Aramark Reports Strong Fourth Quarter And Full Year 2015 Results

Nov. 18, 2015

PHILADELPHIA, Nov. 18, 2015 /PRNewswire/ -- Aramark, a global leader in food, facilities management, and uniforms, today reported strong fourth quarter and full-year fiscal 2015 results which generated a 13% increase in full year adjusted net income. The company provided an initial outlook for fiscal 2016, and also announced approval by the Board of Directors of a 10% increase in the company's regular quarterly dividend.   

Key Highlights

  • 2015 sales of $14.3 billion with organic growth of 2%. Organic sales were flat in Q4;
  • 2015 adjusted operating income rose to $881 million, Q4 adjusted operating income rose to $239 million. 2015 and Q4 GAAP operating income of $628 million and $154 million, respectively;
  • 2015 and Q4 adjusted earnings per share of $1.57 and $0.44, respectively. 2015 and Q4 GAAP earnings per share of $0.96 and $0.23, respectively;
  • Board of Directors increases regular quarterly dividend to 9.5 cents per share

"The power of our clear and focused strategy, combined with our relentless focus on operational excellence, delivered strong returns for our shareholders," said Eric J. Foss, Chairman, President and Chief Executive Officer. "Our strategic transformation is squarely on track and we expect to continue driving meaningful shareholder value by focusing on growth, innovation, brand building and operational excellence to capture productivity and deliver great customer experiences."

Fourth Quarter Sales Results

The company experienced solid retention rates, strong new client wins and underlying base business expansion in the quarter.  As previously disclosed, a large client non-renewal along with non-recurring facilities revenue reported in the fourth quarter of 2014, which totaled about 5% of total company sales in the quarter, reduced North American organic sales.  The Education business experienced a particularly strong quarter as new account wins on-boarded during the back-to-school season.  FSS International's organic growth remained strong driven by expansion in Emerging Markets, especially China.  Organic sales growth in the Uniform and Career Apparel segment accelerated to 5% as incremental capacity continued to come on-line. 

Fourth Quarter Adjusted Operating Income (AOI) Results

In the fourth quarter the company continued to drive solid productivity gains from food and labor initiatives, particularly in its FSS North America base locations.  Consistent with the company's previously disclosed expectations, the lapping of certain start-up accounts as well as the phasing of reinvestment spending were also contributors to operating income growth versus the prior year.  FSS International's results reflect continued strong revenue and productivity trends, particularly in the emerging markets.  The Uniform & Career Apparel segment achieved strong underlying profit expansion driven by revenue and productivity improvement, however this was offset in the quarter by temporary start-up costs associated with capacity expansion. 

Fourth Quarter Earnings Summary

Adjusted net income was $110 million or $0.44 per share, versus adjusted net income of $91 million or $0.37 per share in the fourth quarter of 2014.  The calendar shift is estimated to have increased fourth quarter 2015 earnings per share by $0.02.  On a GAAP basis, sales were $3.5 billion, operating income was $154 million, net income attributable to Aramark stockholders was $57 million and diluted earnings per share were $0.23.  This compares to the fourth quarter of 2014 where on a GAAP basis, sales were $3.9 billion, operating income was $145 million, net income attributable to Aramark stockholders was $44 million and diluted earnings per share were $0.18.  The significant strengthening of the U.S. dollar versus the prior year period decreased sales by approximately $130 million, operating income by $8 million and net income by $4 million ($0.02 in earnings per share) in the quarter. 

Fiscal 2015 Results

Sales were $14.3 billion, versus $14.8 billion in 2014, with organic growth of 2%.  The calculation of organic growth includes an adjustment for 2014's 53rd week of approximately $258 million, or approximately 2%, and adjusts for adverse currency translation of $471 million.  Adjusted operating income was $881 million, versus $852 million in 2014 (which includes approximately$14 million related to the 53rd week).  Adjusted net income was $387 million or $1.57 per share, versus adjusted net income of $344 million (which includes an estimated $5 million related to the 53rd week) or $1.45 per share (which includes an estimated $0.02 related to the 53rd week) in 2014.  On a GAAP basis, sales were $14.3 billion, operating income was $628 million, net income attributable to Aramark stockholders was $237 million and earnings per share were $0.96. Full report.