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KEY HIGHLIGHTS
Revenue +8%; Legacy Business Revenue +4%1
Operating
Income 72%; Adjusted Operating Income (AOI) +21%1
EPS
-15% to
Operating Income Margin up 330 bps to 8.8%; AOI
Margin up 60 bps to 6.9%1
Raising Full-Year Outlook
“2019 is off to a good start, with broad-based momentum across the
portfolio, driven by strong base business performance and progress in
our integration of Avendra and AmerPride. We continue to elevate the
consumer experience by enhancing our product offerings, obsessing on
service excellence, and innovating with new technologies,” said Eric J.
Foss, Chairman, President and CEO. “We now expect our full-year Adjusted
EPS outlook to be
Foss added: “Aramark benefits from an advantaged business model and excellent financial flexibility. As we look ahead to the full year, we expect to deliver solid financial performance that will drive sustainable shareholder value."
1 Constant Currency. |
FIRST QUARTER RESULTS* |
||||||||
Revenue | ||||||||
Q1 '19 | Q1 '18 | Change |
Adjusted |
|||||
FSS United States | $2,660M | $2,650M | —% | 3% | ||||
FSS International | 953 | 913 | 4% | 10% | ||||
Uniform & Career Apparel |
652 |
403 |
62% | 62% | ||||
Total Company | $4,265M | $3,965M | 8% | 11% | ||||
Operating Income | AOI | ||||||||||||
Q1 '19 | Q1 '18 | Change | Q1 '19 | Q1 '18 | Change | ||||||||
FSS United States | $364M | $180M | 102% | $232M | $190M | 22% | |||||||
FSS International | 11 | 44 | (74)% | 33 | 45 | (27)% | |||||||
Uniform & Career |
53 | 44 | 18% | 66 | 46 | 42% | |||||||
Corporate |
(55) |
(52) |
6% |
(34) |
(34) |
(1)% | |||||||
Total Company | $373M | $217M | 72% | $297M | $247M | 20% | |||||||
Effect of Currency |
3 | ||||||||||||
Constant Currency AOI | $299M | 21% | |||||||||||
* May not total due to rounding. |
|||||||||||||
Consolidated revenue was
The Company continues to deliver broad-based productivity improvements
while reinvesting in the business. The FSS United States segment income
benefited from the inclusion of Avendra results and synergies, as well
as a client payment. In the
FIRST QUARTER SUMMARY
On a GAAP basis, revenue was
CAPITAL STRUCTURE & LIQUIDITY
Total trailing 12-month net debt to covenant adjusted EBITDA was 4.2x at the end of the quarter, a 30 basis point improvement versus the end of the first quarter of 2018.
During the quarter, the Company received
SHARE REPURCHASE
During the quarter, the company repurchased 1.6 million shares of
2019 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.
The Company is increasing its 2019 adjusted EPS outlook to
CONFERENCE CALL SCHEDULED
The Company has scheduled a conference call at
About
Selected Operational and Financial Metrics
Adjusted Revenue
Adjusted Revenue represents revenue growth, adjusted to eliminate the impact of currency translation and divestitures.
Legacy Business Revenue
Legacy Business Revenue represents Adjusted Revenue, excluding the revenue of AmeriPride and Avendra, the impact of the adoption of Accounting Standards Codification ("ASC") 606, Revenue from Contracts with Customers, the effect of 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 intangible assets; the impact of the change in fair value related to certain gasoline and diesel agreements; severance and other charges; the effect of divestitures; 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 and other assets. 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 Revenue, Legacy Business Revenue, 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 revenue, operating income, net income, or earnings per share, determined in accordance with GAAP. Adjusted Revenue, Legacy Business Revenue, 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 intangible
assets - adjustments to eliminate the change in amortization
resulting from the purchase accounting applied to the
Severance and other charges -
adjustments to eliminate severance expenses and other costs incurred in
the applicable period related to streamlining initiatives (
Effects of divestitures - adjustments to eliminate the impact that the Healthcare Technologies divestitures had on comparative periods.
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 (
Gain on sale of Healthcare Technologies - adjustment to eliminate the impact of the gain on sale of the Healthcare Technologies business.
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 made by our Chairman, President, and CEO and
under the heading "2019 Outlook" and including with respect to, without
limitation, anticipated effects of changes related to accounting changes
and the divestiture of our Healthcare Technologies business, 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 and 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 | ||||||||
December 28, 2018 | December 29, 2017 | |||||||
Revenue | $ | 4,265,349 | $ | 3,965,118 | ||||
Costs and Expenses: | ||||||||
Cost of services provided | 3,794,445 | 3,522,230 | ||||||
Depreciation and amortization | 150,721 | 133,849 | ||||||
Selling and general corporate expenses | 104,130 | 92,168 | ||||||
Gain on sale of Healthcare Technologies | (157,309 | ) | — | |||||
3,891,987 | 3,748,247 | |||||||
Operating income | 373,362 | 216,871 | ||||||
Interest and Other Financing Costs, net | 82,978 | 74,133 | ||||||
Income Before Income Taxes | 290,384 | 142,738 | ||||||
(Benefit) Provision for Income Taxes | 39,708 | (149,702 | ) | |||||
Net income | 250,676 | 292,440 | ||||||
Less: Net income (loss) attributable to noncontrolling interest | (6 | ) | 156 | |||||
Net income attributable to Aramark stockholders | $ | 250,682 | $ | 292,284 | ||||
Earnings per share attributable to Aramark stockholders: | ||||||||
Basic | $ | 1.02 | $ | 1.19 | ||||
Diluted | $ | 0.99 | $ | 1.16 | ||||
Weighted Average Shares Outstanding: | ||||||||
Basic | 246,887 | 245,086 | ||||||
Diluted | 253,656 | 252,244 | ||||||
ARAMARK AND SUBSIDIARIES | |||||||
CONDENSED CONSOLIDATED BALANCE SHEETS* | |||||||
(Unaudited) | |||||||
(In Thousands) | |||||||
December 28, 2018 | September 28, 2018 | ||||||
Assets | |||||||
Current Assets: | |||||||
Cash and cash equivalents | $ | 249,881 | $ | 215,025 | |||
Receivables | 1,880,299 | 1,790,433 | |||||
Inventories | 371,111 | 724,802 | |||||
Prepayments and other current assets | 148,697 | 171,165 | |||||
Total current assets | 2,649,988 | 2,901,425 | |||||
Property and Equipment, net | 2,153,154 | 1,378,094 | |||||
Goodwill | 5,508,603 | 5,610,568 | |||||
Other Intangible Assets | 2,096,893 | 2,136,844 | |||||
Other Assets | 1,330,304 | 1,693,171 | |||||
$ | 13,738,942 | $ | 13,720,102 | ||||
Liabilities and Stockholders' Equity | |||||||
Current Liabilities: | |||||||
Current maturities of long-term borrowings | $ | 53,441 | $ | 30,907 | |||
Accounts payable | 866,162 | 1,018,920 | |||||
Accrued expenses and other current liabilities | 1,277,672 | 1,440,332 | |||||
Total current liabilities | 2,197,275 | 2,490,159 | |||||
Long-Term Borrowings | 7,323,706 | 7,213,077 | |||||
Deferred Income Taxes and Other Noncurrent Liabilities | 990,021 | 977,215 | |||||
Redeemable Noncontrolling Interest | 10,047 | 10,093 | |||||
Total Stockholders' Equity | 3,217,893 | 3,029,558 | |||||
$ | 13,738,942 | $ | 13,720,102 | ||||
*In connection with the Company's adoption of ASC 606, Revenue from Contracts with Customers, the classification of certain balance sheet line items has been adjusted as of December 28, 2018, including Inventories, Property and Equipment, net and Other Assets. Further details will be available in the Quarterly Report on Form 10-Q for the quarterly period ended December 28, 2018. |
ARAMARK AND SUBSIDIARIES | ||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
(Unaudited) | ||||||||
(In Thousands) | ||||||||
Three Months Ended | ||||||||
December 28, 2018 | December 29, 2017 | |||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 250,676 | $ | 292,440 | ||||
Adjustments to reconcile net income to net cash used in operating activities | ||||||||
Depreciation and amortization | 150,721 | 133,849 | ||||||
Deferred income taxes | (5,764 | ) | (178,231 | ) | ||||
Share-based compensation expense | 18,562 | 16,489 | ||||||
Net gain on sale of Healthcare Technologies | (140,165 | ) | — | |||||
Changes in operating assets and liabilities | (436,053 | ) | (590,893 | ) | ||||
Other operating activities | (45,391 | ) | 14,897 | |||||
Net cash used in operating activities | (207,414 | ) | (311,449 | ) | ||||
Cash flows from investing activities: | ||||||||
Net purchases of property and equipment and other | (113,446 | ) | (117,747 | ) | ||||
Acquisitions, divestitures and other investing activities | 307,597 | (1,325,039 | ) | |||||
Net cash provided by (used in) investing activities | 194,151 | (1,442,786 | ) | |||||
Cash flows from financing activities: | ||||||||
Net proceeds/payments of long-term borrowings | (241,308 | ) | 1,631,665 | |||||
Net change in funding under the Receivables Facility | 390,000 | 136,050 | ||||||
Payments of dividends | (27,161 | ) | (25,779 | ) | ||||
Proceeds from issuance of common stock | 1,077 | 4,929 | ||||||
Repurchase of stock | (50,000 | ) | (24,410 | ) | ||||
Other financing activities | (24,489 | ) | (21,354 | ) | ||||
Net cash provided by financing activities | 48,119 | 1,701,101 | ||||||
Increase (decrease) in cash and cash equivalents | 34,856 | (53,134 | ) | |||||
Cash and cash equivalents, beginning of period | 215,025 | 238,797 | ||||||
Cash and cash equivalents, end of period | $ | 249,881 | $ | 185,663 | ||||
ARAMARK AND SUBSIDIARIES | ||||||||||||||||||||
RECONCILIATION OF NON-GAAP MEASURES | ||||||||||||||||||||
ADJUSTED CONSOLIDATED OPERATING INCOME MARGIN | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
(In thousands) | ||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||
December 28, 2018 | ||||||||||||||||||||
FSS United States | FSS International | Uniform | Corporate |
Aramark and |
||||||||||||||||
Revenue (as reported) | $ | 2,660,356 | $ | 953,122 | $ | 651,871 | $ | 4,265,349 | ||||||||||||
Operating Income (as reported) | $ | 363,751 | $ | 11,456 | $ | 52,694 | $ | (54,539 | ) | $ | 373,362 | |||||||||
Operating Income Margin (as reported) | 13.67 | % | 1.20 | % | 8.08 | % | 8.75 | % | ||||||||||||
Revenue (as reported) | $ | 2,660,356 | $ | 953,122 | $ | 651,871 | $ | 4,265,349 | ||||||||||||
Effect of Currency Translation | 1,823 | 55,407 | 2,234 | 59,464 | ||||||||||||||||
Adjusted Revenue | $ | 2,662,179 | $ | 1,008,529 | $ | 654,105 | $ | 4,324,813 | ||||||||||||
Revenue Growth (as reported) | 0.41 | % | 4.40 | % | 61.91 | % | 7.57 | % | ||||||||||||
Adjusted Revenue Growth | 2.75 | % | 10.47 | % | 62.47 | % | 10.71 | % | ||||||||||||
Operating Income (as reported) | $ | 363,751 | $ | 11,456 | $ | 52,694 | $ | (54,539 | ) | $ | 373,362 | |||||||||
Amortization of Acquisition-Related Intangible Assets | 23,243 | 1,130 | 6,019 | — | 30,392 | |||||||||||||||
Severance and Other Charges | 9,955 | 17,945 | 493 | 5,835 | 34,228 | |||||||||||||||
Merger and Integration Related Charges | 2,096 | — | 6,513 | 8 | 8,617 | |||||||||||||||
Gain on sale of Healthcare Technologies | (157,309 | ) | — | — | — | (157,309 | ) | |||||||||||||
Gains, Losses and Settlements impacting comparability | (9,843 | ) | 2,219 | — | 15,010 | 7,386 | ||||||||||||||
Adjusted Operating Income* | $ | 231,893 | $ | 32,750 | $ | 65,719 | $ | (33,686 | ) | $ | 296,676 | |||||||||
Effect of Currency Translation | 411 | 1,990 | 204 | — | 2,605 | |||||||||||||||
Adjusted Operating Income (Constant Currency) | $ | 232,304 | $ | 34,740 | $ | 65,923 | $ | (33,686 | ) | $ | 299,281 | |||||||||
Operating Income Growth (as reported) | 101.95 | % | (73.88 | )% | 18.49 | % | 5.75 | % | 72.16 | % | ||||||||||
Adjusted Operating Income Growth | 21.93 | % | (26.94 | )% | 42.43 | % | (0.94 | )% | 20.04 | % | ||||||||||
Adjusted Operating Income Growth (Constant Currency) | 22.15 | % | (22.51 | )% | 42.87 | % | (0.94 | )% | 21.10 | % | ||||||||||
Adjusted Operating Income Margin (Constant Currency) | 8.73 | % | 3.44 | % | 10.08 | % | 6.92 | % | ||||||||||||
Three Months Ended | ||||||||||||||||||||
December 29, 2017 | ||||||||||||||||||||
FSS United States | FSS International | Uniform | Corporate |
Aramark and |
||||||||||||||||
Revenue (as reported) | $ | 2,649,526 | $ | 912,982 | $ | 402,610 | $ | 3,965,118 | ||||||||||||
Effect of Divestitures | (58,547 | ) | — | — | (58,547 | ) | ||||||||||||||
Adjusted Revenue | $ | 2,590,979 | $ | 912,982 | $ | 402,610 | $ | 3,906,571 | ||||||||||||
Operating Income (as reported) | $ | 180,118 | $ | 43,855 | $ | 44,472 | $ | (51,574 | ) | $ | 216,871 | |||||||||
Amortization of Acquisition-Related Intangible Assets | 21,202 | 974 | 457 | — | 22,633 | |||||||||||||||
Severance and Other Charges | 643 | — | — | 5,842 | 6,485 | |||||||||||||||
Effect of Divestitures | (5,126 | ) | — | — | — | (5,126 | ) | |||||||||||||
Merger and Integration Related Charges | 2,854 | — | 2,958 | 13,559 | 19,371 | |||||||||||||||
Gains, Losses and Settlements impacting comparability | (9,512 | ) | — | (1,746 | ) | (1,831 | ) | (13,089 | ) | |||||||||||
Adjusted Operating Income* | $ | 190,179 | $ | 44,829 | $ | 46,141 | $ | (34,004 | ) | $ | 247,145 | |||||||||
Operating Income Margin (as reported) | 6.80 | % | 4.80 | % | 11.05 | % | 5.47 | % | ||||||||||||
Adjusted Operating Income Margin | 7.34 | % | 4.91 | % | 11.46 | % | 6.33 | % | ||||||||||||
* Beginning in fiscal 2019, the definition of AOI changed. AOI for the three months ended December 29, 2017 has been calculated based on this new definition. See page 4 for the new definition of AOI. |
ARAMARK AND SUBSIDIARIES | ||||||||
RECONCILIATION OF NON-GAAP MEASURES | ||||||||
ADJUSTED NET INCOME & ADJUSTED EPS | ||||||||
(Unaudited) | ||||||||
(In thousands, except per share amounts) | ||||||||
Three Months Ended | ||||||||
December 28, 2018 | December 29, 2017 | |||||||
Net Income Attributable to Aramark Stockholders (as reported) | $ | 250,682 | $ | 292,284 | ||||
Adjustment: | ||||||||
Amortization of Acquisition-Related Intangible Assets | 30,392 | 22,633 | ||||||
Severance and Other Charges | 34,228 | 6,485 | ||||||
Effect of Divestitures | — | (5,126 | ) | |||||
Merger and Integration Related Charges | 8,617 | 19,371 | ||||||
Gains, Losses and Settlements impacting comparability | 7,386 | (13,089 | ) | |||||
Gain on sale of Healthcare Technologies | (157,309 | ) | — | |||||
Effects of Refinancing on Interest and Other Financing Costs, net | — | 12,439 | ||||||
Effect of Tax Reform on Provision for Income Taxes | (11,317 | ) | (183,808 | ) | ||||
Tax Impact of Adjustments to Adjusted Net Income | (3,143 | ) | (12,326 | ) | ||||
Adjusted Net Income | $ | 159,536 | $ | 138,863 | ||||
Effect of Currency Translation, net of Tax | 2,499 | — | ||||||
Adjusted Net Income (Constant Currency) | $ | 162,035 | $ | 138,863 | ||||
Earnings Per Share (as reported) | ||||||||
Net Income Attributable to Aramark Stockholders (as reported) | $ | 250,682 | $ | 292,284 | ||||
Diluted Weighted Average Shares Outstanding | 253,656 | 252,244 | ||||||
$ | 0.99 | $ | 1.16 | |||||
Earnings Per Share Growth (as reported) | (14.66 | )% | ||||||
Adjusted Earnings Per Share | ||||||||
Adjusted Net Income* | $ | 159,536 | $ | 138,863 | ||||
Diluted Weighted Average Shares Outstanding | 253,656 | 252,244 | ||||||
$ | 0.63 | $ | 0.55 | |||||
Adjusted Earnings Per Share Growth | 14.55 | % | ||||||
Adjusted Earnings Per Share (Constant Currency) | ||||||||
Adjusted Net Income (Constant Currency) | $ | 162,035 | $ | 138,863 | ||||
Diluted Weighted Average Shares Outstanding | 253,656 | 252,244 | ||||||
$ | 0.64 | $ | 0.55 | |||||
Adjusted Earnings Per Share Growth (Constant Currency) | 16.36 | % | ||||||
|
* Beginning in fiscal 2019, the definition of Adjusted Net Income changed. Adjusted Net Income for the three months ended December 29, 2017 has been calculated based on this new definition. See page 4 for the new definition of Adjusted Net Income. |
ARAMARK AND SUBSIDIARIES | ||||||||
RECONCILIATION OF NON-GAAP MEASURES | ||||||||
NET DEBT TO COVENANT ADJUSTED EBITDA | ||||||||
(Unaudited) | ||||||||
(In thousands) | ||||||||
Twelve Months Ended | ||||||||
December 28, 2018 | December 29, 2017 | |||||||
Net Income Attributable to Aramark Stockholders (as reported) | $ | 526,283 | $ | 540,868 | ||||
Interest and Other Financing Costs, net | 360,940 | 298,037 | ||||||
(Benefit) Provision for Income Taxes | 92,845 | (56,190 | ) | |||||
Depreciation and Amortization | 613,054 | 515,534 | ||||||
Share-based compensation expense(1) | 90,349 | 65,420 | ||||||
Unusual or non-recurring (gains) and losses(2) | (157,309 | ) | — | |||||
Pro forma EBITDA for equity method investees(3) | 14,150 | 13,590 | ||||||
Pro forma EBITDA for certain transactions(4) | (18,218 | ) | 82,887 | |||||
Other(5) | 183,884 | 60,477 | ||||||
Covenant Adjusted EBITDA | $ | 1,705,978 | $ | 1,520,623 | ||||
Net Debt to Covenant Adjusted EBITDA | ||||||||
Total Long-Term Borrowings | $ | 7,377,147 | $ | 7,047,681 | ||||
Less: Cash and cash equivalents | $ | 249,881 | $ | 185,663 | ||||
Net Debt | $ | 7,127,266 | $ | 6,862,018 | ||||
Covenant Adjusted EBITDA | $ | 1,705,978 | $ | 1,520,623 | ||||
Net Debt/Covenant Adjusted EBITDA | 4.2 | 4.5 | ||||||
(1) Represents compensation expense related to the Company's issuances of share-based awards. |
(2) Represents the gain on sale of Healthcare Technologies. |
(3) Represents our estimated share of EBITDA primarily from our AIM Services Co., Ltd. equity method investment, not already reflected in our net income attributable to Aramark stockholders. EBITDA for this equity method investee is calculated in a manner consistent with Covenant Adjusted EBITDA but does not represent cash distributions received from this investee. |
(4) Represents the annualizing of net EBITDA from certain acquisitions and divestitures made during the period. |
(5) "Other" for the twelve months ended December 28, 2018 and December 29, 2017, respectively, includes organizational streamlining initiatives ($58.5 million costs and $18.4 million costs), the impact of the change in fair value related to certain gasoline and diesel agreements ($10.5 million loss and $3.3 million loss), expenses related to merger and integration related charges ($67.4 million and $21.7 million) and other miscellaneous expenses. "Other" for the twelve months ended December 28, 2018 also includes property and other asset write-downs related to a joint venture liquidation and acquisition ($7.5 million), duplicate rent charges, moving costs, opening costs to build out and ready the Company's new headquarters while occupying its existing headquarters and closing costs ($14.3 million), banker fees and other charges related to the sale of Healthcare Technologies ($9.9 million), certain environmental charges ($5.0 million) and the impact of hyperinflation in Argentina ($3.8 million). "Other" for the twelve months ended December 29, 2017 also includes the estimated impact of natural disasters ($17.0 million, of which $6.1 million related to asset write-downs). |
ARAMARK AND SUBSIDIARIES | ||||
RECONCILIATION OF NON-GAAP MEASURES | ||||
LEGACY BUSINESS REVENUE | ||||
(Unaudited) | ||||
(In thousands) | ||||
Three Months Ended | ||||
December 28, 2018 | ||||
Revenue (as reported) | $ | 4,265,349 | ||
Effect of Currency Translation | 59,464 | |||
Adjusted Revenue | 4,324,813 | |||
Effect of AmeriPride and Avendra Acquisitions | (171,654 | ) | ||
Changes pursuant to ASC 606, Revenue from Contracts with Customers | (88,507 | ) | ||
Legacy Business Revenue | $ | 4,064,652 | ||
Three Months Ended | ||||
December 29, 2017 | ||||
Revenue (as reported) | $ | 3,965,118 | ||
Effect of Divestitures | (58,547 | ) | ||
Legacy Business Revenue | $ | 3,906,571 | ||
Revenue Growth (as reported) | 7.57 | % | ||
Legacy Business Revenue Growth | 4.05 | % | ||
View source version on businesswire.com: https://www.businesswire.com/news/home/20190205005484/en/
Source:
Media Inquiries:
Karen Cutler
(215) 238-4063
Cutler-Karen@aramark.com
Investor Inquiries:
Kate Pearlman
(215) 409-7287
Pearlman-Kate@aramark.com