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FISCAL 2018 KEY HIGHLIGHTS
Sales +8%; Constant Currency Sales +7%
Operating Income +2%; Adjusted Operating Income (AOI) +15%1
EPS +50% to
Operating Income Margin down 30 bps to 5.2%; AOI Margin up 46 bps to 7.05%1
Aggressive De-leveraging to 4.1x After Two Strategic Acquisitions
Board Increases Quarterly Dividend by 5%
“2018 was a record year, driven by balanced, broad-based business
momentum. We delivered strong revenue growth, very strong AOI margin
expansion and achieved our three-year margin target, as well as
successfully integrated two strategic acquisitions ... all of which
strengthens our portfolio and improves our competitive position," said
“In addition, solid free cash flow bolstered our balance sheet and enabled us to lower our leverage ratio below our original target for this year,” Foss continued. “While 2018 was an exceptional year, we are even more excited about our future prospects for growth and sustainable shareholder value creation.”
1 Constant Currency
FOURTH QUARTER RESULTS*
Sales | ||||||||||||
Q4 '18 | Q4 '17 | Change |
Constant Currency Change |
|||||||||
FSS United States | $2,481M | $2,406M | 3% | 3% | ||||||||
FSS International | 888 | 854 | 4% | 7% | ||||||||
Uniform & Career Apparel |
545 |
394 |
38% | 39% | ||||||||
Total Company | $3,914M | $3,654M | 7% | 8% | ||||||||
Operating Income | AOI | |||||||||||||||||
Q4 '18 | Q4 '17 | Change | Q4 '18 | Q4 '17 | Change | |||||||||||||
FSS United States | $229M | $159M | 44% | $244M | $178M | 37% | ||||||||||||
FSS International | 43 | 54 | (20)% | 45 | 54 | (16)% | ||||||||||||
Uniform & Career Apparel | 50 | 38 | 33% | 65 | 38 | 72% | ||||||||||||
Corporate |
(40) |
(33) |
(21%) |
(15) |
(15) |
1% | ||||||||||||
Total Company | $282M | $218M | 30% | $339M | $255M | 33% | ||||||||||||
Effect of Currency Translation | 1 | |||||||||||||||||
Constant Currency AOI | $340M | |||||||||||||||||
* May not total due to rounding. |
||||||||||||||||||
Consolidated revenues were
Consolidated operating income increased in the quarter, primarily due to
broad-based productivity. Additionally, FSS United States segment income
benefited from the inclusion of Avendra results, while uniform income
benefited from the inclusion of AmeriPride results. Finally, operating
income was negatively impacted by an estimated
FOURTH QUARTER SUMMARY
On a GAAP basis, sales were
Adjusted net income was
FISCAL 2018 SUMMARY
On a GAAP basis, sales were
Adjusted net income was
SALE OF HEALTHCARE TECHNOLOGIES BUSINESS
On
FREE CASH FLOW & LIQUIDITY
The Company generated Free Cash Flow of
DIVIDEND INCREASE & DECLARATION
Due to the Company's improving profitability and strong financial
flexibility, the Company's Board of Directors is increasing the regular
quarterly dividend by 5% to
2019 OUTLOOK
The Company will discuss its strategic imperatives, its growth framework
for the next three years, as well as its outlook for 2019 performance at
the
CONFERENCE CALL SCHEDULED
The Company has scheduled a conference call at
About
Selected Operational and Financial Metrics
Constant Currency Sales
Constant Currency Sales represents sales growth, adjusted to eliminate the impact of currency translation.
Legacy Business Sales
Legacy Business Sales represents sales excluding the impact of currency translation and the sales of AmeriPride and Avendra.
Adjusted Operating Income
Adjusted Operating Income represents operating income adjusted to eliminate the change in amortization of acquisition-related customer relationship intangible assets 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; merger and integration 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
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.
Adjusted EPS (Constant Currency)
Adjusted EPS (Constant Currency) represents Adjusted EPS adjusted to eliminate the impact of currency translation.
Covenant Adjusted EBITDA
Covenant Adjusted EBITDA represents net income attributable to
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 Constant Currency Sales, Adjusted Operating Income (including on a constant currency basis), Covenant Adjusted EBITDA, Adjusted Net Income (including on a constant currency basis), Adjusted EPS (including on a constant currency basis) 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. Constant Currency Sales, 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 resulting from the 2007 Leveraged Buy-out
- adjustments to eliminate the change in amortization 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 related to streamlining initiatives (
Merger and Integration Related Charges
- adjustments to eliminate merger and integration charges primarily
related to the Avendra and AmeriPride acquisitions, including deal
costs, costs for transitional employees and integration related
consulting costs (
Gains, losses and settlements impacting
comparability - adjustments to eliminate certain transactions
that are not indicative of our ongoing operational performance,
primarily for income/loss from prior years' loss experience 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.
Effect of tax reform on provision for income taxes - adjustments to eliminate the impact of tax reform that is not indicative of our ongoing tax position based on the new tax policies and certain other adjustments.
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 "2019 Outlook" and including
with respect to, without limitation, the benefits and costs of our
acquisitions of each of
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 and costs of our acquisitions 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 and benefits of the
acquisitions 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 28, 2018 | September 29, 2017 | ||||||||
Sales | $ | 3,913,598 | $ | 3,654,124 | |||||
Costs and Expenses: | |||||||||
Cost of services provided | 3,383,808 | 3,231,082 | |||||||
Depreciation and amortization | 152,536 | 129,954 | |||||||
Selling and general corporate expenses | 94,801 | 75,186 | |||||||
3,631,145 | 3,436,222 | ||||||||
Operating income | 282,453 | 217,902 | |||||||
Interest and Other Financing Costs, net | 92,544 | 62,624 | |||||||
Income Before Income Taxes | 189,909 | 155,278 | |||||||
Provision for Income Taxes | 14,341 | 42,121 | |||||||
Net income | 175,568 | 113,157 | |||||||
Less: Net income attributable to noncontrolling interest | 113 | 19 | |||||||
Net income attributable to Aramark stockholders | $ | 175,455 | $ | 113,138 | |||||
Earnings per share attributable to Aramark stockholders: | |||||||||
Basic | $ | 0.71 | $ | 0.46 | |||||
Diluted | $ | 0.69 | $ | 0.45 | |||||
Weighted Average Shares Outstanding: | |||||||||
Basic | 246,321 | 245,078 | |||||||
Diluted | 253,724 | 252,016 | |||||||
Fiscal Year Ended | |||||||||
September 28, 2018 | September 29, 2017 | ||||||||
Sales | $ | 15,789,633 | $ | 14,604,412 | |||||
Costs and Expenses: | |||||||||
Cost of services provided | 13,990,185 | 12,988,973 | |||||||
Depreciation and amortization | 596,182 | 508,212 | |||||||
Selling and general corporate expenses | 377,129 | 299,170 | |||||||
14,963,496 | 13,796,355 | ||||||||
Operating income | 826,137 | 808,057 | |||||||
Interest and Other Financing Costs, net | 354,261 | 287,415 | |||||||
Income Before Income Taxes | 471,876 | 520,642 | |||||||
(Benefit) Provision for Income Taxes | (96,564 | ) | 146,455 | ||||||
Net income | 568,440 | 374,187 | |||||||
Less: Net income attributable to noncontrolling interest | 555 | 264 | |||||||
Net income attributable to Aramark stockholders | $ | 567,885 | $ | 373,923 | |||||
Earnings per share attributable to Aramark stockholders: | |||||||||
Basic | $ | 2.31 | $ | 1.53 | |||||
Diluted | $ | 2.24 | $ | 1.49 | |||||
Weighted Average Shares Outstanding: | |||||||||
Basic | 245,771 | 244,453 | |||||||
Diluted | 253,352 | 251,557 | |||||||
ARAMARK AND SUBSIDIARIES | ||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
(Unaudited) | ||||||||
(In Thousands) | ||||||||
September 28, 2018 | September 29, 2017 | |||||||
Assets | ||||||||
Current Assets: | ||||||||
Cash and cash equivalents | $ | 215,025 | $ | 238,797 | ||||
Receivables | 1,790,433 | 1,615,993 | ||||||
Inventories | 724,802 | 610,732 | ||||||
Prepayments and other current assets | 171,165 | 187,617 | ||||||
Total current assets | 2,901,425 | 2,653,139 | ||||||
Property and Equipment, net | 1,378,094 | 1,042,031 | ||||||
Goodwill | 5,610,568 | 4,715,511 | ||||||
Other Intangible Assets | 2,136,844 | 1,120,824 | ||||||
Other Assets | 1,693,171 | 1,474,724 | ||||||
$ | 13,720,102 | $ | 11,006,229 | |||||
Liabilities and Stockholders' Equity | ||||||||
Current Liabilities: | ||||||||
Current maturities of long-term borrowings | $ | 30,907 | $ | 78,157 | ||||
Accounts payable | 1,018,920 | 955,925 | ||||||
Accrued expenses and other current liabilities | 1,440,332 | 1,334,013 | ||||||
Total current liabilities | 2,490,159 | 2,368,095 | ||||||
Long-Term Borrowings | 7,213,077 | 5,190,331 | ||||||
Other Liabilities | 977,215 | 978,944 | ||||||
Redeemable Noncontrolling Interest | 10,093 | 9,798 | ||||||
Total Stockholders' Equity | 3,029,558 | 2,459,061 | ||||||
$ | 13,720,102 | $ | 11,006,229 | |||||
ARAMARK AND SUBSIDIARIES | ||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||
(Unaudited) | ||||||||||
(In Thousands) | ||||||||||
Fiscal Year Ended | ||||||||||
September 28, 2018 | September 29, 2017 | |||||||||
Cash flows from operating activities: | ||||||||||
Net income | $ | 568,440 | $ | 374,187 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||
Depreciation and amortization | 596,182 | 508,212 | ||||||||
Income taxes deferred | (104,289 | ) | (37,856 | ) | ||||||
Share-based compensation expense | 88,276 | 65,155 | ||||||||
Changes in operating assets and liabilities | (128,356 | ) | 83,735 | |||||||
Other operating activities | 27,098 | 59,954 | ||||||||
Net cash provided by operating activities | 1,047,351 | 1,053,387 | ||||||||
Cash flows from investing activities: | ||||||||||
Net purchases of property and equipment, client contract investments and other | (618,113 | ) | (533,823 | ) | ||||||
Acquisitions, divestitures and other investing activities | (2,247,163 | ) | (144,661 | ) | ||||||
Net cash used in investing activities | (2,865,276 | ) | (678,484 | ) | ||||||
Cash flows from financing activities: | ||||||||||
Net proceeds of long-term borrowings | 2,203,624 | (60,575 | ) | |||||||
Net change in funding under the Receivables Facility | (254,200 | ) | (13,800 | ) | ||||||
Payments of dividends | (103,115 | ) | (100,813 | ) | ||||||
Proceeds from issuance of common stock | 21,507 | 28,779 | ||||||||
Repurchase of stock | (24,410 | ) | (100,000 | ) | ||||||
Other financing activities | (49,253 | ) | (42,277 | ) | ||||||
Net cash used in financing activities | 1,794,153 | (288,686 | ) | |||||||
Increase in cash and cash equivalents | (23,772 | ) | 86,217 | |||||||
Cash and cash equivalents, beginning of period | 238,797 | 152,580 | ||||||||
Cash and cash equivalents, end of period | $ | 215,025 | $ | 238,797 | ||||||
ARAMARK AND SUBSIDIARIES | |||||||||||||||||||||||||
RECONCILIATION OF NON-GAAP MEASURES | |||||||||||||||||||||||||
ADJUSTED CONSOLIDATED OPERATING INCOME MARGIN | |||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||||
September 28, 2018 | |||||||||||||||||||||||||
FSS United States | FSS International | Uniform | Corporate |
Aramark and Subsidiaries |
|||||||||||||||||||||
Sales (as reported) | $ | 2,480,846 | $ | 887,646 | $ | 545,106 | $ | 3,913,598 | |||||||||||||||||
Operating Income (as reported) | $ | 229,012 | $ | 42,950 | $ | 50,637 | $ | (40,146 | ) | $ | 282,453 | ||||||||||||||
Operating Income Margin (as reported) | 9.23 | % | 4.84 | % | 9.29 | % | 7.22 | % | |||||||||||||||||
Sales (as reported) | $ | 2,480,846 | $ | 887,646 | $ | 545,106 | $ | 3,913,598 | |||||||||||||||||
Effect of Currency Translation | 2,190 | 29,155 | 1,944 | 33,289 | |||||||||||||||||||||
Constant Currency Sales | $ | 2,483,036 | $ | 916,801 | $ | 547,050 | $ | 3,946,887 | |||||||||||||||||
Sales Growth (as reported) | 3.09 | % | 3.96 | % | 38.42 | % | 7.10 | % | |||||||||||||||||
Constant Currency Sales Growth | 3.18 | % | 7.37 | % | 38.92 | % | 8.01 | % | |||||||||||||||||
Operating Income (as reported) | $ | 229,012 | $ | 42,950 | $ | 50,637 | $ | (40,146 | ) | $ | 282,453 | ||||||||||||||
Amortization of Acquisition-Related Customer Relationship Intangible Assets Resulting from the 2007 LBO | 8,158 | (433 | ) | — | — | 7,725 | |||||||||||||||||||
Share-Based Compensation | 102 | (1 | ) | 3 | 19,980 | 20,084 | |||||||||||||||||||
Severance and Other Charges | 374 | (2,216 | ) | — | 3,886 | 2,044 | |||||||||||||||||||
Merger and Integration Related Charges | 2,742 | — | 10,398 | 630 | 13,770 | ||||||||||||||||||||
Gains, Losses and Settlements impacting comparability | 3,251 | 4,676 | 4,401 | 1,030 | 13,358 | ||||||||||||||||||||
Adjusted Operating Income | $ | 243,639 | $ | 44,976 | $ | 65,439 | $ | (14,620 | ) | $ | 339,434 | ||||||||||||||
Effect of Currency Translation | 437 | (4 | ) | 234 | — | 667 | |||||||||||||||||||
Adjusted Operating Income (Constant Currency) | $ | 244,076 | $ | 44,972 | $ | 65,673 | $ | (14,620 | ) | $ | 340,101 | ||||||||||||||
Operating Income Growth (as reported) | 43.96 | % | (20.32 | )% | 32.96 | % | (21.07 | )% | 29.62 | % | |||||||||||||||
Adjusted Operating Income Growth | 36.73 | % | (15.93 | )% | 71.71 | % | 1.14 | % | 33.11 | % | |||||||||||||||
Adjusted Operating Income Growth (Constant Currency) | 36.98 | % | (15.94 | )% | 72.32 | % | 1.14 | % | 33.37 | % | |||||||||||||||
Adjusted Operating Income Margin (Constant Currency) | 9.83 | % | 4.91 | % | 12.00 | % | 8.62 | % | |||||||||||||||||
Three Months Ended | |||||||||||||||||||||||||
September 29, 2017 | |||||||||||||||||||||||||
FSS United States | FSS International | Uniform | Corporate |
Aramark and Subsidiaries |
|||||||||||||||||||||
Sales (as reported) | $ | 2,406,462 | $ | 853,870 | $ | 393,792 | $ | 3,654,124 | |||||||||||||||||
Operating Income (as reported) | $ | 159,076 | $ | 53,901 | $ | 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 | $ | 178,187 | $ | 53,498 | $ | 38,110 | $ | (14,788 | ) | $ | 255,007 | ||||||||||||||
Operating Income Margin (as reported) | 6.61 | % | 6.31 | % | 9.67 | % | 5.96 | % | |||||||||||||||||
Adjusted Operating Income Margin | 7.40 | % | 6.27 | % | 9.68 | % | 6.98 | % | |||||||||||||||||
ARAMARK AND SUBSIDIARIES | |||||||||||||||||||||||||
RECONCILIATION OF NON-GAAP MEASURES | |||||||||||||||||||||||||
ADJUSTED CONSOLIDATED OPERATING INCOME MARGIN | |||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||
Fiscal Year Ended | |||||||||||||||||||||||||
September 28, 2018 | |||||||||||||||||||||||||
FSS United States | FSS International | Uniform | Corporate |
Aramark and Subsidiaries |
|||||||||||||||||||||
Sales (as reported) | $ | 10,137,825 | $ | 3,655,803 | $ | 1,996,005 | $ | 15,789,633 | |||||||||||||||||
Operating Income (as reported) | $ | 680,503 | $ | 150,892 | $ | 182,666 | $ | (187,924 | ) | $ | 826,137 | ||||||||||||||
Operating Income Margin (as reported) | 6.71 | % | 4.13 | % | 9.15 | % | 5.23 | % | |||||||||||||||||
Sales (as reported) | $ | 10,137,825 | $ | 3,655,803 | $ | 1,996,005 | $ | 15,789,633 | |||||||||||||||||
Effect of Currency Translation | (4,328 | ) | (155,830 | ) | (1,712 | ) | (161,870 | ) | |||||||||||||||||
Constant Currency Sales | $ | 10,133,497 | $ | 3,499,973 | $ | 1,994,293 | $ | 15,627,763 | |||||||||||||||||
Sales Growth (as reported) | 4.00 | % | 11.06 | % | 27.56 | % | 8.12 | % | |||||||||||||||||
Constant Currency Sales Growth | 3.95 | % | 6.33 | % | 27.45 | % | 7.01 | % | |||||||||||||||||
Operating Income (as reported) | $ | 680,503 | $ | 150,892 | $ | 182,666 | $ | (187,924 | ) | $ | 826,137 | ||||||||||||||
Amortization of Acquisition-Related Customer Relationship Intangible Assets Resulting from the 2007 LBO | 39,481 | (1,725 | ) | — | — | 37,756 | |||||||||||||||||||
Share-Based Compensation | 648 | 149 | 175 | 88,493 | 89,465 | ||||||||||||||||||||
Severance and Other Charges | 22,283 | 21,333 | 1,571 | 22,390 | 67,577 | ||||||||||||||||||||
Merger and Integration Related Charges | 14,398 | — | 37,535 | 27,975 | 79,908 | ||||||||||||||||||||
Gains, Losses and Settlements impacting comparability | (8,474 | ) | 12,588 | 2,655 | 809 | 7,578 | |||||||||||||||||||
Adjusted Operating Income | $ | 748,839 | $ | 183,237 | $ | 224,602 | $ | (48,257 | ) | $ | 1,108,421 | ||||||||||||||
Effect of Currency Translation | (1,006 | ) | (5,757 | ) | (25 | ) | — | (6,788 | ) | ||||||||||||||||
Adjusted Operating Income (Constant Currency) | $ | 747,833 | $ | 177,480 | $ | 224,577 | $ | (48,257 | ) | $ | 1,101,633 | ||||||||||||||
Operating Income Growth (as reported) | 14.04 | % | (6.92 | )% | 0.21 | % | 41.23 | % | 2.24 | % | |||||||||||||||
Adjusted Operating Income Growth | 12.92 | % | 4.90 | % | 23.45 | % | (16.48 | )% | 15.22 | % | |||||||||||||||
Adjusted Operating Income Growth (Constant Currency) | 12.77 | % | 1.60 | % | 23.44 | % | (16.48 | )% | 14.52 | % | |||||||||||||||
Adjusted Operating Income Margin (Constant Currency) | 7.38 | % | 5.07 | % | 11.26 | % | 7.05 | % | |||||||||||||||||
Fiscal Year Ended | |||||||||||||||||||||||||
September 29, 2017 | |||||||||||||||||||||||||
FSS United States | FSS International | Uniform | Corporate |
Aramark and Subsidiaries |
|||||||||||||||||||||
Sales (as reported) | $ | 9,748,020 | $ | 3,291,674 | $ | 1,564,718 | $ | 14,604,412 | |||||||||||||||||
Operating Income (as reported) | $ | 596,729 | $ | 162,102 | $ | 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 | 598 | 444 | 271 | 65,776 | 67,089 | ||||||||||||||||||||
Severance and Other Charges | 9,593 | 13,370 | 1,098 | 4,267 | 28,328 | ||||||||||||||||||||
Gains, Losses and Settlements impacting comparability | (2,711 | ) | (277 | ) | (1,336 | ) | 5,236 | 912 | |||||||||||||||||
Adjusted Operating Income | $ | 663,139 | $ | 174,677 | $ | 181,937 | $ | (57,782 | ) | $ | 961,971 | ||||||||||||||
Operating Income Margin (as reported) | 6.12 | % | 4.92 | % | 11.65 | % | 5.53 | % | |||||||||||||||||
Adjusted Operating Income Margin | 6.80 | % | 5.31 | % | 11.63 | % | 6.59 | % | |||||||||||||||||
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 28, 2018 |
September 29, 2017 |
September 28, 2018 |
September 29, 2017 |
|||||||||||||||||
Net Income Attributable to Aramark Stockholders (as reported) | $ | 175,455 | $ | 113,138 | $ | 567,885 | $ | 373,923 | ||||||||||||
Adjustment: | ||||||||||||||||||||
Amortization of Acquisition-Related Customer Relationship Intangible Assets and Depreciation of Property and Equipment Resulting from the 2007 LBO | 7,725 | 13,714 | 37,756 | 57,585 | ||||||||||||||||
Share-Based Compensation | 20,084 | 15,023 | 89,465 | 67,089 | ||||||||||||||||
Severance and Other Charges | 2,044 | 7,454 | 67,577 | 28,328 | ||||||||||||||||
Merger and Integration Related Charges | 13,770 | — | 79,908 | — | ||||||||||||||||
Gains, Losses and Settlements impacting comparability | 13,358 | 914 | 7,578 | 912 | ||||||||||||||||
Effects of Refinancing on Interest and Other Financing Costs, net | — | 1,523 | 17,773 | 31,491 | ||||||||||||||||
Effect of Tax Reform on Provision for Income Taxes | (38,190 | ) | — | (221,998 | ) | — | ||||||||||||||
Tax Impact of Adjustments to Adjusted Net Income | (15,794 | ) | (14,445 | ) | (77,032 | ) | (69,180 | ) | ||||||||||||
Adjusted Net Income | $ | 178,452 | $ | 137,321 | $ | 568,912 | $ | 490,148 | ||||||||||||
Effect of Currency Translation, net of Tax | (93 | ) | — | (4,798 | ) | — | ||||||||||||||
Adjusted Net Income (Constant Currency) | $ | 178,359 | $ | 137,321 | $ | 564,114 | $ | 490,148 | ||||||||||||
Earnings Per Share (as reported) | ||||||||||||||||||||
Net Income Attributable to Aramark Stockholders (as reported) |
$ | 175,455 | $ | 113,138 | $ | 567,885 | $ | 373,923 | ||||||||||||
Diluted Weighted Average Shares Outstanding | 253,724 | 252,016 | 253,352 | 251,557 | ||||||||||||||||
$ | 0.69 | $ | 0.45 | $ | 2.24 | $ | 1.49 | |||||||||||||
Earnings Per Share Growth (as reported) | 53.33 | % | 50.34 | % | ||||||||||||||||
Adjusted Earnings Per Share | ||||||||||||||||||||
Adjusted Net Income | $ | 178,452 | $ | 137,321 | $ | 568,912 | $ | 490,148 | ||||||||||||
Diluted Weighted Average Shares Outstanding | 253,724 | 252,016 | 253,352 | 251,557 | ||||||||||||||||
$ | 0.70 | $ | 0.54 | $ | 2.25 | $ | 1.95 | |||||||||||||
Adjusted Earnings Per Share Growth | 29.63 | % | 15.38 | % | ||||||||||||||||
Adjusted Earnings Per Share (Constant Currency) | ||||||||||||||||||||
Adjusted Net Income (Constant Currency) | $ | 178,359 | $ | 137,321 | $ | 564,114 | $ | 490,148 | ||||||||||||
Diluted Weighted Average Shares Outstanding | 253,724 | 252,016 | 253,352 | 251,557 | ||||||||||||||||
$ | 0.70 | $ | 0.54 | $ | 2.23 | $ | 1.95 | |||||||||||||
Adjusted Earnings Per Share Growth (Constant Currency) |
29.63 | % | 14.36 | % | ||||||||||||||||
ARAMARK AND SUBSIDIARIES | ||||||||||
RECONCILIATION OF NON-GAAP MEASURES | ||||||||||
NET DEBT TO COVENANT ADJUSTED EBITDA | ||||||||||
(Unaudited) | ||||||||||
(In thousands) | ||||||||||
Twelve Months Ended | ||||||||||
September 28, 2018 | June 29, 2018 | |||||||||
Net Income Attributable to Aramark Stockholders (as reported) | $ | 567,885 | $ | 505,568 | ||||||
Interest and Other Financing Costs, net | 354,261 | 324,341 | ||||||||
Benefit for Income Taxes | (96,564 | ) | (68,783 | ) | ||||||
Depreciation and Amortization | 596,182 | 573,601 | ||||||||
Share-based compensation expense(1) | 88,276 | 83,154 | ||||||||
Pro forma EBITDA for equity method investees(2) | 15,214 | 16,168 | ||||||||
Pro forma EBITDA for certain transactions(3) | 58,600 | 105,424 | ||||||||
Other(4) | 143,910 | 133,936 | ||||||||
Covenant Adjusted EBITDA | $ | 1,727,764 | $ | 1,673,409 | ||||||
Net Debt to Covenant Adjusted EBITDA | ||||||||||
Total Debt | $ | 7,243,984 | $ | 7,870,305 | ||||||
Less: Cash and cash equivalents | $ | 215,025 | $ | 165,968 | ||||||
Net Debt | $ | 7,028,959 | $ | 7,704,337 | ||||||
Covenant Adjusted EBITDA | $ | 1,727,764 | $ | 1,673,409 | ||||||
Net Debt/Covenant Adjusted EBITDA | 4.1 | 4.6 | ||||||||
|
(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 EBITDA primarily from our
(3) Represents the annualizing of net EBITDA from certain acquisitions made during the period.
(4) "Other" for the twelve months ended
ARAMARK AND SUBSIDIARIES | ||||||||||
RECONCILIATION OF NON-GAAP MEASURES | ||||||||||
FREE CASH FLOW | ||||||||||
(Unaudited) | ||||||||||
(In thousands) | ||||||||||
Fiscal Year Ended | ||||||||||
September 28, 2018 | September 29, 2017 | |||||||||
Net Cash provided by operating activities | $ | 1,047,351 | $ | 1,053,387 | ||||||
Net purchases of property and equipment, client contract investments and other | (618,113 | ) | (533,823 | ) | ||||||
Free Cash Flow | $ | 429,238 | $ | 519,564 | ||||||
ARAMARK AND SUBSIDIARIES | ||||||||||
RECONCILIATION OF NON-GAAP MEASURES | ||||||||||
LEGACY BUSINESS SALES (CONSTANT CURRENCY) | ||||||||||
(Unaudited) | ||||||||||
(In thousands) | ||||||||||
Three Months Ended | Fiscal Year Ended | |||||||||
September 28, 2018 | September 28, 2018 | |||||||||
Sales (as reported) | $ | 3,913,598 | $ | 15,789,633 | ||||||
Effect of Currency Translation | 33,289 | (161,870 | ) | |||||||
Constant Currency Sales | 3,946,887 | 15,627,763 | ||||||||
Effect of AmeriPride and Avendra Acquisitions | (184,141 | ) | (522,188 | ) | ||||||
Legacy Business Sales | $ | 3,762,746 | $ | 15,105,575 | ||||||
Three Months Ended | Fiscal Year Ended | |||||||||
September 29, 2017 | September 29, 2017 | |||||||||
Sales (as reported) | $ | 3,654,124 | $ | 14,604,412 | ||||||
Constant Currency Sales Growth | 8.01 | % | 7.01 | % | ||||||
Legacy Business Sales Growth | 2.97 | % | 3.43 | % | ||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20181113005601/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