UniFirst Corporation announced results for its fiscal 2014 third quarter, which ended May 31, 2014. Revenues were $352.2 million, up 4.9% from $335.8 million in the year ago period. Net income of $30.9 million ($1.53 per diluted share), was up 7.7% from $28.7 million ($1.43 per diluted share) reported in the year ago period.
Ronald D. Croatti, UniFirst President and Chief Executive Officer said, “Overall we were pleased with our results for the quarter. We continue to get solid performances from our sales and service organizations in two areas that are integral to our success; selling new business and retaining existing customer relationships.”
Revenues in the Core Laundry Operations were $313.3 million, up 5.2% from those reported in the prior year’s third quarter. Excluding the negative impact of the weaker Canadian dollar as well as the positive effect of acquisitions, the Core Laundry Operations’ revenues grew 4.8%. This segment’s income from operations grew 10.3% compared to the third quarter of fiscal 2013 and its operating margin increased to 14.2% from 13.6% a year ago. Operating margins expanded primarily due to lower merchandise costs and other expenses related to our plant operations as a percentage of revenues. Those items were partially offset by higher healthcare claims and energy expense during the quarter as a percentage of revenues.
Revenues for the Specialty Garments segment, which consists of nuclear decontamination and cleanroom operations, were $27.6 million, up 4.9% from $26.3 million in the third quarter of fiscal 2013. This increase was primarily the result of a higher number of power reactor outage projects in the United States and Canada compared to a year ago.
This segment’s income from operations for the quarter increased to $4.0 million from $3.6 million in the comparable period in fiscal 2013. The stronger performance of the Specialty Garments segment was offset by a decrease in operating income from the Company’s First Aid segment.
UniFirst continues to maintain a solid balance sheet and financial position. We ended the quarter with essentially no long-term debt and cash and cash equivalents of $151.0 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 concluded, “Based on our results to date as well as our outlook for our fourth fiscal quarter, we now expect our full year revenues will be between $1.382 billion and $1.387 billion. We also expect full year EPS to be between $5.70 and $5.85 per share.”
As a reminder, fiscal 2014 will be a 52 week year for the Company compared to fiscal 2013, which was a 53 week year. The fourth quarter of fiscal 2013 contained 14 weeks. The negative comparison of one less week of operations will have the impact of reducing our year over year revenues by approximately 2.0% and our fourth quarter revenues by approximately 7.1%.