Aramark(US:ARMK)2022-05-10 20:26Revenue and Income - Revenue for the three months ended April 1, 2022, was $3,860.5 million, a 37% increase from $2,819.7 million for the same period in 2021[9] - Net income attributable to Aramark stockholders for the three months ended April 1, 2022, was $35.7 million, compared to a loss of $77.6 million for the same period in 2021[9] - Total revenue for the six months ended April 1, 2022, was $7,808.8 million, an increase from $5,563.5 million for the same period in 2021[77] - Net income for the six months ended April 1, 2022, was $78.252 million, a significant improvement from a net loss of $159.043 million for the same period in 2021[15] - Comprehensive income attributable to Aramark stockholders for the six months ended April 1, 2022, was $173.6 million, compared to a loss of $106.6 million for the same period in 2021[12] Operating Performance - Operating income for the six months ended April 1, 2022, was $282.2 million, compared to a loss of $15.1 million for the same period in 2021[10] - Operating income for the three months ended April 1, 2022, was $142.0 million, compared to $5.4 million for the same period in 2021, reflecting a significant improvement[95] - Operating income increased by approximately $297.3 million during the six-month period ended April 1, 2022, driven by improved profitability from clients reopening after COVID-19 restrictions[105] Segment Performance - FSS United States segment revenue reached $2,338.3 million for the three months ended April 1, 2022, compared to $1,551.0 million in the prior year, marking a year-over-year growth of approximately 50.6%[61] - FSS International segment revenue increased to $870.9 million for the three months ended April 1, 2022, from $677.7 million in the same period of 2021, representing a growth of approximately 28.5%[61] - The Uniform segment generated revenue of $651.3 million for the three months ended April 1, 2022, compared to $591.0 million in the prior year, reflecting a growth of approximately 10.2%[61] Cash Flow and Financial Position - Net cash used in operating activities was $(128.267) million, compared to $221.861 million provided in the prior year, indicating a decline in cash flow[15] - Cash flows from investing activities resulted in a net cash outflow of $(289.819) million, up from $(175.710) million in the previous year, reflecting increased investments[15] - The company reported a decrease in cash and cash equivalents to $429.306 million at the end of the period, down from $1.400 billion a year earlier[15] - As of April 1, 2022, the company had $429.3 million of cash and cash equivalents and approximately $1,043.8 million of availability under its senior secured revolving credit facility[112] Shareholder Returns - Cash dividends paid to stockholders were approximately $56.5 million for the six months ended April 1, 2022, compared to $55.9 million for the same period in 2021[65] - The company made payments of dividends totaling $56.464 million, slightly up from $55.875 million in the previous year[15] Strategic Initiatives - The proposed spin-off of Aramark Uniform Services is expected to create additional value for stockholders, with ongoing evaluations of its impact on operations[6] - The Company plans to acquire Union Supply Group, Inc., a commissary goods and services supplier, with the transaction expected to close in the third quarter of fiscal 2022[83] - The company intends to spin off its Uniform segment into an independent publicly traded company, expected to be completed by the end of fiscal 2023[83] Challenges and Risks - The ongoing impact of COVID-19 on the company's operations remains uncertain, with potential effects on revenue and financial condition depending on future developments[88] - The company continues to adapt its business model in response to inflation and global supply chain disruptions, implementing pricing pass-through where appropriate[88] Accounting and Compliance - The company is currently evaluating the impact of several new accounting standards effective in fiscal 2024, including those related to troubled debt restructuring and contract assets[24] - The company adopted optional expedients related to the discontinuance of LIBOR, which may ease the accounting burden for contract modifications[25] - The company incurred $63.0 million in governmental labor-related tax credits due to the COVID-19 pandemic, net of labor charges and other expenses[126] Tax and Credits - The Company recorded a tax benefit of approximately $8.5 million during the six months ended April 1, 2022, due to the reversal of a valuation allowance at a foreign subsidiary[65] - The company recorded approximately $21.0 million and $33.2 million of labor-related tax credits in the FSS International segment during the three and six months ended April 1, 2022, respectively[36]