UniFirst Corporation announced results for its fiscal 2014 first quarter, which ended November 30, 2013. First quarter revenues were $346.7 million, up 4.3% from $332.6 million in the year ago period. Net income of $34.5 million ($1.71 per diluted share), was 12.0% ahead of the $30.8 million ($1.54 per diluted share) reported in the year ago period.
Ronald D. Croatti, UniFirst President and Chief Executive Officer said, “We are very pleased with the results for our first quarter. During the quarter, we experienced positive trends in sales representative productivity and customer retention as well as a slight uptick in the wearer levels at our customers.”
Revenues in the Core Laundry Operations were $312.0 million, up 5.9% from those reported in the prior year’s first quarter. Excluding the effect of acquisitions and a weaker Canadian dollar, revenues grew 5.1%.
This segment’s income from operations increased 17.6% compared to the first quarter of fiscal 2013, while the operating margin expanded to 16.8% from 15.1%. Merchandise amortization, energy and bad debt expense for the Core Laundry Operations were all lower as a percentage of revenues compared to the prior year. Selling payroll and certain other payroll-related costs were also lower than in the prior year as a percentage of revenues.
Revenues for the Specialty Garments’ segment, which consists of nuclear decontamination and cleanroom operations, were $24.4 million, down 12.3% from $27.9 million in the first quarter of fiscal 2013. This decrease was primarily the result of less power reactor business in the U.S. and Canada compared to a year ago. As a result of the revenue decline, this segment’s income from operations for the quarter fell to $2.8 million from $4.7 million in the comparable period in fiscal 2013.
UniFirst continues to maintain a solid balance sheet and financial position. Cash provided by operating activities for the quarter was $68.6 million, up 22.2% compared to $56.2 million for the first quarter of fiscal 2013. The improved cash flows were primarily the result of higher earnings as well as the timing of income tax payments compared to the prior year. Cash and cash equivalents at the end of the quarter totaled $141.8 million, down from $197.5 million at the end of fiscal 2013. This decrease was due to the Company’s repayment of $100.0 million in private placement notes that came due in September 2013.
Mr. Croatti continued, “In October, we told investors that we expected fiscal 2014 revenues to be between $1.372 billion and $1.385 billion and full year EPS to be between $5.60 and $5.85. As a reminder, fiscal 2014 will be a 52 week year for the Company compared to fiscal 2013 which was a 53 week year. Based on the first quarter performance, we now anticipate our full year results will be at the higher end of these ranges.”