UNF

Business Context and Reporting Period

Company: UniFirst Corporation
Filing Type: Form 10-K (Annual Report)
Fiscal Year End: August 25, 2001
Business Overview: UniFirst is a leading provider of workplace uniforms and protective clothing in the United States. The company rents, manufactures, and sells uniforms, protective gear, and non-garment items (e.g., industrial wiping products, floor mats) to over 150,000 customer locations across 45 states, Canada, and Europe. Operations include garment rental, lease programs, direct sales, and specialized decontamination services for radioactive materials.

Key Financial Metrics

Revenue: $556.4 million for fiscal 2001.
Revenue Composition:

• Garment Rental: ~65%
• Non-Garment Rental: ~26%
• Garment Decontamination Services: ~7%
• Direct Sales of Garments: ~2%

Profit, Cash Flow, Margins, Debt, and Liquidity: The filing text incorporates the Consolidated Statements of Income, Cash Flows, and Balance Sheets by reference to the 2001 Annual Report to Shareholders. Specific values for net income, operating margins, cash flow, total debt, and liquidity ratios are not explicitly stated in the provided text.
Allowance for Doubtful Accounts:

• Beginning Balance (2001): $3.11 million
• Charged to Expenses: $3.357 million
• End Balance (2001): $3.237 million

Assets: The company owns or occupies 150 facilities (approx. 4.3 million sq. ft.), owns 92 of these facilities, and maintains a fleet of approximately 2,000 delivery vehicles.

Material Changes and Operational Updates

Manufacturing Changes:

• Closed manufacturing plants in Luquillo, Puerto Rico, and Wilburton, Oklahoma during fiscal 2001.
• Began construction of a new manufacturing plant in Valles, San Luis Potosi, Mexico.
• Manufactured approximately 55% of garments placed in service during the fiscal year (primarily pants in Mexico and shirts in Arkansas).

Leadership Changes:

• Aldo Croatti, Chairman of the Board, passed away on October 4, 2001.
• Robert L. Croatti, Executive Vice President, retired effective August 31, 2001.
• Cynthia Croatti was appointed Executive Vice President in January 2001.

Customer Concentration: No single customer accounted for more than 1% of total revenues in any of the past five years.

Outlook, Risks, and Contingencies

Forward-Looking Statements: The filing contains forward-looking statements subject to risks that could cause actual results to differ materially.
Environmental Risks:

• Operations involve hazardous waste disposal (detergent wastewater). Past settlements have occurred, and future remediation costs could be material.
• Liability may exist for hazardous substances on owned or leased properties regardless of knowledge or responsibility.

Regulatory and Operational Risks:

• Nuclear garment decontamination facilities are subject to strict NRC and state regulations. Increased scrutiny has led to suspensions or disruptions at certain facilities in the past.
• There is no assurance that increased regulation will not lead to facility shut-downs or material disruptions in the decontamination business.

Legal Proceedings: The company is subject to routine legal proceedings (personal injury, contract, employment, environmental). Management does not expect material loss from these claims due to insurance coverage.

Investor Verification Checklist

• Financial Details: Verify specific net income, operating margin, cash flow, and debt figures in the referenced 2001 Annual Report to Shareholders, as they are not detailed in this 10-K text.
• Manufacturing Transition: Assess the impact of closing US/PR plants and the timeline/capacity of the new Mexico facility on cost structures and supply chain reliability.
• Leadership Continuity: Review the succession plan following the death of the Chairman and retirement of the Executive Vice President.
• Environmental Liability: Investigate the status of any pending environmental claims or remediation costs not covered by insurance.
• Nuclear Segment Stability: Monitor regulatory developments affecting the nuclear decontamination segment, which represents 7% of revenue.