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FISCAL 2017 KEY HIGHLIGHTS
Sales +1%; Organic Sales +2%
Operating Income +8%; Adjusted Operating Income (AOI) +2%1
EPS +28% to
Operating Income Margin up 35 bps to 5.5%; AOI Margin up 5 bps to 6.6%1
Record Full-Year Free Cash Flow
Achievement of 3.5x Leverage Ratio
Board Increases Quarterly Dividend
“Our solid operating performance in the fourth quarter led to another
very successful year of double digit adjusted EPS growth in 2017,” said
"The combination of robust cash flows and disciplined financial management has significantly strengthened Aramark’s balance sheet, paving the way for us to make the strategically sound and financially compelling acquisitions of Avendra and AmeriPride that we announced last month," Foss continued. "We’re entering 2018 with solid momentum as we continue to focus on growth and shareholder value creation, consistent with our long-term framework.”
1 Constant Currency
FOURTH QUARTER RESULTS*
Sales | ||||||||||||
Q4 '17 | Q4 '16 | Change |
Organic |
|||||||||
FSS North America | $2,518M | $2,492M | 1% | 1% | ||||||||
FSS International | 743 | 661 | 12% | 10% | ||||||||
Uniform & Career Apparel | 394 | 391 | 1% | 1% | ||||||||
Total Company | $3,654M | $3,544M | 3% | 2% | ||||||||
Operating Income | AOI | ||||||||||||||||||
Q4 '17 | Q4 '16 | Change | Q4 '17 | Q4 '16 | Change | ||||||||||||||
FSS North America | $165M | $140M | 17% | $184M | $172M | 7% | |||||||||||||
FSS International | 48 | 36 | 34% | 48 | 44 | 9% | |||||||||||||
Uniform & Career Apparel | 38 | 49 | (22)% | 38 | 55 | (30)% | |||||||||||||
Corporate | (33) | (34) | 4% | (15) | (16) | 8% | |||||||||||||
Total Company | $218M | $191M | 14% | $255M | $255M | —% | |||||||||||||
Effect of Currency Translation | — | ||||||||||||||||||
Constant Currency AOI | $255M |
* May not total due to rounding.
Consolidated revenues were
Income was negatively impacted by an estimated
FOURTH QUARTER SUMMARY
On a GAAP basis, sales were
Adjusted net income was
FISCAL 2017 SUMMARY
On a GAAP basis, sales were
Adjusted net income was
FREE CASH FLOW, CAPITAL STRUCTURE & LIQUIDITY
The Company generated record Free Cash Flow of
DIVIDEND INCREASE & DECLARATION
In recognition of the Company's improving growth and profitability, the
Company's Board of Directors is increasing the regular quarterly
dividend to
2018 OUTLOOK
The Company provides its expectations for full-year adjusted EPS and full-year free cash flow 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 impact of the change in fair value related to certain gasoline and diesel agreements, severance and other charges and the effect of currency translation.
2018 adjusted EPS is expected to be within a range of
CONFERENCE CALL SCHEDULED
The Company has scheduled a conference call at
About
Selected Operational and Financial Metrics
Adjusted Sales (Organic)
Adjusted Sales (Organic) represents sales growth, adjusted to eliminate the effects of material acquisitions and divestitures 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 customer relationship intangible assets and depreciation of property and equipment resulting from the going-private transaction in 2007 (the "2007 LBO"); the impact of the change in fair value related to certain gasoline and diesel agreements; severance and other charges; share-based compensation; the effects of material acquisitions and divestitures 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.
Covenant Adjusted EBITDA
Covenant Adjusted EBITDA represents net income attributable to
Adjusted Net Income
Adjusted Net Income represents net income attributable to
Adjusted Net Income (Constant Currency)
Adjusted Net Income (Constant Currency) represents Adjusted Net Income adjusted to eliminate the impact of currency translation.
Adjusted EPS
Adjusted EPS represents Adjusted Net Income divided by diluted weighted average shares outstanding.
Free Cash Flow
Free Cash Flow represents net cash provided by operating activities less net purchases of property and equipment, client contract investments 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.
We use Adjusted Sales (Organic), Adjusted Operating Income (including on a constant currency basis), Covenant Adjusted EBITDA, Adjusted Net Income (including on a constant currency basis), Adjusted EPS and Free Cash Flow 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 sales, operating income, net income, or earnings per share, determined in accordance with GAAP. Adjusted Sales (Organic), Adjusted Operating Income, Covenant Adjusted EBITDA, Adjusted Net Income, Adjusted EPS 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 customer
relationship intangible assets and depreciation of property and
equipment resulting from the 2007 Leveraged Buy-out -
adjustments to eliminate the change in amortization and depreciation
resulting from the purchase accounting applied to the
Share-based compensation - adjustments to eliminate compensation expense related to the Company's issuances of share-based awards and the related employer payroll tax expense incurred by the Company when employees exercise in the money stock options or vest in restricted stock awards.
Severance and other charges -
adjustments to eliminate severance expenses and other costs incurred in
the applicable period such as organizational streamlining initiatives
(
Effects of acquisitions and divestitures - adjustments to eliminate the impact that material acquisitions and divestitures had on the comparative periods.
Gains, losses and settlements impacting
comparability - adjustments to eliminate certain transactions
that are not indicative of our ongoing operational performance,
primarily for income from prior years' loss experience that were
favorable under our casualty insurance program (
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.
Effect of refinancing 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 third party costs and non-cash charges for the write-offs of deferring financing costs and debt discounts.
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 U.S. federal and state tax rate for U.S. adjustments and the local country tax rate for adjustments in jurisdictions outside the U.S.
Forward-Looking Statements
This press release includes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect our current views as to future events and financial performance with respect to, without limitation, conditions in our industry, our operations, our economic performance and financial condition, including, in particular, statements under the heading "2018 Outlook" and including with respect to, without limitation, the benefits, costs and timing of and ability to consummate the acquisitions of each of Avendra and AmeriPride and related financings, as well as statements regarding these companies’ services and products and relating to our business and growth strategy. These statements can be identified by the fact that they do not relate strictly to historical or current facts. They use words such as "outlook," "aim," "anticipate," "are or remain 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.
Forward-looking statements speak only as of the date made. All
statements we make relating to our estimated and projected earnings,
costs, expenditures, cash flows, growth rates, financial results, our
estimated benefits, costs and timing of and ability to consummate the
acquisitions and related financings are forward-looking statements. In
addition, we, through our senior management, from time to time make
forward-looking public statements concerning our expected future
operations and performance and other developments. These forward-looking
statements are subject to risks and uncertainties that may change at any
time, and, therefore, our actual results may differ materially from
those that we expected. We derive many of our forward-looking statements
from our operating budgets and forecasts, which are based upon many
detailed assumptions. While we believe that our assumptions are
reasonable, we caution that it is very difficult to predict the impact
of known factors, and, of course, it is impossible for us to anticipate
all factors that could affect our actual results. All subsequent written
and oral forward-looking statements attributable to us, or persons
acting on our behalf, are expressly qualified in their entirety by the
cautionary statements. Some of the factors that we believe could affect
our results or the costs, benefits or timing of the proposed
acquisitions and related financings include without limitation:
unfavorable economic conditions; natural disasters, global calamities,
sports strikes and other adverse incidents; 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; the inability to
achieve cost savings through our cost reduction efforts; our expansion
strategy; the failure to maintain food safety throughout our supply
chain, food-borne illness concerns and claims of illness or injury;
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; currency risks and other risks
associated with international operations, including Foreign Corrupt
Practices Act,
ARAMARK AND SUBSIDIARIES |
|||||||||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME |
|||||||||
(Unaudited) |
|||||||||
(In Thousands, Except Per Share Amounts) |
|||||||||
Three Months Ended | |||||||||
September 29, 2017 |
September 30, 2016 | ||||||||
Sales | $ | 3,654,124 | $ | 3,543,824 | |||||
Costs and Expenses: | |||||||||
Cost of services provided | 3,231,082 | 3,152,291 | |||||||
Depreciation and amortization | 129,954 | 125,593 | |||||||
Selling and general corporate expenses | 75,186 | 75,177 | |||||||
3,436,222 | 3,353,061 | ||||||||
Operating income | 217,902 | 190,763 | |||||||
Interest and Other Financing Costs, net | 62,624 | 68,548 | |||||||
Income Before Income Taxes | 155,278 | 122,215 | |||||||
Provision for Income Taxes | 42,121 | 38,774 | |||||||
Net income | 113,157 | 83,441 | |||||||
Less: Net income attributable to noncontrolling interest | 19 | 97 | |||||||
Net income attributable to Aramark stockholders | $ | 113,138 | $ | 83,344 | |||||
Earnings per share attributable to Aramark stockholders: | |||||||||
Basic | $ | 0.46 | $ | 0.34 | |||||
Diluted | $ | 0.45 | $ | 0.33 | |||||
Weighted Average Shares Outstanding: | |||||||||
Basic | 245,078 | 243,941 | |||||||
Diluted | 252,016 | 250,135 | |||||||
Fiscal Year Ended | |||||||||
September 29, 2017 | September 30, 2016 | ||||||||
Sales | $ | 14,604,412 | $ | 14,415,829 | |||||
Costs and Expenses: | |||||||||
Cost of services provided | 12,988,973 | 12,890,408 | |||||||
Depreciation and amortization | 508,212 | 495,765 | |||||||
Selling and general corporate expenses | 299,170 | 283,342 | |||||||
13,796,355 | 13,669,515 | ||||||||
Operating income | 808,057 | 746,314 | |||||||
Interest and Other Financing Costs, net | 287,415 | 315,383 | |||||||
Income Before Income Taxes | 520,642 | 430,931 | |||||||
Provision for Income Taxes | 146,455 | 142,699 | |||||||
Net income | 374,187 | 288,232 | |||||||
Less: Net income attributable to noncontrolling interest | 264 | 426 | |||||||
Net income attributable to Aramark stockholders | $ | 373,923 | $ | 287,806 | |||||
Earnings per share attributable to Aramark stockholders: | |||||||||
Basic | $ | 1.53 | $ | 1.19 | |||||
Diluted | $ | 1.49 | $ | 1.16 | |||||
Weighted Average Shares Outstanding: | |||||||||
Basic | 244,453 | 242,286 | |||||||
Diluted | 251,557 | 248,763 | |||||||
ARAMARK AND SUBSIDIARIES | |||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||||
(Unaudited) | |||||||||
(In Thousands) | |||||||||
September 29, 2017 | September 30, 2016 | ||||||||
Assets | |||||||||
Current Assets: | |||||||||
Cash and cash equivalents | $ | 238,797 | $ | 152,580 | |||||
Receivables | 1,615,993 | 1,476,349 | |||||||
Inventories | 610,732 | 587,155 | |||||||
Prepayments and other current assets | 187,617 | 276,487 | |||||||
Total current assets | 2,653,139 | 2,492,571 | |||||||
Property and Equipment, net | 1,042,031 | 1,023,083 | |||||||
Goodwill | 4,715,511 | 4,628,881 | |||||||
Other Intangible Assets | 1,120,824 | 1,111,883 | |||||||
Other Assets | 1,474,724 | 1,325,654 | |||||||
$ | 11,006,229 | $ | 10,582,072 | ||||||
Liabilities and Stockholders' Equity | |||||||||
Current Liabilities: | |||||||||
Current maturities of long-term borrowings | $ | 78,157 | $ | 46,522 | |||||
Accounts payable | 955,925 | 847,588 | |||||||
Accrued expenses and other current liabilities | 1,334,013 | 1,290,635 | |||||||
Total current liabilities | 2,368,095 | 2,184,745 | |||||||
Long-Term Borrowings | 5,190,331 | 5,223,514 | |||||||
Other Liabilities | 978,944 | 1,003,013 | |||||||
Redeemable Noncontrolling Interest | 9,798 | 9,794 | |||||||
Total Stockholders' Equity | 2,459,061 | 2,161,006 | |||||||
$ | 11,006,229 | $ | 10,582,072 | ||||||
ARAMARK AND SUBSIDIARIES | ||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||
(Unaudited) | ||||||||||
(In Thousands) | ||||||||||
Fiscal Year Ended | ||||||||||
September 29, 2017 | September 30, 2016 | |||||||||
Cash flows from operating activities: | ||||||||||
Net income | $ | 374,187 | $ | 288,232 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||
Depreciation and amortization | 508,212 | 495,765 | ||||||||
Income taxes deferred | (37,856 | ) | 52,416 | |||||||
Share-based compensation expense | 65,155 | 56,942 | ||||||||
Changes in operating assets and liabilities | 83,735 | (35,061 | ) | |||||||
Other operating activities | 59,954 | 9,020 | ||||||||
Net cash provided by operating activities | 1,053,387 | 867,314 | ||||||||
Cash flows from investing activities: | ||||||||||
Net purchases of property and equipment, client contract investments and other | (533,823 | ) | (485,708 | ) | ||||||
Acquisitions, divestitures and other investing activities | (144,661 | ) | (194,037 | ) | ||||||
Net cash used in investing activities | (678,484 | ) | (679,745 | ) | ||||||
Cash flows from financing activities: | ||||||||||
Net proceeds of long-term borrowings | (60,575 | ) | 36,454 | |||||||
Net change in funding under the Receivables Facility | (13,800 | ) | (82,000 | ) | ||||||
Payments of dividends | (100,813 | ) | (92,074 | ) | ||||||
Proceeds from issuance of common stock | 28,779 | 35,705 | ||||||||
Repurchase of stock | (100,000 | ) | (749 | ) | ||||||
Other financing activities | (42,277 | ) | (54,741 | ) | ||||||
Net cash used in financing activities | (288,686 | ) | (157,405 | ) | ||||||
Increase in cash and cash equivalents | 86,217 | 30,164 | ||||||||
Cash and cash equivalents, beginning of period | 152,580 | 122,416 | ||||||||
Cash and cash equivalents, end of period | $ | 238,797 | $ | 152,580 | ||||||
ARAMARK AND SUBSIDIARIES | ||||||||||||||||||||||||||
RECONCILIATION OF NON-GAAP MEASURES | ||||||||||||||||||||||||||
ADJUSTED CONSOLIDATED OPERATING INCOME MARGIN | ||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||||||||
September 29, 2017 | ||||||||||||||||||||||||||
FSS North |
FSS International |
Uniform | Corporate |
Aramark and |
||||||||||||||||||||||
Sales (as reported) | $ | 2,517,602 | $ | 742,730 | $ | 393,792 | $ | 3,654,124 | ||||||||||||||||||
Operating Income (as reported) | $ | 164,541 | $ | 48,436 | $ | 38,085 | $ | (33,160 | ) | $ | 217,902 | |||||||||||||||
Operating Income Margin (as reported) | 6.54 | % | 6.52 | % | 9.67 | % | 5.96 | % | ||||||||||||||||||
Sales (as reported) | $ | 2,517,602 | $ | 742,730 | $ | 393,792 | $ | 3,654,124 | ||||||||||||||||||
Effect of Currency Translation | (6,837 | ) | (17,638 | ) | — | (24,475 | ) | |||||||||||||||||||
Adjusted Sales (Organic) | $ | 2,510,765 | $ | 725,092 | $ | 393,792 | $ | 3,629,649 | ||||||||||||||||||
Sales Growth (as reported) | 1.04 | % | 12.34 | % | 0.70 | % | 3.11 | % | ||||||||||||||||||
Adjusted Sales Growth (Organic) | 0.77 | % | 9.67 | % | 0.70 | % | 2.42 | % | ||||||||||||||||||
Operating Income (as reported) | $ | 164,541 | $ | 48,436 | $ | 38,085 | $ | (33,160 | ) | $ | 217,902 | |||||||||||||||
Amortization of Acquisition-Related Customer Relationship Intangible Assets and Depreciation of Property and Equipment Resulting from the 2007 LBO | 14,127 | (413 | ) | — | — | 13,714 | ||||||||||||||||||||
Share-Based Compensation | 107 | 10 | 25 | 14,881 | 15,023 | |||||||||||||||||||||
Severance and Other Charges | 4,877 | — | — | 2,577 | 7,454 | |||||||||||||||||||||
Gains, Losses and Settlements impacting comparability | — | — | — | 914 | 914 | |||||||||||||||||||||
Adjusted Operating Income | $ | 183,652 | $ | 48,033 | $ | 38,110 | $ | (14,788 | ) | $ | 255,007 | |||||||||||||||
Effect of Currency Translation | (523 | ) | 87 | — | — | (436 | ) | |||||||||||||||||||
Adjusted Operating Income (Constant Currency) | $ | 183,129 | $ | 48,120 | $ | 38,110 | $ | (14,788 | ) | $ | 254,571 | |||||||||||||||
Operating Income Growth (as reported) | 17.49 | % | 34.14 | % | (22.35 | )% | 3.72 | % | 14.23 | % | ||||||||||||||||
Adjusted Operating Income Growth | 6.74 | % | 9.02 | % | (30.49 | )% | 8.29 | % | 0.08 | % | ||||||||||||||||
Adjusted Operating Income Growth (Constant Currency) | 6.44 | % | 9.22 | % | (30.49 | )% | 8.29 | % | (0.09 | )% | ||||||||||||||||
Adjusted Operating Income Margin (Constant Currency) | 7.29 | % | 6.64 | % | 9.68 | % | 7.01 | % | ||||||||||||||||||
Three Months Ended | ||||||||||||||||||||||||||
September 30, 2016 | ||||||||||||||||||||||||||
FSS North |
FSS International |
Uniform | Corporate |
Aramark and |
||||||||||||||||||||||
Sales (as reported) | $ | 2,491,648 | $ | 661,133 | $ | 391,043 | $ | 3,543,824 | ||||||||||||||||||
Adjusted Sales (Organic) | $ | 2,491,648 | $ | 661,133 | $ | 391,043 | $ | 3,543,824 | ||||||||||||||||||
Operating Income (as reported) | $ | 140,048 | $ | 36,108 | $ | 49,048 | $ | (34,441 | ) | $ | 190,763 | |||||||||||||||
Amortization of Acquisition-Related Customer Relationship Intangible Assets and Depreciation of Property and Equipment Resulting from the 2007 LBO | 17,022 | 209 | (521 | ) | — | 16,710 | ||||||||||||||||||||
Share-Based Compensation | 339 | 35 | 32 | 13,591 | 13,997 | |||||||||||||||||||||
Severance and Other Charges | 8,910 | 7,707 | — | 4,704 | 21,321 | |||||||||||||||||||||
Gains, Losses and Settlements impacting comparability | 5,734 | — | 6,266 | 22 | 12,022 | |||||||||||||||||||||
Adjusted Operating Income | $ | 172,053 | $ | 44,059 | $ | 54,825 | $ | (16,124 | ) | $ | 254,813 | |||||||||||||||
Operating Income Margin (as reported) | 5.62 | % | 5.46 | % | 12.54 | % | 5.38 | % | ||||||||||||||||||
Adjusted Operating Income Margin | 6.91 | % | 6.66 | % | 14.02 | % | 7.19 | % | ||||||||||||||||||
ARAMARK AND SUBSIDIARIES | ||||||||||||||||||||||||||
RECONCILIATION OF NON-GAAP MEASURES | ||||||||||||||||||||||||||
ADJUSTED CONSOLIDATED OPERATING INCOME MARGIN | ||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
Fiscal Year Ended | ||||||||||||||||||||||||||
September 29, 2017 | ||||||||||||||||||||||||||
FSS North |
FSS International |
Uniform | Corporate |
Aramark and |
||||||||||||||||||||||
Sales (as reported) | $ | 10,231,503 | $ | 2,808,191 | $ | 1,564,718 | $ | 14,604,412 | ||||||||||||||||||
Operating Income (as reported) | $ | 621,864 | $ | 136,967 | $ | 182,287 | $ | (133,061 | ) | $ | 808,057 | |||||||||||||||
Operating Income Margin (as reported) | 6.08 | % | 4.88 | % | 11.65 | % | 5.53 | % | ||||||||||||||||||
Sales (as reported) | $ | 10,231,503 | $ | 2,808,191 | $ | 1,564,718 | $ | 14,604,412 | ||||||||||||||||||
Effect of Currency Translation | (5,117 | ) | 76,897 | — | 71,780 | |||||||||||||||||||||
Effects of Acquisitions and Divestitures | — | (18,563 | ) | — | (18,563 | ) | ||||||||||||||||||||
Adjusted Sales (Organic) | $ | 10,226,386 | $ | 2,866,525 | $ | 1,564,718 | $ | 14,657,629 | ||||||||||||||||||
Sales Growth (as reported) | 1.08 | % | 2.87 | % | 0.07 | % | 1.31 | % | ||||||||||||||||||
Adjusted Sales Growth (Organic) | 1.03 | % | 5.01 | % | 0.07 | % | 1.68 | % | ||||||||||||||||||
Operating Income (as reported) | $ | 621,864 | $ | 136,967 | $ | 182,287 | $ | (133,061 | ) | $ | 808,057 | |||||||||||||||
Amortization of Acquisition-Related Customer Relationship Intangible Assets and Depreciation of Property and Equipment Resulting from the 2007 LBO | 58,930 | (962 | ) | (383 | ) | — | 57,585 | |||||||||||||||||||
Share-Based Compensation | 606 | 436 | 271 | 65,776 | 67,089 | |||||||||||||||||||||
Severance and Other Charges | 12,230 | 10,733 | 1,098 | 4,267 | 28,328 | |||||||||||||||||||||
Effects of Acquisitions and Divestitures | — | (1,127 | ) | — | — | (1,127 | ) | |||||||||||||||||||
Gains, Losses and Settlements impacting comparability | (2,988 | ) | — | (1,336 | ) | 5,236 | 912 | |||||||||||||||||||
Adjusted Operating Income | $ | 690,642 | $ | 146,047 | $ | 181,937 | $ | (57,782 | ) | $ | 960,844 | |||||||||||||||
Effect of Currency Translation | (456 | ) | 1,763 | — | — | 1,307 | ||||||||||||||||||||
Adjusted Operating Income (Constant Currency) | $ | 690,186 | $ | 147,810 | $ | 181,937 | $ | (57,782 | ) | $ | 962,151 | |||||||||||||||
Operating Income Growth (as reported) | 13.82 | % | 6.06 | % | (6.69 | )% | 6.85 | % | 8.27 | % | ||||||||||||||||
Adjusted Operating Income Growth | 5.80 | % | 3.33 | % | (9.87 | )% | 1.51 | % | 2.32 | % | ||||||||||||||||
Adjusted Operating Income Growth (Constant Currency) | 5.73 | % | 4.58 | % | (9.87 | )% | 1.51 | % | 2.46 | % | ||||||||||||||||
Adjusted Operating Income Margin (Constant Currency) | 6.75 | % | 5.16 | % | 11.63 | % | 6.56 | % | ||||||||||||||||||
Fiscal Year Ended | ||||||||||||||||||||||||||
September 30, 2016 | ||||||||||||||||||||||||||
FSS North |
FSS International |
Uniform | Corporate |
Aramark and |
||||||||||||||||||||||
Sales (as reported) | $ | 10,122,373 | $ | 2,729,782 | $ | 1,563,674 | $ | 14,415,829 | ||||||||||||||||||
Adjusted Sales (Organic) | $ | 10,122,373 | $ | 2,729,782 | $ | 1,563,674 | $ | 14,415,829 | ||||||||||||||||||
Operating Income (as reported) | $ | 546,356 | $ | 129,143 | $ | 195,346 | $ | (124,531 | ) | $ | 746,314 | |||||||||||||||
Amortization of Acquisition-Related Customer Relationship Intangible Assets and Depreciation of Property and Equipment Resulting from the 2007 LBO | 79,916 | 670 | (2,412 | ) | — | 78,174 | ||||||||||||||||||||
Share-Based Compensation | 1,093 | 222 | 173 | 57,870 | 59,358 | |||||||||||||||||||||
Severance and Other Charges | 12,070 | 10,921 | 2,480 | 16,265 | 41,736 | |||||||||||||||||||||
Gains, Losses and Settlements impacting comparability | 13,325 | 381 | 6,266 | (6,525 | ) | 13,447 | ||||||||||||||||||||
Adjusted Operating Income | $ | 652,760 | $ | 141,337 | $ | 201,853 | $ | (56,921 | ) | $ | 939,029 | |||||||||||||||
Operating Income Margin (as reported) | 5.40 | % | 4.73 | % | 12.49 | % | 5.18 | % | ||||||||||||||||||
Adjusted Operating Income Margin | 6.45 | % | 5.18 | % | 12.91 | % | 6.51 | % | ||||||||||||||||||
ARAMARK AND SUBSIDIARIES | |||||||||||||||||||||
RECONCILIATION OF NON-GAAP MEASURES | |||||||||||||||||||||
ADJUSTED NET INCOME & ADJUSTED EPS | |||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||
(In thousands, except per share amounts) | |||||||||||||||||||||
Three Months Ended | Fiscal Year Ended | ||||||||||||||||||||
September 29, |
September 30, |
September 29, |
September 30, |
||||||||||||||||||
Net Income Attributable to Aramark Stockholders (as reported) | $ | 113,138 | $ | 83,344 | $ | 373,923 | $ | 287,806 | |||||||||||||
Adjustment: | |||||||||||||||||||||
Amortization of Acquisition-Related Customer Relationship Intangible Assets and Depreciation of Property and Equipment Resulting from the 2007 LBO | 13,714 | 16,710 | 57,585 | 78,174 | |||||||||||||||||
Share-Based Compensation | 15,023 | 13,997 | 67,089 | 59,358 | |||||||||||||||||
Severance and Other Charges | 7,454 | 21,321 | 28,328 | 41,736 | |||||||||||||||||
Effects of Acquisitions and Divestitures | — | — | (1,127 | ) | — | ||||||||||||||||
Gains, Losses and Settlements impacting comparability | 914 | 12,022 | 912 | 13,447 | |||||||||||||||||
Effects of Refinancing on Interest and Other Financing Costs, net | 1,523 | — | 31,491 | 31,267 | |||||||||||||||||
Tax Impact of Adjustments to Adjusted Net Income | (14,445 | ) | (24,444 | ) | (69,039 | ) | (86,929 | ) | |||||||||||||
Adjusted Net Income | $ | 137,321 | $ | 122,950 | $ | 489,162 | $ | 424,859 | |||||||||||||
Effect of Currency Translation, net of Tax | (319 | ) | — | 989 | — | ||||||||||||||||
Adjusted Net Income (Constant Currency) | $ | 137,002 | $ | 122,950 | $ | 490,151 | $ | 424,859 | |||||||||||||
Earnings Per Share (as reported) | |||||||||||||||||||||
Net Income Attributable to Aramark Stockholders
(as reported) |
$ | 113,138 | $ | 83,344 | $ | 373,923 | $ | 287,806 | |||||||||||||
Diluted Weighted Average Shares Outstanding | 252,016 | 250,135 | 251,557 | 248,763 | |||||||||||||||||
$ | 0.45 | $ | 0.33 | $ | 1.49 | $ | 1.16 | ||||||||||||||
Earnings Per Share Growth (as reported) | 36.36 | % | 28.45 | % | |||||||||||||||||
Adjusted Earnings Per Share | |||||||||||||||||||||
Adjusted Net Income | $ | 137,321 | $ | 122,950 | $ | 489,162 | $ | 424,859 | |||||||||||||
Diluted Weighted Average Shares Outstanding | 252,016 | 250,135 | 251,557 | 248,763 | |||||||||||||||||
$ | 0.54 | $ | 0.49 | $ | 1.94 | $ | 1.71 | ||||||||||||||
Adjusted Earnings Per Share Growth | 10.20 | % | 13.45 | % | |||||||||||||||||
Adjusted Earnings Per Share (Constant Currency) | |||||||||||||||||||||
Adjusted Net Income (Constant Currency) | $ | 137,002 | $ | 122,950 | $ | 490,151 | $ | 424,859 | |||||||||||||
Diluted Weighted Average Shares Outstanding | 252,016 | 250,135 | 251,557 | 248,763 | |||||||||||||||||
$ | 0.54 | $ | 0.49 | $ | 1.95 | $ | 1.71 | ||||||||||||||
Adjusted Earnings Per Share Growth
(Constant Currency) |
10.20 | % | 14.04 | % | |||||||||||||||||
ARAMARK AND SUBSIDIARIES | ||||||||
RECONCILIATION OF NON-GAAP MEASURES | ||||||||
NET DEBT TO COVENANT ADJUSTED EBITDA | ||||||||
(Unaudited) | ||||||||
(In thousands) | ||||||||
Twelve Months Ended | ||||||||
September 29, 2017 | September 30, 2016 | |||||||
Net Income Attributable to Aramark Stockholders (as reported) | $ | 373,923 | $ | 287,806 | ||||
Interest and Other Financing Costs, net | 287,415 | 315,383 | ||||||
Provision for Income Taxes | 146,455 | 142,699 | ||||||
Depreciation and Amortization | 508,212 | 495,765 | ||||||
Share-based compensation expense(1) | 65,155 | 56,942 | ||||||
Pro forma EBITDA for equity method investees(2) | 14,198 | 14,277 | ||||||
Pro forma EBITDA for certain transactions(3) | 18 | 4,098 | ||||||
Other(4) | 36,833 | 35,436 | ||||||
Covenant Adjusted EBITDA | $ | 1,432,209 | $ | 1,352,406 | ||||
Net Debt to Covenant Adjusted EBITDA | ||||||||
Total Debt | $ | 5,268,488 | $ | 5,270,036 | ||||
Less: Cash and cash equivalents | $ | 238,797 | $ | 152,580 | ||||
Net Debt | $ | 5,029,691 | $ | 5,117,456 | ||||
Covenant Adjusted EBITDA | $ | 1,432,209 | $ | 1,352,406 | ||||
Net Debt/Covenant Adjusted EBITDA | 3.5 | 3.8 | ||||||
(1) Represents compensation expense related to the Company's issuances of share-based awards but does not include the related employer payroll tax expense incurred by the Company when employees exercise in the money stock options or vest in restricted stock awards. |
(2) Represents our estimated share of Covenant Adjusted EBITDA primarily from our AIM Services Co., Ltd. equity method investment, not already reflected in our Covenant Adjusted EBITDA. Covenant Adjusted EBITDA for this equity method investee is calculated in a manner consistent with consolidated Covenant Adjusted EBITDA but does not represent cash distributions received from this investee. |
(3) Represents the annualizing of net EBITDA from certain acquisitions made during the period. |
(4) Other includes organizational streamlining initiatives ($19.4 million for fiscal 2017 and $24.9 million for fiscal 2016), the impact of the change in fair value related to certain gasoline and diesel agreements ($0.4 million loss for fiscal 2017 and $8.3 million gain for fiscal 2016), expenses related to acquisition costs ($2.6 million for fiscal 2017 and $3.9 million for fiscal 2016) and other miscellaneous expenses. "Other" for the twelve months ended September 29, 2017 also includes the estimated impact from natural disasters of $17.0 million ($6.1 million of which relates to asset write-downs). "Other" for the twelve months ended September 30, 2016 also includes property and other asset write-downs associated with the sale of a building of $6.8 million and asset write-offs of $5.0 million. |
ARAMARK AND SUBSIDIARIES | |||||||||||
RECONCILIATION OF NON-GAAP MEASURES | |||||||||||
FREE CASH FLOW | |||||||||||
(Unaudited) | |||||||||||
(In thousands) | |||||||||||
Fiscal Year Ended | |||||||||||
September 29, 2017 |
September 30, 2016 |
||||||||||
Net Cash provided by operating activities | $ | 1,053,387 | $ | 867,314 | |||||||
Net purchases of property and equipment, client contract investments and other | (533,823 | ) | (485,708 | ) | |||||||
Free Cash Flow | $ | 519,564 | $ | 381,606 | |||||||
36.15 | % | ||||||||||
View source version on businesswire.com: http://www.businesswire.com/news/home/20171114005841/en/
Source:
Aramark
Media Inquiries:
Karen Cutler, 215-238-4063
Cutler-Karen@aramark.com
or
Investor
Inquiries:
Kate Pearlman, 215-409-7287
Pearlman-Kate@aramark.com