Core Laundry Operations and Specialty Garments sales rise...
The company's Core Laundry Operations produced first quarter revenues of $373.8 million, up 6.2% from those in the first quarter of the prior year. Adjusting for the estimated effect of acquisitions, primarily from the September 2016 purchase of Arrow Uniform, as well as a stronger Canadian dollar, Core Laundry revenues grew 4.5%.
Revenues in the first quarter of fiscal 2018 for our Specialty Garments segment, which consists of nuclear decontamination and cleanroom operations, were $28.4 million, up 27.2% in the quarter compared to the same period a year ago.
Looking ahead, the company raised the bottom end of its fiscal year 2018 earnings forecast to $5.10-5.30 from $5.00-5.30, excluding non-recurring items, which remained in-line with expectations. Meanwhile, revenue is forecasted to come in at $1.63-1.65 billion, also falling in-line with expectations.
This outlook includes the $0.07 per share impact of the adoption of ASU 2016-9 in its first quarter. The company's outlook does not include any further tax benefits related to the adoption of this ASU for the remainder of the fiscal year. In addition, while the company expects its future results to substantially benefit from the recent U.S. tax reform, our earnings per share guidance also does not reflect this impact as our analysis is preliminary."
In a separate topic, the company noted that during its first quarter of fiscal 2018 it had adopted Accounting Standards Update 2016-09 (ASU 2016-09), Improvements to Employee Share-Based Payment Accounting. Under ASU 2016-09, excess tax benefits and deficiencies associated with employee share-based payments are no longer recognized as additional paid-in capital on the balance sheet but instead recognized directly to income tax expense or benefit in the income statement in the reporting period in which they occur. The net benefit in its first quarter to fully diluted earnings per share from the adoption of ASU 2016-09 was $0.07. The full year 2018 outlook provided by the Company in its October 2017 earnings release did not include any expected benefit from this change in accounting.
In short, the company beat on the top and bottom line this morning, raised the bottom end of its fiscal year 2018 earnings forecast and continues to maintain a strong balance sheet with no long-term debt and significant cash balances.
However, shares of UNF are just showing a modest gain in morning trade.