Financial Performance - Adjusted EBITDA for the first quarter was $70 million, showing improvement from the low point in fiscal Q4 2025, reflecting progress in cost management and operational efficiency [4][16] - Revenue for the first quarter was $663.4 million, a decline of $20.4 million or 3% compared to the first quarter of fiscal 2025, with rental revenue down $17.9 million and direct sales down $2.7 million [12][14] - Cost of service decreased by $3 million year-over-year, while SG&A expenses were down approximately $0.9 million, but were impacted by $7.8 million in third-party support costs and $5.5 million in severance related to the transformation [15][16] - First quarter adjusted EBITDA margin was 10.6%, compared to 11.9% in the prior year, but improved by 150 basis points from fiscal Q4 2025 [16] Business Line Performance - Volume processed was flat year-over-year, but the product mix shifted, with a 2% decrease in uniforms and a 7% increase in linen volume, negatively impacting revenue quality [12][13] - The shift in product mix resulted in a $0.04 or 3% decline in revenue per pound, equating to a $20 million decrease in total revenue [14] Market Data - The company processed the same amount of work on a pound basis year-over-year, indicating stable overall throughput despite the decline in revenue [12][33] - The company continues to focus on key verticals with no significant changes in macro demand observed [33] Company Strategy and Development Direction - The company is focused on a business transformation framework with three pillars: operational excellence, commercial excellence, and network and asset optimization [4][9] - Efforts are being made to improve revenue quality through better product mix and strategic pricing, with a focus on customer engagement [8][14] - The company is actively marketing non-core properties for sale to optimize its asset footprint and intends to use proceeds to repay debt [9][21] Management Comments on Operating Environment and Future Outlook - Management expressed that they are in the early stages of transformation, with ongoing improvements expected in cost per pound and revenue per pound [10][37] - The company reaffirmed its full-year guidance for fiscal 2026, expecting revenue to be flat to down 2% compared to fiscal 2025, and adjusted EBITDA to be between $285 million and $315 million [21][22] Other Important Information - The company generated $38 million in operating cash flow and $28 million in free cash flow during the quarter, with significant improvements in working capital management [17][19] - Net debt at the end of the first quarter was $1.29 billion, with a strong liquidity position and no debt maturities until 2028 [20] Q&A Session Summary Question: Revenue per pound decline and future trends - Management confirmed that revenue per pound is expected to trend flat to down 2% for the year, with strategic pricing and mix improvements as key drivers [24][25] Question: Sequential EBITDA growth assumptions - Management guided for 5% sequential adjusted EBITDA growth for each remaining quarter, with operational and commercial assumptions underpinning this progression [27][28] Question: General macro and customer demand - Management indicated no significant changes in macro demand, with consistent volume on a pound basis year-over-year [33][34] Question: Progress on transformation - Management described their progress as being in the early stages, with ongoing improvements expected in both cost and revenue metrics [36][37] Question: Cost savings realization and unvended market growth - Management clarified that the $75 million cost savings is a full-year target, with $40 million expected to be realized in FY 2026, and noted stable penetration in the unvended market [53][54][59]