Vestis (VSTS) - 2026 Q1 - Quarterly Results

Financial Performance - Revenue for Q1 2026 totaled $663.4 million, a decrease of $20.4 million or 3.0% year-over-year[9] - Adjusted EBITDA for Q1 2026 was $70.4 million, representing 10.6% of revenue, down from $81.2 million or 11.9% in Q1 2025[11] - Net loss for Q1 2026 was $6.4 million or $(0.05) per diluted share, compared to a net income of $0.8 million or $0.01 per diluted share in Q1 2025[10] - Revenue for the three months ended January 2, 2026, was $663,388,000, a decrease of 2% from $683,780,000 for the same period in 2024[41] - Operating income for the same period was $16,578,000, down 45.5% from $30,399,000 in the prior year[41] - Net loss for the three months ended January 2, 2026, was $(6,391,000), compared to a net income of $832,000 for the same period in 2024[41] - Adjusted Basic EPS and Adjusted Diluted EPS for the current period were both $(0.05), compared to $0.01 in the prior year[41][26] - Adjusted EBITDA for the trailing twelve months ended January 2, 2026, was $246,606 thousand, down from $257,425 thousand in the previous period[51] - Adjusted net income for the three months ended January 2, 2026, was $13,129 thousand, compared to $18,149 thousand in the same period in 2024[49] - The adjusted EBITDA margin (Non-GAAP) for the three months ended January 2, 2026, was 10.6%, compared to 11.9% for the same period in 2024[49] Cash Flow and Liquidity - Free Cash Flow for Q1 2026 was $28.3 million, with Adjusted Free Cash Flow increasing by $53.9 million compared to Q1 2025[13] - Free Cash Flow for the three months ended January 2, 2026, was $37,687,000, significantly higher than $3,780,000 for the same period in 2024[45] - Cash and cash equivalents increased to $41,547,000 as of January 2, 2026, from $29,748,000 at the end of the previous quarter[43] - The company had available liquidity of $316.7 million, including $41.5 million in cash and cash equivalents[6] Debt and Liabilities - The company plans to use proceeds from the sale of non-core properties to repay debt[8] - Net debt as of January 2, 2026, was $1,288,509 thousand, slightly down from $1,310,875 thousand as of October 3, 2025[51] - Total principal debt outstanding as of January 2, 2026, was $1,161,500 thousand, compared to $1,168,500 thousand as of October 3, 2025[51] - Total liabilities decreased to $2,019,593,000 from $2,041,256,000 in the previous quarter[43] - The Net Leverage Ratio is calculated as Net Debt divided by Trailing Twelve Months Covenant Adjusted EBITDA, indicating the company's ability to meet future financial obligations[28] - The net leverage ratio (Non-GAAP) as of January 2, 2026, was 4.83, compared to 4.72 in the previous period[51] Operational Efficiency - Plant productivity improved by 7%, on-time deliveries increased by 3%, and customer complaints decreased by 12% compared to Q1 2025[7] - Revenue per Pound for the period reflects pricing and product mix relative to processing volume, providing insight into operational efficiency[37] Future Outlook - The company expects fiscal 2026 revenue to be flat to down 2% and Adjusted EBITDA to range between $285 million and $315 million[16] - Adjusted EBITDA is expected to improve approximately 5% sequentially for each remaining quarter of fiscal 2026[17] - The strategic business transformation plan is expected to generate annual operating cost savings of at least $75 million by the end of fiscal 2026[4]