Business Context and Reporting Period
Company: UniFirst Corporation
Filing Type: Form 10-K (Annual Report)
Fiscal Year Ended: August 27, 1994
Industry: Garment Rental and Industrial Cleaning Services
UniFirst is a leading provider of industrial employment garment rental, cleaning, and delivery services. The company operates 99 service locations and distribution centers across 44 U.S. states and Canada, servicing over 100,000 customer locations. Revenue is derived primarily from garment rentals (66% of total revenue in 1994) and non-garment items such as wiper towels and floor mats (25%). The company also operates specialized nuclear decontamination facilities.
Key Financial Metrics
Note: Specific revenue, net income, cash flow, and debt totals are incorporated by reference to the 1994 Annual Report to Shareholders and are not explicitly stated in the provided text. The following metrics are available from the supplemental schedules:
- Property, Plant, and Equipment (End of Period): $227,566,000 (Gross Cost)
- Accumulated Depreciation (End of Period): $89,554,000
- Depreciation and Amortization Expense (1994): $17,912,000
- Allowance for Doubtful Accounts (End of Period): $582,000
- Capital Expenditures (Additions to PP&E): $29,018,000
- Outstanding Shares (as of Nov 14, 1994): 7,884,644 Common Stock and 12,625,964 Class B Common Stock.
Material Changes and Operational Highlights
- Revenue Mix: Garment rental operations increased slightly to 66% of total revenues in 1994, compared to 65% in 1993 and 64% in 1992. Non-garment items remained stable at 25%.
- Manufacturing Capacity: The company manufactured approximately 43% of all employment garments placed in service during fiscal 1994 at its facilities in Puerto Rico and Arkansas.
- Asset Growth: Gross property, plant, and equipment increased by approximately $26.1 million from the prior year, driven by $29 million in additions.
- Related Party Transaction: A note receivable of $200,000 from Company President Anthony F. DiFillippo was outstanding at the end of the period (originated in 1993).
Guidance, Risks, and Management Commentary
Management Strategy: The company emphasizes customer service as its primary competitive advantage, utilizing a distinct separation between sales and service personnel. Growth is pursued through both internal expansion into contiguous markets and an acquisition program to enter new geographic areas.
Risks and Contingencies:
- Competition: The market is highly competitive with larger firms possessing greater financial resources. Competition is based on service quality and price.
- Environmental Matters: The company is subject to proceedings regarding hazardous substances in Woburn, Massachusetts, but does not anticipate material adverse effects on financial position. Nuclear decontamination facilities are licensed by the NRC or state agencies.
- Legal Proceedings: The company faces routine claims (personal injury, contracts, employment) but maintains insurance coverage and does not expect material losses.
Investor Verification Checklist
- Verify the specific Revenue, Net Income, and Cash Flow figures in the incorporated 1994 Annual Report to Shareholders, as they are not listed in this filing text.
- Review the "Ten Year Financial Summary" (incorporated by reference) for historical trend analysis.
- Confirm the status of the $200,000 related-party note receivable from the President.
- Assess the impact of the $29 million capital expenditure on future depreciation and cash flow requirements.
- Monitor the outcome of the EPA proceedings in Woburn, Massachusetts, despite management's current assessment of immateriality.