Ladies and gentlemen, thank you for standing by and welcome to the second quarter earnings results conference call. (Operator Instructions) I would now like to turn the conference call over to John Bartlett, Senior Vice President, UniFirst Corporation. Please proceed, sir.

Thank you and welcome to UniFirst's conference call to review our second quarter operating results for the fiscal 2008 year and to discuss our expectations going forward. My name is John Bartlett and I am the Chief Financial Officer. Joining is me Ronald Croatti, UniFirst's President and CEO, and Steve Sintros, our Corporate Controller. This call will be on a listen-only mode until we complete our prepared remarks. Today we released the results for the second quarter and first half of fiscal 2008, which ended on March 1, 2008. Our net income for the second quarter increased almost 120% from the amount earned in the second quarter of last year. Although these results benefited because this year’s second quarter had 14 weeks versus 13 weeks last year, and the fact that last year’s quarter was impacted by non-recurring charges, the 2008 increase was very significant. The increase is primarily due to improved performance from our core laundry operation and in simple terms resulted from the fact that our strong revenue growth was accompanied by tight cost controls, which increased our operating margin from 7.1% in the second quarter of fiscal 2007 to 11% this year. We are pleased that our focus to increase our operating margins is yielding results. Now, before I turn the call over to Ron Croatti and Steven Sintros for more details, I would like to give a brief disclaimer. This conference call may contain forward-looking statements that reflect the company’s current views with respect to future events and financial performance. These forward-looking statements are subject to certain risks and uncertainties. The words anticipate, believe, and other expression that indicate future events and trends identify forward-looking statements. Actual future results may differ materially from those anticipated, depending on a variety of factors including but not limited to performance of acquisitions, fluctuations in the cost of materials, fuel, and labor, economic and other developments associated with the ongoing war on terrorism, and the outcome of pending and future litigation and environmental matters. Now I will turn the call over to Ron Croatti for his comments.

Thank you, John. I would like to welcome all of you for joining us for this review of our second quarter and the first half results of fiscal 2008. Steve will get into the financial details in a few minutes but let me start with a brief recap. We are excited to report our best second quarter and first half performance ever in revenue and profits. Revenues for the quarter were a record $270.3 million and for the first half, they were a record $517.5 million. This represents a 21.6% increase for the quarter compared to $222.4 million in the second quarter of last year, and a 16.4% increase for the first half compared to the $444.7 million posted in the first half of 2007. All business units contributed to these revenue increases, with the majority of the -- continuing to come from our core laundry operations. Net income for the second quarter was the best ever -- $15.3 million, 120% increase from the $6.9 million in the second quarter of fiscal 2007. Net income for the first six months of fiscal 2008 was a record $31.8 million, a 53.4% increase over the $20.7 million reported in the comparable period last year. U.S. laundry operations showed solid profit increases, both for the quarter and for the year to date, as did the Canadian laundries, our specialty garment business, and our first aid and safety business. Profits benefited from both lower merchandise cost and lower payroll cost as a percent of total revenue, and the fact that we recorded an additional week’s results for both the quarter and the half, 14-weeks in the second fiscal quarter this year as compared to 13 weeks last year, and 27 weeks in the first half of this year as compared to 26 weeks last…

Thanks, Ron. As Ron and John discussed, we were happy to report revenues and profits that represent the best results for the second quarter and first half of any year in the company’s history. Revenues were $270.3 million and $517.5 million for the second quarter and first six months of 2008, which represent increases of 21.6% and 16.4% respectively over the comparable fiscal 2007 period. Second quarter net income increased 119.6% to $15.3 million, or $0.79 per diluted common share from last year’s second quarter net income of $7 million, or $0.36 per diluted common share. Net income for the first six months increased 53.4% to $31.8 million, or $1.64 per diluted common share, from $20.7 million or $1.07 per diluted common share in 2007. As Ron mentioned, both the second quarter and six-month periods of fiscal 2008 include an extra week compared to fiscal 2007, as this is a 53-week year for the company. The extra week accounted for revenue growth of approximately 8.9% and 4.4% compared to the second quarter and first six months of fiscal 2007 respectively. As a reminder, the company’s second quarter and six-month earnings in fiscal 2007 were also affected by severance expense, as well as adjustments made to the company’s environmental reserve that combine to decrease the company’s income from operations and net income by approximately $2.3 million and $1.4 million respectively. Without these adjustments, the company’s diluted earnings per common share for the second quarter and first six months of 2007 would have been $0.43 and $1.14. Excluding the impact of the extra week, as well as the effect of the severance and environmental charges in fiscal 2007, the company’s overall net income still grew over 60% for the quarterly period and over 30% for the six months. The increase in earnings…

(Operator Instructions) Our first question comes from the line of Ashwin Shirvaikar with Citigroup.

Thank you. I don’t think the cautionary outlook should take anything away from your performance, so congratulations on the quarter. The question I have is the new sales success that you had, what kind of clients are buying in this environment? And you did mention that the push back against signing longer term contracts, does that mean that you are now signing shorter term contracts, maybe more towards the three-year timeframe as opposed to five?

I’ll take that one. About 8% of our business comes from the trades and constructions, or what I would call the SICs 15, 16, 17, when you wind them up. That’s where we are seeing the reductions and the cut-backs and the financial issues more than anything. I think where we are seeing where we are getting our new accounts and we are getting a little push-back on the contracts is on the smaller accounts because of the business uncertainty. And it’s a variety of sectors but it’s certainly -- we’re not writing much business out of that trades and construction, or construction support. It’s really -- you know, we’re still writing business in the other areas, you know, auto repair and healthcare and wholesale. Does that help you at all?

That does help. How about the length of contract? Is that --

Well, we’ve always pushed for a five-year contract. The only thing I could tell you is we’ve tried to work -- when I get the numbers up here, it’s -- we’re probably running at an average of about 4.6, 4.7 and that’s slipped down to about 4.5, so we are taking a few more three-year contracts.

Got it. In terms of stock room efficiency, clearly you mentioned merchandise costs going down. How much can you push the stock room efficiency lever?

The merchandise is affected as we lose more business and we get the reductions, hopefully we get paid for those clothes or we get the clothes back. If we get those clothes back, we recycle them and that helps lower our merchandise costs. And then when things pick up, we’ll have to basically put new garments in and it will just reverse the other way, so how bad will the economy go -- I mean, you can call that one as well as I. Hopefully it doesn’t go too bad and it stops at about 5% on the unemployment level. But that’s really what it amounts to. We get the clothes back. We reuse them for our existing customers.

Got it. On a different sector, the first aid part of the business, with all the restructuring and all that, is that completely now behind you? Results are modestly better --

No, I think Steve just told you we sold off one segment, a small segment so I’d say we have a couple of more quarters that we are fooling around with it. We are still not happy with our overall direction in that division.

Go it. And final question on the European front, any progress on new contracts there for specialty?

Well, our boys tell us -- I haven’t seen it yet -- our people over there are telling us that we are going to be getting -- the funding by the British Government has been loosening up on one of their clean-up sites, so we should be picking up that and by putting this plant in England that we are currently putting in, we should be getting new revenues from British Fuels and -- I forget the name of the other British power company, but we are supposed to be getting probably by next year when we are totally online next fiscal that we are supposed to be getting a substantial kick in revenues in that division.

And they’ve slowly started to get some business from -- obviously that U.K. business that’s going to be going into our U.K. facility was in our facility in the Netherlands and we’ve started to get some contracts out of France, Sweden, and some additional German contracts, which we are kind of lining up for the fall outages to help fill the gap of the earnings per share that’s going to leave our Netherlands plant and go to the U.K. So they have been planning for that and I think they’ve made some inroads into some of those other countries.

Thank you, guys.

Our next question comes from the line of Michael Schneider with Robert W. Baird. Please proceed with your question.

Maybe first, Ron, you can address the trendline through the quarter. Last time we were on the call, you had cited that they had started to deteriorate. Is there a consistent deterioration through the quarter itself as well?

We have seen just about every week deteriorate, Mike. You know, I just try to compute it another way that we might understand it a little easier -- it looks like we are losing about 150 wearers a day. That’s our current -- John just slipped me the numbers. The answer to your question -- it has deteriorated significantly harder in February than September or October, almost double, triple.

I think every year we typically see a falloff after the holidays, after January and February. I mean, they kind of hold on to the employees through the holidays and then they let them go but it’s been a much more dramatic fall-off this year in January and February.

And Ron and John, is it concentrated in the areas of the country where there’s been such excess construction -- Southeast, Southwest, or has it hit some of even the stronger markets like the Texas area and the Gulf Coast?

We only have one area that’s positive and that’s oil patch. Other than that --

It’s pretty much across the country, except Texas, you know, West Texas has stayed pretty strong.

Okay, and then when you look at the margins in the core laundry business in Q2, you did have the extra week. You mentioned some of the lower cost merchandise as a result of uniforms coming back, but the performance still seems extraordinary and my numbers, you basically came up with about $8 million of operating profit that I wouldn’t have expected. That’s a big number. Can you give us any insight as to what you mean by tighter cost controls, if there’s been any unusual product sales or product confirms that bump that number in the quarter? It just seems like an extraordinary margin performance.

There’s really nothing extraordinary, Mike. The biggest factor was the merchandise cost and just so you understand the extra week, I mean, even though we had an extra week of revenues, we account for all of our labor on a weekly basis and all of our depreciation and all of our garment amortization on a weekly basis, so there was not an extra week of revenues without the costs associated with it. So if you actually look at it, you’ll see that the margins in the second quarter declined a little bit from the first quarter in the laundry business, so I think really what happened with the strong revenue growth, we really -- our margins didn’t deteriorate as much in the second quarter as they have in most prior years and -- it’s just a --

So then --

There’s no one thing. I mean, it’s just the control of the labor and the merchandise and if you don’t do that, you’re never going to --

But I guess still surprised given that the organic growth rate was 7.6, last quarter it was 8.5. So the deceleration in organic growth hasn’t been that significant, so that the benefit for the merchandise costs overall for the business just doesn’t seem like it should have been that dramatic so quickly.

I think what I’m saying is the second quarter was actually not quite as good as the first quarter. It was clearly much, much better than the second quarter of a year ago, but sequentially the performance was down a little bit in the second quarter.

Okay, and I guess as you try to account for the softer economy then and the presumably the ad stop rate deteriorating further in the second half, does it -- are you trying to tell us that the margins won’t bounce up sequentially as they historically do? Are you anticipating the margins go flat from here?

I think it’s possible the margin in the third quarter will be roughly flat -- I mean, at a pretty relatively high level. But I think the third quarter has typically been a strong quarter for us and we are expecting a strong from Unitech, our specialty garments in the third quarter. That’s where we have to make the money there to --

Go back -- Unitech doesn’t make a fourth quarter, Mike. We are lucky if they break even, so -- but I think it goes back to what John is basically saying. It’s merchandise. We’ve got a tight control on labor. We certainly reacted -- we had a meeting some time ago when we saw things slowing that we went into phase one, you know, really telling our guys if somebody leaves don’t replace them unless they are absolutely positively necessary, so that’s helped the payroll a little bit. You know, we’ve certainly cut back on some travel, some meetings, and we foresee doing that the rest of the year. So you know, it’s $50,000 here, $100,000 there and it’s all adding up. And have we got it all out? I don’t know, but we are certainly going to keep a tight rein on what we are doing.

Was there a material reduction in the incentive comp around calendar year-end based on the trajectory --

No. No.

And then just on the guidance for the second half, if you look at what you’ve got left in the annual guidance versus what you posted in the first half, it basically means that earnings are going to be flat year over year in the second half, despite the huge momentum you had in the first half. Is there anything else you guys have baked in there as far as --

No, I don’t believe -- they are not going to flat; 2.91 would be flat.

I think the $3.00 to $3.10 envisions earnings growth in the second half of 7% to 15% year-on-year in the third and fourth quarters.

Okay, and then final question on the fuel costs; they have been raging for the industry. Have you guys gone out with -- do you intend to go out with a fuel surcharge?

Well, we have been very aggressive in doing that already and I think that’s clearly one of the things that’s helping us offset those costs. But of course, if they continue to go up, I guess we’ll continue to do what we can.

And have your competitors followed?

I assume they have. We don’t -- we’re not privy to exactly what they’ve done but I’m assuming they are trying to do that, yeah.

Okay. Congratulations, guys. Great performance.

(Operator Instructions) There are no questions at this time. I will now turn the call back over to you, John. Thank you.

I’ll take it. We’re very excited about our first two quarters performance and we’ve updated our guidance. I think we are very comfortable with the guidance, updated guidance we are putting out there and like I said earlier back in December, we went to what we call phase one tightened cost controls and we plan to continue in that mode at least for the next two quarters, and hopefully this business cycle will turn around and we will keep our sales effort at peak level. So I appreciate your interest in the company and we look forward to talking to you in three months.

Ladies and gentlemen, that does conclude the conference call for today. We thank you for your participation and ask that you please disconnect your lines.