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Segment Reporting | 6 Months Ended
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Feb. 29, 2020
Segment Reporting [Abstract] |
Segment Reporting | 16. Segment Reporting Operating segments are identified as components of an enterprise for which separate discrete financial information is available for evaluation by the chief operating decision-maker, or decision-making group, in making decisions on how to allocate resources and assess performance. The Company’s chief operating decision maker is the Company’s chief executive officer. The Company has six operating segments based on the information reviewed by its chief executive officer: U.S. Rental and Cleaning, Canadian Rental and Cleaning, Manufacturing (“MFG”), Corporate, Specialty Garments and First Aid. The U.S. Rental and Cleaning and Canadian Rental and Cleaning operating segments have been combined to form the U.S. and Canadian Rental and Cleaning reporting segment, and as a result, the Company has five reporting segments. The U.S. and Canadian Rental and Cleaning reporting segment purchases, rents, cleans, delivers and sells uniforms and protective clothing and non-garment items in the United States and Canada. The laundry locations of the U.S. and Canadian Rental and Cleaning reporting segment are referred to by the Company as “industrial laundries” or “industrial laundry locations.” The MFG operating segment designs and manufactures uniforms and non-garment items primarily for the purpose of providing these goods to the U.S. and Canadian Rental and Cleaning reporting segment. MFG revenues are primarily generated when goods are shipped from the Company’s manufacturing facilities, or its subcontract manufacturers, to other Company locations. These intercompany revenues are recorded at a transfer price which is typically in excess of the actual manufacturing cost. Manufactured products are carried in inventory until placed in service at which time they are amortized at this transfer price. On a consolidated basis, intercompany revenues and income are eliminated and the carrying value of inventories and rental merchandise in service is reduced to the manufacturing cost. Income before income taxes from MFG net of the intercompany MFG elimination offsets the merchandise amortization costs incurred by the U.S. and Canadian Rental and Cleaning reporting segment as the merchandise costs of this reporting segment are amortized and recognized based on inventories purchased from MFG at the transfer price which is above the Company’s manufacturing cost. The Corporate operating segment consists of costs associated with the Company’s distribution center, sales and marketing, information systems, engineering, materials management, manufacturing planning, finance, budgeting, human resources, other general and administrative costs and interest expense. The revenues generated from the Corporate operating segment represent certain direct sales made by the Company directly from its distribution center. The products sold by this operating segment are the same products rented and sold by the U.S. and Canadian Rental and Cleaning reporting segment. In the table below, no assets or capital expenditures are presented for the Corporate operating segment because no assets are allocated to this operating segment in the information reviewed by the chief executive officer. However, depreciation and amortization expense related to certain assets are reflected in operating income and income before income taxes for the Corporate operating segment. The assets that give rise to this depreciation and amortization are included in the total assets of the U.S. and Canadian Rental and Cleaning reporting segment as this is how they are tracked and reviewed by the Company. The majority of expenses accounted for within the Corporate segment relate to costs of the U.S. and Canadian Rental and Cleaning segment, with the remainder of the costs relating to the Specialty Garment and First Aid segments. The Specialty Garments operating segment purchases, rents, cleans, delivers and sells, specialty garments and non-garment items primarily for nuclear and cleanroom applications and provides cleanroom cleaning services at limited customer locations. The First Aid operating segment sells first aid cabinet services and other safety supplies as well as maintains wholesale distribution and pill packaging operations. The Company refers to the U.S. and Canadian Rental and Cleaning, MFG, and Corporate reporting segments combined as its “Core Laundry Operations,” which is included as a subtotal in the following table (in thousands):
Thirteen weeks ended |  | U.S. and Canadian Rental and Cleaning |  |  | MFG |  |  | Net Interco MFG Elim |  |  | Corporate |  |  | Subtotal Core Laundry Operations |  |  | Specialty Garments |  |  | First Aid |  |  | Total |
February 29, 2020 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Revenues |  | $ | 403,161 |  |  | $ | 53,661 |  |  | $ | (53,661 | ) |  | $ | 9,031 |  |  | $ | 412,192 |  |  | $ | 35,980 |  |  | $ | 16,428 |  |  | $ | 464,600 |
Operating income (loss) |  | $ | 59,008 |  |  | $ | 16,714 |  |  | $ | 3,093 |  |  | $ | (40,458 | ) |  | $ | 38,357 |  |  | $ | 4,627 |  |  | $ | 1,143 |  |  | $ | 44,127 |
Interest income, net |  | $ | (1,124 | ) |  | $ | — |  |  | $ | — |  |  | $ | (1,051 | ) |  | $ | (2,175 | ) |  | $ | — |  |  | $ | — |  |  | $ | (2,175 | )
Income (loss) before taxes |  | $ | 60,119 |  |  | $ | 16,646 |  |  | $ | 3,093 |  |  | $ | (39,811 | ) |  | $ | 40,047 |  |  | $ | 4,573 |  |  | $ | 1,143 |  |  | $ | 45,763 |
February 23, 2019 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Revenues |  | $ | 385,528 |  |  | $ | 60,978 |  |  | $ | (60,978 | ) |  | $ | 8,880 |  |  | $ | 394,408 |  |  | $ | 29,745 |  |  | $ | 13,332 |  |  | $ | 437,485 |
Operating income (loss) |  | $ | 64,619 |  |  | $ | 20,160 |  |  | $ | 1,047 |  |  | $ | (26,713 | ) |  | $ | 59,113 |  |  | $ | 2,235 |  |  | $ | 1,098 |  |  | $ | 62,446 |
Interest income, net |  | $ | (1,058 | ) |  | $ | — |  |  | $ | — |  |  | $ | (951 | ) |  | $ | (2,009 | ) |  | $ | — |  |  | $ | — |  |  | $ | (2,009 | )
Income (loss) before taxes |  | $ | 65,667 |  |  | $ | 19,876 |  |  | $ | 1,046 |  |  | $ | (26,502 | ) |  | $ | 60,087 |  |  | $ | 2,210 |  |  | $ | 1,098 |  |  | $ | 63,395 |
Twenty-six weeks ended |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
February 29, 2020 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Revenues |  | $ | 810,964 |  |  | $ | 118,671 |  |  | $ | (118,671 | ) |  | $ | 17,526 |  |  | $ | 828,490 |  |  | $ | 69,382 |  |  | $ | 32,126 |  |  | $ | 929,998 |
Operating income (loss) |  | $ | 135,295 |  |  | $ | 39,260 |  |  | $ | 567 |  |  | $ | (82,957 | ) |  | $ | 92,165 |  |  | $ | 9,506 |  |  | $ | 2,551 |  |  | $ | 104,222 |
Interest income, net |  | $ | (2,100 | ) |  | $ | — |  |  | $ | — |  |  | $ | (2,436 | ) |  | $ | (4,536 | ) |  | $ | — |  |  | $ | — |  |  | $ | (4,536 | )
Income (loss) before taxes |  | $ | 137,376 |  |  | $ | 39,049 |  |  | $ | 567 |  |  | $ | (81,309 | ) |  | $ | 95,683 |  |  | $ | 9,457 |  |  | $ | 2,551 |  |  | $ | 107,691 |
February 23, 2019 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Revenues |  | $ | 766,316 |  |  | $ | 128,524 |  |  | $ | (128,524 | ) |  | $ | 18,569 |  |  | $ | 784,885 |  |  | $ | 64,193 |  |  | $ | 26,957 |  |  | $ | 876,035 |
Operating income (loss) |  | $ | 119,333 |  |  | $ | 44,892 |  |  | $ | (2,700 | ) |  | $ | (57,630 | ) |  | $ | 103,895 |  |  | $ | 6,705 |  |  | $ | 2,272 |  |  | $ | 112,872 |
Interest income, net |  | $ | (2,105 | ) |  | $ | — |  |  | $ | — |  |  | $ | (1,609 | ) |  | $ | (3,714 | ) |  | $ | — |  |  | $ | — |  |  | $ | (3,714 | )
Income (loss) before taxes |  | $ | 121,419 |  |  | $ | 44,716 |  |  | $ | (2,701 | ) |  | $ | (56,735 | ) |  | $ | 106,699 |  |  | $ | 6,383 |  |  | $ | 2,272 |  |  | $ | 115,354 |

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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