Vestis (VSTS) Q2 2025 Earnings Call May 07, 2025 09:00 AM ET Speaker0 Welcome to the Vestas Corporation Fiscal Second Quarter twenty twenty five Earnings Conference Call. At this time, all participants have been placed on a listen only mode and the floor will be open for your questions following the presentation. I would now like to turn the call over to Michael Aurelio, Vice President, Investor Relations. Speaker1 Thank you, operator, and thank you all for joining us. With me are Philip Holliman, Interim E ...

Vestis (VSTS) came out with a quarterly loss of $0.05 per share versus the Zacks Consensus Estimate of $0.15. This compares to earnings of $0.13 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -133.33%. A quarter ago, it was expected that this provider of uniforms and workplace supplies would post earnings of $0.12 per share when it actually produced earnings of $0.14, delivering a surprise of 16.67%.Over the last four quarter ...

May 6, 2025 Forward Looking Statements This presentation contains "forward-looking statements" within the meaning of the securities laws. All statements that reflect our expectations, assumptions or projections about the future, other than statements of historical fact, are forward-looking statements, including, without limitation, statements relating to future operations and financial performance and statements regarding our strategy for growth, future product development, regulatory approvals, competitive ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 28, 2025 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 001-41783 (Registrant's telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: | Title of each class | Trading Sym ...

Execution Version AMENDMENT NO. 2 (this "Amendment"), dated as of May 1, 2025, among VESTIS CORPORATION, a Delaware corporation (the "U.S. Borrower"), CANADIAN LINEN AND UNIFORM SERVICE CORP., a corporation organized under the laws of Canada (the "Canadian Borrower" and, together with the U.S. Borrower, the "Borrowers"), each Subsidiary Guarantor party hereto, each Lender party hereto, and JPMORGAN CHASE BANK, N.A., as administrative agent for the Lenders and collateral agent for the Secured Parties (in suc ...

Company Overview - Vestis Corporation (NYSE: VSTS) has reported stable and predictable revenue growth and has been operating in the same industry for over 75 years, indicating a strong foundation and potential for future growth [1] Industry Insights - The accumulated know-how from over 75 years of operation is expected to accelerate revenue growth in the future, showcasing the importance of experience in the industry [1] Investment Strategy - The focus is on small and medium-cap companies in Europe, the United States, and South America, with an emphasis on mature industries such as mining, oil and gas, and real estate [1] - The investment strategy includes M&A deals, deep value investments, and dividend investing, targeting an internal rate of return of approximately 5%-7% [1]

Core Viewpoint - Vestis (VSTS) has experienced significant selling pressure, declining 17.2% over the past four weeks, but is now positioned for a potential trend reversal as it is in oversold territory, with analysts expecting better earnings than previously predicted [1]. Group 1: Stock Performance and Technical Indicators - VSTS shares have been under heavy selling pressure, indicated by an RSI reading of 23.35, suggesting that the stock may soon reverse its trend [5]. - The Relative Strength Index (RSI) is a momentum oscillator that helps identify oversold stocks, with a reading below 30 typically indicating oversold conditions [2]. - Stocks oscillate between overbought and oversold states, and the RSI can help investors identify potential entry points for a rebound [3]. Group 2: Earnings Estimates and Analyst Consensus - There is strong agreement among sell-side analysts regarding an increase in earnings estimates for VSTS, with the consensus EPS estimate rising by 6.1% over the last 30 days [6]. - An upward trend in earnings estimate revisions is generally associated with price appreciation in the near term [6]. - VSTS holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate trends and EPS surprises, indicating a strong potential for a turnaround [7].

Financial Performance - Revenue for the three months ended December 27, 2024, was $683,780, a decrease of 4.7% compared to $717,923 for the same period in 2023[17]. - Operating income decreased to $30,399, down 36.1% from $47,598 in the prior year[17]. - Net income for the quarter was $832, a significant decline of 93.2% from $12,266 in the same quarter last year[17]. - Earnings per share (EPS) for the quarter was $0.01, compared to $0.09 in the previous year, reflecting a decrease of 88.9%[17]. - Total revenue for the three months ended December 27, 2024, was $683.8 million, a decrease of 4.7% from $717.9 million in the same period in 2023[62]. - Operating income for the same period was $30.40 million, down 36.1% from $47.60 million in the prior year[89]. - Net income for the three months ended December 27, 2024, was $0.8 million, down $11.4 million or 93.2% from $12.3 million in the same period of 2023[126]. Assets and Liabilities - Total current assets increased to $809,589, up 2.6% from $787,389 as of September 27, 2024[15]. - Total liabilities decreased to $1,997,563, down 1.6% from $2,029,336 in the previous quarter[15]. - The company had long-term borrowings, net of current portion, of $1.128 billion as of December 27, 2024, down from $1.148 billion as of September 27, 2024[54]. - The company had $105.0 million of employee sales commissions recorded as assets as of December 27, 2024[65]. - As of December 27, 2024, total principal debt was $1,142.5 million, down from $1,162.5 million as of September 27, 2024[137]. Cash Flow and Investments - Cash and cash equivalents at the end of the period were $18,564, a decrease of 40.0% from $31,010 at the beginning of the period[21]. - Net cash provided by operating activities was $3.8 million for the three months ended December 27, 2024, a decrease of $47.7 million from $51.5 million in the prior year[139]. - Cash flows from investing activities for the three months ended December 27, 2024, were $17.9 million, an increase of $34.8 million compared to the prior year, primarily due to $36.8 million from the sale of equity investments[141]. - Operating cash flows experienced an unfavorable change of approximately $30.0 million due to increased cash use for inventory compared to the previous year[140]. Dividends and Shareholder Returns - The company declared dividends of $0.035 per common share, totaling $4,610 for the quarter[23]. - The company declared a quarterly cash dividend of $4.6 million, or $0.035 per common share, payable on January 6, 2025[104]. Segment Performance - Revenue from the United States for the three months ended December 27, 2024, was $621.7 million, down from $653.2 million in the prior year, representing a decline of 4.8%[62]. - Total segment operating income for the United States was $58.03 million, down 21.7% from $74.08 million in the prior year[89]. - Segment revenue in Canada was $62.1 million, down $2.6 million or 4.0%, impacted by unfavorable foreign currency rates[132]. - Segment operating income in Canada decreased by 58.0% to $1.9 million, with a margin decline from 7.0% to 3.1%[133]. Operational Costs and Expenses - The company recorded severance charges of $4.3 million for the three months ended December 27, 2024, compared to $0.4 million for the same period in 2023[50]. - Operating lease costs for the three months ended December 27, 2024, were $10.989 million, compared to $10.371 million for the same period in 2023[69]. - Share-based compensation expense for the three months ended December 27, 2024, totaled $5,180,000, up from $4,716,000 in the same period last year, indicating an increase of 9.8%[72]. Risk Factors - The company is exposed to foreign currency risk from revenues and profits denominated in foreign currencies, with no financial instruments currently used to manage this risk[153]. - Interest rate risk exists due to fluctuations in interest rates on debt obligations, which could increase servicing costs and reduce profitability[154]. - The company is also exposed to commodity price risk, particularly related to gasoline, diesel, and natural gas, and seeks to manage this through operations and commodity derivative agreements[156].

Core Viewpoint - Vestis (VSTS) has experienced significant selling pressure, resulting in a 17% decline over the past four weeks, but analysts anticipate improved earnings in the near future [1] Group 1: Technical Analysis - The Relative Strength Index (RSI) is a key technical indicator used to determine if a stock is oversold, with a reading below 30 typically indicating oversold conditions [2] - VSTS has an RSI reading of 22.78, suggesting that the heavy selling may be exhausting, indicating a potential bounce back towards equilibrium [5] Group 2: Fundamental Analysis - There is a consensus among sell-side analysts that earnings estimates for VSTS have increased by 3.4% over the last 30 days, which often correlates with price appreciation [6] - VSTS holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises, indicating a strong potential for a turnaround [7]

Group 1 - The article discusses Vestis Corp. (NYSE: VSTS) and its recent positive improvements, indicating a potential turnaround in the business [1] - The author has previously rated VSTS as a hold, expressing the need for more evidence of the company's recovery [1] - The author emphasizes a diverse investment approach, incorporating fundamental, technical, and momentum investing strategies [1] Group 2 - The article serves as a platform for tracking investment ideas and connecting with like-minded investors [1]