UniFirst Corporation (NYSE:UNF) Q2 2023 Earnings Call Transcript

So, I won’t break down the components any further there, other than say that we continue to push price in some ways. It is a difficult analysis to be honest. To really fair it out exactly how much pricing we are keeping because, we’ve said this before, but new accounts come in at lower prices than accounts in some cases that you’ve had for a little while. And so the net impact of price continues to be something that we work on. And I think we still have opportunities there. And our customers have been receptive understanding the environment and it’s something we’ll continue to work through.

Sam Karlov: That’s helpful. Thanks. And then one follow-up. You updated your guidance – sorry your updated guidance includes about $60 million to $65 million of additional top-line growth for the full year with $42 million of that coming from the cleanroom or Clean Uniform acquisition. How much of that additional $20 million was from strong performance in the second quarter versus higher growth expectations for the second half of the year?

Steven Sintros : It’s a good question. I think a lot of it is based on the estimates or the performance through the six months of the year. As Shane mentioned some of it relates to the Specialty Garment segment. Some of that Specialty Garment strength probably continues to the back half of the year and contributing it to, as well. But I think I think a fair amount of it is from the first half of the year. Maybe two-thirds of it and I’m going off the top of my head a little bit.

Sam Karlov: That’s helpful. Thanks.

Steven Sintros : Thank you.

Operator: Our next question comes from Kartik Mehta with Northcoast Research. Please proceed.

Jack Boyle : Good morning. This is Jack Boyle on behalf of Kartik Mehta. Good morning, everyone.

Steven Sintros : Good morning.

Shane O’Connor: Morning.

Jack Boyle : Just a quick question regarding the Clean Uniform acquisition. You guys have said that you plan on doubling the EBITDA margins from 10% to 20% percent in the next two to three years. Could you just give us a little more color as to maybe what strategy you are planning to pursue to do that? Or maybe what opportunities you saw within Clean Uniform?

Steven Sintros : Sure. I think, as I mentioned, one of the things that attracted us to Clean, the most is their service reputation in that market. When you look at that market, we have a decent presence in the some of the markets they service, but in others we really don’t have that significant of a presence. So, when you think about the ability to integrate operations, optimized routes, synergize sales forces, the supply chain efficiencies, working together on sourcing products, some of our self-manufactured goods. So, it’s really all of the typical things you would think of when you think about what we can gain from integrating with any sort of acquisition in our industry. I think the one that made this, even more attractive is, some of these markets aren’t some of our top performing markets.

And that’s really as a result of scale and density, which we’ve said for a long time is really key to profitability in all of our markets. And so, really the combination of the two companies will provide us a strong platform in really all of the markets that Clean and UniFirst serve commonly in that in that Midwest area. And so, as I mentioned before, it’s going to take a little time, because we’re still deploying technology. I don’t think I mentioned this, but they are deployed on the same ABS software that we’re deploying. Now, both different versions of ABS have different bells and whistles that we sort of have to synergize as we work through it. But that will help us as well in terms of trying to put the companies together.