Vestis (VSTS) - 2025 Q1 - Quarterly Report

Financial Performance - Revenue for the three months ended December 27, 2024, was $683,780, a decrease of 4.7$717,923 for the same period in 2023[17]. - Operating income decreased to $30,399, down 36.1$47,598 in the prior year[17]. - Net income for the quarter was $832, a significant decline of 93.2$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$717.9 million in the same period in 2023[62]. - Operating income for the same period was $30.40 million, down 36.1$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$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$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$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].