ARAMARK Reports Record Fourth Quarter and Fiscal Year Sales and Income.Business Editors PHILADELPHIA--(BUSINESS WIRE)--Nov. 13, 2003 ARAMARK Aramark Corporation is a private company that is a professional services organization, providing food services, facilities management, hospitality services, uniforms and career apparel to large public and private institutions worldwide. Corporation (NYSE NYSE See: New York Stock Exchange :RMK RMK Remark (Weather METAR) RMK Rocky Mountain King (Polaris Snowmobiles) RMK Remarks RMK Resource Manager Kernel ), a world leader in managed services An umbrella term for third-party monitoring and maintaining of computers, networks and software. The actual equipment may be inhouse or at the third-party's facilities, but the "managed" implies an ongoing effort; for example, making sure the equipment is running at a certain quality , today reported record fourth quarter and full year results for fiscal year 2003. ARAMARK reported consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: sales of $2.6 billion for its fourth fiscal quarter, a 19 percent increase from the same quarter a year ago. Sales from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the for the full year 2003 were $9.4 billion, 13 percent above fiscal 2002 sales. The quarter and fiscal year contained 14 and 53 weeks, respectively, in each case one more week than the corresponding period in the prior year. Fourth Quarter Results ARAMARK reported income from continuing operations for the quarter of $105.3 million, or $.54 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, compared to $81.0 million, or $.40 per share, in the prior year quarter. Excluding the after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. impact of two unusual items from the fourth quarter of 2003, for comparison purposes, income per diluted share from continuing operations increased 18 percent from $.40 to $.47. The reported results for the fourth fiscal quarter include: $32.0 million of business interruption insurance Noun 1. business interruption insurance - insurance that provides protection for the loss of profits and continuing fixed expenses resulting from a break in commercial activities due to the occurrence of a peril proceeds, representing the final settlement of the Company's 9/11/01 claim, and a $10.7 million charge to write down a residual Residual See:Residual value investment in a previously divested entity to its net realizable value Net realizable value (NRV) is a commonly used method of evaluating an asset's worth in the field of inventory accounting. NRV is part of GAAP rules that apply to valuing inventory, so as to not overstate or understate the value of inventory goods. . Full Year Results ARAMARK reported income from continuing operations in fiscal 2003 of $265.4 million or $1.34 per diluted share compared to $251.3 million or $1.25 per diluted share last year. Excluding from both years the per share effects of all of the items mentioned below for comparison purposes, full year income per diluted share from continuing operations increased 15 percent in 2003 from $1.10 to $1.26. Fiscal 2002's reported results included the previously disclosed dis·close tr.v. dis·closed, dis·clos·ing, dis·clos·es 1. To expose to view, as by removing a cover; uncover. 2. To make known (something heretofore kept secret). $.12 per share gain from the sale of ARAMARK's interest in the Boston Red Sox The Boston Red Sox are a professional baseball team based in Boston, Massachusetts. The Red Sox are a member and currently champions of the Eastern Division of Major League Baseball’s American League. From to the present, the Red Sox have played in Fenway Park. baseball baseball, bat-and-ball sport known as the national pastime of the United States. It derives its name from the four bases that form a diamond (the infield) around the pitcher's mound. team and a third quarter $.03 per share divestiture The breakup of AT&T. By federal court order, AT&T divested itself on January 1, 1984 of its 23 operating companies, which became known as the Regional Bell Operating Companies (RBOCs). gain. In addition to the two fourth quarter 2003 items mentioned above, in the third quarter of fiscal 2003, ARAMARK pre-paid a portion of its outstanding debt, resulting in an extinguishment The destruction or cancellation of a right, a power, a contract, or an estate. Extinguishment is sometimes confused with merger, though there is a clear distinction between them. charge, net of tax, of $4.7 million. ARAMARK also reached a settlement of certain open tax years and, as a result, reduced its provision for income taxes by approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $8.4 million. These two items added $.02 to the 2003 third quarter earnings per share. Chairman's Comments "We are pleased with the overall financial performance of our businesses this year, which reflects our continuing focus on organic growth, margin improvement and strong operating cash flows Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. ," said Joseph Neubauer Neubauer is a surname, and may refer to:
A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: and continued robust cash flow. We were particularly pleased with the fourth quarter organic growth of 5 percent for ARAMARK and the positive organic growth trends in our U.S. business services operations and the acceleration acceleration, change in the velocity of a body with respect to time. Since velocity is a vector quantity, involving both magnitude and direction, acceleration is also a vector. In order to produce an acceleration, a force must be applied to the body. of our facilities management The management of a user's computer installation by an outside organization. All operations including systems, programming and the datacenter can be performed by the facilities management organization on the user's premises. organic sales growth. "During the year, we continued to add new business at a record pace, surpassing the prior year," Mr. Neubauer continued. "ARAMARK won $860 million in annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. new business in fiscal 2003. An increasing portion of our new business was generated from cross-selling Cross-selling is the term used to describe the sale of additional products or services to a customer. Less frequently it is used to describe the sale of services to additional business units at an account or to different geographic units of a customer. of new services to existing clients through our Mission One growth strategy. We are pleased that our clients recognized and rewarded our outstanding client service levels as we increased our overall retention rate two percentage points to 95 percent. "Internal cash flow, an operating metric that we define as income from continuing operations plus non-cash charges Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. such as depreciation, amortization and deferred taxes less all net capital expenditures and non-recurring gains, was $306 million in fiscal 2003 versus $253 million in 2002. The strength of the cash flow generated by our businesses made this the appropriate time for our Board of Directors to declare TO DECLARE. To make known or publish. By tho constitution of the United States, congress have power to declare war. In this sense the word, declare, signifies, not merely to make it known that war exists, but also to make war and to carry it on. 4 Dall. 37; 1 Story, Const. Sec. a cash dividend on our common stock, which we announced on November November: see month. 11, 2003." Food and Support Services support services Psychology Non-health care-related ancillary services–eg, transportation, financial aid, support groups, homemaker services, respite services, and other services In ARAMARK's Food and Support Services - U.S. segment, fourth quarter sales increased 21 percent over the same quarter a year ago. Organic sales growth for the period was 5 percent. Segment operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. increased 11 percent from a year ago, excluding the business interruption insurance proceeds mentioned above. Business Services organic growth rate was positive 1 percent, a significant improvement over the negative rates seen in the first nine months of the year. ARAMARK's Facilities Management operations also generated much improved organic sales growth. Sales for the Food and Support Services - International segment for the quarter increased 21 percent from last year's fourth quarter. The impact of changes in currency translation rates between the fourth quarters of 2002 and 2003 increased reported sales growth by about 10 percentage points. Organic sales growth for the segment was 3 percent. Uniform and Career Apparel In ARAMARK's Uniform Career Apparel - Rental RENTAL. A roll or list of the rents of an estate containing the description of the lands let, the names of the tenants, and other particulars connected with such estate. This is the same as rent roll, from which it is said to be corrupted. segment, sales for the fourth quarter were up about 8 percent compared with the same quarter last year, while organic growth was flat. Operating income for the segment was down 4 percent from the prior year quarter. Net new business growth, modest price increases and solid client retention were offset by a contraction contraction, in physics contraction, in physics: see expansion. contraction, in grammar contraction, in writing: see abbreviation. contraction - reduction in base business and higher fuel and energy costs. Fourth quarter sales in ARAMARK's Direct Marketing segment rose 10 percent over the prior year quarter, 3 percent organically. Operating income for the quarter was up significantly based on a favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. mix of product sales and improved profitability for our WearGuard-Crest operation. 2004 Financial Guidance Mr. Neubauer concluded, "Looking forward to fiscal 2004, we expect economic conditions to be relatively stable with gradual The Gradual (Latin: graduale, sometimes called the Grail) is a chant in the extraordinary form of the Roman Catholic Mass, sung after the reading or singing of the Epistle and before the Alleluia, or, during penitential seasons, before the Tract. improvement from today's market environment. As you know, fiscal 2004 is a normal, 52-week year, whereas 2003 was a 53-week year. The year over year sales impact of the extra week in 2003 is approximately 2 percent. Our estimates of organic growth rates Growth Rates The compounded annualized rate of growth of a company's revenues, earnings, dividends, or other figures. Notes: Remember, historically high growth rates don't always mean a high rate of growth looking into the future. have been adjusted for this effect. "We believe that ARAMARK's 2004 organic sales growth will be between 4 and 6 percent. The higher end Coordinates: For other places with the same name, see Billinge. Higher End or Billinge Higher End is a district of the Metropolitan Borough of Wigan, in Greater Manchester, England. of this range could be achieved if economic conditions, particularly employment levels, improve meaningfully. Our worldwide Food and Support Services organic growth is expected to be between 4 and 6 percent, while the combined uniform business is forecasted to deliver 1 to 3 percent organic growth. Our expectations for 2004 reflect our continuing focus on high retention rates, winning new business and growth within existing clients - all key components of our Mission One strategy. We expect to report consolidated sales for 2004 of between $9.6 and $9.9 billion. "We anticipate 2004 diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of to be in the range of $1.38 to $1.44 compared to $1.26 on an adjusted basis for the 53 week fiscal 2003. We currently anticipate that first quarter diluted EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. will be in the range of $.33 to $.35, compared to $.29 in the first quarter of 2003. "Overall, I am extremely proud of the fiscal 2003 performance of the ARAMARK team members - all 200,000 of them. As our business grows and service offerings become more complex and deep-rooted deep-root·ed adj. Firmly implanted; well-established: deep-rooted prejudices. deep-rooted or deep-seated Adjective (of ideas, beliefs, etc. in our customers' organizations, we will rely on our outstanding people to become even more aware of our clients' needs and to work even more diligently dil·i·gent adj. Marked by persevering, painstaking effort. See Synonyms at busy. [Middle English, from Old French, from Latin d to build stronger, more enduring partnerships." In conjunction conjunction, in astronomy conjunction, in astronomy, alignment of two celestial bodies as seen from the earth. Conjunction of the moon and the planets is often determined by reference to the sun. with its fourth quarter and full year fiscal 2003 earnings release, ARAMARK will discuss its results in a conference call broadcast live over the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the on November 13, 2003 at 10:00 a.m. EST EST electroshock therapy. EST abbr. electroshock therapy . Interested parties are invited to log on to www.aramark.com to listen to this webcast. A recording of the conference call will be available on that website. Certain previously undisclosed financial information relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc a completed fiscal period, as well as any reconciliations for non-GAAP disclosures, that are disclosed in the conference call will be available on the Investor Relations Investor relations The process by which the corporation communicates with its investors. section of ARAMARK's website at www.aramark.com. About ARAMARK ARAMARK Corporation is a world leader in providing award-winning Adj. 1. award-winning - having received awards; "this award-winning bridge spans a distance of five miles" food and facilities management services to healthcare institutions, universities and schools, stadiums and arenas, international and domestic corporations, as well as providing uniform and career apparel. In FORTUNE Magazine's 2003 survey of the "Most Admired ad·mire v. ad·mired, ad·mir·ing, ad·mires v.tr. 1. To regard with pleasure, wonder, and approval. 2. To have a high opinion of; esteem or respect. 3. Companies in America America [for Amerigo Vespucci], the lands of the Western Hemisphere—North America, Central (or Middle) America, and South America. The world map published in 1507 by Martin Waldseemüller is the first known cartographic use of the name. ," ARAMARK ranks No. 1 in the outsourcing (1) Contracting with outside consultants, software houses or service bureaus to perform systems analysis, programming and datacenter operations. Contrast with insourcing. See netsourcing, ASP, SSP and facilities management. services category and is No. 10 among all companies included in the survey by overall score as evaluated by peers within the industry. Headquartered in Philadelphia Philadelphia, ancient cities Philadelphia, name of several ancient cities. One was in Lydia, W Asia Minor (now W Turkey). At the foot of Mt. Tmolus and near the location of modern Alaşehir, it was founded in the 2d cent. B.C. , ARAMARK has approximately 200,000 employees serving clients in 18 countries. Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. The Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995 provides a safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. from civil litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. for forward-looking statements that reflect our current views as to future events and financial performance with respect to our operations. These statements can be identified by the fact that they do not relate strictly to historical or current facts. They use words such as "aim," "anticipate," "estimate," "expect," "will be," "will continue," "will likely result," "project," "intend," "plan," "believe" and other words and terms of similar meaning in conjunction with a discussion of future operating or financial performance. Forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and other factors (many of which are beyond our control) that could cause actual results to differ materially from the future results expressed or implied Inferred from circumstances; known indirectly. In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. by such forward-looking statements. The forward-looking statements regarding such matters are based on certain assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate in the circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or . Factors that might cause such a difference include: unfavorable economic conditions, including ramifications ramifications npl → Auswirkungen pl of any future terrorist attacks; increased operating costs operating costs npl → gastos mpl operacionales ; shortages of qualified personnel; currency risks and other risks associated with international markets; risks associated with acquisitions, including acquisition integration costs; our ability to integrate and derive de·rive v. 1. To obtain or receive from a source. 2. To produce or obtain a chemical compound from another substance by chemical reaction. the expected benefits from recent acquisitions; competition; decline in attendance at client facilities; unpredictability of sales and expenses due to contract terms and terminations; clients' disputes of our contract determinations; high leverage; claims relating to the provision of food services food services Hospital services A 24/7 department in a hospital that provides for the nutritional needs of inpatients–eg, those needing special diets, preparing meals and transporting them to the floor and, through the cafeteria, the hospital staff and ; costs of compliance with governmental regulations; liability associated with non-compliance with governmental regulations, including regulations pertaining per·tain intr.v. per·tained, per·tain·ing, per·tains 1. To have reference; relate: evidence that pertains to the accident. 2. to food services and the environment; and seasonality. For further information regarding risks and uncertainties associated with ARAMARK's business, please refer to the "Management's Discussion and Analysis Management's discussion and analysis (MD&A) A report from management to shareholders that accompanies the firm's financial statements in the annual report. It explains the period's financial results and enables management to discuss topics that may not be apparent in the financial of Results of Operations and Financial Condition" and "Risk Factors" sections of ARAMARK's SEC filings, including, but not limited to, our annual report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. and quarterly reports on Form 10-Q Form 10-Q See 10-Q. , copies of which may be obtained by contacting ARAMARK's investor relations department via its web site www.aramark.com. Forward-looking statements speak only as of the date made. We undertake no obligation to update any forward-looking statements to reflect the events or circumstances arising after the date as of which they are made. As a result of these risks and uncertainties, readers are cautioned not to place undue reliance on the forward-looking statements included herein or that may be made elsewhere from time to time by, or on behalf of, us.
ARAMARK CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In Thousands, Except Per Share Amounts)
Three Months Ended
---------------------------
October 3, September 27,
2003 (1) 2002
------------- -------------
Sales $2,588,015 $2,180,925
------------- -------------
Costs and Expenses:
Cost of services provided (3) 2,278,083 1,931,208
Depreciation and amortization 70,345 59,124
Selling and general corporate
expenses 29,165 28,896
Other (income) expense (2) 10,700 -
------------- -------------
2,388,293 2,019,228
------------- -------------
Operating income 199,722 161,697
Interest and other financing costs, net 31,473 32,856
------------- -------------
Income from continuing operations
before income taxes 168,249 128,841
Provision for income taxes 62,958 47,801
------------- -------------
Income from continuing operations 105,291 81,040
Income from discontinued operations, net
(4) - 486
------------- -------------
Net income $105,291 $81,526
============= =============
Earnings Per Share - Basic:
Income from continuing operations $0.56 $0.42
Net income $0.56 $0.42
Earnings Per Share - Diluted:
Income from continuing operations $0.54 $0.40
Net income $0.54 $0.40
Weighted Average Shares Outstanding:
Basic 188,743 192,593
Diluted 194,598 201,684
(1) - The fiscal 2003 fourth quarter is a fourteen week period, as
fiscal 2003 is a 53-week period. The fourth quarter of fiscal 2002
is a thirteen week period.
(2) - During the fourth quarter of fiscal 2003, ARAMARK reached
agreement for the sale of its 15% interest in a periodicals
distribution business to the majority shareholder, and wrote down
this investment to the expected recoverable amount. The resulting
pre-tax charge of $10.7 million ($6.6 million, net of tax) is
included in "Other (income) expense."
(3) - The fiscal 2003 fourth quarter includes approximately $32
million ($19.7 million net of tax) of business interruption
proceeds from the final settlement of the Company's September 11,
2001 claim.
(4) - In the third quarter of fiscal 2003, ARAMARK completed the
previously announced sale of ARAMARK Educational Resources (AER)
to Knowledge Learning Corporation, Inc. for approximately $250
million in cash. AER is accounted for as a discontinued operation
in the accompanying financial schedule. AER's results of
operations and cash flows have been removed from the Company's
results of continuing operations for all periods presented.
ARAMARK CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In Thousands, Except Per Share Amounts)
Fiscal Year Ended
---------------------------
October 3, September 27,
2003 (1) 2002
------------- -------------
Sales $9,447,815 $8,356,007
------------- -------------
Costs and Expenses:
Cost of services provided (2) 8,506,465 7,525,323
Depreciation and amortization 262,944 229,608
Selling and general corporate
expenses 115,684 115,190
Other (income) expense (3) (4) 10,700 (43,695)
------------- -------------
8,895,793 7,826,426
------------- -------------
Operating income 552,022 529,581
Interest and other financing costs, net
(5) 142,469 136,432
------------- -------------
Income from continuing operations
before income taxes 409,553 393,149
Provision for income taxes (5) 144,185 141,829
------------- -------------
Income from continuing operations 265,368 251,320
Income from discontinued operations, net
(6) 35,724 18,592
------------- -------------
Net income $301,092 $269,912
============= =============
Earnings Per Share - Basic:
Income from continuing operations $1.39 $1.32
Net income $1.58 $1.42
Earnings Per Share - Diluted:
Income from continuing operations $1.34 $1.25
Net income $1.52 $1.34
Weighted Average Shares Outstanding:
Basic 190,723 190,256
Diluted 197,505 200,924
(1) Fiscal 2003 is a 53-week year. Fiscal 2002 is a 52-week year.
(2) The fiscal 2003 fourth quarter includes approximately $32 million
($19.7 million net of tax) of business interruption proceeds from
the final settlement of the Company's September 11, 2001 claim.
(3) During the fourth quarter of fiscal 2003, ARAMARK reached
agreement for the sale of its 15% interest in a periodicals
distribution business to the majority shareholder, and wrote down
this investment to the expected recoverable amount. The resulting
pre-tax charge of $10.7 million ($6.6 million, net of tax) is
included in "Other (income) expense."
(4) During fiscal 2002, ARAMARK sold its ownership interests in the
Boston Red Sox and a related entity, resulting in a pre-tax gain
of $37.9 million, and recorded a pre-tax gain of $5.8 million,
resulting principally from the sale of a residual interest in a
previously divested business. These items totaling $43.7 million
($30.8 million after-tax) are included in "Other (income)
expense."
(5) In the third quarter of fiscal 2003, ARAMARK completed a tender
offer to purchase approximately $94.3 million of its 6.75%
Guaranteed Notes due August 1, 2004, for approximately $101.9
million, including accrued interest, and retired a $45 million
term loan due March 2005. These two transactions resulted in an
extinguishment charge of $7.7 million ($4.7 million net of tax)
which is included in "Interest and other financing costs, net" in
the accompanying financial schedule. Additionally, in the third
quarter of fiscal 2003, ARAMARK reduced the provision for income
taxes, based upon the settlement of open tax years, by
approximately $8.4 million.
(6) In the third quarter of fiscal 2003, ARAMARK completed the
previously announced sale of ARAMARK Educational Resources (AER)
to Knowledge Learning Corporation, Inc. for approximately $250
million in cash. AER is accounted for as a discontinued operation
in the accompanying financial schedule. AER's results of
operations and cash flows have been removed from the Company's
results of continuing operations for all periods presented.
Included in income from discontinued operations is a net gain of
$23.6 million related to the sale of AER.
ARAMARK CORPORATION AND SUBSIDIARIES
SELECTED CONSOLIDATED BALANCE SHEET DATA
(Unaudited)
(In Thousands)
October 3, September 27,
2003 2002
------------- -------------
Assets
------------------------------------------
Current Assets $1,226,592 $1,081,085
Current Assets of Discontinued Operations
(1) - 17,307
Property and Equipment, net 1,184,320 1,069,868
Goodwill 1,417,021 1,298,808
Other Assets 639,644 536,980
Noncurrent Assets of Discontinued
Operations (1) - 255,254
------------- -------------
$4,467,577 $4,259,302
============= =============
Liabilities and Shareholders' Equity
------------------------------------------
Current Liabilities (2) $1,415,789 $1,249,466
Current Liabilities of Discontinued
Operations (1) - 54,096
Long-Term Borrowings 1,711,705 1,835,632
Other Liabilities 301,111 254,198
Noncurrent Liabilities of Discontinued
Operations (1) - 7,725
Total Shareholders' Equity 1,038,972 858,185
------------- -------------
$4,467,577 $4,259,302
============= =============
(1) In the third quarter of fiscal 2003, ARAMARK completed the
previously announced sale of ARAMARK Educational Resources (AER)
to Knowledge Learning Corporation, Inc. for approximately $250
million in cash. AER is accounted for as a discontinued operation
in the accompanying financial schedule.
(2) Includes $18.2 million and $39.5 million of current maturities of
long-term borrowings as of October 3, 2003 and September 27, 2002,
respectively.
ARAMARK CORPORATION AND SUBSIDIARIES
SELECTED CONSOLIDATED CASH FLOW DATA
(Unaudited)
(In Thousands)
Fiscal Year Ended
----------------------------
October 3, September 27,
2003 2002
-------------- -------------
Cash flows from operating activities from
continuing operations:
Income from continuing operations $265,368 $251,320
Adjustments to reconcile income from
continuing operations to net cash
provided by operating activities:
Depreciation and amortization 262,944 229,608
Income taxes deferred 29,675 17,740
(Gain) loss on investments 10,700 (45,320)
Changes in noncash working capital 59,766 103,026
Net proceeds from sale of receivables - 39,105
Other operating activities (22,192) (17,475)
------------- -------------
Net cash provided by operating activities
from continuing operations 606,261 578,004
------------- -------------
Cash flows from investing activities from
continuing operations:
Net purchases of property and
equipment (238,945) (214,618)
Proceeds from sale of investments - 76,964
Divestiture of certain businesses 248,076 3,502
Acquisitions and other investing
activities (278,346) (897,241)
------------- -------------
Net cash used in investing activities from
continuing operations (269,215) (1,031,393)
------------- -------------
Cash flows from financing activities from
continuing operations:
Net proceeds from long-term
borrowings (150,706) 173,288
Proceeds from issuance of common
stock 21,280 771,178
Repurchase of stock and other
financing activities (209,439) (508,490)
------------- -------------
Net cash provided by (used in) financing
activities from continuing operations (338,865) 435,976
------------- -------------
Net cash provided by discontinued
operations (1) 14,722 24,186
------------- -------------
Increase in cash and cash equivalents $12,903 $6,773
============= =============
(1) In the third quarter of fiscal 2003, ARAMARK completed the
previously announced sale of ARAMARK Educational Resources (AER)
to Knowledge Learning Corporation, Inc. for approximately $250
million in cash. AER is accounted for as a discontinued operation
in the accompanying financial schedule.
ARAMARK CORPORATION AND SUBSIDIARIES
SALES AND OPERATING INCOME BY SEGMENT
SUPPLEMENTAL DATA
(Unaudited)
(In Thousands)
Three Months Ended
---------------------------
October 3, September 27,
2003 (1) 2002
------------- -------------
Sales (4)
------------------------------------------
Food and Support Services - United States $1,832,541 $1,520,541
Food and Support Services - International 371,570 306,172
Uniform and Career Apparel - Rental 271,062 251,538
Uniform and Career Apparel - Direct
Marketing 112,842 102,674
------------- -------------
$2,588,015 $2,180,925
============= =============
Operating Income (4)
------------------------------------------
Food and Support Services - United States
(2) $167,047 $121,784
Food and Support Services - International 12,948 11,710
Uniform and Career Apparel - Rental 31,021 32,149
Uniform and Career Apparel - Direct
Marketing 7,584 4,045
Corporate and Other (8,178) (7,991)
Other income (expense) (3) (10,700) -
------------- -------------
$199,722 $161,697
============= =============
(1) The fiscal 2003 fourth quarter is a fourteen week period, as
fiscal 2003 is a 53-week period. The fourth quarter of fiscal 2002
is a thirteen week period.
(2) The fiscal 2003 fourth quarter includes approximately $32 million
($19.7 million net of tax) of business interruption proceeds from
the final settlement of the Company's September 11, 2001 claim.
(3) During the fourth quarter of fiscal 2003, ARAMARK reached
agreement for the sale of its 15% interest in a periodicals
distribution business to the majority shareholder, and wrote down
this investment to the expected recoverable amount. The resulting
pre-tax charge of $10.7 million ($6.6 million, net of tax) is
included in "Other income (expense)."
(4) In the third quarter of fiscal 2003, ARAMARK completed the
previously announced sale of ARAMARK Educational Resources (AER)
to Knowledge Learning Corporation, Inc. for approximately $250
million in cash. AER is accounted for as a discontinued operation
in the accompanying financial schedule. AER's results of
operations and cash flows have been removed from the Company's
results of continuing operations for all periods presented.
ARAMARK CORPORATION AND SUBSIDIARIES
SALES AND OPERATING INCOME BY SEGMENT
SUPPLEMENTAL DATA
(Unaudited)
(In Thousands)
Fiscal Year Ended
---------------------------
October 3, September 27,
2003 (1) 2002
------------- -------------
Sales (5)
------------------------------------------
Food and Support Services - United States $6,545,395 $5,716,465
Food and Support Services - International 1,423,825 1,200,806
Uniform and Career Apparel - Rental 1,030,343 1,004,170
Uniform and Career Apparel - Direct
Marketing 448,252 434,566
------------- -------------
$9,447,815 $8,356,007
============= =============
Operating Income (5)
------------------------------------------
Food and Support Services - United States
(2) $394,253 $326,707
Food and Support Services - International 60,200 46,261
Uniform and Career Apparel - Rental 111,889 121,909
Uniform and Career Apparel - Direct
Marketing 26,416 22,628
Corporate and Other (30,036) (31,619)
Other income (expense) (3) (4) (10,700) 43,695
------------- -------------
$552,022 $529,581
============= =============
(1) Fiscal 2003 is a 53-week year. Fiscal 2002 is a 52-week year.
(2) The fiscal 2003 fourth quarter includes approximately $32 million
($19.7 million net of tax) of business interruption proceeds from
the final settlement of the Company's September 11, 2001 claim.
(3) During the fourth quarter of fiscal 2003, ARAMARK reached
agreement for the sale of its 15% interest in a periodicals
distribution business to the majority shareholder, and wrote down
this investment to the expected recoverable amount. The resulting
pre-tax charge of $10.7 million ($6.6 million, net of tax) is
included in "Other income (expense)."
(4) During fiscal 2002, ARAMARK sold its ownership interests in the
Boston Red Sox and a related entity, resulting in a pre-tax gain
of $37.9 million and recorded a pre-tax gain of $5.8 million,
resulting principally from the sale of a residual interest in a
previously divested business. These items totaling $43.7 million
($30.8 million after-tax) are included in "Other income
(expense)."
(5) In the third quarter of fiscal 2003, ARAMARK completed the
previously announced sale of ARAMARK Educational Resources (AER)
to Knowledge Learning Corporation, Inc. for approximately $250
million in cash. AER is accounted for as a discontinued operation
in the accompanying financial schedule. AER's results of
operations and cash flows have been removed from the Company's
results of continuing operations for all periods presented.
ARAMARK CORPORATION AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP MEASURES
FOURTH QUARTER AND FULL YEAR OPERATING RESULTS
EXCLUDING OTHER INCOME/ UNUSUAL ITEMS
(Unaudited)
(In thousands, except per share amounts)
The fiscal 2003 fourth quarter includes approximately $32 million
of business interruption proceeds from the final settlement of the
Company's September 11, 2001 claim. During the fourth quarter of
fiscal 2003, ARAMARK reached agreement for the sale of its 15%
interest in a periodicals distribution business to the majority
shareholder, and wrote down this investment to the expected
recoverable amount. The resulting pre-tax charge of $10.7 million is
included in "Other (income) expense." In the third quarter of fiscal
2003, ARAMARK completed a tender offer to purchase approximately $94.3
million of its 6.75% Guaranteed Notes due August 1, 2004, for
approximately $102 million, including accrued interest, and retired a
$45 million term loan due March 2005. These two transactions resulted
in a pre-tax extinguishment charge of $7.7 million which is included
in "Interest and other financing costs, net". Additionally, in the
third quarter of fiscal 2003, ARAMARK reduced the provision for income
taxes based upon the settlement of open tax years, by approximately
$8.4 million. During fiscal 2002, ARAMARK sold its ownership interests
in the Boston Red Sox and a related entity, resulting in a pre-tax
gain of $37.9 million, and recorded a pre-tax gain of $5.8 million,
resulting principally from the sale of a residual interest in a
previously divested business. These items totaling $43.7 million are
included in "Other (income) expense." These items have been excluded
from the comparisons of earning per share to enhance comparability due
to the size and unusual nature of these items.
-------------------------------
Three Months Ended %
----------------------
Oct. 3, Sept. 27, Change
2003 2002
-------------------------------
Income from continuing operations
(as reported) $105,291 $81,040
Add: Other expense (net of tax) 6,583 -
Less: Other income (net of tax) - -
Less: Insurance proceeds (net of
tax) (19,683) -
Add: Debt extinguishment (net of
tax) - -
Less: Tax provision adjustment - -
--------- ---------
Income from continuing operations
(as adjusted) $92,191 $81,040
========= =========
Weighted average diluted shares
outstanding 194,598 201,684
========= =========
Earnings Per Share - Diluted - Income
from continuing operations
As reported $0.54 $0.40 35%
As adjusted $0.47 $0.40 18%
========= =========
Food and Support Services - United
States
Operating Income (as reported) $167,047 $121,784 37%
Less: Insurance Proceeds (31,990) -
--------- ---------
Operating Income (as adjusted) $135,057 $121,784 11%
========= =========
------------------------------
Fiscal Year Ended %
----------------------
Oct. 3, Sept. 27, Change
2003 2002
------------------------------
Income from continuing operations (as
reported) $265,368 $251,320
Add: Other expense (net of tax) 6,583 -
Less: Other income (net of tax) - (30,803)
Less: Insurance proceeds (net of tax) (19,683) -
Add: Debt extinguishment (net of tax) 4,687 -
Less: Tax provision adjustment (8,439) -
--------- ---------
Income from continuing operations (as
adjusted) $248,516 $220,517
========= =========
Weighted average diluted shares
outstanding 197,505 200,924
========= =========
Earnings Per Share - Diluted - Income
from continuing operations
As reported $1.34 $1.25 7%
As adjusted $1.26 $1.10 15%
========= =========
Food and Support Services - United
States
Operating Income (as reported) $394,253 $326,707 21%
Less: Insurance Proceeds (31,990) -
--------- ---------
Operating Income (as adjusted) $362,263 $326,707 11%
========= =========
ARAMARK CORPORATION AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP MEASURES
CASH FLOW BEFORE WORKING CAPITAL AND AFTER CAPITAL EXPENDITURES
(INTERNAL CASH FLOW)
(Unaudited)
(In Thousands)
----------------------------------------------------------------------
Cash flow before working capital and after capital expenditures,
as defined by ARAMARK, is an internal operating metric used by
management to evaluate cash flows from normal operations of our
business, excluding the impact of working capital changes. This metric
eliminates the volatility of working capital changes which long term
investors may find useful.
----------------------------------------------------------------------
Fiscal Year Ended
------------------------
Oct. 3, Sept. 27,
2003 2002
------------------------
Cash flow before working capital and after
capital expenditures:
Income from continuing operations $265,368 $251,320
Depreciation and amortization 262,944 229,608
Income taxes deferred 29,675 17,740
Other income and insurance
proceeds, net of taxes (13,100) (30,803)
Net purchases of property and
equipment (238,945) (214,618)
---------- ----------
Cash flow before working capital and
after capital expenditures $305,942 $253,247
========== ==========
Reconciliation of cash flow before working
capital and after capital expenditures
to net cash provided by operating
activities from continuing operations: $305,942 $253,247
Net purchases of property and
equipment 238,945 214,618
Other income and insurance
proceeds, net of taxes 13,100 30,803
(Gain) loss on investments 10,700 (45,320)
Changes in noncash working capital 59,766 103,026
Net proceeds from sale of
receivables - 39,105
Other operating activities (22,192) (17,475)
---------- ----------
Net cash provided by operating activities from
continuing operations $606,261 $578,004
========== ==========
Reconciliation of net purchases of property
and equipment:
Purchases of property and equipment $(267,128) $(230,650)
Disposals of property and equipment 28,183 16,032
---------- ----------
Net purchases of property and equipment $(238,945) $(214,618)
========== ==========
ARAMARK CORPORATION AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP MEASURES
ORGANIC GROWTH
(Unaudited)
(In Thousands)
----------------------------------------------------------------------
The impact of currency translation has been excluded from the
comparison of quarterly and full year sales to enhance comparability
in the Food and Support Services- International Segment by identifying
the portion of the change in sales related to changes in foreign
currency, which provides a comparison of sales on a constant currency
basis. Similarly, the impact of currency translation has been excluded
from the comparison of consolidated quarterly and full year sales.
----------------------------------------------------------------------
Three Months Ended
----------------------
October 3, September 27, %
Fiscal 2003 Results 2003 2002 Change
-------------------------- ----------- ---------------- ------------
Food and Support Services
- International -
Sales (as reported) $371,570 $306,172 21%
Less: Impact of Currency
Translation - (28,203)
---------- ------------
Food and Support Services
- International -
Sales (as adjusted) $371,570 $334,375 11%
========== ============
ARAMARK Corporation
Consolidated Sales (as
reported) $2,588,015 $2,180,925 19%
Less:Impact of
Currency Translation - (28,203)
---------- ------------
ARAMARK Corporation
Consolidated Sales (as
adjusted) $2,588,015 $2,209,128 17%
============ ==========
Fiscal Year Ended
-----------------------
October 3, September 27, %
Fiscal 2003 Results 2003 2002 Change
-------------------- -------------- --------------- -------------
Food and Support Services
- International -
Sales (as reported) $1,423,825 $1,200,806 19%
Less: Impact of Currency
Translation - (129,759)
-------------- ---------------
Food and Support Services
- International -
Sales (as adjusted) $1,423,825 $1,330,565 7%
============== ================
ARAMARK Corporation
Consolidated Sales (as
reported) $9,447,815 $8,356,007 13%
Less: Impact of
Currency Translation - (129,759)
-------------- -----------------
ARAMARK Corporation
Consolidated Sales (as
adjusted) $9,447,815 $8,485,766 11%
=============== ==================
----------------------------------------------------------------------
The impact of currency translation has been excluded from the
comparison of ARAMARK consolidated full year sales for fiscal 2003
periods being compared to the projected fiscal 2004 amounts. This
exclusion is made to enhance comparability by identifying the portion
of the change in sales related to changes in foreign currency, which
provides a comparison of results on a constant currency basis when
comparing fiscal 2004 projected amounts to fiscal 2003 actual results.
Fiscal 2003 is a 53 week year; the year over year sales impact is
approximately 2%.
----------------------------------------------------------------------
Fiscal Year
Ended
---------------------------
Fiscal 2004 Projection Oct. 1, Oct. 3, %
2004 2003 Change
----------------------------------- ------------- ------------- ------
ARAMARK Corporation Consolidated
Sales (as projected/reported) $9,750,000 $9,447,815 3%
Less: Impact of Currency
Translation - (59,711)
----------- -----------
ARAMARK Corporation Consolidated
Sales (as adjusted) $9,750,000 $9,507,526 3%
=========== ===========
|
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion