ARAMARK Reports Record Quarterly Sales of $2.7 Billion; First Quarter Earnings Per Share Rise to 38 Cents.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 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 sales of $2.7 billion for the first quarter of 2005, an increase of 11 percent over the first quarter of 2004. Organic sales growth for the quarter, which excludes the impact of acquisitions, divestitures and foreign currency fluctuations, was 6 percent. First quarter net income increased 8 percent to $72.4 million and 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 were $0.38, an increase of 9 percent over the prior year quarter. Chief Executive Officer's Comments "With our record sales performance in the first quarter, we are off to a solid start for fiscal 2005," said Joseph Neubauer Neubauer is a surname, and may refer to:
tr.v. grat·i·fied, grat·i·fy·ing, grat·i·fies 1. To please or satisfy: His achievement gratified his father. See Synonyms at please. 2. since they were achieved in the face of the negative impact of the NHL lockout The NHL lockout may refer to any of the two lockouts in the history of the National Hockey League:
v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. the global growth trends in 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. ." 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, first quarter sales rose 7 percent to $1.8 billion, driven principally by the healthcare and education businesses. 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. of $94.7 million increased 6 percent compared to the prior year despite the negative effect of the NHL lockout on the sports and entertainment business. Sales for the Food and Support Services - International segment of $552 million were up 33 percent from the 2004 first quarter. Organic sales growth for the segment was 6 percent, driven by solid growth in Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of , Germany Germany (jûr`mənē), Ger. Deutschland, officially Federal Republic of Germany, republic (2005 est. pop. 82,431,000), 137,699 sq mi (356,733 sq km). and Spain Spain, Span. España (āspä`nyä), officially Kingdom of Spain, constitutional monarchy (2005 est. pop. 40,341,000), 194,884 sq mi (504,750 sq km), including the Balearic and Canary islands, SW Europe. . Operating income in this segment increased 29 percent to $21.1 million. Currency translation contributed about 10 and 9 percentage points, respectively, to the sales and operating income 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. . Uniform and Career Apparel In ARAMARK's Uniform and Career Apparel - Rental segment, sales of $276 million for the first quarter were up 8 percent and up 5 percent organically. This represented the fifth consecutive quarter of improved organic sales growth. Operating income of $30.6 million was up 6 percent over the first quarter of 2004. In ARAMARK's Direct Marketing segment, first quarter sales decreased 1 percent from the prior year quarter to $126 million. Operating income declined to $8.3 million due to margin erosion erosion (ĭrō`zhən), general term for the processes by which the surface of the earth is constantly being worn away. The principal agents are gravity, running water, near-shore waves, ice (mostly glaciers), and wind. at WearGuard-Crest and the ongoing costs of the Galls investigation. Second Quarter 2005 Financial Guidance ARAMARK anticipates second quarter 2005 sales of between $2.5 billion and $2.7 billion and diluted earnings per share of between $0.25 and $0.27, which reflect the continuing impact of the NHL lockout. Conference Call and Related Financial Information In conjunction with its first quarter 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 February February: see month. 9, 2005 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. The balance sheet, income statement and other financial information related to the first fiscal quarter of 2005 are attached to this press release and can also be found 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. 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 reconciliations of non-GAAP financial measures that are 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). on the conference call, will also be available on the Investor Relations section of ARAMARK's website. 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 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. services to health care institutions, universities and school districts, stadiums and arenas, international and domestic corporations, as well as providing uniform and career apparel. ARAMARK was ranked number one in its industry in the 2004 FORTUNE 500 survey and was also named one of "America's Most Admired Companies A yearly publication by Fortune Magazine, America's Most Admired Companies consists of corporations that are highly esteemed by the likes of Business Executives, Directors, and Analysts. A survey is taken of close to 3300 professionals who give their opinions on the companies. " by FORTUNE magazine in 2004, consistently ranking since 1998 as one of the top three 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 its industry as evaluated by peers. Headquartered in Philadelphia, ARAMARK has approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 242,500 employees serving clients in 19 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. Forward-looking statements speak only as of the date made. We undertake no obligation to update any forward-looking statements, including prior forward-looking statements, to reflect the events or 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 arising after the date as of which they were made. As a result of these risks and uncertainties, readers are cautioned not to place undue reliance on any forward-looking statements included herein or that may be made elsewhere from time to time by, or on behalf of, us. This press release includes "forward-looking statements" within the meaning of 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 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. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the forward-looking statements. Factors that might cause such a difference include: unfavorable economic conditions, ramifications ramifications npl → Auswirkungen pl of any future terrorist attacks or increased security alert levels; increased operating costs operating costs npl → gastos mpl operacionales , including labor-related and energy costs; shortages of qualified personnel or increases in labor costs; costs and possible effects of union organizing activities; 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; the contract intensive nature of our business, which may lead to client disputes; 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 and government investigations; 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 service, the environment, Federal and state employment laws and wage and hour laws; import and export controls and customs laws; dram shop Dram shop or dramshop is a legal term in the United States referring to a bar, tavern or the like where alcoholic beverages are sold. Traditionally, it referred to a shop where spirits were sold by the dram, a small unit of liquid. 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. ; inability to retain current clients and renew existing client contracts; determination by customers to reduce outsourcing and use of preferred vendors; seasonality; and other risks that are set forth in the "Risk Factors," "Legal Proceedings All actions that are authorized or sanctioned by law and instituted in a court or a tribunal for the acquisition of rights or the enforcement of remedies. " and "Management Discussion and Analysis of Results of Operations and Financial Condition" sections of and elsewhere in ARAMARK's SEC filings. For further information regarding risks and uncertainties associated with ARAMARK's business, please refer to the "Legal Proceedings," "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", "Risk Factors" and other 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.
ARAMARK CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In Thousands, Except Per Share Amounts)
Three Months Ended
------------------------------------
December 31, 2004 January 2, 2004
------------------ ----------------
Sales $ 2,730,233 $ 2,458,857
------------------ ----------------
Costs and Expenses:
Cost of services provided 2,474,763 2,221,504
Depreciation and amortization 77,655 69,532
Selling and general corporate
expenses 33,851 30,400
------------------ ----------------
2,586,269 2,321,436
------------------ ----------------
Operating income 143,964 137,421
Interest and other financing
costs, net 31,275 29,259
------------------ ----------------
Income before income taxes 112,689 108,162
Provision for income taxes 40,243 40,810
------------------ ----------------
Net income $ 72,446 $ 67,352
================== ================
Earnings Per Share:
Basic $0.39 $0.36
Diluted $0.38 $0.35
Weighted Average Shares
Outstanding:
Basic 185,623 187,536
Diluted 188,838 193,860
ARAMARK CORPORATION AND SUBSIDIARIES
SELECTED CONSOLIDATED BALANCE SHEET DATA
(Unaudited)
(In Thousands)
December 31, 2004 October 1, 2004
------------------ ----------------
Assets
---------------------------------
Current Assets $ 1,343,319 $ 1,340,015
Property and Equipment, net 1,219,008 1,214,382
Goodwill 1,625,923 1,589,144
Other Assets 805,659 678,032
------------------ ----------------
$ 4,993,909 $ 4,821,573
================== ================
Liabilities and Shareholders'
Equity
---------------------------------
Current Liabilities (1) $ 1,250,237 $ 1,454,930
Long-Term Borrowings 2,052,444 1,843,200
Other Liabilities 487,248 373,788
Total Shareholders' Equity 1,203,980 1,149,655
------------------ ----------------
$ 4,993,909 $ 4,821,573
================== ================
(1) - Includes $46.1 million and $25.5 million of current maturities
of long-term borrowings as of December 31, 2004 and October 1,
2004, respectively.
ARAMARK CORPORATION AND SUBSIDIARIES
SELECTED CONSOLIDATED CASH FLOW DATA
(Unaudited)
(In Thousands)
Three Months Ended
------------------------------------
December 31, 2004 January 2, 2004
------------------ ----------------
Cash flows from operating
activities:
Net income $ 72,446 $ 67,352
Adjustments to reconcile net
income to net cash used in
operating activities:
Depreciation and
amortization 77,655 69,532
Income taxes deferred (2,635) 6,488
Changes in noncash working
capital (244,949) (289,249)
Net proceeds from sale of
receivables 45,000 16,300
Other operating activities (10,117) (12,839)
------------------ ----------------
Net cash used in operating
activities (62,600) (142,416)
------------------ ----------------
Cash flows from investing
activities:
Net purchases of property and
equipment and client contract
investments (66,135) (63,625)
Proceeds from sale of
investment - 8,500
Acquisitions and other
investing activities (30,249) (3,908)
------------------ ----------------
Net cash used in investing
activities (96,384) (59,033)
------------------ ----------------
Cash flows from financing
activities:
Net proceeds from long-term
borrowings 208,659 227,355
Payment of dividend (10,040) (9,212)
Proceeds from issuance of
common stock 6,812 4,787
Repurchase of stock and other
financing activities (57,422) (31,837)
------------------ ----------------
Net cash provided by financing
activities 148,009 191,093
------------------ ----------------
Decrease in cash and cash
equivalents $ (10,975) $ (10,356)
================== ================
ARAMARK CORPORATION AND SUBSIDIARIES
SALES AND OPERATING INCOME BY SEGMENT
SUPPLEMENTAL DATA
(Unaudited)
(In Thousands)
Three Months Ended
------------------------------------
December 31, 2004 January 2, 2004
------------------ ----------------
Sales
---------------------------------
Food and Support Services -
United States $ 1,776,531 $ 1,660,558
Food and Support Services -
International 552,010 415,373
Uniform and Career Apparel -
Rental 276,174 255,815
Uniform and Career Apparel -
Direct Marketing 125,518 127,111
------------------ ----------------
$ 2,730,233 $ 2,458,857
================== ================
Operating Income
---------------------------------
Food and Support Services -
United States $ 94,674 $ 89,436
Food and Support Services -
International 21,141 16,438
Uniform and Career Apparel -
Rental 30,626 28,920
Uniform and Career Apparel -
Direct Marketing 8,310 11,451
Corporate (10,787) (8,824)
------------------ ----------------
$ 143,964 $ 137,421
================== ================
ARAMARK CORPORATION AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP MEASURES
ORGANIC GROWTH
(Unaudited)
(In thousands)
----------------------------------------------------------------------
Management believes that presentation of sales growth in the quarterly
periods adjusted to eliminate the effects of acquisitions,
divestitures, the impact of currency translation and, in the fourth
quarter of fiscal 2003, the effect of the 53rd week provides useful
information to investors because it enhances comparability between the
current year and prior year reporting periods. Elimination of the
currency translation effect provides constant currency comparisons
without the distortion of currency rate fluctuations.
----------------------------------------------------------------------
Three Months Ended
---------------------------
December 31, January 2, %
2004 2004 Change
--------------------------------- -------------- ------------ --------
ARAMARK Corporation Consolidated
Sales (as reported) $ 2,730,233 $ 2,458,857 11%
Effect of Currency Translation - 35,242
Effect of Acquisitions and
Divestitures (84,910) (2,168)
-------------- ------------
ARAMARK Corporation Consolidated
Sales (as adjusted) $ 2,645,323 $ 2,491,931 6%
============== ============
Food and Support Services -
International - Sales (as
reported) $ 552,010 $ 415,373 33%
Effect of Currency Translation - 35,242
-------------- ------------
Food and Support Services -
International - Sales (excluding
translation) 552,010 450,615 23%
-------------- ------------
Effect of Acquisitions and
Divestitures (73,094) -
-------------- ------------
Food and Support Services -
International - Sales (as
adjusted) $ 478,916 $ 450,615 6%
============== ============
Three Months Ended
---------------------------
October 1, October 3, %
2004 2003 Change
--------------------------------- -------------- ------------ --------
Uniform and Career Apparel -
Rental Sales (as reported) $ 264,064 $ 271,062
Estimated Effect of the 53rd
Week - (19,457)
Effect of Acquisitions and
Divestitures (3,414) (539)
-------------- ------------
Uniform and Career Apparel -
Rental Sales (as adjusted) $ 260,650 $ 251,066 4%
============== ============
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