NEW YORK, June 09, 2025 (GLOBE NEWSWIRE) -- The following statement is being issued by Levi & Korsinsky, LLP: To: All persons or entities who purchased or otherwise acquired securities of Vestis Corporation (“Vestis” or the “Company”) (NYSE: VSTS) between May 2, 2024, to May 6, 2025, both dates inclusive. You are hereby notified that the class action lawsuit Cesar Torres v. Vestis Corporation, et al. (Case No. 1:25-cv-04844) has been commenced in the United States District Court for the Southern District of ...

Group 1 - The article discusses the challenges faced by Vestis Corporation (NYSE: VSTS), including sluggish sales and margins, despite a belief that stability was arriving in the summer of the previous year [1] - The investing group "Value In Corporate Events" provides members with opportunities to capitalize on significant corporate events such as IPOs, mergers & acquisitions, and earnings reports, covering 10 major events a month [1]

Financial Data and Key Metrics Changes - Second quarter revenue was $665 million, a decline of approximately $18 million or 2.7% from Q1, which was significantly below the expected growth [6][16] - Adjusted EBITDA was $63 million or 9.4% of revenue, a reduction of 250 basis points compared to Q1 [6][22] - Net loss for the quarter was $28 million, with a diluted loss per share of $0.21; on an adjusted basis, the net loss was $6 million with a diluted loss per share of $0.05 [22] Business Line Data and Key Metrics Changes - Revenue from rental business decreased by $11 million, while direct sales declined by $7 million [17][20] - New business contributed $17 million or 2.4% of revenue growth during the quarter, with a 35% increase in recurring revenue year over year [17][18] - Customer retention was 92.4% at the end of Q2, consistent with previous years [18] Market Data and Key Metrics Changes - The decline in revenue was attributed to lost business exceeding new business, although the gap narrowed by approximately 10% [11][18] - Revenue from existing customers declined by approximately $8 million compared to Q1, including a $4 million decrease in L and R revenue [19] Company Strategy and Development Direction - The company is focused on improving customer service and operational effectiveness, with a customer-centric approach being emphasized [12][13] - A new CEO will be stepping in to drive profitable growth and ensure a seamless transition [4][5] - The company is committed to deleveraging and disciplined capital allocation, with an amendment to the credit agreement providing additional flexibility [14][26] Management's Comments on Operating Environment and Future Outlook - Management expressed disappointment with Q2 performance but noted positive trends in recent months, including sequential monthly revenue growth [15][29] - The company is optimistic about entering Q3 in a stronger position, expecting revenue growth and margin expansion [15][30] Other Important Information - The company has suspended annual guidance and shifted to quarterly guidance due to recent performance and macroeconomic uncertainties [28][69] - A significant investment of $30 million in inventory was made to support new customer installations [23][44] Q&A Session Summary Question: Confidence in Q3 earnings guidance - Management expressed confidence in the Q3 guidance, citing improved trends and a better understanding of financial metrics [35][36] Question: Actions on cost structure - Management indicated ongoing efforts to utilize assets efficiently while balancing investments in customer service [39][45] Question: Service issues and competitive dynamics - Management acknowledged ongoing service issues but emphasized renewed focus on improvements and customer-centric culture [50][51] Question: Cultural transformation timeline - Management stated that cultural transformation will take time and will be influenced by the new CEO [72] Question: Update on strategic advisors - Management confirmed no active activity regarding strategic advisors at this time [70] Question: Year-over-year revenue decline causes - Management attributed the decline to lost business exceeding new business, service issues, and a significant loss of a large national account [88]

Financial Data and Key Metrics Changes - Second quarter revenue was $665 million, a decline of approximately $18 million or 2.7% from Q1, which was significantly below the expected growth [6][16] - Adjusted EBITDA was $63 million or 9.4% of revenue, a reduction of 250 basis points compared to Q1, reflecting the impact of lower revenue on the company's fixed cost structure [6][22] - Net loss for the quarter was $28 million, with a diluted loss per share of $0.21, while adjusted net loss was $6 million with a diluted loss per share of $0.05 [22] Business Line Data and Key Metrics Changes - Revenue from rental business decreased by $11 million, while direct sales declined by $7 million, with the latter reflecting typical seasonality [6][17] - New business contributed $17 million or 2.4% of revenue growth during the quarter, with a 35% year-over-year increase in recurring revenue installations [17][18] - Customer retention rate was 92.4% at the end of Q2, consistent with previous years, despite a decline in revenue from existing customers by approximately $8 million [18][19] Market Data and Key Metrics Changes - The company experienced a significant decline in volume as some customers adjusted their demand seasonally, particularly in workplace supplies [8][19] - The impact of lost business was approximately $20 million, which improved by roughly 10% compared to Q1 [18] - The company noted that the decline in direct sales was primarily due to the loss of a large national account customer, which represented approximately $26 million in annual revenue [20] Company Strategy and Development Direction - The company is focused on improving customer service and operational effectiveness, with a strong emphasis on a customer-centric approach [12][13] - There is a commitment to deleveraging and disciplined capital allocation, with an amendment to the credit agreement providing additional flexibility [14][26] - The company is optimistic about entering Q3 in a stronger position, with expectations for revenue growth and margin expansion [15][29] Management's Comments on Operating Environment and Future Outlook - Management expressed disappointment with Q2 performance but highlighted positive trends in recent months, including sequential monthly revenue growth [10][29] - The new CEO, effective June 2, 2025, is expected to drive profitable growth and ensure a seamless transition [4][5] - Management is confident in the guidance for Q3, citing improved trends and a better understanding of financial metrics [35][36] Other Important Information - The company generated $7 million in operating cash flow, but cash flow was negative due to lower profit and higher working capital investments [23] - The company has a strong liquidity position with no debt maturities until 2027 and $293 million of available liquidity [26] - The company has suspended annual guidance and shifted to quarterly guidance due to recent performance and macroeconomic uncertainties [28][68] Q&A Session Summary Question: Confidence in Q3 earnings guidance - Management expressed confidence in the Q3 guidance, noting that trends support this outlook and that they are monitoring sustainability [35][36] Question: Actions on cost structure - Management indicated ongoing efforts to better utilize assets and facilities while balancing investments to retain customers and improve service [39][45] Question: Service issues and competitive dynamics - Management acknowledged ongoing service issues but emphasized improvements in organization and customer focus to address these challenges [50][51] Question: Cultural transformation timeline - Management stated that cultural transformation will take time and is focused on accountability and effective communication within the organization [70][71] Question: Update on strategic advisors - Management confirmed there is currently no active activity regarding strategic advisors [69] Question: Year-over-year revenue decline causes - Management attributed the revenue decline to lost business exceeding new business, lower volume with existing customers, and the loss of a significant national account [86][87]

Vestis (VSTS) Q2 2025 Earnings Call May 07, 2025 09:00 AM ET Speaker0 Welcome to the Vestas Corporation Fiscal Second Quarter twenty twenty five Earnings Conference Call. At this time, all participants have been placed on a listen only mode and the floor will be open for your questions following the presentation. I would now like to turn the call over to Michael Aurelio, Vice President, Investor Relations. Speaker1 Thank you, operator, and thank you all for joining us. With me are Philip Holliman, Interim E ...

Company Performance - Vestis reported a quarterly loss of $0.05 per share, missing the Zacks Consensus Estimate of $0.15, and compared to earnings of $0.13 per share a year ago, representing an earnings surprise of -133.33% [1] - The company posted revenues of $665.25 million for the quarter ended March 2025, missing the Zacks Consensus Estimate by 3.79%, and down from $705.37 million year-over-year [2] - Over the last four quarters, Vestis has surpassed consensus EPS estimates two times and topped consensus revenue estimates just once [2] Stock Outlook - Vestis shares have declined approximately 41.7% since the beginning of the year, contrasting with the S&P 500's decline of -3.9% [3] - The current consensus EPS estimate for the coming quarter is $0.19 on revenues of $709.93 million, and for the current fiscal year, it is $0.70 on revenues of $2.81 billion [7] Industry Context - The Uniform and Related industry, to which Vestis belongs, is currently in the top 9% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% of industries [8]

Financial Performance - Revenue for Q2 2025 was $665 million, a decrease of 6% year-over-year from $705 million in Q2 2024[5] - Gross profit for Q2 2025 was $175 million, a decrease of 13% year-over-year from $201 million in Q2 2024[5] - Adjusted EBITDA for Q2 2025 was $48 million, a decrease of 45% year-over-year from $87 million in Q2 2024[5] - Adjusted EPS for Q2 2025 was a loss of $005, compared to earnings of $013 in Q2 2024[5] - Free cash flow for Q2 2025 was negative $7 million, compared to positive $63 million in Q2 2024[5] Revenue Drivers and Trends - The year-over-year revenue decline was driven by $18 million in lost business exceeding new customer growth, $6 million in reduced volume with existing customers, $7 million in lower direct sales, and $5 million from one-time customer exit billings[8] - Revenue improved each month in Q2 2025, with continued improvement in April[8] - The company experienced a sequential revenue decline of approximately $18 million, with $11 million from rental and $7 million from direct sales[14] - Installed recurring revenue from new customers increased by 10% quarter-over-quarter and 35% year-over-year, skewed toward the second half of Q2[17] Guidance and Future Focus - Revenue guidance for Q3 2025 is $674 million to $682 million[8] - Adjusted EBITDA for Q3 2025 is expected to be at least $63 million, representing growth versus Q2[8] - The company is focused on strengthening its core business, prioritizing customer retention, and driving high-quality growth with new customers[37] - The company aims to operate within a target net leverage range of less than 30x and maintain a strong liquidity position, with $293 million of available liquidity at the end of Q2[39]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 28, 2025 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 001-41783 (Registrant's telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: | Title of each class | Trading Sym ...

[Amendment No. 2 to Credit Agreement](index=1&type=section&id=Amendment%20No.%202%20to%20Credit%20Agreement) This amendment, dated May 1, 2025, modifies the Credit Agreement from September 29, 2023, between VESTIS CORPORATION, its Canadian subsidiary, lenders, and JPMorgan Chase Bank, N.A., becoming effective upon specific conditions [Introduction and Effectiveness](index=1&type=section&id=Introduction%20and%20Effectiveness) This document, dated May 1, 2025, amends the Credit Agreement between VESTIS CORPORATION, its Canadian subsidiary, lenders, and JPMorgan Chase Bank, N.A., outlining terms and effectiveness conditions - The amendment, dated **May 1, 2025**, modifies the Credit Agreement originally established on **September 29, 2023**[1](index=1&type=chunk) - The parties include **VESTIS CORPORATION** (U.S. Borrower), **CANADIAN LINEN AND UNIFORM SERVICE CORP.** (Canadian Borrower), subsidiary guarantors, lenders, and **JPMorgan Chase Bank, N.A.** as agent[1](index=1&type=chunk) - The amendment becomes effective upon satisfaction of conditions including execution by required parties, receipt of an Officers' Certificate, payment of fees, accurate representations, and absence of default[3](index=3&type=chunk)[4](index=4&type=chunk)[5](index=5&type=chunk) - The amendment and Credit Agreement are governed by the laws of the **State of New York**[9](index=9&type=chunk) [Credit Agreement](index=15&type=section&id=Credit%20Agreement) This agreement, dated September 29, 2023, establishes credit facilities for VESTIS CORPORATION and its Canadian subsidiary, detailing definitions, credit mechanics, representations, conditions, covenants, and default provisions [Preamble](index=21&type=section&id=Preamble) The Credit Agreement, dated September 29, 2023, outlines initial credit facilities for VESTIS CORPORATION and its Canadian subsidiary, including Term A-1, Term A-2, and Revolving Commitments, with proceeds primarily for intercompany loan repayment and general corporate purposes Initial Credit Facilities | Facility | Borrower | Amount (USD) | | :--- | :--- | :--- | | Term A-1 Facility | U.S. Borrower | $800 million | | Term A-2 Facility | U.S. Borrower | $700 million | | Initial Revolving Commitments | Borrowers | $300 million | - Initial Term Loan proceeds funded a **$1.486 billion** intercompany loan to AUCA Group for repaying a note owed to Aramark Services, Inc., and covering related expenses[68](index=68&type=chunk) - Initial Revolving Loan proceeds are designated for **general corporate purposes**[68](index=68&type=chunk) [ARTICLE I: DEFINITIONS](index=21&type=section&id=ARTICLE%20I%20DEFINITIONS) This article defines all capitalized terms within the Credit Agreement, encompassing financial, legal, and operational terms, including loan types, key financial metrics, events, and interest rate benchmarks - A **Change of Control** is defined as the acquisition of **40% or more** of the U.S. Borrower's Voting Stock by any person or group[153](index=153&type=chunk) - EBITDA definition allows add-backs to Consolidated Net Income, including taxes, interest, D&A, restructuring charges, and projected cost savings up to **20% of EBITDA**[200](index=200&type=chunk)[201](index=201&type=chunk) - Key leverage ratios defined for covenants include **Consolidated First Lien Net Leverage Ratio**, **Consolidated Secured Net Leverage Ratio**, and **Consolidated Total Net Leverage Ratio**[166](index=166&type=chunk)[170](index=170&type=chunk)[173](index=173&type=chunk) - The **Maximum Incremental Amount** for new facilities is the sum of a fixed basket (greater of **$375 million** or **100% of EBITDA**), voluntary prepayments, and an unlimited amount subject to a pro forma **Consolidated First Lien Net Leverage Ratio of 4.00 to 1.00**[296](index=296&type=chunk) [ARTICLE II: THE CREDITS](index=90&type=section&id=ARTICLE%20II%20THE%20CREDITS) This article details credit facility mechanics, including lender commitments, borrowing procedures, repayment schedules for Term A-2 and Term B-1 loans, optional and mandatory prepayments, fees, interest calculations, and provisions for incremental facilities and defaulting lenders Term Loan Repayment Schedule | Loan Facility | Quarterly Amortization | Commencement | Final Maturity Date | | :--- | :--- | :--- | :--- | | Term A-2 Loans | 1.25% of original principal | December 2023 | September 29, 2028 | | Term B-1 Loans | 0.25% of original principal | June 2024 | February 22, 2031 | - Mandatory prepayments are required from a percentage of **Excess Cash Flow (ECF)**, ranging from **0% to 50%** based on the **Consolidated Secured Net Leverage Ratio**[199](index=199&type=chunk)[533](index=533&type=chunk) - A prepayment premium of **1.0%** applies to any Repricing Transaction involving Term B-1 Loans if within **six months** of Amendment No. 1 Effective Date[530](index=530&type=chunk) - The agreement allows for **New Term Commitments** and **New Revolving Commitments** up to the **Maximum Incremental Amount**, subject to no existing default and pro forma compliance with financial covenants[606](index=606&type=chunk) [ARTICLE III: REPRESENTATIONS AND WARRANTIES](index=125&type=section&id=ARTICLE%20III%20REPRESENTATIONS%20AND%20WARRANTIES) This article details Loan Parties' representations and warranties, confirming legal and financial standing, including organization, authority, compliance with laws, solvency, validity of security interests, and absence of Material Adverse Effect since February 22, 2023 - The Loan Parties represent no **Material Adverse Effect** has occurred since **February 22, 2023**[627](index=627&type=chunk) - The company represents it is **solvent** on a consolidated basis post-Transactions, with assets exceeding liabilities and ability to pay debts as they mature[647](index=647&type=chunk) - The Loan Parties represent Collateral Documents create **valid and perfected first-priority liens** on the Collateral, securing obligations[652](index=652&type=chunk) - The company represents policies are implemented to ensure compliance with **Anti-Corruption Laws** and **Sanctions**, prohibiting loan proceeds use in violation[657](index=657&type=chunk) [ARTICLE IV: CONDITIONS](index=130&type=section&id=ARTICLE%20IV%20CONDITIONS) This article outlines conditions for credit agreement effectiveness and subsequent extensions, requiring executed loan documents, legal opinions, financial statements, fee payments, and continued accuracy of representations and warranties, plus absence of default - Initial effectiveness required Agent's receipt of executed Loan Documents, favorable legal opinions, financial statements, closing certificates, and all required fees[661](index=661&type=chunk)[663](index=663&type=chunk)[664](index=664&type=chunk)[666](index=666&type=chunk) - A key effectiveness condition was evidence of Loan Parties' obligations and liens under the **RemainCo Credit Agreement** being released upon Intermediate Distributions[670](index=670&type=chunk) - Each subsequent borrowing or letter of credit issuance requires all representations and warranties to be true and correct, and no continuing Default or Event of Default[673](index=673&type=chunk) [ARTICLE V: AFFIRMATIVE COVENANTS](index=133&type=section&id=ARTICLE%20V%20AFFIRMATIVE%20COVENANTS) This article details Loan Parties' ongoing obligations, including timely delivery of financial statements and compliance certificates, notice of material events, maintaining corporate existence, paying taxes, legal compliance, permitted use of loan proceeds, and granting security interests in new assets and subsidiaries - The U.S. Borrower must deliver audited annual financial statements within **90 days** of fiscal year-end (**120 days for FY2024**) and unaudited quarterly statements within **45 days** of quarter-end[677](index=677&type=chunk) - The U.S. Borrower must promptly notify the Agent of any **Event of Default** or **Default**[683](index=683&type=chunk) - Loan proceeds must be used only for specified purposes, not violating margin regulations, **anti-corruption laws**, or **sanctions**[691](index=691&type=chunk)[694](index=694&type=chunk) - The U.S. Borrower must cause new Domestic Subsidiaries (unless excluded) to become **Loan Guarantors** and grant liens on their property within **60 days** of becoming a subsidiary[697](index=697&type=chunk) [ARTICLE VI: NEGATIVE COVENANTS](index=140&type=section&id=ARTICLE%20VI%20NEGATIVE%20COVENANTS) This article imposes restrictions on Loan Parties, including limitations on indebtedness, liens, restricted payments, affiliate transactions, and asset disposals, and outlines amended financial covenants requiring a maximum Consolidated Total Net Leverage Ratio and minimum Interest Coverage Ratio - The company is generally prohibited from incurring additional debt unless its pro forma **Consolidated Total Net Leverage Ratio** is at or below **4.50 to 1.00**, subject to exceptions[710](index=710&type=chunk) - The company and subsidiary guarantors are prohibited from creating or incurring any liens on their assets, other than **Permitted Liens**[725](index=725&type=chunk) - **Restricted Payments** (dividends, share repurchases, junior debt prepayments) are limited but permitted under various baskets, including one based on an **Applicable Amount** and another allowing unlimited payments if pro forma **Consolidated Total Net Leverage Ratio** is below **3.50 to 1.00**[735](index=735&type=chunk)[736](index=736&type=chunk)[737](index=737&type=chunk) Amended Financial Covenants (Section 6.10) | Covenant | Requirement | Test Period | | :--- | :--- | :--- | | Consolidated Total Net Leverage Ratio | ≤ 5.00 to 1.00 | Fiscal quarter ending July 3, 2026 | | Consolidated Total Net Leverage Ratio | ≤ 4.75 to 1.00 | Fiscal quarter ending October 2, 2026 | | Consolidated Total Net Leverage Ratio | ≤ 4.50 to 1.00 | Fiscal quarters ending on or after October 2, 2026 | | Interest Coverage Ratio | ≥ 2.00 to 1.00 | Each Test Period | [ARTICLE VII: EVENTS OF DEFAULT](index=160&type=section&id=ARTICLE%20VII%20EVENTS%20OF%20DEFAULT) This article defines events constituting a default, including payment failures, covenant violations, misrepresentation, cross-default on material indebtedness, bankruptcy, and change of control, granting lenders the right to accelerate loans upon occurrence - **Events of Default** include non-payment of principal or interest, breach of covenants, misrepresentation, cross-default on other **Material Indebtedness**, bankruptcy, and a **Change of Control**[760](index=760&type=chunk)[761](index=761&type=chunk)[763](index=763&type=chunk) - A breach of financial covenants in **Section 6.10** will not constitute an **Event of Default** for **Term B-1 Loans** until revolving and Term A-2 facility lenders exercise remedies[760](index=760&type=chunk) - Upon an **Event of Default**, the Agent, at **Required Lenders'** request, may terminate commitments and declare all outstanding loans and obligations immediately due and payable[765](index=765&type=chunk) [ARTICLE VIII: THE AGENT](index=163&type=section&id=ARTICLE%20VIII%20THE%20AGENT) This article outlines the role, powers, and protections of the Administrative Agent, JPMorgan Chase Bank, N.A., establishing its administrative authority, limiting its liability, and detailing its right to rely on information, resign, and appoint a successor - Lenders and Issuing Banks irrevocably appoint **JPMorgan Chase Bank, N.A.** as the administrative and collateral agent[768](index=768&type=chunk) - The Agent's duties are primarily mechanical and administrative, not fiduciary, and it is protected from liability except for **gross negligence**, **bad faith**, or **willful misconduct**[770](index=770&type=chunk)[771](index=771&type=chunk)[779](index=779&type=chunk) - The Agent may resign with **30 days' notice**, allowing **Required Lenders** to appoint a successor, subject to U.S. Borrower's approval if no Event of Default exists[783](index=783&type=chunk) [ARTICLE IX: MISCELLANEOUS](index=171&type=section&id=ARTICLE%20IX%20MISCELLANEOUS) This article contains standard legal and operational clauses, including notice procedures, waiver and amendment rules, borrower indemnification obligations, loan assignment processes, New York governing law and jurisdiction, jury trial waiver, and confidentiality obligations - Amendments generally require **Required Lenders'** consent, but changes to fundamental economic terms require consent of each directly affected Lender[812](index=812&type=chunk) - Borrowers must pay all reasonable out-of-pocket expenses of the Agent and indemnify Credit Parties against financing-related losses, except those from indemnitee's **gross negligence** or **willful misconduct**[821](index=821&type=chunk)[823](index=823&type=chunk) - Lenders can assign loans to eligible institutions with U.S. Borrower's (unless default exists) and Agent's consent; U.S. Borrower and subsidiaries may purchase Term Loans via auctions or open market under specific conditions[830](index=830&type=chunk)[842](index=842&type=chunk) - The agreement is governed by **New York State law**, and all parties waive their right to a **jury trial** in any Loan Document-related legal proceeding[855](index=855&type=chunk)[862](index=862&type=chunk) [ARTICLE X: LOAN GUARANTY](index=193&type=section&id=ARTICLE%20X%20LOAN%20GUARANTY) This article establishes the joint and several, absolute, and unconditional guarantee by each Loan Guarantor of all Secured Obligations, including the U.S. Borrower's guarantee of Foreign Borrowers' obligations, detailing the nature of the guarantee and conditions for guarantor release - Each **Loan Guarantor** provides a **joint and several**, **absolute**, and **unconditional guarantee** for all **Secured Obligations**[886](index=886&type=chunk) - The U.S. Borrower also acts as a guarantor for **Foreign Borrowers'** obligations[887](index=887&type=chunk) - The guarantee is one of **payment**, not collection, and guarantors waive most defenses, including requiring the Agent to first pursue the primary borrower or collateral[889](index=889&type=chunk)[893](index=893&type=chunk) - A **Subsidiary Guarantor** is automatically released upon ceasing to be a Domestic Subsidiary, being designated an **Unrestricted Subsidiary**, or becoming an **Immaterial Subsidiary** (subject to aggregate limits)[902](index=902&type=chunk)

Company Overview - Vestis Corporation (NYSE: VSTS) has reported stable and predictable revenue growth and has been operating in the same industry for over 75 years, indicating a strong foundation and potential for future growth [1] Industry Insights - The accumulated know-how from over 75 years of operation is expected to accelerate revenue growth in the future, showcasing the importance of experience in the industry [1] Investment Strategy - The focus is on small and medium-cap companies in Europe, the United States, and South America, with an emphasis on mature industries such as mining, oil and gas, and real estate [1] - The investment strategy includes M&A deals, deep value investments, and dividend investing, targeting an internal rate of return of approximately 5%-7% [1]