UniFirst(US:UNF)2021-10-20 15:25Financial Data and Key Metrics Changes - For fiscal year 2021, the company reported revenues of $1.826 billion, an increase from $1.804 billion in fiscal 2020, indicating a growth despite challenges posed by the COVID-19 pandemic [7] - Full year diluted earnings per share were $7.94, up from $7.13 in fiscal 2020, primarily due to improved performance following the pandemic's impact [8] - Consolidated revenues for Q4 2021 were $465.3 million, an increase of 8.5% from $428.6 million a year ago, with net income rising to $34.6 million or $1.82 per diluted share from $31.6 million or $1.66 [21] Business Line Data and Key Metrics Changes - Core laundry operations revenues for Q4 2021 were $415.1 million, a 7.9% increase from the previous year, with organic growth at 7.2% [23] - Specialty garment segment revenues reached $33.9 million for Q4 2021, a 22.5% increase, driven by improved performance in clean room and nuclear operations [25] - First aid segment revenues decreased slightly to $16.3 million from $16.4 million, reflecting elevated PPE sales in the prior year [27] Market Data and Key Metrics Changes - The effective tax rate for Q4 2021 was 22%, down from 26.6% in the prior year, influenced by discrete events related to employee share-based payments [22] - Energy costs increased to 4.2% of revenues in Q4 2021, up from 3.5% a year ago, indicating rising operational costs [25] Company Strategy and Development Direction - The company is focused on investing in people, infrastructure, and technology to enhance long-term returns and improve competitive positioning [9] - Key initiatives for fiscal 2022 include the rollout of a new CRM system, revitalization of the UniFirst brand, and implementation of a corporate-wide ERP system [10][11][12] - The company aims to achieve organic growth exceeding recent years, driven by customer reopenings and improved retention [13] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's ability to navigate ongoing challenges from the pandemic and inflationary pressures, while also highlighting the essential nature of their products [20] - For fiscal 2022, the company anticipates revenues between $1.92 billion and $1.945 billion, with core laundry organic growth projected at approximately 6.1% [33] - Expected fully diluted earnings per share for fiscal 2022 are between $5.70 and $6.10, factoring in $38 million of costs related to key initiatives [34] Other Important Information - The company maintains a solid balance sheet with no long-term debt and cash equivalents totaling $512.9 million at the end of fiscal 2021 [28] - Capital expenditures for fiscal 2021 were $133.6 million, with ongoing investments in facilities and automation systems [29] - The quarterly dividend was increased by 20% to $0.30 per share, reflecting a commitment to returning value to shareholders [18] Q&A Session Summary Question: Guidance on core laundry operating margin - Management acknowledged the goal of returning to double-digit operating margins, citing current challenges from energy, labor costs, and supply chain disruptions [43][45] Question: Labor availability and environment - Management characterized the labor environment as still challenging but marginally improved, attributing some improvements to wage increases and the end of unemployment benefits [47][48] Question: First aid business expansion - Management discussed efforts to build out the first aid business geographically, indicating a presence in most major markets but needing further scale and depth [50][52] Question: Definition of transitory costs - Management clarified that transitory costs primarily relate to the CRM, ERP, and branding initiatives, with costs expected to be present in 2022 and some continuing into 2023 [58][60]