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UniFirst Corporation (NYSE:UNF), a company with a market capitalization of $3.24 billion and strong financial health according to InvestingPro metrics, announced Thursday that it has entered into a Third Amended and Restated Credit Agreement, establishing a $300 million unsecured revolving credit facility. The agreement was executed on Tuesday between UniFirst and several lenders, including Bank of America, N.A. as administrative agent, along with BofA Securities, Inc., Santander Bank, N.A., and Wells Fargo Bank, N.A. The company’s robust balance sheet, with more cash than debt and a current ratio of 3.51, positions it well for this credit arrangement.
According to a statement in the company’s SEC filing, the new credit facility replaces the previous agreement dated March 26, 2021. The facility allows for up to $150 million to be used for letters of credit and is scheduled to mature on August 12, 2030. With total debt of just $74.73 million and liquid assets exceeding short-term obligations, UniFirst demonstrates prudent financial management.
The agreement provides UniFirst with the option to request an increase in total commitments by up to $100 million, subject to certain conditions, which could bring the aggregate commitment to $400 million. The company must meet specified financial covenants and have no events of default to exercise this option.
As of August 12, 2025, the interest rate for borrowings under the facility is set at the Secured Overnight Financing Rate (SOFR) plus 1.00%, based on UniFirst’s current consolidated funded debt ratio. The spread over SOFR may vary depending on the company’s financial metrics. In the event of a default, the interest rate would increase by an additional 2.00% per annum.
The agreement includes standard financial and restrictive covenants, as well as events of default provisions such as non-payment, covenant violations, cross-defaults, insolvency, and change of control. In the event of default, obligations may be declared immediately due and payable.
This information is based on a statement in UniFirst’s recent SEC filing.
In other recent news, UniFirst Corporation reported its fiscal third-quarter 2025 earnings, revealing a modest earnings per share (EPS) beat but a slight revenue miss. The company achieved an EPS of $2.17, exceeding the projected $2.10, while revenue reached $610.8 million, slightly below the anticipated $614.5 million. In another development, UniFirst’s Board of Directors declared regular quarterly cash dividends, with Common Stock shareholders receiving $0.35 per share and Class B Common Stock holders getting $0.28 per share. These dividends are payable on September 26, 2025, to shareholders of record as of September 5, 2025. Additionally, UBS adjusted its price target for UniFirst to $194.00 from $196.00, maintaining a Neutral rating due to slower growth. This adjustment followed a 10% drop in UniFirst shares after the company released its fiscal third-quarter results. These recent developments highlight various factors influencing investor sentiment around UniFirst.
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