Financial Data and Key Metrics Changes - Revenues increased to $621.3 million, up 2.7% from the prior year period [3][9] - Operating income decreased to $45.3 million from $55.5 million year-over-year [9] - Net income decreased to $34.4 million, or $1.89 per diluted share, down from $43.1 million, or $2.31 per diluted share [9] - Adjusted EBITDA decreased to $82.8 million from $94 million in the prior year [9] - Effective tax rate increased to 26.9% from 25.6% in the prior year [9] Business Line Data and Key Metrics Changes - Uniform and Facility Service Solutions revenues increased to $565.9 million, with organic growth of 2.4% driven by strong new account sales and improved customer retention [10][12] - First Aid and Safety Solutions revenues increased by 15.3% to $30.2 million, primarily due to investments in the First Aid van business [13] - Other segment revenues decreased by 2.9% to $25.2 million, reflecting the anticipated start of a large refurbishment project wind-down [13] Market Data and Key Metrics Changes - The employment climate has softened, affecting both rental and direct sale accounts, which has tempered growth [6][32] - Energy costs represented 4.1% of revenues in the first quarter [12] Company Strategy and Development Direction - The company is focused on investments in sales and service organizations to build a stronger platform for growth [3][4] - Key initiatives include operational excellence through the UniFirst Way, enhanced inventory management, and digital transformation [4][5] - The company is committed to creating value for all stakeholders, including employees, customers, and shareholders [7] Management's Comments on Operating Environment and Future Outlook - Management remains confident in the ongoing investments yielding measurable improvements in growth metrics [6] - The full-year guidance for fiscal 2026 remains unchanged, with consolidated revenue expected between $2.475 billion and $2.495 billion [15] - Management anticipates inflection points in profitability and growth initiatives by 2027 and 2028 [19][40] Other Important Information - The company repurchased approximately $32 million of common stock during the quarter and over $77 million in the past two quarters [6] - The board is evaluating an unsolicited non-binding proposal from Cintas, engaging independent financial and legal advisors [7][8] Q&A Session Summary Question: Timeline for achieving long-term objectives - Management expects steady improvement towards mid-single-digit organic growth and high-teens adjusted EBITDA margins by 2027 and 2028 [17][19] Question: New account growth and customer mix - New accounts are primarily from mid-size customers, with a focus on improving sales organization structure [29][30] Question: Impact of employment climate on growth - The employment situation has become incrementally more impactful, affecting existing account penetration [32] Question: Unchanged revenue guidance despite momentum - Management believes it is early in the year to make meaningful changes to guidance, despite positive top-line momentum [38] Question: ERP implementation status - The ERP project is ongoing, with core financial modules being prioritized this year and supply chain enhancements expected in 2027 [50][51]

Financial Data and Key Metrics Changes - Revenues increased to $621.3 million, up 2.7% from the prior year period [3][9] - Operating income decreased to $45.3 million from $55.5 million year-over-year [9] - Net income for the quarter decreased to $34.4 million, or $1.89 per diluted share, down from $43.1 million, or $2.31 per diluted share [9] - Consolidated Adjusted EBITDA was $82.8 million compared to $94 million in the prior year [9] - Effective tax rate increased to 26.9% from 25.6% in the prior year [9] Business Line Data and Key Metrics Changes - Uniform and Facility Service Solutions segment revenues increased to $565.9 million, with organic growth of 2.4% [10][11] - First Aid and Safety Solutions segment revenues grew by 15.3% to $30.2 million, driven by investments in the First Aid Van Business [5][12] - Other segment revenues decreased by 2.9% to $25.2 million due to anticipated project wind-downs [12][13] - Operating margin for Uniform and Facility Service Solutions was 7.4%, down from 8.8% in the previous year [11] Market Data and Key Metrics Changes - The employment climate has softened, affecting both rental and direct sale accounts [5][6] - Energy costs represented 4.1% of revenues in the first quarter [11] Company Strategy and Development Direction - The company is focused on investments in sales and service organizations to build a sustainable growth platform [3][4] - Key initiatives include operational excellence through the UniFirst Way, enhanced inventory management, and digital transformation [4][5] - The company is evaluating an unsolicited proposal from Cintas, engaging independent advisors to determine the best course of action [7][8] Management's Comments on Operating Environment and Future Outlook - Management remains confident in the ongoing investments yielding measurable improvements in growth metrics [6] - The full-year fiscal 2026 guidance remains unchanged, with consolidated revenue expected between $2.475 billion and $2.495 billion [15] - Management anticipates steady improvement towards mid-single-digit organic growth and high-teens adjusted EBITDA margins by 2027-2028 [17][18] Other Important Information - The company repurchased approximately $32 million of common stock during the quarter and increased the common stock dividend [6] - Capital expenditures for the quarter were $38.9 million, with four first-aid businesses acquired for $14.9 million [14] Q&A Session Summary Question: Timeline for achieving long-term objectives - Management expects to see steady improvement towards mid-single-digit organic growth and high-teens adjusted EBITDA margins by 2027-2028, with significant milestones anticipated in the next 18-24 months [17][18] Question: New account growth and customer mix - New account growth is being driven by a tiered sales organization focusing on mid-size accounts, which has shown positive results [26][27] Question: Impact of employment climate on growth - The employment climate has become a headwind, but the company is making progress in product placements and customer retention [28][30] Question: Unchanged revenue guidance - Management feels positive about top-line momentum but believes it is too early to make meaningful changes to guidance due to economic weaknesses affecting customer purchasing [33][34] Question: ERP implementation status - The ERP project is ongoing, with foundational releases scheduled for this year and supply chain enhancements expected in 2027 [44][45]