UniFirst Corporation announced results for its first quarter of fiscal 2012, which ended on November 26, 2011. Revenues were $313.0 million, up 14.6% from $273.1 million for the first quarter a year ago.
Net income was $25.8 million ($1.30 per diluted common share), compared to the first quarter of fiscal 2011 when net income was $23.8 million ($1.20 per diluted common share).
Ronald D. Croatti, UniFirst President and Chief Executive Officer said, "We are very pleased with the strong revenue growth in our core laundry operations during the quarter which was the result of the continued outstanding performance of our sales and service organizations. The excellent results of our Specialty Garments and First Aid segments also contributed to the quarter's top and bottom line growth."
Core laundry revenues for the quarter were $272.3 million, up 14.1% from those reported in the same period in fiscal 2011. Excluding the positive effects of acquisitions and a stronger Canadian dollar, core laundry revenues increased 12.1%.
Income from operations for this segment grew 1.7% compared to the first quarter of fiscal 2011, but fell as a percentage of revenues to 12.8% from 14.4% a year ago.
As anticipated, the operating margin decline in the core laundry operations was due primarily to increased merchandise amortization as a percentage of revenues. The impact of the merchandise was partially offset by lower payroll and payroll related costs as well as depreciation expense as a percentage of revenues.
Revenues for the Specialty Garments segment, which consists of nuclear decontamination and cleanroom operations, were $30.3 million in the first quarter, up 17.3% compared to the same period a year ago.
This increase was primarily the result of increased North American project related revenues as well as strong performances from the segment's European operations and cleanroom business. As a result of the revenue growth, income from operations for this segment increased to $6.6 million in the first quarter from $4.0 million a year earlier.
Earnings comparisons for the quarter were helped by a decrease in net interest expense of $1.7 million from the first quarter of fiscal 2011. The decrease was due to the expiration of an interest rate swap and the payment of $75.0 million in private placement notes that came due in June 2011.
Conversely, the Company recognized foreign exchange losses of $0.6 million in the quarter versus gains of $0.2 million for the same quarter a year ago. In addition, the effective income tax rate for the quarter was 38.3% compared to 37.0% in the first quarter of fiscal 2011.
The year ago first quarter tax rate benefited from the reversal of tax contingency reserves related to the resolution of certain state tax audits.
UniFirst continues to maintain a solid balance sheet and overall financial position. Cash and cash equivalents on hand atthe end of the quarter was $54.1 million. Cash flows from operations during the quarter increased 12.8% compared to the same quarter a year ago. In addition, the percentage of debt to total capital declined to 12.0%.
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