminal activity and instability in Mexico where our principal garment manufacturing plants are located, additional professional and internal costs necessary for compliance with recent and proposed future changes in Securities and Exchange Commission, New York Stock Exchange and accounting rules, strikes and unemployment levels, the Companys efforts to evaluate and potentially reduce internal costs, economic and other developments associated with the war on terrorism and its impact on the economy, general economic conditions and other factors described under Item 1A. Risk Factors in the Companys Annual Report on Form 10-K for the year ended August 27, 2011 and in other filings with the Securities and Exchange Commission. When used in this public announcement, the words anticipate, optimistic, believe, estimate, expect, intend, and similar expressions as they relate to the Company are included to identify such forward looking statements. The Company undertakes no obligation to update any forward looking statements to reflect events or circumstances arising after the date on which such statements are made.

UniFirst Corporation and Subsidiaries Consolidated Statements of Income
								Thirteen weeks ended										Thirty-nine weeks ended
(In thousands, except per share data)								May 26, 2012 (2)					May 28, 2011 (2)					May 26, 2012 (2)					May 28, 2011 (2)
Revenues							$	320,931				$	291,567				$	943,915				$	843,252
Operating expenses:
Cost of revenues (1)								202,433					185,217					599,009					524,685
Selling and administrative expenses (1)								59,108					60,852					179,429					174,649
Depreciation and amortization								16,718					16,365					49,615					47,942
Total operating expenses								278,259					262,434					828,053					747,276
Income from operations								42,672					29,133					115,862					95,976
Other expense (income):
Interest expense								511					1,586					1,639					5,991
Interest income								(656	)				(616	)				(2,036	)				(1,852	)
Exchange rate loss (gain)								457					(291	)				1,028					(682	)
								312					679					631					3,457
Income before income taxes								42,360					28,454					115,231					92,519
Provision for income taxes								14,901					10,023					42,774					34,047
Net income							$	27,459				$	18,431				$	72,457				$	58,472
Income per share Basic
Common Stock							$	1.45				$	0.98				$	3.83				$	3.10
Class B Common Stock							$	1.16				$	0.78				$	3.06				$	2.48
Income per share Diluted
Common Stock							$	1.37				$	0.93				$	3.63				$	2.94
Income allocated to Basic
Common Stock							$	21,587				$	14,453				$	59,926				$	45,810
Class B Common Stock							$	5,381				$	3,635				$	14,214				$	11,555
Income allocated to Diluted
Common Stock							$	26,993				$	18,105				$	71,205				$	57,420
Weighted average number of shares outstanding Basic
Common Stock								14,905					14,810					14,872					14,780
Class B Common Stock								4,644					4,656					4,642					4,660
Weighted average number of shares outstanding Diluted
Common Stock								19,646					19,549					19,600					19,522
(1) Exclusive of depreciation on the Companys property, plant and equipment and amortization on its intangible assets
(2) Unaudited

UniFirst Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands)										May 26, 2012 (1)					August 27, 2011
Assets
Current assets:
Cash and cash equivalents									$	78,821				$	48,812
Receivables, net										140,140					128,377
Inventories										76,291					76,460
Rental merchandise in service										140,327					126,536
Prepaid and deferred income taxes										7,232					11,358
Prepaid expenses										8,506					3,647
Total current assets										451,317					395,190
Property, plant and equipment:
Land, buildings and leasehold improvements										350,698					346,738
Machinery and equipment										419,581					393,530
Motor vehicles										140,975					129,762
										911,254					870,030
Less - accumulated depreciation										501,206					474,963
										410,048					395,067
Goodwill										287,982					288,249
Customer contracts and other intangible assets, net										52,888					60,905
Other assets										2,178					2,109
									$	1,204,413				$	1,141,520
Liabilities and shareholders' equity
Current liabilities:
Current maturities of long-term debt									$	4,492				$	20,133
Accounts payable										58,492					56,064
Accrued liabilities										76,328					76,630
Accrued income taxes										2,569					-
Total current liabilities										141,881					152,827
Long-term liabilities:
Long-term debt, net of current maturities										100,157					100,163
Accrued liabilities										43,124					39,698
Accrued and deferred income taxes										50,198					50,890
Total long-term liabilities										193,479					190,751
Shareholders' equity:
Common Stock										1,505					1,499
Class B Common Stock										488					488
Capital surplus										40,648					33,588
Retained earnings										822,856					752,530
Accumulated other comprehensive income										3,556					9,837
Total shareholders' equity										869,053					797,942
									$	1,204,413				$	1,141,520
(1) Unaudited

UniFirst Corporation and Subsidiaries
Detail of Operating Results
Revenues
												Thirteen weeks ended
(In thousands, except percentages)												May 26, 2012 (1)					May 28, 2011 (1)							Dollar Change						Percent Change
Core Laundry Operations											$	281,141				$	252,052						$	29,089						11.5	%
Specialty Garments												29,263					30,575							(1,312	)					-4.3
First Aid												10,527					8,940							1,587						17.7
Consolidated total											$	320,931				$	291,567						$	29,364						10.1	%
												Thirty-nine weeks ended
(In thousands, except percentages)												May 26, 2012 (1)					May 28, 2011 (1)							Dollar Change						Percent Change
Core Laundry Operations											$	830,661				$	737,611						$	93,050						12.6	%
Specialty Garments												83,032					79,902							3,130						3.9
First Aid												30,222					25,739							4,483						17.4
Consolidated total											$	943,915				$	843,252						$	100,663						11.9	%
Income from Operations
												Thirteen weeks ended
(In thousands, except percentages)												May 26, 2012 (1)					May 28, 2011 (1)							Dollar Change						Percent Change
Core Laundry Operations											$	36,275				$	22,505						$	13,770						61.2	%
Specialty Garments												5,033					5,685							(652	)					-11.5
First Aid												1,364					943							421						44.7
Consolidated total											$	42,672				$	29,133						$	13,539						46.5	%
												Thirty-nine weeks ended
(In thousands, except percentages)												May 26, 2012 (1)					May 28, 2011 (1)							Dollar Change						Percent Change
Core Laundry Operations											$	98,706				$	79,997						$	18,709						23.4	%
Specialty Garments												14,175					13,442							733						5.4
First Aid												2,981					2,537							444						17.5
Consolidated total											$	115,862				$	95,976						$	19,886						20.7	%
(1) Unaudited

UniFirst Corporation and Subsidiaries
Consolidated Statements of Cash Flows
Thirty-nine weeks ended (In thousands)					May 26, 2012 (1)							May 28, 2011 (1)
Cash flows from operating activities:
Net income					$	72,457						$	58,472
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation						41,644							40,171
Amortization of intangible assets						7,971							7,771
Amortization of deferred financing costs						178							202
Share-based compensation						5,202							5,180
Accretion on environmental contingencies						474							511
Accretion on asset retirement obligations						473							442
Deferred income taxes						362							5,598
Changes in assets and liabilities, net of acquisitions:
Receivables						(12,985	)						(20,434	)
Inventories						(320	)						(18,835	)
Rental merchandise in service						(14,475	)						(25,653	)
Prepaid expenses						(4,870	)						(2,416	)
Accounts payable						2,629							4,264
Accrued liabilities						2,411							4,398
Prepaid and accrued income taxes						5,666							(3,718	)
Net cash provided by operating activities						106,817							55,953
Cash flows from investing activities:
Acquisition of businesses						-							(17,317	)
Capital expenditures						(59,325	)						(49,416	)
Other						(436	)						(544	)
Net cash used in investing activities						(59,761	)						(67,277	)
Cash flows from financing activities:
Proceeds from long-term debt						40,410							-
Payments on long-term debt						(55,845	)						(1,404	)
Payments of deferred financing costs						-							(975	)
Proceeds from exercise of Common Stock options						2,000							1,164
Payment of cash dividends						(2,129	)						(2,122	)
Net cash used in financing activities						(15,564	)						(3,337	)
Effect of exchange rate changes						(1,483	)						2,411
Net increase (decrease) in cash and cash equivalents						30,009							(12,250	)
Cash and cash equivalents at beginning of period						48,812							121,258
Cash and cash equivalents at end of period					$	78,821						$	109,008
(1) Unaudited

UniFirst Corporation
Steven S. Sintros, 978- 658-8888
Vice President & CFO
ssintros@UniFirst.com

Source: UniFirst Corporation

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