Q3 2024 Vestis Corp Earnings Call Transcript
Key Points
- Third-quarter results are in line with expectations, reaffirming full-year fiscal '24 guidance with EBITDA margin trending toward the higher end of the range.
- Customer retention rates have improved year to date, with a 210-basis-point improvement compared to fiscal '23.
- New business wins contributed approximately 700 basis points of growth in Q3, with an additional 100 basis points from route sales.
- Operational efficiencies are being realized through new leadership and organizational restructuring, resulting in a net $4 million cost savings.
- The company has successfully implemented a $250 million accounts receivable securitization facility, significantly reducing net debt and improving leverage ratios.
- Revenue for the quarter was down 1.6% year over year, and adjusted EBITDA margin declined by 260 basis points versus the prior year.
- Incremental public company costs impacted adjusted EBITDA margin by 100 basis points.
- Customer losses reduced third-quarter revenue by approximately 900 basis points year over year.
- There were some onetime benefits to EBITDA in Q3 that will not repeat in Q4, leading to an expected sequential EBITDA stepdown.
- Pricing contributed only 60 basis points to top-line growth, reflecting moderated off-cycle pricing and the erosion of prior year pricing actions.
Welcome to the Vestis Corporation fiscal third-quarter 2024 earnings conference call. (Operator Instructions)
I would now like to turn the conference over to Michael Aurelio, Senior Director, Investor Relations. Please go ahead, sir.
Thank you, Connie, and good morning, everyone. Welcome to the Vestis Corporation fiscal third-quarter 2024 earnings call. With me here today are our President and CEO, Kim Scott; and our CFO, Rick Dillon. As a reminder, a telephonic replay of this call will be available on the Investor Relations section of the vestis.com website shortly after the completion of the call. Also, access to the materials discussed on today's call are available on the Vestis website under the Investor Relations section.
Before we begin, I would like to remind you that this call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These include remarks about management's future expectations, beliefs, estimates, plans, and prospects.
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