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What changed in Vestis Corp's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Vestis Corp's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+338 added−294 removedSource: 10-K (2025-12-02) vs 10-K (2024-11-22)

Top changes in Vestis Corp's 2025 10-K

338 paragraphs added · 294 removed · 222 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeWe believe we are well positioned to take advantage of the various key trends and drivers that are impacting our industry. Demand in this industry is influenced primarily by macro-economic conditions, employment levels, increasing standards for workplace hygiene and safety and an ongoing trend of businesses outsourcing non-core, back-end operations.
Biggest changeDemand in this industry is influenced primarily by macro-economic conditions, employment levels, increasing standards for workplace hygiene and safety and an ongoing trend of businesses outsourcing non-core, back-end operations. 5 Table of Contents As noted above, the diversity of our customer base and the variety of industries in which our customers operate results in relatively low exposure to discrete industry trends.
In addition to offering market competitive salaries and wages, we offer comprehensive health and retirement benefits to our teammates. Our core health and welfare benefits are supplemented with specific programs to manage or improve common health conditions and include a variety of voluntary benefits and paid time away from work programs.
In addition to offering market competitive salaries and wages, we offer comprehensive health and retirement benefits to our teammates. Our core health and welfare benefits are supplemented with specific programs to manage or improve common health conditions and include a variety of voluntary wellness benefits and paid time away from work programs.
Our revenue is diversified across numerous sectors and customers operating primarily in manufacturing, hospitality, retail, food processing, automotive and healthcare. These are all sectors where we have decades of expertise. Geographically, 91% of our fiscal year 2024 revenue was from sales in the United States, with the remaining 9% from sales in Canada.
Our revenue is diversified across numerous sectors and customers operating primarily in manufacturing, hospitality, retail, food processing, automotive and healthcare. These are all sectors where we have decades of expertise. Geographically, 91% of our fiscal year 2025 revenue was from sales in the United States, with the remaining 9% from sales in Canada.
Operations and Supply Chain We operate a network of over 350 facilities including laundry plants, satellite plants, distribution centers and manufacturing plants along with a fleet of service vehicles that support over 3,300 pick-up and delivery routes.
Operations and Supply Chain We operate a network of over 325 facilities including laundry plants, satellite plants, distribution centers and manufacturing plants along with a fleet of service vehicles that support over 3,300 pick-up and delivery routes.
In addition to uniforms, we also provide workplace supplies including restroom supply services, first-aid supplies and safety products, floor mats, towels and linens. 6 Table of Contents We believe our customers value our services and products for a variety of reasons: • Our full-service programs typically offer a lower-cost solution for customers than if they were serviced in-house, as evidenced by our historical experience and customer feedback, as we leverage our scale and network to achieve procurement and operating efficiencies. • We enable customers to focus on operating their core businesses as we take care of their needs for clean uniforms, fully stocked restrooms, complete first-aid kits and other workplace supplies. • We help customers establish corporate identity, foster a sense of team and belonging among employees, project a professional image and enhance brand awareness. • Our uniforms are reusable and can be assigned to another employee (rather than being discarded) when employees transition to new opportunities. • We offer a variety of specialty garments that help customers: ◦ adhere to applicable regulatory standards; ◦ safeguard against contamination in the production or service of items such as food, pharmaceuticals and healthcare products; ◦ operate in static-free or low-static environments; ◦ enhance visibility and safety in work environments including construction, utility services, waste management and public safety; and ◦ promote employee safety in workplace environments that involve heavy soils, heat, flame or chemicals in the production process.
We believe our customers value our services and products for a variety of reasons: • Our full-service programs typically offer a lower-cost solution for customers than if they were serviced in-house, as evidenced by our historical experience and customer feedback, as we leverage our scale and network to achieve procurement and operating efficiencies. • We enable customers to focus on operating their core businesses as we take care of their needs for clean uniforms, fully stocked restrooms, complete first-aid kits and other workplace supplies. 6 Table of Contents • We help customers establish corporate identity, foster a sense of team and belonging among employees, project a professional image and enhance brand awareness. • Our uniforms are reusable and can be assigned to another employee (rather than being discarded) when employees transition to new opportunities. • We offer a variety of specialty garments that help customers: ◦ adhere to applicable regulatory standards; ◦ safeguard against contamination in the production or service of items such as food, pharmaceuticals and healthcare products; ◦ operate in static-free or low-static environments; ◦ enhance visibility and safety in work environments including construction, utility services, waste management and public safety; and ◦ promote employee safety in workplace environments that involve heavy soils, heat, flame or chemicals in the production process.
Our business is subject to various environmental protection laws and regulations, including the United States Federal Clean Water Act, Clean Air Act, Resource Conservation and Recovery Act, Comprehensive Environmental Response, Compensation, and Liability Act and similar local, provincial, state, federal and international laws and regulations governing the use, treatment, management, transportation, and disposal of wastes and hazardous materials.
Our business is subject to various environmental protection laws and regulations, including the United States Federal Clean Water Act, Clean Air Act, Resource Conservation and Recovery Act, Comprehensive Environmental 10 Table of Contents Response, Compensation, and Liability Act and similar local, provincial, state, federal and international laws and regulations governing the use, treatment, management, transportation, and disposal of wastes and hazardous materials.
We believe that, by focusing on these areas, we will achieve higher growth rates with more attractive margin profiles. Customer Retention: We serve an attractive, large and long-tenured customer base with services and products that generate recurring revenue streams that typically allow more predictability of revenue than non-recurring revenue business models.
We believe that, by focusing on these areas, we will achieve higher growth rates with more attractive margin profiles. 8 Table of Contents Customer Retention: We serve an attractive, large and long-tenured customer base with services and products that generate recurring revenue streams that typically allow more predictability of revenue than non-recurring revenue business models.
While environmental compliance is not a material component of our costs, we invest in equipment, technology and operating expenses, primarily for water treatment and waste removal, on a regular basis in order to comply with environmental laws and regulations, to promote the safety of our teammates, customers, and communities and to enhance the sustainability of our operations.
While environmental compliance is not a material component of our costs, we invest in equipment, technology and operating expenses, primarily for water treatment and waste removal, on a regular basis in order to comply with environmental laws and regulations, and to promote the safety of our teammates, customers, and communities.
Item 1. Business Overview Vestis Corporation (“Vestis”, the “Company”, “our”, “we” or “us”) is a leading provider of uniform rentals and workplace supplies across the United States and Canada. We provide uniforms, mats, towels, linens, restroom supplies, first-aid supplies, safety products and other workplace supplies. In fiscal year 2024, we generated revenue of approximately $2.8 billion.
Item 1. Business Overview Vestis Corporation, a Delaware Corporation (“Vestis”, the “Company”, “our”, “we” or “us”) is a leading provider of uniform rentals and workplace supplies across the United States and Canada. We provide uniforms, mats, towels, linens, restroom supplies, first-aid supplies, safety products and other workplace supplies. In fiscal year 2025, we generated revenue of approximately $2.7 billion.
We continue to believe there is a significant opportunity to increase our wallet share with our existing customers through cross-selling additional services and products, including compelling adjacent services such as first aid and restroom supply services. This is expected to result in high-margin growth with existing customers by increasing revenue per stop and leveraging our existing delivery costs.
We continue to believe there is a significant opportunity to increase our wallet share with our existing customers through cross-selling additional services and products, including compelling adjacent services such as first aid and restroom supply services. This is expected to result in growth with existing customers by increasing revenue while leveraging our existing delivery costs.
We actively manage the sites which we know require remediation and monitoring in conjunction with regulators and relevant partners. Based on these activities and various estimates and assumptions, we determine our 11 Table of Contents estimated costs and liabilities.
We actively manage the sites which we know require remediation and monitoring in conjunction with regulators and relevant partners. Based on these activities and various estimates and assumptions, we determine our estimated costs and liabilities.
Our team consists of approximately 19,600 teammates who operate over 350 sites including laundry plants, satellite plants, distribution centers and manufacturing plants. We leverage our broad footprint and our supply chain, delivery fleet and route logistics capabilities to serve customers on a recurring basis, typically weekly, and primarily through multi-year contracts.
Our team consists of approximately 18,150 teammates who operate over 325 sites including laundry plants, satellite plants, distribution centers and manufacturing plants. We leverage our broad footprint and our supply chain, delivery fleet and route logistics capabilities to serve customers on a recurring basis, typically weekly, and primarily through multi-year contracts.
Merchandise Inventory Management : We are focused on lowering merchandise in service costs across our system in order to improve the profitability of new and existing business. Examples include delivering higher levels of garment and product reuse to reduce the issuance of new products and supply chain procurement strategies to reduce purchasing costs.
Merchandise Inventory Management : We are focused on managing merchandise in service costs across our system in order to support the profitability of new and existing business. Examples include the targeting of higher levels of garment and product reuse to reduce the issuance of new products and supply chain procurement strategies to reduce purchasing costs.
We are one of the largest companies operating within the United States and Canada in our industry. We have over 75 years of experience providing uniforms and workplace supplies and a broad footprint that supports efficient delivery of our services and products to more than 300,000 customer locations across the United States and Canada.
We are one of the largest companies operating within the United States and Canada in our industry. We have over 75 years of experience providing uniforms and workplace supplies and a broad footprint that supports efficient delivery of our services and products to more than 300,000 customer accounts (based on unique customer identification numbers) across the United States and Canada.
Across these sectors, we also serve customers who operate cleanrooms, or controlled environments where pollutants like dust, airborne microbes, and aerosol particles are removed to aid in providing clean work environments. Cleanrooms are typically used in the manufacturing of electronics, pharmaceutical products and medical equipment.
We believe our competitive advantages identified below apply to each of the sectors. Across these sectors, we also serve customers who operate cleanrooms, or controlled environments where pollutants like dust, airborne microbes, and aerosol particles are removed to aid in providing clean work environments. Cleanrooms are typically used in the manufacturing of electronics, pharmaceutical products and medical equipment.
Industry Overview 5 Table of Contents We operate within the uniforms, mats, towels, linens, restroom supplies, first-aid supplies and safety products industry in the United States and Canada. This includes businesses that outsource these services through rental programs or direct purchases, as well as non-programmers (which are businesses that maintain these services in-house).
Industry Overview We operate within the uniforms, mats, towels, linens, restroom supplies, first-aid supplies and safety products industry in the United States and Canada. This includes businesses that outsource these services through rental programs or direct purchases, as well as businesses that maintain these services in-house.
Our footprint enables us to serve large, national customers across the United States and Canada. Long-Tenured Customer Relationships : We deliver to over 300,000 customer locations and serve businesses which participate across numerous industries.
Our footprint enables us to serve large, national customers across the United States and Canada. Long-Tenured Customer Relationships : We deliver to over 300,000 customer accounts (based on unique customer identification numbers) and serve businesses which participate across numerous industries.
Performance-Driven Culture Fostering a performance-driven culture is essential to the delivery of high-quality revenue growth and margin expansion. We are focused on further strengthening our capabilities and enhancing competencies in functional areas that are core to the delivery of our strategy such as sales and marketing, pricing, procurement, logistics, technology, talent acquisition and retention and plant operations.
Performance-driven culture: We are focused on further strengthening our capabilities and enhancing competencies in functional areas that are core to the delivery of our strategy such as sales and marketing, pricing, procurement, logistics, technology, talent acquisition and retention and plant operations.
The contracted and recurring nature of our business provides a meaningful level of predictability to annual revenue. Additionally, the diversity of our customer base and the variety of industries in which our customers participate results in relatively low exposure to discrete industry trends.
Revenue from our recurring rental business comprised 95% of total revenue, with 5% from direct sales. The contracted and recurring nature of our business provides a meaningful level of predictability to annual revenue. Additionally, the diversity of our customer base and the variety of industries in which our customers participate results in relatively low exposure to discrete industry trends.
Increasing Revenue Per Stop Through Cross-Selling to Leverage Fixed Costs: On average, our current customers take advantage of approximately 30% to 40% of our full line of services and products.
Increase Cross-Selling to Leverage Fixed Costs: On average, our current customers take advantage of approximately 30% to 40% of our full line of services and products.
This requires an unwavering commitment to safety, diversity and inclusion, professional growth opportunities and competitive total compensation and benefits that meet the needs of our teammates and their families. We have approximately 19,600 teammates, primarily based in the United States, Canada and Mexico. As of September 27, 2024, approximately 10,800 of our teammates were represented by labor unions.
This requires an unwavering commitment to safety, diversity and inclusion, professional growth opportunities and competitive total compensation and benefits that meet the needs of our teammates and their families. We have approximately 18,150 teammates, primarily based in the United States, Canada and Mexico. Approximately 10,750 of our teammates are represented by labor unions.
Hiring, developing and retaining teammates is critically important to our operations and we are focused on creating experiences and programs that foster growth, performance and 10 Table of Contents retention.
Hiring, developing and retaining teammates is critical to our operations and we are focused on creating experiences and programs that foster growth, performance and retention.
Value Creation Strategy We are focused on the development, growth and expansion of our business, with increased flexibility to pursue independent strategic and financial plans, adapt quickly to the changing needs of our customers and sector dynamics, effectively allocate capital to invest in growth areas and accelerate decision-making processes.
Other Information , in this annual report on Form 10-K for additional information. We are focused on the development, growth and expansion of our business, with increased flexibility to pursue independent strategic and financial plans, adapt quickly to the changing needs of our customers and sector dynamics, effectively allocate capital to invest in growth areas and accelerate decision-making processes.
Additionally, many businesses perform certain aspects of our product and service offerings in-house rather than outsourcing them. Customers Customers in our industry value the ability of providers to consistently deliver quality products on-time and with a high level of customer service.
Cintas Corporation and UniFirst Corporation are notable competitors of size, and we also have numerous local and regional competitors. Additionally, many businesses perform certain aspects of our product and service offerings in-house rather than outsourcing them. Customers Customers in our industry value the ability of providers to consistently deliver quality products on-time and with a high level of customer service.
We maintain a Corporate Social Compliance 7 Table of Contents Policy and related Vendor Code of Conduct both of which require the international manufacturing of our private label garments to occur under safe, lawful and humane working conditions.
We maintain a Corporate Social Compliance Policy and related Vendor Code of Conduct both of which require the international manufacturing of our private label garments to occur under safe, lawful and humane working conditions. To support our Corporate Social Compliance Policy, our international private label garment manufacturers confirm annually their commitment to comply with our Vendor Code of Conduct.
Our Board of Directors oversees our ESG goals and objectives, and supports the implementation of our ESG priorities and commitments. Available Information We file annual, quarterly and current reports as well as other information with the Securities and Exchange Commission (“SEC”). These filings are available to the public over the internet at the SEC's website at www.sec.gov.
Available Information We file annual, quarterly and current reports as well as other information with the Securities and Exchange Commission (“SEC”). These filings are available to the public over the internet at the SEC's website at www.sec.gov.
Human Capital Resources Our success begins with our people, and ensuring a safe workplace is our first priority. Investing in, developing and caring for our teammates is paramount to retaining our teammates. We believe serving our teammates in this manner significantly improves our ability to serve and retain customers, accelerate profitable growth and enhance productivity.
Investing in, developing and caring for our teammates is paramount to retaining our teammates. We believe serving our teammates in this manner significantly improves our ability to serve and retain customers, accelerate profitable growth and enhance productivity.
We believe we are a leading provider within this industry and we compete with national, regional and local providers who vary in size, scale, capabilities and product and service offering. Primary methods of competition include product quality, service quality and price. Cintas Corporation and UniFirst Corporation are notable competitors of size and we have numerous local and regional competitors.
Competition Our industry is local in nature, fragmented and highly competitive. We believe we are a leading provider within this industry and we compete with national, regional and local providers who vary in size, scale, capabilities and product and service offering. Primary methods of competition include range of products, product quality, service quality and price.
In addition, our facilities are subject to periodic inspection by federal, state, provincial, local and international authorities. We have various controls and procedures designed to maintain compliance with applicable laws and regulations. Our compliance requirements are subject to legislative changes, or changes in regulatory interpretation, implementation or enforcement.
In addition, our facilities are subject to periodic inspection by federal, state, provincial, local and international authorities. We have various controls and procedures designed to comply with applicable laws and regulations and we may face increased operating costs or material capital investments to maintain compliance.
On September 30, 2023 (the "Distribution Date"), Vestis Corporation completed its spin-off from Aramark (the "Spin-Off," or the “Separation”). On October 2, 2023 our common stock began regular-way trading on the New York Stock Exchange (“NYSE”) under the ticker symbol “VSTS”. Our corporate headquarters are in Roswell, Georgia.
In addition, we offer customized uniforms through direct sales agreements, typically for large regional or national companies. On September 30, 2023 (the "Distribution Date"), Vestis Corporation completed its spin-off from Aramark (the "Spin-Off," or the “Separation”). On October 2, 2023 our common stock began regular-way trading on the New York Stock Exchange (“NYSE”) under the ticker symbol “VSTS”.
If we fail to comply with applicable laws, we may be subject to investigations, criminal sanctions or civil remedies, including fines, penalties, damages, reimbursement, injunctions, seizures, disgorgements or debarments from government contracts.
Our compliance requirements are subject to the nature of our equipment and operations, legislative changes, or changes in regulatory interpretation, implementation or enforcement. If we fail to comply with applicable laws, we may be subject to investigations, criminal sanctions or civil remedies, including fines, penalties, damages, reimbursement, injunctions, seizures, disgorgements or debarments from government contracts.
We are pursuing the following key strategies to drive value creation and grow our business: High-Quality Revenue Growth Our strategy will continue to focus on retaining customers, with an increased emphasis on increasing revenue per stop through cross-selling, investing in attractive sectors, margin accretive products and service offerings and adding new customers on existing routes to increase our route density.
Commercial Excellence Our strategy will continue to focus on retaining customers, with an increased emphasis on cross-selling, investing in attractive sectors, margin accretive products and service offerings and adding new customers on existing routes to increase our route density.
Additionally, they value trustworthy suppliers who partner with them to resolve workplace challenges that may arise with timely solutions that meet their needs. We deliver to over 300,000 customer locations across the United States and Canada. We serve customers ranging from small, family-owned operations with a single location to large corporations and national franchises with multiple locations.
Additionally, they value trustworthy suppliers who partner with them to resolve workplace challenges that may arise with timely solutions that meet their needs. We deliver to over 300,000 customer accounts (based on unique customer identification numbers) across the United States and Canada.
We have invested in tools to support our trusted and tenured route service representative teammates and we are incentivizing them to pursue these opportunities with our existing customer base. Targeting Attractive Sectors, Services and Products: We are implementing more targeted sales strategies to drive growth across high-value sectors, services and products.
We have invested in tools to support our trusted and tenured route service representative teammates as well as certain members of our sales force, and we are incentivizing them to pursue these opportunities with our existing customer base.
Our Competitive Advantages We believe we have significant competitive advantages including our full-service uniform solution offering, size and scale, extensive network footprint, long-tenured customer relationships and experienced leadership team. Given our robust capabilities, scale and talent, we are well positioned to partner with customers for their future needs across a range of services, use cases and business strategies.
Given our robust capabilities, scale and talent, we are well positioned to partner with customers for their future needs across a range of services, use cases and business strategies.
We work to maintain productive working relationships with these unions. Diversity, Equity and Inclusion . We believe that it is beneficial to align our diversity, equity and inclusion priorities with our business strategy. As of September 27, 2024, 60% of our Board of Directors is from underrepresented groups, including females who represent 50% of our Board of Directors.
We believe that it is beneficial to align our inclusion and belonging priorities with our business strategy. We strive to achieve broad representation and an inclusive workforce where 50% of our Board of Directors are from underrepresented groups, including females who represent 40% of our Board of Directors.
We will focus on implementing analytical and geographical prospecting tools that will aid and reward our sales representatives for delivering growth that increases route density and lowers our overall cost to serve per route. 9 Table of Contents Efficient Operations Our operations currently include significant cost inputs in areas such as labor, merchandise in service costs, plant operating costs and service-related costs.
We will focus on implementing analytical and geographical prospecting tools that will aid and reward our sales representatives for delivering growth that increases route density and lowers our overall cost to serve per route. 9 Table of Contents Human Capital Resources Our success begins with our people, and ensuring a safe workplace is our first priority.
The competitive landscape across these sectors for our products and services is highly fragmented and driven primarily by product quality, service quality and pricing of our competitors. We believe our competitive advantages identified below apply to each of the sectors.
Our customers represent a diverse array of industries including sectors such as manufacturing, hospitality, retail, government, automotive, healthcare and food processing. The competitive landscape across these sectors for our products and services is highly fragmented and driven primarily by product quality, service quality and pricing of our competitors.
Further, we have identified a portfolio of initiatives related to routing and scheduling efficiencies and transport and logistics improvements. We believe we can deliver margin expansion through this flow optimization. Workforce Management : We are working to reduce our labor costs by decreasing frontline turnover to improve plant productivity, reducing general and administrative costs and improving plant operations.
Further, we have identified a portfolio of initiatives related to routing and scheduling efficiencies and transport and logistics improvements. We believe we can deliver margin expansion through this flow optimization. Increasing Route Density. We are establishing route density metrics to target sales along existing customer routes.
Financial Profile In fiscal year 2024, we generated revenue of approximately $2.8 billion, operating income of $158.0 million, or 5.6% of revenue, and net income of $21.0 million, or 0.7% of revenue. Cash provided from operating activities was $471.8 million. Revenue from our recurring rental business comprised 94% of total revenue, with 6% from direct sales.
Our corporate headquarters are located in Roswell, Georgia. Financial Profile In fiscal year 2025, we generated revenue of approximately $2.7 billion, operating income of $64.4 million, or 2.4% of revenue, and a net loss of $40.2 million, or (1.5)% of revenue. Cash provided from operating activities was $64.2 million.
We have identified key areas of opportunity to reduce our operating costs and expand margins across our business: Network Optimization : A comprehensive analysis of our plant network and customer flows (route movements from plant to customer) has revealed a significant opportunity throughout our network to lower our cost to serve.
We make decisions that are informed by data and implement performance measurements and incentives that are aligned with the achievement of our strategic objectives. Asset and Network Optimization Network Optimization: A comprehensive analysis of our plant network and customer flows (route movements from plant to customer) has revealed a significant opportunity throughout our network to lower our cost to serve.
Continuing to increase diversity in executive and all levels of the leadership pipeline remains an organizational priority for the coming years. We will have multiple employee resource groups; examples include those supporting women, racially and ethnically diverse employees and the LGBTQ+ community. Talent Acquisition, Development and Retention .
Additionally, 41% of our senior leadership team are from underrepresented groups including females, who represent 33% of our senior leadership team. We have multiple employee resource groups; examples include those supporting women, veterans, racially and ethnically diverse employees and the LGBTQ+ community. Talent Acquisition, Development and Retention .
Using enhanced data analytics and insights will enable us to focus on customer wins that improve our revenue mix. Increasing Route Density: We are establishing route density metrics to target sales along existing customer routes.
Targeting Attractive Sectors, Services and Products: We are implementing more targeted sales tools and strategies to drive growth across high-value sectors, services and products. Using enhanced data analytics and insights will enable us to focus on customer wins that improve our revenue mix at the right price.
Our revenue is diversified across our many customers as demonstrated by the revenue generated from our 10 largest customers accounting for less than 15% of total revenue in fiscal year 2024. Our customers represent a diverse array of industries including sectors such as manufacturing, hospitality, retail, government, automotive, healthcare and food processing.
We serve customers ranging from small, family-owned operations with a single location to large corporations and national franchises with multiple locations. Our revenue is diversified across our many customers as demonstrated by the revenue generated from our 10 largest customers accounting for less than 10% of total revenue in fiscal year 2025.
The references to our website and the SEC's website are intended to be inactive textual references only and the contents of those websites are not incorporated by reference herein.
You may request a copy of our SEC filings (excluding exhibits) at no cost by writing or telephoning us at the following address or telephone number: Vestis Corporation 1035 Alpharetta Street Suite 2100 Roswell, Georgia 30075 Telephone: 470-226-3655 Attention: Corporate Secretary The references to our website and the SEC's website are intended to be inactive textual references only and the contents of those websites are not incorporated by reference herein.
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In addition, we offer customized uniforms through direct sales agreements, typically for large regional or national companies.
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We believe we are well positioned to take advantage of the various key trends and drivers that are impacting our industry.
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Vestis is led by Kim Scott, President and Chief Executive Officer, Rick Dillon, Executive Vice President and Chief Financial Officer, Angela Kervin, Executive Vice President and Chief Human Resources Officer, Bill Seward, Executive Vice President and Chief Operating Officer and Timothy Donovan, Executive Vice President, Chief Legal Officer and General Counsel. These executives have deep expertise in their respective fields.
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In addition to uniforms, we also provide workplace supplies including restroom supply services, first-aid supplies and safety products, floor mats, towels and linens.
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They were recruited to lead Vestis as a standalone, independent company and are complemented by long-tenured members of management across the company’s commercial and operational functions as well as newly appointed leaders who bring functional expertise, diversity and depth to the Vestis leadership team.
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Further, the factories used to produce these products are subject to annual third-party social compliance audits. 7 Table of Contents Our Competitive Advantages We believe we have significant competitive advantages including our full-service uniform solution offering, size and scale, extensive network footprint and long-tenured customer relationships.
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As noted above, the diversity of our customer base and the variety of industries in which our customers operate results in relatively low exposure to discrete industry trends. Competition Our industry is local in nature, fragmented and highly competitive.
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Value Creation Strategy We recently reviewed our strategic initiatives and priorities and decided to accelerate our near-term growth strategy in order to build a stronger foundation from which to scale in the future as well as drive sustainable and disciplined growth, profitability and return on invested capital.
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To support our Corporate Social Compliance Policy, our international private label garment manufacturers confirm annually their commitment to comply with our Vendor Code of Conduct. Further, the factories used to produce these products are subject to annual third-party social compliance audits.
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As a result, during the first quarter of fiscal 2026, we initiated a multi-year business transformation and restructuring plan (the “Plan”) that is intended to improve our profitability and cash flow generation. See “Management's Discussion and Analysis of Financial Condition and Results of Operations - Restructuring Plan”, and Item 9B.
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Experienced Leadership Team : The Company is led by Kim Scott, President and Chief Executive Officer, Rick Dillon, Executive Vice President and Chief Financial Officer, and Bill Seward, Executive Vice President and Chief Operating Officer. These executives have deep experience in their respective areas.
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We are executing a long-term strategy built on three strategic priorities: • Commercial Excellence; • Operational Excellence; and • Asset & Network Optimization.
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They were hired to lead the Company as a standalone, independent company and are complemented by seasoned industry executives across the Company’s commercial and operational functions as well as newly appointed leaders who bring functional expertise, diversity and depth to the Company’s leadership team. Ms.
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Operational Excellence Our operations currently include significant cost inputs in areas such as labor, merchandise in service costs, plant operating costs and service-related costs.
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Scott has deep and relevant expertise with recurring revenue models having led and operated multiple businesses of this nature over the past 16 years. She also has extensive experience in logistics, route-based distribution and complex rental or subscription-based programs, including in her role as Chief Operating Officer of Terminix.
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We have identified key areas of opportunity to reduce our operating costs and expand margins across our business: Workforce Management : We are working to reduce our labor costs by using targeted workforce reduction actions, and decreasing frontline turnover to improve plant productivity, reducing general and administrative costs and improving plant operations.
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Additionally, she has a broad operating background that includes plant management, logistics, procurement, engineering, acquisitions and large-scale integrations. She joined Aramark in October 2021 as President and CEO of Aramark Uniform Services to develop and launch an accelerated growth and value creation strategy for the company, while also preparing the Company to be a standalone, independent public company. Mr.
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We work to maintain productive working relationships with these unions. During the first quarter of fiscal 2026, we approved and initiated a multi-year business transformation and restructuring plan that is intended to improve our profitability and cash flow generation, and includes certain planned workforce reduction actions (the “Plan”).
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Dillon is a seasoned public company executive with more than 20 years of experience in finance leadership roles. Prior to joining Aramark, Mr. Dillon served as the Chief Financial Officer and Executive Vice President of two publicly traded companies, Enerpac Tool Group and Century Aluminum.
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In addition, during the fourth quarter of fiscal year 2025 and prior to development and approval of the Plan, we took certain workforce reduction actions. See “Management's Discussion and Analysis of Financial Condition and Results of Operations - Restructuring Plan” for additional information. Inclusion and Belonging .
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He joined Aramark in May 2022 to serve as 8 Table of Contents Chief Financial Officer of Aramark Uniform Services and to prepare the Company to be a standalone, independent public company. Mr.
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For example, 11 Table of Contents information from our telematics technology gives us the visibility needed to reduce the amount of idling in our fleet.
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Seward has extensive expertise in leadership roles and previously served as President at UPS Supply Chain Solutions where he oversaw multiple business units including global logistics, freight forwarding, warehousing and distribution. In addition, Mr. Seward previously served as Executive Vice President and Chief Commercial Officer at Stericycle, in addition to other leadership roles at UPS.
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He joined Vestis in September 2024 to serve as Executive Vice President and Chief Operating Officer. Our executive leaders foster a culture of investing in our people, supporting their growth and development, instilling a sense of higher purpose, winning through teamwork with integrity and creating a safe environment for all.
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In addition, our commitment to diversity, equity and inclusion continues to shape our teammate engagement and recruiting efforts.
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We are focused on long-term opportunities to make deliveries in our service network more effective, which we expect will drive revenue growth and margin expansion. Our strategy is focused on creating shareholder value through high-quality and profitable revenue growth that is underpinned by efficient operations and a performance-driven culture.
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We have invested across these areas over the past year and will continue to strengthen these teams to support our strategy. We will make decisions that are informed by data and implement performance measurements and incentives that are aligned with the achievement of our strategic objectives.
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Additionally, 60% of our named executive officers are from underrepresented groups including females, who represent 40% of our named executive officers; 67% of our executive officers are from underrepresented groups including females who represent 33% of our executive officers; and 44% of our senior leadership team are from underrepresented groups including females, who represent 33% of our senior leadership team.
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As of September 27, 2024, we do not anticipate any expenditures for environmental remediation that would have a material effect on our financial condition.
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For example, our telematics technology allows us to proactively reduce fuel usage by limiting idling through real-time, in-cab driver alerts.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeWe are subject to legal proceedings that may adversely affect our business, financial condition or results of operations. We are subject to various litigation claims and legal proceedings including securities class actions, personal injury, customer contract, environmental and employment claims.
Biggest changeWe are subject to various litigation claims and legal proceedings, including securities class actions, personal injury, customer contract, acquisition-related, environmental and employment claims. Certain of these lawsuits, or any potential future lawsuits, if decided adversely to us or settled by us, may result in liability and expense material to our consolidated financial condition and consolidated results of operations.
There can be no assurance that we will be able to obtain new business, renew existing customer contracts at the same or higher levels of pricing or that our current customers will not turn to competitors, cease operations, elect to in-source or terminate contracts with us.
There can be no assurance that we will be able to obtain new business, renew existing customer contracts at the current or higher levels of pricing or that our current customers will not turn to competitors, cease operations, elect to in-source or terminate contracts with us.
These provisions are, among others: • until the third annual stockholder meeting following the Separation, our Board of Directors will be divided into three classes, with each class consisting, as nearly as may be possible, of one-third of the total number of directors, which could have the effect of making the replacement of incumbent directors more time consuming and difficult; • as long as the Board of Directors is classified, our directors can be removed by stockholders only for cause • vacancies occurring on the Board of Directors can only be filled by a majority of the remaining members of our Board of Directors or by a sole remaining director; • for two years following the Separation, stockholders do not have the right to call a special meeting; • stockholders do not have the ability to act by written consent; • our Board of Directors has the power to designate and issue, without any further vote or action by the our stockholders, shares of preferred stock from time to time in one or more series; and • stockholders have to follow certain procedures and notice requirements in order to present certain proposals or nominate directors for election at stockholder meetings.
These provisions are, among others: • until the third annual stockholder meeting following the Separation, our Board of Directors will be divided into three classes, with each class consisting, as nearly as may be possible, of one-third of the total number of directors, which could have the effect of making the replacement of incumbent directors more time consuming and difficult; • as long as the Board of Directors is classified, our directors can be removed by stockholders only for cause; 27 Table of Contents • vacancies occurring on the Board of Directors can only be filled by a majority of the remaining members of our Board of Directors or by a sole remaining director; • for two years following the Separation, stockholders do not have the right to call a special meeting; • stockholders do not have the ability to act by written consent; • our Board of Directors has the power to designate and issue, without any further vote or action by the our stockholders, shares of preferred stock from time to time in one or more series; and • stockholders have to follow certain procedures and notice requirements in order to present certain proposals or nominate directors for election at stockholder meetings.
While we believe that our current tax provisions are appropriate, there can be no assurance that these items will be settled for the amounts accrued, that additional tax exposures will not be identified in the future or that additional tax reserves will not be necessary for any such exposure.
While we believe that our current tax (benefits)/ provisions are appropriate, there can be no assurance that these items will be settled for the amounts accrued, that additional tax exposures will not be identified in the future or that additional tax reserves will not be necessary for any such exposure.
In addition, we typically incur substantial start-up and operating costs and experience lower profit margin and operating cash flows in connection with the establishment of new business, and in periods with higher rates of new business, we have experienced and expect to continue to experience negative impact to our profit margin and our cash flows.
We typically incur substantial start-up and operating costs and experience lower profit margin and operating cash flows in connection with the establishment of new business, and in periods with higher rates of new business, we have experienced and expect to continue to experience negative impact to our profit margin and our cash flows.
This significant amount of debt could potentially have important consequences to us and our debt and equity investors, including: • requiring a substantial portion of our cash flow from operations to make interest payments, thereby reducing our ability to use our cash flow to fund operations, capital expenditures and future business opportunities ; • making it more difficult to satisfy debt service and other obligations; • increasing the risk of a future credit ratings downgrade of our debt, which could increase future debt costs and limit the future availability of debt financing; • increasing our vulnerability to general adverse economic and industry conditions; • reducing the cash flow available to fund capital expenditures and other corporate purposes and to grow our business; • limiting our flexibility in planning for, or reacting to, changes in our business and the industry; • limiting our ability to adjust to changing market conditions and placing us at a competitive disadvantage relative to our competitors that may not be as highly leveraged with debt; and • limiting our ability to borrow additional funds as needed or take advantage of business opportunities as they arise.
This significant amount of debt could potentially have important consequences to us and our debt and equity investors, including: • requiring a substantial portion of our cash flow from operations to make interest payments, thereby reducing our ability to use our cash flow to fund operations, capital expenditures and future business opportunities ; • making it more difficult to satisfy debt service and other obligations; 22 Table of Contents • increasing the risk of a future credit ratings downgrade of our debt, which could increase future debt costs and limit the future availability of debt financing; • increasing our vulnerability to general adverse economic and industry conditions; • reducing the cash flow available to fund capital expenditures and other corporate purposes and to grow our business; • limiting our flexibility in planning for, or reacting to, changes in our business and the industry; • limiting our ability to adjust to changing market conditions and placing us at a competitive disadvantage relative to our competitors that may not be as highly leveraged with debt; and • limiting our ability to borrow additional funds as needed or take advantage of business opportunities as they arise.
Accordingly, the historical financial information included in this 10-K for these periods does not necessarily reflect the financial condition, results of operations or cash flows that we would have achieved as a separate, publicly traded company during the periods presented or those that we will achieve in the future primarily as a result of the factors described below: • Generally, our working capital requirements and capital for our general corporate purposes, including capital expenditures and acquisitions, have historically been satisfied as part of the corporate-wide cash management policies of Aramark.
Accordingly, the historical financial information included in this 10-K for this period does not necessarily reflect the financial condition, results of operations or cash flows that we would have achieved as a separate, publicly traded company during the periods presented or those that we will achieve in the future primarily as a result of the factors described below: • Generally, our working capital requirements and capital for our general corporate purposes, including capital expenditures and acquisitions, have historically been satisfied as part of the corporate-wide cash management policies of Aramark.
In the past, due to more geographically isolated natural disasters, such as wildfires in the western United States and hurricanes and extreme cold conditions in the southern United States, we experienced lost and closed customer locations, business disruptions and delays, the loss of inventory and other assets, and asset impairments.
For example, in the past, due to more geographically isolated natural disasters, such as wildfires in the western United States and hurricanes and extreme cold conditions in the southern United States, we experienced lost and closed customer locations, business disruptions and delays, the loss of inventory and other assets, and asset impairments.
Although we believe that the sources of capital in place will permit us to finance our operations for the foreseeable future on acceptable terms and conditions, our access to, and the availability of, financing on acceptable terms and conditions in 25 Table of Contents the future will be impacted by many factors, including, but not limited to: (1) our financial performance; (2) our credit ratings; (3) the liquidity of the overall capital markets; and (4) the state of the economy.
Although we believe that the sources of capital in place will permit us to finance our operations for the foreseeable future on acceptable terms and conditions, our access to, and the availability of, financing on acceptable terms and conditions in the future will be impacted by many factors, including, but not limited to: (1) our financial performance; (2) our credit ratings; (3) the liquidity of the overall capital markets; and (4) the state of the economy.
Our systems and the systems maintained or used by third parties and service providers to process data on our behalf may not be able to satisfy these changing legal and regulatory requirements, or may require significant additional investments or time to do so.
Our systems and the systems maintained or used by third parties to process data on our behalf may not be able to satisfy these changing legal and regulatory requirements or may require significant additional investments or time to do so.
Any failure, or perceived failure, to achieve ESG goals and initiatives, as well as to manage ESG risks, adhere to public statements, comply with federal, state or international ESG laws and regulations or meet evolving and varied stakeholder expectations and standards could result in legal and regulatory proceedings against us and materially adversely affect our business, financial condition or results of operations.
Any failure, or perceived failure, to achieve ESG goals and initiatives, as well as to manage ESG risks, adhere to public statements, comply with federal, state or international ESG laws and regulations or meet evolving and 21 Table of Contents varied stakeholder expectations and standards could result in legal and regulatory proceedings against us and materially adversely affect our business, financial condition or results of operations.
Non-compliance with these emerging rules or standards or a failure to address regulator, stakeholder and societal expectations may result in potential cost increases, litigation, fines, penalties, production and sales restrictions, brand or 20 Table of Contents reputational damage, loss of customers, suppliers and commercial partners, failure to retain and attract talent, lower valuation and higher investor activism activities.
Non-compliance with these emerging rules or standards or a failure to address regulator, stakeholder and societal expectations may result in potential cost increases, litigation, fines, penalties, production and sales restrictions, brand or reputational damage, loss of customers, suppliers and commercial partners, failure to retain and attract talent, lower valuation and higher investor activism activities.
Furthermore, we are subject to specific restrictions on discontinuing the active conduct of our trade or business, the issuance or sale of stock or other 24 Table of Contents securities (including securities convertible into our stock but excluding certain compensatory arrangements), and sales of assets outside the ordinary course of business. Such restrictions may reduce our strategic and operating flexibility.
Furthermore, we are subject to specific restrictions on discontinuing the active conduct of our trade or business, the issuance or sale of stock or other securities (including securities convertible into our stock but excluding certain compensatory arrangements), and sales of assets outside the ordinary course of business. Such restrictions may reduce our strategic and operating flexibility.
There can be no assurance that our reserves with respect to our environmental sites will be sufficient or that the costs of remediation and investigation will not substantially exceed our reserves as new facts, circumstances, or estimates arise. Unanticipated changes in tax law could adversely impact our financial results.
There can be no assurance that our reserves with respect to our environmental sites will 19 Table of Contents be sufficient or that the costs of remediation and investigation will not substantially exceed our reserves as new facts, circumstances, or estimates arise. Unanticipated changes in tax law could adversely impact our financial results.
In addition, financial distress and insolvency experienced by customers, especially larger customers, has in the past made it difficult and in the future could make it difficult for us to collect amounts we are owed and could result in the voiding, termination or modification of existing contracts.
In addition, financial distress and insolvency experienced by customers, especially larger customers, has in the past made it difficult and in the future could 12 Table of Contents make it difficult for us to collect amounts we are owed and could result in the voiding, termination or modification of existing contracts.
In the course of our business, we may be subject to penalties and fines and reputational harm for non-compliance with environmental protection laws and regulations, and we may settle, or contribute 18 Table of Contents to the settlement of, actions or claims relating to the handling and disposal of wastes or hazardous materials.
In the course of our business, we may be subject to penalties and fines and reputational harm for non-compliance with environmental protection laws and regulations, and we may settle, or contribute to the settlement of, actions or claims relating to the handling and disposal of wastes or hazardous materials.
We are repositioning our brand to remove the Aramark name, which could adversely affect our ability to attract and maintain customers. We have historically marketed our products and services using the “Aramark” name and logo, which is a globally recognized brand with a strong reputation for high-quality products and services.
We have repositioned our brand to remove the Aramark name, which could adversely affect our ability to attract and maintain customers. We historically marketed our products and services using the “Aramark” name and logo, which is a globally recognized brand with a strong reputation for high-quality products and services.
Following the completion of the Separation, our results of operations and cash flows 23 Table of Contents may be more volatile, and we may need to obtain additional financing from banks, through public offerings or private placements of debt or equity securities, strategic relationships or other arrangements, which may or may not be available and may be more costly. • Prior to the Separation, our business was operated by Aramark as part of its broader corporate organization, rather than as an independent company.
Following the completion of the Separation, our results of operations and cash flows have been more volatile, and we may need to obtain additional financing from banks, through public offerings or private placements of debt or equity securities, strategic relationships or other arrangements, which may or may not be available and may be more costly. • Prior to the Separation, our business was operated by Aramark as part of its broader corporate organization, rather than as an independent company.
The resolution of these disputes in a manner adverse to our interests could negatively affect revenue and operating results. If a large number of our customer arrangements were modified in response to any such matter, the effect could be materially adverse to our business, financial condition or results of operations. Our expansion strategy involves risks.
The resolution of these disputes in a manner adverse to our interests could negatively affect revenue and operating results. If a large number of our customer arrangements were modified in response to any such matter, the effect could be materially adverse to our business, financial condition or results of operations.
Our variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly and potentially limit our ability to effectively refinance our indebtedness as it matures. 21 Table of Contents Borrowings under the Credit Agreement bear interest at variable rates and expose us to interest rate risk.
Our variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly and potentially limit our ability to effectively refinance our indebtedness as it matures. Borrowings under the Credit Agreement bear interest at variable rates and expose us to interest rate risk.
Aramark or one of its affiliates performed various corporate functions for us, such as legal, treasury, accounting, auditing, human resources, information technology, investor relations and finance.
Aramark or one of its affiliates performed various corporate functions for us, such as legal, treasury, accounting, auditing, human resources, information technology, 24 Table of Contents investor relations and finance.
Current global supply chain disruptions caused by the current macroeconomic environment, the COVID-19 pandemic and the Russia/Ukraine conflict have resulted, and may continue to result, in delivery delays as well as lower fill rates and higher substitution rates for a wide-range of products.
Current global supply chain disruptions caused by the current macroeconomic environment, recovery from the COVID-19 pandemic and the ongoing military conflict in Ukraine have resulted, and may continue to result, in delivery delays as well as lower fill rates and higher substitution rates for a wide-range of products.
These risks may be exacerbated by current 13 Table of Contents economic conditions due to, among other things, increased cost pressure at our customers, tight labor markets and heightened competition in a contracted marketplace.
These risks may be exacerbated by current economic conditions due to, among other things, increased cost pressure at our customers, tight labor markets and heightened competition in a contracted marketplace.
The amount of such debt financing for acquisitions could be significant and the terms of such debt 15 Table of Contents instruments could be more restrictive than our current covenants.
The amount of such debt financing for acquisitions could be significant and the terms of such debt instruments could be more restrictive than our current covenants.
If we do not satisfactorily perform our obligations under these agreements, we may be held liable for any resulting losses suffered by Aramark, subject to certain limits.
If we do not 25 Table of Contents satisfactorily perform our obligations under these agreements, we may be held liable for any resulting losses suffered by Aramark, subject to certain limits.
The timing, declaration, amount and payment of any future dividends are within the discretion of our Board of Directors, and will depend upon many factors, including our financial condition, earnings, capital requirements of our operating subsidiaries, covenants associated with certain of our debt service obligations, legal requirements, regulatory constraints, industry practice, ability to access capital markets and other factors deemed relevant by our Board of Directors.
While, historically, we have at times paid quarterly dividends, the timing, declaration, amount and payment of any future dividends are within the discretion of our Board of Directors, and will depend upon many factors, including our financial condition, earnings, capital requirements of our operating subsidiaries, covenants associated with certain of our debt service obligations, legal requirements, regulatory constraints, industry practice, ability to access capital markets and other factors deemed relevant by our Board of Directors.
Continued or further unionization of our workforce may increase our costs and work stoppages could damage our business. As of September 27, 2024, approximately 10,800 of our employees were represented by labor unions and covered by over 200 collective bargaining agreements with various terms and dates of expiration.
Continued or further unionization of our workforce may increase our costs and work stoppages could damage our business. Approximately 10,750 of our employees were represented by labor unions and covered by over 200 collective bargaining agreements with various terms and dates of expiration.
Although we believe the exclusive forum provision benefits us by providing increased consistency in the application of law in the types of lawsuits to which it applies, the provision may limit the ability of our stockholders to bring a claim in a judicial forum that such stockholders find favorable for disputes with Vestis or its directors or officers, and it may be costlier for our stockholders to bring a claim in the Court of Chancery of the State of Delaware than other judicial forums, each of which may discourage such lawsuits against Vestis and its directors and officers.
Although we believe the exclusive forum provision benefits us by providing increased consistency in the application of law in the types of lawsuits to which it applies, the provision may limit the ability of our stockholders to bring a claim in a judicial forum that such stockholders find favorable for disputes with Vestis or its directors or officers, and it may be costlier for our stockholders to bring a claim in the Court of Chancery of the State of Delaware than other judicial forums, each of which may discourage such lawsuits against Vestis and its directors and officers. 28 Table of Contents Although our amended and restated certificate of incorporation includes this exclusive forum provision, it is possible that a court could rule that this provision is inapplicable or unenforceable.
Our ability to meet those financial ratios and tests can be affected by events beyond our control and, in the 22 Table of Contents event of a significant deterioration of our financial performance, there can be no assurance that we will satisfy those ratios and tests.
Our ability to meet the financial leverage ratio covenant and certain other financial ratios, tests and covenants can be affected by events beyond our control and, in the event of a significant deterioration of our financial performance, there can be no assurance that we will satisfy those ratios, tests and covenants.
Any of the following risks and uncertainties could materially adversely affect our business, financial condition or results of operations. 12 Table of Contents Risks Related to Our Business Operational Risks Unfavorable economic conditions have in the past adversely affected, are currently adversely affecting and in the future could adversely affect our business, financial condition or results of operations.
Risks Related to Our Business Operations Unfavorable economic conditions have in the past adversely affected, are currently adversely affecting and in the future could adversely affect our business, financial condition or results of operations.
Our systems and the systems of our vendors and other third parties are subject to damage or interruption from power outages, computer or telecommunication failures, computer viruses, catastrophic events and implementation delays or difficulties, as well as usage errors by our employees or third-party service providers.
Our systems and the systems of third parties are subject to damage or interruption from power outages, telecommunication failures, state or federal infrastructure failures, natural disasters and other catastrophic events, implementation delays or difficulties, as well as human errors by employees or third-party service providers.
Risks Related to Our Indebtedness We have debt obligations that could adversely affect our business and profitability and our ability to meet other obligations. We have approximately $1,162.5 million of borrowings outstanding as of September 27, 2024 under our senior secured credit agreement (the “Credit Agreement”), and we may incur additional indebtedness in the future.
We have significant indebtedness that could adversely affect our business and profitability and our ability to meet other obligations. We have approximately $1,168.5 million of borrowings outstanding as of October 3, 2025 under our senior secured credit agreement (the “Credit Agreement”), and we may incur additional indebtedness in the future.
Unfavorable economic conditions could adversely affect the demand for our products and services. For example, in the early stages of the COVID-19 pandemic, we were negatively affected by reduced employment levels at our customers’ locations and declining levels of business and customer spending.
For example, in the early stages of the COVID-19 pandemic, we were negatively affected by reduced employment levels at our customers’ locations and declining levels of business and customer spending.
We do not have direct operations in the Middle East but the recent conflicts in Israel and escalating tensions in the region may disrupt global markets and impact our supply chain.
We do not have direct operations in the Middle East, but the recent conflict in Israel and the potential for re-escalation of tensions in the region, may disrupt global markets and impact our supply chain.
During fiscal 2024, approximately 91% of our revenue was generated in the United States and approximately 9% of our revenue was generated in Canada. In addition, we operate manufacturing plants and a distribution center in Mexico that collectively employ approximately 2,100 personnel as of September 27, 2024.
During fiscal 2025, approximately 91% of our revenue was generated in the United States and approximately 9% of our revenue was generated in Canada. In addition, we operate manufacturing plants and a distribution center in Mexico that collectively employ approximately 1,900 personnel as of October 3, 2025.
The occurrence of some or all of the foregoing could have a material adverse effect on our results of operations, financial condition, business and reputation. We expect that stakeholder expectations relating to environmental, social and governance (“ESG”) considerations may expose us to liabilities, increased costs, reputational harm and other adverse effects on our business.
Any of these risks could have an adverse effect on our results of operations, financial condition, business and reputation. We expect that stakeholder expectations relating to environmental, social and governance (“ESG”) considerations may expose us to liabilities, increased costs, reputational harm and other adverse effects on our business.
Natural disasters, global calamities, climate change, political unrest and other adverse incidents beyond our control could adversely affect our business, financial condition or results of operations. Natural disasters, including hurricanes and earthquakes, global calamities and political unrest have affected, and in the future could affect, our business, financial condition or results of operations.
Natural disasters, global calamities, climate change, terrorist acts, political unrest and other adverse incidents beyond our control could adversely affect our business, financial condition or results of operations.
Following the Separation, subject to limited exceptions, we are repositioning our brand and update, as applicable, our products and services using the “Vestis” name or other names and marks and removing the “Aramark” name and logo on our products and discontinuing its use in connection with our service offerings.
Following the Separation, subject to limited exceptions, we repositioned our brand and updated, as applicable, our products and services using the “Vestis” name or other names and marks and have discontinued using the “Aramark” name and logo in connection with our service offerings.
These systems are also vulnerable to an increasing threat of rapidly evolving cyber-based attacks, including malicious software, attempts to deny access to 19 Table of Contents systems or networks, attempts to gain unauthorized access to data, including through phishing emails, attempts to fraudulently induce employees or others to disclose information, the exploitation of software and operating vulnerabilities and physical device tampering/skimming at card reader units.
These systems are also vulnerable to an increasing threat of cyber-based attacks, including malicious software, denial of service attacks, attempts to gain unauthorized access to data, including social engineering that attempts to fraudulently induce employees or others to improperly disclose confidential information , the exploitation of software and operating vulnerabilities and physical device tampering/skimming at card reader units.
If we make acquisitions, we also cannot be sure that any benefits anticipated from the acquisitions will actually be realized. Likewise, we cannot be sure we will be able to obtain necessary financing for acquisitions. Such financing could be restricted by the terms of our debt agreements or it could be more expensive than our current debt.
Likewise, we cannot be sure we will be able to obtain necessary financing for acquisitions. Such financing could be restricted by the terms of our debt agreements or it could be more expensive than our 15 Table of Contents current debt.
The historical financial information of Vestis included in this 10-K for the fiscal years ended September 29, 2023 and September 30, 2022 is derived from the Combined Financial Statements and accounting records of Aramark.
The historical information about Vestis in this 10-K for the fiscal year ended September 29, 2023 refers to Vestis as operated by and integrated with Aramark. The historical financial information of Vestis included in this 10-K for the fiscal year ended September 29, 2023 is derived from the Combined Financial Statements and accounting records of Aramark.
We may not be able to consummate those dispositions or to obtain the proceeds that we could realize from them and these proceeds may not be adequate to meet any debt service obligations then due. Our debt agreements contain restrictions that limit our flexibility in operating our business.
We may 23 Table of Contents not be able to consummate those dispositions or to obtain the proceeds that we could realize from them and these proceeds may not be adequate to meet any debt service obligations then due.
If the lenders under the credit facilities accelerate the repayment of borrowings, there can be no assurance that we will have sufficient assets to repay those borrowings, as well as our unsecured indebtedness.
If the lenders under the credit agreement accelerate the repayment of borrowings, there can be no assurance that we will have sufficient assets to repay those borrowings, as well as our unsecured indebtedness. In addition, our credit agreement contains various covenants that limit our ability to engage in specified types of transactions.
Section 203 provides that, subject to limited exceptions, persons that acquire, or are affiliated with persons that acquire, more than 15% of the outstanding voting stock of a Delaware corporation may not engage in a business combination with that corporation, including by merger, consolidation or acquisitions of additional shares, for a three-year period following the date on which that person or any of its affiliates becomes the holder of more than 15% of the corporation’s outstanding voting stock. 26 Table of Contents We believe these provisions protect our stockholders from coercive or otherwise unfair takeover tactics by requiring potential acquirers to negotiate with our Board of Directors and by providing the Board with more time to assess any acquisition proposal.
Section 203 provides that, subject to limited exceptions, persons that acquire, or are affiliated with persons that acquire, more than 15% of the outstanding voting stock of a Delaware corporation may not engage in a business combination with that corporation, including by merger, consolidation or acquisitions of additional shares, for a three-year period following the date on which that person or any of its affiliates becomes the holder of more than 15% of the corporation’s outstanding voting stock.
We may seek to acquire companies or interests in companies, or enter into joint ventures that complement our business. Our inability to complete acquisitions, integrate acquired companies successfully or enter into joint ventures may render us less competitive. Our ability to engage in acquisitions, joint ventures and related business opportunities may be subject to additional limitations due to the Separation.
Our expansion strategy involves risks, including our ability to successfully integrate the businesses we acquire and costs and timing related thereto. We may seek to acquire companies or interests in companies, or enter into joint ventures that complement our business. Our inability to complete acquisitions, integrate acquired companies successfully or enter into joint ventures may render us less competitive.
We are increasingly utilizing information technology systems, including with respect to administrative functions, financial and operational data, ordering, point-of-sale processing and payment and the management of our supply chain, to enhance the efficiency of our business and to improve the overall experience of our customers.
Our information systems and infrastructure are used to support our operations and manage key business processes, including, but not limited to, administrative functions, financial and operational data, ordering, point-of-sale processing and payment and the management of our supply chain, to enhance the efficiency of our business and to improve the overall experience of our customers.
Item 1A. Risk Factors . You should carefully consider the following risks and other information in this Form 10-K in evaluating Vestis and Vestis’s common stock.
Item 1A. Risk Factors . You should carefully consider the following risks and other information in this Form 10-K in evaluating Vestis and Vestis’s common stock. Any of the following risks and uncertainties could materially adversely affect our business, financial condition or results of operations.
We have had and may continue to have difficulty in hiring and retaining qualified personnel, particularly at the entry level. We will continue to have significant requirements to hire such personnel.
We believe much of our future growth and success depends on the continued availability, service and well-being of entry level personnel. We have had and may continue to have difficulty in hiring and retaining qualified personnel, particularly at the entry level. We will continue to have significant requirements to hire such personnel.
In certain circumstances, payment card association rules and obligations make us liable to payment card issuers if information in connection with payment cards and payment card transactions that we hold is compromised, the liabilities for which could be substantial.
In certain circumstances, payment card association rules and obligations make us liable to payment card issuers if information in connection with payment cards and payment card transactions that we hold is compromised, the liabilities for which could be substantial. 20 Table of Contents Cybersecurity related laws, regulations and obligations are increasing in complexity and number, change frequently and may be inconsistent across the various jurisdictions in which we operate.
During the normal course of business, we have experienced and expect to continue to experience cyber-based attacks and other attempts to compromise our information systems, although none, to our knowledge, has had a material adverse effect on our business, financial condition or results of operations.
During the normal course of business, we have experienced and expect to continue to experience cyber-based attacks and other attempts to compromise our information systems.
Similarly, financial distress or insolvency, if experienced by our key vendors and service providers such as insurance carriers, could significantly increase our costs. Increases in fuel and energy costs could materially and adversely affect our business, financial condition or results of operations.
Similarly, financial distress or insolvency, if experienced by our key vendors and service providers such as insurance carriers, could significantly increase our costs. Our failure to retain our current customers, renew our existing customer contracts on comparable terms and obtain new customer contracts could adversely affect our business, financial condition or results of operations.
These laws and regulations are evolving to match changes in cyber-attacks and protection programs, which require us to review and amend the legal framework we have in place.
These laws and regulations and contractual obligations continue to evolve in an effort to keep pace with cyber-attacks and protection programs, which require us to routinely review and amend the legal framework we have in place.
While we attempt to comply with all applicable laws and regulations, there can be no assurance that we are in full compliance with all applicable laws and regulations or interpretations of these laws and regulations at all times or that we will be able to comply with any future laws, regulations or interpretations of these laws and regulations.
While we attempt to comply with all applicable laws and regulations, there can be no assurance that we are in full compliance with all applicable laws and regulations or interpretations of these laws and regulations at all times or that we will be able to comply with any future laws, regulations or interpretations of these laws and regulations. 18 Table of Contents Government agencies may make changes in the regulatory frameworks within which we operate that may require us to incur substantial increases in costs in order to comply with such laws and regulations.
We are subject to numerous laws and regulations in the United States and internationally as well as contractual obligations and other security standards, each designed to protect the personal information of customers, employees and other third parties that we collect and maintain.
We also have contractual obligations and security standards, each designed to protect the personal information of customers, employees and other third parties that we directly or indirectly collect and maintain.
We face competition from major national competitors with significant financial resources. In addition, there are regional and local uniform suppliers whom we believe have strong customer loyalty. The primary areas of competition within the industry are price, design, quality of products and quality of services.
Competition in our industry could adversely affect our business, financial condition or results of operations. The uniform apparel and workplace supply services industry is highly competitive. We face competition from major national competitors with significant financial resources. In addition, there are regional and local uniform suppliers whom we believe have strong customer loyalty.
There can be no assurance that we will have access to the capital markets on terms acceptable to us. Risks Related to our Common Stock Your percentage of ownership in Vestis may be diluted in the future.
There can be no assurance that we will have access to the capital markets on terms acceptable to us. 26 Table of Contents Risks Related to our Common Stock Our stock price has recently been volatile and may continue to be volatile in the future, and as a result, the value of our common stock may decline.
In addition, any increased funding obligations for underfunded multiemployer-defined benefit pension plans could have an adverse financial impact on us. 17 Table of Contents Legal, Regulatory, Safety and Security Risks If we fail to comply with requirements imposed by applicable law or other governmental regulations, we could become subject to lawsuits, investigations and other liabilities and restrictions on our operations that could significantly and adversely affect our business, financial condition or results of operations.
If we fail to comply with requirements imposed by applicable law or other governmental regulations, we could become subject to lawsuits, investigations and other liabilities and restrictions on our operations that could significantly and adversely affect our business, financial condition or results of operations.
At any given time, we may be evaluating one or more acquisitions or engaging in acquisition negotiations. We cannot be sure that we will be able to continue to identify acquisition candidates or joint venture partners on commercially reasonable terms or at all.
We cannot be sure that we will be able to continue to identify acquisition candidates or joint venture partners on commercially reasonable terms or at all. If we make acquisitions, we also cannot be sure that any benefits anticipated from the acquisitions will actually be realized.
Unfavorable economic conditions may arise during times of national and international economic downturns, or may be attributed to natural disasters, calamities, public health crises, political unrest and global conflicts. Unfavorable economic conditions may also contribute to supply chain disruptions, geopolitical events, global energy shortages, major central bank policy actions including interest rate increases, public health crises or other factors.
Unfavorable economic conditions may also contribute to supply chain disruptions, geopolitical events, global energy shortages, major central bank policy actions including interest rate increases, public health crises or other factors. Unfavorable economic conditions could adversely affect the demand for our products and services.
In addition, customers are increasingly focused on and requiring us to set targets and meet standards related to environmental sustainability matters, such as greenhouse gas emissions, packaging, waste and wastewater. When we renew existing customer contracts, it is often on terms that are less favorable or less profitable for us than the then-current contract terms.
In addition, customers are increasingly focused on and requiring us to set targets and meet standards related to environmental sustainability matters, such as greenhouse gas emissions, packaging, waste and wastewater.
The continued or further unionization of our workforce could increase our overall costs and adversely affect our flexibility to run our business in the most efficient manner, to remain competitive and acquire new business.
A work stoppage or other limitations on our operations and facilities for any reason could have an adverse effect on our business, financial condition or results of operations. 17 Table of Contents The continued or further unionization of our workforce could increase our overall costs and adversely affect our flexibility to run our business in the most efficient manner, to remain competitive and acquire new business.
Cybersecurity related laws, regulations and obligations are increasing in complexity and number, change frequently and may be inconsistent across the various jurisdictions in which we operate. Additionally, the federal government and some states have adopted, are considering or in the future may adopt similar data protection laws.
Additionally, the federal government and some states have adopted, are considering or in the future may adopt similar data protection laws.
We maintain confidential, proprietary and personal information about, or on behalf of, our potential, current and former customers, employees and other third parties in these systems or engage third parties in connection with storage and processing of this information. Such information includes employee, customer and third-party data, including credit card numbers, social security numbers, healthcare information and other personal information.
In the ordinary course of business, we directly or indirectly maintain confidential, proprietary and personal information about, or on behalf of, our potential, current and former customers, employees and third parties. Such information may include employee, customer, supplier and other third-party data that may contain personal information, personal health information, and/or personal credit information.
Continuing or additional increases in fuel and energy costs could have a material adverse effect on our business, financial condition or our results of operations. Our failure to retain our current customers, renew our existing customer contracts on comparable terms and obtain new customer contracts could adversely affect our business, financial condition or results of operations.
Our operating margins have been and may continue to be impacted by such increased fuel prices. Continuing or additional increases in fuel and energy costs could have a material adverse effect on our business, financial condition or our results of operations.
Any terrorist attacks or incidents prompted by political unrest also may adversely affect our revenue and operating results. These future developments are outside of our control and are highly uncertain. Competition in our industry could adversely affect our business, financial condition or results of operations. The uniform apparel and workplace supply services industry is highly competitive.
Any terrorist attacks or incidents prompted by political unrest also may adversely affect our revenue and operating results. These future developments are outside of our control and are highly uncertain. Labor-Related Risks Our business may suffer if we are unable to hire and retain sufficient qualified personnel or if labor costs increase.
Moreover, there can be no assurance that we will continue to pay such dividends or the amount of such dividends. Anti-takeover provisions could enable our Board of Directors to resist a takeover attempt by a third party and limit the power of our stockholders.
From time to time, we will issue additional stock-based awards to our employees under our employee benefits plans. Anti-takeover provisions could enable our Board of Directors to resist a takeover attempt by a third party and limit the power of our stockholders.
The prices of fuel and energy to run our vehicles, equipment and facilities are volatile and fluctuate based on factors outside of our control. For example, the ongoing conflict between Russia and Ukraine disrupted supply chains and caused increased fuel prices. Our operating margins have been and may continue to be impacted by such increased fuel prices.
The prices of fuel and energy to run our vehicles, equipment and facilities are volatile and fluctuate based on factors outside of our control.
In addition, our Credit Agreement requires us to satisfy and maintain specified financial ratios and other financial condition tests.
Risks Related to Our Indebtedness Our credit agreement contains certain financial ratios, tests and covenants, including a net leverage ratio, as well as restrictions that limit our flexibility in operating our business. Our credit agreement requires us to satisfy and maintain specified financial ratios, tests and other covenants, including a net leverage ratio covenant.
The techniques used to obtain unauthorized access, disable or degrade service or sabotage systems change frequently, may be difficult to detect for a long time and often are not recognized until after an attack is launched or occurs. As a result, we and such third parties may be unable to anticipate these techniques or to implement adequate preventative measures.
Techniques used to obtain unauthorized access, disable or degrade service or sabotage systems evolve rapidly, and may be difficult to detect until after they are already deployed, potentially allowing them to persist within our systems and the systems of third parties for extended periods of time.
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Labor-Related Risks Our business may suffer if we are unable to hire and retain sufficient qualified personnel or if labor costs increase. We believe much of our future growth and success depends on the continued availability, service and well-being of entry level personnel.
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Unfavorable economic conditions may arise during times of national and international economic downturns, or may be attributed to government shutdowns, 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), inflationary or deflationary pressures, natural disasters, calamities, public health crises, political unrest, terrorist acts and global conflicts.
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A work stoppage or other limitations on our operations and facilities for any reason could have an adverse effect on our business, financial condition or results of operations.
Added
In recent quarters, we have experienced rental revenue declines resulting from lost business in excess of new business, as well as declines in rental revenue related to existing business.
Removed
Government agencies may make changes in the regulatory frameworks within which we operate that may require us to incur substantial increases in costs in order to comply with such laws and regulations.
Added
An impairment charge of our intangible assets, including goodwill, could have a negative impact on our financial condition and results of operations. Our total assets reflect substantial intangible assets, primarily goodwill. Goodwill and other intangible assets are not amortized and are subject to impairment testing at least annually.
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In addition, we or such third parties may decide to upgrade existing information technology systems from time to time to support the needs of our business and growth strategy and the risk of system disruption is increased when significant system changes are undertaken.
Added
Future events may cause impairments of our goodwill or other intangible assets based on factors such as the price of our common stock, projected cash flows, assumptions used or other variables.
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We maintain a global cybersecurity program governed by an information security management system aligned with ISO27001 and mapped against NIST-800. The company’s Chief Information Security Officer (CISO) is responsible for developing and managing the company’s cybersecurity program and reporting cybersecurity matters to senior management, the Audit Committee, and the Board.
Added
For example, we determined it was appropriate to perform an interim quantitative impairment assessment of goodwill due to the existence of a possible impairment indicator as of June 27, 2025 resulting from a decline in financial performance, and a sustained decrease in our share price during the quarter ended June 27, 2025.
Removed
We have established and maintain a cross-functional Cyber Governance Committee that is responsible for helping the CISO prioritize and manage evolving cyber risks.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeGovernance The Company’s Board of Directors provide ultimate oversight of the Company’s cybersecurity risk management program. As reflected in the Audit Committee’s charter, the Board of Directors has specifically delegated responsibility for oversight of cybersecurity matters to the Audit Committee.
Biggest changeAs reflected in the Audit Committee’s charter, the Audit Committee of the Company’s Board of Directors has been delegated certain cybersecurity oversight responsibility and, among other things, monitors the Company’s cybersecurity risk profile, receives periodic updates from management on all matters related to cybersecurity and reports to the full Board of Directors.
Where needed, the Company seeks appropriate certifications from vendors and contractually requires adherence to data privacy and security requirements from its vendors. Where service providers are materially utilized, the company obtains SOC1 or SOC2 reports and complies with complementary user entity controls to keep those attestations valid.
Where service providers are materially utilized, the company obtains SOC1 or SOC2 reports and complies with complementary user entity controls to keep those attestations valid. Where needed, the Company requires appropriate certifications and contractually requires adherence to data privacy and security requirements from its vendors.
The Company’s cybersecurity risk management program is aligned with the International Standards Organization (ISO 27001:2022) and mapped to National Institute of Standards 27 Table of Contents Special Publication 800-53 Revision 5 (NIST 800-53). The Company’s cybersecurity program is integrated into the Company’s overarching enterprise risk management program.
The Company’s cybersecurity risk management program is aligned with the International Standards Organization (ISO 27001:2022) and mapped to National Institute of Standards Special Publication 800-53 Revision 5 (NIST 800-53). The Company’s cybersecurity program is integrated into the Company’s overarching enterprise risk management program.
The Company’s Chief Information Security Officer (CISO) is responsible for managing the Company’s cybersecurity program and reporting on cybersecurity matters to management, the Cyber Governance Committee, and the Company’s board of directors.
The Company’s Chief Information Security Officer (CISO) is responsible for developing and managing the Company’s cybersecurity program and reporting on cybersecurity matters to management, the Audit Committee and the Company’s Board of Directors.
The CISO has over twenty years of cybersecurity and technology experience, originating with cryptography and security experience as a military officer and progressing through senior management roles at prominent global audit and technology consulting corporations.
The CISO has over twenty years of cybersecurity and technology experience, originating with cryptography and security experience as a military officer and progressing through senior management roles at prominent global audit and technology consulting corporations. The CISO is supervised by the Company’s Chief Information Officer.
The Company’s maintains a Cyber Governance Committee, which meets quarterly, and interfaces with other functional areas within the Company, including, but not limited to, legal, internal audit, accounting, risk management, human resources, as well as external third-party partners.
The Cyber Governance Committee, which oversees the Company’s governance and oversight of information security, meets quarterly and interfaces with other functional areas within the Company, including, but not limited to, legal, internal audit, accounting, risk management, human resources, as well as external third-party partners. The CISO serves as the chair of the Cyber Governance Committee.
As required, the Company engages consultants and third parties to assist with penetration testing, tabletop incident response exercises, or other activities necessary to comply with various standards and certifications that we require to operate as a business.
As required, the Company engages consultants and third parties to assist with penetration testing, tabletop incident response exercises, or other activities necessary to comply with various standards and certifications that are necessary for the Company’s business operations.
The Company provides regular awareness training to our employees and consultants using our collaboration platforms, including periodic phishing tests, to help identify, avoid, and mitigate cybersecurity threats, as well as targeted security training for key departments dealing with sensitive data types.
The Company provides regular awareness training to its employees and consultants using its collaboration platforms to help identify, avoid, and mitigate cybersecurity threats, as well as targeted security training for key departments that routinely process, store or handle sensitive data types.
The CISO presents quarterly updates to the Audit Committee on the Company’s cyber risks and threats, status of projects to strengthen the Company’s information security systems, and emerging threats.
The CISO presents quarterly updates to the Audit 29 Table of Contents Committee on the Company’s cyber risks and threats, status of projects to strengthen the Company’s information security systems, and emerging threats. During the normal course of business, the Company has experienced and expects to continue to experience cyber-based attacks and other attempts to compromise its information systems.
The CISO serves as the chair of the committee, which has been tasked with providing governance and oversight of the Information Security and Management System and to provide governance during major cybersecurity incidents. The Company engages third parties to assist with the monitoring components of the security infrastructure that we have deployed.
The CISO also provides response and oversight during any significant cybersecurity incidents and informs the Cyber Governance Committee of all cybersecurity incidents that have been identified by the Company to date. The Company engages third parties to assist with the monitoring components of the security infrastructure that we have deployed.
Item 1C. Cybersecurity. Risk Management and Strategy The Company maintains comprehensive policies, procedures, and controls to protect the Company’s information systems and related data from cybersecurity threats and incidents.
Item 1C. Cybersecurity. Risk Management and Strategy Cybersecurity risk management is a critical component of the Company’s overall risk management. The Company proactively addresses cybersecurity risk through a comprehensive cybersecurity program to identify, protect, respond to, and manage any reasonably foreseeable cybersecurity risks, threats and incidents.
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The CISO leads the Company’s cybersecurity and information technology compliance department which is staffed with technical and compliance personnel with the appropriate experience and certifications required to accomplish the department’s mandates. The CISO is supervised by the Company’s Chief Technology Officer.
Added
The Company has established and maintains a cross-functional Cyber Governance Committee that is responsible for helping the CISO prioritize and manage evolving cyber risks and reports to the Company’s Chief Information Officer.
Removed
During the normal course of business, the Company has experienced and expects to continue to experience cyber-based attacks and other attempts to compromise our information systems, although none, to our knowledge, has had a material adverse effect on our business, financial condition or results of operations.
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Governance The Company’s Board of Directors recognizes the importance of cybersecurity and has ultimate oversight of the Company’s cybersecurity risk management program.
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The Company does not believe that any risks from cybersecurity threats, nor any previous cybersecurity incidents, have materially affected the Company.
Added
Based on the information that the Company had as of the end of the fiscal year covered by this Annual Report on Form 10-K, the Company does not believe that it has experienced any cybersecurity incidents that have materially affected the Company.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe own 161 buildings in the United States and 28 buildings in Canada. We lease 186 premises, consisting of offices, laundry plants, satellite plants, manufacturing plants, and distribution centers. We lease 173 premises in the United States and 13 premises in Canada.
Biggest changeWe own 149 buildings in the United States and 28 buildings in Canada. We lease 161 premises, consisting of offices, laundry plants, satellite plants, manufacturing plants, and distribution centers. We lease 148 premises in the United States and 13 premises in Canada. No individual parcel of real estate owned or leased is of material significance to our total assets.
Item 2. Properties . Our principal executive offices are currently leased at 1035 Alpharetta Street, Roswell, GA 30075. As of September 27, 2024, we operated 375 sites including laundry plants, satellite plants, distribution centers and manufacturing plants that are located across the United States, Canada, and Mexico. We own 189 buildings, including distribution centers and satellite plants.
Item 2. Properties . Our principal executive offices are currently leased at 1035 Alpharetta Street, Roswell, GA 30075. As of October 3, 2025, we operated 338 sites including laundry plants, satellite plants, distribution centers and manufacturing plants that are located across the United States, Canada, and Mexico. We own 177 buildings, including distribution centers and satellite plants.
Removed
No individual parcel of real estate owned or leased is of material significance to our total assets. 28 Table of Contents

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeHowever, in the event of unexpected further developments, it is possible that the ultimate resolution of these matters, or other similar matters, if unfavorable, may be materially adverse to our business, financial condition, results of operations or cash flows.
Biggest changeHowever, in the event of unexpected further developments, it is possible that the ultimate resolution of these matters, or other similar matters, if unfavorable, may be materially adverse to our business, financial condition, results of operations or cash flows. We discuss significant legal proceedings pending against us in Note 9.
From time to time, Vestis and its subsidiaries are a party to various other legal actions, proceedings and investigations involving claims incidental to the conduct of their business or otherwise related to us, including actions by customers, employees, government entities and third parties, including under federal, state, international, national, provincial and local employment laws, wage and hour laws, discrimination laws, immigration laws, human health and safety laws, import and export controls and customs laws, environmental laws, false claims or whistleblower statutes, tax codes, antitrust and competition laws, customer protection statutes, procurement regulations, intellectual property laws, supply chain laws, the Foreign Corrupt Practices Act and other anti-corruption laws, lobbying laws, motor carrier safety laws, data privacy and security laws, or alleging negligence and/or breaches of contractual and other obligations.
From time to time, Vestis and its subsidiaries are a party to various other legal actions, proceedings and investigations, including securities class action claims and claims incidental to the conduct of their business or otherwise related to us, including actions by customers, employees, acquisition counterparties, government entities and third parties, including under federal, state, international, national, provincial and local employment laws, wage and hour laws, discrimination laws, immigration laws, human health and safety laws, import and export controls and customs laws, environmental laws, false claims or whistleblower statutes, tax codes, antitrust and competition laws, customer protection statutes, procurement regulations, intellectual property laws, supply chain laws, the Foreign Corrupt Practices Act and other anti-corruption laws, lobbying laws, motor carrier safety laws, data privacy and security laws, or alleging negligence and/or breaches of contractual and other obligations.
Removed
Item 3. Legal Proceedings . On May 13, 2022, Cake Love Co. (“Cake Love”) commenced a putative class action lawsuit against AmeriPride Services, LLC (“AmeriPride”), a subsidiary of Vestis, in the United States District Court for the District of Minnesota. The lawsuit was subsequently updated to add an additional named plaintiff, Q-Mark Manufacturing, Inc.
Added
Commitments and Contingencies , in the “Notes to the Consolidated and Combined Financial Statements” included within Item 8. Financial Statements and Supplementary Data , of this annual report on Form 10-K. Please refer to such section, which we incorporate by reference into this Item 3. Item 4. Mine Safety Disclosures. Not applicable. 30 Table of Contents PART II
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(“Q-Mark” and, together with Cake Love, the “Plaintiffs”). Plaintiffs allege that the defendants increased certain pricing charged to members of the purported class without the proper notice required by service agreements between AmeriPride and members of the purported class and that AmeriPride breached the duty of good faith and fair dealing.
Removed
Plaintiffs seek damages on behalf of the purported class representing the amount of the allegedly improperly noticed price increases along with attorneys’ fees, interest and costs. In the current quarter, the parties reached a settlement in principle, subject to court approval. The settlement includes, among other terms, a monetary component of $3.1 million.
Removed
The full amount of the proposed settlement has been provided for in the Consolidated and Combined Financial Statements.
Removed
On May 17, 2024, a purported Vestis shareholder commenced a putative class action lawsuit against Vestis and certain of its officers, in the United States District Court for the Northern District of Georgia, captioned Plumbers, Pipefitters and Apprentices Local No. 112 Pension Fund v. Vestis Corporation, et al., Case No. 1: 24-cv-02175-SDG.
Removed
The lawsuit is purportedly brought on behalf of purchasers of Vestis’ common stock between October 2, 2023 and May 1, 2024, inclusive. The complaint alleges claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, based on allegedly false or misleading statements generally related to our business and operations, pricing practices, and financial results and outlook.
Removed
The lawsuit seeks unspecified damages and other relief. On September 23, 2024, the Court appointed co-lead plaintiffs. On October 30, 2024, the Court entered an amended scheduling order. On June 4, 2024, a purported Vestis shareholder commenced a putative class action lawsuit against Vestis, in the Court of Chancery of the State of Delaware, captioned O’Neill v.
Removed
Vestis Corp., Case No. 2024-0600-JTL . The lawsuit is purportedly brought on behalf of Vestis shareholders. The complaint alleges a single claim for declaratory judgment, seeking to invalidate and void Section II.5(d) of Vestis’ Amended and Restated Bylaws, effective September 29, 2023.
Removed
On October 7, 2024, the Court granted a stipulation to consolidate multiple related actions involving similar company defendants, including the Vestis action, solely for purposes of adjudicating an omnibus motion to dismiss the complaints in each of those actions. On October 11, 2024, Vestis and the other consolidated defendants filed an omnibus motion to dismiss.
Removed
On July 10, 2024, a purported Vestis shareholder commenced a derivative action against Vestis’ directors and certain of its officers, in the United States District Court for the Northern District of Georgia, captioned Hollin v. Scott, et al., Case No. 1: 24-cv-03059-SDG.
Removed
The complaint seeks unspecified damages on behalf of Vestis and certain other relief, such as certain reforms to corporate governance and internal procedures.
Removed
The complaint (in which Vestis is named as a nominal defendant) generally alleges, among other things, breaches of fiduciary duties in connection with the oversight of Vestis’ public statements and internal controls, and that Vestis was damaged as a result of the breaches of fiduciary duties.
Removed
The complaint also alleges, among other things, violations of Section 10(b) of the Securities Exchange Act of 1934, aiding and abetting breach of fiduciary duty, unjust enrichment, and waste of corporate assets.
Removed
We cannot predict the outcome of these legal matters, nor can we predict whether any outcome may be materially adverse to our business, financial condition, results of operations or cash flows. We intend to vigorously defend these matters. 29 Table of Contents Item 4. Mine Safety Disclosures. Not applicable. 30 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeDividends We declared and paid a quarterly dividend of $0.035 per share to our shareholders of record for the first, second, and third quarter of fiscal 2024. In the fourth quarter of fiscal 2024, we declared a dividend of $0.035 to be paid in the first quarter of fiscal 2025.
Biggest changeDividends We declared and paid a quarterly dividend of $0.035 per share to our shareholders of record for the first and second quarter of fiscal 2025.
The graph assumes $100 was invested in the S&P 600 and peer group companies on the first day of regular-way trading on October 2, 2023 for our common stock, and that all dividends were reinvested.
The graph assumes $100 was invested in the S&P 600 and peer group companies on the first day of regular-way trading on October 2, 2023 for our common stock, and that all dividends paid during the period were reinvested.
Stock Performance Graph The following graph compares the total return on the Company’s common stock for our fiscal 2024 year with the Standard & Poor’s SmallCap 600 Index (“S&P 600”) and a customized peer group of three companies that includes Cintas Corporation, UniFirst Corporation, and Rollins, Inc..
Stock Performance Graph The following graph compares the total return on the Company’s common stock with the Standard & Poor’s SmallCap 600 Index (“S&P 600”) and a customized peer group of three companies that includes Cintas Corporation, Rollins, Inc. and UniFirst Corporation.
As of October 25, 2024, there were approximately 770 holders of record of our outstanding common stock. This does not include persons who hold our common stock in nominee or “street name” accounts through brokers or banks.
As of November 19, 2025, there were approximately 739 holders of record of our outstanding common stock. This does not include persons who hold our common stock in nominee or “street name” accounts through brokers or banks.
There can be no assurance that we will continue to pay such dividends or the amount of such dividends.
Accordingly, there can be no assurance that we will pay dividends in the future or the amount of any such dividends.
Removed
The timing, declaration, amount and payment of any future dividends will continue to be within the discretion of our Board of Directors and will depend upon many factors, including our financial condition, earnings, capital requirements of our operating subsidiaries, covenants associated with certain of our debt service obligations, legal requirements, regulatory constraints, industry practice, ability to access capital markets and other factors deemed relevant by our Board of Directors.
Added
As part of the May 1, 2025 amendment to the Company’s Credit Agreement disclosed in Note 4, Borrowings, of the Consolidated and Combined Financial Statements included elsewhere in this annual report on Form 10-K, the Company agreed to restrict all dividends and share repurchases until the earlier of (i) any fiscal quarter ending after October 2, 2026 so long as the Company is then in compliance with the financial covenants and (ii) when the Company achieves a net leverage ratio below or equal to 4.50x as of the last day of two consecutive quarters through the end of fiscal 2026.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeSegment operating income of $264.7 million in fiscal 2024 decreased 12.9% compared to the prior fiscal year, primarily driven by: • the nonrecurrence of the $26.0 million temporary energy fee recorded in fiscal 2023; • incremental production and delivery labor costs of approximately $18.4 million in fiscal 2024; • higher rental merchandise in service costs of $4.2 million in fiscal year 2024; • higher bad debt expense of $11.5 million in fiscal year 2024; and • the decreases were partially offset by: • lower sales wage costs of $9.0 million largely resulting from lower year-over-year headcount; • year-over-year energy savings of $12.9 million primarily driven by lower rates, as well as our route optimization efforts; Segment operating income margin decreased approximately 140 basis points from 11.8% in fiscal 2023 to approximately 10.4% in fiscal 2024. 37 Table of Contents Results of Operations—Canada Results Fiscal 2024 Compared to Fiscal 2023 The following table presents an overview of our Canada reportable segment results with the amount of and percentage change between periods for the fiscal years 2024 and 2023 (dollars in thousands).
Biggest changeSegment operating income margin decreased approximately 420 basis points from 10.4% in fiscal 2024 to approximately 6.2% in fiscal 2025. 38 Table of Contents Results of Operations—Canada Results Fiscal 2025 Compared to Fiscal 2024 The following table presents an overview of our results for the Canada reportable segment for fiscal 2025 and fiscal 2024 with the amount of and percentage change between periods (dollars in thousands).
Our uniform options include shirts, pants, outerwear, gowns, scrubs, high visibility garments, particulate-free garments, and flame-resistant garments, along with shoes and accessories. We service our customers on a recurring rental basis, typically weekly, delivering clean uniforms while, during the same visit, picking up worn uniforms for inspection, cleaning and repair or replacement.
Our uniform options include shirts, pants, outerwear, gowns, scrubs, high visibility garments, particulate-free garments, and flame-resistant garments, along with shoes and accessories. We service our customers on a recurring rental basis, typically weekly, delivering clean uniforms while, during the same visit, picking up worn uniforms for inspection, cleaning, repair or replacement.
Revenue is recognized in an amount that reflects the consideration we expect to be entitled to in exchange for the services or products described above and is presented net of sales and other taxes we collect on behalf of governmental authorities.
Revenue is recognized in an amount that reflects the consideration we expect to be entitled to in exchange for the services or products described above and is presented net of sales and other taxes that we collect on behalf of governmental authorities.
The Purchasers benefit from SPE’s guarantee of repayment on Receivables transferred as well as its pledge of additional Receivables as collateral. We have agreed to guarantee the performance of the Originators’ respective obligations under the A/R Facility. Neither we (except for the SPE referenced above) nor the Originators guarantees the collectability of the Receivables under the A/R Facility.
The Purchasers benefit from the SPE’s guarantee of repayment on Receivables transferred as well as its pledge of additional Receivables as collateral. We have agreed to guarantee the performance of the Originators’ respective obligations under the A/R Facility. Neither we (except for the SPE referenced above) nor the Originators guarantees the collectability of the Receivables under the A/R Facility.
Revenue from these contracts represent a single-performance obligation and are recognized over time as services are performed based on the nature of services provided and contractual rates (output method).
Revenue from these contracts represent a single-performance obligation and are recognized over time as services are performed based on the nature of services provided and contractual rates (output method).
We leverage our broad footprint, supply chain, delivery fleet and route logistics capabilities to serve customers on a recurring basis, typically weekly, and primarily through multi-year contracts. Our full-service uniform offering (“Uniforms”) includes the design, sourcing, manufacturing, customization, personalization, delivery, laundering, sanitization, repair, and replacement of uniforms.
We leverage our broad footprint, supply chain, delivery fleet and route logistics capabilities to serve customers on a recurring basis, typically weekly, and primarily through multi-year contracts. Our full-service uniform offering includes the design, sourcing, manufacturing, customization, personalization, delivery, laundering, sanitization, repair, and replacement of uniforms.
Based on our evaluation performed, we determined that the fair value of the reporting units exceeded their respective carrying amount, and therefore, we determined that goodwill was not impaired. The determination of fair value for the Vestis reporting units includes assumptions, which are considered Level 3 inputs, that are subject to risk and uncertainty.
Based on the evaluation performed, we determined that the fair value of the reporting units exceeded their respective carrying amount, and therefore, we determined that goodwill was not impaired. The determination of fair value for the Vestis reporting units includes assumptions, which are considered Level 3 inputs, that are subject to risk and uncertainty.
The Term Loan A-1 interest rate was, and the Term Loan A-2 interest rate is, the Secured Overnight Financing Rate (“SOFR”), plus a Credit Spread Adjustment of 10 basis points and a margin from 1.50% to 2.50% depending on the Company’s Consolidated Total Net Leverage Ratio, as defined in the Credit Agreement.
The Term Loan A-2 interest rate is, the Secured Overnight Financing Rate (“SOFR”), plus a Credit Spread Adjustment of 10 basis points and a margin from 1.50% to 2.50% depending on the Company’s Consolidated Total Net Leverage Ratio, as defined in the Credit Agreement.
The Credit Agreement contains certain customary affirmative covenants. The Credit Agreement also includes customary events of default and other provisions that could require all amounts due thereunder to become immediately due and payable at the option of the lenders, if we fail to comply with the terms of the Credit Agreement or if other customary events occur.
Additionally, the Credit Agreement contains certain customary affirmative covenants. The Credit Agreement also includes customary events of default and other provisions that could require all amounts due thereunder to become immediately due and payable at the option of the lenders, if we fail to comply with the terms of the Credit Agreement or if other customary events occur.
The Term Loan B-1 requires $2.0 million of principal payments each quarter until the maturity date, at which the remaining unpaid principal amount is due. During fiscal 2024, the Company paid principal amounts of $202.5 million and $135.0 million on its Term Loan A-2 and Term Loan B-1.
The Term Loan B-1 requires $2.0 million of principal payments each quarter until the maturity date, at which point the remaining unpaid principal amount is due. During fiscal 2024, the Company paid principal amounts of $202.5 million and $135.0 million on its Term Loan A-2 and Term Loan B-1.
Covenant Compliance The Credit Agreement contains a number of covenants that, among other things, restrict, subject to certain exceptions, our ability to: incur additional indebtedness; issue preferred stock or provide guarantees; create liens on assets; engage in mergers or consolidations; sell or dispose of assets; pay dividends, make distributions or repurchase capital stock; engage in certain transactions with affiliates; make investments, loans or advances; create restrictions on the payment of dividends or other amounts to the Company from its restricted subsidiaries; amend material agreements 40 Table of Contents governing our subordinated debt; repay or repurchase any subordinated debt, except as scheduled or at maturity; make certain acquisitions; change our fiscal year; and fundamentally change our business.
Covenant Compliance The Credit Agreement contains a number of covenants that, among other things, restrict, subject to certain exceptions, our ability to: incur additional indebtedness; issue preferred stock or provide guarantees; create liens on assets; engage in mergers or consolidations; sell or dispose of assets; pay dividends, make distributions or repurchase capital stock; engage in certain transactions with affiliates; make investments, loans or advances; create restrictions on the payment of dividends or other amounts to the Company from its restricted subsidiaries; amend material agreements governing our subordinated debt; repay or repurchase any subordinated debt, except as scheduled or at maturity; make certain acquisitions; change our fiscal year; and fundamentally change our business.
New Accounting Standards Updates See Note 1 to the audited Consolidated and Combined Financial Statements for a full description of recent accounting standards updates, including the expected dates of adoption.
New Accounting Standards Updates See Note 1 to the audited Consolidated and Combined Financial Statements for a full description of recent accounting standard updates, including the expected dates of adoption.
More specifically, depreciation expense is related to processing operation assets such as washers, dryers, steam tunnels and related equipment, distribution centers and related product handling and storage equipment, company-owned and financed delivery vehicles, information technologies and other assets for which we expect to receive an economic benefit for greater than one year.
More specifically, depreciation expense is related to processing operational assets such as washers, dryers, steam tunnels and related equipment, distribution centers and related product handling and storage equipment, company-owned and financed delivery vehicles, information technologies and other assets for which we expect to receive an economic benefit for greater than one year.
We have two manufacturing facilities in Mexico with approximately 189,000 square feet of manufacturing capacity between both plants that produce approximately 60% of our uniforms and linens products. We source raw materials, finished goods, equipment, and other supplies from a variety of domestic and international suppliers.
We have two manufacturing facilities in Mexico with approximately 189,000 square feet of manufacturing capacity between both plants that produce approximately 60% of our uniforms and linen products. We source raw materials, finished goods, equipment, and other supplies from a variety of domestic and international suppliers.
We apply these accounting policies in a consistent manner. In preparing our Consolidated and Combined Financial Statements, management is required to make estimates and assumptions that, among other things, affect the reported amounts of assets, liabilities, revenue, and expenses.
We apply these accounting policies in a consistent manner. In preparing our Consolidated and Combined Financial Statements, management is required to make estimates and assumptions that, among other things, affect the reported amounts of assets, liabilities, revenues, and expenses.
Our effective tax rate differs from the statutory United States income tax rate due to the effect of state and local income taxes, the tax rate in Canada where we have operations, change to deferred taxes on foreign investments, tax credits, and certain nondeductible expenses.
Our effective tax rate differs from the statutory United States income tax rate due to the effect of state and local income taxes, the tax rate in Canada where we have operations, changes to deferred taxes on foreign investments, tax credits, and certain nondeductible expenses.
Revenue Recognition We generate and recognize over 94% of our total revenue from route servicing contracts on both Uniforms, which we generally manufacture, and Workplace Supplies, such as mats, towels, and linens that are procured from third-party suppliers.
Revenue Recognition We generate and recognize over 95% of our total revenue from route servicing contracts on both uniforms, which we generally manufacture, and workplace supplies, such as mats, towels, and linens that are procured from third-party suppliers.
Actual results and the timing of events could differ materially from those anticipated in those forward-looking statements as a result of a number of factors, including those set forth under “Risk Factors,” “Cautionary Note Regarding Forward-Looking Statements” and “Business” sections and elsewhere in this Annual Report on Form 10-K (“Annual Report”).
Actual results and the timing of events could differ materially from those anticipated in those forward-looking statements as a result of a number of factors, including those set forth under “Risk Factors,” “Cautionary Note Regarding Forward-Looking Statements,” the “Business” section and elsewhere in this Annual Report on Form 10-K (“Annual Report”).
If results of the qualitative assessment indicate a more likely than not determination or if a qualitative assessment is not performed, a quantitative test is performed by comparing the estimated fair value using a discounted cash flow method or market method for each reporting unit with its estimated net book value.
If results of the qualitative assessment indicate a more likely than not determination of impairment or if a qualitative assessment is not performed, a quantitative test is performed by comparing the estimated fair value, using a combination of a discounted cash flow method and a market method, for each reporting unit with its estimated net book value.
All amounts discussed are in thousands of U.S. dollars, except where otherwise indicated. Company Overview We are a leading provider of uniforms and workplace supplies across the United States and Canada, with over 75 years of experience in the workplace apparel and supplies industry.
All amounts discussed are in thousands of U.S. dollars, except where otherwise indicated. 32 Table of Contents Company Overview We are a leading provider of uniforms and workplace supplies across the United States and Canada, with over 75 years of experience in the workplace apparel and supplies industry.
Results of Operations—United States Results Fiscal 2024 Compared to Fiscal 2023 The following table presents an overview of our United States reportable segment results with the amount of and percentage change between periods for the fiscal years 2024 and 2023 (dollars in thousands).
Results of Operations—United States Results Fiscal 2025 Compared to Fiscal 2024 The following table presents an overview of the results for our United States reportable segment for fiscal 2025 and fiscal 2024, with the amount of and percentage change between periods (dollars in thousands).
In addition to our weekly, recurring customer contracts, we offer customized uniforms through direct sales agreements, typically for large, regional, or national companies. 32 Table of Contents In addition to Uniforms, we also provide workplace supplies (“Workplace Supplies”) including restroom supply services, first aid supplies and safety products, floor mats, towels, and linens.
In addition to our weekly, recurring customer contracts, we offer customized uniforms through direct sales agreements, typically for large, regional, or national companies. In addition to uniforms, we also provide workplace supplies including restroom supply services, first aid supplies and safety products, floor mats, towels, and linens.
The following discussion and analysis of Vestis Corporation’s (“Vestis”, the “Company”, “our”, “we” or “us”) financial condition and results of operations for the fiscal years ended September 27, 2024 and September 29, 2023 should be read in conjunction with our audited Consolidated and Combined Financial Statements and the notes to those statements.
The following discussion and analysis of Vestis Corporation’s (“Vestis”, the “Company”, “our”, “we” or “us”) financial condition and results of operations for the fiscal years ended October 3, 2025, referred to as fiscal 2025, and September 27, 2024, referred to as fiscal 2024, should be read in conjunction with our audited Consolidated and Combined Financial Statements and the notes to those statements.
Refer to Note 16, “Accounts Receivable Securitization Facility”, of our Consolidated and Combined Financial Statements for further discussion regarding our accounting for the A/R Facility.
Refer to Note 16, “ Accounts Receivable Securitization Facility, ” of our Consolidated and Combined Financial Statements for further discussion regarding our accounting for the A/R Facility.
The Term Loan A-2 includes $8.75M of principal payments each quarter until the maturity date, in which the remaining unpaid principal amount is due. On February 22, 2024, the Company amended the Credit Agreement to refinance its Term Loan A-1 with an $800 million term loan B-1 due 38 Table of Contents February 22, 2031 (“Term Loan B-1”).
The Term Loan A-2 requires $8.75M of principal payments each quarter until the maturity date, at which point the remaining unpaid principal amount is due. On February 22, 2024, the Company amended the Credit Agreement to refinance its Term Loan A-1 with an $800 million term loan B-1 due February 22, 2031 (“Term Loan B-1”).
With approximately 19,600 employees, we operate a network of over 350 facilities including laundry plants, satellite plants, distribution centers and manufacturing plants along with a fleet of service vehicles that support over 3,300 pick-up and delivery routes.
With approximately 18,150 employees, we operate a network of over 325 facilities including laundry plants, satellite plants, distribution centers and manufacturing plants along with a fleet of service vehicles that support over 3,300 pick-up and delivery routes.
Covenant Adjusted EBITDA is defined in the Credit Agreement as consolidated net income increased by interest expense, taxes, depreciation and amortization expense, initial public company costs, restructuring charges, write-offs and noncash charges, non-controlling interest expense, net cost savings in connection with any acquisition, disposition, or other permitted investment under the Credit Agreement, share-based compensation expense, non-recurring or unusual gains and losses, reimbursable insurance costs, cash expenses related to earn outs, and insured losses.
Adjusted EBITDA is defined in the Credit Agreement as consolidated net income increased by interest expense, taxes, depreciation and amortization expense, initial public company costs, restructuring charges, write-offs and noncash charges, non-controlling interest expense, net cost savings in connection with any acquisition, disposition, or other permitted investment under the Credit Agreement, share-based compensation expense, non-recurring or unusual gains and losses, reimbursable insurance costs, cash expenses related to earn outs, and insured losses. 41 Table of Contents Additionally, the Credit Agreement establishes a minimum Interest Coverage Ratio, defined as Adjusted EBITDA (as defined in the Credit Agreement) divided by consolidated interest expense.
The historical results of operations, financial position and cash flows of Vestis presented in these Combined Financial Statements may not be indicative of what they would have been had we been an independent standalone public company, nor are they necessarily indicative of our future results of operations, financial position, and cash flows.
The historical results of operations and cash flows of Vestis presented in these Combined Financial Statements may not be indicative of what they would have been had we been an independent standalone public company, nor are they necessarily indicative of our future results of operations, financial position, and cash flows. Our business historically functioned together with other Aramark businesses.
Sources of Revenue We generate and recognize over 94% of our total revenue from route servicing contracts on both Uniforms, which we generally manufacture, and Workplace Supplies, such as mats, towels, and linens that are procured from third-party suppliers.
Sources of Revenue We generate and recognize revenue from route servicing contracts on both uniforms, which we generally manufacture, and workplace supplies, such as mats, towels, and linens that are procured from third-party suppliers. In fiscal 2025, total revenue from such route servicing contracts was 95% of our total revenue.
For additional information on the year ended September 30, 2022 and year-over-year comparisons to September 29, 2023, refer to "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) for the fiscal year ended September 29, 2023.
For additional information on fiscal 2023 and year-over-year comparisons to fiscal 2024, refer to "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in our Annual Report on Form 10-K for fiscal 2024, filed with the Securities and Exchange Commission (“SEC”) on November 22, 2024.
The Company controls and therefore consolidates the SPE in its consolidated financial statements. The A/R Facility is scheduled to terminate on August 2, 2027 , unless terminated earlier pursuant to its terms. As of September 27, 2024, the total value of accounts receivable sold under the A/R Facility and derecognized from the Company's Consolidated Balance Sheet was $229.0 million.
The Company controls and therefore consolidates the SPE in its consolidated financial statements. The A/R Facility is scheduled to terminate on August 2, 2027 , unless terminated earlier pursuant to its terms. As of October 3, 2025, the total value of accounts receivable sold under the A/R Facility and derecognized from the Company's Consolidated Balance Sheet was $202.5 million.
Refer to Note 11, “Income Taxes”, of our Consolidated and Combine Financial Statements for further discussion regarding our accounting for income taxes and our uncertain tax positions for financial accounting purposes.
Refer to Note 11, “ Income Taxes, ” of our Consolidated and Combined Financial Statements for further discussion regarding our accounting for income taxes and our uncertain tax positions for financial accounting purposes.
Rental merchandise in service is valued at cost less amortization, calculated using the straight-line method. Rental merchandise in service is amortized over its useful life, which ranges from one to four years. The amortization rates are based on industry experience, intended use of the merchandise, our specific experience, and wear tests performed by us.
Rental merchandise in service is amortized over its useful life, which ranges from one to four years. The amortization rates are based on industry experience, intended use of the merchandise, our specific experience, and wear tests performed by us.
The applicable margin on these term loans was 2.25% during fiscal 2024. The Term Loan B-1 interest rate is SOFR plus a margin from 2.0% to 2.25% depending on the Company’s Consolidated Total Net Leverage Ratio, as defined in the Credit Agreement. The applicable margin on the Term Loan B-1 was 2.25% during fiscal 2024.
The applicable margin on Term Loan A-2 was 2.33% during fiscal 2025. 39 Table of Contents The Term Loan B-1 interest rate is SOFR plus a margin from 2.0% to 2.25% depending on the Company’s Consolidated Total Net Leverage Ratio, as defined in the Credit Agreement. The applicable margin on the Term Loan B-1 was 2.25% during fiscal 2025.
These challenges have continued to impact our business during fiscal 2024. Our actions to mitigate the effects of inflation in fiscal 2023 and fiscal 2024 included operating cost reductions, reductions in discretionary spending and reductions in our non-operational footprint, along with the implementation of targeted and strategic price increases under the terms of our customer contracts.
Our actions to mitigate the effects of inflation in fiscal 2024 and fiscal 2025 included operating cost reductions, reductions in discretionary spending and reductions in our non-operational footprint, along with the implementation of targeted and strategic price increases under the terms of our customer contracts.
The impact on our longer-term operational and financial performance will depend on future developments, including our response and governmental response to inflation, the duration and severity of the ongoing volatility and disruption of global financial markets and our ability to effectively hire and retain personnel. Some of these future developments are outside of our control and are highly uncertain.
The impact on our longer-term operational 35 Table of Contents and financial performance will depend on future developments, including our response and governmental response to inflation, the duration and severity of the ongoing volatility and disruption of global financial markets and our ability to effectively hire and retain personnel.
On September 29, 2023, concurrent with consummation of the Separation, we made a cash distribution of approximately $1,457 million to Aramark. As of September 27, 2024, we had approximately $31 million of cash and cash equivalents and $295 million of availability for borrowing under the Revolving Credit Facility.
On September 29, 2023, concurrent with consummation of the Separation, we made a cash distribution of approximately $1,457 million to Aramark. As of October 3, 2025, we had approximately $30 million of cash and cash equivalents and $268.2 million of availability for borrowing under the Revolving Credit Facility.
The cost and availability of debt financing will be influenced by market conditions and our future credit ratings. We believe that we will meet known and likely future cash requirements through the combination of cash flows from operating activities, available cash balances, available borrowings under our financing arrangements and access to capital markets.
We believe that we will meet known and likely future cash requirements through the combination of cash flows from operating activities, available cash balances, available borrowings under our financing arrangements and access to capital markets.
The Credit Agreement requires us to maintain a maximum Consolidated Total Net Leverage Ratio, defined as consolidated total indebtedness over unrestricted cash divided by Covenant Adjusted EBITDA, not to exceed 5.25x for any fiscal quarter ending prior to March 31, 2025, and not to exceed 4.50x for any fiscal quarter ending on or after March 31, 2025, subject to certain exceptions.
Prior to our May 1, 2025 amendment, which is described below, our Credit Agreement required us to maintain a maximum Consolidated Total Net Leverage Ratio, defined as consolidated total indebtedness in excess of unrestricted cash divided by Adjusted EBITDA (as defined in the Credit Agreement), not to exceed 5.25x for any fiscal quarter ending prior to March 31, 2025, and not to exceed 4.50x for any fiscal quarter ending on or after March 31, 2025, subject to certain exceptions.
Our cash flows within the United States segment were transferred to Aramark regularly as part of Aramark’s centralized cash management program. Our cash flows within the Canada segment were reinvested locally. The cash and cash equivalents held by Aramark at the corporate level were not specifically identifiable to us and therefore were not allocated to any of the periods presented.
Our cash flows within the Canada segment were reinvested locally. The cash and cash equivalents held by Aramark at the corporate level were not specifically identifiable to us and therefore were not allocated to any of the periods presented.
Cash Flows Provided by Operating Activities Net cash provided by operating activities was $471.8 million and $257.0 million during fiscal 2024 and fiscal 2023, respectively.
Cash Flows Provided by Operating Activities Net cash provided by operating activities was $64.2 million and $471.8 million during fiscal 2025 and fiscal 2024, respectively.
The assets, liabilities, revenue, and expenses of Vestis have been reflected in these Combined Financial Statements on a historical cost basis, as included in the Combined Financial Statements of Aramark, using the historical accounting policies applied by Aramark. Historically, separate financial statements have not been prepared for Vestis and it has not operated as a standalone business from Aramark.
The assets, liabilities, revenue, and expenses of Vestis have been reflected in these Combined Financial Statements on a historical cost basis, as included in the Combined Financial Statements of Aramark, using the historical accounting policies applied by Aramark.
Litigation and Claims From time to time, we and our subsidiaries are party to various legal actions, proceedings and investigations involving claims incidental to the conduct of our businesses, including actions by customers, employees, government entities and third parties, including under federal, state, international, national, provincial and local employment laws, wage and hour laws, discrimination laws, immigration laws, human health and safety laws, import and export controls and customs laws, environmental laws, false claims or whistleblower statutes, tax codes, antitrust and competition laws, customer protection statutes, procurement regulations, intellectual property laws, supply chain laws, the Foreign Corrupt Practices Act and other anti-corruption laws, lobbying laws, motor carrier safety laws, data privacy and security laws, or claims alleging negligence and/or breach of contractual and other obligations.
We believe that an accounting estimate relating to goodwill impairment is a critical accounting estimate because the assumptions underlying future cash flow estimates are subject to change from time to time and the recognition of an impairment could have a significant impact on our Consolidated and Combined Statements of Income. 43 Table of Contents Litigation and Claims From time to time, we and our subsidiaries are party to various legal actions, proceedings and investigations involving claims incidental to the conduct of our businesses, including actions by customers, employees, government entities and third parties, including under federal, state, international, national, provincial and local employment laws, wage and hour laws, discrimination laws, immigration laws, human health and safety laws, import and export controls and customs laws, environmental laws, false claims or whistleblower statutes, tax codes, antitrust and competition laws, customer protection statutes, procurement regulations, intellectual property laws, supply chain laws, the Foreign Corrupt Practices Act and other anti-corruption laws, lobbying laws, motor carrier safety laws, data privacy and security laws, or claims alleging negligence and/or breach of contractual and other obligations.
The table below summarizes our cash activity (in thousands): Fiscal Year Ended September 27, 2024 September 29, 2023 Net cash provided by operating activities $ 471,788 $ 256,977 Net cash used in investing activities (73,636) (14,746) Net cash used in financing activities (402,975) (230,269) Reference to the audited Consolidated and Combined Statements of Cash Flows will facilitate understanding of the discussion that follows.
The table below summarizes our cash activity (in thousands): Fiscal Year Ended October 3, 2025 September 27, 2024 Net cash provided by operating activities $ 64,229 $ 471,788 Net cash used in investing activities (19,817) (73,636) Net cash used in financing activities (46,057) (402,975) Reference to the audited Consolidated and Combined Statements of Cash Flows will facilitate an understanding of the discussion that follows.
Our business has historically functioned together with other Aramark businesses. Accordingly, we relied on certain of Aramark’s corporate support functions to operate. The Combined Financial Statements include all revenues and costs directly attributable to us and an allocation of expenses related to certain Aramark corporate functions.
Accordingly, we relied on certain of Aramark’s corporate support functions to operate. The Combined Financial Statements for fiscal 2023 include all revenues and costs directly attributable to us and an allocation of expenses related to certain Aramark corporate functions.
Interest Expense is comprised of interest expense incurred under our Credit Agreement and interest expense recognized on financing leases.
Interest Expense, which is net of interest income, primarily consists of interest expense incurred under our Credit Agreement and interest expense recognized on financing leases.
Other income, net is primarily comprised of fees incurred for our accounts receivable securitization facility and our share of the financial results for our equity method investment. 34 Table of Contents Provision for Income Taxes The Provision for Income Taxes represents federal, foreign, state, and local income taxes.
Other Expense (net of other income), is primarily comprised of fees incurred for our accounts receivable securitization facility, and prior to its sale in fiscal 2025, our share of the financial results of an equity method investment. (Benefit)/Provision for Income Taxes The (Benefit)/Provision for Income Taxes represents federal, foreign, state, and local income taxes.
This includes businesses that outsource these services through rental programs or direct purchases, as well as non-programmers, or businesses that maintain these services in-house. We believe that demand in this industry is largely influenced by macro-economic conditions, employment levels, increasing standards for workplace hygiene and safety and an ongoing trend of businesses outsourcing non-core, back-end operations.
We believe that demand in this industry is largely influenced by macro-economic conditions, employment levels, increasing standards for workplace hygiene and safety and an ongoing trend of businesses outsourcing non-core, back-end operations.
Prior to September 29, 2023, the Company had no debt obligations. Interest expense in fiscal 2024 also included a $3.9 million 36 Table of Contents non-cash expense for the write-off of unamortized debt issuance costs associated with the extinguishment of our $800 million Term Loan A-1 as a result of the aforementioned refinancing.
Interest expense in fiscal 2024 also included a $3.9 million non-cash 37 Table of Contents expense for the write-off of unamortized debt issuance costs associated with the extinguishment of an $800 million Term Loan A-1 as a result of its refinancing in fiscal 2024.
Historically, Vestis represented one reporting unit under Aramark’s structure for fiscal years ended September 29, 2023 and September 30, 2022. For the fiscal year ended September 27, 2024, Vestis had two reporting units, Unites States and Canada. During the fourth quarter of fiscal 2024, we performed the annual impairment test for goodwill using a quantitative testing approach.
For the fiscal years ended October 3, 2025 and September 27, 2024, Vestis had two reporting units, Unites States and Canada. During the fourth quarter of fiscal 2025, we performed the annual impairment test for goodwill using a quantitative testing approach.
Basis of Presentation Consolidated Financial Statements The Consolidated Financial Statements reflect the historical results of operations, comprehensive income and cash flows for the year ended September 27, 2024 and the financial position as of September 27, 2024 for Vestis.
Basis of Presentation Consolidated Financial Statements The Consolidated Financial Statements reflect the financial position, results of operations, comprehensive income and cash flows of the Company as of and for the years ended October 3, 2025 and September 27, 2024. 33 Table of Contents Combined Financial Statements The Combined Financial Statements reflect the combined historical results of operations, comprehensive income and cash flows for the year ended September 29, 2023.
(2) Interest payments on long-term debt includes interest due on outstanding debt obligations under our Credit Agreement. Payments related to variable debt are based on applicable rates at September 27, 2024 plus the specified margin in the Credit Agreement for each period presented. (3) Represents purchase commitments for inventory. (4) Includes severance.
Payments related to variable rate debt are based on applicable rates at October 3, 2025 plus the specified margin in the Credit Agreement for each period presented. (3) Represents purchase commitments for inventory. (4) Includes severance.
Following the separation, certain functions that Aramark provided to us prior to the separation continued to be provided to us by Aramark under a transition services agreement. As of September 27, 2024 these transition services were no longer being provided.
Following the separation, certain functions that Aramark provided to us prior to the separation continued to be provided to us by Aramark under a transition services agreement. No such transition services were performed in fiscal 2025, as they ceased on or prior to September 27, 2024.
These factors are critical to determining the amount of rental merchandise in service and related cost of services provided that are presented in the Consolidated and Combined Financial Statements.
These factors are critical to determining the amount of rental merchandise in service and related cost of services provided that are presented in the Consolidated and Combined Financial Statements. Material differences may result in the amount and timing of operating income if management makes significant changes to these estimates.
Cost of services provided includes the costs associated with the recurring pickup, processing and delivery of products to rental customers, the amortized cost of merchandise in service for the rental business, and the cost of products sold to customers through our direct sales offerings.
Costs and Expenses Our costs and expenses are comprised of cost of services provided (exclusive of depreciation and amortization) (hereafter referred to as “cost of services provided”), depreciation and amortization and selling, general and administrative expenses. 34 Table of Contents Cost of services provided includes the costs associated with the recurring pickup, processing and delivery of products to rental customers, the amortized cost of merchandise in service for the rental business, and the cost of products sold to customers through our direct sales offerings.
We provide a full range of uniform programs, restroom supply services, first aid supplies and safety products, as well as ancillary items such as floor mats, towels, and linens, to more than 300,000 customer locations across the United States and Canada. We compete with national, regional, and local providers who vary in size, scale, capabilities and product and service offering.
We provide a full range of uniform programs, restroom supply services, first aid supplies and safety products, as well as ancillary items such as floor mats, towels, and linens, to more than 300,000 customer accounts (based on unique customer identification numbers) across the United States and Canada.
If our assumptions or estimates in our fair value calculations change or if future cash flows, margin projections or future growth rates vary from what was expected, this may impact our impairment analysis and could reduce the underlying cash flows used to estimate fair values and result in a decline in fair value that may trigger future impairment charges. 42 Table of Contents We believe that an accounting estimate relating to goodwill impairment is a critical accounting estimate because the assumptions underlying future cash flow estimates are subject to change from time to time and the recognition of an impairment could have a significant impact on our Consolidated and Combined Statements of Income.
If our assumptions or estimates in our fair value calculations change or if future cash flows, margin projections or future growth rates vary from what was expected, this may impact our impairment analysis and could reduce the underlying cash flows used to estimate fair values and result in a decline in fair value that may trigger future impairment charges.
Cash Flows Used in Financing Activities During fiscal 2024, cash used in financing activities was primarily impacted by the following: • cash proceeds from long-term debt borrowings ($798.0 million); • principal payments on long-term borrowings ($1,137.5 million) ; • payments related to finance leases ($30.6 million); • payments related to debt issuance costs ($11.1 million); • dividend payments ($13.8 million); and • cash distributions to Aramark ($6.1 million); During fiscal 2023, cash used in financing activities was impacted by the following: • cash proceeds from long-term debt borrowings ($1,500.0 million); • payments related to debt issuance costs ($13.7 million); • payments related to finance leases ($27.6 million); and • cash distributions to Aramark ($1,688.9 million); Accounts Receivable Securitization Facility On August 2, 2024, certain of our subsidiaries entered into a three-year $250 million accounts receivable securitization facility (the “A/R Facility”).
During fiscal 2024, cash used in financing activities was primarily impacted by the following: • proceeds from long-term borrowings of $798.0 million; • principal payments on long-term borrowings of $1,137.5 million; 40 Table of Contents • payments related to finance leases of $30.6 million; • dividend payments of $13.8 million • payments related to debt issuance costs of $11.1 million; and • cash distributions to Aramark of $6.1 million.
Primary methods of competition include product quality, service quality and price. Notable competitors of size include Cintas Corporation and UniFirst Corporation, as well as numerous regional and local competitors. Additionally, many businesses perform certain aspects of our product and service offerings in-house rather than outsourcing them and leveraging the benefits of full-service programs.
Additionally, many businesses perform certain aspects of our product and service offerings in-house rather than outsourcing them and leveraging the benefits of full-service programs.
Liquidity and Capital Resources Overview Historically, our business generated positive cash flows from operations. For the Combined Statement of Cash Flows during the fiscal years ended September 29, 2023 and September 30, 2022, cash flows within our United States operations were transferred to Aramark regularly as part of Aramark’s centralized cash management program.
For the Combined Statement of Cash Flows for fiscal 2023, cash flows within our United States operations were transferred to Aramark regularly as part of Aramark’s centralized cash management program. This arrangement was used to manage the liquidity of Aramark and fund the operations of our business as needed.
Our annual effective income tax rate includes the impact of discrete income tax matters including adjustments to reserves for uncertain tax positions. Tax regulations require items to be included in our tax returns at different times than these same items are reflected in our consolidated financial statements.
Tax regulations require items to be included in our tax returns at different times than these same items are reflected in our consolidated financial statements. As a result, the effective income tax rate in our consolidated financial statements differs from that reported in our tax returns.
On September 29, 2023, the Company and certain of its subsidiaries entered into a senior secured credit agreement in the aggregate amount of $1,800 million (the “Credit Agreement”).
That arrangement was not indicative of how we would have funded our operations had we been a standalone company separate from Aramark during fiscal 2023. On September 29, 2023, the Company and certain of its subsidiaries entered into a senior secured credit agreement in the aggregate amount of $1,800 million (the “Credit Agreement”).
As a result, the effective income tax rate in our consolidated financial statements differs from that reported in our tax returns. Some of these differences are permanent, such as expenses that are not tax deductible, while others are temporary differences, such as amortization and depreciation expenses.
Some of these differences are permanent, such as expenses that are not tax deductible, while others are temporary differences, such as amortization and depreciation expenses.
Inventories and Rental Merchandise In Service We record an inventory obsolescence reserve for obsolete, excess, and slow-moving inventory. In calculating our inventory obsolescence reserve, we analyze historical and projected data regarding customer demand within specific product categories and make assumptions regarding economic conditions within customer specific industries, as well as style and product changes.
In calculating our inventory obsolescence reserve, we analyze historical and projected data regarding customer demand within specific product categories and make assumptions regarding economic conditions within customer specific industries, as well as style and product changes. 44 Table of Contents Rental merchandise in service is valued at cost less accumulated amortization, calculated using the straight-line method.
Judgment is required to determine the annual effective income tax rate, deferred tax assets and liabilities, reserves for unrecognized tax benefits and any valuation allowances recorded against net deferred tax assets. Our effective income tax rate is based on annual income, statutory tax rates and other adjustments in the jurisdictions in which we operate.
Beginning after the Separation, we file tax returns separate from Aramark, and our deferred taxes and effective tax rates may differ from those of the historical periods. Judgment is required to determine the annual effective income tax rate, deferred tax assets and liabilities, reserves for unrecognized tax benefits and any valuation allowances recorded against net deferred tax assets.
Net income of $21.0 million in fiscal 2024 represented a decrease of $192.2 million, or 90.2% compared to the prior fiscal year from the impact of changes to revenue, operating costs, interest expense, and income taxes noted above. ______________________ (1) Customer retention is equal to lost annualized recurring revenue for the period reported divided by total company annualized recurring revenue for the trailing 52 weeks.
Net loss of $40.2 million in fiscal 2025 represented a decrease of $61.2 million, or 291.8% compared to net income of $21.0 million in the prior fiscal year from the impact of changes to revenue, operating costs, interest expense, and income taxes noted above.
The “Provision for Income Taxes” in the Combined Statements of Income has been calculated as if we filed a separate tax return and were operating as a standalone company. Therefore, income tax expense, cash tax payments and items of current and deferred income taxes may not be reflective of our actual tax balances prior to or subsequent to the distribution.
Therefore, income tax expense, cash tax payments and items of current and deferred income taxes may not be reflective of our actual tax balances prior to or subsequent to the Separation.
However, the allocations may not be indicative of the actual expense that would have been incurred had we operated as an independent, standalone public entity, nor are they indicative of our future expenses. The Combined Financial Statements include assets and liabilities that have been determined to be specifically identifiable or otherwise attributable to us.
However, the allocations may not be indicative of the actual expense that would have been incurred had we operated as an independent, standalone public entity, nor are they indicative of our future expenses. Our cash flows within the United States segment were transferred to Aramark regularly as part of Aramark’s centralized cash management program.
With respect to such taxable periods, income taxes on our financial statements were calculated on a separate tax return basis. Beginning after the Separation, we file tax returns separate from Aramark, and our deferred taxes and effective tax rates may differ from those of the historical periods.
Income Taxes Prior to the Separation, our operations were included in Aramark’s U.S. federal and state tax returns for those taxable periods. With respect to such taxable periods, income taxes on our financial statements were calculated on a separate tax return basis.
We continue to remain principally focused on the safety and well-being of our employees, customers, and everyone we serve, while simultaneously taking timely, proactive measures to adapt to the current environment. We continue to evaluate and react to the effects of a prolonged global disruption, including items such as inflationary pressures on product and energy costs and greater labor challenges.
We continue to evaluate and react to the effects of a prolonged global disruption, including items such as inflationary pressures on product and energy costs and greater labor challenges. These challenges have continued to impact our business during fiscal 2025.
The deferred costs are amortized using the portfolio approach on a straight-line basis over the average period of benefit, approximately nine years , and are assessed for impairment on a periodic basis. Income Taxes Prior to the Separation, our operations were included in Aramark’s U.S. federal and state tax returns for those taxable periods.
Costs to Obtain a Contract We defer employee sales commissions earned by our sales force that are considered to be incremental and recoverable costs of obtaining a contract. The deferred costs are amortized using the portfolio approach on a straight-line basis over the average period of benefit, approximately nine years , and are assessed for impairment on a periodic basis.
Fiscal Year Ended Change Change September 27, 2024 September 29, 2023 $ % Revenue $ 2,805,820 $ 2,825,286 $ (19,466) (0.7 %) Operating Expenses: Cost of services provided (1) 1,989,872 1,970,215 19,657 1.0 % Depreciation and amortization 140,781 136,504 4,277 3.1 % Selling, general and administrative expenses 517,216 500,658 16,558 3.3 % Total Operating Expenses 2,647,869 2,607,377 40,492 1.6 % Operating Income 157,951 217,909 (59,958) (27.5 %) Gain on Sale of Equity Investment, net — (51,831) 51,831 (100.0 %) Interest Expense, net 126,563 2,109 124,454 5901.1 % Other (Income), net (642) (2,099) 1,457 (69.4 %) Income Before Income Taxes 32,030 269,730 (237,700) (88.1 %) Provision for Income Taxes 11,060 56,572 (45,512) (80.4 %) Net Income $ 20,970 $ 213,158 $ (192,188) (90.2 %) ______________________ (1) Exclusive of depreciation and amortization Consolidated revenue of $2,805.8 million decreased $19.5 million or 0.7% in fiscal 2024 compared to the prior fiscal year.
Fiscal Year Ended Change Change October 3, 2025 September 27, 2024 $ % Revenue $ 2,734,839 $ 2,805,820 $ (70,981) (2.5 %) Operating Expenses: Cost of services provided (1) 2,010,082 1,989,872 20,210 1.0 % Depreciation and amortization 143,017 140,781 2,236 1.6 % Selling, general and administrative expenses 517,309 517,216 93 — % Total Operating Expenses 2,670,408 2,647,869 22,539 0.9 % Operating Income 64,431 157,951 (93,520) (59.2 %) Loss (Gain) on Sale of Equity Investment, net 2,784 — 2,784 (100.0 %) Interest Expense, net 92,264 126,563 (34,299) (27.1 %) Other Expense (Income), net 13,689 (642) 14,331 (2232.2 %) (Loss) Income Before Income Taxes (44,306) 32,030 (76,336) (238.3 %) (Benefit) Provision for Income Taxes (4,083) 11,060 (15,143) (136.9 %) Net (Loss) Income $ (40,223) $ 20,970 $ (61,193) (291.8 %) ______________________ (1) Exclusive of depreciation and amortization Excluding a $51.6 million increase from the 53rd week in fiscal 2025, consolidated revenue decreased $122.6 million or 4.4% in fiscal 2025 compared to the prior fiscal year.
Fiscal Year Ended Change Change September 27, 2024 September 29, 2023 $ % Revenue $ 2,555,922 $ 2,575,352 $ (19,430) (0.8 %) Segment Operating Income 264,709 303,762 (39,053) (12.9 %) Segment Operating Income % 10.4 % 11.8 % United States revenue decreased 0.8% in fiscal 2024 compared to the prior fiscal year.
Fiscal Year Ended Change Change October 3, 2025 September 27, 2024 $ % Revenue $ 2,489,376 $ 2,555,922 $ (66,546) (2.6 %) Segment Operating Income 154,011 264,709 (110,698) (41.8 %) Segment Operating Income % 6.2 % 10.4 % Excluding a $47.0 million increase from the 53rd week in fiscal 2025, United States segment revenue decreased $113.5 million or 4.4% in fiscal 2025 compared to the prior fiscal year.
The fiscal years ended September 27, 2024, September 29, 2023 and September 30, 2022 were each 52-week periods. Key Trends Affecting Our Results of Operations We serve the uniforms, mats, towels, linens, restroom supplies, first-aid supplies and safety products industry within the United States and Canada.
Key Trends Affecting Our Results of Operations We serve the uniforms, mats, towels, linens, restroom supplies, first-aid supplies and safety products industry within the United States and Canada. This includes businesses that outsource these services through rental programs or direct purchases, as well as non-programmers, or businesses that maintain these services in-house.
Other Income, net, decreased $1.5 million, in fiscal 2024 from the prior fiscal year primarily as a result of expenses from the Company’s Accounts Receivable Securitization Facility, which was entered on August 2, 2024. The provision for income taxes for fiscal 2024 was recorded at an effective rate of 34.5% compared to an effective rate of 21.0% in fiscal 2023.
Other expense, net of other income, decreased $14.3 million, in fiscal 2025 from the prior fiscal year primarily due to a loss on sale of accounts receivable for the A/R Facility of $11.9 million, as the A/R Facility was entered into on August 2, 2024, approximately two months before the end of the prior fiscal year.
Future Liquidity and Contractual Obligations We primarily rely on cash and recurring cash flow provided by operations to fund our operations. As of September 27, 2024, we have access to $295 million of borrowing capacity from our Revolving Credit Facility and expect to have access to capital markets for additional funding.
As of October 3, 2025, we have access to $268.2 million of borrowing capacity from our Revolving Credit Facility and expect to have access to capital markets for additional funding. The cost and availability of debt financing will be influenced by market conditions and our future credit ratings.
The following table summarizes our future obligations for long-term borrowings, estimated interest payments, finance leases, future minimum lease payments under noncancelable operating leases, purchase obligations and other liabilities as of September 27, 2024 (dollars in thousands): Payments Due by Period Contractual Obligations as of September 27, 2024 Total Less than 1 year 1-3 years 3-5 years More than 5 years Long-term borrowings (1) 1,162,500 — — 497,500 665,000 Estimated interest payments (2) 473,844 89,914 176,436 137,780 69,714 Finance lease obligations 167,586 37,246 61,112 42,821 26,407 Operating leases 108,061 23,755 35,984 20,620 27,702 Purchase obligations (3) 5,800 5,800 — — — Other liabilities (4) 2,703 2,703 — — — $ 1,920,494 $ 159,418 $ 273,532 $ 698,721 $ 788,823 ______________________ 41 Table of Contents (1) Excludes the $13.2 and $1.6 million reduction to long-term borrowings from debt issuance costs and debt discount, respectively.
The following table summarizes our future obligations for long-term borrowings, estimated interest payments, finance leases, future minimum lease payments under noncancelable operating leases, purchase obligations and other liabilities as of October 3, 2025 (dollars in thousands): Payments Due by Period Contractual Obligations as of October 3, 2025 Total Less than 1 year 1-3 years 3-5 years More than 5 years Long-term borrowings (1) 1,168,500 — 503,500 — 665,000 Estimated interest payments (2) 330,019 75,227 150,454 86,710 17,628 Finance lease obligations 191,876 42,293 71,906 71,518 6,159 Operating leases 126,262 27,921 45,238 27,384 25,719 Purchase obligations (3) 6,200 6,200 — — — Other liabilities (4) 7,392 7,392 — — — $ 1,830,249 $ 159,033 $ 771,098 $ 185,612 $ 714,506 ______________________ (1) Excludes the $12.0 and $1.4 million reduction to long-term borrowings from debt issuance costs and debt discount, respectively. 42 Table of Contents (2) Interest payments on long-term debt includes interest due on outstanding debt obligations under our Credit Agreement.
See “Risk Factors—Operational Risks—Unfavorable economic conditions have in the past adversely affected, are currently affecting and in the future could adversely affect our business, financial condition or results of operations.” 35 Table of Contents Results of Operations Fiscal 2024 Compared to Fiscal 2023 The following table presents an overview of our results on a combined basis with the amount of and percentage change between periods for the fiscal years 2024 and 2023 (dollars in thousands).
See “Risk Factors—Operational Risks—Unfavorable economic conditions have in the past adversely affected, are currently affecting and in the future could adversely affect our business, financial condition or results of operations.” Restructuring Plan During the first quarter of fiscal 2026, we approved and initiated a formal multi-year business transformation and restructuring plan (the “Plan”) to support the Company’s initiatives to make the Company more agile, efficient and customer focused.
Operating income of $158.0 million decreased 27.5% in fiscal 2024 compared to the prior fiscal year from the impact of changes in revenue and costs noted above. Gain on Sale of Equity Investments, net, decreased $51.8 million in fiscal 2024 from the prior fiscal year.
Operating income of $64.4 million decreased 59.2% in fiscal 2025 compared to the prior fiscal year from the impact of changes in revenue and costs noted above. Interest Expense, net, decreased $34.3 million in fiscal 2025 compared with the prior fiscal year, due primarily to lower average outstanding debt during fiscal 2025, and lower interest rates.
Fiscal Year Ended Change Change September 27, 2024 September 29, 2023 $ % Revenue $ 249,898 $ 249,934 $ (36) — % Segment Operating Income 8,162 13,707 (5,545) (40.5) % Segment Operating Income % 3.3 % 5.5 % Canada revenue was flat in fiscal 2024 relative to the prior fiscal year.
Fiscal Year Ended Change Change October 3, 2025 September 27, 2024 $ % Revenue $ 245,463 $ 249,898 $ (4,435) (1.8 %) Segment Operating Income 8,954 8,162 792 9.7 % Segment Operating Income % 3.6 % 3.3 % Excluding a $4.6 million increase from the 53rd week in fiscal 2025, Canada segment revenue decreased $9.1 million or 3.6% in fiscal 2025 compared to the prior fiscal year.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

4 edited+0 added−0 removed2 unchanged
Biggest changeWe currently do not enter into financial instruments to manage this foreign currency translation risk. Approximately 9% of our consolidated revenue and profit are generated from foreign denominated revenue and profit. Interest Rate Risk We are exposed to interest rate risk through fluctuations in interest rates on our debt obligations. Our outstanding Term Loan Facilities bear interest at variable rates.
Biggest changeWe currently do not enter into financial instruments to manage this foreign currency translation risk. Approximately 9% of our consolidated revenues are generated from foreign denominated revenues. Interest Rate Risk 45 Table of Contents We are exposed to interest rate risk through fluctuations in interest rates on our debt obligations. Our outstanding Term Loan Facilities bear interest at variable rates.
Commodity Price Risk 44 Table of Contents We are exposed to changes in prices of commodities used in our operations, primarily associated with gasoline, diesel and natural gas fuel. We may from time to time seek to manage exposure to adverse commodity price changes through our normal operations as well as through entering into commodity derivative agreements.
Commodity Price Risk We are exposed to changes in prices of commodities used in our operations, primarily associated with gasoline, diesel and natural gas fuel. We may from time to time seek to manage exposure to adverse commodity price changes through our normal operations as well as through entering into commodity derivative agreements.
Each 1% increase in interest rates on the Term Loan Facilities would increase our annual interest expense by approximately $12 million based on the aggregate principal amount outstanding under the Term Loan Facilities as of September 27, 2024. As of September 27, 2024, $1,163 million aggregate principal amount was outstanding under the Term Loan Facilities.
Each 1% increase in interest rates on the Term Loan Facilities would increase our annual interest expense by approximately $11.4 million based on the aggregate principal amount outstanding under the Term Loan Facilities as of October 3, 2025. As of October 3, 2025, $1,143 million aggregate principal amount was outstanding under the Term Loan Facilities.
As of September 27, 2024 we did not have any outstanding derivative arrangements. 45 Table of Contents
As of October 3, 2025, we had no outstanding derivative arrangements. 46 Table of Contents

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