Ladies and gentlemen, thank you for standing by. Welcome to the first quarter earnings conference call. [Operator Instructions] I would now like to turn the conference over to Steven Sintros. Please go ahead.

Thank you and welcome to the UniFirst Corporation conference call to review our first quarter results for fiscal 2014 and to discuss our expectations going forward. I'm Steven Sintros, UniFirst's Chief Financial Officer. Joining me is Ronald Croatti, UniFirst's President and Chief Executive Officer. This call will be on a listen-only mode until we complete our prepared remarks. Now before I turn the call over to Ron, 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. The forward-looking statements are subject to certain risks and uncertainties. Words like anticipate, optimistic, believe, estimate, expect, intend and similar expressions 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, the continued availability of credit and the performance of the capital markets; the performance of acquisitions; fluctuations in the costs of materials, fuel and labor; and the outcome of pending and future legal and environmental matters. I refer you to our discussion of our risk factors in our most recent 10-K and 10-Q filings with the Securities and Exchange Commission. Now I would like to turn the call over to Ron Croatti for his comments.

Thanks, Steve. I'd like to welcome everyone joining us for this financial review of UniFirst's first quarter of fiscal 2014. Steven will cover all the details in a moment. But first, I'll provide an overview. UniFirst revenues for the first quarter of fiscal 2014 set another new record at $346.7 million, a 4.3% increase over the $332.6 million reported for the same period in 2013. Net income for the quarter was also a new UniFirst record at $34.5 million, a 12% increase over the $30.8 million reported 1 year ago. Organic growth for the Core Laundry Operations, which accounts for 90% of the UniFirst total business, was the primary driver of our positive first quarter performance. Our laundry set a new quarterly record for new account sales for making slight gains in our uniform wearers adds over reduction matrix. These are positive factors contributing to our Core Laundry Operations, improving revenue by 5.9% and operating income by 17.6%, when compared to last year's first quarter. Meanwhile, Specialty Garments segment, which includes specialized nuclear, cleanroom laundries and ancillary services, reported a 12.3% revenue decrease and a 41.3% operating income dip for the quarter, which compared to the same period in 2013. These results were expected, as we've mentioned in our last webcast, based on the cyclical nature of the nuclear industry and with the nuclear arm of the segment representing the majority of Specialty Garment business. Moving forward, we continue to expect the cyclical challenges to remain throughout 2014 and anticipate a down year for the Specialty Garment unit. And we also expect this segment to begin bouncing back in coming years as increased number of large nuclear reactor projects are scheduled with the anticipated increase in decommissioning opportunities in Europe. In the meantime, the Specialty Garment unit will continue to…

Thanks, Ron. Revenues for the first quarter were $346.7 million, up 4.3% from $332.6 million 1 year ago. Net income was $34.5 million or $1.71 per diluted share, compared to $30.8 million or $1.54 per diluted share reported in the first quarter of fiscal 2013. First quarter revenues in our Core Laundry Operations were $312 million, up 5.9% from those reported in the prior year's first quarter. Excluding the impact of acquisitions and a weaker Canadian dollar, revenues grew 5.1%. Solid new account sales as well as certain annual price adjustments contributed to our top line performance in the quarter. New account sales, account retention and wearer additions versus reductions, all trended positively compared to the first quarter of 2013. Wearer additions versus reductions were slightly positive during the quarter compared to flat in the same quarter 1 year ago. Core Laundry operating margin for the quarter was 16.8% compared to 15.1% 1 year ago. Merchandise amortization, energy and bad debt expense were all lower as a percentage of revenues compared to the prior year. Selling, payroll and certain other payroll-related costs were also lower than the prior year as a percentage of revenues. Energy costs for the first quarter of fiscal 2014 were 4.8%, compared to 5.1% for the first quarter of fiscal 2013. Merchandise in service addition did trend higher in the quarter, which could be an indication of increased merchandise amortization as the year continues. Revenues for the Specialty Garments segment, which consists of the nuclear decontamination and cleanroom operations, were $24.4 million for the first quarter of fiscal '14, down 12.3% from $27.9 million in the first quarter of 2013. This anticipated decline in revenues is a result of fewer U.S. and Canadian power reactor outages compared to 1 year ago. As a result of this…

[Operator Instructions] Our first question comes from the line of Andrew Wittmann with Robert W. Baird. Andrew J. Wittmann - Robert W. Baird & Co. Incorporated, Research Division: So in the last few years we haven't had a lot of positive commentary on add-stops. I think the words slight improvement is about as good as it's gotten. So just for context here, it this -- it's obviously slight, is this the best add-stops that we've seen in a few years, or how would you put this in a -- kind of a longer-term context versus the past few years?

I would say that this probably is the best quarter we have had in 2 or 3 years. I made the comment that it was better than the first quarter of last year. Sometimes in our first fiscal quarter, it tends to be a little bit better than some other quarters, which is why I provided the perspective versus the first quarter 1 year ago. So we are seeing a little momentum. We did say slight because we don't want to give the impression it was robust. It was not. We're very interested in seeing how it progresses over the next quarter as we were slightly negative for the last 9 months of last year. So we're as interested as anyone to see if it continues over the next several months. Andrew J. Wittmann - Robert W. Baird & Co. Incorporated, Research Division: Is there any end markets? I mean, is this manufacturing? Is this like a trades thing? Energy we've heard is strong, can you just give us some details as to where you might be seeing it?

Well, I think energy certainly continues to be strong. But we are seeing in some other parts of the country that would indicate that it's more broad than just energy. I don't know if -- Ron, you want to add to that?

No, I think Steve said it all. We measure it by area of the country, and there are a couple of sectors that are down and poorer sectors that are up. Andrew J. Wittmann - Robert W. Baird & Co. Incorporated, Research Division: Okay, that's good. And moving on to maybe some National commentary -- you didn't have anything really in the prepared remarks, at least that I heard. How much National Account business is out there? And is any of the competitive pressures that we've been hearing about, from you guys and maybe even others, is that subsiding as everybody is getting more full and we're seeing capacity additions in the industry? Are big contracts like that now being more scrutinized for price and ones that maybe wouldn't be as aggressive today as they were yesterday?

I think the National Account arena is still highly competitive, number one. There still is a consolidation of a lot of smaller industries or grocery markets, or so forth, into a National Account arena, and I think you'll see that trend to continue. But the competition has not let up in that arena, that's the only thing I can tell you. Andrew J. Wittmann - Robert W. Baird & Co. Incorporated, Research Division: Okay. And just kind of a long -- I kind of asked -- mentioned in my question there, but just kind of want to get your thoughts. I mean, we see your CapEx guidance, 90 to 100 -- we know that CRM's in there, automation. Are there new plants that need to be constructed at UniFirst in the next year or 2 where you're just growing out of facilities that you have or major expansion, which should actually kind of functionally be a new plant? Are those the types of things that you're seeing inside the company today, Ron?

We basically put 2 plants a year on, and we will do that. We've done it the last 2 years, and we will do that the next couple of years. We've had substantial growth that we need capacity at the markets. And we know when we have a plant over our branch in the market we do better in sales and gaining market share, so we like that approach. And plus, we're always adding to a couple of plants. So we -- basically, you have 4 to 5 major projects going a year. Andrew J. Wittmann - Robert W. Baird & Co. Incorporated, Research Division: Sounds busy. Last question, just on capacity additions. What about routes, Ron? Where are you on your -- on the route curve? Are you -- is this an area where you think you might need outside investment? Are you too full now or have you recently made those? I just want to get a sense of kind of where the investment is and how that it can impact margins.

I will never say a route is too full. I mean, we like to have full routes, it keeps our employees stable. And -- but as required in a location, we add routes. We add routes every year, just as part of doing the business.

Yes. I don't think we're at a tipping point one way or the other. I think it's more business as usual. And some locations are adding routes, but many still have capacity to absorb additional business.

Our next question comes from the line of John Healy with Northcoast Research.

Wanted to ask you a little bit more about the add-stop trajectory, I'm afraid to hear the inflection there. But was curious, like throughout the quarter, was there a trajectory to the add-stops? And I guess just, by and large, let me get a little bit of color and just in terms of how the business progress in terms of strength or weakness throughout the quarter. And I believe in the guidance for the full year, I think last quarter you mentioned that -- it implied that add-stops will be a little bit negative for the year and I was wondering if that's changed in the guidance as well.

I think for the first quarter, there wasn't any. And we track it every week, and there wasn't a substantial difference toward the end of the quarter versus the beginning of the quarter, John. As far as the rest of the year goes, our guidance at this point probably assumes a flattish or slightly negative adds-reductions until we see differently. I mentioned our first quarter is typically our strongest adds-reductions quarter, and although this first quarter was a little bit better than 1 year ago, I think we want to see it before we start building it in. And until we see another couple of months of it, I'm not sure we're going to be convinced it's a trend yet.

Okay, fair enough. And I wanted to ask just about kind of the December business. I know we've had some -- a little bit of volatile weather and I know Christmas kind of fell at a different point of the calendar and it's impacted some service companies. And I was just curious to know if there's been any sort of -- anything you'd want to call out on December in terms of how it affected the calendar or weather, anything like that.

Yes, I think on balance, we're a little behind the year-over-year -- at least as it relates to the holiday impact. I think it was a little stronger this year based on the way the holidays fell. And your point about the weather is a good one. We've been hit hard here particularly in the Northeast and even in some other markets that aren't traditionally impacted as much by the weather. We've had some plant closures for a day here, a day there. And so, we don't think it'll have a real material impact on our second quarter, but there'll be some incremental impact.

Okay. And then just final question on the M&A side. I know when there's something to be said, we'll all read about it in a filing from you. But I was just curious to know if you feel like the activity level in 2014 is going to bring more to the market than we've seen in the prior years. I know we've been kind of waiting for buyer and seller expectations to align, but when I look at your company and with the pristine balance sheet and the operational progress you've made that I just kind of wonder if you guys are at a point where you think you might be willing to pull the trigger on maybe some midsized or larger deals at some point in the near future.

Well, we're always looking and shopping. And as individual companies, number one, have to do their tax returns in the first quarter of the year, ownership generally wakes up to their current status, and then some opportunity window usually in late spring or early summer to talk to them. But we're talking to people every day as we possibly can. And we have to find the larger acquisition at the right return at the right price, and the seller has to be willing, and want someone in that position today at this point.

Our next question comes from the line of Andrew Steinerman with JPMorgan. Molly R. McGarrett - JP Morgan Chase & Co, Research Division: It's Molly McGarrett for Andrew. Last quarter, you gave guidance for Specialty Garments to be down 9% in revenues and 15% in operating profit for the full fiscal year. Should we still assume those numbers?

Yes, I think you can stick with those numbers, Molly. The first quarter was a little further off those numbers, but that was somewhat expected as it was planned to be somewhat of a light outage season. The spring outage season in the third quarter is expected to be the stronger quarter this year, which last year was a little bit flip-flopped. And so we do still feel at this point we can achieve those numbers that we put out there. Molly R. McGarrett - JP Morgan Chase & Co, Research Division: Okay. And then given the strong performance in the first quarter, I know you guided to the high end of guidance, but what's holding you back from raising guidance for the full year, and particularly within -- with margin pressures? Could you maybe rank the margin pressures going forward, where you think there could be a possible bias towards the downside?

Well, I think there's a couple of items we just want to make sure we highlight from a comparative standpoint to make sure you're taking into account. The first being, in the fourth quarter, obviously, the extra week. But also, in the fourth quarter, we called out last year we had a $2.3 million adjustment to some of our workers' compensation reserves that was a benefit in the fourth quarter that's not built into our guidance this year. In addition, if you remember in the second quarter last year, we had a buyout on a large account that provided about $1.7 million of profit that was somewhat of an unusual item. So there's a few kind of negative comparisons coming from some of those items over the last 9 months of the year. After taking those into account, a couple of the areas that give us some reason to pause about the remainder of the year and the profit trajectory, I mentioned merchandise. With the solid sales in the first quarter and the better-than-expected adds, we did also have higher-than-expected merchandise additions. And so we want to see how that's developing over the next quarter or so before we move too much on the guidance and the profit sizes as that's a large driver of our guidance. Molly R. McGarrett - JP Morgan Chase & Co, Research Division: Okay, great. And just one quick modeling if I could. Could you give a breakout of growth from acquisitions and FX impact?

Yes, the acquisitions was 1.3%, Molly, in the Core Laundry business and the balance is from the FX.

Our next question comes from the line of Dan Dolev with Jefferies & Co.

I've got 2 quick questions. The first one is on growth. The net add-stop to wearer additions seems to be ticking upwards. But just to make sure I don't miss anything, it looks like the comps are about 100 basis points easier this quarter and yet your growth has slightly decelerated. How should we think about growth going forward, especially as comps are getting a little bit easier throughout the rest of the year?

As far as the growth over the remainder of the year, the organic growth that is in the assumption at the higher end of the range is slightly lower than where we ended up this quarter. Now part of that is my assumption that adds-reductions are going to be slightly negative for the remainder of the year. If they outpace that, there's probably some upside there. But that's what's built into the guidance right now.

Got it. And my next -- my last question is on margins. Everybody knows that better wearer additions should be good for margins, and margins are indeed expanding. But if my numbers are correct, it looks like the operating margin growth on a year-over-year basis is about 170 basis points this quarter, which is slightly below the last quarter, which is about 190, and well below 3Q, which was about 300. So how should we think about kind of the positive impact of higher wearers per existing customers on margins going forward?

I think everything else being equal, Dan, your assumption is correct. I think there's -- if you go back over the last several quarters, there are just many other factors that are causing those positive comparisons, the trajectory of merchandise being one of them. So I think the comment is a good one, but I think that we've talked about last year how some of the year-over-year benefit that we got from improvement at underperforming locations and improved collection of extra charges. I mean, those things were some of the things that were driving the improved margin to the level that it was at. And those things have somewhat moderated, at least the impact of them, from a year-over-year basis. And so I think those are some of the things that are causing, I guess, what you call a deceleration of the margin improvement even though adds versus reductions are getting a little bit better. So hopefully, that helps your question.

Our next question comes from the line of Chris McGinnis with Sidoti & Company. Christopher McGinnis - Sidoti & Company, LLC: Steve, just a quick question on SG&A levels, and can you just talk maybe throughout the year how this compares to just kind of growth year-over-year on your SG&A spending?

Well, SG&A was definitely low for the quarter. We mentioned selling costs being down. And I don't believe we said it in our prepared remarks, but at this point of the year, we feel we're a little bit understaffed on the selling side. We continue to grow the sales force to take advantage of opportunities out there. And from a sales productivity standpoint, we had a good quarter. But we're still pushing to get those headcounts up and to increase the overall number of tenured reps that we have on the street, and so that will potentially cause the selling cost to come up as the year goes along. We hope it does, because that's really our strategy, to continue to push on the new sales side.

Our next question comes from the line of Joe Box with KeyBanc.

Just a follow-up on a prior question. I think you noted that the guidance assumes a slightly negative add-quit for the rest of the year. If we were to basically just assume that the current situation holds with respect to positive wearer levels, how should we think about the sensitivity to Core Laundry organic growth? I think last quarter, you guys were looking for about a 4% organic growth improvement for the full year, so what would be the sensitivity to that number if the wearer levels hold?

Yes, Joe, because we are making a lot of the adds-reductions -- and I think it is an important trend to keep watching. But we made the comment that it was a slight positive because the reality is, if the slight negative I'm projecting becomes a slight positive, it's not going to mean another percent on the growth, for example. It's going to be more muted and incremental on what we've estimated at this point. And that just kind of highlights the fact that we're not seeing real robust adds. They are slightly positive. But to go from slightly positive for the remainder of the year to where we are in the first quarter, it wouldn't be a full percent on the revenues. I'm not even sure it'd be 0.5%, to be honest.

That's perfect. Could you maybe rank or put some color around how much some of the revenue drivers like new account sales, flame-resistant garments and collection of ancillary charges are contributing to your organic revenue growth?

I mean, I think this quarter we didn't really call out anything in particular, because I think where we are now and kind of having to annualize some of the strong growth in some of those areas, it's more balanced. I'm not sure -- we still are growing higher than average in our protective garment apparel, but it's not to the extent that it was over the last several years and such a large driver in improving the growth from 5% to 7%, for example. So I'd say it's much more balanced. It was a good quarter all around and with contributions from many areas.

Understood. Just relative to pricing, what are you seeing a bigger contributor from right now? Is it the collection of ancillary fees or are you actually seeing a decent move on core pricing changes?

I think it's both. I mean, I think -- again, we highlighted that ancillary charges last year because some of the improvements we made there. But again, I think we're more balanced, at least in this quarter, that there's normal contributions from the core pricing. And we continue to push ancillary charges, they're always going to be a part of our offering. But I wouldn't say there was a real trend one way or the other.

Okay. And one last one for you, Steve. I think you mentioned 1 minute ago that you expect to see more sales productivity gains this year. You guys have absolutely done fantastic in that arena over the last several years, so do you have some new programs in place or can you point us to anything specifically that should drive it higher?

Well, I think as Steven basically mentioned, our issue -- our headcount is an issue at this point. And what we -- if we can get our headcount where we want it to be, we think we'll be able to pick that up.

[Operator Instructions] Our next question comes from the line of Kevin Steinke with Barrington Resources.

Steve, I was just wondering of the factors you outlined that contributed to margin expansion in the Core Laundry business, if it would be possible to somewhat rank what the largest contributors to the margin expansion were.

Sure, Kevin. I think from a directional standpoint, merchandise was the largest contributor. The selling cost differential was probably next, which you can see in our SG&A line. And then energy with a few tenths, and then there was a few other small things as well. But those were the bigger areas.

Okay. And as you talked about merchandise amortization going forward might not be as big of a contributor, so that perhaps implies that some of the slower margin expansion that you might expect in addition to those onetime items, is that correct?

Exactly. That's what's built in right now, yes.

Okay. So I think last quarter, you talked about at the midpoint of your guidance you would expect Core Laundry Operating margin to be down a few tenths. Now that you expect towards a higher end of the range, what sort of a Core Laundry margin are you baking into that updated expectation?

The full year Core Laundry margin is slightly over 14% based on that high end of that range. And adding in what we expect nuclear to do and First Aid, that will get you to the high end of that range.

Our next question is a follow-up question from the line of Andrew Wittmann. Andrew J. Wittmann - Robert W. Baird & Co. Incorporated, Research Division: I have a hunch you know what this question is going to be. But Ron, any increase in the sense of urgency on your balance sheet and how you're thinking about it here today? Great cash flow quarter, it sounds like there's some timing stuff in there. But regardless, we're over $6 per share net cash, several hundreds of millions of dollars of capacity here. What should shareholders be expecting you to be thinking about and may be doing with that excess cash.

We still follow the Warren Buffett rule, take that cash and we look for acquisitions. And like I said earlier, we're talking to people almost daily. We have a pretty sizable list of potential people we keep talking to. And that's where that cash is going to go, to expand the business. Andrew J. Wittmann - Robert W. Baird & Co. Incorporated, Research Division: Is there the kinds of opportunities out there to deploy that kind of capital out there? Do those companies exist?

Every other thing -- if you look at all private businesses out there, they all have issues to resolve and they're all basically deal around family issues, state issues, children fighting that -- that are second or third generation. And the parents, I guess, have to make tough decisions. And when they do that, that opportunity arises. And I can't go out there and solve those problems, I can just go out there and...

Offer solutions.

Offer a solution to their problem. Andrew J. Wittmann - Robert W. Baird & Co. Incorporated, Research Division: Okay. Do you think it's a little bit easier, at least from your ability to underwrite deals here today, kind of where your stock is trading. Clearly, markets extensive, or at least historically extensive. Does that -- do you feel like you're able to reach a little bit more to narrow the gap on your side of the equation. I know that you'll always going to be disciplined, you're not going to overpay. But are you able to get a little closer to some of those seller expectations which maybe have been high, historically?

I guess it varies on the quality of the business. I mean, if you go back to what I've always said, we're 65% garment, and garments are the sticky part of the business. I mean, that controls your loss business numbers. And when you look at some of these guys businesses, if they're only 30% garment, but they still want that same evaluation, and that's where you get the issues.

And we have no further questions from the phone lines at this time.

Very good. We'd like to thank everyone for joining us this morning to review UniFirst's first quarter results for fiscal 2014. We look forward to speaking to you again in March where we'll be reporting our second quarter and our 6-month numbers. Have a great day, and happy and healthy new year. And thank you much.

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.