Q4 YEAR-OVER-YEAR SUMMARY
- Revenue +12%; Organic Revenue +11%
- Global FSS +12%1; Uniform Services +5%1
- Operating Income +40%; Adjusted Operating Income (AOI)
+28%1
- Global FSS AOI +33%1; Uniform Services AOI +15%1
- EPS +169% to $0.78; Adjusted EPS +34%1 to $0.64
- GAAP EPS included a gain on sale from non-controlling equity
investment
FISCAL 2023 YEAR-OVER-YEAR SUMMARY
- Net New Business momentum continued in Global FSS
- Annualized gross new business totaled $1.2 billion,
representing 8.8% of prior year revenue
- Retention at 95.5%, maintained significant improvement vs.
historical levels
- Revenue +15%; Organic Revenue +16%
- Global FSS +18%1; Uniform Services +5.5%1
- Performance driven by net new business, pricing actions, and
base business growth
- Operating Income +37%; Adjusted Operating Income (AOI)
+34%1
- Global FSS AOI +46%1; Uniform Services AOI +10%1
- Well-positioned to drive expected AOI growth and margin
expansion into fiscal '24
- EPS +243% to $2.57; Adjusted EPS +50%1 to $1.70
- GAAP EPS included a net gain on sales from non-controlling
equity investments
- Strong Cash Flow and higher earnings drove 1.4x improvement
in leverage ratio
- Net Cash provided by operating activities of $766 million; Free
Cash Flow of $334 million
- Subsequent to year-end, completed spin-off of Uniform
Services business; now "Vestis"
- Vestis began trading as an independent public company on
October 2, 2023, under "VSTS"
Aramark (NYSE: ARMK) today reported fourth quarter and full year
fiscal 2023 results.
"This year represented a significant step forward in achieving
our strategic and financial goals," said John Zillmer, Aramark's
Chief Executive Officer. "Our hospitality, field-focused culture
generated a third consecutive year of strong Net New Business, with
rising Revenue and AOI resulting in significant Adjusted EPS
growth. Throughout the year, we continued to opportunistically
de-lever through diligent cash management and strategic asset
optimization. Additionally, we completed a key milestone with the
Uniform Services spin-off, which we believe enhances our
performance and focus. We could not have accomplished these results
without our extraordinary teams around the globe, who exemplify our
'Reach for Remarkable' mindset in all that they do."
Notes:
– 1Revenue adjusted for the effect of
certain acquisitions and currency translation; AOI and Adjusted EPS
on a constant-currency basis.
– Supplemental business review slides
available on Aramark's Investor Relations website.
– Global FSS defined as the sum of FSS
United States, FSS International, and Corporate reportable
segments. Uniform Services defined as Uniform & Career Apparel
reportable segment. Adjusted results do not reflect incremental
public company costs associated with spin transaction.
– Retention and Net New Business
calculations exclude Next Level business due to portfolio
optimization.
FOURTH QUARTER RESULTS
Consolidated revenue was $4.9 billion in the fourth quarter, a
12% increase year-over-year, driven by net new business, pricing
actions, and base business growth. The effect of currency
translation increased revenue by $19 million.
Organic revenue, which adjusts for the effect of currency
translation, grew 11% year-over-year. Organic revenue growth for
Global FSS exceeded 12% versus the fourth quarter last year and
Uniform Services increased 5%.
Revenue
Q4 '23
Q4 '22
Change (%)
Organic Revenue Change
(%)
FSS United States
$3,067M
$2,786M
10%
10%
FSS International
$1,134M
$935M
21%
19%
Global FSS
$4,200M
$3,720M
13%
12%
Uniform & Career
Apparel
$701M
$670M
5%
5%
Total Company
$4,902M
$4,390M
12%
11%
Difference between Change (%) and Organic
Revenue Change (%) reflects the impact of currency translation. May
not total due to rounding.
- FSS United States revenue growth benefited from net new
business and pricing actions, as well as strong base business
performance led by higher attendance and per capita spending in the
Sports & Entertainment business, and favorable volume trends in
the Business & Industry ("B&I") sector.
- FSS International grew revenue across all geographies resulting
from net new business, pricing actions, and ongoing base business
growth—primarily from a robust events calendar and greater B&I
participation rates in Europe, mining activity in South America,
and a strong start to the academic year for higher education in
Canada.
- Uniform & Career Apparel increased revenue largely through
pricing actions, and growth in adjacency sales, partially offset by
the rollback of an energy surcharge that was in effect during the
fourth quarter last year.
Operating Income gained 40% year-over-year to $278 million, and
AOI grew 28%1 to $339 million, reflecting an operating income
margin increase of 115 basis points and an AOI margin increase of
91 basis points1. The effect of currency translation benefited
results by $2 million.
Global FSS increased AOI 33%1 compared to the prior year period,
resulting in an AOI margin improvement of 94 basis points1 to 6.1%.
Performance was driven by operating leverage from increased
revenue, continued contract maturity of accounts won in prior
years, improved supply chain economics, and disciplined above-unit
cost management. Uniform Services increased AOI 15%1 in the quarter
resulting in nearly 70 basis points of improvement in AOI margin
from the third quarter and 106 basis points1 higher AOI margin than
the fourth quarter last year.
Operating Income
Adjusted Operating Income
(AOI)
Q4 '23
Q4 '22
Change (%)
Q4 '23
Q4 '22
Change (%)
Constant Currency Change
(%)
FSS United States
$222M
$179M
24%
$234M
$189M
24%
24%
FSS International
$41M
$18M
129%
$52M
$33M
57%
52%
Corporate
($43M)
($41M)
(5)%
($30M)
($31M)
2%
2%
Global FSS
$220M
$156M
41%
$256M
$191M
34%
33%
Uniform & Career
Apparel
$58M
$43M
36%
$83M
$72M
15%
15%
Total Company
$278M
$198M
40%
$339M
$263M
29%
28%
May not total due to rounding. *FSS
International does not include the contribution from AIM Services
subsequent to the sale of the non-controlling interest at the
beginning of April 2023.
Year-over-year profitability improvement was a result of the
following segment performance:
- FSS United States increased driven by the ongoing maturity of
previous new business, improved supply chain economics and
purchasing initiatives, and disciplined above-unit cost management
across the segment, as well as actions taken to close the
price-inflation lag within the Education sector and Corrections
business.
- FSS International benefited from scaling new business, pricing,
higher base business volumes, improved supply chain economics, and
reduced above-unit costs from personnel actions taken earlier in
the fiscal year.
- Uniform & Career Apparel improved through the execution on
the strategic initiatives outlined at the Vestis Analyst Day in
September.
- Corporate expenses improved primarily from above-unit cost
containment while appropriately supporting the business, as well as
lower share-based compensation expense.
FISCAL 2023 SUMMARY
Consolidated revenue was $18.9 billion, a 15% increase
year-over-year, driven by net new business, pricing actions, and
base business growth. Organic revenue increased 16% year-over-year
to $18.9 billion, which adjusted for $186 million from Union Supply
Group through the anniversary of its acquisition in June 2023, as
well as $207 million of currency translation associated with a
stronger dollar compared to prior year. Organic Revenue for Global
FSS grew 18% to $16.1 billion, and Uniforms Services increased 5.5%
to $2.8 billion.
Revenue
FY23
FY22
Change (%)
Organic Revenue Change
(%)
FSS United States
$11,721M
$10,031M
17%
15%
FSS International
$4,362M
$3,656M
19%
24%
Global FSS
$16,083M
$13,687M
18%
18%
Uniform & Career
Apparel
$2,771M
$2,639M
5%
6%
Total Company
$18,854M
$16,327M
15%
16%
Difference between Change (%) and Organic
Revenue Change (%) reflects the effect of certain acquisitions and
currency translation. May not total due to rounding.
Aramark's operating income increased 37% to $863 million and
margin increased 73 basis points to 4.6%. Adjusted Operating Income
grew 34%1 to $1.03 billion, resulting in a year-over-year AOI
margin improvement of 76 basis points1 to 5.5%. AOI in Global FSS
increased 46%1 to $743 million reflecting AOI margin progression of
92 basis points1 to 4.7%. Uniform Services improved 10%1 to $292
million, expanding margins 43 basis points1.
Operating Income
Adjusted Operating Income
(AOI)
FY23
FY22
Change (%)
FY23
FY22
Change (%)
Constant Currency Change
(%)
FSS United States
$670M
$449M
49%
$693M
$515M
35%
35%
FSS International
$114M
$113M
2%
$176M
$138M
28%
33%
Corporate
($148M)
($151M)
2%
($126M)
($139M)
10%
10%
Global FSS
$636M
$410M
55%
$743M
$513M
45%
46%
Uniform & Career
Apparel
$227M
$218M
4%
$292M
$265M
10%
10%
Total Company
$863M
$628M
37%
$1,035M
$778M
33%
34%
May not total due to rounding. *FSS
International does not include the contribution from AIM Services
subsequent to the sale of the non-controlling interest at the
beginning of April 2023.
The Company's earnings per share of $2.57 included a net gain on
sales of non-controlling equity investments. Adjusted earnings per
share increased 50%1 to $1.70, associated with the ongoing focus on
profitable growth across the organization.
CASH FLOW AND CAPITAL
STRUCTURE
Consistent with the typical quarterly cadence of the business,
the fourth quarter generated a significant cash inflow. Net cash
provided by operating activities was $1.04 billion, a
year-over-year increase of $200 million, and Free Cash Flow was
$892 million, representing a $174 million improvement compared to
the prior year period.
In fiscal 2023, Net cash provided by operating activities was
$766 million and Free Cash Flow was $334 million that included a
payment of $64 million of deferred payroll taxes associated with
the CARES Act and $72 million in spin-off and restructuring related
costs that were less than expected due to timing. Before these
items, fiscal 2023 Free Cash Flow was $471 million. Favorable
year-over-year performance was primarily due to significantly
higher operational results and lower working capital.
As a result of the cash flow performance, higher year-over-year
earnings, and over $800 million of net debt reduction versus prior
year-end, the Company's leverage ratio improved 1.4x to 3.9x at
year-end.
Immediately prior to year-end, Aramark received proceeds of $1.5
billion in debt associated with the Uniform Services capital raise
in preparation for its spin-off. Subsequent to fiscal year-end,
Aramark used the funds to redeem the entire $1.5 billion aggregate
principal amount of its 6.375% Senior Notes due 2025, resulting in
a future interest expense savings of approximately $100 million
annually.
DIVIDEND DECLARATION
Given the Company's strengthening financial profile, Aramark's
Board of Directors approved a 15% increase to its pro rata portion
of the pre-spin quarterly dividend. The dividend of 9.5 cents per
common share will be payable on December 8, 2023, to stockholders
of record at the close of business on November 28, 2023.
UNIFORM SERVICES
SPIN-OFF
Aramark completed the spin-off of its Uniform Services
business—now called Vestis—on September 30, 2023, the first day of
the Company's fiscal year 2024. The strengthened results of the
Uniform Services business in the fourth quarter reflected the
strategic priorities outlined at the Vestis Analyst Day in
September 2023.
ARAMARK BUSINESS UPDATE
With a growth mindset now firmly in place across the
organization, Aramark continued its net new business momentum for
the third consecutive year. In fiscal 2023, Annualized Net New
Business for the Global FSS business was $582 million, representing
4.3% of its prior year revenue. The Company's performance was a
result of high retention rates of 95.5% and strength in new
business signings that totaled nearly $1.2 billion across multiple
lines of business and geographies. Entering fiscal 2024, Aramark is
already off to a strong start and remains confident in the robust
sales pipeline for the remainder of the year to achieve its target
Net New Business at 4% to 5% of prior year revenue.
Aramark expects its typical "U-shaped" margin seasonality to
continue in its Global FSS segments—with margins higher in the
first and fourth quarters compared to the second and third
quarters.
The Company anticipates increased profitability in the near- and
longer-term through:
- Profitability ramp of new business booked in prior years as a
result of operational maturity and efficiencies, following three
consecutive strong years of adding new clients;
- Benefits from early trends related to the slow moderation of
inflation, paired with progress in pricing, most notably in the
Education sector and Corrections business;
- Run-rate of improved supply chain economics, as well as
incremental optimization opportunities through purchasing,
efficiencies from new deals, and benefits from greater scale;
- Continued rebound of front-line margins as food and labor costs
normalize, combined with leveraging a flexible operating
model;
- And, disciplined control and containment of above-unit overhead
costs, including leveraging existing resources to support the lines
of business in additional ways post-spin.
OUTLOOK
The Company provides its expectations for organic revenue
growth, Adjusted Operating Income growth, Adjusted Earnings per
Share growth, and Net Debt to Covenant Adjusted EBITDA ("Leverage
Ratio") on a non-GAAP basis, and does not provide a reconciliation
of such forward-looking non-GAAP measures to GAAP due to the
inherent difficulty in forecasting and quantifying certain amounts
that are necessary for such reconciliations, including adjustments
that could be made for the effect of currency translation. The
fiscal 2024 outlook reflects management's current assumptions
regarding numerous evolving factors that are difficult to
accurately predict, including those discussed in the Risk Factors
set forth in the Company's filings with the United States
Securities and Exchange Commission.
Aramark currently expects its full-year performance for fiscal
2024 as follows:
($ in millions, except EPS)
FY23
FY24 Outlook
Global FSS Post-Spin
Reference Point
Year-over-year Growth1
Organic Revenue
$16,083
+7%
—
+9%
Adjusted Operating Income
$743
+15%
—
+20%
Adjusted EPS
$1.16
+25%
—
+35%
Leverage Ratio
3.9x*
~3.5x
1constant currency, except Leverage
Ratio
*Leverage ratio represents total Company
including Uniform Services at year-end.
"With the spin-off now complete, fiscal '24 represents a new
chapter in Aramark's history," Zillmer continued. "The business is
off to a strong start to the year in delivering profitable growth,
and we believe it is well positioned for continued top- and
bottom-line success. We remain confident in our ability to build
upon the momentum we've worked hard to establish, rooted in the
hospitality culture and growth mindset that now define all aspects
of the organization."
CONFERENCE CALL
SCHEDULED
The Company has scheduled a conference call at 8:30 a.m. ET
today to discuss its earnings and outlook. This call and related
materials can be heard and reviewed, either live or on a delayed
basis, on the Company's website, www.aramark.com, on the investor
relations page.
About Aramark
Aramark (NYSE: ARMK) proudly serves the world’s leading
educational institutions, Fortune 500 companies, world champion
sports teams, prominent healthcare providers, iconic destinations
and cultural attractions, and numerous municipalities in 15
countries around the world with food and facilities management.
Because of our hospitality culture, our employees strive to do
great things for each other, our partners, our communities, and the
planet. Aramark has been recognized on FORTUNE’s list of “World’s
Most Admired Companies,” DiversityInc’s “Top 50 Companies for
Diversity” and “Top Companies for Supplier Diversity,” Newsweek’s
list of “America’s Most Responsible Companies 2023,” the HRC’s
“Best Places to Work for LGBTQ Equality,” and scored 100% on the
Disability Equality Index. Learn more at www.aramark.com and
connect with us on LinkedIn, Facebook, X (formerly known as
Twitter), and Instagram.
Selected Operational
and Financial Metrics
Adjusted Revenue
(Organic)
Adjusted Revenue (Organic) represents revenue growth, adjusted
to eliminate the effect of certain material acquisitions and the
impact of currency translation.
Adjusted Operating
Income
Adjusted Operating Income represents operating income adjusted
to eliminate the change in amortization of acquisition-related
intangible assets; the impact of the change in fair value related
to certain gasoline and diesel agreements; severance and other
charges; the effect of certain material acquisitions; spin-off
related charges and other items impacting comparability.
Adjusted Operating Income (Constant
Currency)
Adjusted Operating Income (Constant Currency) represents
Adjusted Operating Income adjusted to eliminate the impact of
currency translation.
Adjusted Net Income
Adjusted Net Income represents net income attributable to
Aramark stockholders adjusted to eliminate the change in
amortization of acquisition-related intangible assets; the impact
of changes in the fair value related to certain gasoline and diesel
agreements; severance and other charges; the effect of certain
material acquisitions; spin-off related charges; gain on sale of
equity investments, net; loss on defined benefit pension plan
termination; the effect of debt repayments and refinancings on
interest and other financing costs, net, and other items impacting
comparability, less the tax impact of these adjustments. The tax
effect for adjusted net income for our United States earnings is
calculated using a blended United States federal and state tax
rate. The tax effect for adjusted net income in jurisdictions
outside the United States is calculated at the local country tax
rate.
Adjusted Net Income (Constant
Currency)
Adjusted Net Income (Constant Currency) represents Adjusted Net
Income adjusted to eliminate the impact of currency
translation.
Adjusted Net Income Net of Interest
Adjustment
Adjusted Net Income Net of Interest Adjustment represents
Adjusted Net Income adjusted to eliminate the effect of the
repayment of the 6.375% Senior Notes due 2025 on interest expense,
net of tax.
Adjusted EPS
Adjusted EPS represents Adjusted Net Income divided by diluted
weighted average shares outstanding.
Adjusted EPS (Constant
Currency)
Adjusted EPS (Constant Currency) represents Adjusted EPS
adjusted to eliminate the impact of currency translation.
Adjusted EPS Net of Interest
Adjustment
Adjusted EPS Net of Interest Adjustment represents Adjusted EPS
adjusted to eliminate the effect of the repayment of the 6.375%
Senior Notes due 2025 on interest expense, net of tax.
Covenant Adjusted EBITDA
Covenant Adjusted EBITDA represents net income attributable to
Aramark stockholders adjusted for interest and other financing
costs, net; provision for income taxes; depreciation and
amortization and certain other items as defined in our debt
agreements required in calculating covenant ratios and debt
compliance. We also use Net Debt for our ratio to Covenant Adjusted
EBITDA, which is calculated as total long-term borrowings less cash
and cash equivalents and short-term marketable securities.
Free Cash Flow
Free Cash Flow represents net cash provided by (used in)
operating activities less net purchases of property and equipment
and other. Management believes that the presentation of free cash
flow provides useful information to investors because it represents
a measure of cash flow available for distribution among all the
security holders of the Company.
Free Cash Flow Before
Items
Free Cash Flow Before Items represents free cash flow adjusted
to add back deferred payroll taxes associated with the CARES Act
and spin-off and restructuring related costs.
Items to Rebase
Items to Rebase represents the elimination of balances related
to the Company's Uniform segment, along with other adjustments
related to the spin-off of the Uniform segment, and the elimination
of adjustments related to the effect of certain acquisitions.
Net New Business
Net New Business is an internal statistical metric used to
evaluate our new sales and retention performance. The calculation
is defined as the annualized value of gross new business less the
annualized value of lost business, excluding portfolio optimization
in the Next Level business.
We use Adjusted Revenue (Organic), Adjusted Operating Income
(including on a constant currency basis), Adjusted Net Income
(including on a constant currency and net of interest adjustment
basis), Adjusted EPS (including on a constant currency and net of
interest adjustment basis), Covenant Adjusted EBITDA and Free Cash
Flow (including on a before items basis) as supplemental measures
of our operating profitability and to control our cash operating
costs. We believe these financial measures are useful to investors
because they enable better comparisons of our historical results
and allow our investors to evaluate our performance based on the
same metrics that we use to evaluate our performance and trends in
our results. These financial metrics are not measurements of
financial performance under generally accepted accounting
principles, or GAAP. Our presentation of these metrics has
limitations as an analytical tool and should not be considered in
isolation or as a substitute for analysis of our results as
reported under GAAP. You should not consider these measures as
alternatives to revenue, operating income, net income, earnings per
share or net cash provided by (used in) operating activities,
determined in accordance with GAAP. Adjusted Revenue (Organic),
Adjusted Operating Income, Adjusted Net Income, Adjusted EPS,
Covenant Adjusted EBITDA and Free Cash Flow as presented by us may
not be comparable to other similarly titled measures of other
companies because not all companies use identical calculations.
Explanatory Notes to
the Non-GAAP Schedules
Amortization of Acquisition-Related
Intangible Assets - adjustments to eliminate the change
in amortization expense resulting from the purchase accounting
applied to the January 26, 2007 going-private transaction and
amortization expense recognized on other acquisition-related
intangible assets.
Severance and Other Charges
- adjustments to eliminate severance expenses in the applicable
period ($3.9 million for the fourth quarter of 2023, $37.5 million
for fiscal 2023 and $19.6 million for both the fourth quarter and
fiscal 2022).
Effect of Certain
Acquisitions - adjustments to eliminate the operating
results of certain material acquisitions that are not comparable to
the prior year periods.
Spin-off Related Charges -
adjustments to eliminate charges related to the Company's spin-off
of the Uniform segment, including salaries and benefits, recruiting
and relocation costs, accounting and legal related expenses,
branding and other costs.
Gains, Losses and Settlements impacting
comparability - adjustments to eliminate certain
transactions that are not indicative of the Company's ongoing
operational performance, primarily for the reversal of contingent
consideration liabilities related to acquisition earn outs, net of
expense ($13.4 million for the fourth quarter of 2023, $85.7
million for fiscal 2023, $16.5 million for the fourth quarter of
2022 and $15.1 million for fiscal 2022), non-cash charges for the
impairment of operating lease right-of-use assets and property and
equipment ($29.3 million for fiscal 2023), charges related to
hyperinflation in Argentina ($3.7 million for the fourth quarter of
2023, $10.4 million for fiscal 2023, $1.3 million for the fourth
quarter of 2022 and $3.5 million for fiscal 2022), non-cash charges
related to information technology assets ($2.1 million for the
fourth quarter of 2023 and $8.2 million for fiscal 2023), the gain
from the sale of land ($6.8 million for fiscal 2023), multiemployer
pension plan withdrawal charges, net ($2.0 million for the fourth
quarter of 2023 and $5.9 million for fiscal 2023), non-cash charges
for the impairment of certain assets related to a business that was
sold ($5.2 million for fiscal 2023), legal settlement charges ($2.7
million for fiscal 2023), charges related to the retirement of the
Company's former Executive Vice President of Human Resources ($2.6
million for fiscal 2023), non-cash charges related to the
impairment of a tradename ($2.3 million for both the fourth quarter
and fiscal 2023), the impact of the change in fair value related to
certain gasoline and diesel agreements ($1.1 million gain for the
fourth quarter of 2023, $1.9 million gain for fiscal 2023, $6.8
million loss for the fourth quarter of 2022 and $6.4 million loss
for fiscal 2022), cash termination fees and moving costs related to
exiting a real estate property ($1.3 million for fiscal 2023),
non-cash charges for inventory write-downs to net realizable value,
excess inventory and fixed asset write-offs related to personal
protective equipment ($20.5 million for both the fourth quarter and
fiscal 2022), the gain from insurance proceeds received related to
property damage from a tornado in Nashville ($3.1 million for
fiscal 2022) and other miscellaneous charges.
Gain on Sale of Equity Investments,
net - adjustments to eliminate the impact of the gain
from the sale of the Company's equity method investment in AIM
Services, Co., Ltd. ($377.1 million for fiscal 2023), the gain from
the sale of the Company's equity investment in a uniform company
($51.8 million for both the fourth quarter and fiscal 2023) and the
loss from the sale of a portion of the Company's equity investment
in the San Antonio Spurs NBA franchise ($1.1 million for fiscal
2023).
Loss on Defined Benefit Pension Plan
Termination - adjustment to eliminate the impact of a
non-cash loss in the prior year from the termination of certain
single-employer defined benefit pension plans.
Effect of Debt Repayments and
Refinancings on Interest and Other Financing Costs, net
- adjustments to eliminate expenses associated with refinancing
activities undertaken by the Company in the applicable period such
as non-cash charges for the write-off of unamortized debt issuance
costs related to debt activity, including the repayment of
borrowings ($2.5 million for fiscal 2023).
Effect of Tax Legislation on Provision
for Income Taxes - adjustments to eliminate the impact
of tax legislation that is not indicative of the Company's ongoing
tax position based on new tax policies, including the benefit from
a tax legislative change in the state of Pennsylvania ($4.2 million
for both the fourth quarter and fiscal 2022).
Tax Impact of Adjustments to Adjusted
Net Income - adjustments to eliminate the net tax impact
of the adjustments to adjusted net income calculated based on a
blended United States federal and state tax rate for United States
adjustments and the local country tax rate for adjustments in
jurisdictions outside the United States. Adjustment also eliminates
the impact related to international tax restructuring initiatives
($29.1 million for both the fourth quarter and fiscal 2023),
including the utilization of capital losses to offset the tax gain
related to the Company's sale of AIM Services, Co., Ltd. and from
the reversal of valuation allowances based on the Company's ability
to utilize deferred tax assets based on future taxable income, and
reverses valuation allowances recorded against deferred tax assets
in a foreign subsidiary that were previously deemed to be not
realizable, mainly due to business acquisitions (approximately $3.8
million for fiscal 2023, $0.8 million for the fourth quarter of
2022 and $9.3 million for fiscal 2022).
Effect of Currency
Translation - adjustments to eliminate the impact that
fluctuations in currency translation rates had on the comparative
results by presenting the periods on a constant currency basis.
Assumes constant foreign currency exchange rates based on the rates
in effect for the prior year period being used in translation for
the comparable current year period.
Forward-Looking Statements
This press release contains "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of
1995. These statements reflect our current expectations as to
future events based on certain assumptions and include any
statement that does not directly relate to any historical or
current fact. These statements include, but are not limited to,
statements under the heading "Outlook" and those related to our
expectations regarding the performance of our business, our
financial results, our operations, our liquidity and capital
resources, the conditions in our industry and our growth strategy.
In some cases, forward-looking statements can be identified by
words such as "outlook," "aim," "anticipate," "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.
Some of the factors that we believe could affect or continue to
affect our results include without limitation: unfavorable economic
conditions; natural disasters, global calamities, climate change,
pandemics, energy shortages, sports strikes and other adverse
incidents; geopolitical events including, but not limited to, the
ongoing conflict between Russia and Ukraine and its effects on
global supply chains, inflation, volatility and disruption of
global financial markets; the failure to retain current clients,
renew existing client contracts and obtain new client contracts; a
determination by clients to reduce their outsourcing or use of
preferred vendors; competition in our industries; increased
operating costs and obstacles to cost recovery due to the pricing
and cancellation terms of our food and support services contracts;
currency risks and other risks associated with international
operations, including compliance with a broad range of laws and
regulations, including the United States Foreign Corrupt Practices
Act; risks associated with suppliers from whom our products are
sourced; disruptions to our relationship with our distribution
partners; the contract intensive nature of our business, which may
lead to client disputes; the inability to hire and retain key or
sufficient qualified personnel or increases in labor costs; our
expansion strategy and our ability to successfully integrate the
businesses we acquire and costs and timing related thereto; risks
associated with the recently completed spin-off of Aramark Uniform
Services (our Uniform segment) as an independent publicly traded
company to our stockholders; continued or further unionization of
our workforce; liability resulting from our participation in
multiemployer defined benefit pension plans; laws and governmental
regulations including those relating to food and beverages, the
environment, wage and hour and government contracting; liability
associated with noncompliance with applicable law or other
governmental regulations; new interpretations of or changes in the
enforcement of the government regulatory framework; increases or
changes in income tax rates or tax-related laws; potential
liabilities, increased costs, reputational harm, and other adverse
effects based on our commitments and stakeholder expectations
relating to environmental, social and governance considerations;
the failure to maintain food safety throughout our supply chain,
food-borne illness concerns and claims of illness or injury; a
cybersecurity incident or other disruptions in the availability of
our computer systems or privacy breaches; our leverage; variable
rate indebtedness that subjects us to interest rate risk; the
inability to generate sufficient cash to service all of our
indebtedness; debt agreements that limit our flexibility in
operating our business; and other factors set forth under the
headings "Part I, Item 1A Risk Factors," "Part I, Item 3 Legal
Proceedings" and "Part II, Item 7 Management's Discussion and
Analysis of Financial Condition and Results of Operations" and
other sections of our Annual Report on Form 10-K, filed with the
Securities and Exchange Commission (the "SEC") on November 22, 2022
as such factors may be updated from time to time in our other
periodic filings with the SEC, which are accessible on the SEC's
website at www.sec.gov and which may be obtained by contacting
Aramark's investor relations department via its website at
www.aramark.com. These factors should not be construed as
exhaustive and should be read in conjunction with the other
cautionary statements that are included herein and in our other
filings with the SEC. As a result of these risks and uncertainties,
readers are cautioned not to place undue reliance on any
forward-looking statements included herein or that may be made
elsewhere from time to time by, or on behalf of, us.
Forward-looking statements speak only as of the date made. We
undertake no obligation to publicly update or review any
forward-looking statement, whether as a result of new information,
future developments, changes in our expectations, or otherwise,
except as required by law.
ARAMARK AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (In
Thousands, Except Per Share Amounts)
Three Months Ended
September 29, 2023
September 30, 2022
Revenue
$
4,901,565
$
4,390,457
Costs and Expenses:
Cost of services provided (exclusive of
depreciation and amortization)
4,381,592
3,957,459
Depreciation and amortization
137,567
131,549
Selling and general corporate expenses
104,491
103,208
4,623,650
4,192,216
Operating income
277,915
198,241
Gain on Sale of Equity Investments,
net
(51,831
)
—
Interest and Other Financing Costs,
net
111,472
98,559
Income Before Income Taxes
218,274
99,682
Provision for Income Taxes
12,832
24,238
Net income
205,442
75,444
Less: Net income (loss) attributable to
noncontrolling interest
10
(352
)
Net income attributable to Aramark
stockholders
$
205,432
$
75,796
Earnings per share attributable to Aramark
stockholders:
Basic
$
0.79
$
0.29
Diluted
$
0.78
$
0.29
Weighted Average Shares Outstanding:
Basic
261,319
258,122
Diluted
263,454
260,117
Fiscal Year Ended
September 29, 2023
September 30, 2022
Revenue
$
18,853,857
$
16,326,624
Costs and Expenses:
Cost of services provided (exclusive of
depreciation and amortization)
17,037,797
14,767,570
Depreciation and amortization
546,362
532,327
Selling and general corporate expenses
406,772
398,362
17,990,931
15,698,259
Operating income
862,926
628,365
Gain on Sale of Equity Investments,
net
(427,803
)
—
Interest and Other Financing Costs,
net
439,585
372,727
Income Before Income Taxes
851,144
255,638
Provision for Income Taxes
177,614
61,461
Net income
673,530
194,177
Less: Net loss attributable to
noncontrolling interest
(578
)
(307
)
Net income attributable to Aramark
stockholders
$
674,108
$
194,484
Earnings per share attributable to Aramark
stockholders:
Basic
$
2.59
$
0.76
Diluted
$
2.57
$
0.75
Weighted Average Shares Outstanding:
Basic
260,592
257,314
Diluted
262,594
259,074
ARAMARK AND
SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Unaudited)
(In Thousands)
September 29, 2023
September 30, 2022
Assets
Current Assets:
Cash and cash equivalents
$
1,963,139
$
329,452
Receivables
2,363,698
2,147,957
Inventories
578,427
552,386
Prepayments and other current assets
314,763
262,195
Total current assets
5,220,027
3,291,990
Property and Equipment, net
2,090,503
2,032,045
Goodwill
5,579,529
5,515,124
Other Intangible Assets
2,043,082
2,113,726
Operating Lease Right-of-use Assets
630,158
592,145
Other Assets
1,307,942
1,537,406
$
16,871,241
$
15,082,436
Liabilities and Stockholders'
Equity
Current Liabilities:
Current maturities of long-term
borrowings
$
1,596,942
$
65,047
Current operating lease liabilities
71,206
68,858
Accounts payable
1,406,356
1,322,936
Accrued expenses and other current
liabilities
1,955,463
1,829,045
Total current liabilities
5,029,967
3,285,886
Long-Term Borrowings
6,666,572
7,345,860
Noncurrent Operating Lease Liabilities
291,955
305,623
Deferred Income Taxes and Other Noncurrent
Liabilities
1,161,805
1,106,587
Commitments and Contingencies
Redeemable Noncontrolling Interest
8,224
8,840
Total Stockholders' Equity
3,712,718
3,029,640
$
16,871,241
$
15,082,436
ARAMARK AND
SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Unaudited)
(In Thousands)
Fiscal Year Ended
September 29, 2023
September 30, 2022
Cash flows from operating activities:
Net income
$
673,530
$
194,177
Adjustments to reconcile net income to net
cash provided by operating activities
Depreciation and amortization
546,362
532,327
Asset write-downs
37,563
—
Reduction of contingent consideration
liability
(97,336
)
(20,749
)
Gain on sale of equity investments,
net
(427,803
)
—
Deferred income taxes
114,545
35,422
Share-based compensation expense
86,938
95,487
Changes in operating assets and
liabilities
(72,614
)
(108,669
)
Payments made to clients on contracts
(119,217
)
(56,865
)
Other operating activities
24,461
23,369
Net cash provided by operating
activities
766,429
694,499
Cash flows from investing activities:
Net purchases of property and equipment
and other
(432,166
)
(364,755
)
Proceeds from sale of equity
investments
685,048
—
Acquisitions, divestitures and other
investing activities
(43,970
)
(466,532
)
Net cash provided by (used in) investing
activities
208,912
(831,287
)
Cash flows from financing activities:
Net proceeds/payments of long-term
borrowings
856,680
(52,287
)
Net change in funding under the
Receivables Facility
(104,935
)
104,935
Payments of dividends
(114,614
)
(113,120
)
Proceeds from issuance of common stock
46,974
49,322
Other financing activities
(30,456
)
(26,544
)
Net cash provided by (used in) financing
activities
653,649
(37,694
)
Effect of foreign exchange rates on cash
and cash equivalents
4,697
(28,657
)
Increase (decrease) in cash and cash
equivalents
1,633,687
(203,139
)
Cash and cash equivalents, beginning of
period
329,452
532,591
Cash and cash equivalents, end of
period
$
1,963,139
$
329,452
ARAMARK AND
SUBSIDIARIES
RECONCILIATION OF NON-GAAP
MEASURES
ADJUSTED CONSOLIDATED
OPERATING INCOME MARGIN
(Unaudited)
(In thousands)
Three Months Ended
September 29, 2023
FSS United States
FSS International
Uniform
Corporate
Aramark and Subsidiaries
Revenue (as reported)
$
3,066,543
$
1,133,743
$
701,279
$
4,901,565
Operating Income (as reported)
$
221,838
$
41,227
$
58,097
$
(43,247
)
$
277,915
Operating Income Margin (as reported)
7.23
%
3.64
%
8.28
%
5.67
%
Revenue (as reported)
$
3,066,543
$
1,133,743
$
701,279
$
4,901,565
Effect of Currency Translation
1,670
(22,270
)
1,702
(18,898
)
Adjusted Revenue (Organic)
$
3,068,213
$
1,111,473
$
702,981
$
4,882,667
Revenue Growth (as reported)
10.08
%
21.31
%
4.64
%
11.64
%
Adjusted Revenue Growth (Organic)
10.14
%
18.92
%
4.90
%
11.21
%
Operating Income (as reported)
$
221,838
$
41,227
$
58,097
$
(43,247
)
$
277,915
Amortization of Acquisition-Related
Intangible Assets
19,268
3,540
6,502
—
29,310
Severance and Other Charges
—
3,861
—
—
3,861
Spin-off Related Charges
—
—
18,221
12,962
31,183
Gains, Losses and Settlements impacting
comparability
(6,990
)
3,758
—
109
(3,123
)
Adjusted Operating Income
$
234,116
$
52,386
$
82,820
$
(30,176
)
$
339,146
Effect of Currency Translation
297
(1,885
)
65
—
(1,523
)
Adjusted Operating Income (Constant
Currency)
$
234,413
$
50,501
$
82,885
$
(30,176
)
$
337,623
Operating Income Growth (as reported)
24.09
%
129.49
%
36.19
%
(5.08
)%
40.19
%
Adjusted Operating Income Growth
23.96
%
57.19
%
15.22
%
1.82
%
28.78
%
Adjusted Operating Income Growth (Constant
Currency)
24.11
%
51.53
%
15.31
%
1.82
%
28.21
%
Adjusted Operating Income Margin
7.63
%
4.62
%
11.81
%
6.92
%
Adjusted Operating Income Margin (Constant
Currency)
7.64
%
4.54
%
11.79
%
6.91
%
Three Months Ended
September 30, 2022
FSS United States
FSS International
Uniform
Corporate
Aramark and Subsidiaries
Revenue (as reported)
$
2,785,681
$
934,602
$
670,174
$
4,390,457
Operating Income (as reported)
$
178,773
$
17,965
$
42,658
$
(41,155
)
$
198,241
Amortization of Acquisition-Related
Intangible Assets
18,920
2,178
6,508
—
27,606
Severance and Other Charges
7,698
11,908
—
—
19,606
Spin-off Related Charges
—
—
2,235
3,636
5,871
Gains, Losses and Settlements impacting
comparability
(16,521
)
1,276
20,480
6,784
12,019
Adjusted Operating Income
$
188,870
$
33,327
$
71,881
$
(30,735
)
$
263,343
Operating Income Margin (as reported)
6.42
%
1.92
%
6.37
%
4.52
%
Adjusted Operating Income Margin
6.78
%
3.57
%
10.73
%
6.00
%
ARAMARK AND
SUBSIDIARIES
RECONCILIATION OF NON-GAAP
MEASURES
ADJUSTED CONSOLIDATED
OPERATING INCOME MARGIN
(Unaudited)
(In thousands)
Fiscal Year Ended
September 29, 2023
FSS United States
FSS International
Uniform
Corporate
Aramark and Subsidiaries
Revenue (as reported)
$
11,721,368
$
4,361,844
$
2,770,645
$
18,853,857
Operating Income (as reported)
$
669,570
$
114,480
$
227,272
$
(148,396
)
$
862,926
Operating Income Margin (as reported)
5.71
%
2.62
%
8.20
%
4.58
%
Revenue (as reported)
$
11,721,368
$
4,361,844
$
2,770,645
$
18,853,857
Effect of Certain Acquisitions
(186,463
)
—
—
(186,463
)
Effect of Currency Translation
9,516
183,410
14,364
207,290
Adjusted Revenue (Organic)
$
11,544,421
$
4,545,254
$
2,785,009
$
18,874,684
Revenue Growth (as reported)
16.85
%
19.29
%
4.97
%
15.48
%
Adjusted Revenue Growth (Organic)
15.09
%
24.31
%
5.52
%
15.61
%
Operating Income (as reported)
$
669,570
$
114,480
$
227,272
$
(148,396
)
$
862,926
Amortization of Acquisition-Related
Intangible Assets
76,798
12,664
26,007
—
115,469
Severance and Other Charges
2,310
29,951
4,672
552
37,485
Effect of Certain Acquisitions
(8,631
)
—
—
—
(8,631
)
Spin-off Related Charges
—
—
31,182
19,922
51,104
Gains, Losses and Settlements impacting
comparability
(46,869
)
18,915
2,410
1,994
(23,550
)
Adjusted Operating Income
$
693,178
$
176,010
$
291,543
$
(125,928
)
$
1,034,803
Effect of Currency Translation
1,809
6,422
603
—
8,834
Adjusted Operating Income (Constant
Currency)
$
694,987
$
182,432
$
292,146
$
(125,928
)
$
1,043,637
Operating Income Growth (as reported)
49.12
%
1.75
%
4.24
%
1.86
%
37.33
%
Adjusted Operating Income Growth
34.66
%
28.00
%
9.83
%
9.56
%
32.92
%
Adjusted Operating Income Growth (Constant
Currency)
35.01
%
32.67
%
10.06
%
9.56
%
34.06
%
Adjusted Operating Income Margin
6.01
%
4.04
%
10.52
%
5.54
%
Adjusted Operating Income Margin (Constant
Currency)
6.02
%
4.01
%
10.49
%
5.53
%
Fiscal Year Ended
September 30, 2022
FSS United States
FSS International
Uniform
Corporate
Aramark and Subsidiaries
Revenue (as reported)
$
10,030,829
$
3,656,440
$
2,639,355
$
16,326,624
Operating Income (as reported)
$
449,021
$
112,516
$
218,036
$
(151,208
)
$
628,365
Amortization of Acquisition-Related
Intangible Assets
73,165
9,609
25,902
—
108,676
Severance and Other Charges
7,698
11,908
—
—
19,606
Spin-off Related Charges
—
—
4,143
5,166
9,309
Gains, Losses and Settlements impacting
comparability
(15,112
)
3,473
17,367
6,807
12,535
Adjusted Operating Income
$
514,772
$
137,506
$
265,448
$
(139,235
)
$
778,491
Operating Income Margin (as reported)
4.48
%
3.08
%
8.26
%
3.85
%
Adjusted Operating Income Margin
5.13
%
3.76
%
10.06
%
4.77
%
ARAMARK AND
SUBSIDIARIES
RECONCILIATION OF NON-GAAP
MEASURES
ADJUSTED NET INCOME &
ADJUSTED EARNINGS PER SHARE
(Unaudited)
(In thousands, except per share
amounts)
Three Months Ended
Fiscal Year Ended
September 29, 2023
September 30, 2022
September 29, 2023
September 30, 2022
Net Income Attributable to Aramark
Stockholders (as reported)
$
205,432
$
75,796
$
674,108
$
194,484
Adjustment:
Amortization of Acquisition-Related
Intangible Assets
29,310
27,606
115,469
108,676
Severance and Other Charges
3,861
19,606
37,485
19,606
Effect of Certain Acquisitions
—
—
(8,631
)
—
Spin-off Related Charges
31,183
5,871
51,104
9,309
Gains, Losses and Settlements impacting
comparability
(3,123
)
12,019
(23,550
)
12,535
Gain on Sale of Equity Investments,
net
(51,831
)
—
(427,803
)
—
Loss on Defined Benefit Pension Plan
Termination
—
—
—
3,644
Effect of Debt Repayments and Refinancings
on Interest and Other Financing Costs, net
—
—
2,522
—
Effect of Tax Legislation on Provision for
Income Taxes
—
(4,233
)
—
(4,233
)
Tax Impact of Adjustments to Adjusted Net
Income
(46,435
)
(15,400
)
25,390
(44,968
)
Adjusted Net Income
$
168,397
$
121,265
$
446,094
$
299,053
Effect of Currency Translation, net of
Tax
(2,872
)
—
7,984
—
Adjusted Net Income (Constant
Currency)
$
165,525
$
121,265
$
454,078
$
299,053
Earnings Per Share (as
reported)
Net Income Attributable to Aramark
Stockholders (as reported)
$
205,432
$
75,796
$
674,108
$
194,484
Diluted Weighted Average Shares
Outstanding
263,454
260,117
262,594
259,074
$
0.78
$
0.29
$
2.57
$
0.75
Earnings Per Share Growth (as reported)
$
$
0.49
$
1.82
Earnings Per Share Growth (as reported)
%
169
%
243
%
Adjusted Earnings Per Share
Adjusted Net Income
$
168,397
$
121,265
$
446,094
$
299,053
Diluted Weighted Average Shares
Outstanding
263,454
260,117
262,594
259,074
$
0.64
$
0.47
$
1.70
$
1.15
Adjusted Earnings Per Share Growth $
$
0.17
$
0.55
Adjusted Earnings Per Share Growth %
36
%
48
%
Adjusted Earnings Per Share (Constant
Currency)
Adjusted Net Income (Constant
Currency)
$
165,525
$
121,265
$
454,078
$
299,053
Diluted Weighted Average Shares
Outstanding
263,454
260,117
262,594
259,074
$
0.63
$
0.47
$
1.73
$
1.15
Adjusted Earnings Per Share Growth
(Constant Currency) $
$
0.16
$
0.58
Adjusted Earnings Per Share Growth
(Constant Currency) %
34
%
50
%
ARAMARK AND
SUBSIDIARIES
RECONCILIATION OF NON-GAAP
MEASURES
NET DEBT TO COVENANT ADJUSTED
EBITDA
(Unaudited)
(In thousands)
Twelve Months Ended
September 29, 2023
September 30, 2022
Net Income Attributable to Aramark
Stockholders (as reported)
$
674,108
$
194,484
Interest and Other Financing Costs,
net
439,585
372,727
Provision for Income Taxes
177,614
61,461
Depreciation and Amortization
546,362
532,327
Share-based compensation expense(1)
86,938
95,487
Unusual or non-recurring (gains) and
losses(2)
(422,596
)
—
Pro forma EBITDA for certain
transactions(3)
4,033
11,750
Other(4)(5)
100,681
53,466
Covenant Adjusted EBITDA
$
1,606,725
$
1,321,702
Net Debt to Covenant Adjusted
EBITDA
Total Long-Term Borrowings(6)
$
6,763,514
$
7,410,907
Less: Cash and cash equivalents and
short-term marketable securities(6)(7)
573,853
407,656
Net Debt
$
6,189,661
$
7,003,251
Covenant Adjusted EBITDA
$
1,606,725
$
1,321,702
Net Debt/Covenant Adjusted EBITDA
3.9
5.3
(1) Represents share-based compensation
expense resulting from the application of accounting for stock
options, restricted stock units, performance stock units, deferred
stock unit awards and employee stock purchases.
(2) The twelve months ended September 29,
2023 represents the fiscal 2023 gain from the sale of the Company's
equity method investment in AIM Services, Co., Ltd. ($377.1
million), the fiscal 2023 gain from the sale of the Company's
equity investment in a foreign company ($51.8 million), the fiscal
2023 non-cash charge for the impairment of certain assets related
to a business that was sold ($5.2 million) and the fiscal 2023 loss
from the sale of a portion of the Company's equity investment in
the San Antonio Spurs NBA franchise ($1.1 million).
(3) Represents the annualizing of net
EBITDA from certain acquisitions and divestitures made during the
period.
(4) "Other" for the twelve months ended
September 29, 2023 includes the reversal of contingent
consideration liabilities related to acquisition earn outs, net of
expense ($85.7 million), charges related to the Company's spin-off
of the Uniform segment ($51.1 million), adjustments to remove the
impact attributable to the adoption of certain accounting standards
that are made to the calculation in accordance with the Credit
Agreement and indentures ($47.5 million), net severance charges
($37.5 million), non-cash charges for the impairment of operating
lease right-of-use assets and property and equipment related to
certain real estate properties ($29.3 million), income related to
non-United States governmental wage subsidies ($12.5 million), the
impact of hyperinflation in Argentina ($10.4 million), non-cash
charges related to information technology assets ($8.2 million),
the gain from the sale of land ($6.8 million), net multiemployer
pension plan withdrawal charges ($5.9 million), labor charges and
other expenses associated with closed or partially closed locations
from adverse weather ($5.4 million), legal settlement charges ($2.7
million), non-cash charges for inventory write-downs ($2.6
million), the gain from the change in fair value related to certain
gasoline and diesel agreements ($1.9 million) and other
miscellaneous expenses.
(5) "Other" for the twelve months ended
September 30, 2022 includes adjustments to remove the impact
attributable to the adoption of certain accounting standards that
are made to the calculation in accordance with the Credit Agreement
and indentures ($34.8 million), non-cash charges for inventory
write-downs to net realizable value and fixed asset write-offs
related to personal protective equipment ($20.5 million), severance
charges ($19.6 million), United States and non-United States
governmental labor related tax credits resulting from the COVID-19
pandemic ($17.3 million), the reversal of contingent consideration
liabilities related to acquisition earn outs, net of expense ($15.1
million), the favorable impact related to a client contract dispute
($9.6 million), charges related to the Company's spin-off of the
Uniform segment ($9.3 million), favorable adjustments for the
EBITDA impact attributable to equity investments that are permitted
in the calculation in accordance with the Credit Agreement and
indentures, primarily from the Company's previous ownership
interest in AIM Services Co., Ltd. ($8.4 million), the gain from a
funding agreement related to a legal matter ($6.5 million), the
loss from the change in fair value related to certain gasoline and
diesel agreements ($6.4 million), the gain from insurance proceeds
received related to property damage from a tornado in Nashville
($4.0 million), the impact of hyperinflation in Argentina ($3.5
million), due diligence charges related to acquisitions ($2.5
million) and other miscellaneous expenses.
(6) "Total Long-Term Borrowings" and "Cash
and cash equivalents and short term marketable securities" excludes
both the outstanding liability and the related cash proceeds
resulting from the $1.5 billion of new term loans borrowed by the
Uniform Services business in anticipation of the spin-off which
occurred on September 30, 2023.
(7) Short-term marketable securities
represent held-to-maturity debt securities with original maturities
greater than three months, which are maturing within one year and
will convert back to cash. Short-term marketable securities are
included in "Prepayments and other current assets" on the
Consolidated Balance Sheets.
ARAMARK AND
SUBSIDIARIES
RECONCILIATION OF NON-GAAP
MEASURES
FREE CASH FLOW
(Unaudited)
(In thousands)
Fiscal Year Ended
Nine Months Ended
Three Months Ended
September 29, 2023
June 30, 2023
September 29, 2023
Net Cash provided by (used in) operating
activities
$
766,429
$
(270,093
)
$
1,036,522
Net purchases of property and equipment
and other
(432,166
)
(287,302
)
(144,864
)
Free Cash Flow
$
334,263
$
(557,395
)
$
891,658
Fiscal Year Ended
Nine Months Ended
Three Months Ended
September 30, 2022
July 1, 2022
September 30, 2022
Net Cash provided by (used in) operating
activities
$
694,499
$
(141,993
)
$
836,492
Net purchases of property and equipment
and other
(364,755
)
(245,647
)
(119,108
)
Free Cash Flow
$
329,744
$
(387,640
)
$
717,384
Fiscal Year Ended
Nine Months Ended
Three Months Ended
Change
Change
Change
Net Cash provided by (used in) operating
activities
$
71,930
$
(128,100
)
$
200,030
Net purchases of property and equipment
and other
(67,411
)
(41,655
)
(25,756
)
Free Cash Flow
$
4,519
$
(169,755
)
$
174,274
Fiscal Year Ended
September 29, 2023
Free Cash Flow
$
334,263
Items:
CARES Act Deferred Payroll Taxes
64,247
Spin-off and Restructuring Costs
72,114
Free Cash Flow Before Items
$
470,624
ARAMARK AND
SUBSIDIARIES
RECONCILIATION OF NON-GAAP
MEASURES
GLOBAL FSS ADJUSTED
CONSOLIDATED OPERATING INCOME MARGIN
(Unaudited)
(In thousands)
Three Months Ended
September 29, 2023
FSS United States
FSS International
Corporate
Global FSS
Revenue (as reported)
$
3,066,543
$
1,133,743
$
4,200,286
Operating Income (as reported)
$
221,838
$
41,227
$
(43,247
)
$
219,818
Operating Income Margin (as reported)
7.23
%
3.64
%
5.23
%
Revenue (as reported)
$
3,066,543
$
1,133,743
$
4,200,286
Effect of Currency Translation
1,670
(22,270
)
(20,600
)
Adjusted Revenue (Organic)
$
3,068,213
$
1,111,473
$
4,179,686
Revenue Growth (as reported)
10.08
%
21.31
%
12.90
%
Adjusted Revenue Growth (Organic)
10.14
%
18.92
%
12.35
%
Operating Income (as reported)
$
221,838
$
41,227
$
(43,247
)
$
219,818
Amortization of Acquisition-Related
Intangible Assets
19,268
3,540
—
22,808
Severance and Other Charges
—
3,861
—
3,861
Spin-off Related Charges
—
—
12,962
12,962
Gains, Losses and Settlements impacting
comparability
(6,990
)
3,758
109
(3,123
)
Adjusted Operating Income
$
234,116
$
52,386
$
(30,176
)
$
256,326
Effect of Currency Translation
297
(1,885
)
—
(1,588
)
Adjusted Operating Income (Constant
Currency)
$
234,413
$
50,501
$
(30,176
)
$
254,738
Operating Income Growth (as reported)
24.09
%
129.49
%
(5.08
)%
41.29
%
Adjusted Operating Income Growth
23.96
%
57.19
%
1.82
%
33.88
%
Adjusted Operating Income Growth (Constant
Currency)
24.11
%
51.53
%
1.82
%
33.05
%
Adjusted Operating Income Margin
7.63
%
4.62
%
6.10
%
Adjusted Operating Income Margin (Constant
Currency)
7.64
%
4.54
%
6.09
%
Three Months Ended
September 30, 2022
FSS United States
FSS International
Corporate
Global FSS
Revenue (as reported)
$
2,785,681
$
934,602
$
3,720,283
Operating Income (as reported)
$
178,773
$
17,965
$
(41,155
)
$
155,583
Amortization of Acquisition-Related
Intangible Assets
18,920
2,178
—
21,098
Severance and Other Charges
7,698
11,908
—
19,606
Spin-off Related Charges
—
—
3,636
3,636
Gains, Losses and Settlements impacting
comparability
(16,521
)
1,276
6,784
(8,461
)
Adjusted Operating Income
$
188,870
$
33,327
$
(30,735
)
$
191,462
Operating Income Margin (as reported)
6.42
%
1.92
%
4.18
%
Adjusted Operating Income Margin
6.78
%
3.57
%
5.15
%
ARAMARK AND
SUBSIDIARIES
RECONCILIATION OF NON-GAAP
MEASURES
GLOBAL FSS ADJUSTED
CONSOLIDATED OPERATING INCOME MARGIN
(Unaudited)
(In thousands)
Fiscal Year Ended
September 29, 2023
FSS United States
FSS International
Corporate
Global FSS
Items to Rebase
Rebased Global FSS
Revenue (as reported)
$
11,721,368
$
4,361,844
$
16,083,212
$
16,083,212
Operating Income (as reported)
$
669,570
$
114,480
$
(148,396
)
$
635,654
$
635,654
Operating Income Margin (as reported)
5.71
%
2.62
%
3.95
%
3.95
%
Revenue (as reported)
$
11,721,368
$
4,361,844
$
16,083,212
$
—
$
16,083,212
Effect of Certain Acquisitions
(186,463
)
—
(186,463
)
186,463
—
Effect of Currency Translation
9,516
183,410
192,926
(192,926
)
—
Adjusted Revenue (Organic)
$
11,544,421
$
4,545,254
$
16,089,675
$
(6,463
)
$
16,083,212
Revenue Growth (as reported)
16.85
%
19.29
%
17.50
%
Adjusted Revenue Growth (Organic)
15.09
%
24.31
%
17.55
%
Operating Income (as reported)
$
669,570
$
114,480
$
(148,396
)
$
635,654
$
(10,626
)
$
625,028
Amortization of Acquisition-Related
Intangible Assets
76,798
12,664
—
89,462
—
89,462
Severance and Other Charges
2,310
29,951
552
32,813
—
32,813
Effect of Certain Acquisitions
(8,631
)
—
—
(8,631
)
8,631
—
Spin-off Related Charges
—
—
19,922
19,922
19,922
Gains, Losses and Settlements impacting
comparability
(46,869
)
18,915
1,994
(25,960
)
1,639
(24,321
)
Adjusted Operating Income
$
693,178
$
176,010
$
(125,928
)
$
743,260
$
(356
)
$
742,904
Effect of Currency Translation
1,809
6,422
—
8,231
(8,231
)
—
Adjusted Operating Income (Constant
Currency)
$
694,987
$
182,432
$
(125,928
)
$
751,491
$
(8,587
)
$
742,904
Operating Income Growth (as reported)
49.12
%
1.75
%
1.86
%
54.91
%
Adjusted Operating Income Growth
34.66
%
28.00
%
9.56
%
44.87
%
Adjusted Operating Income Growth (Constant
Currency)
35.01
%
32.67
%
9.56
%
46.48
%
Adjusted Operating Income Margin
6.01
%
4.04
%
4.68
%
Adjusted Operating Income Margin (Constant
Currency)
6.02
%
4.01
%
4.67
%
Fiscal Year Ended
September 30, 2022
FSS United States
FSS International
Corporate
Global FSS
Revenue (as reported)
$
10,030,829
$
3,656,440
$
13,687,269
Operating Income (as reported)
$
449,021
$
112,516
$
(151,208
)
$
410,329
Amortization of Acquisition-Related
Intangible Assets
73,165
9,609
—
82,774
Severance and Other Charges
7,698
11,908
—
19,606
Spin-off Related Charges
—
—
5,166
5,166
Gains, Losses and Settlements impacting
comparability
(15,112
)
3,473
6,807
(4,832
)
Adjusted Operating Income
$
514,772
$
137,506
$
(139,235
)
$
513,043
Operating Income Margin (as reported)
4.48
%
3.08
%
3.00
%
Adjusted Operating Income Margin
5.13
%
3.76
%
3.75
%
ARAMARK AND
SUBSIDIARIES
RECONCILIATION OF NON-GAAP
MEASURES
REBASED GLOBAL FSS ADJUSTED
NET INCOME & ADJUSTED EARNINGS PER SHARE
(Unaudited)
(In thousands)
Fiscal Year Ended
September 29, 2023
Aramark and Subsidiaries
Items to Rebase
Rebased Global FSS
Net Income Attributable to Aramark
Stockholders
$
674,108
$
(226,432
)
$
447,676
Adjustment:
Amortization of Acquisition-Related
Intangible Assets
115,469
(26,007
)
89,462
Severance and Other Charges
37,485
(4,672
)
32,813
Effect of Certain Acquisitions
(8,631
)
8,631
—
Spin-off Related Charges
51,104
(31,182
)
19,922
Gains, Losses and Settlements impacting
comparability
(23,550
)
(771
)
(24,321
)
Gain on Sale of Equity Investments,
net
(427,803
)
51,831
(375,972
)
Effect of Debt Repayments and Refinancings
on Interest and Other Financing Costs, net
2,522
—
2,522
Tax Impact of Adjustments to Adjusted Net
Income
25,390
12,419
37,809
Adjusted Net Income
$
446,094
$
(216,183
)
$
229,911
Effect of Repayment of the 6.375% Senior
Notes due 2025, net
74,137
Adjusted Net Income, Net of Interest
Adjustment
$
304,048
Earnings Per Share
Net Income Attributable to Aramark
Stockholders
$
447,676
Diluted Weighted Average Shares
Outstanding
262,594
$
1.70
Adjusted Earnings Per Share
Adjusted Net Income
$
229,911
Diluted Weighted Average Shares
Outstanding
262,594
$
0.88
Adjusted Earnings Per Share Net of
Interest Adjustment
Adjusted Net Income Net of Interest
Adjustment
$
304,048
Diluted Weighted Average Shares
Outstanding
262,594
$
1.16
ARAMARK AND
SUBSIDIARIES
RECONCILIATION OF NON-GAAP
MEASURES
ADJUSTED CONSOLIDATED
OPERATING INCOME MARGIN
(Unaudited)
(In thousands)
Three Months Ended
June 30, 2023
FSS United States
FSS International
Uniform
Corporate
Aramark and Subsidiaries
Revenue (as reported)
$
2,890,639
$
1,162,411
$
696,159
$
4,749,209
Operating Income (as reported)
$
128,564
$
39,607
$
66,822
$
(31,611
)
$
203,382
Operating Income Margin (as reported)
4.45
%
3.41
%
9.60
%
4.28
%
Revenue (as reported)
$
2,890,639
$
1,162,411
$
696,159
$
4,749,209
Effect of Certain Acquisitions
(47,165
)
—
—
(47,165
)
Effect of Currency Translation
2,778
14,626
3,342
20,746
Adjusted Revenue (Organic)
$
2,846,252
$
1,177,037
$
699,501
$
4,722,790
Revenue Growth (as reported)
16.49
%
18.89
%
4.19
%
15.07
%
Adjusted Revenue Growth (Organic)
14.70
%
20.38
%
4.69
%
14.43
%
Operating Income (as reported)
$
128,564
$
39,607
$
66,822
$
(31,611
)
$
203,382
Amortization of Acquisition-Related
Intangible Assets
19,196
3,362
6,502
—
29,060
Severance and Other Charges
—
—
(778
)
—
(778
)
Effect of Certain Acquisitions
(2,514
)
—
—
—
(2,514
)
Spin-off Related Charges
—
—
6,005
3,529
9,534
Gains, Losses and Settlements impacting
comparability
1,579
3,090
(1,150
)
(1,865
)
1,654
Adjusted Operating Income
$
146,825
$
46,059
$
77,401
$
(29,947
)
$
240,338
Effect of Currency Translation
287
368
174
—
829
Adjusted Operating Income (Constant
Currency)
$
147,112
$
46,427
$
77,575
$
(29,947
)
$
241,167
Operating Income Growth (as reported)
44.36
%
13.97
%
10.40
%
13.28
%
37.53
%
Adjusted Operating Income Growth
35.54
%
20.40
%
12.25
%
15.97
%
33.60
%
Adjusted Operating Income Growth (Constant
Currency)
35.81
%
21.36
%
12.50
%
15.97
%
34.06
%
Adjusted Operating Income Margin
5.16
%
3.96
%
11.12
%
5.11
%
Adjusted Operating Income Margin (Constant
Currency)
5.17
%
3.94
%
11.09
%
5.11
%
Three Months Ended
July 1, 2022
FSS United States
FSS International
Uniform
Corporate
Aramark and Subsidiaries
Revenue (as reported)
$
2,481,433
$
977,759
$
668,186
$
4,127,378
Operating Income (as reported)
$
89,059
$
34,752
$
60,528
$
(36,453
)
$
147,886
Amortization of Acquisition-Related
Intangible Assets
17,856
2,312
6,519
—
26,687
Spin-off Related Charges
—
—
1,908
1,530
3,438
Gains, Losses and Settlements impacting
comparability
1,409
1,192
—
(714
)
1,887
Adjusted Operating Income
$
108,324
$
38,256
$
68,955
$
(35,637
)
$
179,898
Operating Income Margin (as reported)
3.59
%
3.55
%
9.06
%
3.58
%
Adjusted Operating Income Margin
4.37
%
3.91
%
10.32
%
4.36
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231113428795/en/
Inquiries: Felise Kissell (215) 409-7287
Kissell-Felise@aramark.com
Scott Sullivan (215) 238-3953 Sullivan-Scott@aramark.com
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