Vestis Corp
For the period ended Dec 27, 2024. Filed Feb 5, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Dec 27, 2024 · Filed Feb 5, 2025
VSTS$14.20+0.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-28; filed 2024-08-07.
0001967649-24-000043
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-12-27; filed 2025-02-05.
0001967649-25-000014
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 126 previous paragraphs and 79 current paragraphs.
33 unchanged; 26 reworded; 19 added; 59 removed; 8 previous and 1 current paragraphs rearranged.
Tables are not compared: 7 previous and 4 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (19)
Current report
Consolidated revenue of $683.8 million decreased $34.1 million, or 4.8%, for the three months ended December 27, 2024 compared to the three months ended December 29, 2023. Revenue from new rental volume of approximately $52 million partially offset reductions in revenue due to lost business of $60 million, lower net pricing of $9 million from the erosion of prior year price increases that favorably impacted the first quarter of fiscal 2024, and approximately $16 million lower revenue from direct sales and one-time loss and ruin. Customer retention 1 improved from 92.6% in first quarter 2024 to 92.9% in first quarter 2025.
Current report
Cost of services provided decreased $7.1 million, or 1.4%, for the three months ended December 27, 2024 compared to the three months ended December 29, 2023 primarily due to decreases in merchandise cost of $3.9 million, energy costs of $4.2 million, and wages and payroll of $2.4 million. These reductions were partially offset by an increase in vehicle expenses of $2.7 million.
Current report
Interest expense, net, decreased $8.4 million for the three months ended December 27, 2024 compared to the three months ended December 29, 2023 primarily due to lower average outstanding debt during the three months ended December 27, 2024 as compared to the three months ended December 29, 2023.
Current report
Other Expense (Income)increased $6.5 million for the three months ended December 27, 2024 compared to the three months ended December 29, 2023 primarily due to the loss on sale of accounts receivable for the A/R Facility of $3.4 million and the loss on sale of the equity method investment of $2.2 million. These costs were not incurred during the three months ended December 29, 2023.
Current report
United States revenue of $621.7 million decreased $31.5 million, or 4.8%, for the three months ended December 27, 2024 compared to the three months ended December 29, 2023. Revenue from new rental volume of approximately $47.4 million partially offset reductions in revenue due to lost business of $55.3 million, lower net pricing of $8.8 million from the erosion of prior year price increases that favorably impacted the first quarter of fiscal 2024, and $14.8 million lower revenue from direct sales and one-time loss and ruin.
Current report
Segment operating income of $58.0 million for the three months ended December 27, 2024 decreased $16.0 million, or 21.7%, compared to the three months ended December 29, 2023, primarily driven by:
Current report
•a decrease in wage and labor costs of approximately $11.1 million;
Current report
•lower merchandise costs of $2.8 million; and
Current report
•a decrease in energy costs of $4.1 million; partially offset by
Current report
•an increase in vehicle expenses of $3.0 million.
Current report
Segment operating income margin decreased approximately 200 basis points from 11.3% for the three months ended December 29, 2023 to approximately 9.3% for the three months ended December 27, 2024.
Current report
Canada revenue of $62.1 million decreased $2.6 million, or 4.0%, for the three months ended December 27, 2024 compared to the three months ended December 29, 2023. The year-over-year change in foreign currency rates resulted in a $1.6 million unfavorable impact on revenue.
Current report
Segment operating income of $1.9 million for the three months ended December 27, 2024 decreased $2.6 million, or 58.0%, compared to the three months ended December 29, 2023, primarily driven by the decrease in revenue during the three months ended December 27, 2024, as described above.
Current report
Segment operating income margin decreased approximately 400 basis points from 7.0% for the three months ended December 29, 2023, to approximately 3.1% for the three months ended December 27, 2024.
Current report
•a greater use of cash for inventory from investments to support new business wins during the three months ended December 27, 2024, and beyond, as compared to a concerted effort to reduce inventory in the prior year comparable period, resulting in an approximate $30.0 million unfavorable change to operating cash flows; and
Current report
•a $7.0 million greater use of cash for payment of accrued expenses.
Current report
Net cash provided by (used in) investing activities of $17.9 million for the three months ended December 27, 2024 was $34.8 million higher relative to the three months ended December 29, 2023 primarily due to $36.8 million of net proceeds from the sale of our equity investment and $2.2 million lower year-over-year purchases of property and equipment. This activity was partially offset by cash outflow of $4.6 million associated with a tuck-in acquisition completed during the three months ended December 27, 2024.
Current report
•dividend payments ($4.6 million);
Current report
•cash transferred to Aramark ($3.6 million).
Removed paragraphs (59)
Previous report
Separation from and Relationship with Aramark
Previous report
On September 30, 2023 (the "Distribution Date"), Aramark completed the previously announced spin-off of Vestis (the “Separation”). The Separation was completed through a distribution of our outstanding common stock to stockholders of record of Aramark’s common stock as of the close of business on September 20, 2023. Aramark stockholders of record received one share of Vestis common stock for every two shares of common stock, par value $0.01, of Aramark.
Previous report
Following the Separation, certain functions that Aramark provided to us prior to the Separation continue to be provided to us by Aramark under a transition services agreement.
Previous report
Basis of Presentation
Previous report
The Combined Financial Statements for the three and nine months ended and as of June 30, 2023 have been derived from Aramark’s historical accounting records and were prepared on a standalone basis in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) and pursuant to the rules and regulations of the SEC. 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 consolidated financial statements of Aramark, using the historical accounting policies applied by Aramark. Historically, separate financial statements have not been prepared for Vestis as it previously did not operate as a standalone business from Aramark prior to the Separation. The historical results of operations, financial position and cash flows of Vestis presented in the 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.
Previous report
After the Separation, Vestis became a standalone public company and the consolidated financial statements were prepared in accordance with U.S. GAAP and pursuant to the rules and regulations of the SEC. For additional information, see Note 1. "Nature of Business and Basis of Presentation" to the Consolidated and Combined Financial Statements.
Previous report
Consolidated revenue of $698.2 million decreased $11.1 million, or 1.6%, for the three months ended June 28, 2024 compared to the three months ended June 30, 2023. Revenue decreased $2.9 million from lower year-over-year direct sales and $65.5 million from prior year sales associated with lost customers, of which roughly 56.5% were from customers who ceased doing business with us during fiscal 2023. In fiscal 2023, customer retention 1 was 90.4%. Customer retention for the three month period ended June 28, 2024, was 91.7%. The decreases were partially offset by $54.6 million of new customer sales and cross-selling activities to current customers and by $3.9 million from pricing actions. There was a negligible impact to revenue from the change in foreign currency rates year-over-year.
Previous report
Cost of services provided increased $11.2 million, or 2.3%, for the three months ended June 28, 2024 compared to the three months ended June 30, 2023 primarily due to an increase in labor costs of $9.2 million and merchandise in service costs of $1.0 million.
Previous report
Interest expense and other, net, increased $29.3 million for the three months ended June 28, 2024 compared to the three months ended June 30, 2023 primarily driven by interest expense related to our term loan debt issued on September 29, 2023, and subsequently partially refinanced on February 22, 2024, that was not outstanding during the three months ended June 30, 2023.
Previous report
Results of Operations Nine Months Ended June 28, 2024 compared with June 30, 2023
Previous report
Consolidated revenue of $2,121.5 million increased $12.2 million, or 0.6%, for the nine months ended June 28, 2024 compared to the nine months ended June 30, 2023. This increase was muted by 1.2% due to the non-recurrence of prior year temporary energy fees of $26.2 million enacted to offset the effect of inflationary pressure on energy costs. Revenue increased $168.5 million, or approximately 8.0%, from new customer sales and cross-selling activities to current customers and $71.5 million, or approximately 3.4%, from pricing actions. These increases were partially offset by $6.9 million of lower year-over-year direct sales and $193.5 million of prior year sales associated with lost customers, of which roughly 70.3% were from customers who ceased doing business with us during fiscal 2023. There was a negligible impact to revenue growth from the change in foreign currency rates year-over-year.
Previous report
Cost of services provided increased $22.4 million, or 1.5%, for the nine months ended June 28, 2024 compared to the nine months ended June 30, 2023 primarily due to anincrease in labor costs of $20.6 millionand merchandise in service costs of $4.8 million partially offset by lower energy costs linked primarily to lower energy rates, as well as productivity savings from route optimization efforts.
Previous report
Depreciation and amortization expense of$105.5 million for thenine months ended June 28, 2024 increased$3.8 million or 3.7% compared to thenine months ended June 30, 2023.
Previous report
SG&Aincreased $17.9 million, or 4.9%, for the nine months ended June 28, 2024 compared to the nine months ended June 30, 2023, respectively. The increase in SG&A was primarily due to approximately $13.5 million of incremental public company costs, $6.8 million of gain on sale of land for the nine months ended June 30, 2023 that did not recur in the current fiscal year, $5.6 million of incremental one-time separation costs, and $4.5 million of increased insurance costs. The increases were partially offset by the impairment of operating lease right-of-use assets and other costs for the nine months ended June 30, 2023 of $7.7 million that did not recur for the nine months ended June 28, 2024 and by a decrease in selling payroll related costs of $5.5 million in the current year.
Previous report
Operating income of $128.2 million decreased 20.0% for the nine months ended June 28, 2024 compared to the nine months ended June 30, 2023 from the impact of changes in revenue and costs noted above.
Previous report
Interest expense and other, net, increased $95.1 million for the nine months ended June 28, 2024 compared to the nine months ended June 30, 2023 primarily driven by interest expense related to our term loan debt issued on September 29, 2023, and subsequently partially refinanced on February 22, 2024, that was not outstanding during the nine months ended June 30, 2023. Interest expense for the nine months ended June 28, 2024 includeda$3.9 million non-cash loss for the write-off of unamortized debt issuance costs associated with the extinguishment of our $800 million Term Loan A-1.
Previous report
Net income of $23.3 million for the nine months ended June 28, 2024 represented adecrease of $95.9 million, or 80.5% compared to the nine months ended June 30, 2023 from the impact of changes to revenue, operating costs and net interest expense noted above.
Previous report
United States revenue of $636.8 million decreased $9.6 million, or 1.5%, for the three months ended June 28, 2024 compared to the three months ended June 30, 2023. Revenue decreased $2.9 million from lower year-over-year direct sales and $61.8 million from prior year sales associated with lost customers. The decreases were partially offset by $53.1 million of new customer sales and cross-selling activities to current customers and by $2.0 million from pricing actions.
Previous report
Segment operating income of $64.5 million for the three months ended June 28, 2024 decreased $19.6 million, or 23.3%, compared to the three months ended June 30, 2023, primarily driven by:
Previous report
•incremental labor costs of approximately $7.9 million for the three months ended June 28, 2024;
Previous report
•higher rental merchandise in service costs of $1.4 million;
Previous report
•higher professional services costs of $3.7 million;
Previous report
•increase in repairs and maintenance costs of $3.2 million; and
Previous report
•higher other selling costs of $1.1 million.
Previous report
Segment operating income margin decreased approximately 290 basis points from 13.0% for the three months ended June 30, 2023 to approximately 10.1% for the three months ended June 28, 2024.
Previous report
United States revenue of $1,932.1 million increased $11.1 million, or 0.6%, for the nine months ended June 28, 2024 compared to the nine months ended June 30, 2023. This increase was muted by 1.2% due to the non-recurrence of prior year temporary energy fees of $26.2 million enacted to offset the effect of inflationary pressure on energy costs. Revenue increased approximately $157.2 million from new customer sales and cross-selling activities to current customers and approximately $66.5 million from pricing actions. These increases were partially offset by approximately $6.9 million of lower year-over-year direct sales and approximately $179.5 million of prior year sales associated with lost customers.
Previous report
Segment operating income of $209.8 million for the nine months ended June 28, 2024 decreased $6.3 million, or 2.9%, compared to the nine months ended June 30, 2023, primarily driven by:
Previous report
•incremental labor costs of approximately $17.6 million for the nine months ended June 28, 2024;
Previous report
•higher rental merchandise in service costs of $2.5 million; and
Previous report
•higher professional services costs of $2.4 million.
Previous report
•the growth in revenue during the nine months ended June 28, 2024 as described above;
Previous report
•higher cost reductions of $4.0 million within salaries and wages from efficiency actions taken during the previous twelve months; and
Previous report
•year-over-year energy savings of $9.7 million primarily driven by lower rates, as well as our route optimization efforts.
Previous report
Segment operating income margin decreased approximately 30 basis points from 11.2% for the nine months ended June 30, 2023 to approximately 10.9% for the nine months ended June 28, 2024.
Previous report
Canada revenue of $61.4 million decreased $1.6 million, or 2.5%, for the three months ended June 28, 2024 compared to the three months ended June 30, 2023. Revenue decreased $3.7 million from prior year sales associated with lost customers and by $1.3 million due to the change in foreign currency rates year-over-year. The decreases were partially offset by $1.9 million from pricing actions and by $1.5 million of new customer sales and cross-selling activities to current customers.
Previous report
Segment operating income of $1.3 million for the three months ended June 28, 2024 decreased $2.0 million, or 60.6%, compared to the three months ended June 30, 2023, primarily driven by:
Previous report
•incremental labor costs of approximately $1.3 million for the three months ended June 28, 2024.
Previous report
•lower rental merchandise in service costs of $0.4 million.
Previous report
Segment operating income margin decreased approximately 310 basis points from 5.2% for the three months ended June 30, 2023, to approximately 2.1% for the three months ended June 28, 2024.
Previous report
Canada revenue of $189.4 million increased $1.1 million, or 0.6%, for the nine months ended June 28, 2024 compared to the nine months ended June 30, 2023. Revenue increased $11.3 million from new customer sales and cross-selling activities to current customers and $5.0 million from pricing actions. These increases were partially offset by the loss of $14.0 million of prior year sales associated with lost customers. The change in sales resulting from the year-over-year fluctuation in foreign exchange rates was immaterial.
Showing the first 40 of 59 passages. Open the source sections for the rest.
Reworded paragraphs (26)
Previous wording
The following discussion and analysis of Vestis Corporation’s (“Vestis”, the “Company”, “our”, “we” or “us”) financial condition and results of operations for the three and nine months ended June 28, 2024 and June 30, 2023 should be read in conjunction with our audited Combined Financial Statements and the notes to those statements for the fiscal year ended September 29, 2023 included in our Annual Report on Form 10-K, filed with the Securities and Exchange Commission ("SEC") on December 21, 2023.
Current wording
The following discussion and analysis of Vestis Corporation’s (“Vestis”, the “Company”, “our”, “we” or “us”) financial condition and results of operations for the three months ended December 27, 2024 and December 29, 2023 should be read in conjunction with our audited Consolidated and Combined Financial Statements and the notes to those statements for the fiscal year ended September 27, 2024 included in our Annual Report on Form 10-K, filed with the Securities and Exchange Commission ("SEC") on November 22, 2024.
Previous wording
Our fiscal year is the 52- or 53-week period which ends on the Friday nearest to September 30th. The fiscal years ended September 29, 2023 and September 27, 2024 are both 52-week periods.
Current wording
Our fiscal year is the 52- or 53-week period which ends on the Friday nearest to September 30th. The fiscal year ended September 27, 2024 is 52-week period and the fiscal year ended October 3, 2025 is 53-week period.
Previous wording
Global events, including ongoing geopolitical events, have adversely affected global economies, disrupted global supply chains and labor force participation, and created significant volatility and disruption of financial markets. While we do not have direct operations in Russia and Ukraine or in Israel, conflicts in those regions further disrupted global supply chains and heightened volatility and disruption of global financial markets. The ongoing volatility and disruption of financial markets caused by these global events, as well as other current global economic factors, triggered inflation in labor and energy costs and has driven significant changes in foreign currencies. 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.
Current wording
Global events, including ongoing geopolitical events, have adversely affected global economies, disrupted global supply chains and labor force participation, and created significant volatility and disruption of financial markets. While we do not have direct operations in Russia and Ukraine or in Israel, conflicts in those regions further disrupted global supply chains and heightened volatility and disruption of global financial markets. The ongoing volatility and disruption of financial markets caused by these global events, as well as other current global economic factors, triggered inflation in labor and energy costs and has driven significant changes in foreign currencies. We are also evaluating the potential effects that current trade discussions between the US, Canada, and Mexico may have on the results of our operations. The impact on our longer-term operational and financial performance will depend on future developments, including our response and governmental response to inflation, tariffs, 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.
Previous wording
Depreciation and amortization expense of$34.9 million for the three months ended June 28, 2024 increased $0.7 million, or 2.1%, compared to the three months ended June 30, 2023.
Current wording
Depreciation and amortization expense of$36.9 million for thethree months ended December 27, 2024 increased $1.6 million, or 4.5%, compared to the three months ended December 29, 2023.
Previous wording
Selling, general and administrative expenses ("SG&A")increased $5.8 million, or 4.7%, for the three months ended June 28, 2024 compared to the three months ended June 30, 2023. The increase in SG&A was primarily due to approximately $6.5 million of incremental public company costs. The increases were partially offset by savings from organization optimization efforts executed during the last twelve months.
Current wording
Selling, general and administrative expenses ("SG&A") decreased $11.4 million, or 8.6%, for the three months ended December 27, 2024 compared to the three months ended December 29, 2023. The decrease in SG&A was primarily due to reductions in wage and payroll costs of $7.8 million, travel and entertainment costs of $1.9 million, and equipment expense of $2.2 million. These decreases are primarily a result of the Company's optimization efforts executed during the last twelve months. These reductions were partially offset by an increase in marketing expense of $1.9 million tied to our rebranding efforts.
Previous wording
Operating income of $37.5 million decreased 43.5% for the three months ended June 28, 2024 compared to the three months ended June 30, 2023 from the impact of changes in revenue and costs noted above.
Current wording
Operating income of $30.4 million decreased 36.1% for the three months ended December 27, 2024 compared to the three months ended December 29, 2023 from the impact of changes in revenue and costs noted above.
Previous wording
The provision for income taxes for the three months ended June 28, 2024 was recorded at an effective rate of 38.1% compared to an effective rate of 26.3% for the three months ended June 30, 2023. The higher effective tax rate was primarily due to non-deductible executive compensation and the impact of tax adjustments on the lower year-over-year earnings.
Current wording
The provision for income taxes for the three months ended December 27, 2024 was recorded at an effective rateof 45.9% compared to an effective rate of 27.1% for the three months ended December 29, 2023. The higher effective tax rate was primarily due to the impact of tax adjustments, largely share-based compensation, on the lower year-over-year earnings.
Previous wording
Net income of $5.0 million for the three months ended June 28, 2024 represented adecrease of $43.8 million or 89.7% compared to the three months ended June 30, 2023 from the impact of changes to revenue, operating costs and net interest expense noted above.
Current wording
Net income of $0.8 million for the three months ended December 27, 2024 represented adecrease of $11.4 million or 93.2% compared to the three months ended December 29, 2023 from the impact of changes to revenue and expenses noted above.
Previous wording
(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. This metric takes the full annualized impact of a lost customer in the period it is reported. Retention is a leading indicator, in that the financial impact from the lost business will be realized over the 12 months after the billings cease for the lost customer.
Current wording
(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. This metric takes the full annualized impact of a lost customer in the period it is reported. Retention is a leading indicator, in that the financial impact from the lost business will be realized over the 12 months after the billings cease for the lost customer.
Previous wording
The following table presents an overview of our United States reportable segment results with the amount of and percentage change between periods for thenine months ended June 28, 2024 and June 30, 2023 (dollars in thousands).
Current wording
The following table presents an overview of our United States reportable segment results with the amount of and percentage change between periods for thethree months ended December 27, 2024 and December 29, 2023 (dollars in thousands).
Previous wording
The following table presents an overview of our Canada reportable segment results with the amount of and percentage change between periods for thenine months ended June 28, 2024 and June 30, 2023 (dollars in thousands).
Current wording
The following table presents an overview of our Canada reportable segment results with the amount of and percentage change between periods for thethree months ended December 27, 2024 and December 29, 2023 (dollars in thousands).
Previous wording
On August 2, 2024, Vestis Services, LLC (“Vestis Services”) and certain other subsidiaries of the Company entered into a three-year$250.0 million accounts receivable securitization facility (the “A/R Facility”). Under the A/R Facility, Vestis Services and certain other wholly-owned subsidiaries of the Company transfer accounts receivable and certain related assets to VS Financing, LLC, a bankruptcy remote special purpose entity formed as a wholly-owned subsidiary of Vestis Services, who in turn, may sell the receivables to a financial institution. The net proceeds of the A/R Facility will be used to repay a portion of the outstanding borrowings under the existing term loans. The A/R Facility is scheduled to terminate on August 2, 2027, unless terminated earlier pursuant to its terms.
Current wording
On August 2, 2024, Vestis Services, LLC (“Vestis Services”) and certain other subsidiaries of the Company entered into a three-year$250.0 million accounts receivable securitization facility (the “A/R Facility”). Under the A/R Facility, Vestis Services and certain other wholly-owned subsidiaries of the Company transfer accounts receivable and certain related assets to VS Financing, LLC, a bankruptcy remote special purpose entity formed as a wholly-owned subsidiary of Vestis Services ("SPE"), who in turn, may sell the receivables to one or more financial institutions ("Purchasers"). The net proceeds of the A/R Facility were used to repay a portion of the outstanding borrowings under the existing term loans. The A/R Facility is scheduled to terminate on August 2, 2027, unless terminated earlier pursuant to its terms. As of December 27, 2024 and September 27, 2024, the total value of accounts receivable sold from the SPE to the Purchasers under the A/R Facility and derecognized from the Company's Consolidated Balance Sheet was$227.0 million and $229.0 million, respectively.
Previous wording
As of June 28, 2024, we had approximately $29.1 million of cash and cash equivalents and$294.7 million of availability for borrowing under our Revolving Credit Facility. The servicing of this debt will be supported by cash flows from our operations. As of June 28, 2024, we had $1,420.5 million of total principal debt compared to $1,500.0 million as of September 29, 2023.
Current wording
As of December 27, 2024, we had approximately $18.6 million of cash and cash equivalents and$294.7 million of availability for borrowing under our Revolving Credit Facility. As of December 27, 2024, we had $1,142.5 million of total principal debt compared to $1,162.5 million as of September 27, 2024. The servicing of this debt will be supported by cash flows from our operations.
Previous wording
On May 23, 2024, we announced that our Board of Directors declared a quarterly cash dividend of $0.035 per common share payable on July 2, 2024 to shareholders of record at the close of business on June 14, 2024. The total dividend payable amount was $4.6 million. The amount and timing of any future dividend payment is subject to the approval of our Board of Directors.
Current wording
On January 31, 2025, we announced that our Board of Directors declared a quarterly cash dividend of $0.035 per common share payable on March 18, 2025 to shareholders of record at the close of business on February 21, 2025. The amount and timing of any future dividend payment is subject to the approval of our Board of Directors.
Previous wording
Reference to the Consolidated and Combined Statements of Cash Flows will facilitate understanding of the discussion that follows.
Current wording
Reference to the Consolidated Statements of Cash Flows will facilitate understanding of the discussion that follows.
Previous wording
Net cash provided by operating activities was $176.2 million for the nine months ended June 28, 2024 and $143.9 million for the nine months ended June 30, 2023, respectively. The change was driven by cash inflows from operating assets and liabilities of $37.3 million for the nine months ended June 28, 2024 compared to cash outflows of $97.8 million for the nine months ended June 30, 2023, partially offset by net income for the nine months ended June 28, 2024 of $23.3 million compared to net income for the nine months ended June 30, 2023 of $119.2 million, as discussed in "Results of Operations" above. The change in cash from operating assets and liabilities of $135.1 million, which was primarily due to:
Current wording
Net cash provided by operating activities was $3.8 million for the three months ended December 27, 2024 and $51.5 million for the three months ended December 29, 2023, respectively. The decrease in net cash provided by operating activities of $47.7 million was driven by cash outflows from operating assets and liabilities of $38.9 million for the three months ended December 27, 2024 compared to cash inflows of $0.7 million for the three months ended December 29, 2023. Additionally, net income for the three months ended December 27, 2024 was $0.8 million compared to net income for the three months ended December 29, 2023 of $12.3 million, as discussed in "Results of Operations" above. The year-over-year change in cash used in operating assets and liabilities of$39.6 million, was primarily due to:
Previous wording
Cash Flows Used in Investing Activities
Current wording
Cash Flows Provided by (Used in) Investing Activities
Previous wording
During the nine months ended June 28, 2024, cash used in financing activities was impacted by the following:
Current wording
During the three months ended December 27, 2024, cash used in financing activities was impacted by the following:
Previous wording
•payments of long-term borrowings ($879.5 million);
Current wording
•payments of long-term borrowings ($20.0 million);
Previous wording
•payments related to finance leases ($22.6 million);
Current wording
•payments related to finance leases ($8.3 million); and
Previous wording
During the nine months ended June 30, 2023, cash used in financing activities was impacted by the following:
Current wording
During the three months ended December 29, 2023, cash used in financing activities was impacted by the following:
Previous wording
•payments related to finance leases ($20.8 million).
Current wording
•payments related to finance leases ($7.6 million); and
Previous wording
In the normal course of business, we enter into contracts and commitments that obligate us to make payments in the future. There have not been material changes to our cash requirements from our Annual Report on Form 10-K for the fiscal year ended September 29, 2023 filed with the SEC on December 21, 2023. Additional information regarding our obligations under debt and lease arrangements are provided in Note 4. "Borrowings" and Note 7. "Leases" to the Consolidated and Combined Financial Statements contained elsewhere in this Quarterly Report on Form 10-Q.
Current wording
In the normal course of business, we enter into contracts and commitments that obligate us to make payments in the future. There have not been material changes to our cash requirements from our Annual Report on Form 10-K for the fiscal year ended September 27, 2024 filed with the SEC on November 22, 2024. Additional information regarding our obligations under debt and lease arrangements are provided in Note 4. "Borrowings" and Note 7. "Leases" to the Consolidated Financial Statements contained elsewhere in this Quarterly Report on Form 10-Q.
Previous wording
Our significant accounting policies are described in the notes to the audited Combined Financial Statements included in our Annual Report on form 10-K, filed with the SEC on December 21, 2023. For a more complete discussion of the critical accounting policies and estimates that we have identified in the preparation of our Consolidated and Combined Financial Statements, please refer to our Management's Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K, filed with the SEC on December 21, 2023. Management believes that there have been no significant changes during thenine months ended June 28, 2024 to the items that we disclosed as our critical accounting policies and estimates in our Annual Report on Form 10-K for the fiscal year ended September 29, 2023.
Current wording
Our significant accounting policies are described in the notes to the audited Consolidated and Combined Financial Statements included in our Annual Report on form 10-K, filed with the SEC on November 22, 2024. For a more complete discussion of the critical accounting policies and estimates that we have identified in the preparation of our Consolidated Financial Statements, please refer to our Management's Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K, filed with the SEC on November 22, 2024. Management believes that there have been no significant changes during thethree months ended December 27, 2024 to the items that we disclosed as our critical accounting policies and estimates in our Annual Report on Form 10-K for the fiscal year ended September 27, 2024.
Previous wording
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. These estimates and assumptions are most significant where they involve levels of subjectivity and judgment necessary to account for highly uncertain matters or matters susceptible to change, and where they can have a material impact on our financial condition and operating performance. If actual results were to differ materially from the estimates made, the reported results could be materially affected.
Current wording
In preparing our Consolidated Financial Statements, management is required to make estimates and assumptions that, among other things, affect the reported amounts of assets, liabilities, revenue, and expenses. These estimates and assumptions are most significant where they involve levels of subjectivity and judgment necessary to account for highly uncertain matters or matters susceptible to change, and where they can have a material impact on our financial condition and operating performance. If actual results were to differ materially from the estimates made, the reported results could be materially affected.
Previous wording
See Note 1. "Nature of Business and Basis of Presentation" to the Consolidated and Combined Financial Statements for a full description of recent accounting standards updates, including the expected dates of adoption.
Current wording
See Note 1. "Nature of Business and Basis of Presentation" to the Consolidated Financial Statements for a full description of recent accounting standards updates, including the expected dates of adoption.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
•payments of long-term borrowings ($8.8 million);
Rearranged previous paragraphs (8)
Previous report — wording carried elsewhere
The following table presents an overview of our results with the amount of and percentage change between periods for the nine months ended June 28, 2024 and June 30, 2023 (dollars in thousands).
Previous report — wording carried elsewhere
(1)Exclusive of depreciation and amortization
Previous report — wording carried elsewhere
The provision for income taxes for the nine months ended June 28, 2024 was recorded at an effective rate of 30.1% compared to an effective rate of 25.7% for the nine months ended June 30, 2023. The higher effective tax rate was primarily due to non-deductible executive compensation and the impact of tax adjustments on the lower year-over-year earnings.
Previous report — wording carried elsewhere
The following table presents an overview of our United States reportable segment results with the amount of and percentage change between periods for the three months ended June 28, 2024 and June 30, 2023 (dollars in thousands).
Previous report — wording carried elsewhere
Results of Operations—United States Results Nine Months Ended June 28, 2024 compared with June 30, 2023
Previous report — wording carried elsewhere
The following table presents an overview of our Canada reportable segment results with the amount of and percentage change between periods for the three months ended June 28, 2024 and June 30, 2023 (dollars in thousands).
Previous report — wording carried elsewhere
•the decrease in revenue during the three months ended June 28, 2024, as described above; and
Previous report — wording carried elsewhere
Results of Operations—Canada Results Nine Months Ended June 28, 2024 compared with June 30, 2023