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Share Name | Share Symbol | Market | Type |
---|---|---|---|
G&K Services, Inc. | NASDAQ:GK | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 97.49 | 97.49 | 97.51 | 0 | 01:00:00 |
MINNESOTA
|
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41-0449530
|
(State of incorporation)
|
|
(I.R.S. Employer Identification No.)
|
Title of Each Class
|
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Name of Each Exchange on which Registered
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Class A Common Stock (par value $0.50 per share)
|
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The NASDAQ Stock Market LLC
|
Large accelerated filer
|
x
|
Accelerated filer
|
o
|
Non-accelerated filer
|
o
(do not check if a smaller reporting company)
|
Smaller reporting company
|
o
|
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PAGE
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ITEM 1.
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BUSINESS
|
•
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Image – work apparel helps companies project a professional image through their employees and frame the perception of credibility, knowledge, trust and quality to their customers. Employees in uniform are perceived as well trained, competent and dependable. Branded work apparel promotes a company's brand identity and allows employees in uniform to convey a company's image.
|
•
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Safety and security – protective work apparel helps protect employees from difficult environments, such as heavy soils, heat, flame or chemicals. Additionally, uniforms help improve workplace security by identifying employees working for a particular company or department. Facility services products, such as floor mats and first aid supplies, also help improve workplace safety.
|
•
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Workplace cleanliness and hygiene – facility services products, such as floor mats, towels, mops, and restroom supplies, help ensure a clean, well-maintained facility, which is safer for employees and more attractive to customers.
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•
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Employee retention – work apparel enhances worker morale and helps build teamwork in addition to providing a tangible employee benefit.
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•
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Product protection – work apparel and facility services help protect products against sources of contamination in various industries, including the food, pharmaceutical and healthcare industries.
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ITEM 1A.
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RISK FACTORS
|
•
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changes in business and economic conditions, including downturns in specific industry segments and/or the overall economy;
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•
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changes in consumer confidence caused by changes in market conditions, including changes in the credit market, expectations for inflation and energy prices;
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•
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competitive pressures, including pricing pressures, from companies that have competing products and services;
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•
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changes in customer needs;
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•
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changes in our customers' employment levels, which impact the number of users of our products and services;
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•
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strategic actions taken by our competitors; and
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•
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market acceptance of our products and services.
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•
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the attention of our management may be directed to transaction-related considerations and may be diverted from the day-to-day operations of our business;
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•
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our employees may experience uncertainty about their future roles with us, which might adversely affect our ability to hire, retain and motivate key personnel and other employees;
|
•
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our relationships with employees, customers, suppliers, regulators and other third parties with which we maintain business relationships may experience uncertainty prior to the closing of the Merger and seek alternative relationships with third parties or seek to terminate or re-negotiate their relationships with us; and
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•
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the Merger Agreement restricts us from engaging in certain actions without the consent of Cintas, which may affect our ability to execute on our business strategies and attain our financial and other goals, including continuing efforts to
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ITEM 1B.
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UNRESOLVED STAFF COMMENTS
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ITEM 2.
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PROPERTIES
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ITEM 3.
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LEGAL PROCEEDINGS
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ITEM 5.
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MARKET FOR REGISTRANT'S COMMON STOCK, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
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High
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Low
|
||||
Fiscal 2016
|
|
|
|
||||
1st Quarter
|
$
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72.89
|
|
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$
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64.15
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2nd Quarter
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72.10
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61.17
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||
3rd Quarter
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73.34
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51.94
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||
4th Quarter
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77.66
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69.76
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||
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||||
Fiscal 2015
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|
|
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||||
1st Quarter
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$
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57.85
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|
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$
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47.40
|
|
2nd Quarter
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72.54
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53.62
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||
3rd Quarter
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74.11
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65.69
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4th Quarter
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73.81
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68.57
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Period
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Total Number of Shares Purchased
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Average Price Paid Per Share
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Total Number of Shares Purchased as Part of Publicly Announced Plan
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Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plan
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||
March 27, 2016 - April 30, 2016
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48,172
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$
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72.91
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48,172
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$
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99,666,774
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May 1, 2016 - May 28, 2016
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38,761
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$
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72.58
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38,761
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$
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96,853,471
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May 29, 2016 - July 2, 2016
|
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37,182
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$
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75.59
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37,182
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$
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94,043,059
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Total
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|
124,115
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$
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73.61
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|
124,115
|
|
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$
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94,043,059
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Plan Category
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Number of Securities to
be Issued Upon Exercise
of Outstanding Options,
Warrants and Rights
(A)
|
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Weighted-Average
Exercise Price of
Outstanding Options,
Warrants and Rights
(B)
|
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Number of Securities Remaining
Available for Future Issuance
Under Equity Compensation Plans
(Excluding Securities Reflected
in Column (A))
|
||||
Equity compensation plans approved by security holders (1):
|
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||||
Restated Equity Incentive Plan (2013) (2)
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716,188
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$
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42.94
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1,206,048
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Employee Plans (3)
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1,221
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|
21.11
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—
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Total:
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717,409
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$
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42.90
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1,206,048
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Equity compensation plans not approved by security holders:
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|
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||||
None
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—
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—
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—
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Total
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717,409
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$
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42.90
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1,206,048
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(1)
|
See
Note 10, "Stockholders' Equity"
of Notes to Consolidated Financial Statements.
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(2)
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Our Restated Equity Incentive Plan (2013) was approved at our November 6, 2013 annual meeting of shareholders. The outstanding shares listed for this plan include the initial shares authorized under our 2006 and 2010 Equity Incentive Plans, as well as the additional shares authorized when the restated plan was approved.
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(3)
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Includes our 1998 Stock Option and Compensation Plan.
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ITEM 6.
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SELECTED FINANCIAL DATA
|
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2016
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2015
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2014
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2013
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2012
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||||||||||
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(53 weeks)
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(52 weeks)
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(52 weeks)
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(52 weeks)
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(52 weeks)
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||||||||||
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(1)
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(2)
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(3)
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(4)
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(5)
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||||||||||
Rental and direct sale revenue
|
$
|
978,041
|
|
|
$
|
937,642
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$
|
900,869
|
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$
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866,018
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$
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828,953
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Net Income from Continuing Operations
|
72,439
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59,870
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56,065
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50,506
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24,487
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|||||
Per Share Data:
|
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||||||||||
Basic earnings per share from continuing operations
|
3.65
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3.01
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2.83
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2.62
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1.32
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|||||
Diluted earnings per share from continuing operations
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3.61
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2.95
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2.78
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2.58
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1.31
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|||||
Dividends per share:
|
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|
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||||||||||
Regular
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1.480
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1.240
|
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1.080
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0.780
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0.585
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|||||
Special
|
—
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—
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6.00
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|
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—
|
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6.00
|
|
|||||
Total Assets
|
921,537
|
|
|
928,197
|
|
|
923,519
|
|
|
897,286
|
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|
873,731
|
|
|||||
Long-Term Debt
|
231,148
|
|
|
243,600
|
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|
266,230
|
|
|
175,000
|
|
|
218,018
|
|
|||||
Stockholders' Equity
|
389,540
|
|
|
394,350
|
|
|
374,044
|
|
|
467,008
|
|
|
403,059
|
|
(1)
|
Fiscal year 2016 was a 53 week year, all other fiscal years presented above were 52 weeks.
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(2)
|
Fiscal year 2015 includes a pretax charge of $6.5 million associated with the withdrawal from several multi-employer pension plans and a pretax charge of $3.9 million associated with the environmental reserves established. Total assets reflects the retrospective adoption of a new accounting pronouncement which, among other things, requires deferred tax assets and liabilities to be combined and presented as noncurrent in our Consolidated Balance Sheets. See Note 1, "Summary of Significant Accounting Policies" of Notes to Consolidated Financial Statements for further information about prior year reclassifications.
|
(3)
|
Fiscal year 2014 includes a pretax charge of $9.9 million associated with the withdrawal from several multi-employer pension plans and a pretax loss of $12.8 million on the divestiture of our Direct Sale Program Business and our Ireland Business, offset by the benefit of the change in estimated merchandise in-service amortization lives of $6.1 million.
|
(4)
|
Fiscal year 2013 includes net pretax charges of $8.2 million related to restructuring and impairment charges and an increase in our estimated liability associated with the exit of a multi-employer pension plan, offset by the benefit of the change in estimated merchandise in-service amortization lives.
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(5)
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Fiscal year 2012 includes a pretax charge of $24.0 million associated with withdrawing from a multi-employer pension plan.
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ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
Percentage of Revenues
|
|
Percentage Change
|
|||||||||||
|
Years Ended
|
|
Between Years
|
|||||||||||
|
Fiscal 2016
|
|
Fiscal 2015
|
|
Fiscal 2014
|
|
F16 vs. F15
|
|
F15 vs. F14
|
|||||
Rental and direct sale revenue
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
4.3
|
%
|
|
4.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|||||
Cost of rental and direct sale revenue
|
65.8
|
|
|
66.2
|
|
|
66.0
|
|
|
3.5
|
|
|
4.4
|
|
Gross margin
|
34.2
|
|
|
33.8
|
|
|
34.0
|
|
|
5.8
|
|
|
3.5
|
|
Pension withdrawal and associated expenses
|
—
|
|
|
0.7
|
|
|
1.1
|
|
|
(100.0
|
)
|
|
(34.0
|
)
|
Selling and administrative
|
21.7
|
|
|
22.3
|
|
|
22.2
|
|
|
1.7
|
|
|
4.4
|
|
Income from continuing operations
|
12.5
|
|
|
10.8
|
|
|
10.7
|
|
|
21.2
|
|
|
5.3
|
|
Interest expense
|
0.7
|
|
|
0.8
|
|
|
0.7
|
|
|
(4.2
|
)
|
|
12.9
|
|
Income from continuing operations before income taxes
|
11.8
|
|
|
10.0
|
|
|
10.0
|
|
|
23.1
|
|
|
4.8
|
|
Provision for income taxes
|
4.4
|
|
|
3.6
|
|
|
3.7
|
|
|
26.8
|
|
|
1.4
|
|
Net income from continuing operations
|
7.4
|
|
|
6.4
|
|
|
6.2
|
|
|
21.0
|
|
|
6.8
|
|
Net income (loss) from discontinued operations
|
—
|
|
|
—
|
|
|
(0.9
|
)
|
|
|
|
|
|
|
Net income
|
7.4
|
%
|
|
6.4
|
%
|
|
5.3
|
%
|
|
21.0
|
%
|
|
25.6
|
%
|
Organic growth rate
|
4.0
|
%
|
Impact of 53rd week
|
2.0
|
%
|
Impact of foreign currency exchange rate changes
|
(1.9
|
)%
|
Acquisitions and other
|
0.2
|
%
|
Total revenue growth
|
4.3
|
%
|
Organic growth rate
|
5.6
|
%
|
Impact of foreign currency exchange rate changes
|
(1.4
|
)%
|
Other changes
|
(0.1
|
)%
|
Total revenue growth
|
4.1
|
%
|
|
For the Fiscal Years Ended
|
|
|
||||||||
|
July 2, 2016
|
|
June 27, 2015
|
|
Change
|
||||||
Accounts receivable, net
|
$
|
102,657
|
|
|
$
|
100,402
|
|
|
$
|
2,255
|
|
Inventory
|
34,077
|
|
|
36,258
|
|
|
(2,181
|
)
|
|||
Merchandise in service, net
|
131,801
|
|
|
133,942
|
|
|
(2,141
|
)
|
|||
Accounts payable
|
(44,792
|
)
|
|
(51,616
|
)
|
|
6,824
|
|
|||
Adjusted Working Capital
|
$
|
223,743
|
|
|
$
|
218,986
|
|
|
$
|
4,757
|
|
|
Less than
one year
|
|
One to three
years
|
|
Three to
five years
|
|
After five
years
|
|
Total
|
||||||||||
Borrowings under Unsecured Revolver
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
107,600
|
|
|
$
|
—
|
|
|
$
|
107,600
|
|
Borrowings under A/R Line
|
23,548
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
23,548
|
|
|||||
Borrowings under Fixed Rate Notes
|
—
|
|
|
—
|
|
|
—
|
|
|
100,000
|
|
|
100,000
|
|
|||||
Operating leases
|
24,179
|
|
|
33,221
|
|
|
18,760
|
|
|
10,460
|
|
|
86,620
|
|
|||||
Multi-employer pension plan payments
|
803
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
803
|
|
|||||
Purchase commitments
|
2,133
|
|
|
295
|
|
|
—
|
|
|
—
|
|
|
2,428
|
|
|||||
Estimated interest payments related to long-term debt and interest rate swap
|
7,009
|
|
|
13,882
|
|
|
11,765
|
|
|
24,575
|
|
|
57,231
|
|
|||||
Total contractual cash obligations
|
$
|
57,672
|
|
|
$
|
47,398
|
|
|
$
|
138,125
|
|
|
$
|
135,035
|
|
|
$
|
378,230
|
|
ITEM 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
(Unaudited)
|
First
|
|
Second
|
|
Third
|
|
Fourth
|
||||||||
2016
|
|
|
|
|
|
|
|
||||||||
Revenues
|
$
|
237,171
|
|
|
$
|
243,060
|
|
|
$
|
239,307
|
|
|
$
|
258,503
|
|
Gross Profit
|
81,083
|
|
|
83,030
|
|
|
81,721
|
|
|
89,140
|
|
||||
Income from Continuing Operations
|
27,878
|
|
|
31,484
|
|
|
30,360
|
|
|
32,918
|
|
||||
Net Income
|
16,263
|
|
|
18,493
|
|
|
17,854
|
|
|
19,829
|
|
||||
Basic Earnings per Share
|
0.81
|
|
|
0.93
|
|
|
0.90
|
|
|
1.01
|
|
||||
Diluted Earnings per Share
|
0.80
|
|
|
0.92
|
|
|
0.89
|
|
|
1.00
|
|
||||
Dividends per Share
|
0.37
|
|
|
0.37
|
|
|
0.37
|
|
|
0.37
|
|
||||
2015
|
|
|
|
|
|
|
|
||||||||
Revenues
|
$
|
230,242
|
|
|
$
|
237,309
|
|
|
$
|
233,514
|
|
|
$
|
236,577
|
|
Gross Profit
|
78,790
|
|
|
80,316
|
|
|
78,941
|
|
|
78,460
|
|
||||
Income from Continuing Operations
|
26,850
|
|
|
28,624
|
|
|
21,601
|
|
|
24,139
|
|
||||
Net Income
|
16,368
|
|
|
16,953
|
|
|
12,429
|
|
|
14,120
|
|
||||
Basic Earnings per Share
|
0.82
|
|
|
0.85
|
|
|
0.62
|
|
|
0.72
|
|
||||
Diluted Earnings per Share
|
0.81
|
|
|
0.83
|
|
|
0.61
|
|
|
0.71
|
|
||||
Dividends per Share
|
0.31
|
|
|
0.31
|
|
|
0.31
|
|
|
0.31
|
|
/s/ Douglas A. Milroy
|
Douglas A. Milroy
|
Chairman and Chief Executive Officer
|
(Principal Executive Officer)
|
/s/ Tracy C. Jokinen
|
Tracy C. Jokinen
|
Chief Financial Officer
|
(Principal Financial Officer)
|
/s/ KPMG LLP
|
KPMG LLP
|
/s/ KPMG LLP
|
KPMG LLP
|
|
For the Fiscal Years Ended
|
||||||||||
|
July 2,
2016 |
|
June 27,
2015 |
|
June 28,
2014 |
||||||
(In thousands, except per share data)
|
(53 weeks)
|
|
(52 weeks)
|
|
(52 weeks)
|
||||||
Rental and direct sale revenue
|
$
|
978,041
|
|
|
$
|
937,642
|
|
|
$
|
900,869
|
|
Cost of rental and direct sale revenue
|
643,067
|
|
|
621,135
|
|
|
594,954
|
|
|||
Gross Margin
|
334,974
|
|
|
316,507
|
|
|
305,915
|
|
|||
Pension withdrawal and associated expenses
|
—
|
|
|
6,500
|
|
|
9,854
|
|
|||
Selling and administrative
|
212,334
|
|
|
208,793
|
|
|
199,946
|
|
|||
Income from Continuing Operations
|
122,640
|
|
|
101,214
|
|
|
96,115
|
|
|||
Interest expense
|
6,835
|
|
|
7,138
|
|
|
6,320
|
|
|||
Income from Continuing Operations before Income Taxes
|
115,805
|
|
|
94,076
|
|
|
89,795
|
|
|||
Provision for income taxes
|
43,366
|
|
|
34,206
|
|
|
33,730
|
|
|||
Net Income from Continuing Operations
|
72,439
|
|
|
59,870
|
|
|
56,065
|
|
|||
Net loss from discontinued operations, net of tax
|
—
|
|
|
—
|
|
|
(8,393
|
)
|
|||
Net Income
|
$
|
72,439
|
|
|
$
|
59,870
|
|
|
$
|
47,672
|
|
|
|
|
|
|
|
||||||
Basic Earnings (Loss) per Common Share:
|
|
|
|
|
|
||||||
From continuing operations
|
$
|
3.65
|
|
|
$
|
3.01
|
|
|
$
|
2.83
|
|
From discontinued operations
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(0.43
|
)
|
Basic earnings per share
|
$
|
3.65
|
|
|
$
|
3.01
|
|
|
$
|
2.41
|
|
|
|
|
|
|
|
||||||
Diluted Earnings (Loss) per Common Share:
|
|
|
|
|
|
||||||
From continuing operations
|
$
|
3.61
|
|
|
$
|
2.95
|
|
|
$
|
2.78
|
|
From discontinued operations
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(0.42
|
)
|
Diluted earnings per share
|
$
|
3.61
|
|
|
$
|
2.95
|
|
|
$
|
2.36
|
|
|
|
|
|
|
|
||||||
Weighted average number of shares outstanding, basic
|
19,586
|
|
|
19,676
|
|
|
19,568
|
|
|||
Weighted average number of shares outstanding, diluted
|
19,808
|
|
|
20,047
|
|
|
19,941
|
|
|||
|
|
|
|
|
|
||||||
Dividends Declared per Share
|
$
|
1.48
|
|
|
$
|
1.24
|
|
|
$
|
7.08
|
|
|
For the Fiscal Years Ended
|
||||||||||
|
July 2, 2016
|
|
June 27, 2015
|
|
June 28, 2014
|
||||||
(In thousands)
|
(53 weeks)
|
|
(52 weeks)
|
|
(52 weeks)
|
||||||
Net income
|
$
|
72,439
|
|
|
$
|
59,870
|
|
|
$
|
47,672
|
|
Other comprehensive income (loss)
|
|
|
|
|
|
||||||
Foreign currency translation adjustments
|
(5,188
|
)
|
|
(18,629
|
)
|
|
(1,797
|
)
|
|||
Change in pension benefit liabilities
|
(12,249
|
)
|
|
(2,415
|
)
|
|
(6,572
|
)
|
|||
Derivative financial instruments unrecognized (loss) gain
|
(13,046
|
)
|
|
4,831
|
|
|
(362
|
)
|
|||
Derivative financial instruments (loss) gain reclassified
|
(223
|
)
|
|
532
|
|
|
533
|
|
|||
Total other comprehensive loss before income taxes
|
(30,706
|
)
|
|
(15,681
|
)
|
|
(8,198
|
)
|
|||
Income tax benefit
|
10,783
|
|
|
2,750
|
|
|
2,796
|
|
|||
Other comprehensive loss, net of taxes
|
(19,923
|
)
|
|
(12,931
|
)
|
|
(5,402
|
)
|
|||
Comprehensive income
|
$
|
52,516
|
|
|
$
|
46,939
|
|
|
$
|
42,270
|
|
|
July 2,
2016 |
|
June 27,
2015 |
||||
(In thousands, except per share data)
|
|
||||||
ASSETS
|
|
|
|
||||
Current Assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
24,279
|
|
|
$
|
16,235
|
|
Accounts receivable, less allowance for doubtful accounts of $3,578 and $3,469
|
102,657
|
|
|
100,402
|
|
||
Inventory
|
34,077
|
|
|
36,258
|
|
||
Merchandise in service, net
|
131,801
|
|
|
133,942
|
|
||
Other current assets
|
20,539
|
|
|
30,383
|
|
||
Total current assets
|
313,353
|
|
|
317,220
|
|
||
Property, Plant and Equipment
|
|
|
|
||||
Land
|
32,999
|
|
|
32,567
|
|
||
Buildings and improvements
|
178,177
|
|
|
170,056
|
|
||
Machinery and equipment
|
406,747
|
|
|
394,244
|
|
||
Automobiles and trucks
|
7,928
|
|
|
7,486
|
|
||
Less accumulated depreciation
|
(397,209
|
)
|
|
(382,297
|
)
|
||
Total property, plant and equipment, net
|
228,642
|
|
|
222,056
|
|
||
Other Assets
|
|
|
|
||||
Goodwill
|
324,520
|
|
|
325,183
|
|
||
Other noncurrent assets
|
55,022
|
|
|
63,738
|
|
||
Total other assets
|
379,542
|
|
|
388,921
|
|
||
Total assets
|
$
|
921,537
|
|
|
$
|
928,197
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
||||
Current Liabilities
|
|
|
|
||||
Accounts payable
|
$
|
44,792
|
|
|
$
|
51,616
|
|
Accrued expenses
|
|
|
|
||||
Compensation and employee benefits
|
47,085
|
|
|
46,442
|
|
||
Other
|
25,651
|
|
|
25,297
|
|
||
Current maturities of long-term debt
|
—
|
|
|
169
|
|
||
Total current liabilities
|
117,528
|
|
|
123,524
|
|
||
Long-term debt, net of current maturities
|
231,148
|
|
|
243,600
|
|
||
Deferred income taxes
|
68,895
|
|
|
59,280
|
|
||
Other noncurrent liabilities
|
114,426
|
|
|
107,443
|
|
||
Total liabilities
|
531,997
|
|
|
533,847
|
|
||
Commitments and Contingencies (Note 12)
|
|
|
|
||||
Stockholders' Equity
|
|
|
|
||||
Common stock, $0.50 par value, non-convertible Class A, 400,000 shares authorized, 19,661 and 19,953 shares issued and outstanding
|
9,828
|
|
|
9,976
|
|
||
Additional paid-in capital
|
84,804
|
|
|
78,342
|
|
||
Retained earnings
|
323,775
|
|
|
314,976
|
|
||
Accumulated other comprehensive (loss) income
|
(28,867
|
)
|
|
(8,944
|
)
|
||
Total stockholders' equity
|
389,540
|
|
|
394,350
|
|
||
Total liabilities and stockholders' equity
|
$
|
921,537
|
|
|
$
|
928,197
|
|
(In thousands, except per share data)
|
Shares
|
|
Class A
Common
Stock
|
|
Additional
Paid-In
Capital
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Income/(Loss)
|
|
Stockholders'
Equity
|
|||||||||||
Balance June 29, 2013
|
19,683
|
|
|
$
|
9,842
|
|
|
$
|
44,872
|
|
|
$
|
402,905
|
|
|
$
|
9,389
|
|
|
$
|
467,008
|
|
Comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
47,672
|
|
|
(5,402
|
)
|
|
42,270
|
|
|||||
Proceeds from issuance of common stock under stock option plans
|
460
|
|
|
230
|
|
|
8,518
|
|
|
—
|
|
|
—
|
|
|
8,748
|
|
|||||
Share-based compensation
|
—
|
|
|
—
|
|
|
6,318
|
|
|
—
|
|
|
—
|
|
|
6,318
|
|
|||||
Shares withheld for taxes under our equity compensation plans
|
(26
|
)
|
|
(13
|
)
|
|
(1,422
|
)
|
|
—
|
|
|
—
|
|
|
(1,435
|
)
|
|||||
Repurchase of common stock
|
(205
|
)
|
|
(103
|
)
|
|
—
|
|
|
(11,569
|
)
|
|
—
|
|
|
(11,672
|
)
|
|||||
Excess tax benefit from share-based compensation
|
—
|
|
|
—
|
|
|
4,578
|
|
|
—
|
|
|
—
|
|
|
4,578
|
|
|||||
Cash dividends ($7.08 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(141,771
|
)
|
|
—
|
|
|
(141,771
|
)
|
|||||
Balance June 28, 2014
|
19,912
|
|
|
9,956
|
|
|
62,864
|
|
|
297,237
|
|
|
3,987
|
|
|
374,044
|
|
|||||
Comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
59,870
|
|
|
(12,931
|
)
|
|
46,939
|
|
|||||
Proceeds from issuance of common stock under stock option plans
|
341
|
|
|
171
|
|
|
6,112
|
|
|
—
|
|
|
—
|
|
|
6,283
|
|
|||||
Share-based compensation
|
—
|
|
|
—
|
|
|
6,219
|
|
|
—
|
|
|
—
|
|
|
6,219
|
|
|||||
Shares withheld for taxes under our equity compensation plans
|
(35
|
)
|
|
(18
|
)
|
|
(2,058
|
)
|
|
—
|
|
|
—
|
|
|
(2,076
|
)
|
|||||
Repurchase of common stock
|
(265
|
)
|
|
(133
|
)
|
|
—
|
|
|
(17,464
|
)
|
|
—
|
|
|
(17,597
|
)
|
|||||
Excess tax benefit from share-based compensation
|
—
|
|
|
—
|
|
|
5,205
|
|
|
—
|
|
|
—
|
|
|
5,205
|
|
|||||
Cash dividends ($1.24 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(24,667
|
)
|
|
—
|
|
|
(24,667
|
)
|
|||||
Balance June 27, 2015
|
19,953
|
|
|
9,976
|
|
|
78,342
|
|
|
314,976
|
|
|
(8,944
|
)
|
|
394,350
|
|
|||||
Comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
72,439
|
|
|
(19,923
|
)
|
|
52,516
|
|
|||||
Proceeds from issuance of common stock under stock option plans
|
279
|
|
|
140
|
|
|
2,020
|
|
|
—
|
|
|
—
|
|
|
2,160
|
|
|||||
Share-based compensation
|
—
|
|
|
—
|
|
|
6,631
|
|
|
—
|
|
|
—
|
|
|
6,631
|
|
|||||
Shares withheld for taxes under our equity compensation plans
|
(66
|
)
|
|
(33
|
)
|
|
(4,717
|
)
|
|
—
|
|
|
—
|
|
|
(4,750
|
)
|
|||||
Repurchase of common stock
|
(505
|
)
|
|
(255
|
)
|
|
—
|
|
|
(34,269
|
)
|
|
—
|
|
|
(34,524
|
)
|
|||||
Excess tax benefit from share-based compensation
|
—
|
|
|
—
|
|
|
2,528
|
|
|
|
|
|
—
|
|
|
2,528
|
|
|||||
Cash dividends declared ($1.48 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(29,371
|
)
|
|
—
|
|
|
(29,371
|
)
|
|||||
Balance July 2, 2016
|
19,661
|
|
|
$
|
9,828
|
|
|
$
|
84,804
|
|
|
$
|
323,775
|
|
|
$
|
(28,867
|
)
|
|
$
|
389,540
|
|
|
For the Fiscal Years Ended
|
||||||||||
|
July 2,
2016 |
|
June 27,
2015 |
|
June 28,
2014 |
||||||
(In thousands)
|
(53 weeks)
|
|
(52 weeks)
|
|
(52 weeks)
|
||||||
Operating Activities:
|
|
|
|
|
|
||||||
Net income
|
$
|
72,439
|
|
|
$
|
59,870
|
|
|
$
|
47,672
|
|
Adjustments to reconcile net income to net cash provided by operating activities -
|
|
|
|
|
|
||||||
Depreciation and amortization
|
36,504
|
|
|
32,298
|
|
|
30,877
|
|
|||
Loss on sale of business
|
—
|
|
|
—
|
|
|
12,837
|
|
|||
Pension withdrawal and associated expenses
|
—
|
|
|
6,500
|
|
|
9,854
|
|
|||
Deferred income taxes
|
19,606
|
|
|
18,638
|
|
|
21,972
|
|
|||
Share-based compensation
|
6,749
|
|
|
6,219
|
|
|
6,318
|
|
|||
Changes in operating items, exclusive of acquisitions and divestitures -
|
|
|
|
|
|
||||||
Accounts receivable
|
(3,048
|
)
|
|
(2,908
|
)
|
|
(14,538
|
)
|
|||
Inventory and merchandise in service
|
4,590
|
|
|
(9,429
|
)
|
|
(12,157
|
)
|
|||
Accounts payable
|
(3,662
|
)
|
|
7,201
|
|
|
935
|
|
|||
Other current assets and liabilities
|
18,789
|
|
|
(3,352
|
)
|
|
(25,273
|
)
|
|||
Multi-employer pension plan settlement payment
|
(7,903
|
)
|
|
(24,799
|
)
|
|
—
|
|
|||
Other
|
(9,888
|
)
|
|
3,997
|
|
|
(3,861
|
)
|
|||
Net cash provided by operating activities
|
134,176
|
|
|
94,235
|
|
|
74,636
|
|
|||
Investing Activities:
|
|
|
|
|
|
||||||
Capital expenditures
|
(45,349
|
)
|
|
(55,838
|
)
|
|
(32,776
|
)
|
|||
Divestiture of business
|
—
|
|
|
—
|
|
|
6,641
|
|
|||
Acquisition of business
|
(2,982
|
)
|
|
—
|
|
|
—
|
|
|||
Net cash used for investing activities
|
(48,331
|
)
|
|
(55,838
|
)
|
|
(26,135
|
)
|
|||
Financing Activities:
|
|
|
|
|
|
||||||
Repayments of long-term debt
|
(75,168
|
)
|
|
(843
|
)
|
|
(18
|
)
|
|||
Proceeds from (repayments of) revolving credit facilities, net
|
62,548
|
|
|
(22,362
|
)
|
|
91,000
|
|
|||
Cash dividends paid
|
(30,418
|
)
|
|
(24,544
|
)
|
|
(140,886
|
)
|
|||
Proceeds from issuance of common stock under stock option plans
|
2,160
|
|
|
6,283
|
|
|
8,748
|
|
|||
Repurchase of common stock
|
(34,524
|
)
|
|
(17,597
|
)
|
|
(11,672
|
)
|
|||
Shares withheld for taxes under equity compensation plans
|
(4,750
|
)
|
|
(2,076
|
)
|
|
(1,435
|
)
|
|||
Excess tax benefit from share-based compensation
|
2,528
|
|
|
5,205
|
|
|
4,578
|
|
|||
Net cash used for financing activities
|
(77,624
|
)
|
|
(55,934
|
)
|
|
(49,685
|
)
|
|||
Effect of Exchange Rates on Cash
|
(177
|
)
|
|
(3,346
|
)
|
|
(288
|
)
|
|||
Increase (Decrease) in Cash and Cash Equivalents
|
8,044
|
|
|
(20,883
|
)
|
|
(1,472
|
)
|
|||
Cash and Cash Equivalents:
|
|
|
|
|
|
||||||
Beginning of year
|
16,235
|
|
|
37,118
|
|
|
38,590
|
|
|||
End of year
|
$
|
24,279
|
|
|
$
|
16,235
|
|
|
$
|
37,118
|
|
Supplemental Cash Flow Information:
|
|
|
|
|
|
||||||
Cash paid for -
|
|
|
|
|
|
||||||
Interest
|
$
|
6,658
|
|
|
$
|
6,647
|
|
|
$
|
5,645
|
|
Income taxes
|
$
|
11,290
|
|
|
$
|
11,539
|
|
|
$
|
20,945
|
|
Supplemental Non-cash Investing Information:
|
|
|
|
|
|
||||||
Capital expenditures not yet paid and included in accounts payable
|
$
|
1,792
|
|
|
$
|
3,662
|
|
|
$
|
3,378
|
|
|
July 2, 2016
|
|
June 27, 2015
|
||||
Raw Materials
|
$
|
6,424
|
|
|
$
|
6,368
|
|
Work in Process
|
1,431
|
|
|
975
|
|
||
Finished Goods
|
26,222
|
|
|
28,915
|
|
||
Inventory
|
34,077
|
|
|
36,258
|
|
||
Merchandise in service, net
|
131,801
|
|
|
133,942
|
|
|
Life
(Years)
|
Automobiles and trucks
|
3 to 8
|
Machinery and equipment
|
3 to 10
|
Buildings
|
20 to 33
|
Building improvements
|
1 to 10
|
|
United States
|
|
Canada
|
|
Total
|
||||||
Balance as of June 28, 2014
|
$
|
270,045
|
|
|
$
|
63,169
|
|
|
$
|
333,214
|
|
Foreign currency translation and other
|
—
|
|
|
(8,031
|
)
|
|
(8,031
|
)
|
|||
Balance as of June 27, 2015
|
$
|
270,045
|
|
|
$
|
55,138
|
|
|
$
|
325,183
|
|
Goodwill acquired during the period
|
—
|
|
|
1,880
|
|
|
1,880
|
|
|||
Foreign currency translation and other
|
—
|
|
|
(2,543
|
)
|
|
(2,543
|
)
|
|||
Balance as of July 2, 2016
|
$
|
270,045
|
|
|
$
|
54,475
|
|
|
$
|
324,520
|
|
|
For the Fiscal Years
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Net income from continuing operations
|
$
|
72,439
|
|
|
$
|
59,870
|
|
|
$
|
56,065
|
|
Less: Income allocable to participating securities
|
(1,025
|
)
|
|
(713
|
)
|
|
(610
|
)
|
|||
Net income from continuing operations available to common stockholders
|
71,414
|
|
|
59,157
|
|
|
55,455
|
|
|||
Net loss from discontinued operations
|
—
|
|
|
—
|
|
|
(8,393
|
)
|
|||
Net income available to common stockholders
|
$
|
71,414
|
|
|
$
|
59,157
|
|
|
$
|
47,062
|
|
Basic earnings per share (shares in thousands):
|
|
|
|
|
|
||||||
Weighted average shares outstanding, basic
|
19,586
|
|
|
19,676
|
|
|
19,568
|
|
|||
Basic earnings (loss) per common share:
|
|
|
|
|
|
||||||
From continuing operations
|
$
|
3.65
|
|
|
$
|
3.01
|
|
|
$
|
2.83
|
|
From discontinued operations
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(0.43
|
)
|
Basic earnings per share
|
$
|
3.65
|
|
|
$
|
3.01
|
|
|
$
|
2.41
|
|
Diluted earnings per share (shares in thousands):
|
|
|
|
|
|
||||||
Weighted average shares outstanding, basic
|
19,586
|
|
|
19,676
|
|
|
19,568
|
|
|||
Weighted average effect of non-vested restricted stock grants and assumed exercise of stock options
|
222
|
|
|
371
|
|
|
373
|
|
|||
Weighted average shares outstanding, diluted
|
19,808
|
|
|
20,047
|
|
|
19,941
|
|
|||
Diluted earnings (loss) per common share:
|
|
|
|
|
|
||||||
From continuing operations
|
$
|
3.61
|
|
|
$
|
2.95
|
|
|
$
|
2.78
|
|
From discontinued operations
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(0.42
|
)
|
Diluted earnings per share
|
$
|
3.61
|
|
|
$
|
2.95
|
|
|
$
|
2.36
|
|
|
July 2, 2016
|
|
June 27, 2015
|
||||
Executive deferred compensation assets
|
$
|
33,080
|
|
|
$
|
34,414
|
|
Cash surrender value of life insurance policies
|
14,860
|
|
|
14,659
|
|
||
Derivative financial instruments
|
—
|
|
|
4,857
|
|
||
Customer contracts and non-competition agreements, net
|
3,464
|
|
|
4,544
|
|
||
Other assets
|
6,658
|
|
|
7,186
|
|
||
Less: Portion classified as other current assets
|
(3,040
|
)
|
|
(1,922
|
)
|
||
Total other noncurrent assets
|
$
|
55,022
|
|
|
$
|
63,738
|
|
|
July 2, 2016
|
|
June 27, 2015
|
||||
Customer contracts and non-competition agreements
|
$
|
14,576
|
|
|
$
|
20,244
|
|
Accumulated amortization
|
(11,112
|
)
|
|
(15,700
|
)
|
||
Net
|
$
|
3,464
|
|
|
$
|
4,544
|
|
2017
|
$
|
1,242
|
|
2018
|
436
|
|
|
2019
|
217
|
|
|
2020
|
205
|
|
|
2021
|
193
|
|
|
Thereafter
|
1,170
|
|
|
July 2, 2016
|
|
June 27, 2015
|
|
|||
Multi-employer pension withdrawal liability
|
$
|
803
|
|
|
$
|
9,329
|
|
Pension plan liability
|
32,446
|
|
|
20,188
|
|
||
Executive deferred compensation plan liability
|
33,080
|
|
|
34,529
|
|
||
Supplemental executive retirement plan liability
|
18,523
|
|
|
16,686
|
|
||
Accrued income taxes
|
7,363
|
|
|
8,294
|
|
||
Workers' compensation liability
|
18,036
|
|
|
18,577
|
|
||
Derivative financial instruments
|
8,189
|
|
|
—
|
|
||
Other liabilities
|
5,725
|
|
|
7,659
|
|
||
Less: Portion classified as current liabilities
|
(9,739
|
)
|
|
(7,819
|
)
|
||
Total other noncurrent liabilities
|
$
|
114,426
|
|
|
$
|
107,443
|
|
|
July 2, 2016
|
|
June 27, 2015
|
||||
Borrowings under Unsecured Revolver
|
$
|
107,600
|
|
|
$
|
40,500
|
|
Borrowings under Variable Rate Notes
|
—
|
|
|
75,000
|
|
||
Borrowings under A/R Line
|
23,548
|
|
|
28,100
|
|
||
Borrowings under Fixed Rate Notes
|
100,000
|
|
|
100,000
|
|
||
Capital leases and other
|
—
|
|
|
169
|
|
||
|
231,148
|
|
|
243,769
|
|
||
Less current maturities
|
—
|
|
|
(169
|
)
|
||
Total long-term debt
|
$
|
231,148
|
|
|
$
|
243,600
|
|
|
Required
|
|
Actual
|
||
Maximum Leverage Ratio (Debt/EBITDA)
|
3.50
|
|
|
1.55
|
|
Minimum Interest Coverage Ratio (EBITDA/Interest Expense)
|
3.00
|
|
|
24.27
|
|
2017
|
$
|
23,548
|
|
2018
|
—
|
|
|
2019
|
—
|
|
|
2020
|
107,600
|
|
|
2021 and thereafter
|
100,000
|
|
|
July 2, 2016
|
|
June 27, 2015
|
||||
Derivative financial instruments, assets:
|
|
|
|
||||
Other noncurrent assets
|
$
|
—
|
|
|
$
|
4,857
|
|
Total derivative financial instruments, assets
|
$
|
—
|
|
|
$
|
4,857
|
|
Derivative financial instruments, liabilities:
|
|
|
|
||||
Accrued expense - other
|
$
|
1,387
|
|
|
$
|
188
|
|
Other noncurrent liabilities
|
6,802
|
|
|
—
|
|
||
Total derivative financial instruments, liabilities
|
$
|
8,189
|
|
|
$
|
188
|
|
|
As of July 2, 2016
|
||||||||||
|
Fair Value Measurements Using Inputs Considered as
|
||||||||||
|
Level 1
|
|
Level 2
|
|
Total
|
||||||
Other assets:
|
|
|
|
|
|
||||||
Money market mutual funds
|
$
|
5,681
|
|
|
$
|
—
|
|
|
$
|
5,681
|
|
Equity and fixed income mutual funds
|
27,306
|
|
|
—
|
|
|
27,306
|
|
|||
Cash surrender value of life insurance policies
|
—
|
|
|
14,860
|
|
|
14,860
|
|
|||
Total assets
|
$
|
32,987
|
|
|
$
|
14,860
|
|
|
$
|
47,847
|
|
Accrued expenses:
|
|
|
|
|
|
||||||
Derivative financial instruments
|
$
|
—
|
|
|
$
|
8,189
|
|
|
$
|
8,189
|
|
Total liabilities
|
$
|
—
|
|
|
$
|
8,189
|
|
|
$
|
8,189
|
|
|
As of June 27, 2015
|
||||||||||
|
Fair Value Measurements Using Inputs Considered as
|
||||||||||
|
Level 1
|
|
Level 2
|
|
Total
|
||||||
Other assets:
|
|
|
|
|
|
||||||
Money market mutual funds
|
$
|
4,637
|
|
|
$
|
—
|
|
|
$
|
4,637
|
|
Equity and fixed income mutual funds
|
29,777
|
|
|
—
|
|
|
29,777
|
|
|||
Cash surrender value of life insurance policies
|
—
|
|
|
14,659
|
|
|
14,659
|
|
|||
Derivative financial instruments
|
—
|
|
|
4,857
|
|
|
4,857
|
|
|||
Total assets
|
$
|
34,414
|
|
|
$
|
19,516
|
|
|
$
|
53,930
|
|
Accrued expenses:
|
|
|
|
|
|
||||||
Derivative financial instruments
|
$
|
—
|
|
|
$
|
188
|
|
|
$
|
188
|
|
Total liabilities
|
$
|
—
|
|
|
$
|
188
|
|
|
$
|
188
|
|
|
As of July 2, 2016
|
||||||||||
|
Fair Value Measurements Using Inputs Considered as
|
||||||||||
|
Level 1
|
|
Level 2
|
|
Total
|
||||||
Cash and cash equivalents
|
$
|
24,279
|
|
|
$
|
—
|
|
|
$
|
24,279
|
|
Total assets
|
$
|
24,279
|
|
|
$
|
—
|
|
|
$
|
24,279
|
|
Long-term debt, net of current maturities
|
—
|
|
|
236,568
|
|
|
236,568
|
|
|||
Total liabilities
|
$
|
—
|
|
|
$
|
236,568
|
|
|
$
|
236,568
|
|
|
As of June 27, 2015
|
||||||||||
|
Fair Value Measurements Using Inputs Considered as
|
||||||||||
|
Level 1
|
|
Level 2
|
|
Total
|
||||||
Cash and cash equivalents
|
$
|
16,235
|
|
|
$
|
—
|
|
|
$
|
16,235
|
|
Total assets
|
$
|
16,235
|
|
|
$
|
—
|
|
|
$
|
16,235
|
|
Current maturities of long-term debt
|
$
|
—
|
|
|
$
|
169
|
|
|
$
|
169
|
|
Long-term debt, net of current maturities
|
—
|
|
|
241,589
|
|
|
241,589
|
|
|||
Total liabilities
|
$
|
—
|
|
|
$
|
241,758
|
|
|
$
|
241,758
|
|
|
Pension Plan
|
|
SERP
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Change in benefit obligation:
|
|
|
|
|
|
|
|
||||||||
Projected benefit obligation, beginning of year
|
$
|
93,898
|
|
|
$
|
91,251
|
|
|
$
|
16,686
|
|
|
$
|
17,610
|
|
Interest cost
|
3,774
|
|
|
4,049
|
|
|
590
|
|
|
739
|
|
||||
Actuarial loss/(gain)
|
12,761
|
|
|
1,215
|
|
|
2,055
|
|
|
(870
|
)
|
||||
Benefits paid
|
(2,586
|
)
|
|
(2,617
|
)
|
|
(808
|
)
|
|
(793
|
)
|
||||
Projected benefit obligation, end of year
|
$
|
107,847
|
|
|
$
|
93,898
|
|
|
$
|
18,523
|
|
|
$
|
16,686
|
|
Change in plan assets:
|
|
|
|
|
|
|
|
||||||||
Fair value of plan assets, beginning of year
|
$
|
73,847
|
|
|
$
|
75,985
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Actual return on plan assets
|
4,417
|
|
|
479
|
|
|
—
|
|
|
—
|
|
||||
Employer contributions
|
—
|
|
|
—
|
|
|
808
|
|
|
793
|
|
||||
Benefits paid
|
(2,586
|
)
|
|
(2,617
|
)
|
|
(808
|
)
|
|
(793
|
)
|
||||
Fair value of plan assets, end of year
|
$
|
75,678
|
|
|
$
|
73,847
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Funded status-net amount recognized
|
$
|
(32,169
|
)
|
|
$
|
(20,051
|
)
|
|
$
|
(18,523
|
)
|
|
$
|
(16,686
|
)
|
|
Pension Plan
|
|
SERP
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Accrued benefit liability
|
$
|
(32,169
|
)
|
|
$
|
(20,051
|
)
|
|
$
|
(18,523
|
)
|
|
$
|
(16,686
|
)
|
Net amount recognized
|
$
|
(32,169
|
)
|
|
$
|
(20,051
|
)
|
|
$
|
(18,523
|
)
|
|
$
|
(16,686
|
)
|
|
|
|
|
|
|
|
|
||||||||
|
Pension Plan
|
|
SERP
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Accumulated other comprehensive loss/(gain) related to:
|
|
|
|
|
|
|
|
||||||||
Unrecognized net actuarial losses/(gains)
|
$
|
10,183
|
|
|
$
|
3,625
|
|
|
$
|
1,813
|
|
|
$
|
(1,261
|
)
|
|
Pension Plan
|
|
SERP
|
||||||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|
2016
|
|
2015
|
|
2014
|
||||||||||||
Interest cost
|
$
|
3,774
|
|
|
$
|
4,049
|
|
|
$
|
3,968
|
|
|
$
|
590
|
|
|
$
|
739
|
|
|
$
|
758
|
|
Expected return on assets
|
(4,272
|
)
|
|
(4,904
|
)
|
|
(4,638
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Amortization of net loss
|
2,433
|
|
|
2,015
|
|
|
1,636
|
|
|
242
|
|
|
391
|
|
|
143
|
|
||||||
Net periodic benefit cost
|
$
|
1,935
|
|
|
$
|
1,160
|
|
|
$
|
966
|
|
|
$
|
832
|
|
|
$
|
1,130
|
|
|
$
|
901
|
|
|
Pension Plan
|
|
SERP
|
||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||
Discount rate
|
3.95
|
%
|
|
4.70
|
%
|
|
3.73
|
%
|
|
4.45
|
%
|
Rate of compensation increase
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
Pension Plan
|
|
SERP
|
||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||
Discount rate
|
4.70
|
%
|
|
4.50
|
%
|
|
4.45
|
%
|
|
4.30
|
%
|
Expected return on plan assets
|
5.90
|
|
|
6.50
|
|
|
N/A
|
|
|
N/A
|
|
Rate of compensation increase
|
N/A
|
|
N/A
|
|
N/A
|
|
|
N/A
|
|
|
Target Asset
Allocations
|
|
Actual Asset
Allocations
|
|||||
|
2016
|
|
2016
|
|
2015
|
|||
International equity
|
8.0
|
%
|
|
6.5
|
%
|
|
6.8
|
%
|
Large cap equity
|
26.0
|
|
|
25.7
|
|
|
27.2
|
|
Small cap equity
|
5.0
|
|
|
5.0
|
|
|
5.2
|
|
Absolute return strategy funds
|
16.0
|
|
|
13.8
|
|
|
14.1
|
|
Fixed income
|
45.0
|
|
|
48.8
|
|
|
46.7
|
|
Long/short equity fund
|
—
|
|
|
0.2
|
|
|
—
|
|
Total
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Total
|
||||||
Cash equivalents
|
$
|
420
|
|
|
$
|
—
|
|
|
$
|
420
|
|
Receivable
|
691
|
|
|
—
|
|
|
691
|
|
|||
Payable
|
(172
|
)
|
|
—
|
|
|
(172
|
)
|
|||
U.S. government securities
|
5,405
|
|
|
1,898
|
|
|
7,303
|
|
|||
Corporate debt
|
—
|
|
|
28,894
|
|
|
28,894
|
|
|||
Registered investment companies
|
38,542
|
|
|
—
|
|
|
38,542
|
|
|||
Total
|
$
|
44,886
|
|
|
$
|
30,792
|
|
|
$
|
75,678
|
|
|
Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Total
|
||||||
Interest-bearing cash
|
$
|
997
|
|
|
$
|
—
|
|
|
$
|
997
|
|
Payable
|
(59
|
)
|
|
—
|
|
|
(59
|
)
|
|||
Common/collective trusts
|
—
|
|
|
3,834
|
|
|
3,834
|
|
|||
U.S. government securities
|
6,866
|
|
|
—
|
|
|
6,866
|
|
|||
Corporate debt
|
—
|
|
|
26,663
|
|
|
26,663
|
|
|||
Registered investment companies
|
35,546
|
|
|
—
|
|
|
35,546
|
|
|||
Total
|
$
|
43,350
|
|
|
$
|
30,497
|
|
|
$
|
73,847
|
|
|
For the Fiscal Year
|
||
|
2015
|
||
Balance at beginning of the year
|
$
|
167
|
|
Realized gains
|
15
|
|
|
Net unrealized gains
|
(9
|
)
|
|
Net purchases, issuances and settlements
|
(173
|
)
|
|
Balance at end of the year
|
$
|
—
|
|
|
Pension Plan
|
|
SERP
|
||||
2017
|
$
|
2,875
|
|
|
$
|
877
|
|
2018
|
3,073
|
|
|
929
|
|
||
2019
|
3,293
|
|
|
978
|
|
||
2020
|
3,592
|
|
|
998
|
|
||
2021
|
3,902
|
|
|
1,021
|
|
||
2022 to 2024
|
22,905
|
|
|
5,306
|
|
Fiscal Years
|
2016
|
|
2015
|
|
2014
|
||||||
Current:
|
|
|
|
|
|
||||||
Federal
|
$
|
17,140
|
|
|
$
|
9,912
|
|
|
$
|
10,723
|
|
State and local
|
2,296
|
|
|
1,905
|
|
|
844
|
|
|||
Foreign
|
4,324
|
|
|
3,751
|
|
|
5,283
|
|
|||
|
23,760
|
|
|
15,568
|
|
|
16,850
|
|
|||
Deferred
|
19,606
|
|
|
18,638
|
|
|
16,880
|
|
|||
Provision for income taxes from continuing operations
|
$
|
43,366
|
|
|
$
|
34,206
|
|
|
$
|
33,730
|
|
Fiscal Years
|
2016
|
|
2015
|
||||
Deferred tax liabilities:
|
|
|
|
||||
Inventory
|
$
|
(49,196
|
)
|
|
$
|
(47,888
|
)
|
Depreciation
|
(24,519
|
)
|
|
(12,899
|
)
|
||
Intangibles
|
(60,866
|
)
|
|
(57,146
|
)
|
||
Derivative financial instruments
|
—
|
|
|
(2,630
|
)
|
||
Other
|
(54
|
)
|
|
(904
|
)
|
||
Total deferred tax liabilities
|
(134,635
|
)
|
|
(121,467
|
)
|
||
Deferred tax assets:
|
|
|
|
||||
Compensation and employees benefits
|
45,088
|
|
|
44,833
|
|
||
Accruals and reserves
|
11,486
|
|
|
10,859
|
|
||
Share-based payments
|
4,437
|
|
|
4,025
|
|
||
Derivative financial instruments
|
2,320
|
|
|
—
|
|
||
Net operating loss carry-forwards
|
1,674
|
|
|
1,693
|
|
||
Other
|
1,938
|
|
|
1,986
|
|
||
Gross deferred tax assets
|
66,943
|
|
|
63,396
|
|
||
Less valuation allowance
|
(1,203
|
)
|
|
(1,209
|
)
|
||
Total deferred tax assets
|
65,740
|
|
|
62,187
|
|
||
Net deferred tax liabilities
|
$
|
(68,895
|
)
|
|
$
|
(59,280
|
)
|
Fiscal Years
|
2016
|
|
2015
|
||||
Beginning balance
|
$
|
8,839
|
|
|
$
|
10,826
|
|
Tax positions related to current year:
|
|
|
|
||||
Gross increase
|
1,364
|
|
|
1,487
|
|
||
Tax positions related to prior years:
|
|
|
|
||||
Gross increase
|
577
|
|
|
208
|
|
||
Gross decrease
|
(867
|
)
|
|
(547
|
)
|
||
Settlements
|
(50
|
)
|
|
(1,670
|
)
|
||
Lapses in statutes of limitations
|
(1,903
|
)
|
|
(1,465
|
)
|
||
Ending balance
|
$
|
7,960
|
|
|
$
|
8,839
|
|
|
Shares
|
|
Weighted Average
Exercise Prices
|
|
Weighted Average
Remaining
Contractual Term
(in years)
|
|
Aggregate
Intrinsic Value
|
|||||
Outstanding at June 27, 2015
|
632,287
|
|
|
$
|
32.31
|
|
|
|
|
|
||
Granted
|
185,442
|
|
|
71.17
|
|
|
|
|
|
|||
Exercised
|
(89,135
|
)
|
|
24.23
|
|
|
|
|
|
|||
Forfeited or expired
|
(11,185
|
)
|
|
61.53
|
|
|
|
|
|
|||
Outstanding at July 2, 2016
|
717,409
|
|
|
$
|
42.90
|
|
|
6.75
|
|
$
|
24,255
|
|
Exercisable at July 2, 2016
|
415,503
|
|
|
$
|
27.79
|
|
|
5.41
|
|
$
|
20,324
|
|
|
Shares
|
|
Weighted-Average
Grant-Date Fair Value
|
|||
Non-vested at June 27, 2015
|
224,121
|
|
|
$
|
47.45
|
|
Granted
|
201,032
|
|
|
70.26
|
|
|
Vested
|
(165,822
|
)
|
|
56.80
|
|
|
Forfeited
|
(11,556
|
)
|
|
49.25
|
|
|
Non-vested at July 2, 2016
|
247,775
|
|
|
$
|
59.61
|
|
|
For the Fiscal Years
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Foreign currency translation
|
$
|
3,963
|
|
|
$
|
7,914
|
|
|
$
|
22,682
|
|
Pension benefit liabilities
|
(28,929
|
)
|
|
(21,272
|
)
|
|
(19,748
|
)
|
|||
Derivative financial instruments
|
(3,901
|
)
|
|
4,414
|
|
|
1,053
|
|
|||
Accumulated other comprehensive (loss) income
|
$
|
(28,867
|
)
|
|
$
|
(8,944
|
)
|
|
$
|
3,987
|
|
|
For the Fiscal Year Ended July 2, 2016
|
||||||||||||||
|
Foreign currency translation adjustment
|
|
Pension benefit liabilities
|
|
Derivative financial instruments
|
|
Total
|
||||||||
Accumulated other comprehensive income (loss) as of June 27, 2015
|
$
|
7,914
|
|
|
$
|
(21,272
|
)
|
|
$
|
4,414
|
|
|
$
|
(8,944
|
)
|
Other comprehensive loss before reclassifications
|
(3,951
|
)
|
|
(9,348
|
)
|
|
(8,175
|
)
|
|
(21,474
|
)
|
||||
Reclassifications from net accumulated other comprehensive income
|
—
|
|
|
1,691
|
|
|
(140
|
)
|
|
1,551
|
|
||||
Net current period other comprehensive loss
|
(3,951
|
)
|
|
(7,657
|
)
|
|
(8,315
|
)
|
|
(19,923
|
)
|
||||
Accumulated other comprehensive income (loss) at July 2, 2016
|
$
|
3,963
|
|
|
$
|
(28,929
|
)
|
|
$
|
(3,901
|
)
|
|
$
|
(28,867
|
)
|
|
For the Fiscal Year Ended June 27, 2015
|
||||||||||||||
|
Foreign currency translation adjustment
|
|
Pension benefit liabilities
|
|
Derivative financial instruments
|
|
Total
|
||||||||
Accumulated other comprehensive income (loss) as of June 28, 2014
|
$
|
22,682
|
|
|
$
|
(19,748
|
)
|
|
$
|
1,053
|
|
|
$
|
3,987
|
|
Other comprehensive income (loss) before reclassifications
|
(14,768
|
)
|
|
(2,983
|
)
|
|
3,027
|
|
|
$
|
(14,724
|
)
|
|||
Reclassifications from net accumulated other comprehensive income
|
—
|
|
|
1,459
|
|
|
334
|
|
|
$
|
1,793
|
|
|||
Net current period other comprehensive income (loss)
|
(14,768
|
)
|
|
(1,524
|
)
|
|
3,361
|
|
|
(12,931
|
)
|
||||
Accumulated other comprehensive income (loss) at June 27, 2015
|
$
|
7,914
|
|
|
$
|
(21,272
|
)
|
|
$
|
4,414
|
|
|
$
|
(8,944
|
)
|
|
For the Fiscal Years
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Foreign currency translation adjustments
|
1,237
|
|
|
3,861
|
|
|
386
|
|
|||
Change in pension benefit liabilities recognized
|
4,592
|
|
|
891
|
|
|
2,474
|
|
|||
Derivative financial instruments unrecognized
|
4,871
|
|
|
(1,804
|
)
|
|
138
|
|
|||
Derivative financial instruments reclassified
|
83
|
|
|
(198
|
)
|
|
(202
|
)
|
|||
Income tax benefit
|
$
|
10,783
|
|
|
$
|
2,750
|
|
|
$
|
2,796
|
|
|
Operating Leases
|
||
2017
|
$
|
19,532
|
|
2018
|
14,752
|
|
|
2019
|
11,923
|
|
|
2020
|
8,657
|
|
|
2021
|
6,059
|
|
|
2022 and thereafter
|
8,407
|
|
|
Total minimum lease payments
|
$
|
69,330
|
|
|
United
States
|
|
Canada
|
|
Elimination
|
|
Total
|
||||||||
2016
|
|
|
|
|
|
|
|
||||||||
Revenues
|
$
|
842,350
|
|
|
$
|
135,691
|
|
|
$
|
—
|
|
|
$
|
978,041
|
|
Income from continuing operations
|
106,013
|
|
|
16,627
|
|
|
—
|
|
|
122,640
|
|
||||
Interest expense
|
6,833
|
|
|
2
|
|
|
—
|
|
|
6,835
|
|
||||
Total assets
|
884,033
|
|
|
136,690
|
|
|
(99,186
|
)
|
|
921,537
|
|
||||
Capital expenditures
|
41,393
|
|
|
3,956
|
|
|
—
|
|
|
45,349
|
|
||||
Depreciation and amortization expense
|
32,930
|
|
|
3,574
|
|
|
—
|
|
|
36,504
|
|
||||
Provision for income taxes
|
38,983
|
|
|
4,383
|
|
|
—
|
|
|
43,366
|
|
||||
2015
|
|
|
|
|
|
|
|
||||||||
Revenues
|
$
|
796,855
|
|
|
$
|
140,787
|
|
|
$
|
—
|
|
|
$
|
937,642
|
|
Income from continuing operations
|
85,207
|
|
|
16,007
|
|
|
—
|
|
|
101,214
|
|
||||
Interest expense
|
7,059
|
|
|
79
|
|
|
—
|
|
|
7,138
|
|
||||
Total assets
|
885,295
|
|
|
133,563
|
|
|
(90,661
|
)
|
|
928,197
|
|
||||
Capital expenditures
|
51,032
|
|
|
4,806
|
|
|
—
|
|
|
55,838
|
|
||||
Depreciation and amortization expense
|
28,644
|
|
|
3,654
|
|
|
—
|
|
|
32,298
|
|
||||
Provision for income taxes
|
31,443
|
|
|
2,763
|
|
|
—
|
|
|
34,206
|
|
||||
2014
|
|
|
|
|
|
|
|
||||||||
Revenues
|
$
|
752,802
|
|
|
$
|
148,067
|
|
|
$
|
—
|
|
|
$
|
900,869
|
|
Income from continuing operations
|
79,290
|
|
|
16,825
|
|
|
—
|
|
|
96,115
|
|
||||
Interest expense
|
6,320
|
|
|
—
|
|
|
—
|
|
|
6,320
|
|
||||
Total assets
|
859,474
|
|
|
170,775
|
|
|
(106,730
|
)
|
|
923,519
|
|
||||
Capital expenditures
|
29,053
|
|
|
3,723
|
|
|
—
|
|
|
32,776
|
|
||||
Depreciation and amortization expense
|
26,743
|
|
|
4,134
|
|
|
—
|
|
|
30,877
|
|
||||
Provision for income taxes
|
28,684
|
|
|
5,046
|
|
|
—
|
|
|
33,730
|
|
|
|
For the Fiscal Year
|
||
|
|
2014
|
||
Rental and direct sale revenue from discontinued operations
|
|
$
|
17,844
|
|
Loss before income taxes
|
|
(279
|
)
|
|
|
|
|
||
Loss, net of tax
|
|
(141
|
)
|
|
Loss on sale and other adjustments, net of tax
|
|
(8,252
|
)
|
|
Net loss from discontinued operations, net of tax
|
|
$
|
(8,393
|
)
|
|
|
For the Fiscal Year
|
||
|
|
2014
|
||
Loss in excess of carrying value of Program Business
|
|
$
|
(11,559
|
)
|
Transaction and related costs
|
|
(675
|
)
|
|
Loss on sale of Program Business
|
|
(12,234
|
)
|
|
Loss on sale of Ireland Business
|
|
(603
|
)
|
|
Pretax loss on sale of businesses
|
|
(12,837
|
)
|
|
Income tax benefit
|
|
4,585
|
|
|
Loss on sale and other adjustments, net of tax
|
|
$
|
(8,252
|
)
|
|
|
|
Additions
|
|
|
|
|
||||||||||||
Description
|
Balance at
Beginning of
Year
|
|
Charged to
Costs and
Expenses
|
|
Charged to
Other
Accounts
|
|
Deductions
|
|
Balance at
End of Year
|
||||||||||
Allowance for Doubtful Accounts
|
|
|
|
|
|
|
|
|
|
||||||||||
July 2, 2016
|
$
|
3,469
|
|
|
$
|
2,962
|
|
|
$
|
—
|
|
|
$
|
2,853
|
|
|
3,578
|
|
|
June 27, 2015
|
$
|
3,697
|
|
|
$
|
1,711
|
|
|
$
|
—
|
|
|
$
|
1,939
|
|
|
3,469
|
|
|
June 28, 2014
|
$
|
3,135
|
|
|
$
|
1,980
|
|
|
$
|
—
|
|
|
$
|
1,418
|
|
|
$
|
3,697
|
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
ITEM 9A.
|
CONTROLS AND PROCEDURES
|
ITEM 9B.
|
OTHER INFORMATION
|
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
ITEM 11.
|
EXECUTIVE COMPENSATION
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
ITEM 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
|
ITEM 14.
|
PRINCIPAL ACCOUNTANT FEES AND SERVICES
|
ITEM 15.
|
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|
(a)
|
The following documents are filed as a part of this report:
|
(1)
|
Financial Statements
|
(2)
|
Financial Statement Schedules
|
(3)
|
Exhibits
|
*
|
Filed herewith
|
+
|
Compensatory plan or arrangement
|
(b)
|
Exhibits
|
(c)
|
Financial Statement Schedules
|
Date: August 26, 2016
|
G&K SERVICES, INC.
|
||
|
(Registrant)
|
||
|
|
|
|
|
By:
|
|
/s/ Douglas A. Milroy
|
|
|
|
Douglas A. Milroy, Chairman and Chief Executive Officer
|
|
|
|
(Principal Executive Officer)
|
|
|
|
/s/ Douglas A. Milroy
|
|
Chairman and Chief Executive Officer (Principal Executive Officer)
|
Douglas A. Milroy
|
|
|
|
|
|
/s/ John S. Bronson
|
|
Director
|
John S. Bronson
|
|
|
|
|
|
/s/ Lynn Crump-Caine
|
|
Director
|
Lynn Crump-Caine
|
|
|
|
|
|
/s/ Wayne M. Fortun
|
|
Director
|
Wayne M. Fortun
|
|
|
|
|
|
/s/ Thomas R. Greco
|
|
Director
|
Thomas R. Greco
|
|
|
|
|
|
/s/ Ernest J. Mrozek
|
|
Director
|
Ernest J. Mrozek
|
|
|
|
|
|
/s/ M. Lenny Pippin
|
|
Lead Director
|
M. Lenny Pippin
|
|
|
|
|
|
/s/ Alice M. Richter
|
|
Director
|
Alice M. Richter
|
|
|
|
|
|
/s/ Lee J. Schram
|
|
Director
|
Lee J. Schram
|
|
|
|
|
|
/s/ Tracy C. Jokinen
|
|
Chief Financial Officer
|
Tracy C. Jokinen
|
|
|
|
|
|
/s/ Thomas J. Dietz
|
|
Vice President and Controller
|
Thomas J. Dietz
|
|
|
* By:
|
|
/s/ Douglas A. Milroy
|
|
|
Douglas A. Milroy
|
|
|
Attorney-in-fact
|
1 Year G&K Services, Inc. Chart |
1 Month G&K Services, Inc. Chart |
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