Aramark (NYSE: ARMK) today reported record results for its fourth quarter and full-year fiscal 2018.
“2018 was a record year, driven by balanced, broad-based business momentum. We delivered strong revenue growth, very strong AOI margin expansion and achieved our three-year margin target, as well as successfully integrated two strategic acquisitions ... all of which strengthens our portfolio and improves our competitive position," said Eric J. Foss, Chairman, President and CEO. "Our record performance led to the fifth consecutive year of double-digit adjusted EPS growth since our IPO.”
“In addition, solid free cash flow bolstered our balance sheet and enabled us to lower our leverage ratio below our original target for this year,” Foss continued. “While 2018 was an exceptional year, we are even more excited about our future prospects for growth and sustainable shareholder value creation.”
Consolidated revenues were $3.9 billion in the quarter, an increase of 8% on a constant-currency basis over the prior-year period, composed of a 5% increase in revenue related to the Avendra and AmeriPride acquisitions and 3% of growth related to the legacy business. Revenue growth in the United States segment was negatively impacted by an estimated $30 million from natural disasters in the quarter.
Consolidated operating income increased in the quarter, primarily due to broad-based productivity. Additionally, FSS United States segment income benefited from the inclusion of Avendra results, while uniform income benefited from the inclusion of AmeriPride results. Finally, operating income was negatively impacted by an estimated $11 million from natural disasters in the quarter, primarily in the United States and International segments.
FOURTH QUARTER SUMMARY
On a GAAP basis, sales were $3.9 billion, operating income was $282 million, net income attributable to Aramark stockholders was $175 million and diluted earnings per share were $0.69. This compares to the fourth quarter of 2017 where, on a GAAP basis, sales were $3.7 billion, operating income was $218 million, net income attributable to Aramark stockholders was $113 million and diluted earnings per share were $0.45. Fourth quarter GAAP diluted earnings per share increased 53% year-over-year, partly due to a $38 million benefit to the income tax provision from the Tax Cuts and Jobs Act of 2017.
Adjusted net income was $178 million or $0.70 per share, versus adjusted net income of $137 million or $0.54 per share in the fourth quarter of 2017. A stronger U.S. dollar decreased sales by approximately $33 million, but had no material impact on operating income or earnings per share.
FISCAL 2018 SUMMARY
On a GAAP basis, sales were $15.8 billion, operating income was $826 million, net income attributable to Aramark stockholders was $568 million and diluted earnings per share were $2.24. This compares to fiscal 2017 where, on a GAAP basis, sales were $14.6 billion, operating income was $808 million, net income attributable to Aramark stockholders was $374 million and diluted earnings per share were $1.49. Full-year 2018 GAAP diluted earnings per share increased 50% year-over-year, partly due to the benefits of the Tax Cuts and Jobs Act of 2017.
Adjusted net income was $569 million or $2.25 per share, versus adjusted net income of $490 million or $1.95 per share in fiscal 2017. A weaker U.S. dollar increased sales by approximately $162 million, and increased operating income by $7 million and had a two-cent benefit to earnings per share.
