Revenues up 11.3% at UniFirst in Q2 FY'12
UniFirst Corporation announced results for its second quarter of fiscal 2012, which ended on February 25, 2012. Revenues for the quarter were $310.0 million, up 11.3% from $278.6 million for the second quarter a year ago. Net income was $19.2 million ($0.96 per diluted common share), compared to the second quarter of fiscal 2011 when net income was $16.3 million ($0.82 per diluted common share).
For the first six months, revenues were $623.0 million, up 12.9% from $551.7 million in the prior year. Net income was $45.0 million ($2.26 per diluted common share), compared to the first half of fiscal 2011 when net income was $40.0 million ($2.02 per diluted common share).
Core laundry revenues for the quarter were $277.2 million, up 12.3% from those reported in the same period in fiscal 2011. Excluding the effects of acquisitions and a slightly weaker Canadian dollar, core laundry revenues increased 11.2%. Income from operations for this segment grew 18.9% compared to the second quarter of fiscal 2011. As a percentage of revenues, income from operations also increased to 9.9% from 9.3% a year ago.
Ronald D. Croatti, UniFirst President and Chief Executive Officer said, “We are very pleased with the quarterly results of our core laundry operations which account for approximately 89% of our consolidated revenues. The continuing impact of higher merchandise amortization as a percentage of revenues in this segment was more than offset by positive operating leverage produced by the strong top line growth.”
Revenues for the Specialty Garments segment, which consists of nuclear decontamination and cleanroom operations, were $23.5 million for the second quarter of fiscal 2012 and fiscal 2011. Income from operations for this segment decreased to $2.6 million in the quarter compared to $3.7 million a year earlier. The decrease was due to higher costs of revenues in the quarter compared to a year ago.
The net income comparison for the quarter benefited from a decrease in net interest expense of $1.7 million from the second quarter of fiscal 2011. The decrease was due to the expiration of an interest rate swap in March 2011 and the payment 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 on hand at the end of the quarter totaled $59.3 million. Cash provided by operating activities for the first half of the year was $60.4 million, up 85.3% compared to the first half of fiscal 2011. In addition, the percentage of debt to total capital declined to 11.0% from 13.1% at the end of fiscal 2011.
On March 27, 2012, the Company entered into a settlement related to environmental litigation. As a result of the settlement, the Company expects to recognize a pre-tax gain in its fiscal third quarter of approximately $6.7 million. This gain is expected to positively impact earnings by approximately $0.21 per diluted common share and consists of amounts previously received but not recognized into income as well as amounts that the Company will receive in the third quarter.