UniFirst continues to generate strong cash flows
UniFirst Corporation announced results for its fiscal fourth quarter and full year, which ended on August 29, 2009.
Revenues for the fourth quarter of fiscal 2009 were $241.5 million, a 3.8% decrease from the previous year's $251.0 million. Fourth quarter net income was $17.0 million or $0.88 per diluted common share, a 38.6% increase from the fourth quarter of fiscal 2008, when net income was $12.3 million or $0.63 per diluted common share.
Fiscal 2009 full year revenues were down slightly to $1.013 billion from $1.023 billion in fiscal 2008. However, on a comparable work week basis, revenues increased by 1.0% over the prior year, as fiscal 2008 included an extra week compared to fiscal 2009. Net income for the full year was $75.9 million or $3.92 per diluted common share, a 24.4% increase from fiscal 2008, when net income was $61.0 million or $3.15 per diluted common share.
“The rapid pace of job losses and related wearer reductions in our customer base caused a sequential decline in our quarterly revenues during the year, even as we produced solid levels of new sales and customer retention,” said Ronald D. Croatti, UniFirst President and Chief Executive Officer. “Despite these challenging economic conditions, we were able to achieve record profit levels. I would like to personally thank all our thousands of Team Partner employees throughout North America and Europe for their consistent hard work and sacrifices in what proved to be a very challenging year for our Company.”
The Company's core laundry revenues in the fourth quarter declined 4.0% compared to the same period in fiscal 2008; however, its income from operations increased 31.0%. Total expenses in the core laundries were down $15.5 million from the same quarter a year ago which resulted in a fourth quarter operating margin of 12.6% compared to 9.3% a year earlier. The decline in expenses was the result of lower energy, payroll, and merchandise costs. Gasoline and natural gas costs were significantly lower in the fourth quarter of 2009, as compared with the historically high levels in the same quarter of fiscal 2008. Payroll costs declined from the prior year as a result of headcount reductions made earlier in fiscal 2009. Lower workers' compensation insurance and travel costs also contributed to the decrease in expenses. These benefits were partially offset by higher healthcare and depreciation expense as well as increases to our reserve for environmental contingencies.
The Company's Specialty Garments and First Aid segments both contributed to the Company's overall growth in fourth quarter profits compared to the prior year.
UniFirst continues to generate strong cash flows and maintain a solid balance sheet. Cash produced by operating activities in fiscal 2009 was $159.2 million compared to $119.5 million a year earlier. Free cash flow was used primarily to reduce outstanding debt by $53.1 million. Total debt, as a percentageof capital, as of the end of fiscal 2009, declined to 22.5% from 29.7% at the prior year end. In addition, the year end cash balance increased by $34.5 million to $60.2 million.