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What changed in UNIFIRST CORP's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of UNIFIRST CORP's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+237 added−305 removedSource: 10-K (2025-10-29) vs 10-K (2024-11-14)

Top changes in UNIFIRST CORP's 2025 10-K

237 paragraphs added · 305 removed · 183 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

23 edited+15 added−28 removed20 unchanged
Biggest changeWe employ specialist, trained sales representatives including executive-level salespeople for our Strategic and National Accounts organization—with specialists in rental programs and in direct sale programs—to target the very largest national companies with broad uniform and/or facility services program needs. We believe that effective customer service is the most crucial element in developing and maintaining our market position.
Biggest changeWhile most of our sales representatives present a full range of service solutions. We believe that effective customer service is the most crucial element in developing and maintaining our market position. Our commitment to service excellence is reflected throughout our organization.
These fluctuations have been due to a number of factors, including: general economic conditions in our markets; the timing of acquisitions and of commencing start-up operations and related costs; our effectiveness in integrating acquired businesses and start-up operations; the timing of nuclear plant outages; volatility in raw material and labor costs; capital expenditures; seasonal rental and purchasing patterns of our customers; and price changes in response to competitive factors.
These fluctuations have been due to a number of factors, including: general economic conditions in our served markets; the timing of acquisitions and of commencing start-up operations and related costs; our effectiveness in integrating acquired businesses and start-up operations; the timing of nuclear plant outages; volatility in raw material and labor costs; capital expenditures; seasonal rental and purchasing patterns of our customers; and price changes in response to competitive factors.
There can be no assurance that acquired or leased locations have been operated in compliance with environmental laws and regulations or that future uses or conditions will not result in the imposition of liability upon us under such laws or expose us to third-party actions such as tort suits.
There can be no assurance that our acquired or leased locations have been operated in compliance with environmental laws and regulations or that future uses or conditions will not result in the imposition of liability upon us under such laws or expose us to third-party actions, such as tort suits.
We have settled, or contributed to the settlement of, past actions or claims brought against us relating to the disposal of hazardous materials at several sites and there can be no assurance that we will not have to expend material amounts to remediate the consequences of any such disposal in the future.
We have settled, or contributed to the settlement of, past actions or claims brought against us relating to the disposal of hazardous materials at several sites and there can be no assurance that we will not have to expend material amounts of resources to remediate the consequences of any such disposal in the future.
We continue to address environmental conditions under terms of consent orders negotiated with the applicable environmental authorities or otherwise with respect to certain sites. We routinely review and evaluate sites that may require remediation and monitoring and determine our estimated costs based on 4 various estimates and assumptions.
We continue to address environmental conditions under terms of consent orders negotiated with the applicable environmental authorities or otherwise with respect to certain sites. We routinely review and evaluate sites that may require remediation and monitoring and determine our estimated costs based on various estimates and assumptions.
Our proprietary information systems and our support service center enable us to respond to customer inquiries or issues within 24 hours, and our service personnel are specially trained to handle the daily contact work necessary to effectively manage customer relations.
Our information systems and our support service center enable us to respond to customer inquiries or issues within 24 hours, and our service personnel are specially trained to handle the daily contact work necessary to effectively manage customer relations.
Such laws often impose liability without regard to whether the owner or lessee knew of, or was responsible for the presence of such hazardous or toxic substances.
Such laws 3 often impose liability without regard to whether the owner or lessee knew of, or was responsible for, the presence of such hazardous or toxic substances.
In addition, the SEC maintains an internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, and you may access any materials we file with the SEC through the SEC’s website at www.sec.gov. 5
In addition, the SEC maintains an internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, and you may access any materials we file with the SEC through the SEC’s website at www.sec.gov. 4
We have built and maintain an extensive, proprietary database of prescreened and qualified business prospects that have been sourced from our various promotional initiatives, including mailers, web site contacts, advertising responses, sales calls and lists purchased from third-party providers.
We have built and maintain an extensive, proprietary database of prescreened and qualified business prospects that have been sourced from our various promotional initiatives, including mailers, website contacts, advertising responses, sales calls and lists purchased from third-party providers.
For a discussion of our accruals with respect to environmental liabilities and additional discussion regarding environmental matters, refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Annual Report on Form 10-K. Refer also to the risk factors set forth in this Annual Report on Form 10-K for additional information regarding environmental matters.
For a discussion of our accruals with respect to environmental liabilities and additional discussion regarding environmental matters, refer to “ Management’s Discussion and Analysis of Financial Condition and Results of Operations ” in this Annual Report on Form 10-K. Refer also to the risk factors set forth in this Annual Report on Form 10-K for additional information regarding environmental matters.
Our centralized services, specialized equipment and economies of scale generally allow us to be more cost effective in providing garment solutions and services than customers could be themselves, particularly those customers with high employee turnover rates. During the fiscal year ended August 31, 2024 (“fiscal 2024”), we manufactured approximately 65% of the garments placed in service.
Our centralized services, specialized equipment and economies of scale generally allow us to be more cost effective in providing garment solutions and services than customers could be themselves, particularly those customers with high employee turnover rates. During the fiscal year ended August 30, 2025 (“fiscal 2025”), we manufactured approximately 62% of the garments placed in service.
We also rent and sell industrial wiping products, floor mats, facility management and service products and other non-garment items, and provide restroom and cleaning supplies and first aid cabinet services and other safety supplies as well as certain safety training to a variety of manufacturers, retailers and service companies. We serve businesses of all sizes across multiple industry sectors.
We also rent and sell industrial wiping products, floor mats, facility management and service products and other non-garment items, and provide restroom and cleaning supplies and first aid cabinet services and other safety supplies as well as certain safety training to a variety of manufacturers, retailers and service companies.
We measure the speed and accuracy of our customer service efforts weekly and continuously survey, record and report satisfaction levels to evaluate current performance and highlight areas for improvement. 2 COMPETITION The uniform rental and sales industry is highly competitive.
We measure the speed and accuracy of our customer service efforts weekly and continuously survey, record and report satisfaction levels to evaluate current performance and highlight areas for improvement. COMPETITION The uniform rental and sales industry is highly competitive. Our principal competitors offering uniform rental programs include Cintas Corporation, Alsco, and Vestis Corporation.
Croatti agreed to transition from his role as an Executive Officer of the Company effective as of November 30, 2024. GOVERNMENT REGULATIONS We, like our competitors, are subject to various federal, state and local laws and regulations governing, among other things, air emissions, wastewater discharges, and the generation, handling, storage, transportation, treatment and disposal of hazardous wastes and other substances.
GOVERNMENT REGULATIONS We, like our competitors, are subject to various federal, state and local laws and regulations governing, among other things, air emissions, wastewater discharges, and the generation, handling, storage, transportation, treatment and disposal of hazardous wastes and other substances.
These prospect records serve as a primary targeting resource for our professional sales and marketing organization and are constantly updated, expanded and maintained by an in-house team of specialist database qualifiers and managers.
These prospect records serve as a primary targeting resource for our professional sales and marketing organization and are constantly updated, expanded and maintained by an in-house team of specialist database qualifiers and managers. 2 We employ a large team of trained professional sales representatives to market our services to potential customers and develop new accounts.
Our uniform program is intended not only to help our customers foster a company identity, but also to enhance their corporate image and improve employee safety, productivity and morale.
Our uniform program is intended not only to help our customers foster a company identity, but also to enhance their corporate image and improve employee safety, productivity and morale. We primarily serve our customers pursuant to written service contracts that range in duration from three to five years.
For example, our leadership development program provides leadership education, operational knowledge and hands-on business experience within the industrial laundry and facilities services industry and is designed to develop our future managers. We also seek to promote a family culture and believe that our workforce is critical to our success and to the service of our customers.
We provide continuous training and development opportunities, including our leadership development program, which offers leadership education, operational knowledge, and hands-on business experience within the industrial laundry and facility services industry to develop future managers. We seek to foster a employee-intimate culture and believe our workforce is critical to our long-term success and to the service of our customers.
There can be no assurance that such scrutiny and regulation will not lead to the shut-down of such facilities or otherwise cause material disruptions in our garment decontamination business.
There can be no assurance that such scrutiny and regulation will not lead to the shut-down of such facilities or otherwise cause material disruptions in our garment decontamination business. Additional information regarding our environmental, health, and safety initiatives is available in UniFirst’s Environmental, Social and Governance Report, which can be found on our website at www.unifirst.com/sustainability-report.
We primarily serve our customers pursuant to written service contracts that range in duration from three to five years. 1 Historically, our revenues and operating results have varied from quarter to quarter and are expected to continue to fluctuate in the future.
Historically, our revenues and operating results have varied from quarter to quarter and are expected to continue to fluctuate in the future.
We currently service over 300,000 customer locations in the United States (“U.S.”), Canada and Europe out of more than 270 UniFirst customer service, distribution and manufacturing facilities. MARKETING, SALES, AND CUSTOMER SERVICE We market our products and services to a diverse customer base and to prospects that range across virtually all industry segments.
MARKETING, SALES, AND CUSTOMER SERVICE We market our products and services to a diverse customer base and to prospects that range across virtually all industry segments.
We design, manufacture, personalize, rent, clean, deliver, and sell a wide range of uniforms and protective clothing, including shirts, pants, jackets, coveralls, lab coats, smocks, aprons and specialized protective wear, such as flame resistant and high visibility garments.
We design, manufacture, personalize, rent, clean, deliver, and sell a wide range of uniforms and protective clothing.
HUMAN CAPITAL As of August 31, 2024, we employed approximately 16,000 persons, and less than 1% of our U.S. employees are represented by a union pursuant to a collective bargaining agreement. We consider our employee relations to be good.
We focus on the safety and well-being of our team partners by providing regular safety training, personal protective equipment, and a comprehensive suite of healthcare, wellness, and other employee benefits. Less than 1% of our U.S. employees are represented by a union under a collective bargaining agreement, and we consider our employee relations to be good.
In addition to our traditional rental competitors, we may increasingly compete in the future with businesses that focus on selling uniforms, facilities services products and other related items. MANUFACTURING AND SOURCING We manufactured approximately 65% of all garments we placed in service during fiscal 2024.
In addition to our traditional rental competitors, we also compete with businesses that focus on selling uniforms, facility service products, and other related items directly to end customers. The direct sales market is highly fragmented and includes national, regional, and local providers. The level of competition varies by geographic area and product category.
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At certain specialized facilities, like nuclear plants, we also decontaminate and clean work clothes and other items that may have been exposed to radioactive materials, and service special cleanroom protective wear and facilities.
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Our safety offerings also include fire protection services, such as inspection, testing, and maintenance of fire extinguishers and other fire safety equipment. We serve businesses of all sizes across multiple industry sectors.
Removed
These were primarily work pants and shirts manufactured at two of our plants located in San Luis Potosi, Mexico, one plant located in Managua, Nicaragua, as well as at subcontract manufacturers that we utilize within our sourcing strategy to balance demand and optimize costs.
Added
Prior to May 31, 2025, we organized our business into six operating segments: U.S. Rental and Cleaning, Canadian Rental and Cleaning, Manufacturing (“MFG”), Specialty Garments Rental and Cleaning (“Specialty Garments”), First Aid and Corporate. The U.S.
Removed
CUSTOMERS We serve businesses of all sizes across multiple industries and sectors. During each of the past three years, no single customer in our Core Laundry Operations segment accounted for more than 10% of our revenues.
Added
Rental and Cleaning and Canadian Rental and Cleaning operating segments were previously combined to form the U.S. and Canadian Rental and Cleaning reporting segment, and as a result, we had five reporting segments. We previously referred to our U.S. and Canadian Rental and Cleaning, MFG, and Corporate segments combined as our “Core Laundry Operations”.
Removed
Our typical customers include automobile service centers and dealers, delivery services, food and general merchandise retailers, manufacturers, maintenance facilities, restaurants and food-related businesses, healthcare providers including vaccine manufacturers, business service providers, soft and durable goods wholesalers, transportation and warehousing companies, energy production and transmission operations, and many others who require employee clothing on the job for image, identification, protection and/or utility purposes.
Added
Beginning with the fourth quarter we reorganized our business into three reportable operating segments. Our three operating and reportable segments consist of the following: Uniform & Facility Service Solutions: This reporting segment consolidates the former Corporate, MFG and U.S. and Canadian Rental and Cleaning segments and includes our cleanroom operations, which was previously part of the Specialty Garments reporting segment.
Removed
Among the largest customers of our conventional uniform rental business are divisions, units, regional operations or franchised agencies of major, nationally recognized organizations. With respect to our Specialty Garments segment, typical customers include government agencies, research and development laboratories, high technology companies, cleanroom operators, and utilities operating nuclear reactors.
Added
The Uniform & Facility Service Solutions reporting segment designs, manufactures, purchases, rents, cleans, delivers and sells, uniforms and protective clothing and non-garment items in the U.S. and Canada. The segment, through our cleanroom operations, also purchases, rents, cleans, delivers and sells specialty garments and non-garment items primarily for cleanroom applications and provides cleanroom cleaning at limited customer locations.
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Marketing contact is made through print advertising, direct mail, digital advertising, publicity, trade shows, catalogs, telemarketing, multiple web sites and direct field sales representation.
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Additionally, the Uniform & Facility Service Solutions consists of our distribution center, sales and marketing, information systems, engineering, materials management, manufacturing planning, finance, budgeting, human resources, other general and administrative costs and interest expense.
Removed
To aid in the effective marketing of products and services, we supply sales representatives with an extensive selection of sales aids, brochures, presentation materials and vertical market communications tools. We also provide representatives with detailed on-line profiles of high opportunity markets to educate them on the typical issues, needs and concerns of those markets.
Added
First Aid & Safety Solutions: We renamed our First Aid reporting segment as the First Aid & Safety Solutions reporting segment to better reflect the scope of services and products offered.
Removed
This helps establish credibility and aids their ability to deliver value-based solutions. We employ a large team of trained professional sales representatives to market our services to potential customers and develop new accounts.
Added
The First Aid & Safety Solutions reporting segment sells first aid cabinet services, non-prescription medicines and safety supplies, and provides certain safety training. 1 Other: This reporting segment currently consists of our nuclear business, which was previously part of the Specialty Garments reporting segment with our cleanroom business.
Removed
While most of our sales representatives present a full range of service solutions, we also have dedicated representatives for select products and services as well as for specific markets. For example, in certain geographic markets we employ teams of dedicated facility services sales representatives who focus exclusively on developing business for our floor care, restroom and related service programs.
Added
The segment purchases, rents, cleans, delivers and sells, specialty garments and non-garment items primarily for nuclear applications. The modifications to our reporting and operating segments reflect how we assess performance and allocate resources.
Removed
Our commitment to service excellence is reflected throughout our organization. Our route sales representatives are the first line of continuing customer contact. They are supported by local customer service representatives, local service management staff, and local operations management leaders, all of whom are focused on addressing the ongoing needs of customers, constantly delivering high-value service and pursuing total customer satisfaction.
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For a further discussion of our reporting segments, refer to “ Management’s Discussion and Analysis of Financial Condition and Results of Operations ” and Note 15, “ Segment Reporting ” to our Consolidated Financial Statements in this Annual Report on Form 10-K.
Removed
The principal sources of differentiation in the industry are the range of products and services, the quality of service and pricing. Our principal competitors include Cintas Corporation, Alsco and Vestis Corporation. The remainder of the market is divided among several hundred smaller businesses, mostly serving a single or a limited number of geographic service areas.
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Our fiscal year ends on the last Saturday in August and generally consists of 52 weeks; however, approximately every five or six years includes a 53rd week, which can affect year-over-year comparability of revenues and operating results. CUSTOMERS We serve businesses of all sizes across multiple industries and sectors.
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Given how much of our success depends on our employee team partners, we strive to recruit, develop and retain the best talent. We provide continuous training to our team partners along with opportunities to advance.
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We provide our products and services to over 300,000 customer locations in the United States (“U.S.”), Canada and Europe. In the last three years, no individual customer in our Uniform & Facility Service Solutions segment accounted for greater than 10% of our total revenue.
Removed
In addition, we focus on the safety and well-being of our team partners. We provide safety training and personal protective equipment. We also provide our team partners with competitive healthcare, wellness and other benefits. INFORMATION ABOUT OUR EXECUTIVE OFFICERS Our executive officers are as follows: Name Age Position Steven S.
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The principal sources of differentiation in the industry are the range of products and services, the quality of service, and pricing. Businesses may also elect to perform certain services internally rather than outsource them. MANUFACTURING AND SOURCING We manufactured approximately 62% of all garments we placed in service during fiscal 2025.
Removed
Sintros 51 President and Chief Executive Officer Shane O’Connor 50 Executive Vice President and Chief Financial Officer Kelly Rooney 50 Executive Vice President and Chief Operating Officer David M. Katz 61 Executive Vice President, Sales and Marketing David A. DiFillippo 67 Executive Vice President, Operations William M. Ross 63 Executive Vice President, Operations Michael A.
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HUMAN CAPITAL As of August 30, 2025, we employed approximately 16,000 team partners across our operations. Our people are fundamental to our success, and we strive to recruit, develop, and retain the best talent.
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Croatti 55 Executive Vice President, Operations The principal occupation and positions for the past five years of our executive officers named above are as follows: Steven S. Sintros joined our Company in 2004. Mr. Sintros is our President and Chief Executive Officer and a Director. He has had overall responsibility for management of our Company since 2017.
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Such report is not deemed to be incorporated into this Annual Report on Form 10-K or the documents incorporated by reference into this Annual Report on Form 10-K.
Removed
He previously served as our Chief Financial Officer from 2009 until 2018. Mr. Sintros served as a Finance Manager in 2004 and Corporate Controller from 2005 until 2009. 3 Shane O’Connor joined our Company in 2005. Mr. O’Connor is an Executive Vice President and our Chief Financial Officer.
Removed
He has had primary responsibility for overseeing the financial functions of our Company, as well as our information systems department, since 2018. Mr. O’Connor previously served as our Corporate Controller from 2009 to 2016.
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In 2016, he left the Company to take the role of Senior Vice President and Chief Financial Officer at Unidine Corporation, a managed dining services company, and he then rejoined our Company in 2018. Kelly Rooney joined our Company in September 2024 and has primary responsibility for overseeing the administrative and operational functions of our Company.
Removed
Prior to joining UniFirst, Ms. Rooney held various operational roles at Waste Management, including as an Area General Manager from August 2020 to September 2021 and a Director of Operations from April 2019 to August 2020. Most recently, Ms.
Removed
Rooney served as Senior Vice President and Chief Human Resources Officer from August 2022 to September 2024 and Vice President, Human Resources from September 2021 to August 2022 at Waste Management. As Chief Human Resources Officer, Ms.
Removed
Rooney was responsible for leading the development and implementation of Waste Management’s overall human capital, employee experience and operational effectiveness strategy, with a focus on building organizational health and capability and developing talent. Prior to joining Waste Management, Ms.
Removed
Rooney held various operational and leadership roles at other companies in the waste management industry, including at Advanced Disposal Services, Inc., where she was the Regional General Manager from 2015 to 2019 and Director of Operations, Recycling from 2012 to 2015. David M. Katz joined our Company in 2009. Mr.
Removed
Katz is an Executive Vice President and has had primary responsibility for overseeing the sales and marketing functions since joining our Company. Prior to joining our Company, Mr.
Removed
Katz worked for DHL Express where he served as the Northeast Vice President of Field Sales from 2003 to 2007, the Northeast Vice President of National Account Sales from 2007 to 2008 and the Senior Vice President and General Manager of the Northeast from 2008 until 2009. David A. DiFillippo joined our Company in 1979. Mr.
Removed
DiFillippo is an Executive Vice President, Operations and has had primary responsibility for overseeing the operations of certain regions in the U.S. and Canada since 2002. From 2000 through 2002, Mr. DiFillippo served as Vice President, Central Rental Group and, prior to 2000, he served as a Regional General Manager. William M. Ross joined our Company in 1989. Mr.
Removed
Ross is an Executive Vice President, Operations and has had primary responsibility for overseeing specified regions in the U.S. since 2016. From 2002 to 2016, Mr. Ross served as Regional Vice President of the Company. Prior to 2002, Mr. Ross held several sales and operations management positions at the Company. Michael A. Croatti joined our Company in 1987. Mr.
Removed
Croatti is an Executive Vice President, Operations and has had primary responsibility for overseeing specified regions in the U.S. and the Company’s overall service operations since 2015.
Removed
From 2012 through 2015, he served as Senior Vice President, Service; from 2002 through 2012, he served as Vice President, Central Rental Group; and prior to 2002, he held various operating positions within the Company. Michael A. Croatti is the nephew of Cynthia Croatti, a member of our Board of Directors. On September 16, 2024, Michael A.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

61 edited+8 added−9 removed102 unchanged
Biggest changeNo assurances can be given that these accruals will be sufficient or that the costs of such decommissioning will not substantially exceed such accruals, as our facts, circumstances or estimates change, including changes in the Company’s estimated useful lives of the underlying assets, estimated dates of decommissioning, changes in decommissioning costs, changes in federal or state regulatory guidance on the decommissioning of such facilities, or other changes in estimates.
Biggest changeNo assurances can be given that these accruals will be sufficient or that the costs of such decommissioning will not substantially exceed such accruals, as our facts, circumstances or estimates change, including changes in the Company’s estimated useful lives of the underlying assets, estimated dates of decommissioning, changes in decommissioning costs, changes in federal or state regulatory guidance on the decommissioning of such facilities, or other changes in estimates. 12 In addition to contingencies and claims relating to environmental compliance matters, we may from time to time be subject to legal or regulatory proceedings and claims related to our business operations which may have a material adverse effect on our financial condition and operating results.
Our failure to implement successfully our acquisition strategy and to grow our business could adversely affect our ability to increase our revenues and could negatively impact our profitability. As part of our growth strategy, we intend to continue to actively pursue additional acquisition opportunities. However, as discussed above, we compete with others within our industry for suitable acquisition candidates.
Our failure to successfully implement our acquisition strategy and to grow our business could adversely affect our ability to increase our revenues and could negatively impact our profitability. As part of our growth strategy, we intend to continue to actively pursue additional acquisition opportunities. However, as discussed above, we compete with others within our industry for suitable acquisition candidates.
The rules dealing with U.S. federal, state and local and non-U.S. taxation are regularly under review by persons involved in the legislative process and by the Internal Revenue Service (“IRS”) and the U.S. Treasury Department and other taxing authorities. Changes to tax laws (which changes may have retroactive application) could adversely affect us or holders of our Common Stock.
The rules dealing with U.S. federal, state and local and non-U.S. taxation are regularly under review by persons involved in the legislative process and by the Internal Revenue Service (“IRS”), the U.S. Treasury Department and other taxing authorities. Changes to tax laws (which changes may have retroactive application) could adversely affect us or holders of our Common Stock.
Our international operations are also subject to other risks, including the requirement to comply with changing and conflicting national and local regulatory requirements, including, without limitation, with respect to sustainability matters; potential difficulties in staffing and labor disputes; managing and obtaining support and distribution for local operations; credit risk or financial condition of local customers; potential imposition of restrictions on investments; potentially adverse tax consequences, including imposition or increase of withholding and other taxes on remittances and other payments by subsidiaries; foreign exchange controls; and local political and social conditions.
Our international 8 operations are also subject to other risks, including the requirement to comply with changing and conflicting national and local regulatory requirements, including, without limitation, with respect to sustainability matters; potential difficulties in staffing and labor disputes; managing and obtaining support and distribution for local operations; credit risk or financial condition of local customers; potential imposition of restrictions on investments; potentially adverse tax consequences, including imposition or increase of withholding and other taxes on remittances and other payments by subsidiaries; foreign exchange controls; and local political and social conditions.
If we fail to 10 comply with such laws or regulations, we may be subject to litigation, monetary damages, enforcement actions or fines in one or more jurisdictions, which could have an adverse effect on our business. We also rely on systems and applications provided by third-party vendors for certain information technology services.
If we fail to comply with such laws or regulations, we may be subject to litigation, monetary damages, enforcement actions or fines in one or more jurisdictions, which could have an adverse effect on our business. We also rely on systems and applications provided by third-party vendors for certain information technology services.
If these third-party vendors, or our suppliers or other vendors, experience service interruptions, security breaches, cyber-attacks, computer viruses, ransomware or other similar events, customer, employee or other proprietary information could be compromised and it could as a result or otherwise, have an adverse effect on our business. Our business may be subject to seasonal and quarterly fluctuations.
If these third-party vendors, or our suppliers or other vendors, experience service interruptions, security breaches, cyber-attacks, 9 computer viruses, ransomware or other similar events, customer, employee or other proprietary information could be compromised and it could as a result or otherwise, have an adverse effect on our business. Our business may be subject to seasonal and quarterly fluctuations.
We recognize as a liability the present value of the estimated future costs to decommission these facilities. The estimated liability is based on historical experience in decommissioning nuclear laundry 13 facilities, estimated useful lives of the underlying assets, external vendor estimates as to the cost to decommission these assets in the future, and federal and state regulatory requirements.
We recognize as a liability the present value of the estimated future costs to decommission these facilities. The estimated liability is based on historical experience in decommissioning nuclear laundry facilities, estimated useful lives of the underlying assets, external vendor estimates as to the cost to decommission these assets in the future, and federal and state regulatory requirements.
Although we believe that our current tax provisions are reasonable and appropriate, there can be no assurance that these items 15 will be settled for the amounts accrued, that additional tax exposures will not be identified in the future or that additional tax reserves will not be necessary for any such exposures.
Although we believe that our current tax provisions are reasonable and appropriate, there can be no assurance that these items will be settled for the amounts accrued, that additional tax exposures will not be identified in the future or that additional tax reserves will not be necessary for any such exposures.
If we are unable to remediate the material weaknesses appropriately and timely, or are otherwise unable to maintain effective internal control over financial reporting or disclosure controls and procedures, our ability to record, process and report financial information accurately, and to prepare financial statements within required time periods, could be adversely affected, which could subject us to litigation or investigations requiring management resources and payment of legal and other expenses, negatively affect investor confidence in our financial statements and have a material adverse effect on our business, results of operations, financial condition and stock price.
If we are unable to remediate the material weakness appropriately and timely, or are otherwise unable to maintain effective internal control over financial reporting or disclosure controls and procedures, our ability to record, process and report financial information accurately, and to prepare financial statements within required time periods, could be adversely affected, which could subject us to litigation or investigations requiring management resources and payment of legal and other expenses, negatively affect investor confidence in our financial statements and have a material adverse effect on our business, results of operations, financial condition and stock price.
Continued high interest rates or increases in interest rates, especially if coupled with reduced government spending and volatility in financial markets, may have the effect of further increasing economic uncertainty and heightening these risks, which may result in economic recession.
Continued high interest rates or increases in interest rates, especially if coupled with reduced government spending and volatility in financial markets, may have the effect of further increasing economic uncertainty and heightening these risks, which may result in an economic recession.
Any increase in the amount of taxes we owe, including any fines or penalties, as a result of challenges to our tax filing positions could result in a material adverse effect on our business, results of operations and financial condition.
Any increase in the amount of taxes we owe, including any fines or penalties, as a result of challenges to our tax filing positions could result in a material adverse effect on our 14 business, results of operations and financial condition.
The strength of the U.S. dollar has generally increased recently as compared to other 9 currencies, which has had, and may continue to have, an adverse effect on our operating results as reported in U.S. dollars.
The strength of the U.S. dollar has generally increased recently as compared to other currencies, which has had, and may continue to have, an adverse effect on our operating results as reported in U.S. dollars.
Any failure to comply with applicable laws, rules and regulations could result in substantial fines or penalties by government authorities, payment of damages to private litigants or possible revocation of our authority to conduct our operations, which could materially adversely affect our ability to service customers and our results of operations. 14 Changes in or new interpretations of the governmental regulatory framework may affect our contract terms and may reduce our sales or profits.
Any failure to comply with applicable laws, rules and regulations could result in substantial fines or penalties by government authorities, payment of damages to private litigants or possible revocation of our authority to conduct our operations, which could materially adversely affect our ability to service customers and our results of operations. 13 Changes in or new interpretations of the governmental regulatory framework may affect our contract terms and may reduce our sales or profits.
These events could result in disruption of customer service, physical damage to one or more key operating facilities, the temporary closure of one or more key operating facilities or the temporary disruption of information systems.
These events could result in disruption of customer service, physical damage to one or more key operating facilities, the temporary closure of one or more key operating facilities or the 10 temporary disruption of information systems.
There can be no assurance that we will be able to manage our expanding operations successfully, that any acquired business, including Clean, will perform as we expect, or that we will be able to maintain or accelerate our growth, and any failure to do so could have an adverse effect on our results of operations and financial condition.
There can be no assurance that we will be able to manage our expanding operations successfully, that any acquired business will perform as we expect, or that we will be able to maintain or accelerate our growth, and any failure to do so could have an adverse effect on our results of operations and financial condition.
If not remediated appropriately and timely, such material weaknesses could adversely impact our ability to record, process and report financial information accurately, result in loss of investor confidence and have a material adverse impact on our business, results of operations, financial condition and stock price.
If not remediated appropriately and timely, such material weakness could adversely impact our ability to record, process and report financial information accurately, result in loss of investor confidence and have a material adverse impact on our business, results of operations, financial condition and stock price.
Unexpected events, including, without limitation, fires at facilities, natural disasters as a result of climate change or otherwise, such as hurricanes, earthquakes, floods and tornadoes, public health emergencies, war or terrorist activities, including the conflicts in the Middle East or between Russia and Ukraine, unplanned utility outages, pandemics such as the 11 COVID-19 pandemic, supply disruptions, failure of equipment or information systems, temporary or long-term disruption of our computer systems, or changes in laws and/or regulations impacting our business, could have a material adverse impact on our operating results.
Unexpected events, including, without limitation, fires at facilities, natural disasters as a result of climate change or otherwise, such as hurricanes, earthquakes, floods and tornadoes, public health emergencies, terrorist activities, geopolitical issues including war or other conflicts such as conflicts in the Middle East or between Russia and Ukraine, unplanned utility outages, pandemics such as the COVID-19 pandemic, supply disruptions, failure of equipment or information systems, temporary or long-term disruption of our computer systems, or changes in laws and/or regulations impacting our business, could have a material adverse impact on our operating results.
Such factors include, but are not limited to, uncertainties caused by an economic recession or other adverse economic conditions, including, without limitation, as a result of elevated inflation or interest rates or extraordinary events or circumstances such as geopolitical conflicts like the conflict between Russia and Ukraine and disruption in the Middle East, and their impact on our customers’ businesses and workforce levels, disruptions of our business and operations, including limitations on, or closures of, our facilities, or the business and operations of our customers or suppliers in connection with extraordinary events or circumstances, uncertainties regarding our ability to consummate acquisitions and successfully integrate acquired businesses, and the performance of such businesses, uncertainties regarding any existing or newly-discovered expenses and liabilities related to environmental compliance and remediation, any adverse outcome of pending or future contingencies or claims, our ability to compete successfully without any significant degradation in our margin rates, seasonal and quarterly fluctuations in business levels, our ability to preserve positive labor relationships and avoid becoming the target of corporate labor unionization campaigns that could disrupt our business, the effect of currency fluctuations on our results of operations and financial condition, our dependence on third parties to supply us with raw materials, which such supply could be severely disrupted as a result of extraordinary events or circumstances such as the conflict between Russia and Ukraine, any loss of key management or other personnel, increased costs as a result of any changes in federal, state, international or other laws, rules and regulations or governmental interpretation of such laws, rules and regulations, uncertainties regarding, or adverse impacts from continued high price levels of natural gas, electricity, fuel and labor or increases in such costs, the negative effect on our business from sharply depressed oil and natural gas prices, the continuing increase in domestic healthcare costs, increased workers’ compensation claim costs, increased healthcare claim costs, our ability to retain and grow our customer base, demand and prices for our products and services, fluctuations in our Specialty Garments business, political or other instability, supply chain disruption or infection among our employees in Mexico and Nicaragua where our principal garment manufacturing plants are located, our ability to properly and efficiently design, construct, implement and operate a new enterprise resource planning (“ERP”) computer system, interruptions or failures of our information technology systems, including as a result of cyber-attacks, additional professional and internal costs necessary for compliance with any changes in or additional SEC, New York Stock Exchange (the “NYSE”) and accounting or other rules, including, without limitation, recent rules adopted by the SEC regarding climate-related and cybersecurity-related disclosures, strikes and unemployment levels, our efforts to evaluate and potentially reduce internal costs, the impact of foreign trade policies and tariffs or other impositions on imported goods on our business, results of operations and financial condition, our ability to successfully implement our business strategies and processes, including our capital allocation strategies, our ability to successfully remediate the material weaknesses in internal control over financial reporting disclosed in this Annual Report on Form 10-K in an appropriate and timely matter or at all, and the other factors described under “Part I, Item 1A.
Such factors include, but are not limited to, uncertainties caused by an economic recession or other adverse economic conditions, including, without limitation, as a result of elevated inflation or interest rates or extraordinary events or circumstances such as geopolitical conflicts like the conflict between Russia and Ukraine and disruption in the Middle East, and their impact on our customers’ businesses and workforce levels, disruptions of our business and operations, including limitations on, or closures of, our facilities, or the business and operations of our customers or suppliers in connection with extraordinary events or circumstances, uncertainties regarding our ability to consummate acquisitions and successfully integrate acquired businesses, and the performance of such businesses, uncertainties regarding any existing or newly-discovered expenses and liabilities related to environmental compliance and remediation, any adverse outcome of pending or future contingencies or claims, our ability to compete successfully without any significant degradation in our margin rates, seasonal and quarterly fluctuations in business levels, our ability to preserve positive labor relationships and avoid becoming the target of corporate labor unionization campaigns that could disrupt our business, the effect of currency fluctuations on our results of operations and financial condition, our dependence on third parties to supply us with raw materials, which such supply could be severely disrupted as a result of extraordinary events or circumstances such as the conflict between Russia and Ukraine, any loss of key management or other personnel, increased costs as a result of any changes in federal, state, international or other laws, rules and regulations or governmental interpretation of such laws, rules and regulations, uncertainties regarding, or adverse impacts from continued high price levels of natural gas, electricity, fuel and labor or increases in such costs, the negative effect on our business from sharply depressed oil and natural gas prices, the continuing increase in domestic healthcare costs, increased workers’ compensation claim costs, increased healthcare claim costs, our ability to retain and grow our customer base, demand and prices for our products and services, fluctuations in our nuclear business, political or other instability, supply chain disruption or infection among our employees in Mexico and Nicaragua where our principal garment manufacturing plants are located, our ability to properly and efficiently design, construct, implement and operate a new enterprise resource planning (“ERP”) computer system, interruptions or failures of our information technology systems, including as a result of cyber-attacks, additional professional and internal costs necessary for compliance with any changes in or additional SEC, New York Stock Exchange (the “NYSE”) and accounting or other rules, strikes and unemployment levels, our efforts to evaluate and potentially reduce internal costs, the impact of U.S. and foreign trade policies and tariffs or other impositions on imported goods on our business, results of operations and financial condition, our ability to successfully implement our business strategies and processes, including our capital allocation strategies, our ability to successfully remediate the material weakness in internal control over financial reporting disclosed in this Annual Report on Form 10-K in an appropriate and timely matter or at all, and the other factors described under “ Part I, Item 1A.
Our business could be adversely impacted if we have deficiencies in our disclosure controls and procedures or internal control over financial reporting, including as a result of the material weaknesses identified by management and discussed above.
Our business could be adversely impacted if we have deficiencies in our disclosure controls and procedures or internal control over financial reporting, including as a result of the material weakness identified by management and discussed above.
This competition may 7 increase the price for acquisitions and reduce the number of acquisition candidates available to us. As a result, our ability to acquire businesses in the future, and to acquire such businesses on favorable terms, may be limited.
This competition may 6 increase the price for acquisitions and reduce the number of acquisition candidates available to us. As a result, our ability to acquire businesses in the future, and to acquire such businesses on favorable terms, may be limited.
While we are in the process of implementing changes to remediate the material weaknesses identified, there can be no assurance that such remedial measures will be successful and we will be able to remediate the material weaknesses in a timely manner.
While we are in the process of implementing changes to remediate the material weakness identified, there can be no assurance that such remedial measures will be successful and we will be able to remediate the material weakness in a timely manner.
In addition, geopolitical conflicts, calamities or other events, including the conflict between Russian and Ukraine, disruption in the Middle East and public health events, may disrupt domestic and global business and financial markets and conditions.
In addition, geopolitical conflicts, calamities or other events, including the conflict between Russia and Ukraine, disruption in the Middle East and public health events, may disrupt domestic and global business and financial markets and conditions.
We may incur unexpected cost increases due to rising healthcare costs, the Affordable Care Act and other labor costs. In general, the cost of healthcare that we provide to our employees has grown over the last few years at a rate in excess of our revenue growth and, as a result, has negatively impacted our operating results.
We may incur unexpected cost increases due to rising healthcare costs and other labor costs. In general, the cost of healthcare that we provide to our employees has grown over the last few years at a rate in excess of our revenue growth and, as a result, has negatively impacted our operating results.
We identified material weaknesses in our internal control over financial reporting related to certain information technology general controls ( “ ITGCs ” ) supporting the manage change and manage access processes.
We identified material weakness in our internal control over financial reporting related to certain information technology general controls ( “ ITGCs ” ) supporting the manage change and manage access processes.
As a result of these factors, and depending on the effect of any modifications we have made and may make in the future to our employee healthcare plans and enrollment levels in those plans, including as a result of the Affordable Care Act or any future legislation or regulation affecting the healthcare industry, we expect that our future operating results will continue to be further adversely impacted by increasing healthcare costs.
As a result of these factors, and depending on the effect of any modifications we have made and may make in the future to our employee healthcare plans and enrollment levels in those plans or any future legislation or regulation affecting the healthcare industry, we expect that our future operating results will continue to be further adversely impacted by increasing healthcare costs.
In addition, our nuclear decontamination business tends to generate more revenue in the first and third fiscal quarters, which is when nuclear power plants typically schedule their plant outages and refuelings and thereby increase nuclear garment utilization. Moreover, a significant percentage of this segment’s revenues are generated from a limited number of nuclear power plant operator customers.
In addition, our nuclear decontamination business tends to generate more revenue in the first and third fiscal quarters, which is when nuclear power plants typically schedule refueling and maintenance outages and thereby increase nuclear garment utilization. Moreover, a significant percentage of this segment’s revenues are generated from a limited number of nuclear power plant operator customers.
We manufactured approximately 65% of all garments we placed in service during fiscal 2024. These were primarily work pants and shirts manufactured at two of our plants located in San Luis Potosi, Mexico, at one plant located in Managua, Nicaragua, and by subcontracted manufacturers that we utilize within our sourcing strategy to balance demand and optimize costs.
We manufactured approximately 62% of all garments we placed in service during fiscal 2025. These were primarily work pants and shirts manufactured at two of our plants located in San Luis Potosi, Mexico, at one plant located in Managua, Nicaragua, and by subcontracted manufacturers that we utilize within our sourcing strategy to balance demand and optimize costs.
These material weaknesses did not result in any identified misstatements to the financial statements, and there were no changes to previously issued financial results.
These material weakness did not result in any identified misstatements to the financial statements, and there were no changes to previously issued financial results.
As of August 31, 2024, we employed approximately 16,000 persons and less than 1% of our U.S. employees are represented by a union pursuant to a collective bargaining agreement. Competitors within our industry have been the target of corporate unionization campaigns by multiple labor unions.
As of August 30, 2025, we employed approximately 16,000 persons and less than 1% of our U.S. employees are represented by a union pursuant to a collective bargaining agreement. Competitors within our industry have been the target of corporate unionization campaigns by multiple labor unions.
This concentration subjects this business to significant risks and may result in greater volatility in this segment’s results of operations. Fluctuations in our nuclear decontamination business, including the loss of key customers of our Specialty Garments business, or a significant reduction in our business derived from such key customers, could materially adversely affect our results of operations and financial condition.
This concentration subjects this business to significant risks and may result in greater volatility in this segment’s results of operations. Fluctuations in our nuclear decontamination business, including the loss of key customers of our Other segment, or a significant reduction in our business derived from such key customers, could materially adversely affect our results of operations and financial condition.
Unanticipated issues related to integration may result in additional expense or in disruption to our operations, either of which could negatively impact our ability to achieve anticipated benefits. While we believe we will be able to fully integrate acquired businesses, such as Clean Uniform (“Clean”), we can give no assurance that we will be successful in this regard.
Unanticipated issues related to integration may result in additional expense or in disruption to our operations, either of which could negatively impact our ability to achieve anticipated benefits. While we believe we will be able to fully integrate acquired businesses, we can give no assurance that we will be successful in this regard.
We continue to address environmental conditions under terms of consent orders negotiated with the applicable environmental authorities or otherwise with respect to sites located in or related to certain sites.
We continue to address environmental conditions under terms of consent orders negotiated with the applicable environmental authorities or otherwise with respect to sites located in or related to certain sites. We have accrued certain costs related to certain sites.
In addition, the destruction or temporary loss of, or other disruptions with respect to, key facilities such as our distribution facility in Owensboro, Kentucky or our manufacturing facilities in Mexico, Nicaragua or Cave City, Arkansas, would have a material adverse effect on our operations and financial results.
In addition, the destruction or permanent or temporary loss of, or other disruptions with respect to, key facilities such as our distribution facility in Owensboro, Kentucky or our manufacturing facilities in Mexico or Nicaragua as a result of geopolitical issues or otherwise, or our manufacturing facility in Cave City, Arkansas, would have a material adverse effect on our operations and financial results.
Fluctuations in the nuclear portion of our Specialty Garments segment, including the loss of key customers or a significant reduction in our business derived from key customers, could disproportionately impact our revenue and net income and create volatility in the price of our Common Stock.
Fluctuations in our nuclear business in our Other segment, including the loss of key customers or a significant reduction in our business derived from key customers, could disproportionately impact our revenue and net income and create volatility in the price of our Common Stock.
Refer to Note 11, “Commitments and Contingencies”, of our Consolidated Financial Statements for further discussion, including regarding the tax assessment matter in Mexico. We are controlled by our principal shareholders, and our other shareholders may be unable to affect the outcome of shareholder voting.
Refer to Note 11, “ Commitments and Contingencies ”, of our Consolidated Financial Statements for further discussion, including regarding the tax assessment matter in Mexico. We are controlled by our principal shareholders, and our other shareholders may be unable to affect the outcome of shareholder voting.
However, if we were to experience difficulty obtaining any of our raw materials from such suppliers and were unable to obtain new materials or supplies from other industry suppliers, or if the cost of obtaining such materials or supplies were to increase, including in any case as a result of inflation, high or rising interest rates, geopolitical issues such as the conflict between Russia and Ukraine or other supply chain disruptions, it could adversely affect our results of operations.
However, if we were to experience difficulty obtaining any of our raw materials from such suppliers and were unable to obtain new materials or supplies from other industry suppliers, or if the cost of obtaining such materials or supplies were to increase, including in any case as a result of inflation, high or rising interest rates, tariffs or other impositions on imported goods, geopolitical issues such as the conflict between Russia and Ukraine or disruption in the Middle East, or other supply chain disruptions, it could adversely affect our results of operations.
Revenue denominated in currencies other than the U.S. dollar represented approximately 6.9%, 7.0% and 7.9% of total consolidated revenues for fiscal 2024, the fiscal year ended August 26, 2023 (“fiscal 2023”) and the fiscal year ended August 27, 2022 (“fiscal 2022”), respectively.
Revenue denominated in currencies other than the U.S. dollar represented approximately 7.0%, 6.9% and 7.0% of total consolidated revenues for fiscal 2025, the fiscal year ended August 31, 2024 (“fiscal 2024”) and the fiscal year ended August 26, 2023 (“fiscal 2023”), respectively.
In connection with our year-end assessment as part of this Annual Report, we determined that, as of August 31, 2024, we did not maintain effective internal control over financial reporting due to material weaknesses we identified in the design and operation of certain ITGCs relevant to our key accounting, reporting, and proprietary information technology (“IT”) systems, as more fully described in Part II, Item 9A, “Controls and Procedures” of this Form 10-K.
In connection with our year-end assessment as part of this Annual Report, we determined that, as of August 30, 2025, we did not maintain effective internal control over financial reporting due to material weakness we identified in the design and operation of certain ITGCs relevant to our key accounting, reporting, and proprietary information technology (“IT”) systems, as more fully described in Part II, Item 9A, “ Controls and Procedures ” of this Form 10-K.
We expect the ERP system and the new supply chain and procurement capabilities that it will provide to enable lower operating costs and customer churn through enhanced inventory utilization and vendor management, improved response times to customer orders and more efficient back-end processes.
We expect the ERP system and the new supply chain and procurement capabilities that it will provide to enable lower operating costs and customer churn through enhanced inventory utilization and vendor management, improved response times to customer orders and more efficient back-end processes. We believe these capabilities will allow us to more effectively respond to and mitigate supply chain challenges.
As disclosed in Part II, Item 9A of our Annual Report on Form 10-K for fiscal 2023, we previously identified a material weakness related to deficiencies in our manage change and manage access processes that were not designed and operating effectively.
As disclosed in Part II, Item 9A of our Annual Report on Form 10-K for fiscal 2024, we previously identified a material weakness related to deficiencies in our manage change and manage access processes that were not designed and operating effectively. These deficiencies affected all financially relevant business processes.
Unexpected events could disrupt our operations and have a material adverse impact on our operating results.
Unexpected events could disrupt our operations, including our reliance on key facilities, and have a material adverse impact on our operating results.
While our management believes that our employee relations are good, we cannot assure you that we will not become the target of campaigns similar to those faced by our competitors. The potential for unionization could increase if the U.S. Congress passes federal “card check” legislation in the future.
While our management believes that our employee relations are good, we cannot assure you that we will not become the target of campaigns similar to those faced by our competitors. The potential for unionization could increase in the future.
The rental and sales industry with respect to uniforms, workwear and facility services is highly competitive. The main sources of differentiation in the industry are quality of products, quality of service and price. Our leading competitors include Cintas Corporation, Alsco and Vestis Corporation.
The rental and sales industry for uniforms, workwear and facility services sector is highly competitive. The main sources of differentiation in the industry are quality of products and services, and price. Our principal competitors include Cintas Corporation, Alsco and Vestis Corporation.
Risk Factors” and elsewhere in this Annual Report on Form 10-K. We undertake no obligation to update any forward-looking statements to reflect events or circumstances arising after the date on which they are made. 6 RISKS RELATING TO OUR BUSINESS AND OPERATIONS We face intense competition within our industry, which may adversely affect our results of operations and financial condition.
We undertake no obligation to update any forward-looking statements to reflect events or circumstances arising after the date on which they are made. 5 RISKS RELATING TO OUR BUSINESS AND OPERATIONS We face intense competition within our industry, which may adversely affect our results of operations and financial condition.
In addition, we are also subject to tax audits in the U.S. and other jurisdictions in which we do business, including, but not limited to, various states, as well as Canada and the Canadian provinces of Alberta, British Columbia, Ontario, Saskatchewan, Quebec and New Brunswick, and Mexico. These audits can be complicated and can require several years to resolve.
In addition, we are also subject to tax audits in the U.S., Canada, Mexico, and other jurisdictions in which we do business, including, but not limited to, various states and Canadian provinces. These audits can be complicated and can require several years to resolve.
As of October 23, 2024, to the Company’s knowledge, the members of the Croatti family and other family members owned, directly or indirectly, in the aggregate approximately 3,558,435 shares of our Class B Common Stock, which represents approximately 19.2% of the aggregate number of outstanding shares of our Common Stock and Class B Common Stock, but approximately 70.3% of the combined voting power of the outstanding shares of our Common Stock and Class B Common Stock.
As of October 22, 2025, to the Company’s knowledge, the members of the Croatti family and other family members owned, directly or indirectly, in the aggregate approximately 3,551,265 shares of our Class B Common Stock, which represents approximately 19.6% of the aggregate number of outstanding shares of our Common Stock and Class B Common Stock, but approximately 70.9% of the combined voting power of the outstanding shares of our Common Stock and Class B Common Stock.
Federal Reserve actions, including elevated interest rates and/or increases in interest rates, geopolitical issues or otherwise are difficult to predict and may have a material adverse impact on our business, results of operations and financial condition.
Federal Reserve actions, including elevated interest rates and/or increases in interest rates, geopolitical issues, U.S. and foreign tariffs or other impositions on imported goods or other causes are difficult to predict and may have a material adverse impact on our business, results of operations and financial condition.
Further, state-sponsored cyber-attacks could expand, including as part of the conflict between Russia and Ukraine, which could adversely affect our or our suppliers’ ability to maintain and enhance key cyber security and data protection measures.
Further, state-sponsored cyber-attacks could expand, including in connection with geopolitical conflicts such as the conflict between Russia and Ukraine, which could adversely affect our or our suppliers’ ability to maintain and enhance key cybersecurity and data protection measures.
In addition, if our costs increase and we are not able to pass along these price increases to our customers, our results of operations would be adversely affected, and the adverse impact may be material. Elevated inflation rates have at times had an adverse impact on our operating margins.
In addition, if our costs increase and we are not able to pass along these price increases to our customers, our results of operations would be adversely affected, and the adverse impact may be material.
Refer to Note 11, “Commitments and Contingencies”, of our Consolidated Financial Statements for further discussion.
Refer to Note 11, “ Commitments and Contingencies ”, of our Consolidated Financial Statements for further discussion.
Our failure to comply with these regulatory requirements would expose us to applicable penalties and increase the likelihood that we would be subject to unionization campaigns.
Our failure to comply with these regulatory requirements would expose us to applicable penalties and increase the likelihood that we would be subject to unionization campaigns. Further mandates would require additional increases to our labor costs and adversely affect our operating margins.
These deficiencies related to our CRM system and affected revenue and receivables as well as a group of legacy applications which affected revenue and receivables, supply inventory and merchandise in service.
At the end of fiscal 2025, the material weakness had been narrowed to deficiencies related to our CRM system which affected revenue and receivables as well as a group of legacy applications which affected revenue and receivables, supply inventory and merchandise in service.
Deficiencies in our internal control over financial reporting, including the material weaknesses identified by management and discussed above and any additional material weakness which may occur in the future, could result in misstatements of our results of operations, restatements of our financial statements, a decline in our stock price, or otherwise materially adversely affect our business, reputation, results of operations, financial condition or liquidity. 12 LEGAL AND REGULATORY RISKS The expenses we may incur to comply with environmental regulations, including costs associated with potential environmental remediation, may prove to be significant and could have a material adverse effect on our results of operations and financial condition.
Deficiencies in our internal control over financial reporting, including the material weakness identified by management and discussed above and any additional material weakness which may occur in the future, could result in misstatements of our results of operations, restatements of our financial statements, a decline in our stock price, or otherwise materially adversely affect our business, reputation, results of operations, financial condition or liquidity.
Certain of the claims to which we are subject are typically not covered by our available insurance. In addition, claims occasionally result in significant investigation and litigation expenses and, if successful, may result in material losses to us. Certain claims may also result in significant adverse publicity against us.
In addition, claims occasionally result in significant investigation and litigation expenses and, if successful, may result in material losses to us. Certain claims may also result in significant adverse publicity against us.
Our success depends on our ability to retain our current customers, renew our existing customer contracts and obtain new customers. Our ability to do so generally depends on a variety of factors, including the quality, price and responsiveness of our services, as well as our ability to market these services effectively and to differentiate ourselves from our competitors.
Our ability to do so generally depends on a variety of factors, including the quality, price and responsiveness of 7 our services, as well as our ability to market these services effectively and to differentiate ourselves from our competitors. In addition, renewal rates and our ability to obtain new customers are generally adversely affected by difficult economic and business conditions.
Further mandates would require additional increases to our labor costs and adversely affect our operating margins. 8 Our failure to retain our current customers, renew our existing customer contracts and enter into customer contracts with new customers could adversely affect our business, results of operations and financial condition.
Our failure to retain our current customers, renew our existing customer contracts and enter into customer contracts with new customers could adversely affect our business, results of operations and financial condition. Our success depends on our ability to retain our current customers, renew our existing customer contracts and obtain new customers.
While we worked during fiscal 2024 to remediate the previously identified material weakness, we were unable to fully remediate the material weakness prior to the end of fiscal 2024 and also identified deficiencies within the manage change and manage access processes related to additional applications.
While we worked during fiscal 2025 to remediate the previously identified material weakness, we were unable to fully remediate the material weakness prior to the end of fiscal 2025.
The remainder of the market, however, is divided among hundreds of smaller businesses, many of which serve one or a limited number of markets or geographic service areas. In addition to our traditional rental competitors, we compete with businesses that focus on selling uniforms and other related items, including single-use disposable garments for use in the nuclear industry.
In addition to our traditional rental competitors, we compete with businesses that focus on selling uniforms, facilities service products and other related items, including single-use disposable garments for use in the nuclear industry.
The material weaknesses identified as of the end of fiscal 2024 include design and operating deficiencies in the manage change and manage access processes impacting all financially relevant business processes. As a public company, we are required to establish and periodically evaluate and assess procedures with respect to our internal control over financial reporting.
As a public company, we are required to establish and periodically evaluate and assess procedures with respect to our internal control over financial reporting.
Any period of sustained inflation could pressure our margins in future periods. In addition, the U.S. Federal Reserve rapidly increased its benchmark interest rate from 2021 through 2023 in response to sustained elevated inflation and has only modestly reduced that rate thus far in 2024. Adverse economic conditions resulting from inflationary pressures, U.S.
Elevated inflation rates have at times had an adverse impact on our operating margins, including increased energy costs for our vehicles and plants and increased wages in the labor markets in which we compete. Any period of sustained inflation could pressure our margins in future periods. Adverse economic conditions resulting from inflationary pressures, U.S.
In addition to contingencies and claims relating to environmental compliance matters, we may from time to time be subject to legal or regulatory proceedings and claims related to our business operations which may have a material adverse effect on our financial condition and operating results.
LEGAL AND REGULATORY RISKS The expenses we may incur to comply with environmental regulations, including costs associated with potential environmental remediation, may prove to be significant and could have a material adverse effect on our results of operations and financial condition.
Removed
In addition, renewal rates and our ability to obtain new customers are generally adversely affected by difficult economic and business conditions.
Added
Risk Factors ” and elsewhere in this Annual Report on Form 10-K.
Removed
We believe these capabilities will allow us to more effectively respond to and mitigate the types of supply chain challenges we experienced during the COVID-19 pandemic.
Added
The remainder of the market, however, is divided among hundreds of smaller businesses, many of which serve one or a limited number of markets or geographic service areas.
Removed
We have 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.
Added
However, we made significant progress in remediating the design and operating effectiveness of our control environment and successfully addressed IT General Controls (ITGCs) for several key financial systems, including our legacy ERP platform and supporting tools and utilities.
Removed
We, together with multiple other companies, are party to a consent decree related to our property and parcels of land (the “ Central Area”) at a site in Woburn, Massachusetts. The U.S.
Added
U.S. and foreign trade policies, including the assessment of tariffs and other impositions on imported goods, may have a material adverse impact on our business. The U.S. and certain foreign countries have recently announced new or increased tariffs on imported goods, and additional tariffs or increases in tariffs could be assessed in the future.
Removed
Environmental Protection Agency (the “EPA”) has provided us 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. The consent decree does not address any remediation work that may be required in the Central Area.
Added
If any such tariffs or other impositions on imported goods were to increase our cost or difficulty of obtaining raw materials or products from suppliers and we were unable to mitigate the 11 impacts of any such increased costs or difficulties, it could have a material adverse impact on our business and our results of operations.
Removed
We, and other signatories, have implemented and proposed to do additional work at the Woburn site but many of the EPA’s comments remain to be resolved. We have accrued costs to perform certain work responsive to the EPA’s comments. Additionally, we have implemented mitigation measures and continue to monitor environmental conditions at a site in Somerville, Massachusetts.
Added
In addition, any such tariffs or other impositions on imported goods could have a negative adverse impact on economic conditions generally and on the businesses of our customers, including decreases in wearer levels at our customers, which could have a material adverse impact on our business and our results of operations.
Removed
We have agreed to undertake additional actions responsive to a notice of audit findings from the Massachusetts Department of Environmental Protection concerning a regulatory submittal that we made in 2009 for a portion of the site.
Added
In addition, the federal tax authority appealed the determination of the Federal Tax Court. While we are unable to ascertain the ultimate outcome of this matter, based on the information currently available, we believe that a loss with respect to this matter is neither probable nor remote.
Removed
We have received demands from the local transit authority for reimbursement of certain costs associated with its construction of a new municipal transit station in the area of the Somerville site. This station was part of an extension of the local transit system.
Added
Given the uncertainty associated with the ultimate resolution of this matter, the we are unable to reasonably assess an estimate or range of estimates of any potential losses. Accordingly, we have not recorded a liability related to this matter. Certain of the claims to which we are subject are typically not covered by our available insurance.
Removed
We have reserved for costs in connection with this matter; however, in light of the uncertainties associated with this matter, these costs and the related reserve may change.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe have not identified cybersecurity incidents or threats that have materially affected us or are reasonably likely to materially affect us, including our business strategy, results of operations, or financial condition. However, like other companies in our industry, we and our third-party vendors have from time to time experienced threats that could affect our information or systems.
Biggest changeHowever, like other companies in our industry, we and our third-party vendors have from time to time experienced threats that could affect our information or systems.
For more information, please see the Risk Factor titled “If our information technology systems suffer interruptions or failures, including as a result of cyber-attacks, our business operations could be disrupted or other material adverse impacts on our business could result.” Cybersecurity Governance Our CITO, who reports to our Chief Financial Officer, is responsible for leading our information security team and overseeing the Company’s cybersecurity risk management efforts.
For more information, please see the risk factor titled “If our information technology systems suffer interruptions or failures, including as a result of cyber-attacks, our business operations could be disrupted or other material adverse impacts on our business could result.” Cybersecurity Governance Our CITO, who reports to our Chief Executive Officer, is responsible for leading our information security team and overseeing the Company’s cybersecurity risk management efforts.
As was the case with our CIO, members of the Board of Directors and the Audit Committee will periodically meet with our CITO to discuss material cybersecurity risks facing our organization and significant changes or updates to our cybersecurity processes. The full Board of Directors receives a cybersecurity risk management update from management generally on a quarterly basis.
Members of the Board of Directors and the Audit Committee will periodically meet with our CITO to discuss material cybersecurity risks facing our organization and significant changes or updates to our cybersecurity processes. The full Board of Directors receives a cybersecurity risk management update from management generally on a quarterly basis. 15
Our CITO has significant experience as a chief technology officer. 16 Our cybersecurity risk management program is overseen by our Board of Directors.
Our CITO has significant experience as a chief technology officer. Our Chief Information Security Officer supports the program and incident response and reports to the CITO. Our cybersecurity risk management program is overseen by our Board of Directors.
Removed
Our incident response procedures were overseen until recently by our Chief Information Officer (“CIO”). In connection with the upcoming retirement of our CIO, we recently hired a new Chief Information & Technology Officer (“CITO”) who oversees our incident response procedures. Our incident response procedures are reviewed and updated periodically.
Added
Our Chief Information & Technology Officer (“CITO”) oversees our incident response procedures , which are reviewed and updated periodically. We have not identified cybersecurity incidents or threats that have materially affected us or are reasonably likely to materially affect us, including our business strategy, results of operations, or financial condition.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeITEM 2. PR OPERTIES As of August 31, 2024, we owned or leased 278 facilities containing an aggregate of approximately 8.3 million square feet located in the U.S., Canada, Mexico, Europe and Nicaragua. We owned 147 of these facilities, containing approximately 6.6 million square feet.
Biggest changeITEM 2. PR OPERTIES As of August 30, 2025, we owned or leased 281 facilities containing an aggregate of approximately 8.3 million square feet located in the U.S., Canada, Mexico, Europe and Nicaragua. We owned 148 of these facilities, containing approximately 6.6 million square feet.
We believe that our facilities and our production, cleaning and decontamination equipment have been well maintained and are adequate for our present needs. We also own a fleet of approximately 4,603 delivery vans, trucks and other vehicles.
We believe that our facilities and our production, cleaning and decontamination equipment have been well maintained and are adequate for our present needs. We also own a fleet of approximately 4,813 delivery vans, trucks and other vehicles.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeWe maintain insurance coverage providing indemnification against many of such claims, and we do not expect that we will sustain any material loss as a result thereof.
Biggest changeWe maintain insurance coverage providing indemnification against many of such claims, and we do not expect, although there can be no assurance, that we will sustain any material loss as a result thereof.
ITEM 3. LEGAL PROCEEDINGS From time to time, we are subject to legal proceedings and claims arising from the current conduct of our business operations, including personal injury, customer contract, employment claims such as claims alleging violations of, and damages under, the FLSA and environmental and tax matters as described in our Consolidated Financial Statements.
In addition, from time to time, we are subject to legal proceedings and claims arising from the current conduct of our business operations, including personal injury, customer contract, employment claims such as claims alleging violations of, and damages under, the FLSA and environmental and tax matters as described in our Consolidated Financial Statements.
Refer to Note 11, “Commitments and Contingencies”, of our Consolidated Financial Statements for further discussion. ITEM 4. MINE SAF ETY DISCLOSURES Not Applicable. 17 PART II
Refer to Note 11, “ Commitments and Contingencies ”, of our Consolidated Financial Statements for further discussion. ITEM 4. MINE SAF ETY DISCLOSURES Not Applicable. 16 PART II
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ITEM 3. LEGAL PROCEEDINGS We are involved with environmental investigation, monitoring and remediation activities at certain sites.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeIssuer Purchases of Equity Securities The following table provides information regarding our purchases of equity securities for the periods set forth therein: Period (a) Total Number of Shares Purchased (1) (b) Average Price Paid per Share (1) (c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Program (1) (d) Maximum Number (or Approximate Dollar Value) of Shares that May Yet be Purchased Under the Plans or Program (1) May 26, 2024 - June 22, 2024 17,806 $ 156.92 17,806 $ 81,243,296 June 23, 2024 - July 27, 2024 12,750 $ 174.73 12,750 $ 79,015,185 July 28, 2024 - August 31, 2024 15,000 $ 186.34 15,000 $ 76,219,818 Total 45,556 45,556 (1) On October 24, 2023, our Board of Directors authorized a new share repurchase program to repurchase from time to time up to a total authorized $100.0 million of its outstanding shares of Common Stock, inclusive of the amount which remained available under the existing share repurchase program approved on October 18, 2021.
Biggest changeIssuer Purchases of Equity Securities The following table provides information regarding our purchases of equity securities for the periods set forth therein: Period (a) Total Number of Shares Purchased (1) (b) Average Price Paid per Share (1) (c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Program (1) (d) Maximum Number (or Approximate Dollar Value) of Shares that May Yet be Purchased Under the Plans or Program (1) June 1, 2025 - June 28, 2025 25,500 $ 186.91 25,500 $ 81,600,454 June 29, 2025 - July 26, 2025 153,337 $ 177.04 153,337 $ 54,705,284 July 27, 2025 - August 30, 2025 81,000 $ 176.25 81,000 $ 40,570,487 Total 259,837 259,837 (1) On April 8, 2025, our Board of Directors authorized a new share repurchase program to repurchase up to $100.0 million of our outstanding shares of Common Stock, inclusive of the amount which remained available under the existing share repurchase program approved in 2023.
The share repurchase program has been funded to date using our available cash and may be suspended or discontinued at any time. 18 Stock Performance Graph The graph below compares the cumulative five-year total return on UniFirst Corporation's Common Stock with the Russell 2000 Index and a customized peer group of three companies that includes Aramark, Cintas Corporation and Rollins, Inc.
The share repurchase program has been funded to date using our available cash and may be suspended or discontinued at any time. 17 Stock Performance Graph The graph below compares the cumulative five-year total return on UniFirst Corporation’s Common Stock with the Russell 2000 Index and a customized peer group of three companies that includes Aramark, Cintas Corporation and Rollins, Inc.
The amount and timing of any future dividend payment is subject to the approval of the Board of Directors each quarter. The approximate number of shareholders of record of our Common Stock and Class B Common Stock as of October 23, 2024 was 47 and 42, respectively.
The amount and timing of any future dividend payment is subject to the approval of the Board of Directors each quarter. The approximate number of shareholders of record of our Common Stock and Class B Common Stock as of October 24, 2025 was 46 and 42, respectively.
The graph assumes an investment of $100 in each of UniFirst Corporation’s Common Stock, the Russell 2000 Index, and the performance through August 31, 2024, assuming the reinvestment of dividends. 19 ITEM 6. [ RESERVED] 20
The graph assumes an investment of $100 in each of UniFirst Corporation’s Common Stock, the Russell 2000 Index, and the performance through August 30, 2025, assuming the reinvestment of dividends. 18 ITEM 6. [ RESERVED] 19
On July 11, 2024, our Board of Directors declared a quarterly cash dividend of $0.330 per share of Common Stock and $0.264 per share of Class B Common Stock. Both dividends were paid on September 27, 2024 to shareholders of record as of September 6, 2024.
On July 29, 2025, our Board of Directors declared a quarterly cash dividend of $0.350 per share of Common Stock and $0.280 per share of Class B Common Stock. Both dividends were paid on September 26, 2025 to shareholders of record as of September 5, 2025.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest changeFinancial Statements and Supplementary Data 37 Consolidated Statements of Income for each of the three years in the period ended August 31, 2024 37 Consolidated Statements of Comprehensive Income for each of the three years in the period ended August 31, 2024 38 Consolidated Balance Sheets as of August 31, 2024 and August 26, 2023 39 Consolidated Statements of Shareholders’ Equity for each of the three years in the period ended August 31, 2024 40 Consolidated Statements of Cash Flows for each of the three years in the period ended August 31, 2024 41 Notes to Consolidated Financial Statements 42 Report of Ernst & Young LLP, Independent Registered Public Accounting Firm 71
Biggest changeFinancial Statements and Supplementary Data 32 Consolidated Statements of Income for each of the three years in the period ended August 30, 2025 32 Consolidated Statements of Comprehensive Income for each of the three years in the period ended August 30, 2025 33 Consolidated Balance Sheets as of August 30, 2025 and August 31, 2024 34 Consolidated Statements of Shareholders’ Equity for each of the three years in the period ended August 30, 2025 35 Consolidated Statements of Cash Flows for each of the three years in the period ended August 30, 2025 36 Notes to Consolidated Financial Statements 37 Report of Ernst & Young LLP, Independent Registered Public Accounting Firm 63
Item 6. [ Reserved ] 20 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 21 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 36 Item 8.
Item 6. [ Reserved ] 19 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 20 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 31 Item 8.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeOperating Income For fiscal 2024, changes in our revenues and costs as discussed above resulted in the following changes in our operating income and margin: (In thousands, except percentages) Fiscal 2024 Fiscal 2023 Dollar Change Percent Change Core Laundry Operations $ 143,434 $ 98,666 $ 44,768 45.4 % Specialty Garments 41,976 37,488 4,488 12.0 % First Aid (1,832 ) (2,551 ) 719 (28.2 )% Operating income $ 183,578 $ 133,603 $ 49,975 37.4 % Operating income margin 7.6 % 6.0 % Other income, net (In thousands, except percentages) Fiscal 2024 Fiscal 2023 Dollar Change Percent Change Interest income, net $ (7,242 ) $ (6,738 ) $ (504 ) 7.5 % Other expense, net 1,441 1,504 (63 ) (4.2 )% Total other income, net $ (5,801 ) $ (5,234 ) $ (567 ) 10.8 % Other income, net, in fiscal 2024 increased as compared to the prior year due primarily to $2.1 million of interest income recorded in fiscal 2024 as a result of a tax dispute we favorably resolved.
Biggest changeThe comparison to the prior year is also affected by the additional week of operations included in fiscal 2024, which modestly elevated the prior-year expense. 26 Operating Income For fiscal 2025, changes in our revenues and costs as discussed above resulted in the following changes in our operating income and margin: (In thousands, except percentages) Fiscal 2025 Fiscal 2024 Dollar Change Percent Change Uniform & Facility Service Solutions $ 168,502 $ 169,027 $ (525 ) (0.3 )% First Aid & Safety Solutions 853 (1,832 ) 2,685 (146.6 )% Other 15,143 16,383 (1,240 ) (7.6 )% Operating income $ 184,498 $ 183,578 $ 920 0.5 % Operating income margin 7.6 % 7.6 % Other income, net (In thousands, except percentages) Fiscal 2025 Fiscal 2024 Dollar Change Percent Change Interest income, net $ (9,770 ) $ (7,242 ) $ (2,528 ) 34.9 % Other expense (income), net (1,107 ) 1,441 (2,548 ) (176.8 )% Total other income, net $ (10,877 ) $ (5,801 ) $ (5,076 ) 87.5 % Total other income, net in fiscal 2025 increased as compared to the prior fiscal year primarily due to $2.8 million in proceeds from the sale of a property.
Historically, we have been able to manage the impacts of more significant changes in inflation rates through our customer relationships, customer agreements that generally provide for price increases and continued focus on improvements of operational productivity.
Historically, we have been able to manage the impacts of more significant changes in inflation rates through our customer relationships, customer agreements that generally provide for price increases and continued focus on improvements in operational productivity.
In fiscal 2022, we initiated a multiyear ERP project that we plan to continue through 2027, with early phases focused on master data management and finance capabilities followed by subsequent phases with a strong focus on supply chain and procurement automation and technology.
In fiscal 2022, we initiated a multiyear ERP project that we plan to continue through 2027, with early phases focused on master data management and finance capabilities followed by subsequent phases with a strong focus on supply chain, procurement, automation and technology.
If general economic conditions or our financial performance deteriorate, we may be required to record a goodwill impairment charge in the future which could have a material impact on our financial condition and results of operations. Property, plant and equipment, and definite-lived intangible assets are depreciated or amortized over their useful lives.
If general economic conditions or our financial performance 21 deteriorate, we may be required to record a goodwill impairment charge in the future which could have a material impact on our financial condition and results of operations. Property, plant and equipment, and definite-lived intangible assets are depreciated or amortized over their useful lives.
Our liabilities are based on our estimates, and, while we believe that our accruals are adequate, the ultimate liability may be significantly different from the amounts recorded. In certain cases where partial insurance coverage exists, we must estimate the portion of the liability that will be covered by existing insurance policies to arrive at 23 our net expected liability.
Our liabilities are based on our estimates, and, while we believe that our accruals are adequate, the ultimate liability may be significantly different from the amounts recorded. In certain cases where partial insurance coverage exists, we must estimate the portion of the liability that will be covered by existing insurance policies to arrive at our net expected liability.
Our evaluation considers changes in the operating environment, competitive information, market trends, operating performance and cash flow modeling. We completed our annual goodwill impairment test as of the first day of the fourth quarter in fiscal 2024, fiscal 2023 and fiscal 2022. There have been no impairments of goodwill or other intangible assets in fiscal 2024, 2023 or 2022.
Our evaluation considers changes in the operating environment, competitive information, market trends, operating performance and cash flow modeling. We completed our annual goodwill impairment test as of the first day of the fourth quarter in fiscal 2025, fiscal 2024 and fiscal 2023. There have been no impairments of goodwill or other intangible assets in fiscal 2025, 2024 or 2023.
Useful lives are based on our estimates of the period that the assets will generate economic benefits. Long-lived assets are evaluated for impairment whenever events or circumstances indicate an asset may be impaired. There were no material impairments of long-lived assets in fiscal 2024, 2023 or 2022.
Useful lives are based on our estimates of the period that the assets will generate economic benefits. Long-lived assets are evaluated for impairment whenever events or circumstances indicate an asset may be impaired. There were no material impairments of long-lived assets in fiscal 2025, 2024 or 2023.
Revenues denominated in currencies other than the U.S. dollar represented approximately 6.9% and 7.0% of total consolidated revenues for fiscal 2024 and 2023, respectively. The operating results of our international subsidiaries are translated into U.S. dollars and such results are affected by movements in foreign currencies relative to the U.S. dollar.
Revenues denominated in currencies other than the U.S. dollar represented approximately 7.0% and 6.9% of total consolidated revenues for fiscal 2025 and 2024, respectively. The operating results of our international subsidiaries are translated into U.S. dollars and such results are affected by movements in foreign currencies relative to the U.S. dollar.
We also rent and sell industrial wiping products, floor mats, facility service products and other non-garment items, and provide restroom and cleaning supplies and first aid cabinet services and other safety supplies as well as provide certain safety training to a variety of manufacturers, retailers and service companies. We serve businesses of all sizes across multiple industry sectors.
We also rent and sell industrial wiping products, floor mats, facility service products and other non-garment items, and provides restroom and cleaning supplies and first aid cabinet services and other safety supplies as well as provide certain safety training, to a variety of manufacturers, retailers and service companies. We serve businesses of all sizes across multiple industries and sectors.
During fiscal 2024, we reclassified $0.1 million from accumulated other comprehensive loss to revenue, related to the derivative financial instruments. The gain on these forward contracts that results in a decrease to accumulated other comprehensive loss as of August 31, 2024 is expected to be reclassified to revenues prior to their maturity on August 29, 2026.
During fiscal 2025, we reclassified $0.1 million from accumulated other comprehensive loss to revenue, related to the derivative financial instruments. The gain on these forward contracts that results in a decrease to accumulated other comprehensive loss as of August 30, 2025 is expected to be reclassified to revenues prior to their maturity on August 29, 2026.
We believe that this initiative will become the core of the UniFirst systems technology footprint and will integrate and complement the capabilities of the CRM system. We expect the ERP system and the new supply chain and procurement capabilities that it will provide to enable lower operating costs and reduced customer churn.
We believe that this initiative will become the core of our systems technology footprint and will integrate and complement the capabilities of the CRM system. We expect the ERP system and the new supply chain and procurement capabilities that it will provide to enable lower operating costs and reduce customer churn.
If actual product demand and market conditions are less favorable than the amount we projected, additional inventory write-downs may be required. We use the first-in, first-out method to value our inventories, which primarily consist of finished goods.
If actual product demand and market conditions are less favorable than those projected by management, additional inventory write-downs may be required. We use the first-in, first-out (“FIFO”) method to value our inventories, which primarily consist of finished goods.
Discussions of fiscal 2022 items and year-to-year comparisons between fiscal 2023 and fiscal 2022 that are not included in this Annual Report on Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the year ended August 26, 2023, which was filed with the SEC on October 26, 2023.
Discussions of fiscal 2023 items and year-to-year comparisons between fiscal 2024 and fiscal 2023 that are not included in this Annual Report on Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the year ended August 31, 2024, which was filed with the SEC on November 14, 2024.
In fiscal 2024 and 2023, foreign currency fluctuations impacted our consolidated revenues negatively by a nominal percentage and 0.6%, respectively. These impacts were primarily driven by fluctuations in the Canadian dollar.
In fiscal 2025 and 2024, foreign currency fluctuations impacted our consolidated revenues negatively by 0.1% and a nominal percentage, respectively. These impacts were primarily driven by fluctuations in the Canadian dollar.
This new solution is intended to improve functionality, capability and information flow as well as increase automation for our operations in servicing our customers. We began deployment of our new CRM project during the second half of fiscal 2021 and concluded the deployment to our U.S. locations in the first quarter of fiscal 2024.
This new solution improves functionality, capability and information flow as well as increases automation for our operations in servicing our customers. We began deployment of our new CRM project during the second half of fiscal 2021 and concluded the deployment to our U.S. locations in the first quarter of fiscal 2024.
The estimated liability for environmental contingencies has been discounted as of August 31, 2024 using risk-free interest rates ranging from 4.2% to 4.3% over periods ranging from twenty to thirty years. The estimated current costs, net of legal settlements with insurance carriers, have been adjusted for the estimated impact of inflation at 3.0% per year.
The estimated liability for environmental contingencies has been discounted as of August 30, 2025 using risk-free interest rates ranging from 4.86% to 4.92% over periods ranging from twenty to thirty years. The estimated current costs, net of legal settlements with insurance carriers, have been adjusted for the estimated impact of inflation at 3.0% per year.
We are depreciating this system over a 10-year life and recognized $3.6 million and $3.3 million of amortization expense in fiscal 2024 and fiscal 2023, respectively.
We are depreciating this system over a 10-year life and recognized $4.1 million and $3.6 million of amortization expense in fiscal 2025 and 2024, respectively.
The amendment also refreshed the accordion feature, so that, provided there is no default or event of default under the Credit Agreement and we are in compliance with our financial covenants on a pro forma basis, we may request an increase in the aggregate commitments under the Credit Agreement (in the form of revolving or term tranches) of up to an additional $100.0 million, for a total aggregate commitment of up to $375.0 million.
Provided there is no default or event of default under the Credit Agreement and we are in compliance with our financial covenants on a pro forma basis, we may request an increase in the aggregate commitments under the Credit Agreement (in the form of revolving or term tranches) of up to an additional $100.0 million, for a total aggregate commitment of up to $400.0 million.
For discussion of fiscal 2023 results compared to fiscal 2022 results, see the Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” within our Annual Report on Form 10-K for the fiscal year ended August 26, 2023, filed with the SEC on October 26, 2023.
For discussion of fiscal 2024 results compared to fiscal 2023 results, see the Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” within our Annual Report on Form 10-K for the fiscal year ended August 31, 2024, filed with the SEC on November 14, 2024.
Energy Costs Significant variability in energy costs, specifically with respect to natural gas, gasoline and electricity can materially affect our operating costs. During fiscal 2024, our energy costs, which include fuel, natural gas, and electricity, represented approximately 4.0% of our total revenue.
Energy Costs Significant variability in energy costs, specifically with respect to natural gas, gasoline and electricity can materially affect our operating costs. During fiscal 2025, our energy costs, which include fuel, natural gas, and electricity, represented approximately 3.9% of our total revenue.
Recent Accounting Pronouncements See Note 1, “Summary of Significant Accounting Policies” to our Consolidated Financial Statements included in this Annual Report on Form 10-K for more information on recently implemented and issued accounting standards. 35
Recent Accounting Pronouncements See Note 1, “ Summary of Significant Accounting Policies ” to our Consolidated Financial Statements included in this Annual Report on Form 10-K for more information on recently implemented and issued accounting standards. 30
The Credit Agreement amended and restated our prior credit agreement, which was scheduled to mature on April 11, 2021. Under the Credit Agreement, we are able to borrow funds at variable interest rates.
The Credit Agreement amended and restated our prior credit agreement, which was scheduled to mature on March 26, 2026. Under the Credit Agreement, we are able to borrow funds at variable interest rates.
Selling and administrative costs include costs related to our sales and marketing functions as well as general and administrative costs associated with our corporate offices, non-operating environmental sites and operating locations including information systems, engineering, materials management, manufacturing planning, finance, budgeting, and human resources.
Selling and administrative costs include costs related to our sales and marketing functions as well as general and administrative costs associated with our corporate offices, non-operating environmental sites and operating locations including information systems, engineering, materials management, manufacturing planning, finance, budgeting, and human resources. A portion of our sales is derived from international markets, including Canada.
We generated $295.3 million and $215.8 million in cash from operating activities in fiscal 2024 and 2023, respectively. The increase was due primarily to increased profitability and lower working capital needs of the business. During fiscal 2024, we continued to invest in our business with capital expenditures totaling $160.4 million.
We generated $296.9 million and $295.3 million in cash from operating activities in fiscal 2025 and 2024, respectively. The increase was due primarily to increased profitability and lower working capital needs of the business. During fiscal 2025, we continued to invest in our business with capital expenditures totaling $154.3 million.
Cost of revenues include the amortization of rental merchandise in service and merchandise costs related to direct sales as well as labor and other production, service and delivery costs, and distribution costs associated with operating our Core Laundry Operations, Specialty Garments facilities, and First Aid locations.
Cost of revenues include the amortization of rental merchandise in service and merchandise costs related to direct sales as well as labor and other production, service and delivery costs, and distribution costs associated with operating our Uniform & Facility Service Solutions operations, Other segment facilities, and First Aid & Safety Solutions locations.
However, the inflationary environment in recent years had a negative impact on our margins, including as a result of increased energy costs for our vehicles and our plants, as well as increasing wages in the labor markets in which we compete. While inflation has moderated recently, a period of sustained inflation could pressure our margins in future periods.
However, the inflationary environment in recent years had a negative impact on our margins, including increased energy costs for our vehicles and our plants, and increased wages in the labor markets in which we compete. While inflation has moderated recently, a period of sustained inflation could pressure our margins in future periods. Adverse economic conditions resulting from inflationary pressures, U.S.
These estimates are based on historical information, current trends, and information available from other sources. Our results are affected by economic, political, legislative, regulatory and legal actions. Economic conditions, such as recessionary trends, inflation, interest and monetary exchange rates, government fiscal policies, and changes in the prices of raw materials, can have a significant effect on operations.
Our results are affected by economic, political, legislative, regulatory and legal actions. Economic conditions, such as recessionary trends, inflation, interest and monetary exchange rates, government fiscal policies, and changes in the prices of raw materials, can have a significant effect on operations. These factors and other events could cause actual results to differ from management’s estimates.
Liquidity and Capital Resources General Cash and cash equivalents, and short-term investments totaled $175.1 million as of August 31, 2024, an increase of $85.5 million from $89.6 million as of August 26, 2023. The increase in cash and cash equivalents and short-term investments was largely driven by our cash flows from operating activities.
Liquidity and Capital Resources General Cash and cash equivalents, and short-term investments totaled $209.2 million as of August 30, 2025, an increase of $34.1 million from $175.1 million as of August 31, 2024. The increase in cash and cash equivalents and short-term investments was largely driven by our enhanced cash flows from operating activities.
These factors and other events could cause actual results to differ from management's estimates. Revenue Recognition and Allowance for Doubtful Accounts We recognize revenue from rental operations and related services in the period in which the services are provided. Direct sale revenue is recognized in the period in which the services are performed or when the product is shipped.
Revenue Recognition and Allowance for Doubtful Accounts We recognize revenue from rental operations and related services in the period in which the services are provided. Direct sale revenue is recognized in the period in which the services are performed or when the product is shipped.
As of August 31, 2024, we had forward contracts with a notional value of approximately 3.6 million CAD outstanding and recorded the fair value of the contracts of $0.1 million in prepaid expenses and other current assets with a corresponding gain of $0.1 million in accumulated other comprehensive loss, which was recorded net of tax.
As discussed below under “ Quantitative and Qualitative Disclosures About Market Risk ”, as of August 30, 2025, we had forward contracts with a notional value of approximately 1.8 million CAD outstanding and recorded the fair value of the contracts of $0.1 million in prepaid expenses and other current assets with a corresponding gain of $0.1 million in accumulated other comprehensive loss, which was recorded net of tax.
The U.S. and Canadian Rental and Cleaning reporting segment purchases, rents, cleans, delivers and sells, uniforms and protective clothing and non-garment items in the U.S. and Canada.
The Uniform & Facility Service Solutions reporting segment designs, manufactures, purchases, rents, cleans, delivers and sells, uniforms and protective clothing and non-garment items in the U.S. and Canada.
Federal Reserve actions, including elevated interest rates and/or increases in interest rates, geopolitical issues or otherwise are difficult to predict and may have a material adverse impact on our business, results of operations and financial condition. Please see Part I, Item 1A.
Federal Reserve actions, including elevated interest rates and/or increases in interest rates, geopolitical issues, U.S. and foreign tariffs or other impositions on imported goods or other causes are difficult to predict and may have a material adverse impact on our business, results of operations and financial condition.
“Risk Factors” in this Annual Report on Form 10-K for an additional discussion of risks and potential risks of inflation and adverse economic conditions on our business, financial condition and results of operations. 25 Results of Operations The following table presents certain selected financial data, including the percentage of revenues represented by each item, for fiscal years 2024 and 2023.
“ Risk Factors ” in this Annual Report on Form 10-K for an additional discussion of risks and potential risks of inflation, elevated interest rates and/or increases in interest rates, geopolitical issues, U.S. and foreign tariffs or other impositions on imported goods and adverse economic conditions on our business, financial condition and results of operations. 23 Results of Operations The following table presents certain selected financial data, including the percentage of revenues represented by each item, for fiscal years 2025 and 2024.
Net Cash Used in Investing Activities The net cash used in investing activities in fiscal 2024 decreased as compared to fiscal 2023 due primarily to the Clean acquisition in the third quarter of fiscal 2023, a decrease in capital expenditures of $11.6 million and a reduced net investment in certificates of deposit of $7.1 million during fiscal 2024.
Net Cash Used in Investing Activities Net cash used in investing activities in fiscal 2025 decreased as compared to fiscal 2024 due primarily to reduced net investment in certificates of deposit of $10.9 million and reduced capital expenditures of $6.1 million.
The operations of the U.S. and Canadian Rental and Cleaning reporting segment are referred to by us as our ‘industrial laundry operations’ and we refer to the locations related to this reporting segment as our ‘industrial laundries’.
Certain operations of the Uniform & Facility Service Solutions reporting segment are referred to by the Company as “industrial laundry operations” and we refer to the locations related to this reporting segment as our “industrial laundries”.
GAAP establishes standards for reporting information regarding operating segments in annual financial statements and requires selected information of those segments to be presented in interim financial reports issued to shareholders.
We provide our products and services to over 300,000 customer locations in the U.S., Canada and Europe. U.S. GAAP establishes standards for reporting information regarding operating segments in annual financial statements and requires selected information of those segments to be presented in interim financial reports issued to shareholders.
We may also use cash flows provided by operating activities, as well as proceeds from long-term debt, to fund growth and acquisition opportunities, as well as other cash requirements.
We generally use these cash flows to fund most, if not all, of our operations, capital expenditure and acquisition activities as well as dividends on our Common Stock. We may also use cash flows provided by operating activities, as well as proceeds from long-term debt, to fund growth and acquisition opportunities, as well as other cash requirements.
Net Cash Used in Financing Activities The net cash used in financing activities in fiscal 2024 increased as compared to fiscal 2023 due primarily to a $23.8 million increase in the repurchase of Common Stock during the period. 31 Long-term Debt and Borrowing Capacity On March 26, 2021, we entered into an amended and restated $175.0 million unsecured revolving credit agreement (as subsequently amended, the “Credit Agreement”) with a syndicate of banks, which matures on March 26, 2026.
Net Cash Used in Financing Activities Net cash used in financing activities in fiscal 2025 increased as compared to fiscal 2024 due primarily to a $47.1 million increase in the repurchase of Common Stock during the period, an increase in cash dividends of $1.3 million, an increase in taxes withheld and paid related to net-share settlement of equity awards of $1.2 million and an increase in deferred financing costs of $1.2 million. 28 Long-term Debt and Borrowing Capacity On August 12, 2025, we entered into an amended and restated $300.0 million unsecured revolving credit agreement (the “Credit Agreement”) with a syndicate of banks, which matures on August 12, 2030.
This increase was driven by our continued investment in expanding the first aid van business, which accounted for growth of 10.1%, and growth from fiscal 2024's extra week of 2.2%.
This increase was driven by our continued investment in expanding the first aid van business, which accounted for growth of 10.1%. Excluding the estimated impact of the extra week of operations in fiscal 2024, First Aid & Safety Solutions revenues increased 10.0% compared to fiscal 2024.
Selling and administrative expenses (In thousands, except percentages) Fiscal 2024 Fiscal 2023 Dollar Change Percent Change Selling and administrative expenses $ 522,586 $ 496,915 $ 25,671 5.2 % % of Revenues 21.5 % 22.3 % The increase in selling and administrative costs of 5.2% during fiscal 2024 compared to the prior fiscal year was due primarily to continued investments we have made in our corporate capabilities over the last year and incremental costs from the Clean acquisition as compared to the prior year.
Selling and administrative expenses (In thousands, except percentages) Fiscal 2025 Fiscal 2024 Dollar Change Percent Change Selling and administrative expenses $ 565,099 $ 522,586 $ 42,513 8.1 % % of Revenues 23.2 % 21.5 % The increase in selling and administrative costs of 8.1% during fiscal 2025 compared to the prior fiscal year was due primarily to continued investments we have made in our sales organization capabilities to support our digital transformation over the last year.
For fiscal 2024, we expensed $11.8 million of non-recurring costs related to our Key Initiatives, primarily relating to our ERP project. As of August 31, 2024, we capitalized $47.2 million related to our CRM project and $18.9 million related to our ERP project.
We expensed $6.8 million and $11.8 million of non-recurring costs related to our Key Initiatives, primarily relating to our ERP project, in fiscal 2025 and fiscal 2024, respectively.
(In thousands, except for percentages) Fiscal 2024 % of Revenues Fiscal 2023 % of Revenues % Change Revenues $ 2,427,431 100.0 % $ 2,233,047 100.0 % 8.7 % Operating expenses: Cost of revenue (1) 1,579,835 65.1 1,481,296 66.3 6.7 Selling and administrative expenses (1) 522,586 21.5 496,915 22.3 5.2 Depreciation and amortization 141,432 5.8 121,233 5.4 16.7 Total operating expenses 2,243,853 92.4 2,099,444 94.0 6.9 Operating income 183,578 7.6 133,603 6.0 37.4 Other income, net (5,801 ) (0.2 ) (5,234 ) (0.2 ) 10.8 Income before income taxes 189,379 7.8 138,837 6.2 36.4 Provision for income taxes 43,905 1.8 35,163 1.6 24.9 Net income $ 145,474 6.0 % $ 103,674 4.6 % 40.3 % (1) Exclusive of depreciation on our property, plant and equipment and amortization of our intangible assets.
(In thousands, except for percentages) Fiscal 2025 % of Revenues Fiscal 2024 % of Revenues % Change Revenues $ 2,432,352 100.0 % $ 2,427,431 100.0 % 0.2 % Operating expenses: Cost of revenue (1) 1,542,400 63.4 1,579,835 65.1 (2.4 ) Selling and administrative expenses (1) 565,099 23.2 522,586 21.5 8.1 Depreciation and amortization 140,355 5.8 141,432 5.8 (0.8 ) Total operating expenses 2,247,854 92.4 2,243,853 92.4 0.2 Operating income 184,498 7.6 183,578 7.6 0.5 Other income, net (10,877 ) (0.4 ) (5,801 ) (0.2 ) 87.5 Income before income taxes 195,375 8.0 189,379 7.8 3.2 Provision for income taxes 47,104 1.9 43,905 1.8 7.3 Net income $ 148,271 6.1 % $ 145,474 6.0 % 1.9 % (1) Exclusive of depreciation on our property, plant and equipment and amortization of our intangible assets.
Pursuant to the share repurchase program approved by our Board of Directors on October 24, 2023, we repurchased 139,556 shares of our Common Stock for an aggregate of approximately $23.8 million during fiscal 2024. 30 We believe, although there can be no assurance, that our current cash and cash equivalents balances, our cash generated from future operations and amounts available under our Credit Agreement (as defined below) will be sufficient to meet our current anticipated working capital and capital expenditure requirements for at least the next 12 months and will help us manage the impacts of inflation and address related liquidity needs.
We believe, although there can be no assurance, that our current cash and cash equivalents balances, our cash generated from future operations and amounts available under our Credit Agreement (as defined below) will be sufficient to meet our current anticipated working capital and capital expenditure requirements for at least the next 12 months and will help us manage the impacts of inflation and address related liquidity needs. 27 Cash flows provided by operating activities have historically been the primary source of our liquidity.
Refer to Note 4, “Income Taxes”, of our Consolidated Financial Statements for further discussion regarding our accounting for income taxes and our uncertain tax positions for financial accounting purposes. Fiscal Year Our fiscal year ends on the last Saturday in August. For financial reporting purposes, fiscal 2024 and 2023 consisted of 53 weeks and 52 weeks, respectively.
In evaluating the exposure associated with various filing positions, we record estimated reserves . Refer to Note 4, “ Income Taxes ”, of our Consolidated Financial Statements for further discussion regarding our accounting for income taxes and our uncertain tax positions for financial accounting purposes. Fiscal Year Our fiscal year ends on the last Saturday in August.
The Corporate operating segment consists of costs associated with our distribution center, sales and marketing, information systems, engineering, materials management, manufacturing planning, finance, budgeting, human resources, other general and administrative costs and interest expense. The revenues generated from the Corporate operating segment represent 21 certain direct sales made directly from our distribution center.
Additionally, the Uniform & Facility Service Solutions consists of our distribution center, sales and marketing, information systems, engineering, materials management, manufacturing planning, finance, budgeting, human resources, other general and administrative costs and interest expense.
As of August 31, 2024, the interest rates applicable to our borrowings under the Credit Agreement would be calculated as SOFR plus 1.00% at the time of the respective borrowing. As of August 31, 2024, we had no outstanding borrowings and had outstanding letters of credit amounting to $65.1 million, leaving $209.9 million available for borrowing under the Credit Agreement.
As of August 30, 2025, the interest rates applicable to our borrowings under the Credit Agreement would be calculated as SOFR plus 1.00% at the time of the respective borrowing.
Cost of revenues (In thousands, except percentages) Fiscal 2024 Fiscal 2023 Dollar Change Percent Change Cost of revenues $ 1,579,835 $ 1,481,296 $ 98,539 6.7 % % of Revenues 65.1 % 66.3 % The increase in consolidated cost of revenues of 6.7% during fiscal 2024 compared to the prior fiscal year was due primarily to the impact of the revenue growth mentioned above.
Cost of revenues (In thousands, except percentages) Fiscal 2025 Fiscal 2024 Dollar Change Percent Change Cost of revenues $ 1,542,400 $ 1,579,835 $ (37,435 ) (2.4 )% % of Revenues 63.4 % 65.1 % The decrease in consolidated cost of revenues of 2.4% during fiscal 2025 compared to the prior fiscal year was due primarily to the impact of the revenue change discussed above.
Such benefits are expected to be delivered through enhanced inventory utilization and vendor management, improved response times to customer orders and more efficient back-end processes.
Such benefits are expected to be delivered through enhanced inventory utilization and vendor management, improved response times to customer orders and more efficient back-end processes. As of fiscal 2025, we capitalized $45.3 million related to our ERP project. We refer to our CRM and ERP projects together as our “Key Initiatives”.
We have six operating segments based on the information reviewed by our Chief Executive Officer: U.S. Rental and Cleaning, Canadian Rental and Cleaning, Manufacturing (“MFG”), Specialty Garments Rental and Cleaning (“Specialty Garments”), First Aid and Corporate. The U.S.
Prior to May 31, 2025, we organized our business into six operating segments: U.S. Rental and Cleaning, Canadian Rental and Cleaning, Manufacturing (“MFG”), Specialty Garments Rental and Cleaning (“Specialty Garments”), First Aid and Corporate. The U.S.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Business Overview UniFirst Corporation, together with its subsidiaries, hereunder referred to as “we”, “our”, the “Company”, or “UniFirst”, is one of the leading providers of workplace uniforms and protective work wear clothing in North America.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Business Overview We are one of the leading providers of workplace uniforms and protective clothing in North America.
GAAP, which requires management to make estimates and assumptions that affect the reported amounts in the financial statements and accompanying notes. We utilize key estimates in preparing the financial statements, including casualty and environmental estimates, valuation of intangible assets acquired in connection with a business combination, recoverability of goodwill, intangibles, income taxes and long-lived assets.
We utilize key estimates in preparing the financial statements, including casualty and environmental estimates, valuation of intangible assets acquired in connection with a business combination, recoverability of goodwill, intangibles, income taxes and long-lived assets. These estimates are based on historical information, current trends, and information available from other sources.
Our ability to secure short-term and long-term debt financing in the future will depend on several factors, including our future profitability, our levels of debt and equity, and the overall credit and equity market environments. 34 Contractual Obligations and Other Commercial Commitments The following information is presented as of August 31, 2024 (in thousands): Payments Due by Fiscal Period Contractual Obligations Total Less than 1 year 1 – 3 years 3 – 5 years More than 5 years Retirement plan benefit payments $ 29,489 $ 2,550 $ 3,924 $ 3,988 $ 19,027 Asset retirement obligations 17,929 — — — 17,929 Operating leases 75,833 20,557 30,751 16,160 8,365 Forward contracts 2,668 1,334 1,334 — — Purchase Commitments* 91,206 58,441 21,115 10,687 963 Total contractual cash obligations $ 217,125 $ 82,882 $ 57,124 $ 30,835 $ 46,284 *Includes non-cancellable purchase commitments for inventories, software, and services.
Our ability to secure short-term and long-term debt financing in the future will depend on several factors, including our future profitability, our levels of debt and equity, and the overall credit and equity market environments. 29 Contractual Obligations and Other Commercial Commitments The following information is presented as of August 30, 2025 (in thousands): Payments Due by Fiscal Period Contractual Obligations Total Less than 1 year 1 – 3 years 3 – 5 years More than 5 years Retirement plan benefit payments $ 26,483 $ 2,495 $ 3,663 $ 3,742 $ 16,583 Asset retirement obligations 18,524 — — — 18,524 Operating leases 81,411 20,522 30,732 17,993 12,164 Forward contracts 1,310 1,310 — — — Purchase Commitments* 132,049 89,296 31,784 10,939 30 Total contractual cash obligations $ 259,777 $ 113,623 $ 66,179 $ 32,674 $ 47,301 *Includes non-cancellable purchase commitments for inventories, software, and services.
See Note 4, “Income Taxes” of our Consolidated Financial Statements for the types of items that give rise to significant deferred income tax assets and liabilities. Deferred income taxes are classified as assets or liabilities based on the classification of the related asset or liability for financial reporting purposes.
Deferred tax assets and liabilities are determined by the differences between the consolidated financial statement carrying amounts and the tax basis of assets and liabilities. See Note 4, “ Income Taxes ” of our Consolidated Financial Statements for the types of items that give rise to significant deferred income tax assets and liabilities.
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. The First Aid operating segment sells first aid cabinet products and services and other safety supplies as well as maintains wholesale distribution and pill packaging operations for non-prescription medicines.
The segment, through the Company’s cleanroom operations, also purchases, rents, cleans, delivers and sells specialty garments and non-garment items primarily for cleanroom applications and provides cleanroom cleaning at limited customer locations. We renamed our First Aid reporting segment as the First Aid & Safety Solutions reporting segment to better reflect the scope of services and products offered.
We are periodically reviewed by U.S. domestic and foreign tax authorities regarding the amount of taxes due. These reviews typically include inquiries regarding the timing and amount of deductions and the allocation of income among various tax jurisdictions. In evaluating the exposure associated with various filing positions, we record estimated reserves .
Although realization is not assured, management believes it is more likely than not that the recorded deferred tax assets will be realized. We are periodically reviewed by U.S. domestic and foreign tax authorities regarding the amount of taxes due. These reviews typically include inquiries regarding the timing and amount of deductions and the allocation of income among various tax jurisdictions.
There can be no assurance that such regulation will not lead to material disruptions in our garment decontamination business. From time to time, we are also subject to legal and regulatory proceedings and claims arising from the conduct of our business operations, including personal injury claims, customer contract matters, employment claims and environmental matters as described above.
Environmental and Legal Contingencies We are involved with environmental investigation, monitoring and remediation activities at certain sites. In addition, from time to time, we are also subject to legal and regulatory proceedings and claims arising from the conduct of our business operations, including but not limited to, personal injury, customer contract, employment claims and environmental and tax matters as described.
Effects of Inflation and Adverse Economic Conditions In general, we believe that our results of operations are not dependent on moderate changes in the inflation rate.
For financial reporting purposes, fiscal 2025 and 2024 consisted of 52 weeks and 53 weeks, respectively. Factors Affecting our Business In general, we believe that our results of operations are not dependent on moderate changes in the inflation rate.
Specialty Garments revenues for fiscal 2024 increased slightly compared to the prior year due primarily to growth from fiscal 2024's extra week of 1.9%, and growth in both our cleanroom and U.S. nuclear operations. First Aid revenues for fiscal 2024 increased 12.1% compared to the prior fiscal year.
Other segment revenues for fiscal 2025 increased 2.1% compared to the prior year due primarily to growth in our European and U.S. nuclear operations.
We paid for the acquisition of Clean with cash on hand and borrowings under the Credit Agreement, which we repaid in full during the third quarter of fiscal 2023. 28 The following section of this Annual Report on Form 10-K generally discusses fiscal 2024 and fiscal 2023 items and year-to-year comparisons between fiscal 2024 and fiscal 2023.
The following section of this Annual Report on Form 10-K generally discusses fiscal 2025 and fiscal 2024 items and year-to-year comparisons between fiscal 2025 and fiscal 2024.
Sources and uses of cash flows for fiscal 2024 and 2023, respectively, are summarized as follows: (In thousands, except percentages) Fiscal 2024 Fiscal 2023 Dollar Change Percent Change Net cash provided by operating activities $ 295,269 $ 215,762 $ 79,507 36.8 % Net cash used in investing activities (162,236 ) (487,647 ) 325,411 (66.7 )% Net cash used in financing activities (50,360 ) (25,839 ) (24,521 ) 94.9 % Effect of exchange rate changes (545 ) 768 (1,313 ) (171.0 )% Net decrease in cash and cash equivalents $ 82,128 $ (296,956 ) $ 379,084 (127.7 )% Net Cash Provided by Operating Activities The net cash provided by operating activities in fiscal 2024 increased as compared to fiscal 2023 due to our improved profitability and benefit of depreciation and amortization as well as positive impacts from rental merchandise in service of $31.4 million, receivables of $22.2 million and accrued liabilities of $9.7 million.
Sources and uses of cash flows for fiscal 2025 and 2024, respectively, are summarized as follows: (In thousands, except percentages) Fiscal 2025 Fiscal 2024 Dollar Change Percent Change Net cash provided by operating activities $ 296,872 $ 295,269 $ 1,603 0.5 % Net cash used in investing activities (155,047 ) (162,236 ) 7,189 (4.4 )% Net cash used in financing activities (101,153 ) (50,360 ) (50,793 ) 100.9 % Effect of exchange rate changes 1,258 (545 ) 1,803 (330.8 )% Net decrease in cash and cash equivalents $ 41,930 $ 82,128 $ (40,198 ) (48.9 )% Net Cash Provided by Operating Activities Net cash provided by operating activities in fiscal 2025 increased compared to fiscal 2024, primarily due to improved profitability as well as favorable changes in working capital.
On October 24, 2023, our Board of Directors authorized a share repurchase program to repurchase from time to time up to $100.0 million of our outstanding shares of Common Stock. Repurchases made under the new program, if any, will be made in either the open market or in privately negotiated transactions.
On April 8, 2025, our Board of Directors authorized a new share repurchase program to repurchase up to $100.0 million of our outstanding shares of Common Stock, inclusive of the amount which remained available under the existing share repurchase program approved in 2023.
Deferred income taxes are provided for temporary differences between the amounts recognized for income tax and financial reporting purposes at currently enacted tax rates. Deferred tax assets and liabilities are determined by the differences between the consolidated financial statement carrying amounts and the tax basis of assets and liabilities.
Refer to Note 11, “ Commitments and Contingencies ”, of our Consolidated Financial Statements for additional discussion and analysis. 22 Income Taxes We compute income tax expense by jurisdiction based on our operations in each jurisdiction. Deferred income taxes are provided for temporary differences between the amounts recognized for income tax and financial reporting purposes at currently enacted tax rates.
Judgments and estimates are used in determining the likelihood that new goods on hand can be sold to our customers or used in our rental operations. Historical inventory usage and current revenue trends are considered in estimating both excess and obsolete inventories.
Judgments and estimates are used in determining the likelihood that new goods on hand can be sold to our customers or used in our rental operations. We monitor canceled or terminated contracts (and reductions in customer orders) as part of its ongoing assessment of realizability.
Revenues from Specialty Garments, which accounted for approximately 7.5% of our fiscal 2024 revenues, increase during outages and refueling by nuclear power plants, as garment usage increases at these times. First Aid represented approximately 4.4% of our total revenues in fiscal 2024.
Revenues from our Other segment, which accounted for approximately 4.1% of our fiscal 2025 revenues, increases during outages and refueling by nuclear power plants, as garment usage increases at these times. 20 Critical Accounting Policies and Estimates We believe the following critical accounting policies reflect our more significant judgments and estimates used in the preparation of our Consolidated Financial Statements.
We regularly review deferred tax assets for recoverability based upon projected future taxable income and the expected timing of the reversals of existing temporary differences. Although realization is not assured, management believes it is more likely than not that the recorded deferred tax assets will be realized.
Deferred income taxes are classified as assets or liabilities based on the classification of the related asset or liability for financial reporting purposes. We regularly review deferred tax assets for recoverability based upon projected future taxable income and the expected timing of the reversals of existing temporary differences.
Deferred commissions are classified as current or non-current based on the timing of when we expect to recognize the expense. 22 Inventories and Rental Merchandise in Service Our inventories are stated at the lower of cost or net realizable value, net of any reserve for excess and obsolete inventory.
Our revenues do not include taxes we collect from our customers and remit to governmental authorities. Inventories and Rental Merchandise in Service Our inventories are stated at the lower of cost or net realizable value, net of any reserve for excess and obsolete inventory. Work-in-process and finished goods inventories consist of materials, labor and manufacturing overhead.
The increase in our Core Laundry Operations was due to organic growth of 4.6%, growth from fiscal 2024's extra week of 2.1% and acquisition related growth of 2.5%. Partially offsetting this growth was the effect of Canadian dollar exchange rate changes on our revenues of (0.1)%.
Fiscal 2025 included 52 weeks of operations, while fiscal 2024 included 53 weeks. Excluding the impact of the extra week, consolidated organic growth was 1.8%. The effect of the Canadian dollar exchange rate resulted in changes in our revenues of (0.2)%.
Provision for income taxes (In thousands, except percentages) Fiscal 2024 Fiscal 2023 Dollar Change Percent Change Provision for income taxes $ 43,905 $ 35,163 $ 8,742 24.9 % Effective income tax rate 23.2 % 25.3 % The decrease in the effective tax rate for fiscal 2024 as compared to the corresponding period year was due primarily to the release of certain tax reserves and a U.S. state legislative change enacted during the first quarter of fiscal 2024.
Provision for income taxes (In thousands, except percentages) Fiscal 2025 Fiscal 2024 Dollar Change Percent Change Provision for income taxes $ 47,104 $ 43,905 $ 3,199 7.3 % Effective income tax rate 24.1 % 23.2 % The increase in the effective tax rate for fiscal 2025 compared to the prior fiscal year was to an increase in taxable permanent differences in fiscal 2025.
As discussed above under “Long-Term Debt and Borrowing Capacity”, as of August 31, 2024, we had borrowing capacity of $375.0 million under our Credit Agreement, of which approximately $209.9 million was available for borrowing. Also, as of such date, we had no outstanding borrowings and letters of credit outstanding of $65.1 million.
As discussed above under “ Long-Term Debt and Borrowing Capacity ”, as of August 30, 2025, we had total borrowing capacity of $300.0 million under our Credit Agreement.
Rental and Cleaning and Canadian Rental and Cleaning operating segments have been combined to form the U.S. and Canadian Rental and Cleaning reporting segment. Refer to Note 15, “Segment Reporting”, of our Consolidated Financial Statements for our disclosure of segment information.
Refer to Item 1, “ Business ” and Note 15, “ Segment Reporting ” to our Consolidated Financial Statements for our disclosure of segment information. We have recast certain prior period segment results to conform with the current presentation.
The negative impact from prepaid expenses and other current assets was due primarily to increases in information technology prepaid contracts and increased capitalized commission costs.
These favorable impacts were partially offset by a $11.7 million decrease related to prepaid expenses and other current and non-current assets, primarily reflecting higher information technology-related prepaid contracts and increased capitalized commission costs.
Critical Accounting Policies and Estimates We believe the following critical accounting policies reflect our more significant judgments and estimates used in the preparation of our Consolidated Financial Statements. Use of Estimates We prepare our financial statements in conformity with U.S.
Use of Estimates We prepare our financial statements in conformity with U.S. GAAP, which requires management to make estimates and assumptions that affect the reported amounts in the financial statements and accompanying notes.
Approximately 88.1% of our revenues in fiscal 2024 were derived from our U.S. and Canadian Rental and Cleaning and Corporate segments. A key driver of this business is the number of workers employed by our customers. Our revenues are directly impacted by fluctuations in these employment levels.
The segment purchases, rents, cleans, delivers and sells, specialty garments and non-garment items primarily for nuclear applications. Approximately 91.2% of our revenues in fiscal 2025 were derived from our Uniform & Facility Service Solutions segment. A key driver of this business is the number of workers employed by our customers.
The amount and timing of any future dividend payment is subject to the approval of our Board of Directors each quarter. During fiscal 2024, we repurchased 139,556 shares for an average price of $170.40. During fiscal 2023, we did not repurchase any shares. As of August 31, 2024, we had $76.2 million remaining under our existing share repurchase program.
Pursuant to the share repurchase program, we repurchased 402,415 shares of our Common Stock for an aggregate of approximately $70.9 million during fiscal 2025, representing approximately 2.2% of our outstanding shares as of August 30, 2025. As of August 30, 2025, we had $40.6 million remaining to repurchase shares under the share repurchase program.
Removed
Typical customers include automobile service centers and dealers, delivery services, food and general merchandise retailers, food processors and service operations, light manufacturers, maintenance facilities, restaurants, service companies, soft and durable goods wholesalers, transportation companies, healthcare providers and others who require employee clothing for image, identification, protection or utility purposes.
Added
Rental and Cleaning and Canadian Rental and Cleaning operating segments were previously combined to form the U.S. and Canadian Rental and Cleaning reporting segment, and as a result, we had five reporting segments.
Removed
We also provide our customers with restroom and cleaning supplies, including air fresheners, paper products and hand soaps. At certain specialized facilities, like nuclear operations, we also decontaminate and clean work clothes and other items that may have been exposed to radioactive materials and service special cleanroom protective wear and facilities.
Added
We previously referred to our U.S. and Canadian Rental and Cleaning, MFG, and Corporate segments combined as our “Core Laundry Operations.” Beginning with the fourth quarter of 2025, we reorganized our business into three reportable operating segments based on the information reviewed by our Chief Executive Officer: Uniform & Facility Service Solutions, First Aid & Safety Solutions and Other.
Removed
Typical customers for these specialized services include government agencies, research and development laboratories, high technology companies and utilities operating nuclear reactors. Headquartered in Wilmington, Massachusetts, we are a North American leader in the supply and servicing of uniform and workwear programs, as well as the delivery of facility service programs.
Added
The Uniform & Facility Service Solutions segment consolidates the former Corporate, MFG and U.S. and Canadian Rental and Cleaning operating segments and includes our cleanroom operations, which was previously part of the Specialty Garments reporting segment.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

9 edited+0 added−0 removed7 unchanged
Biggest changeIn seeking to minimize the risks from interest rate fluctuations, we manage exposures through our operating and financing activities. We are exposed to interest rate risk primarily through borrowings under our Credit Agreement. During fiscal 2023, we borrowed and repaid $80.0 million under the Credit Agreement. During fiscal 2024, we had no outstanding borrowings under the Credit Agreement.
Biggest changeIn seeking to minimize the risks from interest rate fluctuations, we manage exposures through our operating and financing activities. We are exposed to interest rate risk primarily through borrowings under our Credit Agreement. During fiscal 2025, we had no outstanding borrowings under the Credit Agreement.
As such, our financial condition and operating results are affected by fluctuations in the value of the U.S. dollar as compared to currencies in foreign countries. Revenues denominated in currencies other than the U.S. dollar represented approximately 6.9%, 7.0% and 7.9% of our total consolidated revenues for fiscal 2024, 2023 and 2022, respectively.
As such, our financial condition and operating results are affected by fluctuations in the value of the U.S. dollar as compared to currencies in foreign countries. Revenues denominated in currencies other than the U.S. dollar represented approximately 7.0%, 6.9% and 7.0% of our total consolidated revenues for fiscal 2025, 2024 and 2023, respectively.
Any losses or gains resulting from unhedged foreign currency transactions, including exchange rate fluctuations on intercompany accounts are reported as transaction losses (gains) in our other expense, net. The intercompany payables and receivables are denominated in Canadian dollars, euros, British pounds, Mexican pesos and Nicaraguan cordobas. During fiscal 2024 transaction losses included in other expense, net, was $0.5 million.
Any losses or gains resulting from unhedged foreign currency transactions, including exchange rate fluctuations on intercompany accounts are reported as transaction losses (gains) in our other expense, net. The intercompany payables and receivables are denominated in Canadian dollars, euros, British pounds, Mexican pesos and Nicaraguan cordobas. During fiscal 2025, transaction losses included in other expense, net, was $0.6 million.
If exchange rates had changed by 10% during fiscal 2024, we would have recognized exchange gains or losses of approximately $0.8 million. Interest Rate Sensitivity We are exposed to market risk from changes in interest rates, which may adversely affect our financial position, results of operations and cash flows.
If exchange rates had changed by 10% during fiscal 2025, we would have recognized exchange gains or losses of approximately $0.1 million. Interest Rate Sensitivity We are exposed to market risk from changes in interest rates, which may adversely affect our financial position, results of operations and cash flows.
During fiscal 2024, we reclassified $0.1 million from accumulated other comprehensive loss to revenue, related to the derivative financial instruments. The gain on these forward contracts that results in a decrease to accumulated other comprehensive loss as of August 31, 2024 is expected to be reclassified to revenues prior to their maturity on August 29, 2026.
During fiscal 2025, we reclassified $0.1 million from accumulated other comprehensive loss to revenue, related to the derivative financial instruments. The gain on these forward contracts that results in a decrease to accumulated other comprehensive loss as of August 30, 2025 is expected to be reclassified to revenues prior to their maturity on August 29, 2026.
As of August 31, 2024, we had forward contracts with a notional value of approximately 3.6 million CAD outstanding and recorded the fair value of the contracts of $0.1 million in prepaid expenses and other current assets with a corresponding gain of $0.1 million in accumulated other comprehensive loss, which was recorded net of tax.
As of August 30, 2025, we had forward contracts with a notional value of approximately 1.8 million CAD outstanding and recorded the fair value of the contracts of $0.1 million in prepaid expenses and other current assets with a corresponding gain of $0.1 million in accumulated other comprehensive loss, which was recorded net of tax.
Please see Item 1A. “Risk Factors” in this Annual Report on Form 10-K for an additional discussion of risks and potential risks on our business, financial performance and the market price of our Common Stock. 36
Please see Item 1A. “ Risk Factors ” in this Annual Report on Form 10-K for an additional discussion of risks and potential risks on our business, financial performance and the market price of our Common Stock. 31
Total assets denominated in currencies other than the U.S. dollar represented approximately 6.8% and 6.6% of our total consolidated assets at August 31, 2024 and August 26, 2023, respectively.
Total assets denominated in currencies other than the U.S. dollar represented approximately 7.0% and 6.8% of our total consolidated assets as of August 30, 2025 and August 31, 2024, respectively.
If exchange rates had increased or decreased by 10% from the actual rates in effect during fiscal 2024, our revenues and assets for the year ended and as of August 31, 2024 would have increased or decreased by approximately $16.7 million and $18.3 million, respectively.
If exchange rates had increased or decreased by 10% from the actual rates in effect during fiscal 2025, our revenues and assets for the year ended and as of August 30, 2025 would have increased or decreased by approximately $17.1 million and $19.4 million, respectively.

Other UNF 10-K year-over-year comparisons