Welcome to the UniFirst Corporation first quarter earningsresults conference call. (OperatorInstructions) Now I’d like to turn the conference over to Mr. Steve Sintros,Corporate Controller. Please go ahead,sir.

Thank you and welcome to UniFirst’s conference call toreview our operating results for thefirst quarter of fiscal 2008 and to discuss our expectations goingforward. My name is Steven Sintros and Iam theCorporate Controller. Joining meis Ronald Croatti, UniFirst’s President and Chief Executive Officer. This call will beon a listen-only modeuntil we complete our prepared remarks. Before I begin I would like to give abrief disclaimer. This conference callmay contain forward-looking statements that reflect thecompany’s current views with respect to future events and financial performance. These forward-looking statements aresubject to certain risks and uncertainties. The wordsanticipate, believe, and other expressions that may indicate future events andtrends identify forward-looking statements. Actual future results may differ materially from those anticipated,depending on a varietyof factors, including but not limited to performance of acquisitions,fluctuations in thecost of materials,fuel and labor, economic and other developments associated with theongoing war on terrorism, and theoutcome of pending and future litigation inenvironmental matters. Now I will turn thecall over to Ronald Croatti for his comments.

Thank you, Steve. Iwould like to welcome allof you for joining us for this review of our first quarter, afiscal period that produced record revenues and profits for our company. Steve will cover thedetails in afew minutes, but let mestart with a briefrecap. Revenues for thefirst quarter of fiscal 2008 were arecord $247.3 million, an11.2% increase over the$222.4 million in thesame period a yearago. Themajor upside influence came from growth inour core laundries,with these operatings showing a12.5% increase. Internal growth andprice increases accounted for 8% of thelaundry’s operational increase. Our specialty garments and first aid business which showedsolid revenue increases inlast year’s first quarter generated smaller increases inthis year’s first quarter. Specialtygarments showed a 0.4%revenue increase as compared to thesame period a yearago. TheUniTech business suffers from theeffects of certain utility customers rescheduling planned shut down periodswhich are times whenour garment cleaning and decontamination services arein priority demand, aswell as for some delayed revenue flowfrom new account installation. As we’venoted several times inthe past, thisbusiness is somewhat lumpy and ithas atendency to exhibit upsand downs. While showing reliable growthover the longterm, despite a flatinterval, we expect theunit to hit it’s revenue and profit targets for thefull year. Our first aid business showed a2.1% revenue growth as compared to thesame period a yearago. This was about what we anticipatedbased on organizational operational changeswe are making. particularlyin regards to ourroutes service operations. We arealso in theprocess of shifting thenew business development focus of our Medique business to put moreconcentration on theinstitutional and wholesale distribution markets and we areplacing greater emphasis on securing third-party private labeling contracts forour private prestige packaging operation. Thecombination of these initiatives with thetactical shifts itentailed have absorbed considerable time and energy during thequarter and resulted insome temporary dilution of sales numbers. Net income for thequarter was a record$16.5…

Thanks, Ron. As Ron discussed, we had a very strong start to fiscal 2008. Consolidated revenues for the first quarter of 2008 were a record $247.3 million, an 11.2% increase over the first quarter of 2007. First quarter net income was $16.5 million or$0.85 per diluted common share compared to the first quarter of fiscal 2007 where netincome was $13.7 million or $0.71 per diluted common share. The company’s performance was primarily driven by strong results for our core laundry operations which includes our U.S. and Canadian rental and cleaning business,our garment manufacturing business, and our distributions and corporateoperations. Income fromoperations from our core laundry operations grew 26.1% from $22 million in the first quarter of 2007 to $27.7 million in 2008. As a percentage of revenues, income from operations from the core laundry increased from 11.1% in the first quarter of 2007 to 12.5% in the first quarter of 2008. The growth and profits in the core laundry operations was primarily the result of strong revenue growth. Revenues from the core laundry operations increased 12.5% in the first quarter of 2008. 8% of the growth was due to organic growth and priceincreases while 3.4% was due to acquisitions, primarily the acquisition of Western Uniform and TowelService, which was completed in September 2007. Fluctuations in the Canadian dollar exchange rate also accounted for 1.1% of the overall growth of the core laundry operation. The increased profit margin of the core laundry operations primarily relates tolower merchandise cost as a percentage of revenues. In addition, production and administrativepayroll costs decreased as a percentage of revenues compared to the first quarter of fiscal 2007. These positive cost comparisons were partially offset by higherselling and healthcare related costs. The first quarter revenues of our specialty garment business were upslightly from $17.2 million to…

(Operator Instructions) Our first question comes from theline of David Lin with William Blair. Please go ahead.

Can you provide alittle bit more coloron the 140 basis pointyear over year gain inthe laundry operatingmargins? How much ofit came from thereductions inmerchandise amortization, how much iscoming from automation improvements atthe Kentucky plant, therollout of handhelds, and how much can we expect this to continue throughout thebalance of the fiscalyear? Arewe eventually going tosee themerchandise amortization reductions start to dissipate alittle bit?

Ithink the bulk of thatimprovement was from themerchandise cost. There were somebenefits with respect to production, payroll, and administrative payroll. Again, I think your reference is agood one to some of theautomation. Butthe bulk ofit was from themerchandise. Some of this trend, I thinkwe would expect will start to turn atsome point during theyear. Atwhat point, it’s unclear. With thestrong growth that wehave, it is inevitablethat garments will begoing into service and that will start to ratchet back up again and that’s howthings have gone over thelast several years. Ittrends up and down andwe’re at agood point right now. I don’t think it’ll allgo away during theyear. That really takes time for itto happen, sowe probably maintained some of that benefit, but to what extent it’s tough toput our finger on. Inaddition, we anticipate that thefuel will become alittle bit more of afactor as the yeargoes on. Itreally didn’t hurt ustoo much in thefirst quarter given our growth but we expect that tocontinue to be anuphill battle as theyear goes on.

What is energy asa percent of revenuesnow, since you brought itup?

Thefuel and natural gastogether Is a littlebit under 4%, David.

In thefirst quarter?

In thefirst quarter.

You guys mentioned that you’re still expecting inthe specialty garmentsdivision to hit your targets infiscal 08. Does that mean thatyou expect margins inspecialty garments to behigher than the 7.6%achieved in fiscal2007?

I think itwould have to be for theremainder of the yearto get to thepoint where we can obviously beat last year’s numbers. Some of thethings that happened inthe first quarter weresome delay of certain work and I think certain one-time costs that we don’texpect to be atrend so ourmanagement there is pretty confident that they can meet their budgetgoals. I don’t think we’re quite asconfident as they arebut we still think that they can meet and beat their overall numbers from lastyear. I don’t know, Ron, if you want toadd anything.

I think that’s totally right. I think itcenters back into theUK, their large decommissioning project started slightly and then thefunding was held back and we expect that funding to come through and thatrevenue will pick us up and improve that margin we’re doing inEurope.

Ron,you mentioned the UK. Arethere any new developments with establishing aplant there?

We arein theprocess of working on it. We’re inthe permittingprocess.

Finally, I was alittle surprised that you didn’t raise your guidance atall. Isthere any particular quarter that you’re expecting alittle bit more weakness than wasoriginally thought?

Normally our second quarter is our weakest quarter. TheUniTech division generally loses money during that quarter and I think I triedto mention it inmy comments. We’re seeing that shrinkageof our warehouse increasing and that’s aconcern for us. We just have to sellthat much more to try to make that up. We’re cautious on that side.

You were alittle cautious last quarter but you seemed to power through itin thefirst quarter.

We powered through it. Exactly what happened. We poweredthrough it with acouple of good sales.

Our next question comes from theline of Ashwin Shirvaikar - Citigroup. Please go ahead. Ashwin Shirvaikar - Citigroup Hi. Thanks for takingmy question and congratulations on afabulous quarter.

Thanks Ashwin. Ashwin Shirvaikar - Citigroup Does your CapEx include theproposed UKplant for UniTech that you talked about?

Yes itdoes. Ashwin Shirvaikar - Citigroup Soyou do expect that tohappen this fiscal year.

We hope so. Ashwin Shirvaikar - Citigroup Thenew client inspecialties, was that allthe decommissioningproject basically or is that thenew contract withcontinental Europe as well?

It’s acombination of three things. It’s acombination of thedecommissioning and cleanup project atUK, it’sgetting more reactor sites which we addressed inthe UKwith British nuclear fuels, and we’re hoping that we can pick up asmall contract once again inFrance. That’s what theboys are telling uswhy they’re still optimistic. Ashwin Shirvaikar - Citigroup Mylast question is with regard to thefirst aid business. When doyou expect the reorganizationto be complete?

I think we’ve taken thereorganization and moving thepeople around – it is prettymuch done. Itwill be done by theend of the month. It’s developing thesales team and changingthe concept of theway they were selling to getthe growth going thatwe’d like to get goingand that will take alittle longer. That’s going to takeanother six months atleast. Ashwin Shirvaikar - Citigroup Okay. Soanother six months ofthat and once that takes off, if that happens, what kind of margins should weexpect?

I think we should expect thegrowth to get nearthat 8% to 10% range and we would expect themargins to return to where they were. Maybe even alittle better than where they were.

Our next question comes from theline of Mike Schneider with Robert W. Baird. Please go ahead.

Happy New Year, guys.

Happy New Year, Mike.

Ron, maybe you could just go back to acomment that you said acouple nice wins helped you power through thedeterioration during thequarter. By that did you mean you signedor installed a couple bignational accounts this quarter?

We have. We got theminstalled. We basically inked them lastquarter but we were able to take advantage of therevenue build up this particular quarter.

Were they fully installed this quarter or will there besome incremental gain next quarter?

They were pretty much fully installed this quarter.

National accounts then as apercent of revenue now? Itmust be running at8% or 9%?

You got it. You’reright there at about 8.5%range.

Add stops to go back to that, themonthly trend, did itactually deteriorate through thequarter?

Itdeteriorated through thequarter, Mike. I know you follow thosenumbers. We have seen adeterioration greater each month.

How about since November? What have you seen through December?

December was not good. This week is probably going to bethe worst week of theyear for us. People don’t lay off thelast two weeks of December and we expect apretty good sized hit this week. It’s aconcern of ours. Again, going back toour business, we do alot of street business, and alot of that street business was related to thehousing business, the airconditioner, theplumber, and soforth. They’re not replacing thesepeople. That’s what we’re seeing,although our Region 4, our Floridaregion, is the hardesthit. That’s pretty unusual because usually that builds up this time of year withall thesnowbirds going down there and that region’s hard hit for some reason.

Sothen in terms of yourinitiatives on thesales force, it soundslike things areunfolding as you would have hoped interms of head count increases, turnover being down etc. I guess I’m still perplexed as to how theorganic growth, that 8%, was able to overcome thedeterioration in theadd stops. I presume new account salesmust be running near20% this quarter up from 15 last quarter?

Not quite. We putthrough a pretty goodprice increase too probably near theend of September to compensate for theincrease we saw coming inthe fuel and oil sowe made a pretty heavyadjustment in that andthat helped us along and as you well know, thesales organization hasreported directly to meand I’ve been pounding sales like no tomorrow and we’re getting theresults.

Pricing now, historically theindustry I guess ransomewhere just over 2% inthe last three to fiveyears have been running at1%. Doyou think you canreachieve that 2% to 3%rate?

We could tell you we did better than 2% for thequarter.

Okay and then theselling ratio, you mentioned inthe release thatselling costs were higher but yet you made thecomment in your preparedremarks that theselling ratio held flat during thequarter. Can you reconcile those? I imagine they’re different numbers.

Well I think we look atit two differentways. We look atit as apercentage of sales and then we look atit as amultiple of new business that we write. I think you’ve heard memention this numerous times. What ourselling cost is andwhat our dressing costis and when we put those two together we use that to basically look atour acquisition cost. We think whatwe’re saying is that as apercentage of revenue theselling cost hasgone up but because our head count hasgone up, reps under management plus thebetter sales performance that we have been getting out of our people haslowered the ratio sofor every $1 of business that we’re writing, all-inis down slightly.

On themerchandise costs, it’s been my experience, I’ve been following these companiesfor almost a decadenow, that is iforganic growth is accelerating, themerchandise costs as apercent of sales accelerates as well and then vice versa, you getrelief when organic growth is slowing down inthe laundrydivision. That didn’t happen thisquarter but we’ve seen itfor the last severalquarters that merchandise hasbeen favorable for youbecause the organicgrowth rate hasbeen decelerating. This quarter itaccelerated and yet itwas still aboost. Isthere something unusual about thenational accounts that were rolled out this quarter? Isthere something unusual about themix?

No, not really. Ithink as long as youkeep writing more and more new business theamortization rates can stay inline but when you getless new business coming inthe door thatamortization rateclimbs.

I think there’s alittle bit of a lag aswell, Mike, and I think that’s partially why with our guidance we’re being alittle cautious because like you said, we had agood quarter writing new business and we don’t expect that that margin benefitfor the merchandise isgoing to be there allyear, especially to theextent that itwas.

Okay. That’s helpful.That’s all I’ve gotfor now. Thank you guys and greatquarter again.

Thanks Mike.

I guess I should add you guys areprobably wondering where John is. Mr.Bartlett is on vacation inEurope and hewill be returning nextweek.

(Operator Instructions) We have afollow up question from theline of Mr. Mike Schneider. Please goahead.

Ron, just one final one. You mentioned that facility service products aregrowing in importanceas a percent ofrevenue. Doyou have some of those breakouts now given that thedivision has beengrowing?

I don’t think we’ve ever put those out, Mike.

Allright. Doyou care to give us aballpark?

You know as apercentage of revenue I think we’re still strongest inthe garment. We’re over 60% garment.

Okay. Thank youagain.

Our next question comes from theline of Kartik Mehta – FTN Midwest. Please go ahead. Kartik Mehta – FTN Midwest: You talked alittle bit about theeconomy in Floridaslowing and you talked about maybe theadd stops weakening. Is itall related to housingor have you seen other sectors slow as well that is having animpact on that?

I really can’t qualify it. All I can tellyou is some of theother companies have alarger national account than we doand maybe it’s more automobile related and maybe they’re not seeing it. Again, we’re thestreet business company. We doa lot of business withthe plumbers, theair conditioning guys,the electricians, and soforth down the lineand we see thatshrinkage happening inthere. I think thehousing market in theFlorida area, thetrades down there arepretty slow. We don’t domuch restaurant business. Some of ourcompetitors do. We didn’t getthat pick up that we normally getwhen the snowbirds goto Florida. We actually had shrinkage down there thisyear where normally we geta pick up. Kartik Mehta – FTN Midwest: Ron, theother thing you mentioned that I found interesting was you said you were ableto push a prettydecent price increase through. Is thisjust a normal priceincrease or was this because gasprices are going up,energy prices aregoing up?

I think we pushed something through because we saw stuffcoming, gas going up,and we wanted to getahead of the curve. Kartik Mehta – FTN Midwest: You would think inthis environment no attrition as aresult or normal attrition? Nothing out ofthe ordinary?

Sofar it’s been normal. But these things taketime to react. To this point I’d sayit ‘s normal. Kartik Mehta – FTN Midwest: Thank you very much.

Allright.

Our next question comes from theline of Steve Balog with Cedar Creek Management. Please go ahead.

On that last point, I wascurious about this price increase and what push back or loss of clients you sawon that. Does that show up right awaywhen you go seesomebody or does ittake them a while, acouple of months for thecontract to roll out andfor them to look around for another vendor? Sowhen might we see theripple effect from that?

I think it’s basically aripple effect. We basically follow ourrental agreements. Our rental agreementsare worded sothat we can put more specialty charges on I guess you would call it, and we’veimplemented a higherspecialty charge to anticipate thefuel going up which ithas, along with our normal price increases.

But also to answer your question, I think it’s hardest hitas far as customer push back right away but there is alag on it and we will seethe effects of thatover the next quarteror two, but at areduced rate.

Arethese special charges unusual for you all? I was under theimpression that one of your strategies was asimple bill, not a lotof nickel and diming on stuff.

Well, our basic strategy is asimple bill, but we anticipate gasoline going at$3.50 a gallon and ournatural gas costs keepraising. We had to make amove and sobe it, really.

Doyou see anything fromcompetitors? Arethey following and everybody breathing asigh of relief that somebody took thefirst step? Or actually were you thefirst step or are you thesecond guy? What’s thecompetition look like?

I really can’t answer that.

There areno further questions atthis time. I’ll turn thecall back to you, sir.

Very good. Well, Icertainly appreciate you following thecompany and theinterest in thecompany and we look forward to talking to you next quarter and we areconfident that we will hit our numbers for theyear. As we keep moving along we willkeep the sales comingthrough the door andhopefully we can overcome theshrinkage problem that thecountry is experiencing with theeconomy. Thank you much.