Aramark(US:ARMK)2023-08-07 16:00Revenue Growth - Revenue for the three months ended June 30, 2023, was $4,749,209, compared to $4,127,378 for the same period in 2022, representing an increase of 15.0%[8] - Revenue for the nine months ended June 30, 2023, reached $13,952,292, compared to $11,936,167 for the same period in 2022, indicating a growth of 16.9%[9] - The FSS United States segment generated $2,890.6 million in revenue for the three months ended June 30, 2023, compared to $2,481.5 million in the same period last year, reflecting a 16.5% increase[65] - FSS International segment revenue for the three months ended June 30, 2023, was $1,162.4 million, up from $977.7 million in the same period last year, representing an increase of about 19%[79] - FSS United States segment revenue grew by 19.5% to $8,654.8 million, while FSS International segment revenue increased by 18.6% to $3,228.1 million for the nine months ended June 30, 2023[98] Income and Earnings - Operating income for the three months ended June 30, 2023, was $203,382, up from $147,886 in the prior year, reflecting a growth of 37.6%[8] - Net income attributable to Aramark stockholders for the three months ended June 30, 2023, was $338,484, compared to $40,329 in the same period last year, marking an increase of 738.5%[8] - Earnings per share (EPS) for the three months ended June 30, 2023, was $1.30, significantly higher than $0.16 for the same period in 2022[8] - Net income for the nine months ended June 30, 2023, was $468.1 million, a significant increase from $118.7 million for the same period in 2022, representing a growth of 294%[14] - The company recorded a comprehensive income attributable to Aramark stockholders of $514.1 million for the nine months ended June 30, 2023, compared to $178.1 million for the same period in the previous year[28] Cash Flow and Financing - Cash flows used in operating activities for the nine months ended June 30, 2023, amounted to $(270.1) million, compared to $(142.0) million for the same period in 2022, indicating a worsening cash flow situation[14] - Net cash provided by investing activities was $281.9 million for the nine months ended June 30, 2023, a turnaround from $(641.4) million in the same period of the previous year[14] - Proceeds from long-term borrowings reached $1.55 billion, a substantial increase from $328.3 million in the previous year, reflecting a strong financing strategy[14] - Interest paid during the period was $322.2 million, compared to $259.0 million in the previous year, indicating increased borrowing costs[14] - Cash and cash equivalents at the end of the period were $402.4 million, down from $438.9 million at the end of the previous year[14] Strategic Initiatives - The company anticipates continued growth driven by strategic market expansions and new product developments in the upcoming quarters[5] - The company announced its intention to spin off its Uniform segment into an independent publicly traded company, expected to be completed near the end of fiscal 2023[24] - The company recorded a significant asset write-down of $35.5 million during the nine months ended June 30, 2023, which was not present in the previous year[14] - The company plans to spin off its Uniform segment into an independent publicly traded company, expected to be completed near the end of fiscal 2023[91] Expenses and Liabilities - The cost of services provided (exclusive of depreciation and amortization) for the nine months ended June 30, 2023, was $12,656.2 million, up 17.1% from $10,810.1 million in the prior year[97] - Personnel costs as a percentage of total cost of services provided decreased to 46.3% for the nine months ended June 30, 2023, from 48.4% in the prior year[102] - The company recorded severance charges of $36.3 million for the nine months ended June 30, 2023, with $25.8 million attributed to the FSS International segment[40][41] - The maximum potential liability under certain lease arrangements was approximately $27.8 million as of June 30, 2023, if the terminal fair value of vehicles coming off lease was zero[76] Market Conditions - Inflationary pressures and global economic disruptions are anticipated to continue affecting operations throughout the remainder of fiscal 2023[90] - The effective tax rate for the nine months ended June 30, 2023, was recorded at 26.0%, compared to 23.9% in the prior year[105] Other Financial Metrics - Covenant Adjusted EBITDA for the twelve months ended June 30, 2023, was $1,524.6 million, up from $1,201.9 million in the previous year, reflecting a year-over-year increase of 27%[119] - The Consolidated Secured Debt Ratio was reported at 2.45x, well below the covenant requirement of 5.125x, indicating strong compliance with debt covenants[121] - The Interest Coverage Ratio was 3.69x, exceeding the minimum requirement of 2.000x, demonstrating robust earnings relative to interest expenses[121]