# EDGAR Filing Document

**Accession Number:** 0000717954
**File Stem:** 0000950170-23-010443
**Filing Date:** 2023-3
**Character Count:** 24436
**Document Hash:** 89d71eaefa87a7e79d2eedd733002057
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0000950170-23-010443.hdr.sgml**: 20230329

**ACCESSION NUMBER**: 0000950170-23-010443

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 13

**CONFORMED PERIOD OF REPORT**: 20230329

**ITEM INFORMATION**: Results of Operations and Financial Condition

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20230329

**DATE AS OF CHANGE**: 20230329

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** UNIFIRST CORP
- **CENTRAL INDEX KEY:** 0000717954
- **STANDARD INDUSTRIAL CLASSIFICATION:** SERVICES-PERSONAL SERVICES [7200]
- **IRS NUMBER:** 042103460
- **STATE OF INCORPORATION:** MA
- **FISCAL YEAR END:** 0829

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-08504
- **FILM NUMBER:** 23771837

**BUSINESS ADDRESS:**
- **STREET 1:** 68 JONSPIN RD
- **CITY:** WILMINGTON
- **STATE:** MA
- **ZIP:** 01887
- **BUSINESS PHONE:** (978) 658-8888

**MAIL ADDRESS:**
- **STREET 1:** 68 JONSPIN ROAD
- **CITY:** WILMINGTON
- **STATE:** MA
- **ZIP:** 01887

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** INTERSTATE UNIFORM SERVICES CORP/MA
- **DATE OF NAME CHANGE:** 19840410

?xml version="1.0" encoding="ASCII"? 8-K

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON, D.C. 20549** 

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**FORM** 8-K

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**CURRENT REPORT** 

**Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934** 

**Date of Report (Date of earliest event reported):** March 29, 2023

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UNIFIRST CORP**ORATION** 

**(Exact name of registrant as specified in its charter)** 

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| | | | |
|:---|:---|:---|:---|
| Massachusetts | 001-08504 | 001-08504 | 04-2103460 |
| **(State or other jurisdiction**<br>**of incorporation)** | **(Commission File Number)** | **(Commission File Number)** | **(IRS Employer**<br>**Identification No.)** |
| 68 Jonspin Road**,** Wilmington**,** Massachusetts  | 68 Jonspin Road**,** Wilmington**,** Massachusetts  | 01887 | 01887 |
| **(Address of Principal Executive Offices)** | **(Address of Principal Executive Offices)** | **(Zip Code)** | **(Zip Code)** |

---

**Registrant's Telephone Number, Including Area Code: (**978**)** 658-8888

**Not Applicable** 

**(Former Name or Former Address, if Changed Since Last Report)** 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) 

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) 

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) 

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) 

Securities registered pursuant to Section 12(b) of the Act:

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| | | |
|:---|:---|:---|
| &nbsp;&nbsp;**Title of each class** | &nbsp;&nbsp;**Trading symbol(s)** | &nbsp;&nbsp;**Name of each exchange on which registered** |
| &nbsp;&nbsp;Common Stock, $0.10 par value per share | &nbsp;&nbsp;UNF | &nbsp;&nbsp;New York Stock Exchange |

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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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**Item 2.02 Results of Operations and Financial Condition.**

On March 29, 2023, UniFirst Corporation (the "Company") issued a press release ("Press Release") announcing financial results for the second quarter of fiscal 2023, which ended on February 25, 2023. A copy of the Press Release is attached as Exhibit 99 to this Current Report on Form 8-K and is incorporated herein by reference.

The information in this Item 2.02, including the exhibit attached hereto, shall not be deemed "filed" for any purpose, including for purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange Act") or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, regardless of any general incorporation language in such filing.

**Item 9.01 Financial Statements and Exhibits.**

(d) <u>Exhibits</u>

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| | |
|:---|:---|
| **Exhibit**<br>**Number** | **Description** |
| 99 | [<u>Press release of the Company dated March 29, 2023</u>](unf-ex99.htm) |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |

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**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

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| | | |
|:---|:---|:---|
|  | UNIFIRST CORPORATION | UNIFIRST CORPORATION |
| Date: March 29, 2023 | By: | /s/ Steven S. Sintros |
|  |  | Steven S. Sintros |
|  |  | President and Chief Executive Officer |
|  | By: | /s/ Shane O'Connor |
|  |  | Shane O'Connor |
|  |  | Executive Vice President and Chief Financial Officer |

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## Ex-99

**Exhibit 99**

**Investor Relations Contact**

Shane O'Connor, Executive Vice President & CFO

UniFirst Corporation

978-658-8888

shane_oconnor@unifirst.com

**UNIFIRST ANNOUNCES FINANCIAL RESULTS FOR THE SECOND QUARTER OF FISCAL 2023**

**Wilmington, MA – March 29, 2023** – UniFirst Corporation (NYSE: UNF) (the "Company," "UniFirst" or "we") today reported results for its second quarter ended February 25, 2023 as compared to the corresponding period in the prior fiscal year:

**Q2 2023 Financial Highlights**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Consolidated revenues increased 11.5% to $542.7 million.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Operating income was $20.7 million, a decrease of 8.4%.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•The quarterly tax rate increased to 24.6% compared to 19.0% in the prior year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Net income decreased to $17.8 million from $18.5 million in the prior year, or 3.5%.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Diluted earnings per share decreased to $0.95 from $0.97 in the prior year, or 2.1%.

The Company's financial results for the second quarter of fiscal 2023 and 2022 included approximately $9.1 million and $6.7 million, respectively, of costs directly attributable to its CRM, ERP and branding initiatives (the "Key Initiatives"). In addition, the Company incurred costs related to the acquisition of Clean Uniform during the second quarter of fiscal 2023 of approximately $2.0 million. The effect of these items on the second quarter of fiscal 2023 and 2022 combined to decrease:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Operating income by $11.1 million and $6.7 million, respectively.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Net income by $8.3 million and $5.1 million, respectively.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•EPS by $0.44 and $0.27, respectively.

Steven Sintros, UniFirst President and Chief Executive Officer, said, "We are pleased with our strong top line performance in the quarter which was partially fueled by our ongoing efforts to mitigate the cost pressures that we have been experiencing in our business. We are also pleased with the progress we are making advancing our technology and infrastructure initiatives. As always, I want to thank our over 14,000 Team Partners who continue to **Always Deliver** for each other and our customers as we strive towards our vision of being universally recognized as the best service provider in the industry."

**Segment Reporting Highlights**

<u>Core Laundry Operations</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Revenues for the quarter increased 10.2% to $477.1 million.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Organic growth, which excludes the effect of acquisitions and fluctuations in the Canadian dollar, was 10.1%.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Operating margin decreased to 2.9% from 4.3%.

The costs incurred related to the Key Initiatives and Clean Uniform acquisition, discussed above, were recorded to the Core Laundry Operations' segment, and decreased the Core Laundry operating margin for the second quarters of fiscal 2023 and 2022 by 2.3% and 1.6%, respectively.

Excluding these costs, the segment's operating margin decreased primarily due to higher merchandise costs as a percentage of revenues as well as continued cost pressure from the inflationary environment, which were partially offset by lower healthcare and casualty claims expense as a percentage of revenues compared to prior year.

<u>Specialty Garments</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Revenues for the quarter were $42.1 million, an increase of 18.5%, which was driven by growth in the segment's cleanroom and North American nuclear operations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Operating margin increased to 19.1% from 10.8% a year ago, primarily the result of the strong top line performance.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Specialty Garments consists of nuclear decontamination and cleanroom operations, and its results can vary significantly due to seasonality and the timing of reactor outages and projects.

**Balance Sheet and Capital Allocation**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Cash and cash equivalents and Short-term investments totaled $345.1 million as of February 25, 2023.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•The Company had no long-term debt outstanding as of February 25, 2023.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•The Company did not repurchase any shares of common stock in the second quarter of fiscal 2023. As of February 25, 2023, the Company had $63.6 million remaining under its current stock repurchase program.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Weighted average shares outstanding – Diluted for the second quarters of fiscal 2023 and fiscal 2022 were 18.8 million and 19.0 million, respectively.

**Acquisition of Clean Uniform**

Mr. Sintros continued, "I am happy to announce that on March 13th we successfully closed on our previously announced purchase of Clean Uniform. Our purchase of Clean is consistent with our focus on making long-term investments to strengthen our business. Due to the strong leadership and service reputation that Clean brings, as well as the complexities of where we are in our technology transformation, we will be strategic and patient in the integration of the two businesses to minimize the impact and risk on Clean's most valuable assets: its employees and its customers. Currently, the Clean Uniform business is operating at an EBITDA margin of approximately 10%, however, we will seek to more than double that performance by the end of the third full year following the acquisition."

Our current assumptions regarding the impact of the Clean acquisition on our operating results for the year, the actual results of which will be recorded to our Core Laundry Operations, are as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•An increase in revenues of $42.0 million.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•A decrease in operating income of $0.5 million, which includes an assumption of purchase-related intangible amortization expense of $3.0 million.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Acquisition-related expenses of $4.0 million, which includes the $2.0 million expensed in the second quarter of fiscal 2023.

**Financial Outlook**

The Company now expects its revenues for fiscal 2023 to be between $2.210 billion and $2.220 billion. We further expect diluted earnings per share to be between $5.02 and $5.37. This outlook includes the estimated impact of the Clean acquisition, noted above, and further assumes:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Core Laundry Operations' operating margin at the midpoint of the range of 5.2%.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•An estimate of $40.0 million of costs directly attributable to our Key Initiatives as well as the $4.0 million of Clean acquisition-related expenses. These items combined to decrease the Core Laundry Operations' operating margin assumption by 2.2% and EPS by $1.76.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•An effective tax rate of 25.0%.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•No impact from any future share buybacks or unexpected significantly adverse economic developments.

**Conference Call Information** 

UniFirst Corporation will hold a conference call today at 9:00 a.m. (ET) to discuss its quarterly financial results, business highlights and outlook. A simultaneous live webcast of the call will be available over the Internet and can be accessed at www.unifirst.com.

**About UniFirst Corporation**

Headquartered in Wilmington, Mass., UniFirst Corporation (NYSE: UNF) is a North American leader in the supply and servicing of uniform and workwear programs, as well as the delivery of facility service programs. Together with its subsidiaries, the Company also provides first aid and safety products, and manages specialized garment programs for the cleanroom and nuclear industries. UniFirst manufactures its own branded workwear, protective clothing, and floorcare products; and with 260 service locations, over 300,000

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customer locations, and 14,000-plus employee Team Partners, the Company outfits nearly 2 million workers each business day. For more information, contact UniFirst at 800.455.7654 or visit UniFirst.com.

**Forward-Looking Statements Disclosure**

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**Consolidated Statements of Income**

**(Unaudited)**

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| | | | | |
|:---|:---|:---|:---|:---|
| **(In thousands, except per share data)** | **Thirteen weeks ended February 25, 2023** | **Thirteen weeks ended February 26, 2022** | **Twenty-six weeks ended February 25, 2023** | **Twenty-six weeks ended February 26, 2022** |
| Revenues | $542691 | $486696 | $1084489 | $972860 |
| Operating expenses: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Cost of revenues (1) | 369896 | 324816 | 723868 | 634946 |
| &nbsp;&nbsp;&nbsp;Selling and administrative expenses (1) | 122190 | 112406 | 239553 | 216794 |
| &nbsp;&nbsp;&nbsp;Depreciation and amortization | 29895 | 26861 | 56940 | 53717 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 521981 | 464083 | 1020361 | 905457 |
| Operating income | 20710 | 22613 | 64128 | 67403 |
| Other (income) expense: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Interest income, net | (3031) | (751) | (5800) | (1399) |
| &nbsp;&nbsp;&nbsp;Other expense, net | 114 | 594 | 905 | 1330 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total other income, net | (2917) | (157) | (4895) | (69) |
| Income before income taxes | 23627 | 22770 | 69023 | 67472 |
| Provision for income taxes | 5817 | 4319 | 17256 | 15316 |
| Net income | $17810 | $18451 | $51767 | $52156 |
| **Income per share – Basic:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Common Stock | $0.99 | $1.02 | $2.88 | $2.88 |
| &nbsp;&nbsp;&nbsp;Class B Common Stock | $0.79 | $0.81 | $2.31 | $2.30 |
| **Income per share – Diluted:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Common Stock | $0.95 | $0.97 | $2.76 | $2.75 |
| **Income allocated to – Basic:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Common Stock | $14962 | $15492 | $43488 | $43792 |
| &nbsp;&nbsp;&nbsp;Class B Common Stock | $2848 | $2959 | $8279 | $8364 |
| **Income allocated to – Diluted:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Common Stock | $17810 | $18451 | $51767 | $52156 |
| **Weighted average shares outstanding – Basic:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Common Stock | 15087 | 15210 | 15084 | 15225 |
| &nbsp;&nbsp;&nbsp;Class B Common Stock | 3590 | 3635 | 3590 | 3635 |
| **Weighted average shares outstanding – Diluted:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Common Stock | 18767 | 18967 | 18757 | 18999 |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Exclusive of depreciation on the Company's property, plant and equipment and amortization on its intangible assets.

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**Condensed Consolidated Balance Sheets**

**(Unaudited)**

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| | | |
|:---|:---|:---|
| **(In thousands)** | **February 25, 2023** | **August 27, 2022** |
| Assets |  |  |
| Current assets: |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | $244098 | $376399 |
| &nbsp;&nbsp;&nbsp;Short-term investments | 101000 |  |
| &nbsp;&nbsp;&nbsp;Receivables, net | 276560 | 249198 |
| &nbsp;&nbsp;&nbsp;Inventories | 150907 | 151459 |
| &nbsp;&nbsp;&nbsp;Rental merchandise in service | 232543 | 219392 |
| &nbsp;&nbsp;&nbsp;Prepaid taxes | 12601 | 25523 |
| &nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | 49571 | 41921 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current assets | 1067280 | 1063892 |
| Property, plant and equipment, net | 685182 | 665119 |
| Goodwill | 461050 | 457259 |
| Customer contracts and other intangible assets, net | 82967 | 84973 |
| Deferred income taxes | 511 | 498 |
| Operating lease right-of-use assets, net | 48543 | 50050 |
| Other assets | 108787 | 106181 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total assets | $2454320 | $2427972 |
| Liabilities and shareholders' equity |  |  |
| Current liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Accounts payable | $80556 | $82131 |
| &nbsp;&nbsp;&nbsp;Accrued liabilities | 137108 | 146808 |
| &nbsp;&nbsp;&nbsp;Accrued taxes |  | 1204 |
| &nbsp;&nbsp;&nbsp;Operating lease liabilities, current | 14472 | 13602 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current liabilities | 232136 | 243745 |
| Long-term liabilities: |  |  |
| Accrued liabilities | 123764 | 123979 |
| Accrued and deferred income taxes | 107697 | 106307 |
| Operating lease liabilities | 35635 | 38070 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities | 499232 | 512101 |
| Shareholders' equity: |  |  |
| &nbsp;&nbsp;&nbsp;Common Stock | 1510 | 1508 |
| &nbsp;&nbsp;&nbsp;Class B Common Stock | 359 | 359 |
| Capital surplus | 94861 | 93131 |
| Retained earnings | 1885788 | 1845163 |
| Accumulated other comprehensive loss | (27430) | (24290) |
| Total shareholders' equity | 1955088 | 1915871 |
| Total liabilities and shareholders' equity | $2454320 | $2427972 |

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**Detail of Operating Results**

**(Unaudited)**

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| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Thirteen weeks ended February 25, 2023** | **Thirteen weeks ended February 25, 2023** | **Thirteen weeks ended February 25, 2023** | **Thirteen weeks ended February 25, 2023** | **Thirteen weeks ended February 26, 2022** | **Thirteen weeks ended February 26, 2022** | **Thirteen weeks ended February 26, 2022** | **Thirteen weeks ended February 26, 2022** |
|  | **Core Laundry** | **Specialty** | **First** |  | **Core Laundry** | **Specialty** | **First** |  |
|  | **Operations** | **Garments** | **Aid** | **Total** | **Operations** | **Garments** | **Aid** | **Total** |
| Revenues | $477050 | $42127 | $23514 | $542691 | $433056 | $35538 | $18102 | $486696 |
| Revenue Growth % | 10.2% | 18.5% | 29.9% | 11.5% |  |  |  |  |
| Operating Income (Loss) (1), (2) | $13642 | $8045 | $(977) | $20710 | $18745 | $3850 | $18 | $22613 |
| Operating Margin | 2.9% | 19.1% | -4.2% | 3.8% | 4.3% | 10.8% | 0.1% | 4.6% |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)The Company's financial results for the second quarter of fiscal 2023 and 2022 included approximately $9.1 million and $6.7 million, respectively, of costs directly attributable to its Key Initiatives. In addition, the Company incurred costs related to the acquisition of Clean Uniform during the second quarter of fiscal 2023 of approximately $2.0 million. These costs were recorded to the Core Laundry Operations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)The Key Initiative and acquisition-related costs resulted in a decrease in Core Laundry Operations' operating margin for the second quarter of fiscal 2023 and 2022 of 2.3% and 1.6%, respectively.

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| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Twenty-six weeks ended February 25, 2023** | **Twenty-six weeks ended February 25, 2023** | **Twenty-six weeks ended February 25, 2023** | **Twenty-six weeks ended February 25, 2023** | **Twenty-six weeks ended February 26, 2022** | **Twenty-six weeks ended February 26, 2022** | **Twenty-six weeks ended February 26, 2022** | **Twenty-six weeks ended February 26, 2022** |
|  | **Core Laundry** | **Specialty** | **First** |  | **Core Laundry** | **Specialty** | **First** |  |
|  | **Operations** | **Garments** | **Aid** | **Total** | **Operations** | **Garments** | **Aid** | **Total** |
| Revenues | $954448 | $86206 | $43835 | $1084489 | $861902 | $75022 | $35936 | $972860 |
| Revenue Growth % | 10.7% | 14.9% | 22.0% | 11.5% |  |  |  |  |
| Operating Income (Loss) (3), (4) | $47473 | $18228 | $(1573) | $64128 | $55252 | $12479 | $(328) | $67403 |
| Operating Margin | 5.0% | 21.1% | -3.6% | 5.9% | 6.4% | 16.6% | -0.9% | 6.9% |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)The Company's financial results for the first half of fiscal 2023 and 2022 included approximately $19.1 million and $12.7 million, respectively, of costs directly attributable to its Key Initiatives. In addition, the Company incurred costs related to the acquisition of Clean Uniform during the first half of fiscal 2023 of approximately $2.0 million. These costs were recorded to the Core Laundry Operations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)The Key Initiative and acquisition-related costs resulted in a decrease in Core Laundry Operations' operating margin for the first half of fiscal 2023 and 2022 of 2.2% and 1.5%, respectively.

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**Consolidated Statements of Cash Flows**

**(Unaudited)**

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| | | |
|:---|:---|:---|
| **(In thousands)** | **Twenty-six weeks ended February 25, 2023** | **Twenty-six weeks ended February 26, 2022** |
| Cash flows from operating activities: |  |  |
| Net income | $51767 | $52156 |
| Adjustments to reconcile net income to cash provided by operating activities: |  |  |
| Depreciation and amortization | 56940 | 53717 |
| Share-based compensation | 4533 | 4961 |
| Accretion on environmental contingencies | 518 | 298 |
| Accretion on asset retirement obligations | 458 | 491 |
| Deferred income taxes | 1080 | 1733 |
| Other | 119 | 76 |
| Changes in assets and liabilities, net of acquisitions: |  |  |
| Receivables, less reserves | (27636) | (27855) |
| Inventories | 683 | (17189) |
| Rental merchandise in service | (13592) | (13317) |
| Prepaid expenses and other current assets and Other assets | (13516) | (3926) |
| Accounts payable | (900) | 5357 |
| Accrued liabilities | (8015) | (16928) |
| Prepaid and accrued income taxes | 11730 | 5319 |
| Net cash provided by operating activities | 64169 | 44893 |
| Cash flows from investing activities: |  |  |
| Acquisition of businesses, net of cash acquired | (7059) | (42325) |
| Capital expenditures, including capitalization of software costs | (74847) | (60178) |
| Purchases of investments | (107000) |  |
| Maturities of investments | 6000 |  |
| Proceeds from sale of assets | 345 | 27 |
| Net cash used in investing activities | (182561) | (102476) |
| Cash flows from financing activities: |  |  |
| Proceeds from exercise of share-based awards | 3 | 3 |
| Taxes withheld and paid related to net share settlement of equity awards | (2802) | (3803) |
| Repurchase of Common Stock |  | (14766) |
| Payment of cash dividends | (10954) | (9976) |
| Net cash used in financing activities | (13753) | (28542) |
| Effect of exchange rate changes | (156) | (856) |
| Net decrease in cash and cash equivalents | (132301) | (86981) |
| Cash and cash equivalents at beginning of period | 376399 | 512868 |
| Cash and cash equivalents at end of period | $244098 | $425887 |

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