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

Thank you, and welcome to the UniFirst Corporation conference call to review our third quarter results for fiscal 2013 and to discuss our expectations going forward. I'm Steven Sintros, UniFirst's Chief Financial Officer. Joining me today 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. 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, including, but not limited to, the continued availability of credit and the performance of 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 will turn the call over to Ron Croatti for his comments.

Thanks, Steve, and welcome to all of you joining us for a review of our UniFirst's Third Quarter Financial Results for fiscal 2013. As always, I will provide you with a brief overview of our performance. And I'll turn it back over to Steve to elaborate on the details. I am pleased to report the company revenue for the third quarter of fiscal 2013 has had another new record for UniFirst at $335.8 million, a 4.6% increase over the $320.9 million reported the same quarter in 2012. Net income was also a new third quarter record, coming in at $28.7 million, a 23.6% improvement over the same period last year, after adjusting for a large gain recognized in 2012 third quarter related to a legal settlement. Our Core Laundry Operations, which account for the majority of UniFirst business, led the company's performance during the quarter with a revenue increase of 5.9%, and an operating income improving by 30.5% over 2012 third quarter results. Again, that's after the adjustment for the last year's legal settlement. Both revenues and operating income were new third quarter records for this segment. As for the Specialty Garments segment, which is made up of specialized nuclear and cleanroom operations. This group reported a third quarter dip of 10% revenues and a 29% drop in operating income when compared to the same quarter in 2012. As stated in previous webcasts, however, we expect this segment to show improvement with the nuclear division getting involved with several new reactor projects in the U.S. and Canada in the coming years in the cleanroom division, further capitalizing on the solid presence of ultra clean niche markets they serve. Our First Aid & Safety segment, which is it made up of our route-based first aid service, pharmaceutical packaging and wholesale operations,…

Thanks, Ron. Revenues were $335.8 million, up 4.6% from $320.9 million a year ago. Net income was $28.7 million in the quarter or $1.43 per diluted share compared to $27.5 million or $1.37 per diluted share reported in the year-ago period. The results of the third quarter of fiscal 2012 included the positive effect of a settlement related to environmental litigation. The settlement resulted in a $6.7 million gain, which was recorded as a reduction in selling and administrative expenses in the third quarter of 2012. Diluted earnings per share for the third quarter of 2012 adjusted to eliminate the effect of the gain was $1.16. Current quarter diluted earnings per share increased 23.3% compared to the adjusted earnings from a year ago. Third quarter revenues in the Core Laundry Operations were $297.7 million, up 5.9% from those reported in the prior year's third quarter. The impact of certain small acquisitions, offset the slightly negative impact of a weaker Canadian dollar, leaving organic growth for the quarter for the Core Laundry at 5.9%. The company's revenues continue to benefit from solid new account sales. In addition, certain annual price adjustments, as well as higher collections of merchandise recovery charges also contributed to revenue growth during the quarter. Wearer additions versus reductions were negative in the third quarter, and remained negative year-to-date. We did see some modest improvement in these metrics sequentially compared to the second quarter. This segment's income from operations increased 36.5% compared to the third quarter of fiscal 2012 when adjusted to exclude the impact of the $6.7 million gain I referred to earlier. Operating margin for the quarter was 13.6% compared to an adjusted operating margin of 10.5% a year ago. Increased profitability in this segment was primarily the result of improved operating leverage that came with…

[Operator Instructions] And our first question comes from the line of Andy Debes with KeyBanc Capital Market.

This is Andy filling in for Joe. Just wanted to, first kind of dive in into the organic growth rate in the Core Laundry segment. Obviously, moderated, as expected, here in the back half. But I wanted to know if you could kind of parse into whether or not you're seeing any new account activity actually slow or any other material slowdown in the business or if it's really just the function of the tougher comps that you guys expected?

I think it's really more of the tougher comps. Our sales force is still writing, actually, writing more dollars than we wrote last year. The prospects are still out there, no programmers. People are basically purchasing direct sale accounts are our prime target to convert. So I think we basically seen things pretty consistent, is my answer to you.

I guess then, maybe also just to get a bit more granular. Anything you're seeing or hearing from those existing customers that -- I know you mentioned the ad quits are down again in the quarter. But any bright spots out there or is it still the general hesitancy to add headcount among all customers?

I think it's more related by industry. Last year and the year before, basically, the energy industry was a big push, that slowed a little bit. I think what we're seeing now is a lot of smaller accounts that want to be competitive down the Street, but there are other competitor. And they're pretty easy sale or a good opportunity for a sale to get them into an image and identity program. I think the larger accounts are still working on the committee-type selling arrangements that are -- take longer to do, to be honest. So I guess, the bottom line is it's fairly consistent.

Okay. That's helpful. And then just to checkup on it, you had mentioned about 5% organic in the back half taking another growth rate in 3Q, that implies about 4% in the last quarter. Is that still a reasonable way to think about it or any expectations changed there?

No. I think organic in the fourth quarter for the laundry should still be in that 5% range with the difference coming from a little bit of shortfall in nuclear.

Okay. That's helpful. And then the only -- the other thing I wanted to comment on, Steve, we talked a bit last quarter about the need for increase investment to support recent growth. I think the expectation was for SG&A to be flat to even up slightly, whereas it came in lower on both a dollar basis and a percent of revenue basis. Can you maybe just give a little more detail around some of the moving pieces you noted in the press release? And maybe help us clarify whether we should still expect that to flatten or move higher as we get into the last quarter and particularly in 2014?

Yes. I think, the comparison if you're looking at compared to the prior year, SG&A being lower. As we mentioned in the press release and my comments, there were some cost related to the -- our systems project that didn't qualify for capitalization earlier on in the project that we expensed a year ago. So that helped comps on the SG&A line year-over-year. But overall, I think we still expect the trend to be kind of a flattening and ultimately increasing of the SG&A line as we continue to invest in sales. And then some of the other support and transition cost we expect to incur related to the systems project as we move, especially into the second half of next year, we'll have that line tick up as well.

Our next question comes from the line of Andrew Steinerman with JPMorgan. Molly R. McGarrett - JP Morgan Chase & Co, Research Division: This is Molly McGarrett for Andrew. Could you just break out the margin impact from the various expense buckets for third quarter? So the lower merchandise, energy and payroll cost.

We mentioned the energy, which was about 0.2 point, Molly. The merchandise was about, 7/10, I believe, I don't have the payroll in front of me but it was probably similar to the merchandise. I think we don't want to get into kind of breaking down every piece, but I know we've talked about the merchandise and we continue to talk about the energy. So I'm happy to provide that color. Merchandise is something we're continuing to watch. It was still a benefit for the quarter. But like I said in my comments, the infusion of merchandise was a little higher than expected during the quarter and something we're keeping an eye on. Molly R. McGarrett - JP Morgan Chase & Co, Research Division: Okay. And can you also give an update, I know it's still early days, but on your thinking about the health care regulations and what kind of impact that could be going forward?

I think, Molly, we're still in a -- we're still in discussions and really don't have a firm direction. We're working with a consulting company. And I really can't give you anything at this point. You want to add to that, Steve?

No. I think that with all the changes, there are new products, new options for companies emerging everyday and every month. And I think we're in the collection mode to figure out what options are available for us and our employees so we can continue to provide affordable health care for them at a reasonable cost to both them and the company. So as Ron said, I think, we're still in the evaluation stage. And I think, as we've mentioned in the past, our adoption of those regulations is a little on the later end because of our fiscal and benefit planned year. We are not required to comply until September of 2014, so not until our fiscal 2015 year. So we're looking in learning from others as they start to implement these rules.

Our next question comes from the line of Chris McGinnis with Sidoti. Christopher McGinnis - Sidoti & Company, LLC: I just want to ask -- I guess just on the -- originally, on the $40 million investment for the CRM and the improvements on the infrastructure. Can you just maybe talk about the payback period you expect on that? And maybe how that impacts positively, maybe, '15?

Yes. I think as it relates to the systems project, there will be cost associated with the depreciation of the system when it goes live and some deployment in transition cost toward the later part of '14. Certainly, once it's deployed and settles down, there will be some positives from administrative cost reduction. And really, the largest benefit we expect to get from the new system is tightening up our service systems, improving customer satisfaction and ultimately our lost accounts, that's really the ultimate goal for the system. That's not going to be an immediate process. I'd hesitate to say in '15, you'll see the benefits come flooding in. I think it'll be something that as we deploy it and settle down the new system, it'll help us in the upcoming years. So it really is a long-term investment and a system that we expect to use for a long time. Christopher McGinnis - Sidoti & Company, LLC: Sure. And then, I guess, if you are thinking of it that way, what -- in terms of when you were selecting it and looking at it, what was -- maybe the expected either gain on sales or however -- what are the big points that made you, obviously, it's going to provide a lot of efficiencies, but was it like an 8% ramp or...

I think the efficiencies are not -- their important, I think, we'll get those. But the whole focus is on the customer, the customer retention side. I think we'll be able to improve our customer retention rather than a 8% or 8.5% that we normally lose today. I think we'll be able to make some good gains in that. Christopher McGinnis - Sidoti & Company, LLC: Great. I appreciate that, Ron.

That's really what it's going to come down to. There's just some competitive differentiator on the sales side. I mean, you got people having all the devices and so forth, this is coming out entirely different. Christopher McGinnis - Sidoti & Company, LLC: And is that an upgrade even from the -- you mentioned it earlier just on the iPad switch over from the BlackBerry?

Well, the iPad -- the sales force ring in for I don't know, 5 or 6 years on BlackBerry maybe. They now have iPad streaming videos. In the old days, we used to call it a brag book, that's now on the iPad form. There's a lot of stuff, there's a lot of streaming material right on there. Before you go in and see an account, you can refresh your memory on how to sell a house per count or whatever the case may be. And so that's a separate project and that's going to be an ongoing project. What we call Unity 20/20 is a service project, a billing project. We hope to have the most friendly bill, obviously, portals, obviously, electronic payment. The list is long in the changes that we're making.

And just to clarify, Chris. I think, Ron is alluding to the iPads are for our professional sales force, those who are out there now providing additional functionality. Unity 20/20 is for the service systems, the route drivers, the service management and have that service focus. So that's the difference. Christopher McGinnis - Sidoti & Company, LLC: Sure. Now I appreciate and -- I guess, the important point is the 8% churn that you're talking about and trying to drive that lower, obviously.

That's the whole thing. Christopher McGinnis - Sidoti & Company, LLC: Just on the fire retardant. Obviously, it was a driver of the last number of years for the industry itself. Can you just maybe talk about where that's growing? And you mentioned energy is, obviously, one of the tougher comps.

I think we're primarily in that, I guess, you can call it excess Oklahoma area. And it was very good for us all this time, Louisiana, Texas. We are not in North Dakota. So we have seen a general slowdown on the energy side, probably in the last 6 months.

And I think, again, it's a slowdown but it's also just tougher comps. We were growing in that product line significantly over the last 2 or 3 years. The growth in that product line is probably still higher than our average, but it is moderating. Christopher McGinnis - Sidoti & Company, LLC: Sure. I was wondering if its still growing or if that's starting to. I knew it was solid comps.

It's still growing.

It's still growing. Christopher McGinnis - Sidoti & Company, LLC: And then maybe, just lastly on kind of the consolidation in the industry. Any changes? It seemed like you were a little more positive last quarter, maybe how do you feel now and is there anything in the environment that makes a change to maybe improve in your favor?

No. I'd say, still consolidation is based, basically, on family issues in the smaller companies, some of the regional chains. We talk to them all the time, but that is all I can tell you.

Our next question comes from the line of Andrew Wittmann with Robert W. Baird & Co. Andrew J. Wittmann - Robert W. Baird & Co. Incorporated, Research Division: I guess, I want to build on that last one. Just looking at the balance sheet, another quarter, a little bit more cash. Ron, do you think about redeployment options? Is that -- I know I sound a little bit like a broken record on this one, but is there any change in your level of motivation to do something with this cash today versus a year ago? And how do you think about maybe about returning some of that to shareholders?

Number one, I think, we have the use for the cash. We have some stuff in the pipeline, whether they'll materialize, I don't know at this point. But we've been working the acquisition targets harder the last 6 month than we had the previous year. So I'm confident that we will come up with something in the year. So that's where the cash is going to go. And we're using a lot of cash in this even though it's going to be depreciated. I mean, our Unity project is an expensive project. Andrew J. Wittmann - Robert W. Baird & Co. Incorporated, Research Division: Yes. Just in terms of, Steve, maybe on the notes that come due this fall. Just thinking about pay that off with cash on hand there and then put that in the revolver, and do you see yourself in the debt markets?

No. I think we're looking a hard look at the debt markets. Obviously, rates are attractive and I think, longer term, I think we want to keep the capacity to look at acquisitions. And potentially if they don't materialize, look at other options for the deployment, as you mentioned.

Our next question comes from the line of Dan Dolev with Jefferies. Dan Dolev - Jefferies & Company, Inc., Research Division: Can you please quantify the impact of, the exact impact of revenues from collection this quarter and how you trended versus last quarter? And then also the revenue from the buyout this quarter and then how it trended from the last quarter, specifically on the Laundry and the Core Laundry business?

So Dan, I think when you're talking about the merchandise recovery charges, which is something we alluded to, we don't break out that level of granularity with our revenue and the different components. When you're talking about the merchandise buyout, we had a merchandise buyout last quarter that we specifically called out, it was about $2.2 million last quarter and that did not reoccur again. That was a specific situation with a particular customer, which we called out last quarter and that did not repeat in this quarter. Dan Dolev - Jefferies & Company, Inc., Research Division: Understood. And then I just have one follow-on question. It seems like in the past 3 years, your growth has been in the high-single digit in the Core Laundry business. And now we're looking more in the mid-single digit. Is it something we should be expecting over the next few years or is there a structural decline in the growth or is it just because of the bad economy? I'm just trying to understand why the growth has decelerated from those high levels to a more modest level?

Yes. We've been talking about it for, really, the last 8 or 9 -- or 9 months or so. And there's been several reasons why our growth has been higher than either the industry average or what you might expect in a not that great of an economy. We talked a little earlier in this call about the boom in flame-resisting garments and energy exploration in different parts of the country, which we participated fully in. We're very strong in those parts of the country. That product line has grown substantially over the last few years. We've talked about the strength in our National Account sales, where we've done a better job participating in large account sales, maybe than we have in the past. We talked about the pricing environment. We think we've done a good job continuing to push price with our customers. And included in that is making sure we execute on the recovery of extra charges when it's warranted. So these are the improvements that we feel that we've made, some of them structurally. But now we're dealing with tougher comparisons, and some of those things are starting to slowdown. The Flame Resistant growth is certainly moderating. And some of the improvements we've made in other areas are moderating at a higher level. And I think that growth, and some of those things, have helped lead to our higher margins in the last couple of years. But from a growth standpoint, we're starting to annualize some of those improvements. And so we've made the comment for the last couple of quarters now that, yes, for the next couple of years, we think that mid-single-digit growth, absent acquisitions or uptick in the economy, where we can really see some pull from wearers, is more of a reality.

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

Steve, I just had a follow-up question on the higher-than-expected investments in merchandise in the quarter that you referenced. Do you have any additional clarity on what might have driven that?

Well, yes. It's just that -- as you're aware, I mean, we have over 200,000 customers we continue to invest merchandise on a day-to-day basis. A portion of those merchandise additions relate to new accounts. But really, the larger portion relate to just replacement of garments in our customer base, whether it's just garments have worn out, customer need a new image and we're renewing a contract and redressing the account, so there's a number of different areas that drive that merchandise investment. The level of that investment ebbs and flows. And it can ebb and flow for a number of different reasons. I'm not sure I can give you too many specifics on exactly why over the last couple of months it ran a little higher. As I alluded to, it typically does in the springtime a little bit. But we thought that the investment was a little higher than expected and something that was worth watching and mentioning. Sometimes competitive pressures in certain markets can lead to more uniform investment, as competitors are calling on accounts and offering to provide the service for price incentive and redress with the new uniform program. So those things are the things we address location via location, market by market. So I'm not sure I have a silver bullet to tell you why they were a little higher the last couple of months. But it was something we thought worth mentioning.

Okay. I appreciate that, that's helpful. And when you're discussing CapEx, you talked a little bit about, you've made some updates to laundry plants and you're going to continue to do that. Is there anything that could move the needle materially in terms of improving productivity of plants and perhaps, benefiting margins in the future? Is that just kind of an ongoing reinvestment that's just kind of your continual improvement process?

Well, the technology improvement in the facilities is ongoing. It's just the way we're doing the plants that we're replacing, where older plants became an acquisition. So technology is our key. We keep putting in automotive equipment, automated sortation, most up-to-date equipment we can get our hands on, software. So that's going to be a continual investment and obviously, there's a payback.

Okay. Good. And sorry if I missed this. But just the outlook on the Specialty Garment segment being a little weaker than expected in the fourth quarter. Is that just due to a lighter overall activity or is it the push forward of projects that you expected that are now going to, maybe, come later. How do you see that playing out? I know it's kind of difficult to predict quarter-to-quarter, but any additional color, please.

Yes. Yes, it's a little bit of both. I think we expected a little heavier spring out each season and then materialize. There were some projects that were scheduled for the fourth quarter, if you look at our last year fourth quarter. Fourth quarter is typically down for this segment. We expect that this year's to be a little bit better than last year's, as a result of some projects particularly in Europe that were scheduled to come in. Those are now delayed. Some of them indefinitely, some of them have been pushed out and may land in the early part of next year. So it's really a little bit of everything that you mentioned and they came in a little short.

Okay. And last one for me is, as you look to fiscal 2014, and I know you're not providing guidance at this time, but I believe you talked about last quarter operating margins, perhaps, peaking in the near term in fiscal 2013. Is that still how you're thinking about things as we move into fiscal '14?

I think so. The guidance assumes we kind of end this year pretty close to 14% operating margin for the laundries, anyway. And looking back, that's pretty much as high as we've been. Now merchandise is a key element to that. That's why I've signaled it's something we're keeping an eye on. We'll have a better idea next quarter when we give our guidance what we think for next year. But I think, we'll work to hold that margin, but there are some things that, with the investments we're making in the short term, may pressure that. And so I think we feel the same as we did last quarter. It's something we're continuing to work on holding.

There are no further questions registered.

We'd like to thank you, all, again, for the interest in our company and look forward to speaking to you in the fall, when we're reporting on UniFirst's Fourth Quarter and Year-End Results for Fiscal 2013. 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 lines.