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UniFirst achieves record revenues in Q4
Oct '11
UniFirst Corporation announced results for its fourth quarter and full year for fiscal 2011, which ended on August 27, 2011.

Revenues for the fourth quarter were $290.9 million, up 14.1% from $255.0 million for the same period in the prior year. Net income was $18.0 million ($0.90 per diluted common share), compared to the fourth quarter of fiscal 2010 when net income was $17.3 million ($0.87 per diluted common share).

For the full year, revenues were $1.134 billion, up 10.5% versus $1.026 billion in the prior year. Net income was $76.5 million for fiscal 2011 ($3.85 per diluted common share) compared to $76.4 million for fiscal 2010 ($3.90 per diluted common share).

Ronald D. Croatti, UniFirst President and Chief Executive Officer said, "We are pleased with the results of our fourth quarter as well as our full fiscal year that finished with the Company achieving record revenues in all of our operating segments. Achieving these results in a challenging economic environment is a testament to the hard work and dedication of all of our employees."

Core laundry revenues for the quarter were $259.3 million, up 14.3% from those reported in the same period a year ago. Excluding the positive effect of acquisitions as well as a stronger Canadian dollar, the Company's core laundry revenues increased 11.4%. Income from operations for this segment fell to 9.9% of revenues in the fourth quarter from 11.4% in the fourth quarter of 2010.

As anticipated, the operating margin decline primarily related to increased merchandise expense and energy costs as a percentage of revenues. These increases were partially offset by lower payroll and depreciation expense as a percentage of revenues. In addition, this segment incurred lower expense in the fourth quarter related to legal and environmental contingencies than it did a year ago.

Revenues for the Specialty Garments segment, which consists of nuclear decontamination and cleanroom operations, were $23.4 million in the fourth quarter, up 17.0% compared to the same period a year ago, primarily the result of higher direct sales. Income from operations for this segment decreased slightly to $1.9 million in the fourth quarter from $2.0 million a year earlier due to higher operating costs.

Earnings comparisons for the quarter were positively impacted by a decrease in net interest expense of $1.6 million from the fourth quarter of fiscal 2010. The decrease in net interest expense is due to the expiration of an interest rate swap as well as the payment of $75.0 million in private placement notes that came due on June 14, 2011. In addition, the effective income tax rate for the quarter was 35.8% compared to 37.1% in the fourth quarter of fiscal 2010.

UniFirst continues to maintain a solid balance sheet and overall financial position. Cash and cash equivalents on hand at the end of the fiscal 2011 was $48.8 million. In addition, the percentage of debt to total capital declined to 13.1% at the end of fiscal 2011, from 20.4% at the end of fiscal 2010. Cash flows from operations in fiscal 2011 were $86.2 million, down from $134.0 million in fiscal 2010.

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