UniFirst Corporation (NYSE:UNF) Q3 2023 Earnings Call Transcript

Steven Sintros: And just to add to that, Andy, many of those were anticipated. So part of the way we certainly look at the breakdown of the quarter is what did we anticipate and what didn’t we? For the most part, the health — excuse me, the energy benefit was anticipated. Most of the merchandise headwind was anticipated, although it was a bit higher than we had built in. And then Shane mentioned a number of these other areas that maybe were a little bit more unanticipated or higher than we expected. But I didn’t want to give you the impression that the merchandise headwind, which was the largest piece, was largely unanticipated because, for the most part, the core merchandise amortization was within our expectations.

Andrew Wittmann: That makes sense. I guess just final one on this. What is the net, Shane? I know your purchase accounting is probably not totally complete, but last quarter, you had an estimate about what the intangible amortization was going to be in that. Can you just talk about what the quarterly impact is as it stands currently from the intangible amortization related to Clean so that we have that?

Shane O’Connor: Yes. So if you take a look at the impact of the, on my EBITDA related to the Clean acquisition, it was about three point or $3 million. The operating loss was nominal. So the depreciation and amortization was just a little over $3 million and about $2.3 million of that was intangibles amortization.

Steven Sintros: And just to follow up on that, Andy. That’s obviously not a full quarter based on where we acquired. So it will be a little higher than that in the fourth quarter.

Shane O’Connor: And you had sort of prefaced.

Andrew Wittmann: All right. So the full quarterly run rate step-up more like, sorry, go ahead.

Shane O’Connor: No. I was just going to say you had sort of prefaced your question with it, but I will caution, we are still early in the purchase accounting process. So we will be refining those over the next three quarters.

Andrew Wittmann: Okay. So the fully loaded quarterly run rate should be closer to like $3 million on before Clean versus after Clean run rate for the intangible amort. Is that about the right way to think about it, take the 2.3 partial quarter up a little bit?

Steven Sintros: Yeah, that’s about it.

Shane O’Connor: Yeah, you’re in the ballpark. Yeah.

Andrew Wittmann: Okay. All right. I will leave it there for now and yield the floor. Thanks for the color here guys.

Steven Sintros: Thank you.

Shane O’Connor: Thank you.

Operator: Our next question is coming from the line of Tim Mulrooney with William Blair. Please go ahead.

Sam Karlov: Hey, guys. This is Sam Karlov on for Tim. Thanks for taking my question. Can you talk about what you’re seeing in regard to customer behavior? Have you seen any pockets of strength or weakness begin to emerge across any particular geographies or end markets?

Steven Sintros: I think it’s been a pretty stable environment across our employee base. I didn’t talk a lot about sales in the quarter, but the sales environment has still been pretty productive for us. From a wearer level, we still see sort of what we had talked about last quarter, pretty good stability. So we’re not seeing nothing to speak of by geography or industry that I would say are particularly positive nor negative at this point based on your question.

Sam Karlov: Okay. Thanks and then a follow-up. In terms of pricing, can you just remind us where pricing is at today relative to historical standards? And does it remain elevated related to historical levels?