Aramark(US:ARMK)2020-05-05 20:25Financial Performance - Revenue for the three months ended March 27, 2020, was $3,731,559, a decrease of 6.7% compared to $3,999,987 for the same period in 2019[6]. - Net loss attributable to Aramark stockholders for the three months ended March 27, 2020, was $(202,260), compared to net income of $29,353 for the same period in 2019[6]. - Operating loss for the three months ended March 27, 2020, was $(97,676), a significant decline from operating income of $122,835 in the prior year[6]. - Comprehensive loss attributable to Aramark stockholders for the three months ended March 27, 2020, was $(310,505), compared to a comprehensive income of $20,698 in the same period last year[9]. - Total revenue for the six months ended March 27, 2020, was $7,985.2 million, down 3.4% from $8,265.3 million in the prior year[51]. - The company experienced a net loss of $(56,138) for the six months ended March 27, 2020, compared to a net income of $279,988 for the same period in 2019[10]. - The company reported a net cash used in investing activities of $(196,588) million, contrasting with $58,195 million provided in the prior year[12]. - The company reported a comprehensive income of $229,609,000 attributable to Aramark stockholders[92]. Goodwill Impairment - The company reported a goodwill impairment of $198,600 for the three months ended March 27, 2020, indicating potential challenges in asset valuation[6]. - The company recognized a non-cash impairment charge of $198.6 million due to a decline in fair value of a reporting unit, with the remaining goodwill balance for that unit at $86.2 million[30]. - Goodwill impairment recorded was $198,600 for the six months ended March 27, 2020[88]. - The company incurred $198.6 million in goodwill impairment during the three months ended March 27, 2020, compared to no impairment in the same period last year[106]. COVID-19 Impact - The company anticipates ongoing challenges due to the impact of COVID-19 on its operations and financial performance, which may affect future earnings and strategic initiatives[5]. - The COVID-19 pandemic is estimated to have impacted revenue by $325 million and operating income by $70 million for the three and six months ended March 27, 2020[101]. - The total decline in revenue related to COVID-19 was estimated at approximately $325 million, impacting revenue by approximately 3.9% for the six-month period[111]. - The company has implemented several cost reduction initiatives, including renegotiations of client contracts and reductions to general corporate expenses, in response to the impacts of COVID-19[101]. Segment Performance - FSS United States segment revenue for the three months ended March 27, 2020, was $2,231.1 million, a decline of 7.7% from $2,417.0 million in the same period last year[51]. - FSS International segment revenue for the three months ended March 27, 2020, was $853.5 million, down 9.4% from $942.0 million in the prior year[51]. - The FSS United States segment reported revenue of $2,231.1 million, down from $2,417.0 million, reflecting a decline of 7.7% year-over-year[74]. - The FSS International segment experienced a revenue drop to $853.5 million from $942.0 million, representing a decrease of 9.4%[74]. Cash Flow and Liquidity - Cash flows from operating activities resulted in a net cash used of $(91,626) million, a significant decrease from $88,983 million provided in the prior year[12]. - Cash and cash equivalents at the end of the period increased to $1,202,964 million, compared to $195,387 million at the end of the previous year[12]. - The company had approximately $1,203.0 million in cash and cash equivalents and $4.7 million available under the senior secured revolving credit facility as of March 27, 2020[36]. - The company undertook borrowings of $948.8 million under its revolving credit facility and $400.0 million under its Receivables Facility in response to COVID-19[122]. Shareholder Actions - The company paid cash dividends of approximately $55.3 million during the six months ended March 27, 2020[65]. - The company repurchased 0.3 million shares of common stock for $6.5 million during the second quarter of fiscal 2020[65]. - The company authorized a new share repurchase program of up to $200.0 million, which will expire in July 2022[128]. Tax and Financing - The company recorded an income tax expense of approximately $3.7 million for both the three and six month periods of fiscal 2020[64]. - The effective tax rate for the three and six months ended March 27, 2020 includes tax benefits of approximately $26.9 million and $45.5 million due to excess tax benefits from equity awards[64]. - Interest and other financing costs for the three months ended March 27, 2020, increased to $99,822 from $84,178 in the same period last year, representing an 18.5% increase[6]. - The company issued $1,500.0 million aggregate principal amount of 6.375% Senior Notes due May 1, 2025, with net proceeds intended for general corporate purposes[39].