What changed in this filing

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Item 1. Financial Statements

2021-07-06 compared with 2021-04-08 · 129 added, 138 removed, 503 unchanged (35% of the section changed)

3 unchanged sentences

Thirteen weeks ended

Twenty-six weeks ended

Thirty-nine weeks ended

(In thousands, except per share data)

February 27, 2021

February 29, 2020

February 27, 2021

February 29, 2020

Operating expenses:

6 unchanged sentences

Interest income, net

Other (income) expense, net

Total other income, net

Other expense, net

Total other (income) expense, net

Income before income taxes

15 unchanged sentences

Thirteen weeks ended

Twenty-six weeks ended

Thirty-nine weeks ended

(In thousands)

February 27, 2021

February 29, 2020

February 27, 2021

February 29, 2020

Other comprehensive income (loss):

10 unchanged sentences

(In thousands, except share and par value data)

February 27, 2021

August 29, 2020

30 unchanged sentences

15,242,690 and

15,251,176 shares issued and outstanding as of February 27, 2021 and

15,251,176 shares issued and outstanding as of May 29, 2021 and

August 29, 2020, respectively

1 unchanged sentence

20,000,000 shares authorized;

shares issued and outstanding as of February 27, 2021 and August 29, 2020,

shares issued and outstanding as of May 29, 2021 and August 29, 2020,

Capital surplus

31 unchanged sentences

Balance, February 29, 2020

Change in fair value of derivatives

Foreign currency translation

Dividends declared Common Stock

($ 0.25 per share)

Dividends declared Class B Common Stock

($ 0.20 per share)

Share-based compensation, net (1)

Share-based awards exercised, net (2)

Repurchase of Common Stock

Balance, May 30, 2020

(In thousands)

21 unchanged sentences

Balance, February 27, 2021

These amounts are shown net of any shares withheld by the Company to satisfy certain tax withholdings obligations in connection with the vesting of certain shares of restricted stock or restricted stock units.

Change in fair value of derivatives

Foreign currency translation

Dividends declared Common Stock

($ 0.25 per share)

Dividends declared Class B Common Stock

($ 0.20 per share)

Share-based compensation, net (1)

Share-based awards exercised, net (2)

Balance, May 29, 2021

These amounts are shown net of any shares withheld by the Company to satisfy certain tax withholding obligations in connection with the vesting of certain restricted stock units.

These amounts are shown net of the effect of income taxes.

3 unchanged sentences

UniFirst Corporation and Subsidiaries

Twenty-six weeks ended

Thirty-nine weeks ended

(In thousands)

February 27, 2021

February 29, 2020

Cash flows from operating activities:

20 unchanged sentences

Cash flows from financing activities:

Payment of deferred financing costs

Proceeds from exercise of share-based awards

42 unchanged sentences

Revenue Recognition

The following table presents the Company’s revenues for the thirteen and twenty-six weeks ended February 27, 2021 and February 29, 2020, respectively, disaggregated by service type:

The following table presents the Company’s revenues for the thirteen and thirty-nine weeks ended May 29, 2021 and May 30, 2020, respectively, disaggregated by service type:

Thirteen Weeks Ended

Twenty-Six Weeks Ended

February 27, 2021

February 29, 2020

February 27, 2021

February 29, 2020

Thirty-Nine Weeks Ended

(In thousands, except percentages)

2 unchanged sentences

Total Revenues

See Note 16 “Segment Reporting” for additional details of segment definitions.

UniFirst Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

See Note 16 “Segment Reporting” for additional details of segment definitions.

Revenue Recognition Policy

During the thirteen weeks ended February 27, 2021 and February 29, 2020, approximately 91.1 % and 90.2 %, respectively, of the Company’s revenues were derived from fees for route servicing of Core Laundry Operations, Specialty Garments, and First Aid performed by the Company’s employees at the customer’s location of business.

During the twenty-six weeks ended February 27, 2021 and February 29, 2020, approximately 91.1 % and 90.9 %, respectively, of the Company’s revenues were derived from fees for route servicing of Core Laundry Operations, Specialty Garments, and First Aid performed by the Company’s employees at the customer’s location of business.

During the thirteen weeks ended May 29, 2021 and May 30, 2020, approximately 90.9 % and 85.7 %, respectively, of the Company’s revenues were derived from fees for route servicing of Core Laundry Operations, Specialty Garments, and First Aid performed by the Company’s employees at the customer’s location of business.

During the thirty-nine weeks ended May 29, 2021 and May 30, 2020, approximately 91.0 % and 89.2 %, respectively, of the Company’s revenues were derived from fees for route servicing of Core Laundry Operations, Specialty Garments, and First Aid performed by the Company’s employees at the customer’s location of business.

Revenues from the Company’s route servicing customer contracts represent a single performance obligation.

8 unchanged sentences

The Company’s performance period generally corresponds with the monthly invoice period.

No significant constraints on the Company’s revenue recognition were applied during the thirteen and twenty-six weeks ended February 27, 2021 and February 29, 2020.

No significant constraints on the Company’s revenue recognition were applied during the thirteen and thirty-nine weeks ended May 29, 2021 and May 30, 2020.

The Company reassesses these estimates during each reporting period.

9 unchanged sentences

The current portion is included in prepaid expenses and other current assets and the non-current portion is included in other assets on the Company’s consolidated balance sheets.

As of February 27, 2021, the current and non-current assets related to deferred commissions totaled $ 13.8 million and $ 58.3 million, respectively.

As of May 29, 2021, the current and non-current assets related to deferred commissions totaled $ 13.9 million and $ 59.1 million, respectively.

As of August 29, 2020, the current and non-current assets related to deferred commissions totaled $ 13.3 million and $ 55.6 million, respectively.

During the thirteen weeks ended February 27, 2021 and February 29, 2020, the Company recorded $ 3.6 million and $ 3.4 million, respectively, of amortization expense related to deferred commissions.

During the twenty-six weeks ended February 27, 2021 and February 29, 2020, the Company recorded $ 7.1 million and $ 6.7 million, respectively, of amortization expense related to deferred commissions.

During the thirteen weeks ended May 29, 2021 and May 30, 2020, the Company recorded $ 3.6 million and $ 3.4 million, respectively, of amortization expense related to deferred commissions.

During the thirty-nine weeks ended May 29, 2021 and May 30, 2020, the Company recorded $ 10.8 million and $ 10.2 million, respectively, of amortization expense related to deferred commissions.

This expense is classified in selling and administrative expenses on the consolidated statements of income.

During the twenty-six weeks ended February 27, 2021, the Company completed four business acquisitions with an aggregate purchase price of approximately $ 7.5 million, which was primarily assigned to goodwill and intangible assets.

During the thirty-nine weeks ended May 29, 2021, the Company completed four business acquisitions with an aggregate purchase price of approximately $ 7.5 million, which was primarily assigned to goodwill and intangible assets.

The results of operations of these acquisitions have been included in the Company’s consolidated financial results since their respective acquisition dates.

4 unchanged sentences

The assets or liabilities measured at fair value on a recurring basis are summarized in the tables below (in thousands):

As of February 27, 2021

As of May 29, 2021

Assets (Liabilities):

Cash equivalents

17 unchanged sentences

dollars at fixed exchange rates in order to manage its exposure related to the certain forecasted Canadian dollar denominated sales of one of its subsidiaries.

These contracts are included in prepaid expenses and other current assets and other long-term assets as of February 27, 2021 and August 29, 2020.

These contracts are included in accrued liabilities as of May 29, 2021 and prepaid expenses and other current assets and other long-term assets as of August 29, 2020.

The fair value of the forward contracts is based on similar exchange traded derivatives and are, therefore, included within Level 2 of the fair value hierarchy.

Derivative Instruments and Hedging Activities

As of February 27, 2021, the Company had forward contracts with a notional value of approximately $ 3.0 million CAD outstanding and recorded the fair value of the contracts of a nominal amount in prepaid expenses and other current assets with a corresponding nominal loss in accumulated other comprehensive loss, which was recorded net of tax.

During the thirteen and twenty-six weeks ended February 27, 2021, the Company reclassified a nominal amount from accumulated other comprehensive loss to revenue, related to the derivative financial instruments.

The loss on these forward contracts that resulted in an increase to accumulated other comprehensive loss as of February 27, 2021 is expected to be reclassified to revenues prior to its maturity on February 25, 2022.

As of May 29, 2021, the Company had forward contracts with a notional value of approximately $ 2.2 million CAD outstanding and recorded the fair value of the contracts of $ 0.1 million in accrued liabilities with a corresponding nominal loss in accumulated other comprehensive loss, which was recorded net of tax.

During the thirteen and thirty-nine weeks ended May 29, 2021, the Company reclassified a nominal amount from accumulated other comprehensive loss to revenue, related to the derivative financial instruments.

The loss on these forward contracts that resulted in an increase to accumulated other comprehensive loss as of May 29, 2021 is expected to be reclassified to revenues prior to its maturity on February 25, 2022.

Employee Benefit Plans

3 unchanged sentences

The Company matches a portion of the employee’s contribution and may make an additional contribution at its discretion.

Contributions charged to expense under the plan for the thirteen weeks ended February 27, 2021 and February 29, 2020 were $ 4.3 million and $ 5.0 million, respectively.

Contributions charged to expense under the plan for the twenty-six weeks ended February 27, 2021 and February 29, 2020 were $ 10.1 million and $ 10.5 million, respectively.

Pension Plans and Supplemental Executive Retirement Plans

Contributions charged to expense under the plan for the thirteen weeks ended May 29, 2021 and May 30, 2020 were $ 5.1 million and $ 1.9 million, respectively.

Contributions charged to expense under the plan for the thirty-nine weeks ended May 29, 2021 and May 30, 2020 were $ 15.2 million and $ 12.4 million, respectively.

UniFirst Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

The Company maintains an unfunded Supplemental Executive Retirement Plan for certain eligible employees of the Company and two frozen non-contributory defined benefit pension plans.

The amounts charged to expense related to these plans for the thirteen weeks ended February 27, 2021 and February 29, 2020 were $ 0.8 million and $ 0.3 million, respectively.

The amounts charged to expense related to these plans for the twenty-six weeks ended February 27, 2021 and February 29, 2020 were $ 1.5 million and $ 0.4 million, respectively.

Pension Plans and Supplemental Executive Retirement Plans

The Company maintains an unfunded Supplemental Executive Retirement Plan for certain eligible employees of the Company and one frozen non-contributory defined benefit pension plan.

The amounts charged to expense related to these plans for the thirteen weeks ended May 29, 2021 and May 30, 2020 were $ 0.8 million and $ 0.7 million, respectively.

The amounts charged to expense related to these plans for the thirty-nine weeks ended May 29, 2021 and May 30, 2020 were $ 2.3 million and $ 1.2 million, respectively.

Income Per Share

2 unchanged sentences

Thirteen Weeks Ended

Twenty-Six Weeks Ended

February 27, 2021

February 29, 2020

February 27, 2021

February 29, 2020

Thirty-Nine Weeks Ended

Net income available to shareholders

8 unchanged sentences

The two-class method assuming a participating security is not exercised or converted.

For the thirteen and twenty-six weeks ended February 27, 2021 and February 29, 2020, the Company’s diluted income per share assumes the conversion of all vested Class B Common Stock into Common Stock and uses the two-class method for its unvested participating shares.

The following tables set forth the computation of diluted income per share of Common Stock for the thirteen and twenty-six weeks ended February 27, 2021 and February 29, 2020 (in thousands, except per share data):

Thirteen weeks ended February 27, 2021

Twenty-six weeks ended February 27, 2021

For the thirteen and thirty-nine weeks ended May 29, 2021 and May 30, 2020, the Company’s diluted income per share assumes the conversion of all vested Class B Common Stock into Common Stock and uses the two-class method for its unvested participating shares.

The following tables set forth the computation of diluted income per share of Common Stock for the thirteen and thirty-nine weeks ended May 29, 2021 and May 30, 2020 (in thousands, except per share data):

Thirteen weeks ended May 29, 2021

Thirty-nine weeks ended May 29, 2021

As reported - Basic

5 unchanged sentences

Notes to Consolidated Financial Statements (Continued)

Thirteen weeks ended February 29, 2020

Twenty-six weeks ended February 29, 2020

Thirteen weeks ended May 30, 2020

Thirty-nine weeks ended May 30, 2020

As reported - Basic

3 unchanged sentences

As reported – Diluted

Share-based awards that would result in the issuance of 2,379 and 11,566 shares, respectively, of Common Stock were excluded from the calculation of diluted income per share for the thirteen and twenty-six weeks ended February 27, 2021 because they were anti-dilutive.

Share-based awards that would result in the issuance of 667 and 423 shares, respectively, of Common Stock were excluded from the calculation of diluted income per share for the thirteen and twenty-six weeks ended February 29, 2020 because they were anti-dilutive.

Share-based awards that would result in the issuance of 2,189 and 1,770 shares, respectively, of Common Stock were excluded from the calculation of diluted income per share for the thirteen and thirty-nine weeks ended May 29, 2021 because they were anti-dilutive.

Share-based awards that would result in the issuance of 7,328 and 2,724 shares, respectively, of Common Stock were excluded from the calculation of diluted income per share for the thirteen and thirty-nine weeks ended May 30, 2020 because they were anti-dilutive.

Inventories are stated at the lower of cost or net realizable value, net of any reserve for excess and obsolete inventory.

4 unchanged sentences

The Company uses the first-in, first-out (“FIFO”) method to value its inventories.

The components of inventory as of February 27, 2021 and August 29, 2020 were as follows (in thousands):

February 27, 2021

The components of inventory as of May 29, 2021 and August 29, 2020 were as follows (in thousands):

August 29, 2020

3 unchanged sentences

Total inventories

UniFirst Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

Goodwill and Other Intangible Assets

4 unchanged sentences

Goodwill recorded during the period

Balance as of February 27, 2021

Balance as of May 29, 2021

UniFirst Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

Intangible assets, net in the Company’s accompanying Consolidated Balance Sheets are as follows (in thousands):

Gross Carrying

February 27, 2021

Customer contracts

7 unchanged sentences

The Company continues to depreciate, on a straight-line basis, the amount added to property, plant and equipment and recognizes accretion expense in connection with the discounted liability over the various remaining lives which range from approximately 1 to 23 years .

A reconciliation of the Company’s asset retirement liability for the twenty-six weeks ended February 27, 2021 was as follows (in thousands):

February 27, 2021

A reconciliation of the Company’s asset retirement liability for the thirty-nine weeks ended May 29, 2021 was as follows (in thousands):

Beginning balance as of August 29, 2020

1 unchanged sentence

Effect of exchange rate changes

Balance as of February 27, 2021

Balance as of May 29, 2021

Asset retirement obligations are included in long-term accrued liabilities in the accompanying Consolidated Balance Sheets.

UniFirst Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

Commitments and Contingencies

9 unchanged sentences

The Company's lease agreements do not contain any material residual value guarantees or material restrictive covenants.

The following table presents the operating lease cost and information related to the operating lease right-of-use assets, net and operating lease liabilities for the twenty-six weeks ended February 27, 2021:

UniFirst Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

The following table presents the operating lease cost and information related to the operating lease right-of-use assets, net and operating lease liabilities for the thirty-nine weeks ended May 29, 2021:

(In thousands, except lease term and discount rate)

5 unchanged sentences

Weighted-average discount rate - operating leases

The contractual future minimum lease payments of the Company's operating lease liabilities by fiscal year are as follows as of February 27, 2021:

The contractual future minimum lease payments of the Company's operating lease liabilities by fiscal year are as follows as of May 29, 2021:

(In thousands)

2021 (remaining six months)

2021 (remaining three months)

Total payments

5 unchanged sentences

The Company is attentive to the environmental concerns surrounding the disposal of these materials and has, through the years, taken measures to avoid their improper disposal.

The Company has settled, or contributed to the settlement of, past actions or claims brought against the Company relating to the disposal of

UniFirst Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

hazardous materials at several sites and there can be no assurance that the Company will not have to expend material amounts to remediate the consequences of any such disposal in the future.

The Company has settled, or contributed to the settlement of, past actions or claims brought against the Company relating to the disposal of hazardous materials at several sites and there can be no assurance that the Company will not have to expend material amounts to remediate the consequences of any such disposal in the future.

GAAP requires that a liability for contingencies be recorded when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated.

6 unchanged sentences

The Company continues to address environmental conditions under terms of consent orders negotiated with the applicable environmental authorities or otherwise with respect to certain sites.

UniFirst Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

The Company has accrued certain costs related to certain sites, including but not limited to sites in Woburn and Somerville, Massachusetts, as it has been determined that the costs are probable and can be reasonably estimated.

The Company, together with multiple other companies, is party to a consent decree related to its property and parcels of land (the “Central Area”) at a site in Woburn, Massachusetts.

The Company , together with multiple other companies, is party to a consent decree related to its property and parcel s of land (the “Central Area”) at a site in Woburn, Massachusetts.

The United States Environmental Protection Agency (the “EPA”) has provided the Company and other signatories to the consent decree with comments on the design and implementation of groundwater and soil remedies at the Woburn site and investigation of environmental conditions in the Central Area.

15 unchanged sentences

The typical allocation of costs among PRPs.

UniFirst Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

There is usually a range of reasonable estimates of the costs associated with each site.

2 unchanged sentences

Where it believes that both the amount of a particular liability and the timing of the payments are reliably determinable, the Company adjusts the cost in current dollars using a rate of 3 % for inflation until the time of expected payment and discounts the cost to present value using current risk-free interest rates.

As of February 27, 2021, the risk-free interest rates utilized by the Company ranged from 1.4 % to 2.2 %.

As of May 29, 2021, the risk-free interest rates utilized by the Company ranged from 1.58 % to 2.26 %.

For environmental liabilities that have been discounted, the Company includes interest accretion, based on the effective interest method, in selling and administrative expenses on the accompanying Consolidated Statements of Income.

The changes to the Company’s environmental liabilities for the twenty-six weeks ended February 27, 2021 were as follows (in thousands):

February 27, 2021

The changes to the Company’s environmental liabilities for the thirty-nine weeks ended May 29, 2021 were as follows (in thousands):

Balance as of August 29, 2020

Revisions in estimates

Costs incurred for which reserves have been provided

2 unchanged sentences

Changes in discount rates

Balance as of February 27, 2021

Anticipated payments and insurance proceeds of currently identified environmental remediation liabilities as of February 27, 2021, for the next five fiscal years and thereafter, as measured in current dollars, are reflected below.

Balance as of May 29, 2021

UniFirst Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

Anticipated payments and insurance proceeds of currently identified environmental remediation liabilities as of May 29, 2021, for the next five fiscal years and thereafter, as measured in current dollars, are reflected below.

(In thousands)

4 unchanged sentences

Effect of discounting

Balance as of February 27, 2021

Balance as of May 29, 2021

Estimated insurance proceeds are primarily received from an annuity received as part of a legal settlement with an insurance company.

1 unchanged sentence

Annual proceeds received but not expended in the current year accumulate in this account and may be used in future years for costs related to this site through the year 2027.

As of February 27, 2021, the balance in this escrow account, which is held in a trust and is not recorded in the Company’s accompanying Consolidated Balance Sheet, was approximately $ 4.5 million.

As of May 29, 2021, the balance in this escrow account, which is held in a trust and is not recorded in the Company’s accompanying Consolidated Balance Sheet, was approximately $ 4.8 million.

Also included in estimated insurance proceeds are amounts the Company is entitled to receive pursuant to legal settlements as reimbursements from three insurance companies for estimated costs at the site in Uvalde, Texas.

The Company’s nuclear garment decontamination facilities are licensed by the Nuclear Regulatory Commission or, in certain cases, by the applicable state agency, and are subject to regulation by federal, state and local authorities.

The Company’s nuclear garment decontamination facilities are licensed by respective state agencies, as delegated authority by the Nuclear Regulatory Commission (the “NRC”) pursuant to the NRC’s Agreement State program and are subject to applicable federal and state radioactive material regulations.

In addition, the Company’s international locations (Canada, the United Kingdom and the European Union) are regulated by equivalent respective jurisdictional authorities.

There can be no assurance that such regulation will not lead to material disruptions in the Company’s garment decontamination business.

2 unchanged sentences

It is possible, however, that the future financial position and/or results of operations for any particular future period could be materially affected by changes in the Company’s assumptions or strategies related to these contingencies or changes out of the Company’s control.

UniFirst Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

In accordance with ASC 740, Income Taxes (“ASC 740”), each interim period is considered integral to the annual period and tax expense is measured using an estimated annual effective tax rate.

1 unchanged sentence

Effective tax rate

The Company’s effective tax rate for the thirteen weeks ended February 27, 2021 was 22.7 % as compared to 24.2 % for the corresponding period in the prior year.

The Company’s effective tax rate for the twenty-six weeks ended February 27, 2021 was 24.0 % as compared to 23.0 % for the corresponding period in the prior year.

The increase in the effective tax rate in the twenty-six weeks ended February 27, 2021 as compared to the corresponding period in the prior year was due to the release of certain tax reserves.

The Company’s effective tax rate for the thirteen weeks ended May 29, 2021 was 22.9 % as compared to 21.8 % for the corresponding period in the prior year.

The increase in the effective tax rate for the thirteen weeks ended May 29, 2021 as compared to the corresponding period in the prior year was due primarily to the impact of discrete tax benefits on lower income before taxes in the corresponding period in the prior year.

The Company’s effective tax rate for the thirty-nine weeks ended May 29, 2021 was 23.6 % as compared to 22.8 % for the corresponding period in the prior year.

The increase in the effective tax rate in the thirty-nine weeks ended May 29, 2021 as compared to the corresponding period in the prior year was due to the release of certain tax reserves.

Uncertain tax positions

The Company recognizes interest and penalties related to uncertain tax positions as a component of income tax expense, which is consistent with the recognition of these items in prior reporting periods.

During the twenty-six weeks ended February 27, 2021, there were no material changes in the amount of unrecognized tax benefits or the amount accrued for interest and penalties.

During the thirty-nine weeks ended May 29, 2021, there was a net increase in unrecognized tax position of $ 2.7 million.

The increase was comprised of a $ 3.5 million increase for new tax reserves offset by an $ 0.8 million decrease for the release of certain existing reserves due to the expiration of the statute of limitations.

UniFirst Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

and Canadian federal income tax statutes have lapsed for filings up to and including fiscal years 2015 and 2013, respectively.

6 unchanged sentences

Availability of credit requires compliance with certain financial and other covenants, including a maximum consolidated funded debt ratio and minimum consolidated interest coverage ratio as defined in the 2021 Credit Agreement.

The Company tests its compliance with these financial covenants on a fiscal quarterly basis.

As of May 29, 2021, the interest rates applicable to the Company’s borrowings under the 2021 Credit Agreement would be calculated as LIBOR plus 1.00 % at the time of the respective borrowing.

As of May 29, 2021, the Company had no outstanding borrowings and had outstanding letters of credit amounting to $ 67.5 million, leaving $ 107.5 million available for borrowing under the 2021 Credit Agreement.

As of May 29, 2021, the Company was in compliance with all covenants under the 2021 Credit Agreement.

Prior to March 26, 2021, the Company had a $ 250 million unsecured revolving credit agreement (the “Credit Agreement”) with a syndicate of banks, which was scheduled to mature on April 11, 2021 .

Under the Credit Agreement, the Company is able to borrow funds at variable interest rates based on, at its election, the Eurodollar rate or a base rate, plus in each case a spread based on the Company’s consolidated funded debt ratio.

Under the Credit Agreement, the Company was able to borrow funds at variable interest rates based on, at its election, the Eurodollar rate or a base rate, plus in each case a spread based on the Company’s consolidated funded debt ratio.

Availability of credit required compliance with certain financial and other covenants, including a maximum consolidated funded debt ratio and minimum consolidated interest coverage ratio as defined in the Credit Agreement.

The Company tested its compliance with these financial covenants on a fiscal quarterly basis.

As of February 27, 2021, the interest rates applicable to the Company’s borrowings under the Credit Agreement would be calculated as LIBOR plus 75 basis points at the time of the respective borrowing.

As of February 27, 2021, the Company had no outstanding borrowings and had outstanding letters of credit amounting to $ 67.5 million, leaving $ 182.5 million available for borrowing under the Credit Agreement.

UniFirst Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

As of February 27, 2021 , the Company was in compliance with all covenants under the Credit Agreement.

Accumulated Other Comprehensive Loss

The changes in each component of accumulated other comprehensive loss, net of tax, for the thirteen and twenty-six weeks ended February 27, 2021 and February 29, 2020 were as follows (in thousands):

Thirteen weeks ended February 27, 2021

The changes in each component of accumulated other comprehensive loss, net of tax, for the thirteen and thirty-nine weeks ended May 29, 2021 and May 30, 2020 were as follows (in thousands):

Thirteen weeks ended May 29, 2021

Instruments (1)

Comprehensive

Balance as of November 28, 2020

Balance as of February 27, 2021

Other comprehensive income (loss) before reclassification

1 unchanged sentence

comprehensive loss

Net current period other comprehensive income (loss)

Balance as of February 27, 2021

Twenty-six weeks ended February 27, 2021

Net current period other comprehensive (loss) income

Balance as of May 29, 2021

UniFirst Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

Thirty-nine weeks ended May 29, 2021

Instruments (1)

4 unchanged sentences

comprehensive loss

Net current period other comprehensive income (loss)

Balance as of February 27, 2021

Thirteen weeks ended February 29, 2020

Net current period other comprehensive (loss) income

Balance as of May 29, 2021

Thirteen weeks ended May 30, 2020

Instruments (1)

Comprehensive

Balance as of November 30, 2019

Other comprehensive income (loss) before reclassification

Balance as of February 29, 2020

Other comprehensive (loss) income before reclassification

Amounts reclassified from accumulated other

comprehensive loss

Net current period other comprehensive income (loss)

Balance as of February 29, 2020

UniFirst Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

Twenty-six weeks ended February 29, 2020

Net current period other comprehensive (loss) income

Balance as of May 30, 2020

Thirty-nine weeks ended May 30, 2020

Instruments (1)

1 unchanged sentence

Balance as of August 31, 2019

Other comprehensive income before reclassification

Other comprehensive income (loss) before reclassification

Amounts reclassified from accumulated other

comprehensive loss

Net current period other comprehensive income

Balance as of February 29, 2020

Net current period other comprehensive (loss) income

Balance as of May 30, 2020

Amounts are shown net of tax

Amounts reclassified from accumulated other comprehensive loss, net of tax, for the thirteen and twenty-six weeks ended February 27, 2021 and February 29, 2020 were as follows (in thousands):

Amounts reclassified from accumulated other comprehensive loss, net of tax, for the thirteen and thirty-nine weeks ended May 29, 2021 and May 30, 2020 were as follows (in thousands):

Thirteen weeks ended

Twenty-six weeks ended

February 27, 2021

February 29, 2020

February 27, 2021

February 29, 2020

Thirty-nine weeks ended

Pension benefit liabilities (net):

5 unchanged sentences

Total amounts reclassified, net of tax

UniFirst Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

Amounts included in selling and administrative expenses in the accompanying Consolidated Statements of Income.

17 unchanged sentences

Income before income taxes from MFG net of the intercompany MFG elimination offsets the merchandise amortization costs incurred by the U.S.

and Canadian Rental and Cleaning reporting segment as the merchandise costs of this

UniFirst Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

reporting segment are amortized and recognized based on inventories purchased from MFG at the transfer price which is above the Company’s manufacturing cost.

and Canadian Rental and Cleaning reporting segment as the merchandise costs of this reporting segment are amortized and recognized based on inventories purchased from MFG at the transfer price which is above the Company’s manufacturing cost.

The Corporate operating segment consists of costs associated with the Company’s distribution center, sales and marketing, information systems, engineering, procurement, supply chain, accounting and finance, human resources, other general and administrative costs and interest expense.

8 unchanged sentences

and Canadian Rental and Cleaning segment, with the remainder of the costs relating to the Specialty Garment and First Aid segments.

UniFirst Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

The Specialty Garments operating segment purchases, rents, cleans, delivers and sells, specialty garments and non-garment items primarily for nuclear and cleanroom applications and provides cleanroom cleaning services at limited customer locations.

3 unchanged sentences

Thirteen weeks ended

February 27, 2021

Operating income (loss)

1 unchanged sentence

Income (loss) before taxes

February 29, 2020

Operating income (loss)

1 unchanged sentence

Income (loss) before taxes

Twenty-six weeks ended

February 27, 2021

Thirty-nine weeks ended

Operating income (loss)

1 unchanged sentence

Income (loss) before taxes

February 29, 2020

Operating income (loss)

1 unchanged sentence

Income (loss) before taxes

UniFirst Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

Shares Repurchased and Dividends

5 unchanged sentences

The share repurchase program will be funded using the Company’s available cash or capacity under its 2021 Credit Agreement and may be suspended or discontinued at any time.

As of February 27, 2021, the Company had repurchased a total of 368,117 shares for an average price per share of $ 167.87 under the share repurchase program using cash on hand.

During the thirteen and twenty-six weeks ended February 27, 2021, the Company repurchased 12,200 and 53,200 shares for an average price per share of $ 189.96 and $ 179.21 , respectively.

During the thirteen weeks and twenty-six weeks ended February 29, 2020, the Company repurchased 20,500 and 71,100 shares for an average price per share of $ 206.34 and $ 199.77 , respectively.

As of May 29, 2021, the Company had repurchased a total of 368,117 shares for an average price per share of $ 167.87 under the share repurchase program using cash on hand.

The Company did no t repurchase any shares during the thirteen weeks ended May 29, 2021.

During the thirty-nine weeks ended May 29, 2021, the Company repurchased 53,200 shares for an average price per share of $ 179.21 .

During the thirteen and thirty-nine weeks ended May 30, 2020, the Company repurchased 46,667 and 117,767 shares for an average price per share of $ 161.65 and $ 184.67 , respectively.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements