Vestis completes spin-off from Aramark and
declares quarterly dividend
Fiscal 2023 results
- Revenue of $2.8 billion increased 5% year-over-year
- Operating income of $218 million and operating margin of
7.7%
- Adjusted operating income of $294 million and adjusted
operating margin of 10.4%
- Net income of $213 million including gain on sale of an
investment
- Adjusted EBITDA of $404 million and adjusted EBITDA margin of
14.3%
Vestis (NYSE: VSTS), a leading provider of uniforms and
workplace supplies, today announced its results for the fourth
quarter and fiscal year ended September 29, 2023, and its outlook
for fiscal year 2024.
Management Commentary
“2023 was a year of milestones for Vestis as we delivered strong
financial performance through the hard work and commitment of our
~20,000 teammates and successfully completed our spin-off from
Aramark into a separate publicly traded company,” said Vestis
President and Chief Executive Officer Kim Scott. “We are energized
as we enter 2024 with great momentum and a clear pathway to value
creation for all of our stakeholders.”
Fiscal Year 2023 Financial Highlights
This press release contains non-GAAP financial measures.
Reconciliations of non-GAAP financial measures to the comparable
GAAP measures are presented in the tables accompanying this
release.
($ in millions)
Consolidated
Fiscal 2023
Fiscal 2022
Change
Revenue
$
2,825.3
$
2,687.0
5.1
%
Operating Income
$
217.9
$
192.2
13.4
%
Adjusted Operating Income
$
293.6
$
264.6
11.0
%
Net Income
$
213.2
$
141.7
50.5
%
Adjusted EBITDA
$
403.9
$
373.0
8.3
%
Adjusted EBITDA Margin
14.3
%
13.9
%
42
bps
($ in millions)
U.S. Segment
Canada Segment
Fiscal 2023
Fiscal 2022
Change
Fiscal 2023
Fiscal 2022
Change
Revenue
$
2,575.4
$
2,447.0
5.2
%
$
249.9
$
240.0
4.1
%
Operating Income
$
303.8
$
243.0
25.0
%
$
13.7
$
18.0
(23.9
)%
Operating Income Margin
11.8
%
9.9
%
187
bps
5.5
%
7.5
%
(202
)bps
Adjusted Operating Income
$
318.5
$
286.3
11.2
%
$
21.4
$
25.6
(16.4
)%
Adjusted Operating Income Margin
12.4
%
11.7
%
67
bps
8.6
%
10.7
%
(211
)bps
Adjusted EBITDA
$
418.0
$
383.1
9.1
%
$
31.8
$
36.7
(13.4
)%
Adjusted EBITDA Margin
16.2
%
15.7
%
57
bps
12.7
%
15.3
%
(256
)bps
Vestis’ fiscal year 2023 revenue growth of 5.1% represented
strong performance against the Company’s strategic growth
priorities comprised of cross-selling existing customers, high
quality new growth and pricing actions. Excluding the unfavorable
impact from changes in foreign currency, Vestis’ growth rate was
5.7%.
Full year adjusted operating income growth of 11.0% was a result
of the team’s focus on delivering efficient operations and
leveraging idle plant and route capacity to capture growth in areas
that provide greater density across the Company’s network.
Q4 2023 Financial Highlights
($ in millions)
Consolidated
Q4 2023
Q4 2022
Change
Revenue
$
715.9
$
683.2
4.8
%
Operating Income
$
57.8
$
30.5
89.5
%
Operating Income Margin
8.1
%
4.5
%
361
bps
Adjusted Operating Income
$
84.5
$
72.2
17.0
%
Adjusted Operating Income Margin
11.8
%
10.6
%
123
bps
Net Income
$
94.0
$
23.2
305.2
%
Adjusted EBITDA
$
112.8
$
99.4
13.5
%
Adjusted EBITDA Margin
15.8
%
14.5
%
121
bps
($ in millions)
U.S. Segment
Canada Segment
Q4 2023
Q4 2022
Change
Q4 2023
Q4 2022
Change
Revenue
$
654.3
$
623.2
5.0
%
$
61.6
$
60.0
2.7
%
Operating Income
$
87.7
$
45.8
91.5
%
$
3.5
$
2.8
25.0
%
Operating Income Margin
13.4
%
7.3
%
605
bps
5.7
%
4.7
%
101
bps
Adjusted Operating Income
$
91.4
$
78.9
15.8
%
$
5.4
$
4.7
14.9
%
Adjusted Operating Income Margin
14.0
%
12.7
%
131
bps
8.8
%
7.8
%
94
bps
Adjusted EBITDA
$
116.7
$
103.3
13.0
%
$
8.3
$
7.4
12.2
%
Adjusted EBITDA Margin
17.8
%
16.6
%
126
bps
13.5
%
12.3
%
114
bps
Fourth quarter 2023 revenue growth of 4.8% was aligned with the
Company’s strategy to grow with existing customers through
workplace supplies while taking pricing actions to help offset the
inflationary environment. Excluding the unfavorable impact from
changes in foreign currency, Vestis’ growth rate was 5.0%.
Adjusted operating income increased 17.0% driven by operating
leverage from revenue growth which more than offset higher labor,
energy and public company preparedness costs.
Balance Sheet and Cash Flow
- Net cash provided by operating activities of $257.0 million for
fiscal year 2023 compared to $232.8 million for fiscal year
2022
- Free cash flow of $190.3 million for fiscal year 2023 compared
to $163.7 million for fiscal year 2022
- As of September 29, 2023, cash and cash equivalents totaled
$36.1 million
- As of September 29, 2023, total debt outstanding was $1.5
billion, with net leverage at 3.95x
- The Company has $300 million in undrawn capacity under its
revolving credit facility
Declaration of Quarterly Dividend
The Company’s Board of Directors declared a quarterly cash
dividend of $0.035 per common share payable on January 4, 2024 to
shareholders of record at the close of business on December 15,
2023.
Fiscal Year 2024 Outlook
The Company expects to deliver revenue growth in the range of
4.0 to 4.5% through a continued focus on providing service
excellence to our customers and delivering high-quality growth.
As a result of solid progress against our strategic plan, in
fiscal 2024 we expect our adjusted EBITDA margin to be maintained
at not less than the fiscal 2023 level (14.3%), with approximately
50 to 60 basis points of margin expansion offsetting approximately
$15 to $18 million in incremental public company costs in the
period.
Our strategic imperatives include disciplined capital allocation
with de-levering as a priority, and we expect not less than 100%
free cash flow conversion of net income.
Forward Looking Non-GAAP Information
This release includes certain non-GAAP financial information
that is forward-looking in nature, including without limitation
adjusted EBITDA margin. Vestis believes that a quantitative
reconciliation of such forward-looking information to the most
comparable financial measure calculated and presented in accordance
with GAAP cannot be made available without unreasonable efforts. A
reconciliation of these non-GAAP financial measures would require
Vestis to predict the timing and likelihood of among other things
future acquisitions and divestitures, restructurings, asset
impairments, other charges and other factors not within Vestis’
control. Neither these forward-looking measures, nor their probable
significance, can be quantified with a reasonable degree of
accuracy. Accordingly, the most directly comparable forward-looking
GAAP measures are not provided. Forward-looking non-GAAP financial
measures provided without the most directly comparable GAAP
financial measures may vary materially from the corresponding GAAP
financial measures. The estimates of revenue growth for fiscal year
2024 and adjusted EBITDA margin for fiscal year 2024 do not attempt
to forecast currency fluctuations and, accordingly, reflect an
assumption of constant currency.
Conference Call Information
Vestis will host a webcast to discuss its fourth quarter and
fiscal year 2023 results on Wednesday, November 29, 2023 at 9:00 AM
ET. The webcast can be accessed live through the investor relations
section of the Company’s website at www.vestis.com. Additionally, a
slide presentation will accompany the call and will also be
available on the Company’s website. A replay of the live event will
be available on the Company’s website shortly after the call for 90
days.
The live event can also be accessed by dialing (800) 274-8461
and entering conference ID VSTSQ423. For International
participants, the event can be accessed by dialing (203) 518-9814
and entering conference ID VSTSQ423.
About Vestis™
Vestis is a leader in the B2B uniform and workplace supplies
category. Vestis provides uniform services and workplace supplies
to a broad range of North American customers from Fortune 500
companies to locally owned small businesses across a broad set of
end sectors. The Company’s comprehensive service offering primarily
includes a full-service uniform rental program, floor mats, towels,
linens, managed restroom services, first aid supplies, and
cleanroom and other specialty garment processing.
Forward-Looking Statements
This press release contains “forward-looking statements” within
the meaning of the securities laws. All statements that reflect our
expectations, assumptions or projections about the future, other
than statements of historical fact, are forward-looking statements,
including, without limitation, forecasts relating to discussions of
future operations and financial performance and statements
regarding our strategy for growth, future product development,
regulatory approvals, competitive position and expenditures. In
some cases, forward-looking statements can be identified by words
such as “2024 outlook,” “aim,” “anticipate,” “are or remain or
continue to be confident,” “have confidence,” “estimate,” “expect,”
“will be,” “will continue,” “will likely result,” “project,”
“intend,” “plan,” “believe,” “see,” “look to” and other words and
terms of similar meaning or the negative versions of such words.
These forward-looking statements are subject to risks and
uncertainties that may change at any time, and actual results or
outcomes may differ materially from those that we expected.
Forward-looking statements are not guarantees of future performance
and are subject to risks, uncertainties, and changes in
circumstances that are difficult to predict including, but not
limited to: unfavorable economic conditions; increases in fuel and
energy costs; the failure to retain current customers, renew
existing customer contracts and obtain new customer contracts;
natural disasters, global calamities, climate change, pandemics,
strikes and other adverse incidents; increased operating costs and
obstacles to cost recovery due to the pricing and cancellation
terms of our support services contracts; a determination by our
customers to reduce their outsourcing or use of preferred vendors;
risks associated with suppliers from whom our products are sourced;
challenge of contracts by our customers; our expansion strategy and
our ability to successfully integrate the businesses we acquire and
costs and timing related thereto; currency risks and other risks
associated with international operations; our inability to hire and
retain key or sufficient qualified personnel or increases in labor
costs; continued or further unionization of our workforce;
liability resulting from our participation in multiemployer-defined
benefit pension plans; liability associated with noncompliance with
applicable law or other governmental regulations; laws and
governmental regulations including those relating to the
environment, wage and hour and government contracting; increases or
changes in income tax rates or tax-related laws; new
interpretations of or changes in the enforcement of the government
regulatory framework; a cybersecurity incident or other disruptions
in the availability of our computer systems or privacy breaches;
stakeholder expectations relating to environmental, social and
governance considerations; the expected benefits of the separation
from Aramark and the risk that conditions to the separation will
not be satisfied; the risk of increased costs from lost synergies;
retention of existing management team members as a result of the
separation from Aramark; reaction of customers, employees and other
parties to the separation from Aramark, and the impact of the
separation on our business; our leverage and ability to meet debt
obligations; any failure by Aramark to perform its obligations
under the various separation agreements entered into in connection
with the separation and distribution; a determination by the IRS
that the distribution or certain related transactions are taxable;
and the and the timing and occurrence (or non-occurrence) of other
transactions, events and circumstances which may be beyond our
control. The above list of factors is not exhaustive or necessarily
in order of importance. For additional information on identifying
factors that may cause actual results to vary materially from those
stated in forward-looking statements, see Vestis’ filings with the
Securities and Exchange Commission. Any forward-looking statement
speaks only as of the date on which it is made, and we assume no
obligation to update or revise such statement, whether as a result
of new information, future events or otherwise, except as required
by applicable law.
VESTIS CORPORATION
COMBINED STATEMENTS OF
INCOME
(Unaudited)
(In thousands)
Three Months Ended
Fiscal Year Ended
September 29, 2023
September 30, 2022
September 29, 2023
September 30, 2022
Revenue
$
715,901
$
683,173
$
2,825,286
$
2,687,005
Operating Expenses:
Cost of services provided (exclusive of
depreciation and amortization)
490,072
511,464
1,970,215
1,909,676
Depreciation and amortization
34,792
33,749
136,504
134,352
Selling, general and administrative
expenses
133,262
107,382
500,658
450,734
Total Operating Expenses
658,126
652,595
2,607,377
2,494,762
Operating Income
57,775
30,578
217,909
192,243
Gain on Sale of Equity Investment, net
(51,831
)
—
(51,831
)
—
Interest Expense and Other, net
278
(524
)
10
2,284
Income Before Income Taxes
109,328
31,102
269,730
189,959
Provision for Income Taxes
15,356
7,889
56,572
48,280
Net Income
$
93,972
$
23,213
$
213,158
$
141,679
VESTIS CORPORATION
CONDENSED COMBINED BALANCE
SHEETS
(Unaudited)
(In thousands)
September 29, 2023
September 30, 2022
ASSETS
Current Assets:
Cash and cash equivalents
$
36,051
$
23,736
Receivables (net of allowances: 2023 -
$25,066; 2022 - $29,100)
392,916
368,714
Inventories, net
174,719
183,439
Rental merchandise in service, net
399,035
393,140
Other current assets
17,244
18,252
Total current assets
1,019,965
987,281
Property and Equipment, at cost:
Land, buildings and improvements
585,797
579,915
Equipment
1,110,812
1,027,224
1,696,609
1,607,139
Less - Accumulated depreciation
(1,032,078
)
(957,540
)
Total property and equipment, net
664,531
649,599
Goodwill
963,543
963,375
Other Intangible Assets, net
238,608
264,264
Operating Lease Right-of-use Assets
57,890
72,567
Other Assets
212,587
195,926
Total Assets
$
3,157,124
$
3,133,012
LIABILITIES AND PARENT’S EQUITY
Current Liabilities:
Current maturities of long-term
borrowings
$
26,250
$
—
Current maturities of financing lease
obligations
27,659
20,482
Current operating lease liabilities
19,935
20,899
Accounts payable
134,498
167,125
Accrued payroll and related expenses
113,771
119,032
Accrued expenses and other current
liabilities
73,412
74,657
Total current liabilities
395,525
402,195
Long-Term Borrowings
1,462,693
—
Noncurrent Financing Lease Obligations
105,217
86,783
Noncurrent Operating Lease Liabilities
46,084
54,017
Deferred Income Taxes
217,647
201,826
Other Noncurrent Liabilities
52,598
52,379
Total Liabilities
2,279,764
797,200
Parent’s Equity:
Net parent investment
908,533
2,367,492
Accumulated other comprehensive loss
(31,173
)
(31,680
)
Total parent’s equity
877,360
2,335,812
Total Liabilities and Parent’s Equity
$
3,157,124
$
3,133,012
VESTIS CORPORATION
COMBINED STATEMENTS OF CASH
FLOWS
(Unaudited)
(In thousands)
Fiscal Year Ended
September 29, 2023
September 30, 2022
Cash flows from operating activities:
Net Income
$
213,158
$
141,679
Adjustments to reconcile Net Income to Net
cash provided by operating activities:
Depreciation and amortization
136,504
134,352
Gain on sale of equity investment, net
(51,831
)
—
Deferred income taxes
14,370
20,603
Share-based compensation expense
14,467
17,398
Asset write-downs
7,698
—
Personal protective equipment charges
—
26,183
Changes in operating assets and
liabilities:
Receivables, net
(23,612
)
(53,860
)
Inventories, net
8,929
(631
)
Rental merchandise in service, net
(5,334
)
(42,226
)
Other current assets
1,050
(2,586
)
Accounts payable
(32,888
)
31,398
Accrued expenses
(7,928
)
(31,456
)
Changes in other noncurrent
liabilities
(944
)
(2,183
)
Changes in other assets
(8,813
)
(4,140
)
Other operating activities
(7,849
)
(1,684
)
Net cash provided by operating
activities
256,977
232,847
Cash flows from investing activities:
Purchases of property and equipment and
other
(77,870
)
(76,449
)
Disposals of property and equipment
11,180
7,316
Acquisition of certain businesses, net of
cash acquired
—
(17,200
)
Proceeds from sale of equity
investment
51,869
—
Other investing activities
75
200
Net cash used in investing activities
(14,746
)
(86,133
)
Cash flows from financing activities:
Proceeds from long-term borrowings
1,500,000
—
Payments of financing lease
obligations
(27,601
)
(28,041
)
Debt issuance costs
(13,749
)
—
Net cash distributions to Parent
(1,688,919
)
(134,502
)
Net cash used in financing activities
(230,269
)
(162,543
)
Effect of foreign exchange rates on cash
and cash equivalents
353
(1,541
)
Increase (Decrease) in cash and cash
equivalents
12,315
(17,370
)
Cash and cash equivalents, beginning of
period
23,736
41,106
Cash and cash equivalents, end of
period
$
36,051
$
23,736
Non-GAAP Definitions
This release could include certain non-GAAP financial measures,
such as Adjusted Revenue Growth (Organic), Adjusted Revenue
(Organic), Adjusted Operating Income, Adjusted Operating Income
Margin, Adjusted EBITDA, Adjusted EBITDA Margin, Free Cash Flow and
Net Debt. Vestis utilizes these measures when monitoring and
evaluating operating performance. The non-GAAP financial measures
presented herein are supplemental measures of Vestis’ performance
that Vestis believes help investors because they enable better
comparisons of Vestis’ historical results and allow Vestis’
investors to evaluate its performance based on the same metrics
that Vestis uses to evaluate its performance and trends in its
results. Vestis’ presentation of these metrics has limitations as
an analytical tool and should not be considered in isolation or as
a substitute for analysis of Vestis’ results as reported under U.S.
GAAP. Because of their limitations, these non-GAAP financial
measures should not be considered as measures of cash available to
Vestis to invest in the growth of Vestis’ business or that will be
available to Vestis to meet its obligations. Vestis compensates for
these limitations by using these non-GAAP financial measures along
with other comparative tools, together with U.S. GAAP financial
measures, to assist in the evaluation of operating performance. You
should not consider these measures as alternatives to revenue,
operating income, operating income margin, net income, net income
margin or net cash provided by operating activities determined in
accordance with U.S. GAAP. Vestis believes that these non-GAAP
financial measures, in addition to the corresponding U.S. GAAP
financial measures, are important supplemental measures which
exclude non-cash or other items that may not be indicative of or
are unrelated to Vestis’ core operating results and the overall
health of Vestis. Non-GAAP financial measures as presented by
Vestis may not be comparable to other similarly titled measures of
other companies because not all companies use identical
calculations.
Adjusted Revenue Growth (Organic)
Adjusted Revenue Growth (Organic) measures our revenue growth
trends excluding the impact of acquisitions and foreign currency,
and we believe it is useful for investors to understand growth
through internal efforts. We define “organic revenue growth” as the
growth in revenues, excluding (i) acquisitions and (ii) the impact
of foreign currency exchange rate changes, (iii) the impact of the
53rd week, when applicable.
Adjusted Revenue (Organic)
Adjusted Revenue (Organic) represents revenue as determined in
accordance with U.S. GAAP, adjusted to exclude (i) acquisitions and
(ii) the impact of foreign currency exchange rate changes, (iii)
the impact of the 53rd week, when applicable.
Adjusted Operating Income
Adjusted Operating Income represents Operating Income adjusted
for Amortization Expense of Acquired Intangibles; Share-based
Compensation Expense; Severance and Other Charges; Merger and
Integration Related Charges; Management Fees; Separation Related
Charges; Estimated Impact of 53rd Week, when applicable; and Gain,
Losses, Settlements and Other Items impacting comparability.
Adjusted results are presented in order to reflect the results in a
manner that allows a better understanding of operational activities
separate from the financial impact of decisions made for the
long-term benefit of the company and other items impacting
comparability between periods. Similar adjustments have been
recorded in earlier periods and similar types of adjustments can
reasonably be expected to be recorded in future periods.
Adjusted Operating Income Margin
Adjusted Operating Income Margin represents Adjusted Operating
Income as a percentage of Revenue.
Adjusted EBITDA
Adjusted EBITDA represents Net Income adjusted for Provision for
Income Taxes; Interest Expense and Other, net; and Depreciation and
Amortization (EBTIDA), further adjusted for Share-based
Compensation Expense; Severance and Other Charges; Merger and
Integration Charges; Management Fees; Separation Related Charges;
Estimated Impact of 53rd Week (when applicable); Gains, Losses,
Settlements; and other items impacting comparability. Adjusted
results are presented in order to reflect the results in a manner
that allows a better understanding of operational activities
separate from the financial impact of decisions made for the
long-term benefit of the company and other items impacting
comparability between periods. Similar adjustments have been
recorded in earlier periods and similar types of adjustments can
reasonably be expected to be recorded in future periods.
Adjusted EBITDA Margin
Adjusted EBITDA Margin is Adjusted EBITDA as a percentage of
Revenue.
Free Cash Flow
Free Cash Flow represents Net cash provided by operating
activities adjusted for Purchases of Property and Equipment and
Other and Disposals of property and equipment.
Net Debt
Net Debt represents total principal debt outstanding and finance
lease obligations, less cash and cash equivalents.
VESTIS CORPORATION
RECONCILIATION OF NON-GAAP
MEASURES
Consolidated
(In millions)
Three Months Ended
Year Ended
Three Months Ended
Year Ended
December 31,
April 1,
July 1,
September 30,
September 30,
December 30,
March 31,
June 30,
September 29,
September 29,
2021
2022
2022
2022
2022
2022
2023
2023
2023
2023
Revenue (as reported)
$
661.1
$
663.0
$
679.7
$
683.2
$
2,687.0
$
700.7
$
699.3
$
709.4
$
715.9
$
2,825.3
Effect of Currency Translation
5.0
4.4
3.3
1.7
14.4
Adjusted Revenue (Organic)
$
705.7
$
703.7
$
712.7
$
717.6
$
2,839.7
Revenue Growth (as reported)
5.99
%
5.48
%
4.37
%
4.79
%
5.15
%
Adjusted Revenue Growth (Organic)
6.75
%
6.14
%
4.86
%
5.04
%
5.68
%
Operating Income (as reported)
$
50.3
$
54.4
$
57.0
$
30.5
$
192.2
$
44.4
$
49.4
$
66.3
$
57.8
$
217.9
Amortization Expense
6.4
6.5
6.5
6.5
25.9
6.5
6.5
6.5
6.5
26.0
Share-Based Compensation
4.3
4.2
4.4
4.5
17.4
4.5
3.5
3.6
2.9
14.5
Severance and Other Charges
—
—
—
—
—
—
5.5
(0.8
)
0.2
4.9
Separation Related Charges
—
—
1.9
2.2
4.1
3.5
3.4
6.0
18.2
31.1
Management Fee
—
—
—
—
—
—
—
—
—
—
Gain, Losses, and Settlements
—
(2.9
)
(0.6
)
28.5
25.0
5.8
(2.6
)
(2.9
)
(1.1
)
(0.8
)
Total Operating Income Adjustments
$
10.7
$
7.8
$
12.2
$
41.7
$
72.4
$
20.3
$
16.3
$
12.4
$
26.7
$
75.7
Adjusted Operating Income (Non-GAAP)
$
61.0
$
62.2
$
69.2
$
72.2
$
264.6
$
64.7
$
65.7
$
78.7
$
84.5
$
293.6
Depreciation Expense
26.9
27.1
27.2
27.2
108.4
27.3
27.1
27.6
28.3
110.3
Adjusted EBITDA (Non-GAAP)
$
87.9
$
89.3
$
96.4
$
99.4
$
373.0
$
92.0
$
92.8
$
106.3
$
112.8
$
403.9
Operating Income Margin (as reported)
7.61
%
8.21
%
8.39
%
4.46
%
7.15
%
6.34
%
7.06
%
9.35
%
8.07
%
7.71
%
Adjusted Operating Income Margin (Non-
GAAP)
9.23
%
9.38
%
10.18
%
10.57
%
9.85
%
9.23
%
9.40
%
11.09
%
11.80
%
10.39
%
Adjusted EBITDA Margin (Non-GAAP)
13.30
%
13.47
%
14.18
%
14.55
%
13.88
%
13.13
%
13.27
%
14.98
%
15.76
%
14.30
%
Net Income (as reported)
$
35.1
$
40.7
$
42.6
$
23.2
$
141.6
$
33.4
$
36.9
$
48.9
$
94.0
$
213.2
Provision for Income Taxes
12.1
13.8
14.5
7.9
48.3
11.1
12.7
17.4
15.4
56.6
Interest Expense and Other, net
3.1
(0.1
)
(0.1
)
(0.6
)
2.3
(0.1
)
(0.2
)
—
0.2
(0.1
)
Depreciation Expense
26.9
27.1
27.2
27.2
108.4
27.3
27.1
27.6
28.3
110.3
Operating Income Adjustments (Above)
10.7
7.8
12.2
41.7
72.4
20.3
16.3
12.4
26.7
75.7
Gain on Sale of Equity Investment, net
—
—
—
—
—
—
—
—
(51.8
)
(51.8
)
Adjusted EBITDA (Non-GAAP)
$
87.9
$
89.3
$
96.4
$
99.4
$
373.0
$
92.0
$
92.8
$
106.3
$
112.8
$
403.9
VESTIS CORPORATION
RECONCILIATION OF NON-GAAP
MEASURES
United States Segment
(In millions)
Three Months Ended
Year Ended
Three Months Ended
Year Ended
December 31,
April 1,
July 1,
September 30,
September 30,
December 30,
March 31,
June 30,
September 29,
September 29,
2021
2022
2022
2022
2022
2022
2023
2023
2023
2023
Revenue (as reported)
$
601.3
$
604.4
$
618.1
$
623.2
$
2,447.0
$
637.7
$
636.9
$
646.5
$
654.3
$
2,575.4
Effect of Currency Translation
—
—
—
—
—
Adjusted Revenue (Organic)
$
637.7
$
636.9
$
646.5
$
654.3
$
2,575.4
Revenue Growth (as reported)
6.05
%
5.38
%
4.59
%
4.99
%
5.25
%
Adjusted Revenue Growth (Organic)
6.05
%
5.38
%
4.59
%
4.99
%
5.25
%
Operating Income (as reported)
$
61.3
$
65.4
$
70.5
$
45.8
$
243.0
$
63.8
$
68.3
$
84.0
$
87.7
$
303.8
Amortization Expense
6.3
6.4
6.4
6.4
25.5
6.4
6.4
6.4
6.4
25.6
Share-Based Compensation
—
—
—
—
—
—
—
—
—
—
Severance and Other Charges
—
—
—
—
—
—
5.7
(0.8
)
0.2
5.1
Separation Related Charges
—
—
—
—
—
—
—
—
—
—
Management Fee
(1.8
)
(1.8
)
(1.8
)
(1.8
)
(7.2
)
(1.9
)
(1.9
)
(1.9
)
(1.8
)
(7.5
)
Gain, Losses, and Settlements
—
(2.9
)
(0.6
)
28.5
25.0
0.7
(5.2
)
(2.9
)
(1.1
)
(8.5
)
Total Operating Income Adjustments
$
4.5
$
1.7
$
4.0
$
33.1
$
43.3
$
5.2
$
5.0
$
0.8
$
3.7
$
14.7
Adjusted Operating Income (Non-GAAP)
$
65.8
$
67.1
$
74.5
$
78.9
$
286.3
$
69.0
$
73.3
$
84.8
$
91.4
$
318.5
Depreciation Expense
23.9
24.2
24.3
24.4
96.8
24.7
24.5
25.0
25.3
99.5
Adjusted EBITDA (Non-GAAP)
$
89.7
$
91.3
$
98.8
$
103.3
$
383.1
$
93.7
$
97.8
$
109.8
$
116.7
$
418.0
Operating Income Margin (as reported)
10.19
%
10.82
%
11.41
%
7.35
%
9.93
%
10.00
%
10.72
%
12.99
%
13.40
%
11.80
%
Adjusted Operating Income Margin (Non-
GAAP)
10.94
%
11.10
%
12.05
%
12.66
%
11.70
%
10.82
%
11.51
%
13.12
%
13.97
%
12.37
%
Adjusted EBITDA Margin (Non-GAAP)
14.92
%
15.11
%
15.98
%
16.58
%
15.66
%
14.69
%
15.36
%
16.98
%
17.84
%
16.23
%
VESTIS CORPORATION
RECONCILIATION OF NON-GAAP
MEASURES
Canada Segment
(In millions)
Three Months Ended
Year Ended
Three Months Ended
Year Ended
December 31,
April 1,
July 1,
September 30,
September 30,
December 30,
March 31,
June 30,
September 29,
September 29,
2021
2022
2022
2022
2022
2022
2023
2023
2023
2023
Revenue (as reported)
$
59.8
$
58.6
$
61.6
$
60.0
$
240.0
$
63.0
$
62.4
$
62.9
$
61.6
$
249.9
Effect of Currency Translation
5.0
4.4
3.3
1.7
14.4
Adjusted Revenue (Organic)
$
68.0
$
66.8
$
66.2
$
63.3
$
264.3
Revenue Growth (as reported)
5.35
%
6.48
%
2.11
%
2.67
%
4.13
%
Adjusted Revenue Growth (Organic)
13.71
%
13.99
%
7.47
%
5.50
%
10.13
%
Operating Income (as reported)
$
4.8
$
5.1
$
5.3
$
2.8
$
18.0
$
5.4
$
1.5
$
3.3
$
3.5
$
13.7
Amortization Expense
0.1
0.1
0.1
0.1
0.4
0.1
0.1
0.1
0.1
0.4
Share-Based Compensation
—
—
—
—
—
—
—
—
—
—
Severance and Other Charges
—
—
—
—
—
—
(0.2
)
—
—
(0.2
)
Separation Related Charges
—
—
—
—
—
—
—
—
—
—
Management Fee
1.8
1.8
1.8
1.8
7.2
1.9
1.9
1.9
1.8
7.5
Gain, Losses, and Settlements
—
—
—
—
—
—
—
—
—
—
Total Operating Income Adjustments
$
1.9
$
1.9
$
1.9
$
1.9
$
7.6
$
2.0
$
1.8
$
2.0
$
1.9
$
7.7
Adjusted Operating Income (Non-GAAP)
$
6.7
$
7.0
$
7.2
$
4.7
$
25.6
$
7.4
$
3.3
$
5.3
$
5.4
$
21.4
Depreciation Expense
2.8
2.8
2.8
2.7
11.1
2.5
2.5
2.5
2.9
10.4
Adjusted EBITDA (Non-GAAP)
$
9.5
$
9.8
$
10.0
$
7.4
$
36.7
$
9.9
$
5.8
$
7.8
$
8.3
$
31.8
Operating Income Margin (as reported)
8.03
%
8.70
%
8.60
%
4.67
%
7.50
%
8.57
%
2.40
%
5.25
%
5.68
%
5.48
%
Adjusted Operating Income Margin (Non-
GAAP)
11.20
%
11.95
%
11.69
%
7.83
%
10.67
%
11.75
%
5.29
%
8.43
%
8.77
%
8.56
%
Adjusted EBITDA Margin (Non-GAAP)
15.89
%
16.72
%
16.23
%
12.33
%
15.29
%
15.71
%
9.29
%
12.40
%
13.47
%
12.73
%
VESTIS CORPORATION
RECONCILIATION OF NON-GAAP
MEASURES
Corporate
(In millions)
Three Months Ended
Year Ended
Three Months Ended
Year Ended
December 31,
April 1,
July 1,
September 30,
September 30,
December 30,
March 31,
June 30,
September 29,
September 29,
2021
2022
2022
2022
2022
2022
2023
2023
2023
2023
Operating Income (as reported)
$
(15.8
)
$
(16.1
)
$
(18.8
)
$
(18.1
)
$
(68.8
)
$
(24.8
)
$
(20.4
)
$
(21.0
)
$
(33.4
)
$
(99.6
)
Amortization Expense
—
—
—
—
—
—
—
—
—
—
Share-Based Compensation
4.3
4.2
4.4
4.5
17.4
4.5
3.5
3.6
2.9
14.5
Severance and Other Charges
—
—
—
—
—
—
—
—
—
—
Separation Related Charges
—
—
1.9
2.2
4.1
3.5
3.4
6.0
18.2
31.1
Management Fee
—
—
—
—
—
—
—
Gain, Losses, and Settlements
—
—
—
—
—
5.1
2.6
—
—
7.7
Total Operating Income Adjustments
$
4.3
$
4.2
$
6.3
$
6.7
$
21.5
$
13.1
$
9.5
$
9.6
$
21.1
$
53.3
Adjusted Operating Income (Non-GAAP)
$
(11.5
)
$
(11.9
)
$
(12.5
)
$
(11.4
)
$
(47.3
)
$
(11.7
)
$
(10.9
)
$
(11.4
)
$
(12.3
)
$
(46.3
)
Depreciation Expense
0.2
0.1
0.1
0.1
0.5
0.1
0.1
0.1
0.1
0.4
Adjusted EBITDA (Non-GAAP)
$
(11.3
)
$
(11.8
)
$
(12.4
)
$
(11.3
)
$
(46.8
)
$
(11.6
)
$
(10.8
)
$
(11.3
)
$
(12.2
)
$
(45.9
)
VESTIS CORPORATION
RECONCILIATION OF NON-GAAP
MEASURES
FREE CASH FLOW AND NET
DEBT
(In millions)
Fiscal Year Ended
Fiscal Year Ended
September 29, 2023
September 30, 2022
Net cash provided by operating
activities
$
257.0
$
232.8
Purchases of property and equipment and
other
(77.9
)
(76.4
)
Disposals of property and equipment
11.2
7.3
Free Cash Flow (Non-GAAP)
$
190.3
$
163.7
Fiscal Year Ended
September 29, 2023
Total principal debt outstanding
$
1,500.0
Finance lease obligations
132.9
Less: Cash and cash equivalents
36.1
Net Debt
$
1,596.8
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231129561581/en/
Valerie Haertel Investor Relations and External Communications
(470) 924-1293 Haertel-Valerie@vestis.com
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