UniFirst Corporation announced results for its first quarter of fiscal 2017 which ended November 26, 2016.
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Revenues for the quarter were $386.1 million, up 3.4% from $373.4 million in the year ago period.
Net income was $28.2 million ($1.38 per diluted share), down 21.4% from $35.9 million ($1.78 per diluted share) in the first quarter of fiscal 2016.
Results from the first quarter include the impact of the Company’s acquisition of Arrow Uniform (Arrow) which was completed in September 2016.
Core Laundry revenues in the quarter were $351.8 million, up 5.0% from those in the prior year’s first quarter. Adjusting for the effect of acquisitions, Core Laundry revenues grew 0.6%.
This segment’s operating income was $43.7 million, a 17.6% decrease from the prior year. Its operating margin was 12.4%, down from 15.8% for the same period in fiscal 2016.
The margin decline was primarily the result of higher costs of revenues and selling and administrative expenses combined with low organic growth.
In addition, the impact of the acquisition of Arrow, including the effect of non-cash purchase accounting charges, decreased the Core Laundry operating margin by approximately 1.1%.
Revenues and operating income from our Specialty Garments segment, which consists of nuclear decontamination and cleanroom operations, declined 16.5% and 73.1%, respectively, in the quarter compared to the same period a year ago.
This segment’s results can vary significantly from period to period due to seasonality and the timing of reactor outages and projects.
The quarterly results for this segment largely met our expectations and we currently expect this segment’s full year results will meet or exceed its fiscal 2016 revenues and operating income.
UniFirst continues to maintain a strong balance sheet with no long-term debt and significant cash balances.
Excluding the cash expended on Arrow, cash balances increased $42.2 million during the quarter and finished the quarter at $286.1 million. ■