Our third quarter results are in line with expectations, and we are reaffirming our full year fiscal 2024 guidance with EBITDA margin trending towards the higher end of our range.
— Kimberly T. Scott
03Detailed Report
VSTS
Company VSTS
Period
Q3 2024
CurrencyUSD
Report TypeQuarterly Earnings
GeneratedJun 25, 2026
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Executive Summary
Vestis Corporation reported a modest revenue decline in QQ3 2024 alongside a stabilized EBITDA trajectory and improving retention metrics, signaling a gradual stabilization of the recurring revenue base after a challenging prior year with large national account losses. GAAP results show revenue of $698.2 million with gross margin near 29% and GAAP EBITDA of $73.4 million (adjusted EBITDA of $87 million, 12.4% margin) driven by ongoing pricing actions and meaningful new business wins. Management reaffirmed full-year 2024 guidance and stressed that second-half results should form the new base for growth, supported by a series of structural improvements (new COO, new Head of Field Sales, delayering, and a cost-out program) that are expected to generate roughly $8 million in annualized gross cost out and roughly $4 million in net annualized savings, funded by a roughly $4 million reinvestment in leadership. Balance-sheet discipline continued with a $250 million AR securitization facility announced post-quarter, intended to unlock latent working capital and materially reduce net debt, positioning the company toward its long-run leverage target of 1.5x–2.5x. Near-term focus remains on improving service levels and retention to convert new-business momentum into durable organic growth.
Key Performance Indicators
Revenue
Decreasing
698.25M
QoQ: -1.01% | YoY: -2.74%
Gross Profit
Increasing
202.49M
29.00% margin
QoQ: 22.17% | YoY: 12.38%
Operating Income
Decreasing
37.52M
QoQ: -12.85% | YoY: -21.17%
Net Income
Decreasing
5.04M
QoQ: -15.56% | YoY: -58.94%
EPS
Decreasing
0.04
QoQ: -16.01% | YoY: -58.99%
Revenue Trend
Margin Analysis
Financial Highlights
- Revenue: $698.25 million, down 1.6% YoY; YoY revenue drivers include 700 bps from new customers and 100 bps from route sales, partially offset by 900 bps from lost business and 60 bps pricing contribution. - Gross Profit: $202.49 million; gross margin 29.00% (0.2900). - Operating Income: $37.52 million; operating margin 5.37%. - EBITDA: GAAP $73.45 million; EBITDA margin 10.52%; Adjusted EBITDA: $87.0 million; adjusted EBITDA margin 12.4%. - Net Income: $5.04 million; net margin 0.72%; EPS $0.0383. YoY and QoQ comparisons show a multiyear consolidation of earnings with an improving top-line mix and ongoing leverage from new-business activity. - Cash Flow: Operating cash flow $49.0 million in Q3; YTD operating cash flow $176.0 million; Free cash flow (FFO) $28.0 million in Q3; YTD FCF $125.0 million. Capex $21.0 million in Q3; Free cash flow conversion >100% of net income and 46% of YTD adjusted EBITDA. - Balance Sheet: Cash $29.1 million; total assets $3.1456 billion; total debt (net) $1.593 billion; net debt/EBITDA 3.98x (GAAP); pro forma net debt $1.28 billion and pro forma net leverage 3.3x if AR facility closed and $250 million debt repaid. - Leverage & liquidity: Net debt-to-EBITDA 3.98x; target leverage 1.5x–2.5x; AR securitization expected to lower net debt and working capital needs; cash balance has remained modest.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
698.25M
-2.74%
-1.01%
Gross Profit
202.49M
12.38%
22.17%
Operating Income
37.52M
-21.17%
-12.85%
Net Income
5.04M
-58.94%
-15.56%
EPS
0.04
-58.99%
-16.01%
Key Financial Ratios
Gross Profit Margin
Fair
29.00%
Gross profit margin is moderate, room for improvement in cost management
Operating Profit Margin
Fair
5.37%
Operating margin is moderate, room for improvement in cost management
Net Profit Margin
Weak
0.72%
Net profit margin is below industry norms, profitability concerns
Return on Assets
Weak
0.16%
Return on assets suggests inefficient capital allocation
Return on Equity
Weak
0.56%
Return on equity suggests inefficient capital allocation
Current Ratio
Healthy
2.37
Current ratio shows adequate liquidity to meet short-term obligations
Debt to Equity
High Risk
1.80
Debt-to-equity indicates high leverage and elevated financial risk
P/E Ratio
High Growth
79.85x
Very high P/E indicates aggressive growth expectations, higher risk
Price to Book
Fair Value
1.79x
Price-to-book ratio reasonable for profitable companies
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