Aramark Q3 revenues increase 39% as client reopenings accelerate
Source Aramark
Philadelphia-headquartered Aramark (NYSE: ARMK) today reported consolidated revenue of $3 billion, an increase of 39% year-over-year, in its third-quarter financial report.
The increase reflects a much-improved business environment, compared with the prior year same period and lapping the first full quarter of COVID-impacted revenue. Organic revenue, which adjusts for the effect of currency and the revenue contribution from the Next Level Hospitality acquisition that closed on June 4, grew 34%, compared with the prior year.
Aramark's accelerated pace of client reopenings contributed to ongoing sequential quarterly improvement with organic revenue reaching 73% of pre-COVID levels. The upward trend was broad-based, led by the Leisure and Sports & Entertainment businesses within the FSS U.S. segment.
The foodservice and facilities company said its FSS U.S. business drove a year-over-year organic revenue increase of 52% and strong improvement compared to the preceding quarter.
“Our third-quarter performance continues to reflect Aramark's strong competitive position and flexible business model as we help clients reopen within various stages of recovery, while also driving growth initiatives that resulted in meaningful new business," said Aramark chief executive John Zillmer.
KEY POINTS
- Revenue 39% plus; organic revenue +34%.
- Increased levels of business activity led by accelerated pace of client reopenings.
- Sequential quarterly improvement across all business segments.
- Operating Income increased by $402 million; adjusted operating income increased by $250 million versus prior year.
- Higher profitability as a result of rebounding sales volumes and effective cost management.
- Ongoing investment in growth resources.
- EPS improved $1.14 to $0.13; adjusted EPS improved $0.72 to $0.03.
- GAAP EPS included non-cash gain on an equity investment, partially offset by non-cash loss from a defined benefit pension plan termination.
- Strengthened balance sheet; enhanced platform for growth.
- Repaid $500 million in debt; proactively extended maturities on $2.6 billion of borrowings; and increased revolver capacity or more than $200 million.
- Completed acquisition of Next Level Hospitality, expanding into high-growth senior living industry.
- Over $1.9 billion cash availability at quarter-end.
