Ladies and gentlemen, thank you for standing by. Welcome to the Third Quarter Earnings Call. During the presentation all participants will be in a listen-only mode. Afterwards we will conduct a question-and-answer session. [Operator Instructions]. I would now like to turn the conference over to Steven Sintros, UniFirst’s President and Chief Executive Officer. Please go ahead sir.

Thank you and good morning. I’m Steven Sintros, UniFirst’s President and Chief Executive Officer. Joining me today is Shane O’Connor, Senior Vice President and Chief Financial Officer. I’d like to welcome you all to UniFirst Corporation’s conference call to review our third quarter financial results for fiscal year 2018 and to discuss our expectations going forward. This call will be on a listen-only mode until I complete my prepared remarks. But first, 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, 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 risk factors. I refer you to our discussion of these risk factors in our most recent 10-Q and 10-K filings with the Securities and Exchange Commission. I am happy to report that UniFirst third quarter produced solid results for our company and our shareholders. Overall revenues for the quarter were an all-time high coming in at $427.4 million, up 4.3% from last year’s third quarter. Fully diluted earnings per share were $1.85 for the quarter compared to $1.19 per share that was reported a year ago. Our EPS comparison to the prior year was once again significantly impacted by the recent U.S. tax reform which Shane will be elaborating on in a few minutes. Additionally a year ago we incurred a $5.4 million expense related to the acceleration of stock compensation associated with the passing of our former Chief Executive Officer. Excluding this accelerated stock compensation expense for the prior year, income from operations increased 6.6% for the quarter. Our…

Thank you. [Operator Instructions]. Our first question comes from a line of Andrew Steinerman with J.P. Morgan. Please proceed with your question.

Hi, it’s Andrew. I know you said that you expect the fourth quarter or organic Core Laundry to lift above 4%. This third quarter it was 2% and so could you just go over what was holding back growth in the third quarter?

So Andrew, as we talked about a little bit, some of it was the timing of certain price adjustments we did a year ago versus the way we’re doing them this year. So some of it is just temporary timing of different things we are working through with the customers. So I wouldn’t read too much into the dip. And then the rebound I think, you know we still are sort of trending in that kind of low single digits area and that’s still the take away.

And how were new sales in the quarter?

New sales, new sales were positive. I think we are running over the course of the year, about 10%, 12% ahead of the prior year in terms of new sales, so new sales are positive. And you know the other items continue to be a work in process, which continue to be you know pricing, adds reduction, selling additional products and trying to improve our retention metrics.

And just lastly, and right now would you describe the environment for pricing as constructive?

I would say it’s constructive. I would say it’s constructive, but at the same time it remains competitive. I don’t want to send the message that we think it’s been a big uplift. I know there’s a lot of discussion on the consolidation. I think the consolidation has improved the environment in certain aspects, but it remains competitive.

Great, thank you.

Thank you.

Our next question comes from the line of Tim Mulrooney with William Blair. Please proceed with your question.

Good morning.

Good morning. Shane O’Connor: Good morning.

Just a book keeping question at first Shane, how much did acquisitions contribute to growth, to revenue growth in the third quarter and how much do you expect them to contribute to total revenue growth in the fourth quarter. I’m trying to reconcile your guidance. Shane O’Connor: So in the third quarter of ‘18, acquisitions contributed about 1% to the growth in our Core Laundries and in the fourth quarter we are anticipating a similar type of benefit from acquisition related growth.

Got it, okay thank. And just one more from me, I mean given where your plants are located, you guys maybe have a stronger presence in oil related geographies and higher exposure to energy generally. Can you talk about what you are seeing there in a little more detail, say over the last couple of months relative to the last year? Has there been a material pick up in [add stops] [ph] in those locations or just anything you could point to for us. Shane O’Connor: Sure, I’d say – I wouldn’t probably describe it as material. We are seeing – if any market is seeing some notable rebound, it’s West Texas and the Odessa market for us. The other energy markets are stable and showing some signs of positive adds, but I wouldn’t categorize the rest of the market as being significant. Odessa is having a pretty good bounce back year, but we haven’t seen it spread out as far into some of the other markets like your Oklahoma City and Corpus Christi or even Western Canada. Again, maybe we’re seeing some of the seedlings of it, but nothing significant yet.

Okay, great. Thank you. Shane O’Connor: Thank you.

Our next question comes from one of Justin Hauke with Baird. Please proceed with your question.

Good morning guys.

Good morning.

This is Scott. Good morning. I guess I’ve got two here. One more on the organic growth; just another point that you brought up in the prepared remarks. I think you mentioned that you know maybe the retention rate dipped a little bit. So I just wanted to understand if that was something specific for the quarter or if that’s going to be something that will continue to drag on the contribution for the next couple of quarters.

So our retention can ebb and flow from quarter-to-quarter, year-to-year. We definitely don’t – we ordinarily don’t stray too far from kind of our baseline and this year it’s picked up a little bit and the third quarter was a little bit higher than what we had been running. On a percentage basis it’s not – you know it’s not more than 0.5% on revenues, but it’s a little higher than we’d like to see. Will there continue to be a drag? Well, as you know any business you lose in a particular quarter kind of helps set the stage for the next quarter, but we don’t see it necessarily as the trend that we expect to continue.

Okay, great, thank you. And then I guess the second question I had, on the acquisition and thank you Shane for quantifying that, but it looks like there was an incremental acquisition in the quarter, maybe $16 million or so that you spent. Where was that? What segment? And maybe just any detail on kind of what you’re seeing in the market there? Shane O’Connor: Sure. So there were a couple of small pieces in the U.S. laundries in the quarter. What was a little bit maybe more unusual is we did expand about $8 million in the quarter on a group of small acquisitions in the nuclear industry. They are related companies that kind of joined together to form a small competitor of ours and so we did purchase that during the quarter of about $8 million. We do think that will help us going forward in some of the markets there, down in the southern part of the country. So that combined with some of the smaller laundry related acquisitions made up the balance for the quarter. As far as what we see out there, it seems like maybe the environment’s a little bit more active, but you know again, as you know these transactions are generally driven by family situations as opposed to an environment that might be more conducive you know to consolidation. So the ones we are seeing kicking around are more facts than circumstances. Not sure there’s anything that’s driving it in particular.

Great. Thank you very much guys. I appreciate it.

[Operator Instructions] Our next question comes from the line of Kevin Steinke with Barrington Research. Please proceed with your question.

Good morning. So on the guidance you mentioned, that the increase in both revenue and EPS guidance is partially due to stronger than expected performance in Specialty Garments. Could you kind of maybe quantify or you know at least give a rough proportion of how much of the guidance increase is attributable both to our Specialty Garments and you know where the rest of the guidance increase is coming from?

Yeah. So as we were looking into the third quarter, we were expecting nuclear to have a strong quarter, but as I had mentioned in my comments, nuclear outperformed our expectation. From a top line perspective, they exceeded by about $5 million to $6 million and from a profitability perspective, you know their performance compared to our expectations acquitted to about $0.10 to our EPS. When you take a look at the other factors that were driving I guess our performance compared to maybe what we originally expected, I had mentioned the fact that there were some discrete tax items in the quarter related to both the ASU adoption earlier in the year, as well as some tax credits that we recognized that equated to about $0.10 of EPS. And then other than that, when we take a look at the performance for the quarter, for the most part aside from those items, a lot of the I guess the headwinds that we were anticipating, the wage pressures, the increase in energy, the depreciation expense, for the most part those were anticipated. The item that really was unanticipated and I sort of spoke to it a little bit was the performance of our healthcare and our workers comp claim. The end of – or in the second half of 2017, we’ve talked about it a number of times. We have very, very high healthcare claims and we were cautious going into the second half of ‘18 that we might have a similar trend, and that was reflected – that caution was reflected somewhat in our outlook. For the third quarter our healthcare claims and our workers comp came in lower than our expectations, and for the most part really makes up the delta between the two items I previously mentioned, the discrete items and the nuclear beat [ph] and our performance improvement for the quarter.

Okay, great, that’s very helpful. And I noticed also in terms of the Core Laundry operating margin, you said expecting 10.2% at the midpoint in the fourth quarter; you know previously you talked about maybe 9.5%. So are you just now assuming that again maybe the healthcare and workers comp claims won’t be as high as you had previously expected or what’s contributing to that margin, you know a bit of an increase there in terms of the outlook?

Yeah, the primary driver behind the improved margin outlook for our fourth quarter is you know revised expectations as it relates to our revenue growth. It’s really obviously that revenue growth is providing some favorable margin benefits. Now those are being offset by you know pressures that we are expecting related to sort of the pressures that we’ve been speaking to and we continue to feel – we still expect that energy is going to be a headwind, as well as depreciation expense. But the main thing that’s driving the improvement over my previous guidance would be the improved revenue performance.

Okay, that’s helpful. And in terms of that 4% growth again, following up on that, I mean I think you mentioned maybe just timing or price adjustment. So I don’t know if you could speak to that a little bit more in terms of what you know, there’s a shift in strategy there or why the changes to maybe timing of some of those price adjustments.

I think we probably don’t want to get into too much detail there, but just needless to say, we were always evaluating when the right time is to work with our customers on pricing in terms of cost pressures and energy pressures and other types of things, and so that timing can vary over the years and have some impact, but you know overall nothing too out of the ordinary.

Okay. I guess lastly just on Specialty Garments, you mentioned I think some new business there, some strength in relationships with existing customers. I’m just curious, as see you look at that business long term, do you think of that as a growth business? I mean really what’s the market opportunity there in terms of winning new customers or getting more business with existing customers, just you know how you think about that Specialty Garments market overall?

I think there’s some expansion opportunities, particularly internationally where we continue to look at new customer acquisition in Europe in particular. In the U.S. we continue to try to work with new customers, as well as expand the services that group provides. I think we have made some head roads into Canada with some large customers and you know I think that businesses is so dependent on – although we do try to obviously improve and expand our customer base, some of those customers and the timing of some large projects they have going on really drive you know the volume coming through that, and you know I think this year was a very strong year and it’s going to provide some more difficult comps for next year, but we are fully confident that it’ll continue to be solid results in that segment with some larger projects coming down the road.

Alright, sounds good. Thanks for taking the questions.

Thank you.

[Operator Instructions] Mr. Sintros, there are no further questions at this time. I will now turn the call back to you.

Okay, thank you. I’d like to thank everyone for joining us today to review our third quarter results for fiscal ‘18. We look forward to speaking with you again in October when we expect to be reporting our year end results and our outlook for fiscal ‘19. Thank you and have a great day!

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