Boston, MA 04/02/2014 (wallstreetpr) – Protective gear maker, UniFirst Corp (NYSE:UNF), continues to sink in the market after the company reported weaker than expected results for its second quarter. Weak Canadian exchange rate continues to affect the company’s operations with high energy prices and a difficult winter making it difficult for it to turn in improved revenues.
UniFirst Challenges
UniFirst Corp (NYSE:UNF) registered narrower operating margins for the quarter as a result of high costs related to its plant operations. High energy prices continue to be a niggling topic not only to UniFirst, but also to all other players in the industry. Depreciation levels for the quarter also rose to unprecedented levels greatly affecting the company’s operating margins with bad debt expenses making the situation even worse.
The quarter was also mired with higher than expected legal and environmental costs compared to the prior year same quarter, greatly affecting the company’s cash balance. Higher costs in this case were slightly offset by a reduction in health care claims expense, for the quarter.
UniFirst Free Cash Flow Levels
Despite facing increasing challenges in the industry, UniFirst Corp (NYSE:UNF), continues to command a solid balance sheet as well as an impressive financial position. UniFirst’s cash from operating activities stood at $109.1 million up from $92.5 million reported for the first half of 2013. The increase in UniFirst’s cash from operating activities was mainly as a result of higher earnings from the company’s segments as well as the timing of income tax compared to last year.
UniFirst board of directors last declared a dividend offering of $0.03 per share held on the company’s Class B common stock. The dividends are to be paid on April 2, 2014 to shareholders on record as of March 12, 2014. The company’s earnings per share for the second quarter came in at $1.27 down from high of $1.33 reported for the same period last year.
Looking forward, UniFirst Corp (NYSE:UNF) expects its revenues to be between $1.372 billion and $1.385 billion for the year with full year earnings per share of between $5.60 and $5.75 per share.
UniFirst Denies Merger Discussions
Early last month UniFirst Corp (NYSE:UNF) denied claims that it was in talks with Cintas Corporation (NASDAQ:CTAS) about a possible merger. In a statement, the company maintained that it has never been involved in any discussions on the matter and remains glued to operate as a single entity.
