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Summary of Significant Accounting Policies | 12 Months Ended
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Aug. 31, 2024
Accounting Policies [Abstract] |
Summary of Significant Accounting Policies | 1. Summary of Significan t Accounting Policies Business Description UniFirst Corporation (the “Company”) is one of the leading providers of workplace uniforms and protective clothing in North America. The Company designs, manufactures, personalizes, rents, cleans, delivers, and sells a wide range of uniforms and protective clothing, including shirts, pants, jackets, coveralls, lab coats, smocks, aprons and specialized protective wear, such as flame resistant and high visibility garments. The Company also rents and sells industrial wiping products, floor mats, facility service products and other non-garment items, and provides restroom and cleaning supplies and first aid cabinet services and other safety supplies as well as provide certain safety training, to a variety of manufacturers, retailers and service companies. The Company serves businesses of all sizes across multiple industry sectors. Typical customers include automobile service centers and dealers, delivery services, food and general merchandise retailers, manufacturers, maintenance facilities, restaurants and food-related businesses, business service companies, soft and durable goods wholesalers, transportation companies, energy producing operations, healthcare providers and others who require employee clothing on the job for image, identification, protection or utility purposes. The Company also provides its customers with restroom and cleaning supplies, including air fresheners, paper products, gloves, masks, hand soaps and sanitizers. At certain specialized facilities, like nuclear operations, the Company decontaminates and cleans work clothes and other items that may have been exposed to radioactive materials and services special cleanroom protective wear. Typical customers for these specialized services include government agencies, research and development laboratories, high technology companies and utility providers operating nuclear reactors. As discussed and described in Note 15, “Segment Reporting”, to these Consolidated Financial Statements, the Company has five reporting segments: United States (“U.S.”) and Canadian Rental and Cleaning, Manufacturing (“MFG”), Specialty Garments Rental and Cleaning (“Specialty Garments”), First Aid and Corporate. The operations of the U.S. and Canadian Rental and Cleaning reporting segment are referred to by the Company as its “industrial laundry operations” and the locations related to this reporting segment are referred to as “industrial laundries”. The Company refers to its U.S. and Canadian Rental and Cleaning, MFG, and Corporate segments combined as its “Core Laundry Operations”. Principles of Consolidation The Consolidated Financial Statements include the accounts of the Company and its subsidiaries, all of which are wholly-owned. Intercompany balances and transactions are eliminated in consolidation. Basis of Presentation The Consolidated Financial Statements included herein have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). There have been no material changes in the accounting policies followed by the Company during the current fiscal year other than the adoption of recent accounting pronouncements as discussed in greater detail in the Recent Accounting Pronouncements sub-section of this Note. Use of Estimates The preparation of these Consolidated Financial Statements is in conformity with U.S. GAAP which requires management to make estimates and assumptions that affect the reported amounts in the financial statements and accompanying notes. The Company utilizes key estimates in preparing the financial statements including casualty and environmental estimates, valuation of intangible assets acquired in a business combination, recoverability of goodwill, intangibles, income taxes and long-lived assets. These estimates are based on historical information, current trends, and information available from other sources. The Company’s results are affected by economic, political, legislative, regulatory and legal actions. Economic conditions, such as recessionary trends, inflation, interest and monetary exchange rates, government fiscal policies, and changes in the prices of raw materials, can have a significant effect on operations. These factors and other events could cause actual results to differ from management's estimates. Fiscal Year The Company’s fiscal year ends on the last Saturday in August. For financial reporting purposes, fiscal year ended August 31, 2024 (“fiscal 2024”) consisted of 53 weeks, and fiscal years ended August 26, 2023 (“fiscal 2023”) and August 27, 2022 (“fiscal 2022”) both consisted of 52 weeks. The additional week was included in the fourth quarter of fiscal 2024. Cash, Cash Equivalents and Short-Term Investments Cash, cash equivalents and short-term investments include cash in banks, money market securities and bank short-term investments having original maturities of six months or less. As of August 31, 2024 and August 26, 2023, the Company had $13.5 million and $10.2 million in short-term investments, respectively. Accounts receivable Accounts receivable represents amounts due from customers and is presented net of reserves for expected credit losses. The Company utilizes its judgment and estimates are used in determining the collectability of accounts receivable and evaluating the adequacy of the reserve for expected credit losses. The Company considers specific accounts receivable and historical credit loss experience, customer credit worthiness, current economic trends and the age of outstanding balances as part of its evaluation. When an account is considered uncollectible, it is written off against the reserve for expected credit losses. The following table presents the change in the allowance for credit losses, which is included in Receivables, net of reserves on the Consolidated Balance Sheets as of August 31, 2024 and August 26, 2023 are as follows (in thousands):
(In thousands) |  | August 31, 2024 |  |  | August 26, 2023 |
Beginning balance |  | $ | 6,276 |  |  | $ | 5,930 |
Current period provision |  |  | 13,976 |  |  |  | 10,740 |
Write-offs and other |  |  | (12,336 | ) |  |  | (10,394 | )
Ending balance |  | $ | 7,916 |  |  | $ | 6,276 |
Financial Instruments The Company’s financial instruments, which may expose the Company to concentrations of credit risk, include cash and cash equivalents, receivables, accounts payable and foreign exchange forward contracts. Each of these financial instruments is recorded at cost, which approximates its fair value given the short maturity of each financial instrument. Revenue Recognition In fiscal 2024, approximately 84.2% of the Company’s revenues are derived from fees for route servicing of Core Laundry Operations, Specialty Garments and First Aid services performed by the Company’s employees at the customer’s location of business. Revenues from the Company’s route servicing customer contracts represent a single-performance obligation. The Company recognizes these revenues over time as services are performed based on the nature of services provided and contractual rates (input method). Certain of the Company’s customer contracts, primarily within the Company’s Core Laundry Operations, include pricing terms and conditions that include components of variable consideration. The variable consideration is typically in the form of consideration due to a customer based on performance metrics specified within the contract. Specifically, some contracts contain discounts or rebates that the customer can earn through the achievement of specified volume levels. Each component of variable consideration is earned based on the Company’s actual performance during the measurement period specified within the contract. To determine the transaction price, the Company estimates the variable consideration using the most likely amount method, based on the specific contract provisions and known performance results during the relevant measurement period. When determining if variable consideration should be constrained, the Company considers whether factors outside its control could result in a significant reversal of revenue. In making these assessments, the Company considers the likelihood and magnitude of a potential reversal. The Company’s performance period generally corresponds with the monthly invoice period. No significant constraints on the Company’s revenue recognition were applied during fiscal 2024, 2023 and 2022. The Company reassesses these estimates during each reporting period. The Company maintains a liability for these discounts and rebates within accrued liabilities on the Consolidated Balance Sheets. Variable consideration also includes consideration paid to a customer at the beginning of a contract. The Company capitalizes this consideration and amortizes it over the life of the contract as a reduction to revenue in accordance with the accounting guidance for revenue recognition. These assets are included in other assets on the Consolidated Balance Sheets. The following table presents the Company’s revenues for fiscal 2024, 2023 and 2022 disaggregated by service type:
|  | Year ended |
|  | 2024 |  |  | 2023 |  |  | 2022 |
(In thousands, except percentages) |  | Revenues |  |  | % of Revenues |  |  | Revenues |  |  | % of Revenues |  |  | Revenues |  |  | % of Revenues |
Core Laundry Operations |  | $ | 2,138,948 |  |  |  | 88.1 | % |  | $ | 1,961,189 |  |  |  | 87.8 | % |  | $ | 1,770,502 |  |  |  | 88.5 | %
Specialty Garments |  |  | 182,212 |  |  |  | 7.5 | % |  |  | 177,034 |  |  |  | 8.0 | % |  |  | 152,885 |  |  |  | 7.6 | %
First Aid |  |  | 106,271 |  |  |  | 4.4 | % |  |  | 94,824 |  |  |  | 4.2 | % |  |  | 77,435 |  |  |  | 3.9 | %
Total revenues |  | $ | 2,427,431 |  |  |  | 100.0 | % |  | $ | 2,233,047 |  |  |  | 100.0 | % |  | $ | 2,000,822 |  |  |  | 100.0 | %
The following table presents the Company's percentage of revenues for fiscal 2024, 2023 and 2022 disaggregated by the timing of revenue recognition by service type:
|  | Year ended |
|  | 2024 |  |  | 2023 |  |  | 2022 |
|  | Over Time |  |  | Point in Time |  |  | Over Time |  |  | Point in Time |  |  | Over Time |  |  | Point in Time |
Core Laundry Operations |  |  | 88.4 | % |  |  | 11.6 | % |  |  | 88.4 | % |  |  | 11.6 | % |  |  | 88.4 | % |  |  | 11.6 | %
Specialty Garments |  |  | 84.2 | % |  |  | 15.8 | % |  |  | 83.9 | % |  |  | 16.1 | % |  |  | 83.8 | % |  |  | 16.2 | %
First Aid |  |  | 0 | % |  |  | 100 | % |  |  | 0 | % |  |  | 100 | % |  |  | 0 | % |  |  | 100 | %
See Note 15, “Segment Reporting” for additional details of segment definitions. Costs to Obtain a Contract The Company defers commission expenses paid to its employee-partners when the commissions are deemed to be incremental for obtaining the route servicing customer contract. The deferred commissions are amortized on a straight-line basis over the expected period of benefit. The Company reviews the deferred commission balances for impairment on an ongoing basis. Deferred commissions are classified as current or non-current based on the timing of when the Company expects to recognize the expense. The following table presents deferred commissions on the Company's Consolidated Balance Sheets as of August 31, 2024 and August 26, 2023 are as follows (in thousands):
Balance Sheet Location |  | August 31, 2024 |  |  | August 26, 2023 |
Prepaid expenses and other current assets |  | $ | 18,079 |  |  | $ | 16,495 |
Other assets |  |  | 78,856 |  |  |  | 70,393 |
The following table presents the Company's amortization expense related to deferred commissions on the Consolidated Statements of Income for fiscal 2024, 2023 and 2022 are as follows (in thousands):
Income Statement Location |  | 2024 |  |  | 2023 |  |  | 2022 |
Selling and administrative expenses |  | $ | 18,031 |  |  | $ | 16,500 |  |  | $ | 15,400 |
I nventories and Rental Merchandise in Service Inventories are stated at the lower of cost or net realizable value, net of any reserve for excess and obsolete inventory. Work-in-process and finished goods inventories consist of materials, labor and manufacturing overhead. Judgments and estimates are used in determining the likelihood that new goods on hand can be sold to customers or used in rental operations. Historical inventory usage and current revenue trends are considered in estimating both excess and obsolete inventories. If actual product demand and market conditions are less favorable than those projected by management, additional inventory write-downs may be required. The Company uses the first-in, first-out (“FIFO”) method to value its inventories. The components of inventory as of August 31, 2024 and August 26, 2023 are as follows (in thousands):
|  | August 31, 2024 |  |  | August 26, 2023 |
Raw materials |  | $ | 22,164 |  |  | $ | 25,147 |
Work in process |  |  | 2,832 |  |  |  | 4,444 |
Finished goods |  |  | 131,912 |  |  |  | 118,743 |
Total inventory |  | $ | 156,908 |  |  | $ | 148,334 |
Rental merchandise in service is amortized, primarily on a straight-line basis, over the estimated service lives of the merchandise, which range from six to thirty-six months. The amortization expense is included in the cost of revenues on the Company’s Consolidated Statements of Income. In establishing estimated lives for merchandise in service, management considers historical experience and the intended use of the merchandise. Material differences may result in the amount and timing of operating profit for any period if management makes significant changes to these estimates. Property, Plant and Equipment Property, plant and equipment are recorded at cost. Expenditures for maintenance and repairs are expensed as incurred, while expenditures for renewals and betterments are capitalized. The components of property, plant and equipment as of August 31, 2024 and August 26, 2023 are as follows (in thousands):
|  | August 31, 2024 |  |  | August 26, 2023 |
Land, buildings and leasehold equipment |  | $ | 787,628 |  |  | $ | 744,085 |
Machinery and equipment |  |  | 710,108 |  |  |  | 676,490 |
Motor vehicles |  |  | 372,837 |  |  |  | 331,537 |
Total property, plant and equipment, gross |  |  | 1,870,573 |  |  |  | 1,752,112 |
Less: accumulated depreciation |  |  | 1,068,961 |  |  |  | 995,572 |
Total property, plant and equipment, net |  | $ | 801,612 |  |  | $ | 756,540 |
The Company provides for depreciation on the straight-line method based on the date the asset is placed in service using the following estimated useful lives:
Buildings (in years) |  | 30 — 40
Building components (in years) |  | 10 — 20
Leasehold improvements |  | Shorter of useful life or term of lease
Machinery and equipment (in years) |  | 3 — 10
Motor vehicles (in years) |  | 3 — 5
Long-lived assets, including property, plant and equipment, are evaluated for impairment whenever events or circumstances indicate an asset may be impaired. There were no material impairments of long-lived assets in fiscal 2024, 2023 and 2022. Goodwill and Other Intangible Assets In accordance with U.S. GAAP, the Company does not amortize goodwill. Instead, the Company tests goodwill for impairment on an annual basis. Management completes its annual goodwill impairment test on the first day of the fourth quarter of each fiscal year. In addition, U.S. GAAP requires that companies test goodwill if events occur or circumstances change that would more likely than not reduce the fair value of a reporting unit to which goodwill is assigned below its carrying amount. The Company used both the qualitative and quantitative assessment options for its impairment testing for goodwill in fiscal 2024 and determined that the fair values of the reporting units more likely than not exceeded their carrying values and that there was no evidence of impairment as of May 26, 2024. The Company cannot predict future economic conditions and their impact on the Company or the future net realizable value of the Company’s stock. A decline in the Company’s market capitalization and/or deterioration in general economic conditions could negatively and materially impact the Company’s assumptions and assessment of the fair value of the Company’s business. If general economic conditions or the Company’s financial performance deteriorate, the Company may be required to record a goodwill impairment charge in the future which could have a material impact on the Company’s financial condition and results of operations. Definite-lived intangible assets are amortized over their estimated useful lives, which are based on management’s estimates of the period that the assets will generate economic benefits. Definite-lived intangible assets are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable in accordance with U.S. GAAP. There were no impairments of goodwill or indicators of impairment for definite-lived intangible assets in fiscal 2024, 2023 or 2022. As of August 31, 2024, definite-lived intangible assets have a weighted average useful life of approximately 12.9 years. Customer contracts have a weighted average useful life of approximately 14.6 years and other intangible assets, net, which consist of primarily of restrictive covenants, software and trademarks, have a weighted average useful life of approximately 8.5 years. Cloud Computing Arrangements The Company enters into certain cloud-based software hosting arrangements that are accounted for as service contracts. Costs incurred for these arrangements are capitalized for application development activities, if material, and immediately expensed for preliminary project activities and post-implementation activities. The Company amortizes the capitalized development costs straight-line over the fixed, non-cancellable term of the associated hosting arrangement plus any reasonably certain renewal periods. The capitalized costs are included in “Prepaid expenses and other current assets” and “Long-term other assets” on the Company's Consolidated Balance Sheets. Capitalized costs were $18.9 million and $2.2 million as of August 31, 2024, and August 26, 2023, respectively. The Company has not placed any modules of the applicable software in service as of August 31, 2024. Environmental and Other Contingencies The Company is subject to legal proceedings and claims arising from the conduct of its business operations, including but not limited to, environmental matters, personal injury, customer contract matters and employment claims. U.S. GAAP require that a liability for contingencies be recorded when it is probable that a liability has occurred and the amount of the liability can be reasonably estimated. Significant judgment is required to determine the existence of a liability, as well as the amount to be recorded. The Company regularly consults with attorneys and outside consultants in its consideration of the relevant facts and circumstances before recording a contingent liability. The Company records accruals for environmental and other contingencies based on enacted laws, regulatory orders or decrees, the Company’s estimates of costs, insurance proceeds, participation by other parties, the timing of payments, and the input of outside consultants and attorneys. The estimated liability for environmental contingencies has been discounted as of August 31, 2024 using risk-free interest rates ranging from 4.2% to 4.3% over periods ranging from twenty to thirty years. The estimated current costs, net of legal settlements with insurance carriers, have been adjusted for the estimated impact of inflation at 3% per year. Changes in enacted laws, regulatory orders or decrees, management’s estimates of costs, risk-free interest rates, insurance proceeds, participation by other parties, the timing of payments, the input of the Company’s attorneys and outside consultants or other factual circumstances could have a material impact on the amounts recorded for environmental and other contingent liabilities. Refer to Note 11, “Commitments and Contingencies”, of these Consolidated Financial Statements for additional discussion and analysis. Asset Retirement Obligations Under U.S. GAAP, asset retirement obligations generally apply to legal obligations associated with the retirement of long-lived assets that result from the acquisition, construction, development and/or the normal operation of a long-lived asset. The Company recognizes asset retirement obligations in the period in which they are incurred if a reasonable estimate of fair value can be made. The associated asset retirement costs are capitalized as part of the carrying amount of the long-lived asset. The Company has recognized as a liability the present value of the estimated future costs to decommission its nuclear laundry facilities. The Company depreciates, on a straight-line basis, the amount added to property, plant and equipment and recognizes accretion expense in connection with the discounted liability over the various remaining lives which range from approximately one to twenty-one years. The estimated liability has been based on historical experience in decommissioning nuclear laundry facilities, estimated useful lives of the underlying assets, external vendor estimates as to the cost to decommission these assets in the future, and federal and state regulatory requirements. The estimated current costs have been adjusted for the estimated impact of inflation at 3% per year. The liability has been discounted using credit-adjusted risk-free rates that range from approximately 7.0% to 7.5%. Revisions to the liability could occur due to changes in the Company’s estimated useful lives of the underlying assets, estimated dates of decommissioning, changes in decommissioning costs, changes in federal or state regulatory guidance on the decommissioning of such facilities, or other changes in estimates. Changes due to revised estimates are recognized by adjusting the carrying amount of the liability and the related long-lived asset if the assets are still in service, or charged to expense in the period if the assets are no longer in service. Insurance The Company is self-insured for certain obligations related to health and dental, workers’ compensation, vehicles and general liability programs. The Company also purchases stop-loss insurance policies for workers’ compensation, vehicles and general liability programs to protect itself from catastrophic losses. Judgments and estimates are used in determining the potential value associated with reported claims and for events that have occurred, but have not been reported. The Company’s estimates consider historical claims experience and other factors. In certain cases where partial insurance coverage exists, the Company estimates the portion of the liability that will be covered by existing insurance policies to arrive at its net expected liability. Receivables for insurance recoveries are recorded as assets, on an undiscounted basis. The Company’s liabilities are based on estimates, and, while the Company believes that its accruals are adequate, the ultimate liability may be significantly different from the amounts recorded. Changes in claims experience, the Company’s ability to settle claims or other estimates and judgments used by management could have a material impact on the amount and timing of expense for any period. Supplemental Executive Retirement Plan and Other Pension Plans Pension expense is recognized on an accrual basis over employees’ estimated service periods. Pension expense is generally independent of funding decisions or requirements. The Company (1) recognizes in its statement of financial position the over-funded or under-funded status of its defined benefit post-retirement plans measured as the difference between the fair value of plan assets and the benefit obligation, (2) recognizes as a component of other comprehensive (loss) income, net of tax, the actuarial gains and losses and the prior service costs and credits that arise during the period but are not recognized as components of net periodic benefit cost, (3) measures defined benefit plan assets and defined benefit plan obligations as of the date of its statement of financial position, and (4) discloses additional information in the notes to financial statements about certain effects on net periodic benefit cost in the upcoming fiscal year that arise from delayed recognition of the actuarial gains and losses and the prior service costs and credits. Refer to Note 7, “Employee Benefit Plans”, of these Consolidated Financial Statements for further discussion regarding the Company’s pension plans. The calculation of pension expense and the corresponding liability requires the use of a number of critical assumptions, including the expected long-term rates of return on plan assets, the assumed discount rates, assumed rate of compensation increases and life expectancy of participants. Changes in these assumptions can result in different expense and liability amounts, and future actual experience can differ from these assumptions. Pension expense increases as the expected rate of return on pension plan assets decreases. Future changes in plan asset returns, assumed discount rates and various other factors related to the participants in the Company’s pension plans will impact the Company’s future pension expense and liabilities. The Company cannot predict with certainty what these factors will be in the future. Non-qualified Deferred Compensation Plan The Company adopted the UniFirst Corporation Deferred Compensation Plan (the “NQDC Plan”) effective on February 1, 2022. The NQDC Plan is an unfunded, non-qualified deferred compensation plan that allows eligible participants to voluntarily defer receipt of their salary and annual cash bonuses up to approved limits. In its discretion, the Company may credit one or more additional contributions to participant accounts. NQDC Plan participants who are not accruing benefits under the Supplemental Executive Retirement Plan are eligible to have discretionary annual employer contributions credited to their NQDC Plan accounts. All participants are also eligible to have employer supplemental contributions and employer discretionary contributions credited to their NQDC Plan accounts. The amounts of such contributions may differ from year to year and from participant to participant. Refer to Note 7, “Employee Benefit Plans”, of these Consolidated Financial Statements for further discussion regarding the Company’s NQDC Plan. Income Taxes The Company computes income tax expense by jurisdiction based on its operations in each jurisdiction. Deferred income taxes are provided for temporary differences between the amounts recognized for income tax and financial reporting purposes at currently enacted tax rates. Deferred tax assets and liabilities are determined by the differences between the consolidated financial statement carrying amounts and the tax basis of assets and liabilities. See Note 4, “Income Taxes” in these Consolidated Financial Statements for the types of items that give rise to significant deferred income tax assets and liabilities. Deferred income taxes are classified as assets or liabilities based on the classification of the related asset or liability for financial reporting purposes. The Company regularly reviews deferred tax assets for recoverability based upon projected future taxable income and the expected timing of the reversals of existing temporary differences. Although realization is not assured, management believes it is more likely than not that the recorded deferred tax assets will be realized. The Company is periodically reviewed by U.S. domestic and foreign tax authorities regarding the amount of taxes due. These reviews typically include inquiries regarding the timing and amount of deductions and the allocation of income among various tax jurisdictions. In evaluating the exposure associated with various filing positions, the Company records estimated reserves. Refer to Note 4, “Income Taxes”, of these Consolidated Financial Statements for further discussion regarding the Company’s accounting for income taxes and its uncertain tax positions for financial accounting purposes. Advertising Costs Advertising costs are expensed as incurred and are classified as selling and administrative expenses. The Company incurred advertising costs of $5.3 million, $9.9 million and $14.7 million, for fiscal 2024, 2023 and 2022, respectively. Share-Based Compensation Compensation expense for all stock options, stock appreciation rights, unrestricted stock and restricted stock units (collectively, “Share-Based Awards”) is recognized ratably over the related vesting period, net of actual forfeitures. Certain Share-Based Awards in the form of stock appreciation rights and shares of unrestricted stock were granted during fiscal 2024, 2023 and 2022 to non-employee Directors of the Company, which were fully vested upon grant and, with respect to stock appreciation rights, expire eight years after the grant date. Accordingly, compensation expense related to these Share-Based Awards in fiscal 2024, 2023 and 2022 was recognized on the date of grant. For performance-based restricted stock unit awards with revenue and profitability performance criteria, we evaluate the probability of meeting the performance criteria at each balance sheet date and, if probable, related compensation cost is amortized over the performance period on a straight-line basis because such awards vest only at the end of the measurement period. Changes to the probability assessment and the estimate of shares expected to vest will result in adjustments to the related share-based compensation expense that will be recorded in the period of the change. If the performance targets are not achieved, no compensation cost is recognized and any previously recognized compensation cost is reversed. U.S. GAAP requires that share-based compensation cost be measured at the grant date based on the fair value of the award and be recognized as expense over the requisite service period, which is generally the vesting period. Determining the fair value of Share-Based Awards in the form of stock appreciation rights at the grant date requires judgment, including estimating expected dividends and share price volatility. The fair value of each Share-Based Award in the form of stock appreciation rights is estimated on the date of grant using the Black-Scholes option pricing model. The Company recognizes compensation expense for restricted stock and restricted stock unit grants over the related vesting period. The fair value for each restricted stock, unrestricted stock and restricted stock unit grant is determined by using the closing price of the Company’s stock on the date of the grant. Refer to Note 12, “Share-Based Compensation”, of these Consolidated Financial Statements for further discussion regarding the Company’s share-based compensation plans. Income Per Share The Company calculates income per share by allocating income to its unvested participating securities as part of its income per share calculations. The following table sets forth the computation of basic income per share using the two-class method for amounts attributable to the Company’s shares of Common Stock and Class B Common Stock (in thousands, except per share data):
Year ended |  | 2024 |  |  | 2023 |  |  | 2022 |
Net income available to shareholders |  | $ | 145,474 |  |  | $ | 103,674 |  |  | $ | 103,404 |
Allocation of net income for Basic: |  |  |  |  |  |  |  |  |
Common Stock |  | $ | 122,188 |  |  | $ | 87,104 |  |  | $ | 86,844 |
Class B Common Stock |  |  | 23,286 |  |  |  | 16,570 |  |  |  | 16,560 |
|  | $ | 145,474 |  |  | $ | 103,674 |  |  | $ | 103,404 |
Weighted average number of shares for Basic: |  |  |  |  |  |  |  |  |
Common Stock |  |  | 15,073 |  |  |  | 15,098 |  |  |  | 15,203 |
Class B Common Stock |  |  | 3,590 |  |  |  | 3,590 |  |  |  | 3,621 |
|  |  | 18,663 |  |  |  | 18,688 |  |  |  | 18,824 |
Income per share for Basic: |  |  |  |  |  |  |  |  |
Common Stock |  | $ | 8.11 |  |  | $ | 5.77 |  |  | $ | 5.71 |
Class B Common Stock |  | $ | 6.49 |  |  | $ | 4.62 |  |  | $ | 4.57 |
The Class B Common Stock may be converted at any time on a one-for-one basis into Common Stock at the option of the holder of the Class B Common Stock. Diluted income per share for the Company’s Common Stock assumes the conversion of all of the Company’s Class B Common Stock into Common Stock, full vesting of outstanding restricted stock, and the exercise of Share-Based Awards under the Company’s stock incentive plans. The Company is required to calculate the diluted income per share for Common Stock using the more dilutive of the following two methods: • The treasury stock method; or • The two-class method assuming a participating security is not exercised or converted. For fiscal 2024, 2023 and 2022, the Company’s diluted income per share assumes the conversion of all Class B Common Stock into Common Stock and uses the two-class method for its unvested participating shares. The following table sets forth the computation of diluted income per share of Common Stock for the years ended August 31, 2024, August 26, 2023 and August 27, 2022 (in thousands, except per share data):
|  | Year Ended August 31, 2024 |  |  | Year Ended August 26, 2023 |  |  | Year Ended August 27, 2022 |
|  | Earnings to Common shareholders |  |  | Common Shares |  |  | Income Per Share |  |  | Earnings to Common shareholders |  |  | Common Shares |  |  | Income Per Share |  |  | Earnings to Common shareholders |  |  | Common Shares |  |  | Income Per Share |
As reported—Basic |  | $ | 122,188 |  |  |  | 15,073 |  |  | $ | 8.11 |  |  | $ | 87,104 |  |  |  | 15,098 |  |  | $ | 5.77 |  |  | $ | 86,844 |  |  |  | 15,203 |  |  | $ | 5.71 |
Add: effect of dilutive potential common shares |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Share-Based Awards |  |  | — |  |  |  | 61 |  |  |  |  |  |  | — |  |  |  | 74 |  |  |  |  |  |  | — |  |  |  | 109 |  |  |  |
Class B Common Stock |  |  | 23,286 |  |  |  | 3,590 |  |  |  |  |  |  | 16,570 |  |  |  | 3,590 |  |  |  |  |  |  | 16,560 |  |  |  | 3,621 |  |  |  |
Diluted Income Per Share— Common Stock |  | $ | 145,474 |  |  |  | 18,724 |  |  | $ | 7.77 |  |  | $ | 103,674 |  |  |  | 18,762 |  |  | $ | 5.53 |  |  | $ | 103,404 |  |  |  | 18,933 |  |  | $ | 5.46 |
Share-Based Awards that would result in the issuance of 60,260, 51,708 and 34,416 shares, respectively, of Common Stock were excluded from the calculation of diluted earnings per share for fiscal 2024, 2023 and 2022 because they were anti-dilutive. Foreign Currency Translation The functional currency of our foreign operations is the local country’s currency. Transaction gains and losses, including gains and losses on our intercompany transactions, are included in other expense, net in the accompanying Consolidated Statements of Income. Assets and liabilities of operations outside the U.S. are translated into U.S. dollars using period-end exchange rates. Revenues and expenses are translated at the average exchange rates in effect during each month of the fiscal year. The effects of foreign currency translation adjustments are included in shareholders’ equity as a component of accumulated other comprehensive loss in the accompanying Consolidated Balance Sheets. Recent Accounting Pronouncements In November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which updates reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses. The amendments are effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The amendments should be applied retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating this ASU to determine its impact on the Company’s disclosures. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which enhances effective tax rate reconciliation disclosure requirements and provides clarity to the disclosures of income taxes paid, income before taxes and provision for income taxes. The amendments are effective for fiscal years beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The amendments in this update should be applied on a prospective basis. Retrospective application is permitted. The Company is currently evaluating this ASU to determine its impact on the Company’s disclosures. Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the SEC have not had, or are not believed by management to, have a material impact on the Company’s present or future financial statements.

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