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 December 29, 2023 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 001-41783 Vestis Corporation (Exact name of registrant as specified in its charter) Delaware 92-2573927 (I.R.S. Employer Identification Number) (State or o ...

Financial Data and Key Metrics - Revenue increased by 2.5% YoY to $718 million, with 4.5% growth excluding the impact of a temporary energy fee and foreign exchange [5][12] - Adjusted EBITDA margin expanded by 60 basis points YoY to 13.7%, driven by operating leverage and lower energy costs [5][13] - Adjusted EPS for Q1 2024 was $0.22 per share [14] - Free cash flow in Q1 was $34.6 million, with cash conversion exceeding 100% of net income [15] Business Line Performance - Workplace supplies revenue grew by 4% YoY, supported by a 25% increase in route sales activity [7] - Uniforms revenue grew by 0.2% YoY, with a 1% growth excluding the impact of direct sales moderation [12] - Direct sales business declined by 4% YoY as part of the company's strategy to optimize the business [12] Market Performance - U.S. sales grew by 2% YoY, while Canada sales increased by 3% YoY [12] - The U.S. segment's adjusted EBITDA increased by 13%, while Canada's declined by 5% due to higher merchandise amortization and fleet maintenance costs [13] Strategy and Industry Competition - The company is focused on high-quality growth, efficient operations, disciplined capital allocation, and a performance-driven culture [6][7] - Strategic initiatives include route and network optimization, telematics deployment, and garment reuse to reduce amortization costs [8][9] - The company is targeting specific micro-verticals, such as auto dealerships, with a 47% increase in weekly revenue from this vertical in Q1 [83] Management Commentary on Operating Environment and Future Outlook - Management remains confident in delivering full-year guidance of 4% to 4.5% revenue growth and an adjusted EBITDA margin of 14.3% [6][16] - The company expects to take incremental pricing actions in the back half of the year, particularly in Q2 and Q3 [19][21] - The company is focused on reducing bad debt and improving customer retention through digital tools and field incentives [67][103] Other Important Information - The company is refinancing its two-year $800 million term loan with a seven-year term loan B, expected to close in the coming weeks [15] - The company is managing incremental public company costs of $15 million to $18 million for the year, including TFA payments to Aramark [14] Q&A Session Summary Question: Pricing Opportunities in the Back Half of the Year - The company sees opportunities for incremental pricing in the back half of the year, particularly for customers underpriced on specific products or receiving multi-day services [19][20][21] Question: Canada Segment Investments and Fleet Maintenance Costs - Higher amortization costs in Canada are due to strategic investments in product quality, while fleet maintenance costs are expected to decrease as the fleet is upgraded [22][23][24] Question: Cross-Sell Progress and Selling Environment - Cross-sell momentum is building, with a 25% increase in route sales activity YoY, and the company is seeing good progress in target micro-verticals like auto dealerships [27][28][30] Question: Revenue Growth Cadence and Moving Parts - Revenue growth is expected to accelerate through the year, with headwinds from a $13 million direct sale customer loss and energy fee impacts in Q2 [33][34] Question: Optimization Events and Margin Impact - Optimization events involve route and network improvements, reducing empty miles, and lowering fuel consumption, with 13 events completed in Q1 compared to 26 in the previous year [37][38][39] Question: Macro Environment and Non-Programmer Wins - The company is seeing growth from non-programmers and varies by end market, with healthcare showing growth and restaurants experiencing closures [42][43] Question: Margin Expansion and Inventory Reuse Program - The inventory reuse program is in early stages, with improvements in used fill rates across 103 facilities, expected to yield long-term benefits in amortization and cash management [45][46][47] Question: Pricing Impact on Guidance - Incremental pricing actions provide additional comfort in achieving full-year guidance but are already factored into the company's expectations [53][54] Question: COO Departure and Organizational Impact - The COO's departure is unrelated to business performance, and the company is taking time to evaluate the organizational structure [56][58][59] Question: Retention Trends and Drivers - Retention remains above 90%, with initiatives focused on improving customer experience and incentives for field teams to drive retention [63][64][67] Question: Input Cost Trends - Labor costs are in line with expectations at over 5%, and material costs are stable, with favorable energy costs expected to flatten in the back half of the year [69][70][71] Question: Uniforms Growth vs Competitors - Uniforms growth is moderated by strategic decisions to throttle down direct sales and focus on targeted micro-verticals, with some impact from business closures and a national account loss [73][74][77] Question: Micro-Vertical Strategy and Traction - The company is methodically tracking progress in eight micro-verticals, with auto dealerships showing a 47% increase in weekly revenue in Q1 [79][80][83] Question: Contract Renewals and Stranded Costs - Contract renewals have been seamless post-spin, and stranded costs were addressed pre-spin, with some duplication of costs expected in the first year [87][88][89] Question: DSO and Bad Debt Trends - The increase in bad debt expense is due to a one-time reserve reversal in the prior year, with no significant DSO movement YoY [95][96] Question: Field Incentives and Sales Enhancements - The company is helping frontline teammates understand the financial benefits of cross-selling and has modified field incentives to include retention metrics [99][101][103]

Table of Contents For the fiscal year ended September 29, 2023 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 001-41783 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Vestis Corporation (Exact name of registrant as specified in its charter) Delaware 92-2573927 (State or other jurisdiction of incorporation or organizati ...

Vestis Corporation (NYSE:VSTS) Q4 2023 Results Conference Call November 29, 2023 9:00 AM ET Company Participants Valerie Haertel - VP, IR Kim Scott - President, CEO Rick Dillon - CFO Conference Call Participants Stephanie Moore - Jefferies Andrew Steinerman - JP Morgan Andy Wittmann - Baird Shlomo Rosenbaum - Stifel Ronan Kennedy - Barclays Operator Welcome to the Inaugural Earnings Call for Vestis Corporation's Fiscal Fourth Quarter and Full Year 2023 Earnings Conference Call. At this time, all participan ...