vsts-20250627

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 June 27, 2025

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
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification Number)

1035 Alpharetta Street, Suite 2100, Roswell, Georgia			30075
(Address of Principal Executive Offices)			(Zip Code)

(470) 226-3655

(Registrant's telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	VSTS	New York Stock Exchange

Securities registered pursuant to section 12(g) of the Act: None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant

was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

As of August 1, 2025, the registrant had 131,839,915 shares of common stock outstanding.

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TABLE OF CONTENTS


		Page
PART I - Financial Information
Item 1.	Financial Statements (Unaudited)	5
	Consolidated Statements of Income	5
	Consolidated Statements of Comprehensive Income	6
	Consolidated Balance Sheets	7
	Consolidated Statements of Changes in Equity	8
	Consolidated Statements of Cash Flows	10
	Notes to Consolidated Financial Statements	11
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	29
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	39
Item 4.	Controls and Procedures	39

PART II - Other Information		40
Item 1.	Legal Proceedings	40
Item 1A.	Risk Factors	40
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	40
Item 3.	Defaults Upon Senior Securities	40
Item 4.	Mine Safety Disclosures	40
Item 5.	Other Information	40
Item 6.	Exhibits	41

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Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q 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 (including volume growth, pricing, sales and cash flows) and statements regarding our strategy for growth, future product development, regulatory approvals, competitive position and expenditures. These statements include, but are not limited to, statements related to our expectations regarding the performance of our business, our financial results, our operations, our liquidity and capital resources, the conditions in our industry and our growth strategy. In some cases, forward-looking statements can be identified by words such as “believe,” “aim,” “anticipate,” “estimate,” “expect,” “future,” “goal,” “have confidence,” “intend,” “likely,” “look to,” “may,” “potential,” “outlook,” “guidance,” “project,” “plan,” “seek,” “see,” “should,” “will,” “will be,” “will continue,” “will likely,” and other words and terms of similar meaning or the negative versions of such words. These forward-looking statements are subject to risks and uncertainties that may change at any time, and actual results or outcomes may differ materially from those that we expected. Forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties, and changes in circumstances that are difficult to predict. Although we believe that the expectations reflected in any forward-looking statements we make are based on reasonable assumptions, we can give no assurance that these expectations will be met and it is possible that actual results may differ materially from those indicated by these forward-looking statements due to a variety of risks and uncertainties.

Such risks and uncertainties include, but are not limited to:

• unfavorable macroeconomic conditions including inflationary pressures and higher interest rates;

• the failure to retain current customers, renew existing customer contracts and obtain new customer contracts, which could result in continued stock volatility and potential future goodwill impairment charges;

• competition in our industry;

• our ability to comply with certain financial ratios, tests and covenants in our credit agreement, including the net leverage ratio;

• our significant indebtedness and ability to meet debt obligations and our reliance on an accounts receivable securitization facility;

• increases in fuel and energy costs and other supply chain challenges and disruptions, including as a result of ongoing military conflicts in Ukraine and the Middle East;

• implementation of new or increased tariffs and ongoing changes in U.S. and foreign government trade policies, including potential modifications to existing trade agreements and retaliatory measures by foreign governments;

• increased operating costs and obstacles to cost recovery due to the pricing and cancellation terms of our support services contracts;

• a determination by our customers to reduce their outsourcing or use of preferred vendors;

• the outcome of legal proceedings to which we are or may become subject;

• risks associated with suppliers from whom our products are sourced;

• challenge of contracts by our customers;

• currency risks and other risks associated with international operations, including compliance with a broad range of laws and regulations, including the United States Foreign Corrupt Practices Act;

• increases in labor costs or inability to hire and retain key or sufficient qualified personnel;

• continued or further unionization of our workforce or any labor strikes;

• our expansion strategy and our ability to successfully integrate the businesses we acquire and costs and timing related thereto;

• natural disasters, global calamities, climate change, pandemics, and other adverse incidents;

• liability resulting from our participation in multiemployer-defined benefit pension plans;

• liability associated with noncompliance with applicable law or other governmental regulations;

• laws and governmental regulations including those relating to the environment, wage and hour and government contracting;

• unanticipated changes in tax law;

• new interpretations of or changes in the enforcement of the government regulatory framework;

• a cybersecurity incident or other disruptions in the availability of our computer systems or privacy breaches;

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• stakeholder expectations relating to environmental, social and governance (“ESG”) considerations which may

expose us to liabilities and other adverse effects on our business;

• any failure by Aramark to perform its obligations under the various separation agreements entered into in connection with the Separation;

• a determination by the IRS that the Separation or certain related transactions are taxable.

The above list of factors is not exhaustive or necessarily in order of importance. For additional information on identifying factors that may cause actual results to vary materially from those stated in forward-looking statements, see the discussions under Item 1A "Risk Factors," Item 3 "Legal Proceedings" and Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations" and other sections of our Annual Report on Form 10-K, filed with the Securities and Exchange Commission ("SEC") on November 22, 2024 and any updates or amendments we make in future filings. There may be other factors not presently known to us or which we currently consider to be immaterial that could cause our actual results to differ materially from those projected in any forward-looking statements we make. Any forward-looking statement speaks only as of the date on which it is made, and we assume no obligation to update or revise such statement, whether as a result of new information, future events or otherwise, except as required by applicable law.

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PART I - Financial Information

Item 1. Financial Statements (Unaudited)

VESTIS CORPORATION

CONSOLIDATED STATEMENTS OF INCOME (LOSS) (UNAUDITED)

(in thousands, except per share amounts)


	Three months ended				Nine months ended
	June 27, 2025		June 28, 2024		June 27, 2025		June 28, 2024
Revenue	$	673,799	$	698,248	$	2,022,828	$	2,121,539
Operating Expenses:
Cost of services provided (exclusive of depreciation and amortization)	491,681		495,759		1,476,932		1,502,557
Depreciation and amortization	34,856		34,925		107,674		105,500
Selling, general and administrative expenses	122,301		130,041		391,432		385,307
Total Operating Expenses	648,838		660,725		1,976,038		1,993,364
Operating Income (Loss)	24,961		37,523		46,790		128,175
Interest Expense, net	22,495		29,857		67,921		96,715
Other Expense (Income), net	3,215		(471)		12,270		(1,841)
Income (Loss) Before Income Taxes	(749)		8,137		(33,401)		33,301
Provision (Benefit) for Income Taxes	(73)		3,100		(5,727)		10,033
Net Income (Loss)	$	(676)	$	5,037	$	(27,674)	$	23,268

Earnings (Loss) per share:
Basic	$	(0.01)	$	0.04	$	(0.21)	$	0.18
Diluted	$	(0.01)	$	0.04	$	(0.21)	$	0.18
Weighted Average Shares Outstanding:
Basic	131,812		131,543		131,719		131,486
Diluted	131,812		131,833		131,719		131,785

The accompanying notes are an integral part of these Consolidated Financial Statements.

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VESTIS CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)

(in thousands)


	Three months ended
	June 27, 2025		June 28, 2024
Net Income (Loss)	$	(676)	$	5,037
Other Comprehensive Income (Loss), net of tax:

Foreign currency translation adjustments	9,019		(3,699)
Other Comprehensive Income (Loss), net of tax	9,019		(3,699)
Comprehensive Income (Loss)	$	8,343	$	1,338


	Nine months ended
	June 27, 2025		June 28, 2024
Net Income (Loss)	$	(27,674)	$	23,268
Other Comprehensive Income (Loss), net of tax:

Foreign currency translation adjustments	7,100		(3,508)
Other Comprehensive Income (Loss), net of tax	7,100		(3,508)
Comprehensive Income (Loss)	$	(20,574)	$	19,760

The accompanying notes are an integral part of these Consolidated Financial Statements.

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VESTIS CORPORATION

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(in thousands, except share and per share amounts)


	June 27, 2025		September 27, 2024
ASSETS
Current Assets:
Cash and cash equivalents	$	23,743	$	31,010
Receivables (net of allowances: $30,795 and $19,804, respectively)	175,789		177,271
Inventories, net	186,992		164,913
Rental merchandise in service, net	400,374		396,094
Other current assets	33,704		18,101
Total current assets	820,602		787,389
Property and Equipment, at cost:
Land, buildings and improvements	574,174		590,972
Equipment	1,170,736		1,168,142
	1,744,910		1,759,114
Less - Accumulated depreciation	(1,092,415)		(1,088,256)
Total property and equipment, net	652,495		670,858
Goodwill	963,027		963,844
Other Intangible Assets, net	196,370		212,773
Operating Lease Right-of-use Assets	86,539		73,530
Other Assets	189,058		223,993
Total Assets	$	2,908,091	$	2,932,387
LIABILITIES AND EQUITY
Current Liabilities:

Current maturities of financing lease obligations	$	32,860	$	31,347
Current operating lease liabilities	20,576		19,886
Accounts payable	156,661		163,054
Accrued payroll and related expenses	97,329		96,768
Accrued expenses and other current liabilities	138,440		145,047
Total current liabilities	445,866		456,102
Long-Term Borrowings	1,156,457		1,147,733
Noncurrent Financing Lease Obligations	119,014		115,325
Noncurrent Operating Lease Liabilities	78,239		66,111
Deferred Income Taxes	175,069		191,465
Other Noncurrent Liabilities	51,218		52,600
Total Liabilities	2,025,863		2,029,336
Commitments and Contingencies (see Note 9)
Equity:
Common stock, par value $0.01 per share, 350,000,000 shares authorized, 131,836,607 and 131,481,967 issued and outstanding as of June 27, 2025 and September 27, 2024, respectively	1,318		1,315
Additional paid-in capital	937,051		928,082
(Accumulated deficit) retained earnings	(34,330)		2,565
Accumulated other comprehensive loss	(21,811)		(28,911)
Total Equity	882,228		903,051
Total Liabilities and Equity	$	2,908,091	$	2,932,387

The accompanying notes are an integral part of these Consolidated Financial Statements.

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VESTIS CORPORATION

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (UNAUDITED)

(in thousands)


	Common Stock
	Shares Outstanding	Par Value		Additional Paid-In Capital		(Accumulated Deficit) Retained Earnings		Net Parent Investment		Accumulated Other Comprehensive Loss		Total Parent’s Equity
Balance, September 27, 2024	131,482	$	1,315	$	928,082	$	2,565	$	—	$	(28,911)	$	903,051
Net Income	—	—		—

SEC Form 10-Q filed by Vestis Corporation