UniFirst posts quarterly profit of $34.7 million, incurs merger costs

Key Facts

UniFirst reported net income of $34.7 million for the fiscal fourth quarter of 2026 in results released on October 21, while incurring expenses related to its pending merger with Cintas. Quarterly revenue totaled $645.0 million, according to the company's statement, which presented results for its uniform, facility services, and first aid and safety businesses. Operating income for the same period was $41.7 million, while reported diluted earnings per share were $1.90. Adjusted earnings before interest, taxes, depreciation and amortization totaled $94.9 million in the final quarter of the fiscal year. The results came as the company continued work on the transaction, incurring legal and advisory fees alongside its operating expenses.

Quarterly merger costs totaled about $14.4 million, according to UniFirst, forming an expense item related to the transaction during the reporting period. The company said most of these costs consisted of legal and advisory fees and professional services as work continued on combining the companies. In its operations, margins in the uniform and facility services segment benefited from declines in some costs relative to the segment's revenue. UniFirst attributed this support to "lower merchandise and selling costs," explaining that the improvement reflected these expenses as a percentage of revenue. But the company said "higher production expenses and healthcare claims" partly offset the effect of improved costs in the core segment during the quarter.

The uniform and facility services segment posted organic growth of 4.6% in the fiscal fourth quarter of 2026, according to the earnings statement, excluding the effects of acquisitions and Canadian dollar fluctuations. In the first aid and safety business, quarterly revenue totaled $35.2 million, among the operations the company included in its review of the final quarter's performance. For the full fiscal year 2026, UniFirst's revenue reached $2.523 billion, according to annual figures released alongside the quarterly results. Annual net income totaled $109.5 million, covering the company's performance throughout the fiscal year to which these results relate. Cash and cash equivalents stood at $192.1 million at fiscal year-end, according to the liquidity balance UniFirst disclosed in the statement.

The Cintas-UniFirst transaction has an implied enterprise value of about $5.5 billion, according to the official transaction presentation filed with the U.S. Securities and Exchange Commission when the agreement was announced. The merger received approval from UniFirst shareholders at a meeting held in June 2026, according to the company's announcement of the vote on the agreement. Votes in favor represented about 95% of all outstanding shares included in the approval calculation, according to the percentage the company announced for that meeting. The share base used to calculate that percentage included UniFirst common shares and Class B shares, voting together as a single class. The shareholder approval forms part of the background to the transaction discussed in the October results, while the expected completion remains subject to closing conditions and regulatory approvals.

The agreement includes a reverse termination fee of $350 million, according to the official presentation filed with the U.S. Securities and Exchange Commission. Cintas would be required to pay the fee to UniFirst if the merger is blocked on antitrust grounds, under the provision specified in the transaction presentation. On the expected benefits of combining the companies, Cintas said it expects the acquisition to boost its earnings per share after completion. The company set a target of achieving that by the end of the second full year following closing, according to the forecast in the official investor presentation. This timetable links the transaction's expected effect on Cintas' earnings per share to the period after completion, while the termination fee applies if the merger is blocked on antitrust grounds.

In its update issued with the October 21, 2026 results, UniFirst said it expects to complete the transaction before the end of the current calendar year, according to the timetable provided in its statement. The company tied that expectation to the satisfaction of closing conditions, among the requirements on which completion of the agreement remains contingent, according to the update. The requirements also include obtaining the regulatory approvals needed to combine UniFirst and Cintas, the company said when presenting its completion outlook. The timing UniFirst specified therefore remains an expectation conditional on completing those procedures, in the context of the transaction its shareholders approved in June. The company has set the end of 2026 as the expected timeframe for closing, with completion remaining subject to the conditions and approvals identified in its earnings statement.