UniFirst Announces Financial Results for the Second Quarter of Fiscal 2025

WILMINGTON, Mass., April 02, 2025 (GLOBE NEWSWIRE) -- UniFirst Corporation (NYSE:UNF) (the "Company," "UniFirst" or "we") today reported results for its second quarter ended March 1, 2025 as compared to the corresponding period in the prior fiscal year:

Q2 2025 Financial Highlights

Consolidated revenues for the second quarter increased 1.9% to $602.2 million.

Operating income was $31.2 million, an increase of 11.7%.

The quarterly tax rate decreased to 25.0% compared to 26.2% in the prior year.

Net income increased to $24.5 million from $20.5 million in the prior year, or 19.6%.

Diluted earnings per share increased to $1.31 from $1.09 in the prior year, or 20.2%.

Adjusted EBITDA increased to $68.9 million compared to $64.8 million in the prior year, or 6.3%.

The Company's financial results for the second quarter of fiscal 2025 and 2024 included approximately $1.9 million and $3.2 million, respectively, of costs directly attributable to its customer relationship management ("CRM") computer system and enterprise resource planning ("ERP") projects. The Company refers to the CRM and ERP projects together as its "Key Initiatives". The effect of these items on the second quarter of fiscal 2025 and 2024 combined to decrease:

Both operating income and Adjusted EBITDA by $1.9 million and $3.2 million, respectively.

Net income by $1.6 million and $2.5 million, respectively.

Diluted earnings per share by $0.09 and $0.13, respectively.

Steven Sintros, UniFirst President and Chief Executive Officer, said, "We are pleased with the results from our second quarter, which were largely in line with our expectations. We are excited that our investments in the business are starting to show returns in several areas, including improved profitability, cash flow and overall operational execution. I want to sincerely thank all of our Team Partners who continue to Always Deliver for each other and our customers as we strive towards our vision of being universally recognized as the best service provider in the industry. …all while living our mission of Serving the People Who do the Hard Work."

Segment Reporting Highlights

Core Laundry Operations

Revenues for the quarter increased 1.5% to $530.4 million.

Organic growth, which excludes the effect of acquisitions and fluctuations in the Canadian dollar, was 1.9%.

Operating margin increased to 4.6% from 3.6%.

Adjusted Core Laundry Operations' EBITDA margin increased to 11.2% from 10.3%.

The costs we incurred related to the Key Initiatives were recorded to the Core Laundry Operations' segment, and decreased both the Core Laundry Operations' operating and Adjusted EBITDA margins for the second quarters of fiscal 2025 and 2024 by 0.3% and 0.6%, respectively.

The segment's operating and Adjusted EBITDA margin increases were primarily due to lower merchandise and production costs as a percentage of revenues. These were partially offset by higher healthcare claims expense and selling and administrative costs as a percentage of revenues in the second quarter of fiscal 2025.

Specialty Garments

Revenues for the quarter were $44.4 million, an increase of 2.2%, which was due primarily to growth in the European nuclear operations.

Operating margin decreased to 16.7% from 22.8% a year ago, primarily as a result of increased merchandise, other production and selling payroll costs as a percentage of revenues.

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 $201.0 million as of March 1, 2025.

The Company had no long-term debt outstanding as of March 1, 2025.

Cash flow from operating activities was $128.3 million in the first half of fiscal 2025, an increase of 20.2% over the prior year.

The Company repurchased 33,000 shares of Common Stock for $6.2 million in the second quarter of fiscal 2025. As of March 1, 2025, the Company had $63.7 million remaining under its existing share repurchase authorization.

Weighted average shares outstanding, Diluted for the second quarters of fiscal 2025 and fiscal 2024 were 18.6 million and 18.8 million, respectively.

Financial Outlook

Mr. Sintros continued, "At this time, we expect our revenues for fiscal 2025 to be between $2.422 billion and $2.432 billion which reflects the anticipated negative impact of the Canadian Dollar exchange rate compared to our original expectations. We further expect that our diluted earnings per share will be between $7.30 and $7.70, which reflects improved anticipated operating income in our Core Laundry Operations and an assumption that our Key Initiative costs in fiscal 2025 will approximate $12.0 million, revised down from prior estimates."

Please note the guidance does not include the impact of any future share buybacks or unexpected events affecting the economy generally.

Conference Call Information

UniFirst Corporation will hold a conference call today at 9:00 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

Headquartered in Wilmington, Mass., UniFirst Corporation (NYSE:UNF) is a North American leader in the supply and servicing of uniform and workwear programs, facility service products, as well as first aid and safety supplies and services. Together with its subsidiaries, the Company also manages specialized garment programs for the cleanroom and nuclear industries. In addition to partnering with leading brands, UniFirst manufactures its own branded workwear, protective clothing, and floorcare products at its five company-owned ISO-9001-certified manufacturing facilities. With more than 270 service locations, over 300,000 customer locations, and 16,000-plus employee Team Partners, the Company outfits more than 2 million workers every day. For more information, contact UniFirst at 888.296.2740 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," "design," "assumption," "vision," "approximate," 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 an economic recession or other adverse economic conditions, including, without limitation, as a result of elevated inflation or interest rates or extraordinary events or circumstances such as geopolitical conflicts like the conflict between Russia and Ukraine and, disruption in the Middle East, 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 uncertainties regarding our ability to consummate acquisitions and successfully integrate acquired businesses, and the performance of such 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 conflict between Russia and Ukraine, any loss of key management or other personnel, increased costs as a result of any changes in federal, state, international or other laws, rules and regulations or governmental interpretation of such laws, rules and regulations, uncertainties regarding, or adverse impacts from continued high price levels of natural gas, electricity, fuel and labor or increases in such costs, the negative effect on our business from sharply depressed oil and natural gas prices, the continuing increase in domestic healthcare costs, increased workers' compensation claim costs, increased healthcare claim costs, our ability to retain and grow our customer base, demand and prices for our products and services, fluctuations in our Specialty Garments business, political or other instability, supply chain disruption or infection among our employees in Mexico and Nicaragua where our principal garment manufacturing plants are located, our ability to properly and efficiently design, construct, implement and operate a new enterprise resource planning 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 or additional Securities and Exchange Commission (the "SEC"), New York Stock Exchange and accounting or other rules, including, without limitation, recent rules adopted by the SEC regarding climate-related and cybersecurity-related disclosures, strikes and unemployment levels, our efforts to evaluate and potentially reduce internal costs, the impact of foreign trade policies and tariffs or other impositions on imported goods on our business, results of operations and financial condition, our ability to successfully implement our business strategies and processes, including our capital allocation strategies, our ability to successfully remediate the material weaknesses in internal control over financial reporting disclosed in our Annual Report on Form 10-K for the year ended August 31, 2024 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 31, 2024, Part II, Item 1A. "Risk Factors" and elsewhere in our subsequent Quarterly Reports on Form 10-Q and in our other filings with the SEC. 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)

 

 

Thirteen Weeks Ended

 

 

Twenty-Six Weeks Ended

 

(In thousands, except per share data)

 

March 1, 2025

 

 

February 24, 2024

 

 

March 1, 2025

 

 

February 24, 2024

 

Revenues

 

$

602,219

 

 

$

590,711

 

 

$

1,207,127

 

 

$

1,184,236

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenues (1)

 

 

394,145

 

 

 

396,191

 

 

 

775,199

 

 

 

779,987

 

Selling and administrative expenses (1)

 

 

141,914

 

 

 

131,417

 

 

 

275,429

 

 

 

254,276

 

Depreciation and amortization

 

 

34,946

 

 

 

35,160

 

 

 

69,754

 

 

 

68,893

 

Total operating expenses

 

 

571,005

 

 

 

562,768

 

 

 

1,120,382

 

 

 

1,103,156

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

 

31,214

 

 

 

27,943

 

 

 

86,745

 

 

 

81,080

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other (income) expense:

 

 

 

 

 

 

 

 

 

 

 

 

Interest income, net

 

 

(2,213

)

 

 

(350

)

 

 

(4,908

)

 

 

(3,184

)

Other expense, net

 

 

794

 

 

 

575

 

 

 

1,084

 

 

 

1,291

 

Total other (income) expense, net

 

 

(1,419

)

 

 

225

 

 

 

(3,824

)

 

 

(1,893

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

 

32,633

 

 

 

27,718

 

 

 

90,569

 

 

 

82,973

 

Provision for income taxes

 

 

8,174

 

 

 

7,261

 

 

 

23,005

 

 

 

20,191

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

24,459

 

 

$

20,457

 

 

$

67,564

 

 

$

62,782

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income per share, Basic:

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock

 

$

1.37

 

 

$

1.14

 

 

$

3.78

 

 

$

3.49

 

Class B Common Stock

 

$

1.10

 

 

$

0.91

 

 

$

3.02

 

 

$

2.79

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income per share, Diluted:

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock

 

$

1.31

 

 

$

1.09

 

 

$

3.62

 

 

$

3.35

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income allocated to, Basic:

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock

 

$

20,559

 

 

$

17,188

 

 

$

56,778

 

 

$

52,754

 

Class B Common Stock

 

$

3,900

 

 

$

3,269

 

 

$

10,786

 

 

$

10,028

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income allocated to, Diluted:

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock

 

$

24,459

 

 

$

20,457

 

 

$

67,564

 

 

$

62,782

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding, Basic:

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock

 

 

15,009

 

 

 

15,106

 

 

 

15,011

 

 

 

15,110

 

Class B Common Stock

 

 

3,558

 

 

 

3,590

 

 

 

3,566

 

 

 

3,590

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding, Diluted:

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock

 

 

18,649

 

 

 

18,754

 

 

 

18,653

 

 

 

18,758

 

(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)

 

March 1, 2025

 

 

August 31, 2024

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

192,174

 

 

$

161,571

 

Short-term investments

 

 

8,805

 

 

 

13,505

 

Receivables, net

 

 

282,207

 

 

 

278,851

 

Inventories

 

 

159,067

 

 

 

156,908

 

Rental merchandise in service