The revenue growth was primarily due to organic growth, which was 7.3% for both the second quarter and the six month periods. The increase in operating margin was primarily due to a reduction in energy costs, production costs and delivery payroll costs as a percentage of revenues. These improvements continue to be partially offset by higher merchandise costs as a percentage of revenues.
The Company's results also continue to be affected by higher interest expense as compared to fiscal 2006, which was the result of higher average borrowings in fiscal 2007 as well as higher interest rates affecting the Company's variable rate debt.
"I continue to be pleased with the strong organic revenue growth in our core laundry operations" said UniFirst President and Chief Executive Officer, Ron Croatti. "Both our professional sales team and our route sales team contributed to these strong results."
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