What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2025-12-02 compared with 2024-11-22 · 605 added, 452 removed, 783 unchanged (57% of the section changed)

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Report of Deloitte & Touche LLP, Independent Registered Public Accounting Firm (PCAOB ID 34 )

Consolidated and Combined Balance Sheets as of September 27, 2024 and September 29, 2023

Consolidated and Combined Statements of Income for the fiscal years ended September 27, 2024 , September 29, 2023, and September 30, 2022

Consolidated and Combined Statements of Comprehensive Income for the fiscal years ended September 27, 2024 , September 29, 2023, and September 30, 2022

Consolidated and Combined Statements of Cash Flows for the fiscal years ended September 27, 2024 , September 29, 2023, and September 30, 2022

Consolidated and Combined Statements of Changes in Equity for the fiscal years ended September 27, 2024 , September 29, 2023, and September 30, 2022

Consolidated and Combined Statements of Income for the fiscal years ended October 3, 2025 , September 27, 2024, and September 29, 2023

Consolidated and Combined Statements of Comprehensive Income for the fiscal years ended October 3, 2025 , September 27, 2024, and September 29, 2023

Consolidated Balance Sheets as of October 3, 2025 and September 27, 2024

Consolidated and Combined Statements of Changes in Equity for the fiscal years ended October 3, 2025 , September 27, 2024, and September 29, 2023

Consolidated and Combined Statements of Cash Flows for the fiscal years ended October 3, 2025 , September 27, 2024, and September 29, 2023

Notes to Consolidated and Combined Financial Statements

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Opinion on the Financial Statements

We have audited the accompanying consolidated and combined balance sheets of Vestis Corporation and subsidiaries (the "Company") as of September 27, 2024 and September 29, 2023, respectively, the related consolidated and combined statements of income, comprehensive income, cash flows and changes in equity, for each of the three years in the period ended September 27, 2024, September 29, 2023 and September 30, 2022, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of September 27, 2024 and September 29, 2023, and the results of its operations and its cash flows for each of the three years in the period ended September 27, 2024, September 29, 2023 and September 30, 2022, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of September 27, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated November 22, 2024, expressed an unqualified opinion on the Company’s internal control over financial reporting.

We have audited the accompanying consolidated balance sheets of Vestis Corporation and subsidiaries (the "Company") as of October 3, 2025 and September 27, 2024, respectively, the related consolidated and combined statements of income, comprehensive income, cash flows and changes in equity, for each of the three years in the period ended October 3, 2025, September 27, 2024 and September 29, 2023, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of October 3, 2025 and September 27, 2024, and the results of its operations and its cash flows for each of the three years in the period ended October 3, 2025, September 27, 2024 and September 29, 2023, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of October 3, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated December 2, 2025, expressed an unqualified opinion on the Company’s internal control over financial reporting.

Basis for Opinion

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We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Accounts Receivable Securitization – Refer to Note 1 and Note 16 to the financial statements

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the Audit Committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relates.

Goodwill – Refer to Notes 1 and 3 to the financial statements

Critical Audit Matter Description

The Company entered into an accounts receivable securitization facility (the “A/R Facility”) to sell certain trade receivables arising from revenue transactions of the Company’s U.S.

subsidiaries on a revolving basis.

The A/R Facility is scheduled to terminate on August 2, 2027, unless terminated earlier pursuant to its terms.

As of September 27, 2024, the total value of accounts receivable sold under the A/R Facility and derecognized from the Company’s consolidated balance sheet was $229.0 million.

We identified the accounting for the A/R Facility as a critical audit matter because of the complexity involved in determining whether the receivables have been appropriately isolated from the Company and whether the Company has transferred control of the receivables such that the transfers should be accounted for as a sale of financial assets.

required a high degree of auditor judgment and an increased extent of effort, including the need to involve subject matter experts.

The Company evaluates goodwill for impairment annually or more frequently whenever events or circumstances indicate that the fair value of its reporting units may be below their carrying value.

The Company uses a combination of the income and market approaches to estimate fair value.

The Company utilizes a discounted cash flow model to perform its income approach, which requires management to make significant judgments in their assumptions including the discount rate and forecasts of future gross profit margin and EBITDA.

Changes in the judgments or assumptions used in management’s evaluation could have a material impact on the fair value of the reporting unit, the amount of any goodwill impairment charge, or both.

Management completed the annual impairment test as of August 22, 2025, and determined that the fair value exceeded the net carrying value of its two reporting units, United States and Canada.

The goodwill balance

was $961,732 thousand as of October 3, 2025, of which $896,237 thousand was allocated to the United States and $65,495 thousand was allocated to the Canadian reporting units.

Given the significant judgments made by management to estimate the fair value of the United States and Canada reporting units and the difference between their fair values and carrying values, performing audit procedures to evaluate the reasonableness of management’s estimates and assumptions related to the selection of the discount rate and forecasts of future gross profit margin and EBITDA, specifically due to the sensitivity of the Company’s forecasts to the restructuring plan (described in Note 17), required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to accounts receivable securitization facility included the following, among others:

• We tested the design and operating effectiveness of management’s controls over the transfer of financial assets, including management’s controls over the evaluation of the accounting conclusion and the terms of the A/R Facility documents and other accompanying agreements.

• We evaluated the Company’s determination of sales of financial assets by evaluating, among other factors, if the transferred receivables have been isolated from the Company and the Company has transferred control of the receivables.

Specifically, we performed the following procedures:

• Obtained and evaluated opinions from outside legal counsel and evaluated whether the receivables have been appropriately isolated from the Company.

• Obtained the executed A/R Facility agreements and evaluated whether the Company:

• Assigned its rights, titles, interests, claims, and demands to the third-party assignee

• Retained any rights with respect to the payments assigned to the third-party assignee

• Obtained and inspected the cash proceeds support from the transfer and compared the cash received to the selling price.

Our audit procedures related to Goodwill included the following, among others:

• We tested the effectiveness of controls over management's goodwill impairment evaluation including those over the determination of the reporting unit’s fair value, such as controls related to management's selection of the discount rate and forecasted gross profit margin and EBITDA.

• With the assistance of our fair value specialists, we evaluated the reasonableness of the discount rate, including testing the source information underlying the determination of the discount rate, testing the mathematical accuracy of the calculation, developing a range of independent estimates, performing sensitivity analysis and comparing those to the discount rate selected by management.

• We performed sensitivity analysis on the forecasted gross profit margins and EBITDA including consideration of the impact of economic conditions and market uncertainty.

• We evaluated the reasonableness of management’s gross profit margin and EBITDA forecasts by comparing the forecasts to (1) historical results, (2) internal communications to management and the Board of Directors, and (3) forecasted information included in Company press releases as well as analyst and industry reports for the Company and certain of its peer companies.

We also evaluated the reasonableness of management’s projected gross profit and EBITDA forecasts by selecting, on a sample basis, elements of the Company’s Restructuring Plan to understand the nature of the operating cost savings, compared the forecasted savings to underlying supporting calculations, compared actual results to-date to forecasted results for those activities that have been implemented, and performed a search for contradictory evidence.

Self-Insured Liabilities — Refer to Note 1 to the financial statements

Critical Audit Matter Description

At October 3, 2025, the Company's self-insured liabilities were $52,975 thousand.

As described in Note 1 to the Company’s consolidated financial statements, the Company’s self-insured liabilities represent the estimated ultimate cost of all asserted and unasserted (incurred but not reported) claims related to workers' compensation, auto liability and general liability exposures.

The unasserted (incurred but not reported) self-insured liabilities are estimated through actuarial procedures and by using industry assumptions, adjusted for Company specific expectations based on claims history.

Auditing the Company's estimate of the unasserted (incurred but not reported) self-insured liabilities is judgmental and complex due to the significant estimation uncertainty of the potential value of unasserted claims, which are developed with the assistance of a third-party actuarial specialist.

How the Critical Audit Matter Was Addressed in the Audit

• We obtained an understanding, evaluated the design and tested the operating effectiveness of internal controls over the Company’s self-insured liabilities.

This includes internal controls over the claims activity and actuarial methods used to establish the unasserted (incurred but not reported) self-insured liabilities.

Specifically, we tested internal controls related to management’s review of data provided to the third-party actuarial specialist and validation of claim activity.

• To test the unasserted (incurred but not reported) self-insured liabilities, our audit procedures included, among others, assessing the methodologies and assumptions used to estimate the self-insured liabilities, testing the completeness and accuracy of the underlying claims data and vouching payments made to third parties.

• In addition, we compared the Company’s contractual self-insured retentions, deductibles, and coverage limits used within the self-insured liabilities estimate to the Company’s contractual agreements.

• Furthermore, we involved our actuarial specialists to assist in evaluating the methodologies and assumptions used by management to determine the unasserted (incurred but not reported) self-insured liabilities and comparing the Company’s recorded unasserted (incurred but not reported) self-insured liabilities to a range developed based on independently selected actuarial methodologies.

/s/ Deloitte & Touche LLP

Atlanta, Georgia

November 22, 2024

December 2, 2025

We have served as the Company’s auditor since 2023.

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Opinion on Internal Control over Financial Reporting

We have audited the internal control over financial reporting of Vestis Corporation and subsidiaries (the “Company”) as of September 27, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of September 27, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended September 27, 2024, of the Company and our report dated November 22, 2024, expressed an unqualified opinion on those financial statements.

We have audited the internal control over financial reporting of Vestis Corporation and subsidiaries (the “Company”) as of October 3, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of October 3, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended October 3, 2025, of the Company and our report dated December 2, 2025, expressed an unqualified opinion on those financial statements.

Basis for Opinion

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Atlanta, Georgia

November 22, 2024

December 2, 2025

VESTIS CORPORATION

CONSOLIDATED AND COMBINED BALANCE SHEETS

SEPTEMBER 27, 2024 AND SEPTEMBER 29, 2023

CONSOLIDATED AND COMBINED STATEMENTS OF INCOME (LOSS)

FOR THE FISCAL YEARS ENDED

OCTOBER 3, 2025, SEPTEMBER 27, 2024 AND SEPTEMBER 29, 2023

(in thousands, except per share amounts)

September 27, 2024 September 29, 2023

Fiscal Year Ended

October 3, 2025 September 27, 2024 September 29, 2023

Revenue $ 2,734,839 $ 2,805,820 $ 2,825,286

Operating Expenses:

Cost of services provided (exclusive of depreciation and amortization) 2,010,082 1,989,872 1,970,215

Depreciation and amortization 143,017 140,781 136,504

Selling, general and administrative expenses 517,309 517,216 500,658

Total Operating Expenses 2,670,408 2,647,869 2,607,377

Operating Income 64,431 157,951 217,909

Loss (Gain) on Sale of Equity Investment, net 2,784 — ( 51,831 )

Interest Expense, net 92,264 126,563 2,109

Other Expense (Income), net 13,689 ( 642 ) ( 2,099 )

(Loss) Income Before Income Taxes ( 44,306 ) 32,030 269,730

(Benefit) Provision for Income Taxes ( 4,083 ) 11,060 56,572

Net (Loss) Income $ ( 40,223 ) $ 20,970 $ 213,158

(Loss) earnings per share:

Basic $ ( 0.31 ) $ 0.16 $ 1.63

Diluted $ ( 0.31 ) $ 0.16 $ 1.63

Weighted Average Shares Outstanding:

Basic 131,751 131,506 130,725

Diluted 131,751 131,787 130,725

The accompanying notes are an integral part of these Consolidated and Combined Financial Statements.

VESTIS CORPORATION

CONSOLIDATED AND COMBINED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

FOR THE FISCAL YEARS ENDED

OCTOBER 3, 2025, SEPTEMBER 27, 2024 AND SEPTEMBER 29, 2023

(in thousands)

Fiscal Year Ended

October 3, 2025 September 27, 2024 September 29, 2023

Net Income (loss) $ ( 40,223 ) $ 20,970 $ 213,158

Other Comprehensive Income (Loss), net of tax:

Pension plan adjustments ( 450 ) ( 30 ) ( 655 )

Foreign currency translation adjustments 3,034 2,292 1,162

Other Comprehensive Income (Loss), net of tax 2,584 2,262 507

Comprehensive Income (loss) $ ( 37,639 ) $ 23,232 $ 213,665

The accompanying notes are an integral part of these Consolidated and Combined Financial Statements.

VESTIS CORPORATION

CONSOLIDATED BALANCE SHEETS

OCTOBER 3, 2025 AND SEPTEMBER 27, 2024

(in thousands, except share and per share amounts)

October 3, 2025 September 27, 2024

Current Assets:

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Receivables (net of allowances:

$ 19,804 , respectively)

162,295 177,271

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Current Liabilities:

Current maturities of long-term borrowings $ — $ 26,250

Current maturities of financing lease obligations $ 35,234 $ 31,347

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Commitments and Contingencies (see Note 9)

Common stock, par value $ 0.01 per share, 350,000,000 shares authorized, 131,481,967 shares issued and outstanding as of September 27, 2024

Common stock, par value $ 0.01 per share, 350,000,000 shares authorized, 131,859,470 and 131,481,967 shares issued and outstanding as of October 3, 2025 and September 27, 2024, respectively

Additional paid-in capital 937,531 928,082

Retained earnings 2,565 —

Net parent investment — 908,533

(Accumulated deficit) retained earnings ( 46,879 ) 2,565

Accumulated other comprehensive loss ( 26,327 ) ( 28,911 )

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VESTIS CORPORATION

CONSOLIDATED AND COMBINED STATEMENTS OF INCOME

FOR THE FISCAL YEARS ENDED

SEPTEMBER 27, 2024, SEPTEMBER 29, 2023 AND SEPTEMBER 30, 2022

(in thousands, except per share amounts)

Fiscal Year Ended

September 27, 2024 September 29, 2023 September 30, 2022

Revenue $ 2,805,820 $ 2,825,286 $ 2,687,005

Operating Expenses:

Cost of services provided (exclusive of depreciation and amortization) 1,989,872 1,970,215 1,909,676

Depreciation and amortization 140,781 136,504 134,352

Selling, general and administrative expenses 517,216 500,658 450,734

Total Operating Expenses 2,647,869 2,607,377 2,494,762

Operating Income 157,951 217,909 192,243

Gain on Sale of Equity Investment, net — ( 51,831 ) —

Interest Expense, net 126,563 2,109 4,548

Other (Income), net ( 642 ) ( 2,099 ) ( 2,264 )

Income Before Income Taxes 32,030 269,730 189,959

Provision for Income Taxes 11,060 56,572 48,280

Net Income $ 20,970 $ 213,158 $ 141,679

Earnings per share:

Basic $ 0.16 $ 1.63 $ 1.08

Diluted $ 0.16 $ 1.63 $ 1.08

Weighted Average Shares Outstanding:

Basic 131,506 130,725 130,725

Diluted 131,787 130,725 130,725

The accompanying notes are an integral part of these Consolidated and Combined Financial Statements.

VESTIS CORPORATION

CONSOLIDATED AND COMBINED STATEMENTS OF COMPREHENSIVE INCOME

CONSOLIDATED AND COMBINED STATEMENTS OF CHANGES IN EQUITY

FOR THE FISCAL YEARS ENDED

SEPTEMBER 27, 2024, SEPTEMBER 29, 2023 AND SEPTEMBER 30, 2022

OCTOBER 3, 2025, SEPTEMBER 27, 2024 AND SEPTEMBER 29, 2023

(in thousands)

Fiscal Year Ended

September 27, 2024 September 29, 2023 September 30, 2022

Shares Outstanding Par Value Additional Paid-In Capital Retained Earnings (Accumulated deficit) Net Parent

Investment Accumulated

Comprehensive

Loss Total Parent’s

Balance, September 30, 2022 — $ — $ — $ — $ 2,367,492 $ ( 31,680 ) $ 2,335,812

Net Income — — — — 213,158 — 213,158

Other Comprehensive Income (Loss), net of tax:

Pension plan adjustments ( 30 ) ( 655 ) 1,697

Foreign currency translation adjustments 2,292 1,162 ( 21,771 )

Other Comprehensive Income (Loss), net of tax 2,262 507 ( 20,074 )

Comprehensive Income $ 23,232 $ 213,665 $ 121,605

Net Transfers to Parent — — — — ( 1,672,117 ) — ( 1,672,117 )

Other Comprehensive Loss — — — — — 507 507

Balance, September 29, 2023 — $ — $ — $ — $ 908,533 $ ( 31,173 ) $ 877,360

Separation-related adjustments — $ — $ — $ — $ 6,406 $ — $ 6,406

Issuance of common stock in connection with the Separation and reclassification of net parent investment (1)

131,225 $ 1,312 $ 913,627 $ — $ ( 914,939 ) $ — $ —

Net Income — $ — $ — $ 20,970 $ — $ — $ 20,970

Net Transfers to Parent — — — — — — —

Dividends Declared ($ 0.035 per common share)

— — — ( 18,405 ) — — ( 18,405 )

Other Comprehensive Income — — — — — 2,262 2,262

Share-based compensation expense — $ — $ 16,336 $ — $ — $ — $ 16,336

Issuance of common stock upon exercise of stock options or awards of restricted stock units 257 $ 3 $ 155 $ — $ — $ — $ 158

Tax payments related to shares withheld for share based compensation plans — $ — $ ( 2,036 ) $ — $ — $ — $ ( 2,036 )

Balance, September 27, 2024 131,482 $ 1,315 $ 928,082 $ 2,565 $ — $ ( 28,911 ) $ 903,051

Separation-related adjustments — $ — $ — $ — $ — $ — $ —

Net Loss — — — ( 40,223 ) — — ( 40,223 )

Dividends Declared ($ 0.035 per common share)

— — — ( 9,221 ) — — ( 9,221 )

Other Comprehensive Income (Loss) — — — — — 2,584 2,584

Share-based compensation expense — — 11,565 — — — 11,565

Issuance of common stock upon exercise of stock options or awards of restricted stock units 377 4 ( 4 ) — — — —

Tax payments related to shares withheld for share based compensation plans — — ( 2,112 ) — — — ( 2,112 )

Balance, October 3, 2025 131,859 $ 1,319 $ 937,531 $ ( 46,879 ) $ — $ ( 26,327 ) $ 865,644

__________________

(1) The issuance of common stock in connection with the Separation consists of 130.7 million shares of common stock distributed and 0.5 million shares contributed to an Aramark donor advised fund for charitable contributions.

The accompanying notes are an integral part of these Consolidated and Combined Financial Statements.

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FOR THE FISCAL YEARS ENDED

SEPTEMBER 27, 2024, SEPTEMBER 29, 2023 AND SEPTEMBER 30, 2022

OCTOBER 3, 2025, SEPTEMBER 27, 2024 AND SEPTEMBER 29, 2023

(in thousands)

Fiscal Year Ended

September 27, 2024 September 29, 2023 September 30, 2022

October 3, 2025 September 27, 2024 September 29, 2023

Cash flows from operating activities:

Net Income $ 20,970 $ 213,158 $ 141,679

Adjustments to reconcile Net Income to Net cash provided by operating activities:

Net (Loss) Income $ ( 40,223 ) $ 20,970 $ 213,158

Adjustments to reconcile Net (Loss) Income to Net cash provided by operating activities:

Depreciation and amortization 143,017 140,781 136,504

Gain on sale of equity investment, net — ( 51,831 ) —

(Gain) loss on sale of equity investment, net 2,784 — ( 51,831 )

Deferred income taxes ( 13,398 ) ( 19,576 ) 14,370

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Asset write-downs 1,169 980 7,698

Loss on disposals of property and equipment 1,042 — —

(Gain) loss on disposals of property and equipment ( 490 ) 1,042 —

Amortization of debt issuance costs 3,637 4,683 —

Loss on extinguishment of debt — 3,883 —

Personal protective equipment charges — — 26,183

Changes in operating assets and liabilities:

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Accounts payable ( 267 ) 21,665 ( 32,888 )

Accrued expenses 80,561 ( 7,928 ) ( 31,456 )

Accrued expenses and other current liabilities ( 12,371 ) 80,561 ( 7,928 )

Changes in other noncurrent liabilities 8,540 ( 16,212 ) ( 944 )

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Proceeds from disposals of property and equipment 5,524 5,269 11,180

Acquisition of certain businesses, net of cash acquired — — ( 17,200 )

Proceeds from sale of equity investment 37,659 — 51,869

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VESTIS CORPORATION

CONSOLIDATED AND COMBINED STATEMENTS OF CHANGES IN EQUITY

FOR THE FISCAL YEARS ENDED

SEPTEMBER 27, 2024, SEPTEMBER 29, 2023 AND SEPTEMBER 30, 2022

(in thousands)

Shares Outstanding Par Value Additional Paid-In Capital Retained Earnings Net Parent

Investment Accumulated

Comprehensive

Loss Total Parent’s

Balance, October 01, 2021 — $ — $ — $ — $ 2,343,591 $ ( 11,606 ) $ 2,331,985

Net Income — — — — 141,679 — 141,679

Net Transfers to Parent — — — — ( 117,778 ) — ( 117,778 )

Other Comprehensive Loss — — — — — ( 20,074 ) ( 20,074 )

Balance, September 30, 2022 — $ — $ — $ — $ 2,367,492 $ ( 31,680 ) $ 2,335,812

Net Income — $ — $ — $ — $ 213,158 $ — $ 213,158

Net Transfers to Parent — — — — ( 1,672,117 ) — ( 1,672,117 )

Other Comprehensive Loss — — — — — 507 507

Balance, September 29, 2023 — $ — $ — $ — $ 908,533 $ ( 31,173 ) $ 877,360

Separation-related adjustments — $ — $ — $ — $ 6,406 $ — $ 6,406

Issuance of common stock in connection with the Separation and reclassification of net parent investment (1)

131,225 1,312 913,627 — ( 914,939 ) — —

Net Income — — — 20,970 — — 20,970

Dividends Declared ($ 0.035 per common share)

— — — ( 18,405 ) — — ( 18,405 )

Other Comprehensive Income — — — — — 2,262 2,262

Share-based compensation expense — — 16,336 — — — 16,336

Issuance of common stock upon exercise of stock options or awards of restricted stock units 257 3 155 — — — 158

Tax payments related to shares withheld for share based compensation plans — — ( 2,036 ) — — — ( 2,036 )

Balance, September 27, 2024 131,482 $ 1,315 $ 928,082 $ 2,565 $ — $ ( 28,911 ) $ 903,051

__________________

The accompanying notes are an integral part of these Consolidated and Combined Financial Statements.

VESTIS CORPORATION

NOTES TO THE CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

NATURE OF BUSINESS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Vestis Corporation ("Vestis", the "Company", “we” or “us”) is a leading provider of uniforms and workplace supplies across the United States and Canada.

Vestis Corporation ("Vestis", the "Company", “we”, “us” or “our”) is a leading provider of uniforms and workplace supplies across the United States and Canada.

The Company provides uniforms, mats, towels, linens, restroom supplies, first-aid supplies and safety products.

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The Company’s operating segments are also its reportable segments.

The United States and Canada reportable segments both provide a range of uniforms and workplace supplies programs.

The Company’s uniforms business (“Uniforms”) generates revenue from the rental, servicing and direct sale of uniforms to customers, including the design, sourcing, manufacturing, customization, personalization, delivery, laundering, sanitization, repair and replacement of uniforms.

The United States and Canada reportable segments both provide a range of uniforms and workplace supplies.

The Company’s uniforms business generates revenue from the rental, servicing and direct sale of uniforms to customers, including the design, sourcing, manufacturing, customization, personalization, delivery, laundering, sanitization, repair and replacement of uniforms.

The uniform options include shirts, pants, outerwear, gowns, scrubs, high visibility garments, particulate-free garments and flame-resistant garments, along with shoes and accessories.

The Company’s workplace supplies business (“Workplace Supplies”) generates revenue from the rental and servicing of workplace supplies, including restroom supply services, first-aid supplies and safety products, floor mats, towels and linens.

The Company’s workplace supplies business generates revenue from the rental and servicing of workplace supplies, including restroom supply services, first-aid supplies and safety products, floor mats, towels and linens.

On September 30, 2023 (the "Distribution Date"), Aramark completed the previously announced spin-off of Vestis (the “Separation”).

The Separation was completed through a distribution of the Company's common stock to holders of record of Aramark’s common stock as of the close of business on September 20, 2023 (the “Distribution”), which resulted in the issuance of approximately 131.2 million shares of common stock, which includes 0.5 million shares contributed to an Aramark donor-advised fund for charitable contributions.

Aramark stockholders of record received one share of Vestis common stock for every two shares of common stock, par value $ 0.01 , of Aramark.

Aramark’s stockholders of record received one share of Vestis common stock for every two shares of common stock, par value $ 0.01 , of Aramark.

As a result of the Separation, the Company became an independent public company.

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Securities and Exchange Commission (“SEC”).

The Financial Statements reflect the historical results of operations, comprehensive income and cash flows for the years ended September 27, 2024, September 29, 2023 and September 30, 2022 and the financial position as of September 27, 2024 and September 29, 2023 for the Company and are denominated in United States (“U.S.”) dollars.

The Financial Statements reflect the historical results of operations, comprehensive income and cash flows for the years ended October 3, 2025, September 27, 2024 and September 29, 2023 and the financial position as of October 3, 2025 and September 27, 2024 for the Company and are denominated in United States (“U.S.”) dollars.

Certain prior period amounts have been reclassified to conform to the current period presentation.

Prior to the Separation, the Company’s business functioned together with other Aramark businesses.

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Prior to the Separation, separate financial statements had not been prepared for the Company, and it had not operated as a standalone business from Aramark.

The historical results of operations, financial

position and cash flows of the Company prior to the Separation presented in these Combined Financial Statements may not be indicative of what they would have been had the Company actually been an independent standalone public company.

Transactions between the Company and Aramark for the years ended September 29, 2023 and September 30, 2022 have been included in the Combined Financial Statements and are considered related party transact ions (see Note 15.

The historical results of operations and cash

flows of the Company prior to the Separation presented in these Consolidated and Combined Financial Statements may not be indicative of what they would have been had the Company actually been an independent standalone public company.

Transactions between the Company and Aramark for the years ended September 27, 2024 and September 29, 2023 have been included in the Consolidated and Combined Financial Statements and are considered related party transact ions (see Note 15.

" Related Party Transactions and Parent Company Investment ").

All intercompany transactions and balances within the Company have been eliminated.

Transactions between the Company and Aramark have been included in these Combined Financial Statements and are considered related party transactions (see Note 15.

Transactions between the Company and Aramark have been included in these Consolidated and Combined Financial Statements and are considered related party transactions (see Note 15.

“Related Party Transactions and Parent Company Investment”).

The “Provision for Income Taxes” in the Combined Statements of Income for the years ended September 29, 2023 and September 30, 2022 has been calculated as if the Company filed a separate tax return and was operating as a standalone company.

The “Provision for Income Taxes” in the Combined Statement of Income for the year ended September 29, 2023 has been calculated as if the Company filed a separate tax return and was operating as a standalone company.

Therefore, income tax expense, cash tax payments and items of current and deferred income taxes may not be reflective of the Company’s actual tax balances prior to or subsequent to the distribution.

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The Company’s fiscal year is the 52- or 53-week period which ends on the Friday nearest to September 30th.

The fiscal years ended September 27, 2024, September 29, 2023 and September 30, 2022 were each 52-week periods.

The fiscal year ended October 3, 2025 (or fiscal 2025) was a 53-week period, while the fiscal years ended September 27, 2024 (or fiscal 2024) and September 29, 2023 (or fiscal 2023) were each 52-week periods.

New Accounting Standards Updates

Adopted Standards (from most to least recent date of issuance)

In September 2022, the Financial Accounting Standards Board ("FASB") issued an Accounting Standards Update ("ASU") to enhance the transparency of supplier finance programs, which may be referred to as reverse factoring, payables finance or structured payables arrangements.

The guidance requires that a buyer in a supplier finance program disclose the program’s nature, activity and potential magnitude.

The guidance was effective for the Company in the first quarter of fiscal 2024.

The Company adopted the ASU prospectively and adoption of this guidance did not have an impact on the Consolidated Financial Statements.

In October 2021, the FASB issued an ASU which requires that an entity (acquirer) recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Accounting Standards Codification 606, Revenue from Contracts with Customers as if it had originated the contracts.

The guidance was effective for the Company in the first quarter of fiscal 2024.

The Company adopted the ASU prospectively and adoption of this guidance did not have an impact on the Consolidated Financial Statements.

In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures , which is intended to improve reportable segment disclosures, primarily through enhanced disclosures regarding significant segment expenses.

The amendments require public entities to disclose significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”) and which are included within segment profit or loss.

The Company adopted the ASU effective October 3, 2025.

The ASU was required to be adopted on a retrospective basis to all periods presented.

The adoption resulted in additional disclosures only and therefore had no impact on the Company’s consolidated financial condition, results of operations or cash flows.

See Note 10, which includes the additional disclosures that result from the adoption of the ASU.

Standards Not Yet Adopted (from most to least recent date of issuance)

In November 2024, the FASB issued an ASU which requires additional disclosure about certain expenses in the notes to financial statements.

In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40)—Targeted Improvements to the Accounting for Internal-Use Software, which amends the guidance on internal-use software.

The ASU removes all references to prescriptive and sequential software development stages (referred to as “project stages”) throughout Subtopic 350-40.

Instead, an entity is required to start capitalizing software costs when 1) management has authorized and committed to funding the software project and 2) it is probable that the project will be completed, and the software will be used to perform the function intended (referred to as the “probable-to complete recognition threshold”).

Among other things, the ASU also specifies that disclosures are required for all capitalized internal-use software costs, regardless of how those costs are presented in the financial statements.

The ASU is effective for annual reporting periods beginning after December 15, 2027 and interim reporting periods within those annual reporting periods.

Early adoption is permitted.

The Company is currently evaluating the ASU to determine its impact on the financial statements.

In July 2025, the FASB issued ASU 2025-05 , Financial Instruments—Credit Losses (Topic 326)—Measurement of Credit Losses for Accounts Receivable and Contract Assets, which provides certain practical expedients when estimating

credit losses.

Among other provisions, the ASU allows public companies the option to elect a practical expedient that assumes that current conditions as of the balance sheet date do not change for the remaining life of the asset.

The ASU is effective for annual reporting periods beginning after December 15, 2025 and interim reporting periods within those annual reporting periods.

Early adoption is permitted.

The Company is currently evaluating the ASU to determine its impact on the financial statements.

In November 2024, the FASB issued ASU 2024-03, which requires additional disclosure about certain expenses in the notes to financial statements.

The amendments are effective for the Company's annual periods beginning October 2, 2027, and interim periods beginning January 1, 2028, with early adoption permitted, and should be applied either prospectively or retrospectively.

The Company is currently evaluating the ASU to determine its impact on the Company's disclosures.

In December 2023, the FASB issued an ASU which includes amendments that further enhance income tax disclosures, primarily through standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction.

The amendments are effective for the Company’s annual periods beginning October 4, 2025, with early

adoption permitted, and should be applied either prospectively or retrospectively.

The Company is currently evaluating the ASU to determine its impact on the Company’s disclosures.

In November 2023, the FASB issued an ASU which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant expenses.

The amendments will require public entities to disclose significant segment expenses that are regularly provided to the chief operating decision maker and included within segment profit and loss.

The amendments are effective for the Company's annual periods beginning September 28, 2024, and interim periods beginning October 4, 2025, with early adoption permitted, and will be applied retrospectively to all prior periods presented in the financial statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures, which includes amendments that further enhance income tax disclosures, primarily through standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction.

The amendments are effective for the Company’s annual periods beginning October 4, 2025, with early adoption permitted, and should be applied either prospectively or retrospectively.

The Company is currently evaluating the ASU to determine its impact on the Company’s disclosures.

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The Company reassesses these estimates during each reporting period.

The Company maintains a liability for these discounts and rebates within “Accrued expenses and other current liabilities” on the Consolidated and Combined Balance Sheets.

The Company maintains a liability for these discounts and rebates within “Accrued expenses and other current liabilities” on the Consolidated Balance Sheets.

Variable consideration can also include consideration paid to a customer at the beginning of a contract.

This type of variable consideration is capitalized as an asset (in “Other Assets” on the Consolidated and Combined Balance Sheets) and is amortized over the life of the contract as a reduction to revenue in accordance with the accounting guidance for revenue recognition.

This type of variable consideration is capitalized as an asset (in “Other Assets” (long-term portion) and in “Other Current Assets” (short-term portion) on the Consolidated Balance Sheets) and is amortized over the life of the contract as a reduction to revenue in accordance with the accounting guidance for revenue recognition.

Use of Estimates

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The Company utilizes key estimates in preparing the financial statements including environmental estimates, goodwill, intangibles, insurance reserves, income taxes and long-lived assets.

These estimates are based on historical information, current trends and information available from other sources.

These estimates are based on

historical information, current trends and information available from other sources.

Actual results could materially differ from those estimates.

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Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Assets and liabilities recorded at fair value are classified

based upon the level of judgment associated with the inputs used to measure their fair value.

Assets and liabilities recorded at fair value are classified based upon the level of judgment associated with the inputs used to measure their fair value.

The hierarchical levels related to the subjectivity of the valuation inputs are defined as follows:

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The resulting fair value measurement of the assets are considered to be Level 3 measurements.

The Company had no business acquisitions during fiscal 2024 and 2023.

The Company completed business acquisitions with aggregate purchase price of approximately $ 17.2 million during fiscal 2022.

The results of operations of these acquisitions have been included in the Company’s consolidated and combined financial results since their respective acquisition dates.

These acquisitions were not significant in relation to the Company’s combined financial results and, therefore, pro forma financial information has not been presented.

Comprehensive Income

Comprehensive income includes all changes to equity during a period, except those resulting from investments by and distributions to stockholders and except those related to the net parent investment.

Components of comprehensive income include net income, pension plan adjustments (net of tax) and changes in foreign currency translation adjustments (net of tax).

The summary of the components of comprehensive income is as follows (in thousands):

The Company had no significant business acquisitions during fiscal 2025, fiscal 2024 or fiscal 2023.

Comprehensive Income (Loss)

Comprehensive income or loss includes all changes to equity during a period, except those resulting from investments by and distributions to stockholders and except those related to the net parent investment.

Components of comprehensive income or loss include net income, pension plan adjustments (net of tax) and changes in foreign currency translation adjustments (net of tax).

The summary of the components of comprehensive income (loss) is as follows (in thousands):

Fiscal Year Ended

September 27, 2024 September 29, 2023 September 30, 2022

October 3, 2025 September 27, 2024 September 29, 2023

Pre-Tax Amount Tax Effect After-Tax Amount Pre-Tax Amount Tax Effect After-Tax Amount Pre-Tax Amount Tax Effect After-Tax Amount

Net Income $ 20,970 $ 213,158 $ 141,679

Net (Loss) Income $ ( 40,223 ) $ 20,970 $ 213,158

Pension plan adjustments ( 660 ) 210 ( 450 ) ( 39 ) 9 ( 30 ) ( 884 ) 229 ( 655 )

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Other Comprehensive Income (Loss) 2,374 210 2,584 2,253 9 2,262 1,367 ( 860 ) 507

Comprehensive Income $ 23,232 $ 213,665 $ 121,605

Comprehensive (Loss) Income $ ( 37,639 ) $ 23,232 $ 213,665

Accumulated other comprehensive loss consists of the following (in thousands):

September 27, 2024 September 29, 2023

October 3, 2025 September 27, 2024

Pension plan adjustments $ ( 5,549 ) $ ( 5,099 )

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dollars using current exchange rates.

dollar results that arise from such translation are included as a component of accumulated other comprehensive loss in equity.

Translation differences are included as a component of accumulated other comprehensive income or loss in equity.

Cash and Cash Equivalents

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Receivables represents amounts due from customers and is presented net of allowance for credit losses.

Judgment and estimates are used in determining the collectability of receivables and evaluating the adequacy of the allowance for credit losses.

Judgment and estimates are used in determining the collectability of receivables and in evaluating the adequacy of the allowance for credit losses.

The Company estimates and reserves for its credit loss exposure based on historical experience, current general and specific industry economic conditions and reasonable and supportable forecasts that affect the collectability of the reported amount in estimating credit losses.

Credit loss expense is classified within “Cost of services provided (exclusive of depreciation and amortization)” in the Consolidated and Combined Statements of Income.

Credit loss expense is classified within Selling, general and administrative expenses in the Consolidated and Combined Statements of Income.

When an account is considered uncollectible, it is written off against the allowance for credit losses.

The amounts recognized in fiscal years 2024 and 2023 relating to allowance for credit losses, which are netted against “Receivables” in the Consolidated and Combined Balance Sheets, are as follows (in thousands):

The allowance for credit losses is netted against “Receivables” in the Consolidated Balance Sheets, and the activity for fiscal 2025 and fiscal 2024 was as follows (in thousands):

Fiscal Year Ended

September 27, 2024 September 29, 2023

October 3, 2025 September 27, 2024

Balance, beginning of year $ 19,804 $ 25,066

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$ 32,677 $ 19,804

__________________

(1) Amounts determined not to be collectible and charged against the reserve and translation.

(2) The increase in the allowance for credit losses was due primarily to a $ 15 million adjustment to the allowance for credit losses that was recorded in fiscal 2025 based on updated estimates of collectability and to ensure the adequacy of the allowance for credit losses.

Transfer of Financial Assets

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These estimates are based on management’s judgment regarding future demand and market conditions and analysis of historical experience.

As of September 27, 2024 and September 29, 2023, the Company’s reserve for inventory was approximately $ 15.7 million and $ 18.7 million, respectively.

The inventory reserve is determined based on history and projected customer consumption and specific identification.

During fiscal 2022, the Company decided to no longer sell certain personal protective equipment (“PPE”), which required inventory charges to reduce the carrying value of PPE to a zero net realizable value.

The Company recorded $ 26.2 million in inventory charges within “Cost of services provided (exclusive of depreciation and amortization)” in the Combined Statement of Income during fiscal 2022 to reflect the net realizable value of certain PPE inventory.

No charges were recorded in fiscal 2023 or 2024 related to PPE.

As of October 3, 2025 and September 27, 2024, the Company’s reserve for inventory was approximately $ 18.6 million and $ 15.7 million, respectively.

The inventory reserve is determined based on history, projected customer consumption and specific identification.

The components of net inventories are as follows (in thousands):

September 27, 2024 September 29, 2023

October 3, 2025 September 27, 2024

Raw Materials $ 41,167 $ 35,210

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Rental merchandise in service represents personalized work apparel, linens and other rental items in service.

Rental merchandise in service is valued at cost less amortization, calculated using the straight-line method.

Rental merchandise in service is amortized over its useful life, which primarily range from one to four years .

Rental merchandise in service is valued at cost less accumulated amortization, calculated using the straight-line method.

Rental merchandise in service is amortized over its useful life, which primarily ranges from one to four years .

The amortization rates are based on the Company’s specific experience and wear tests performed by the Company.

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Material differences may result in the amount and timing of operating income if management makes significant changes to these estimates.

During the fiscal years ended September 27, 2024, September 29, 2023 and September 30, 2022, the Company record ed $ 323.9 million, $ 344.5 million and $ 313.4 million, respectively, of amortization related to rental merchandise in service within “Cost of services provided (exclusive of depreciation and amortization)” on the Consolidated and Combined Statements of Income.

During the fiscal years ended October 3, 2025, September 27, 2024 and September 29, 2023, the Company record ed $ 362.9 million, $ 345.9 million and $ 343.9 million, respectively, of amortization related to rental merchandise in service and other inventoriable costs within “Cost of services provided (exclusive of depreciation and amortization)” in the Consolidated and Combined Statements of Income.

Other Current Assets

“Other current assets” as presented in the Consolidated and Combined Balance Sheets is primarily comprised of prepaid insurance and prepaid taxes and licenses.

“Other current assets” as presented on the Consolidated Balance Sheets is primarily comprised of software subscriptions, prescription and medical refunds, prepaid insurance, prepaid taxes and licenses and as of October 3, 2025, include assets held for sale.

Assets held for sale are recorded at the lower of their carrying value or estimated selling price less estimated costs to sell.

Depreciation is suspended upon classification as held for sale.

The highest and best use of these assets is as real estate properties for use or lease and the Company intends to sell them to third parties as quickly as practicable.

As of October 3, 2025, four properties with an aggregate carrying value of $ 4.2 million were classified as held for sale.

The properties are part of the Company's United States segment.

As of September 27, 2024, the Company had no assets classified as held for sale.

Property and Equipment and Operating Lease Right-of-use Assets

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Gains and losses on dispositions are included in operating results.

Maintenance and repairs are charged to current operations and replacements, and significant improvements that extend the useful life of the asset are capitalized.

Maintenance and repairs are charged to current operations.

Replacements, and significant improvements that extend the useful life of the asset are capitalized.

The estimated useful lives for the major categories of property and equipment are 10 to 40 years for buildings and improvements and 3 to 10 years for equipment.

Depreciation expense during fiscal 2025, fiscal 2024 and fiscal 2023 w as $ 104.8 million, $ 106.3 million and $ 103.8 million, respectively.

The Company had $ 10.2 million , $ 7.6 million, and $ 7.1 million, respectively, of capital expenditures recorded within “Accounts payable” and “Accrued expenses and other current liabilities” in the Consolidated and Combined Balance Sheets a s of September 27, 2024, September 29, 2023, and September 30, 2022.

During fiscal 2024, the Company completed the sale of a property for a net selling price of $ 5.3 million.

As a result, the Company recorded a loss on disposal of $ 0.2 million within the United States segment, which is included in “Selling, general and administrative expenses” in the Consolidated Statement of Income for fiscal 2024.

During fiscal 2023, the Company completed the sale of a property for cash proceeds of $ 9.6 million.

As a result, the Company recorded a gain on disposal of $ 6.8 million within the United States segment, which is included in “Selling, general and administrative expenses” in the Combined Statement of Income for fiscal 2023.

The Company had $ 6.5 million and $ 10.2 million of capital expenditures recorded within “Accounts payable” and “Accrued expenses and other current liabilities” on the Consolidated Balance Sheets a s of October 3, 2025 and September 27, 2024, respectively.

During fiscal 2025, fiscal 2024 and fiscal 2023, the Company completed the sale of certain properties for net selling prices of $ 5.5 million, $ 5.3 million and $ 9.6 million, respectively.

Resulting gains or losses are recorded within the United States segment, and are included in “Selling, general and administrative expenses” in the Consolidated and Combined Statements of Income.

During fiscal 2023, the Company completed a strategic review of certain administrative locations, taking into account facility capacity and current utilization, among other factors.

Based on this review, the Company vacated or otherwise reduced its usage at certain of these locations, resulting in an analysis of the recoverability of the assets associated with the locations.

As a result, the Company recorded an impairment charge of $ 7.7 million within its United States segment, which was included in “Selling, general and administrative expenses” in the Combined Statement of Income for fiscal 2023.

As a result, the Company recorded an impairment charge of $ 7.7 million to its Operating Lease Right of use Assets within its United States segment, which was included in “Selling, general and administrative expenses” in the Combined Statement of Income for fiscal 2023.

The non-cash impairment charge consisted of operating lease right-of-use assets $ 7.1 million and other costs $ 0.6 million.

“Other assets” as presented in the Consolidated and Combined Balance Sheets is primarily comprised of employee sales commissions, computer software cos ts, equity method investment, consid eration payable to a customer at the beginning of the contract, noncurrent pension assets, preparation costs and long-term receivables.

“Other assets,” as presented in the Consolidated Balance Sheets, is primarily comprised of employee sales commissions, computer software cos ts, equity method investment, consid eration payable to a customer at the beginning of the contract, noncurrent pension assets, preparation costs and long-term receivables.

Employee sales commissions represent commission payments made to employees related to new or retained business contracts (see Note 6.

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Under the equity method of accounting, the Company recognizes its share of the investee’s net income or loss.

Equity method investments represent the 39 % ownership interest in Aramark Uniform Services Japan Corporation.

The investment was sold in October 2024 (see Note 17.

“Subsequent Events”).

On September 22, 2023, the Company sold its 25 % interest in Sanikleen, a Japanese linen supply company for $ 51.9 million in cash resulting in a pre-tax gain on sale of this equity investment of $ 51.8 million for fiscal 2023.

The pre-tax gain is included in “Gain on Sale of Equity Investment, net” on the Combined Statement of Income for fiscal 2023.

An equity method investment that represented a 39 % ownership interest in Aramark Uniform Services Japan Corporation, was sold in October 2024 for $ 36.8 million and the proceeds used towards debt repayments.

The loss on sale of $ 2.2 million is included in “Gain (loss) on Sale of Equity Investment, net” in the Consolidated Statement of Income for fiscal 2025.

On September 22, 2023, the Company sold its 25 % interest in Sanikleen, a Japanese linen supply company for $ 51.9 million in cash resulting in a pre-tax gain on sale of $ 51.8 million for fiscal 2023.

The pre-tax gain is included in “Gain (loss) on Sale of Equity Investment, net” in the Combined Statement of Income for fiscal 2023.

Accrued Expenses and Other Current Liabilities

“Accrued Expenses and Other Current Liabilities” as presented in the Consolidated and Combined Balance Sheets is primarily comprised of current deferred income, taxes, insurance, environmental reserves (see Note 9.

Commitments and Contingencies) and rebates.

“Accrued expenses and other current liabilities” as presented in the Consolidated and Combined Balance Sheets include the current portion of insurance accruals related to automotive, general liability and workers’ compensation reserves of $ 16.1 million and $ 31.9 million as of October 3, 2025 and September 27, 2024, respectively.

The remaining components consist primarily of unearned income, interest, taxes, and environmental reserves (see Note 9.

Commitments and Contingencies).

Other Noncurrent Liabilities

“Other Noncurrent Liabilities” as presented in the Consolidated and Combined Balance Sheets is primarily comprised of environmental reserves (see Note 9.

“Other Noncurrent Liabilities” as presented in the Consolidated Balance Sheets include the long-term portion of insurance reserves related to automotive, general liability and workers’ compensation reserves of $ 36.9 million and $ 0 , as of October 3, 2025 and September 27, 2024, respectively.

The remaining components consist primarily of environmental reserves (see Note 9.

Commitments and Contingencies), asset retirement obligations (see Note 9.

Commitments and Contingencies) and noncurrent deferred income.

Commitments and Contingencies), and the noncurrent portion of deferred income.

Following the Separation from Aramark on September 30, 2023, the Company is primarily self-insured for workers’ compensation, general, and automotive liabilities.

Self-insured liabilities are based upon actuarial methods to estimate the future cost of claims and related expenses that have been reported but not settled and have been incurred but not yet reported.

These estimates are reviewed and adjusted as the facts and circumstances change.

Self-insured liabilities are included in “Accrued expenses and other current liabilities” and “Other Noncurrent Liabilities” in the consolidated balance sheets based on the expected timing of ultimate settlement.

The amount of noncurrent self-insured liabilities at September 27, 2024 was not material to the consolidated financial statements and was included in “Accrued expenses and other current liabilities.”

Prior to the Separation, Aramark insured portions of its risk in general liability, automobile liability, workers’ compensation liability and property liability through a wholly owned captive insurance subsidiary (the “Captive”), to enhance its risk financing strategies.

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The Company entered into an independent general liability, automobile liability, workers’ compensation liability insurance policy effec tive September 29, 2023.

During the fiscal year ended September 27, 2024, the Company recorded $ 11.4 million, $ 16.5 million, and $ 22.8 million of g eneral liability, automobile liability, and workers’ compensation liability expenses, respectively, within “Cost of services provided (exclusive of depreciation and amortization)” and “Selling, general and administrative expenses” on the Consolidated Statement of Income.

The Company entered into an independent property insurance policy and was no longer under Aramark’s property insurance policy effective June 1, 2023.

During the fiscal year ended September 27, 2024, the Company recorded $ 4.5 million of property insurance expenses within “Cost of services provided (exclusive of depreciation and amortization)” and “Selling, general and administrative expenses” on the Consolidated Statement of Income.

As a result, during fiscal 2025 and fiscal 2024, the Company recorded general liability, automobile liability, and workers’ compensation liability expenses, which are included within “Cost of services provided (exclusive of depreciation and amortization)” and “Selling, general and administrative expenses” on the Consolidated Statements of Income.

For fiscal 2025, g eneral liability, automobile liability, and workers’ compensation liability expenses were $ 7.9 million , $ 20.6 million , and $ 25.6 million, respectively.

For fiscal 2024 , g eneral liability, automobile liability, and workers’ compensation liability expenses were $ 11.4 million, $ 16.5 million, and $ 22.8 million , respectively.

The estimated current portion of such reserves is included in “Accrued expenses and other current liabilities,” while the estimated long-term portion is included in “Other Noncurrent Liabilities” in the consolidated balance sheets.

Additionally, the Company entered into an independent property insurance policy and was no longer under Aramark’s property insurance policy effective June 1, 2023.

During fiscal 2025 and fiscal 2024, the Company recorded $ 4.6 million and $ 4.5 million of property insurance expenses, respectively, within “Cost of services provided (exclusive of depreciation and amortization)” and “Selling, general and administrative expenses” on the Consolidated Statements of Income.

Environmental Matters

Capital expenditures for ongoing environmental remediation and compliance measures were recorded in Property and Equipment and related expenses were included in the normal operating expenses of conducting business.

The Company accrued for environmental-related activities for which commitments or clean-up plans have been developed and when such costs could be reasonably estimated based on industry standards and professional judgment.

Capital expenditures for ongoing environmental remediation and compliance measures were recorded in Property and Equipment, and related expenses are included in operating expenses.

The Company accrues for environmental-related activities for which commitments or clean-up plans have been developed and when such costs can be reasonably estimated based on industry standards and professional judgment.

Accrued amounts were primarily recorded on an undiscounted basis (see Note 9.

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The Company and its subsidiaries file a federal consolidated income tax return in the United States, and separate legal entities file in various state, local and foreign jurisdictions.

The Company uses the asset and liability approach to determine its provision for income taxes based on its operations in each jurisdiction.

The Company uses the asset and liability approach to determine its (benefit)/provision for income taxes based on its operations in each jurisdiction.

Deferred tax assets and liabilities are determined by the differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and for operating loss and tax credit carryforwards.

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Therefore, the Company has not recorded deferred taxes for basis differences expected to reverse in future periods.

Refer to Note 11, “Income Taxes”, of these Consolidated Financial Statements for further details on income taxes.

Net Parent Investment

“Net parent investment” in the Combined Balance Sheet for fiscal 2023 is presented in lieu of stockholders’ equity and represents Aramark’s historic investment in the Company, the accumulated net earnings after taxes of the Company and the net effect of the transactions with the allocations from Aramark.

All transactions reflected in “Net parent investment” in the accompanying Combined Balance Sheet for fiscal 2023 have been considered as financing activities for purposes of the Combined Statements of Cash Flows for fiscal 2022 and 2023.

Refer to Note 11, “Income Taxes”, of these Consolidated and Combined Financial Statements for further details on income taxes.

Net Cash Distributions to Parent

Net Cash Distributions to Parent on the Combined Statement of Cash Flows for fiscal 2023 include transactions related to Aramark’s historic investment in the Company.

For additional information, see Basis of Presentation above and Note 15.

Related Party Transactions and Parent Company Investment.

Interest Expense, net

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Borrowings) and interest expense recognized on financing leases (see Note 7.

Other (Income), net

“Other (Income), net ” as presented in the Consolidated and Combined Statements of Income is primarily comprised of fees incurred for the Company’s accounts receivable securitization facility (see Note 16.

Accounts Receivable Securitization Facility) and the Company’s share of the financial results for its equity method investment.

Impact of COVID-19

COVID-19 adversely affected global economies, disrupted global supply chains and labor force participation and created significant volatility and disruption of financial markets.

COVID-19 related disruptions negatively impacted the Company’s financial and operating results beginning in the second quarter of fiscal 2020 through the first half of fiscal 2021.

The Company’s financial results started to improve during the second half of fiscal 2021 and continued to improve throughout fiscal 2022 as COVID-19 restrictions were lifted and operations re-opened.

The CARES Act provided for deferred payment of the employer portion of social security taxes through the end of calendar 2020, with 50% of the deferred amount due December 31, 2021 and the remaining 50% due December 31, 2022.

Deferred social security taxes of $ 16.6 million were paid during both fiscal 2022 and fiscal 2023.

During fiscal 2024, the Company approved headcount reductions to streamline and improve the efficiency and effectiveness of operational and administrative functions.

As a result of these actions, severance charges of $ 5.2 million were recorded within “Selling, general and administrative expenses” on the Consolidated Statement of Income for the fiscal year ended September 27, 2024.

As of September 27, 2024, the Company had an accrual of approximately $ 2.7 million related to unpaid severance obligations.

During fiscal 2023, the Company approved action plans to streamline and improve the efficiency and

effectiveness of operational and administrative functions.

As a result of these actions, severance charges of $ 7.6 million were recorded within “Selling, general and administrative expenses” and “Cost of services provided (exclusive of depreciation and amortization)” on the Combined Statement of Income for the fiscal year ended September 29, 2023.

The following table summarizes the unpaid obligations for severance and related costs as of September 27, 2024, which are included in “Accrued payroll and related expenses” on the Consolidated Balance Sheet.

(dollars in thousands) September 29, 2023 Charges Payments and Other September 27, 2024

Other Expense (Income)

“Other Expense (Income), net ” as presented in the Consolidated and Combined Statements of Income (Loss) is primarily comprised of fees incurred for the Company’s accounts receivable securitization facility (see Note 16.

Accounts Receivable Securitization Facility).

For fiscal 2024 and fiscal 2023, “Other Expense (Income), net” also included the Company’s share of the financial results of Sanikleen, a Japanese linen supply company.

For fiscal 2025, “Loss (Gain) on Sale of Equity Investment, net” includes a loss of $ 2.2 million related to the sale of an equity method investment which was sold for $ 36.5 million.

For fiscal 2023, “Loss (Gain) on Sale of Equity Investment, net” includes a gain of $ 51.8 million related to the sale of the Company’s investment in Sanikleen.

During fiscal 2025, 2024 and 2023 , the Company approved headcount reductions to streamline and improve the efficiency and effectiveness of operational and administrative functions.

As a result of these actions, severance charges of $ 18.7 million, $ 5.2 million and $ 7.6 million were recorded on the Consolidated and Combined Statements of Income for the fiscal years ended October 3, 2025, September 27, 2024 and September 29, 2023, respectively.

For fiscal 2025 and 2024, the severance charges were recorded within “Selling, general and administrative expenses.

For fiscal 2023, the severance charges were recorded within “Selling, general and administrative expenses” and “Cost of services provided (exclusive of depreciation and amortization).

As of October 3, 2025 and September 27, 2024, accrued severance obligations were $ 7.4 million and $ 2.7 million, respectively .

The following table summarizes the unpaid obligations for severance and related costs as of October 3, 2025, which are included in “Accrued payroll and related expenses” on the Consolidated Balance Sheets.

(dollars in thousands) September 27, 2024 Charges (Reversals) Payments and Other October 3, 2025

Fiscal 2025 Severance $ — $ 19,264 $ ( 11,872 ) $ 7,392

Fiscal 2024 Severance $ 2,561 $ ( 440 ) $ ( 2,121 ) $ —

Fiscal 2023 Severance $ 142 $ ( 142 ) $ — $ —

Total $ 2,703 $ 18,682 $ ( 13,993 ) $ 7,392

The following table summarizes the unpaid obligations for severance and related costs as of September 29, 2023, which are included in “Accrued payroll and related expenses” on the Combined Balance Sheet.

(dollars in thousands) September 29, 2023 Charges Payments and Other September 27, 2024

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Goodwill represents the excess of the fair value of consideration paid for an acquired entity over the fair value of assets acquired and liabilities assumed in a business combination.

Goodwill is not amortized and is subject to an impairment test that is conducted annually or more frequently if a change in circumstances or the occurrence of events indicates that potential impairment exists.

Based on Aramark’s historical structure, goodwill for the Company was retained within one reporting unit for the fiscal years ended September 29, 2023 and September 30, 2022.

For the fiscal year ended September 27, 2024, Vestis had two reporting units, United States and Canada.

Goodwill is not amortized and is subject to impairment testing that is conducted annually or more frequently if a change in circumstances or the occurrence of events indicates that potential impairment exists.

Based on Aramark’s historical structure, goodwill for the Company was retained within one reporting unit for the fiscal year ended September 29, 2023.

For fiscal years ended October 3, 2025 and September 27, 2024, Vestis had two reporting units, United States and Canada.

The annual impairment test is performed as of the end of the fiscal month of August.

If results of the qualitative assessment indicate a more likely than not determination or if a qualitative assessment is not performed, a quantitative test is performed by comparing the estimated fair value using a discounted cash flow method or market method for each reporting unit with its estimated net book value.

During the fourth quarter of fiscal 2024 the annual impairment test for goodwill was performed using a quantitative testing approach and no impairment was identified.

During fiscal 2023, the annual impairment test for goodwill was performed by Aramark using a quantitative testing approach and no impairment was identified.

The determination of fair value for the reporting unit includes assumptions, which are considered Level 3 inputs, that are subject to risk and uncertainty.

If results of the qualitative assessment indicate a more likely than not determination of impairment or if a qualitative assessment is not performed, a quantitative test is performed by comparing the estimated fair value, using a discounted cash flow method and/or market method for each reporting unit, with its estimated net book value.

During fiscal 2025, the Company identified potential triggering events for impairment under ASC 350, Intangibles, Goodwill and Other .

This conclusion was based on (i) a decline in financial performance, and (ii) a sustained decrease in the Company’s share price.

However, the annual impairment test for goodwill that was performed during the fourth quarter of fiscal 2025, using a quantitative testing approach, revealed no impairment, as the estimated fair value of each reporting unit exceeded its respective carrying value.

Also, no impairment was identified from the quantitative test that was performed during the fourth quarter of fiscal 2024.

The fair value of each reporting unit was estimated using a combination of the income and market approaches, incorporating management’s most recent forecasts and market participant assumptions.

The income approach included the application of discounted cash flow models, utilizing discount and terminal growth assumptions.

The determination of fair value for the reporting units includes assumptions, which are considered Level 3 inputs, that are subject to risk and uncertainty.

The discounted cash flow calculations are dependent on several subjective factors, including the timing of future cash flows, the underlying margin projection assumptions, future growth rates and the discount rate.

The market method is dependent on several factors including the determination of market multiples and future cash flows.

If assumptions or estimates in the fair value calculations change or if future cash flows, margin projections or future growth rates vary from what was expected, this may impact the impairment analysis and could reduce the underlying cash flows used to estimate fair values and result in a decline in fair value that may trigger future impairment charges.

Changes in total goodwill during fiscal 2024 are as follows (in thousands):

September 29, 2023 Acquisitions Translation September 27, 2024

If our future operating results do not meet current forecasts, or we experience a sustained decline in our market capitalization, or if assumptions or estimates in the fair value calculations change, or if margin projections or future growth rates vary from what was expected, and such factors are determined to be indicative of a reduction in fair value within either of the Company’s reporting units, the Company may be required to record future goodwill impairment charges.

Changes in total goodwill during fiscal 2025 were as follows (in thousands):

September 27, 2024 Acquisitions Translation October 3, 2025

United States $ 896,237 $ — $ — $ 896,237

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Other intangible assets consist of (in thousands):

September 27, 2024 September 29, 2023

October 3, 2025 September 27, 2024

Gross Amount Accumulated Amortization Net Amount Gross Amount Accumulated Amortization Net Amount

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The Company utilized the “relief-from-royalty” method, which considers the discounted estimated royalty payments that are expected to be avoided as a result of the trade name being owned.

The Company’s annual trade name impairment test did not result in an impairment charge for fiscal 2024.

The Company’s annual trade name impairment test did not result in an impairment charge for fiscal 2025 or 2024 .

The Company’s annual trade name impairment test was completed by Aramark for fiscal 2023 which did not result in an impairment charge.

Amortization of other intangible assets for fiscal 2025, fiscal 2024 and fiscal 2023 was approximately $ 27.1 million, $ 25.9 million and $ 26.0 million, respectively.

Based on the recorded balances at September 27, 2024, total estimated amortization of all acquisition-related intangible assets for fiscal years 2025 through 2029 are as follows (in thousands):

Based on the recorded balances at October 3, 2025, total estimated amortization of all acquisition-related intangible assets for fiscal years 2026 through 2030 are as follows (in thousands):

2026 $ 26,762

Long-term borrowings, net, are summarized in the following table (in thousands):

September 27, 2024 September 29, 2023

Senior secured term loan facility, due September 2025 $ — $ 800,000

October 3, 2025 September 27, 2024

Senior secured term loan facility, due September 2028 477,500 497,500

Senior secured term loan facility, due February 2031 665,000 665,000

Senior secured revolving facility, due September 2028 26,000 —

Total principal debt issued 1,168,500 1,162,500

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The Company recorded approximately $ 11.1 million and $ 2.6 million of debt issuance costs associated with the term loans and the Revolving Credit Facility, respectively.

The term loan debt issuance costs are reflected as a reduction to debt in the Consolidated and Combined Balance Sheets and are amortized as a component of interest expense over the term of the related debt using the effective interest method.

The Revolving Credit Facility debt issuance costs are reflected within “Other Assets” in the Consolidated and Combined Balance Sheets and are amortized straight-line as a component of interest expense over the term of the facility.

The term loan debt issuance costs are reflected as a reduction to debt in the Consolidated Balance Sheets and are amortized as a component of interest expense over the term of the related debt using the effective interest method.

The Revolving Credit Facility debt issuance costs are reflected within “Other Assets” in the Consolidated Balance Sheets and are amortized on a straight-line basis as a component of interest expense over the term of the facility.

The Revolving Credit Facility will mature on the earliest of (i) September 29, 2028, and (ii) the date of termination of all of the commitments under the revolving credit facility or the date on which the loans under the revolving credit facility become due and payable or the commitments under the revolving credit facility are terminated.

The Company's revolving credit facility includes a $ 50 million sublimit for swingline loans.

The Company's revolving credit facility includes a $ 30 million sublimit for letters of credit.

The Company's revolving credit facility includes a $ 50 million sub-limit for swingline loans.

The Revolving Credit Facility includes a $ 30 million sub-limit for letters of credit.

The Revolving Credit Facility may be drawn by the Company as well as by certain foreign subsidiaries.

Each foreign borrower is subject to a sublimit of $ 100 million with respect to borrowings under the revolving credit facility.

Each foreign borrower is subject to a sub-limit of $ 100 million with respect to borrowings under the Revolving Credit Facility.

In addition to paying interest on outstanding principal under the senior secured credit facilities, the Company is required to pay a commitment fee to the lenders under the Revolving Credit Facility in respect of the unutilized commitments thereunder.

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The actual rate within the range is based on a Consolidated Total Net Leverage Ratio, as defined in the Credit Agreement.

As of September 27, 2024, there was $ 5.3 million of letters of credit outstanding leaving $ 294.7 million available for borrowing under the revolving credit facility.

On February 22, 2024, the Company amended the Credit Agreement to refinance its Term Loan A-1 with an $ 800 million term loan B-1 due February 22, 2031 (“Term Loan B-1”).

The Term Loan B-1 requires $ 2.0 million of principal payments each quarter until the maturity date, at which the remaining unpaid principal amount is due.

The Company recorded approximately $ 11.1 million and $ 2.0 million of Term Loan B-1 debt issuance costs and original issue discount, respectively, which are reflected as a reduction to debt in the Consolidated Balance Sheet and are being amortized as a component of interest expense over the term of the related debt using the effective interest method.

The Term Loan B-1 requires $ 2.0 million of principal payments each quarter until the maturity date, at which point, the remaining unpaid principal amount is due.

The Company recorded approximately $ 11.1 million and $ 2.0 million of Term Loan B-1 debt issuance costs and original issue discount, respectively, which are reflected as a reduction to debt in the Consolidated Balance Sheets, which are being amortized as a component of interest expense over the term of the related debt using the effective interest method.

As a result of the repayment of Term Loan A-1 using the proceeds from Term Loan B-1, the Company also recorded a $ 3.9 million non-cash expense during fiscal 2024 for the write-off of Term Loan A-1 unamortized debt issuance costs to “Interest Expense, net” on the Consolidated Statements of Income.

During fiscal 2024, the Company paid principal amounts of $ 202.5 million and $ 135.0 million on its Term Loan A-2 and Term Loan B-1.

As a result of these payments, the Company has met its quarterly principal payment obligations through the maturity of both term loans.

The Term Loan A-1 interest rate was, and Term Loan A-2 interest rate is, the Secured Overnight Financing Rate (“SOFR”), plus a Credit Spread Adjustment of 10 basis points and a margin from 1.50 % to 2.50 % depending on the Company’s Consolidated Total Net Leverage Ratio, as defined in the Credit Agreement.

The applicable margin on these term loans was 2.25 % during fiscal 2024.

As of October 3, 2025, there was $ 26.0 million outstanding on the Revolving Credit Facility and $ 5.8 million of letters of credit outstanding, leaving $ 268.2 million available for borrowings under the Revolving Credit Facility.

The Term Loan A-2 interest rate is, the Secured Overnight Financing Rate (“SOFR”), plus a Credit Spread Adjustment of 10 basis points and a margin from 1.50 % to 2.50 % depending on the Company’s Consolidated Total Net

Leverage Ratio, as defined in the Credit Agreement.

The applicable margin on Term Loan A-2 was 2.33 % and 2.25 % during fiscal 2025 and fiscal 2024, respectively.

The Term Loan B-1 interest rate is SOFR plus a margin from 2.0 % to 2.25 % depending on the Company’s Consolidated Total Net Leverage Ratio, as defined in the Credit Agreement.

The applicable margin on the Term Loan B-1 was 2.25 % during fiscal 2024.

The weighted-average interest rate for the Company’s senior secured term loans was 7.65 % for fiscal 2024.

During the fiscal year ended September 27, 2024, the Company paid $ 96.8 million of interest on its outstanding principal debt.

The Company did no t have interest payments during the fiscal year ended September 29, 2023.

The Company carries debt at historical cost and discloses fair value.

As of September 27, 2024, the carrying amounts of the Company’s senior secured term loans approximated their fair value as the interest rates are variable and reflective of market rates.

The applicable margin on Term Loan B-1 was 2.25 % and 2.25 % during fiscal 2025 and fiscal 2024, respectively.

The weighted-average interest rate for the Company’s senior secured term loans was 6.79 % and 7.65 % for 2025 and 2024, respectively.

During the fiscal year ended October 3, 2025 and September 27, 2024, the Company paid $ 93.6 million and $ 96.8 million of interest on its outstanding principal debt.

The Company had no interest payments during the fiscal year ended September 29, 2023.

The Company carries its debt at historical cost and discloses fair value.

As of October 3, 2025 and September 27, 2024, the carrying amounts of the Company’s senior secured term loans approximated their fair values, as the interest rates are variable and reflective of market rates.

During fiscal 2024, the Company paid principal amounts of $ 202.5 million and $ 135.0 million on its Term Loan A-2 and Term Loan B-1.

As a result of these payments, the Company met its quarterly principal payment obligations through the maturity of both term loans.

Additionally, during fiscal 2025, the Company made principal repayments of $ 20.0 million on its Term Loan A-2.

The Credit Agreement may be prepaid at any time.

The Credit Agreement requires the Company to prepay outstanding term loans, subject to certain exceptions, with:

Subject to certain exceptions, the Credit Agreement requires the Company to prepay outstanding term loans with:

• 100 % of the net cash proceeds of all non-ordinary course asset sales or other dispositions of collateral subject to certain exceptions and customary reinvestment rights;

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In addition, the Term Loan B-1 is subject to mandatory prepayments using 50 % of the Company’s excess cash flow, with reductions to 25 % and 0 % based upon achievement and maintenance of a secured net leverage ratio of 3.75 :1.00 and 3.25 :1.00, respectively.

All obligations under the Credit Agreement are unconditionally guaranteed by the Company and, subject to certain exceptions, substantially all of the Company’s existing and future wholly-owned domestic material subsidiaries.

All obligations under the Credit Agreement, and the guarantees of those obligations, are secured, subject to customary exceptions, by (i) pledges of 100 % of the capital stock of the Company’s and guarantors’ direct domestic subsidiaries, (ii) pledges of 65 % of the capital stock of the Company’s and guarantors’ direct foreign subsidiaries, and (iii) a security interest in, and mortgages on, substantially all tangible assets of the Company or any of the Guarantors.

Covenants and Covenant Amendment

The Credit Agreement contains a number of covenants that, among other things, restrict, subject to certain exceptions, the Company’s ability and the ability of its restricted subsidiaries to:

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The Credit Agreement also contains certain customary affirmative covenants, such as financial and other reporting, and certain events of default.

The Credit Agreement requires the Company to maintain a maximum Consolidated Total Net Leverage Ratio, defined as consolidated total indebtedness over unrestricted cash divided by Covenant Adjusted EBITDA, not to exceed 5.25 x for any fiscal quarter ending prior to March 31, 2025, and not to exceed 4.50 x for any fiscal quarter ending on or after March 31, 2025, subject to certain exceptions.

Consolidated total indebtedness is defined in the Credit Agreement as total indebtedness consisting of debt for borrowed money, finance leases, disqualified and preferred stock and advances under any Receivables Facility.

Covenant Adjusted EBITDA is defined in the Credit Agreement as consolidated net income increased by interest expense, taxes, depreciation and amortization expense, initial public company costs, restructuring charges, write-offs and noncash charges, non-controlling interest expense, net cost savings in connection with any acquisition, disposition, or other permitted investment under the Credit Agreement, share-based compensation expense, non-recurring or unusual gains and losses, reimbursable insurance costs, cash expenses related to earn outs, and insured losses.

The Credit Agreement establishes a minimum Interest Coverage Ratio, defined as Covenant Adjusted EBITDA divided by consolidated interest expense.

Additionally, the Credit Agreement requires the Company to maintain a maximum Consolidated Total Net Leverage Ratio, defined as consolidated total indebtedness over unrestricted cash divided by Adjusted EBITDA (as defined in the Credit Agreement).

Consolidated total indebtedness is defined in the Credit Agreement as total indebtedness

consisting of debt for borrowed money, finance leases, disqualified and preferred stock and advances under any Receivables Facility.

Adjusted EBITDA is defined in the Credit Agreement as consolidated net income increased by interest expense, taxes, depreciation and amortization expense, initial public company costs, restructuring charges, write-offs and noncash charges, non-controlling interest expense, net cost savings in connection with any acquisition, disposition, or other permitted investment under the Credit Agreement, share-based compensation expense, non-recurring or unusual gains and losses, reimbursable insurance costs, cash expenses related to earn outs, and insured losses.

The Credit Agreement also established a minimum Interest Coverage Ratio, defined as Adjusted EBITDA (as defined in the Credit Agreement) divided by consolidated interest expense.

The minimum Interest Coverage Ratio is required to be at least 2.00 x for the term of the Credit Agreement.

At September 27, 2024, the Company was in compliance with all covenants under the Credit Agreement.

On May 1, 2025, the Company entered into Amendment No.

2 to its Credit Agreement (“Amendment No.

Amendment No.

2 increased the net leverage covenant ratio from 4.50 x to (i) 5.25 x for any fiscal quarter ending prior to July 3, 2026, (ii) 5.00 x for the fiscal quarter ending July 3, 2026 and (iii) 4.75 x for the fiscal quarter ending October 2, 2026.

Pursuant to the Credit Agreement, as amended, the net leverage covenant ratio will remain at 4.50 x for the first quarter of fiscal 2027 through maturity.

Amendment No.

2 also provided a $ 15 million bad debt expense adjustment to EBITDA in the fiscal quarter ended March 28, 2025 solely for the purposes of determining compliance with the financial covenants.

The principal amounts of both the Revolving Credit Facility commitment and the term loans remained unchanged following Amendment No.

As part of Amendment No.

2, the Company agreed to limit the aggregate size of its A/R Facility (as defined in Note 16, Accounts Receivable Securitization Facility ) and any other receivables facilities to $ 250 million and restrict all dividends and share repurchases, in each case until the earlier of (i) any fiscal quarter ending after October 2, 2026 so long as the Company is then in compliance with the financial covenants and (ii) when the Company achieves a net leverage ratio below or equal to 4.50 x as of the last day of two consecutive quarters through the end of fiscal 2026.

In connection with the Amendment No.

2, the Company paid fees of $ 1.6 million, which were deferred and are being amortized on the same basis as the previous unamortized debt issuance costs.

As of October 3, 2025, the Company was in compliance with all covenants under the Credit Agreement.

Debt Maturities

At September 27, 2024, annual maturities on long-term borrowings maturing in the next five fiscal years and thereafter are as follows (in thousands):

At October 3, 2025, annual maturities on long-term borrowings maturing in the next five fiscal years and thereafter are as follows (in thousands):

Thereafter 665,000

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Derivative instruments utilized during the period include pay fixed/receive floating gasoline and diesel fuel agreements based on the Department of Energy weekly retail on-highway index, and pay fixed/receive floating natural gas fuel agreements based on the Henry Hub New York Mercantile Exchange index in order to limit the Company's exposure to price fluctuations for gasoline, diesel, and natural gas fuel mainly for the Company’s operations.

The counterparties to the contractual derivative agreements are all major international financial institutions.

The Company is exposed to credit loss in the event of nonperformance by these counterparties.

The Company continually monitors its positions and the credit ratings of its counterparties, and does not anticipate nonperformance by the counterparties.

The Company did not enter into any new derivative arrangements for the fiscal year ended September 27, 2024.

As of September 27, 2024, all derivative arrangements had reached maturity and thus, no derivative instruments were recognized as either assets or liabilities on the Consolidated Balance Sheet.

The corresponding impact on earnings related to the contractual derivative arrangements have been recorded within the Consolidated Statement of Income for the fiscal year ended September 27, 2024.

Additionally, prior to the Separation the impact on earnings related to the contractual derivative arrangements were allocated to the Company and recorded within the Combined Statements of Income for the fiscal years ended September 29, 2023 and September 30, 2022.

The counterparties to the contractual derivative agreements were all major international financial institutions.

The Company did not enter into any new derivative arrangements during the fiscal year ended October 3, 2025 or September 27, 2024, and as of September 27, 2024, all derivative arrangements had reached maturity and thus, no derivative instruments were recognized as either assets or liabilities on the Consolidated Balance Sheets.

The corresponding impact on earnings related to the contractual derivative arrangements were recorded within the Consolidated Statement of Income for the fiscal year ended September 27, 2024.

Additionally, prior to the Separation the impact on earnings related to the contractual derivative arrangements were allocated to the Company and recorded within the Combined Statement of Income for the fiscal year ended September 29, 2023.

Derivatives not Designated in Hedging Relationships

The Company does not record its gasoline, diesel and natural gas fuel agreements as hedges for accounting purposes.

As of September 27, 2024, the Company did not have fuel contracts outstanding.

As of October 3, 2025, the Company had no fuel contracts outstanding.

The impact on earnings related to the change in fair value of these contracts related to the Company was a gain of $ 0.1 million for fiscal 2024.

on earnings related to the change in fair value of these unsettled contracts related to the Company was a gain of $ 1.6 million for fiscal 2023 and a loss of $ 4.6 million for fiscal 2022.

The following table summarizes the location of realized and unrealized loss (gain) for the Company’s derivatives not designated as hedging instruments in the Consolidated and Combined Statements of Income (in thousands):

The impact on earnings related to the change in fair value of these unsettled contracts related to the Company was a gain of $ 1.6 million for fiscal 2023.

The following table summarizes the location of realized and unrealized losses for the Company’s derivatives not designated as hedging instruments in the Consolidated and Combined Statements of Income (in thousands):

Fiscal Year Ended

Income Statement Location September 27, 2024 September 29, 2023 September 30, 2022

Income Statement Location October 3, 2025 September 27, 2024 September 29, 2023

Gasoline, diesel and natural gas fuel agreements Cost of services provided (exclusive of depreciation and amortization) $ — $ 2,580 $ 3,488

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Fiscal Year Ended

September 27, 2024 September 29, 2023 September 30, 2022

October 3, 2025 September 27, 2024 September 29, 2023

United States:

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The Company expenses sales commissions as incurred if the amortization period is one year or less.

As of September 27, 2024 and September 29, 2023, the Company has $ 105.8 million and $ 104.4 million, respectively, of employee sales commissions recorded as assets within “Other Assets” on the Company’s Consolidated and Combined Balance Sheets.

During the fiscal years ended September 27, 2024, September 29, 2023 and September 30, 2022, the Company recorded $ 21.1 million, $ 20.1 million and $ 19.2 million, respectively, of expense related to employee sales commissions within “Selling, general and administrative expenses” on the Consolidated and Combined Statements of Income.

As of October 3, 2025 and September 27, 2024, the Company had $ 107.1 million and $ 105.8 million, respectively, of employee sales commissions recorded as assets within “Other Assets” and “Other Current Assets” on the Company’s Consolidated Balance Sheets.

During fiscal 2025, fiscal 2024 and fiscal 2023, the Company recorded $ 22.3 million, $ 21.1 million and $ 20.1 million, respectively, of expense related to employee sales commissions within “Selling, general and administrative expenses” on the Consolidated and Combined Statements of Income.

The Company has lease arrangements primarily related to real estate, vehicles and equipment, which generally have terms of one to 20 years.

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A right-of-use asset and corresponding lease liability are not recorded for leases with an initial term of 12 months or less (“short-term leases”).

The Company recognizes operating lease liabilities and operating lease right-of-use assets on its Consolidated and Combined Balance Sheets.

Operating lease right-of-use assets represent the Company’s right to use the underlying assets for the lease term, and operating lease liabilities represent the Company’s obligation to make lease payments arising from

The Company recognizes operating lease liabilities and operating lease right-of-use assets on its Consolidated Balance Sheets.

Operating lease liabilities and operating lease right-of-use assets are recognized at the lease commencement date based on the estimated present value of the lease payments over the lease term.

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As the Company’s leases typically do not provide an implicit rate, the present value of our lease liability is determined using an incremental borrowing rate based on the information available as of the lease commencement date.

The following table summarizes the location of the operating and finance leases in the Company’s Consolidated and Combined Balance Sheets (in thousands), as well as the weighted average remaining lease term and weighted average discount rate:

Leases Balance Sheet Location September 27, 2024 September 29, 2023

The following table summarizes the location of the operating and finance leases in the Company’s Consolidated Balance Sheets (in thousands), as well as the weighted average remaining lease term and weighted average discount rate:

Leases Balance Sheet Location October 3, 2025 September 27, 2024

Operating Operating Lease Right-of-use Assets $ 85,108 $ 73,530

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Fiscal Year Ended

Lease Cost Income Statement Location September 27, 2024 September 29, 2023 September 30, 2022

Lease Cost Income Statement Location October 3, 2025 September 27, 2024 September 29, 2023

Operating lease cost :

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(1) Excludes variable lease costs, which are immaterial.

Supplemental cash flow information related to leases for the period reported is as follows (in thousands):

Supplemental cash flow information related to leases for the periods reported is as follows (in thousands):

Fiscal Year Ended

September 27, 2024 September 29, 2023 September 30, 2022

October 3, 2025 September 27, 2024 September 29, 2023

Cash paid for amounts included in the measurement of lease liabilities:

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For fiscal 2023, excludes cash paid for variable and short-term lease costs of $ 9.9 million and $ 8.2 million, respectively, that are not included within the measurement of lease liabilities.

Additionally, for fiscal 2024, includes $ 4.5 million of cash received for reimbursements of tenant improvement allowances.

Future minimum lease payments under non-cancelable leases as of September 27, 2024 are as follows (in thousands):

Additionally, for fiscal 2025 and 2024, includes $ 0.1 million and $ 4.5 million, respectively, of cash received for reimbursements of tenant improvement allowances.

Future minimum lease payments under non-cancelable leases as of October 3, 2025 are as follows (in thousands):

Operating leases Finance leases Total

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The Company’s participation in these plans for fiscal 2025 is outlined in the table below.

The “EIN/Pension Plan Number” column provides the Employee Identification Number (EIN) and the three-digit plan number, if applicable.

The “EIN/Pension Plan Number” column provides the Employer Identification Number (EIN) and the three-digit plan number, if applicable.

Unless otherwise noted, the most recent Pension Protection Act (PPA) zone status available in 2025 and 2024 is for the plans’ two most recent fiscal year-ends.

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There have been no significant changes that affect the comparability of fiscal 2025, fiscal 2024 and fiscal 2023 contributions.

contributions by the Company were recorded in “Cost of services provided (exclusive of depreciation and amortization)” and “Selling, general and administrative expenses” on the Consolidated and Combined Statements of Income.

The contributions by the Company were recorded in “Cost of services provided (exclusive of depreciation and amortization)” and “Selling, general and administrative expenses” on the Consolidated and Combined Statements of Income.

Pension Protection Act Zone Status Contributions by the Company (in thousands)

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__________________

(1) Over 60 % of the Company’s participants in this fund are covered by a single CBA that expires on 5/22/2026.

(1) Over 60 % of the Company’s participants in this fund are covered by a single CBA that expires on May 22, 2026.

The Company provided more than 5% of the total contributions for the following plans and plan years:

Funds Contributions to the plan exceeded more than 5% of total contributions (as of the plan’s year-end)

National Retirement Fund 12/31/2023, 12/31/2022, and 12/31/2021

National Retirement Fund 12/31/24, 12/31/2023, 12/31/2022

Retail, Wholesale and Department Store International Union and Industry Pension Fund 12/31/24, 12/31/23, 12/31/2022

COMMITMENTS AND CONTINGENCIES:

The Company has capital and other purchase commitments of approximately $ 5.8 million at September 27, 2024, primarily in connection with commitments for the purchase of raw materials from vendors.

From time to time, the Company and its subsidiaries are a party to various legal actions, proceedings and investigations involving claims incidental to the conduct of their business or otherwise related to the Company, including actions by customers, employees, government entities and third parties, including under federal, state, international, national, provincial and local employment laws, wage and hour laws, discrimination laws, immigration laws, human health and safety laws, import and export controls and customs laws, environmental laws, false claims or whistleblower statutes, tax codes, antitrust and competition laws, customer protection statutes, procurement regulations, intellectual property laws, supply chain laws, the Foreign Corrupt Practices Act and other anti-corruption laws, lobbying laws, motor carrier safety laws, data privacy and security laws, or alleging negligence and/or breaches of contractual and other obligations.

Based on information currently available, advice of counsel, available insurance coverage, established reserves and other resources, except as set forth below with respect to the shareholder class action lawsuits and shareholder derivative action lawsuit, the Company does not believe that any such actions are likely to be, individually or in the aggregate, material to its business, financial condition, results of operations or cash flows.

The Company has capital and other purchase commitments of approximately $ 6.2 million at October 3, 2025, primarily in connection with commitments for the purchase of raw materials from vendors.

From time to time, the Company and its subsidiaries are party to various legal actions, proceedings and investigations involving claims incidental to the conduct of their business or otherwise related to the Company, including

actions by customers, employees, acquisition counterparties, government entities and third parties, including under federal, state, international, national, provincial and local employment laws, wage and hour laws, discrimination laws, immigration laws, human health and safety laws, import and export controls and customs laws, environmental laws, false claims or whistleblower statutes, tax codes, antitrust and competition laws, customer protection statutes, procurement regulations, intellectual property laws, supply chain laws, the Foreign Corrupt Practices Act and other anti-corruption laws, lobbying laws, motor carrier safety laws, data privacy and security laws, or alleging negligence and/or breaches of contractual and other obligations.

Based on information currently available, advice of counsel, available insurance coverage, established reserves and other resources, except as set forth below with respect to the shareholder class action lawsuits and shareholder derivative action lawsuits, the Company does not believe that any such actions are likely to be, individually or in the aggregate, material to its business, financial condition, results of operations or cash flows.

However, in the event of unexpected further developments, it is possible that the ultimate resolution of these matters, or other similar matters, if unfavorable, may be materially adverse to the Company’s business, financial condition, results of operations or cash flows.

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The Company initially provides for estimated costs of environmental-related activities relating to its past operations and third-party sites for which commitments or clean-up plans have been developed and when such costs can be reasonably estimated based on industry standards and professional judgment.

These estimated costs, which are mostly undiscounted,

are determined based on currently available facts regarding each site.

These estimated costs, which are mostly undiscounted, are determined based on currently available facts regarding each site.

If the reasonably estimable costs can only be identified as a range and no specific amount within that range can be determined more likely, the minimum of the range is used.

The Company continuously assesses its potential liability for investigation and remediation-related activities and adjusts its environmental-related accruals as information becomes available upon which more accurate costs can be reasonably estimated.

As of September 27, 2024 and September 29, 2023, the Company has $ 6.6 million and $ 6.8 million, respectively, recorded as liabilities within “ Accrued expenses and other current liabilities ” and $ 19.0 million and $ 17.3 million, respectively, recorded as liabilities within “ Other Noncurrent Liabilities ” on the Company’s Consolidated and Combined Balance Sheets.

As of October 3, 2025 and September 27, 2024, the Company has $ 9.8 million and $ 6.6 million, respectively, recorded as liabilities within “ Accrued expenses and other current liabilities ” and $ 22.2 million and $ 19.0 million, respectively, recorded as liabilities within “ Other Noncurrent Liabilities ” on the Company’s Consolidated Balance Sheets.

The Company records the fair value of a liability for an asset retirement obligation both as an asset and a liability when there is a legal obligation associated with the retirement of a tangible long-lived asset and the liability can be reasonably estimated.

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Using investigative, remediation and disposal methods that are currently available to the Company, the estimated costs of these obligations were accrued.

As of September 27, 2024 and September 29, 2023, the Company has $ 11.8 million and $ 12.3 million, respectively, recorded as liabilities within “Other Noncurrent Liabilities” on the Company’s Consolidated and Combined Balance Sheets.

As of October 3, 2025 and September 27, 2024, the Company has $ 12.0 million and $ 11.8 million, respectively, recorded as liabilities within “Other Noncurrent Liabilities” on the Company’s Consolidated Balance Sheets.

On May 13, 2022, Cake Love Co.

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(“Q-Mark” and, together with Cake Love, the “Plaintiffs”).

Plaintiffs allege that the defendants increased certain pricing charged to members of the purported class without the proper notice required by service agreements between AmeriPride and members of the purported class and that AmeriPride breached the duty of good faith and fair dealing.

Plaintiffs seek damages on behalf of the purported class representing the amount of the allegedly improperly noticed price increases along with attorneys’ fees, interest and costs.

In the third quarter of fiscal 2024, the parties reached a settlement in principle, subject to court approval.

The settlement includes, among other terms, a monetary component of $ 3.1 million.

The full amount of the proposed settlement has been provided for in the Consolidated Financial Statements.

Plaintiffs alleged that the defendants increased certain pricing charged to members of the purported class without the proper notice required by service agreements between AmeriPride and members of the purported class and that AmeriPride breached the duty of good faith and fair dealing.

Plaintiffs sought damages on behalf of the purported class representing the amount of the allegedly improperly noticed price increases along with attorneys’ fees, interest and costs.

During fiscal 2024, the parties reached a settlement in principle, which was subject to court approval.

The settlement included, among other terms, a monetary component of $ 3.1 million.

On May 6, 2025, the court issued an order granting approval of the settlement.

The full amount of the settlement was provided for within “Accrued expenses and other current liabilities” in the Consolidated Balance Sheet as of September 27, 2024 and, during fiscal 2025, all amounts due were paid.

With respect to the below matters, the Company cannot predict the outcome of these legal matters, nor can it predict whether any outcome may be materially adverse to its business, financial condition, results of operations or cash flows.

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The lawsuit is purportedly brought on behalf of purchasers of Vestis’ common stock between October 2, 2023 and May 1, 2024, inclusive.

The complaint alleges claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, based on allegedly false or misleading statements generally related to the Company’s business and operations, pricing practices, and financial results and outlook.

The complaint alleges claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934,

based on allegedly false or misleading statements generally related to the Company’s business and operations, pricing practices, and financial results and outlook.

The lawsuit seeks unspecified damages and other relief.

On September 23, 2024, the Court appointed co-lead plaintiffs.

On October 30, 2024, the Court entered an amended scheduling order.

On September 23, 2024, the Court appointed co-lead plaintiffs and on November 22, 2024, plaintiffs filed an amended complaint.

Defendants filed a motion to dismiss the amended complaint on February 25, 2025.

A hearing on the motion to dismiss took place on August 29, 2025.

On September 30, 2025, the Court entered an order denying defendants’ motion to dismiss.

On October 30, 2025, Defendants filed answers to the amended complaint and fact discovery has commenced.

On June 4, 2024, a purported Vestis shareholder commenced a putative class action lawsuit against Vestis, in the Court of Chancery of the State of Delaware, captioned O’Neill v.

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On October 11, 2024, Vestis and the other consolidated defendants filed an omnibus motion to dismiss.

On July 10, 2024, a purported Vestis shareholder commenced a derivative action against Vestis’ directors and certain of its officers, in the United States District Court for the Northern District of Georgia, captioned Hollin v.

The Court held a hearing on the omnibus motion to dismiss on May 14, 2025 and Vestis is awaiting the Court’s decision.

On May 16, 2025 and August 8, 2025, respectively, purported Vestis shareholders commenced derivative actions against certain of Vestis’ current and former directors and former officers, in the United States District Court for the Northern District of Georgia.

The cases are captioned Gribe v.

Scott, et al., Case No.

1:25-cv-02726-TWT and Hollin v.

Scott, et al., Case No.

Case 1:25-cv-04498-TWT.

Both complaints seek unspecified damages on behalf of Vestis and certain other relief, such as certain reforms to corporate governance and internal procedures.

The complaints (in which Vestis is named as a nominal defendant) contain similar allegations to the parallel securities class action, entitled Plumbers, Pipefitters and Apprentices Local No.

112 Pension Fund v.

Vestis Corporation, et al., Case No.

1:24-cv-02175-SDG.

The complaint seeks unspecified damages on behalf of Vestis and certain other relief, such as certain reforms to corporate governance and internal procedures.

The complaint (in which Vestis is named as a nominal defendant) generally alleges, among other things, breaches of fiduciary duties in connection with the oversight of Vestis’ public statements and internal controls, and that Vestis was damaged as a result of the breaches of fiduciary duties.

The complaint also alleges, among other things, violations of Section 10(b) of the Securities Exchange Act of 1934, aiding and abetting breach of fiduciary duty, unjust enrichment, and waste of corporate assets.

The complaints generally allege, among other things, breaches of fiduciary duties in connection with the oversight of Vestis’ public statements and internal controls, and that Vestis was damaged as a result of the breaches of fiduciary duties.

The complaints also allege, among other things, claims against the individual defendants for unjust enrichment, abuse of control, gross mismanagement, waste of corporate assets, and claims against Vestis' former officers for contribution under Section 10(b) of the Securities Exchange Act of 1934.

On June 17, 2025, prior to the filing of the Hollin complaint, the parties to the Gribe action made a joint application to stay the action pending resolution of the motion to dismiss filed in the Plumbers, Pipefitters and Apprentices Local No.

112 Pension Fund v.

Vestis Corporation, et al., case.

On June 18, 2025, the Court granted the parties’ joint application and stayed the action pending further order of the Court.

On September 9, 2025, Gribe and Hollin made a motion to consolidate their cases, to appoint lead counsel, and to stay the consolidated derivative action.

On September 11, 2025, the Court granted the motion, thereby:

(i) consolidating the Gribe and Hollin cases under the caption In re Vestis Corporation Derivative Litigation, Case No.

1:25-cv-02726-TWT, (ii) appointing lead counsel for the consolidated derivative action, and (iii) staying the consolidated derivative action pending further order of the Court.

On October 21, 2025, two additional purported Vestis shareholders, Bruce Harms and Thomas Dove, filed their own complaints (see descriptions below) and then subsequently filed a motion to vacate the leadership structure provided by the Court’s September 11, 2025 order.

That motion to vacate is currently pending.

On October 30, 2025, plaintiff Hollin voluntarily dismissed his case against the Company in the consolidated derivative action, which the court approved on October 31, 2025.

On June 9, 2025, a purported Vestis shareholder commenced a putative class action lawsuit against Vestis and certain of its former officers, in the United States District Court for the Southern District of New York, captioned Torres v.

Vestis Corporation, et al., Case No.

1:25-cv-04844.

The lawsuit is purportedly brought on behalf of purchasers of Vestis’ common stock between May 2, 2024 and May 6, 2025, inclusive.

The complaint alleges claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, based on allegedly false or misleading statements generally related to our business and operations, pricing practices, and financial results and outlook.

The lawsuit seeks unspecified damages and other relief.

Motions for appointment as lead plaintiff and lead counsel were filed with the Court on August 8, 2025.

On August 25, 2025, the Court appointed the Board of Trustees of the Police Officers’ Retirement Plan and Trust Fund for the City of Miramar (“City of Miramar”) to serve as lead plaintiff and also appointed lead counsel.

The City of Miramar filed a first amended complaint on October 24, 2025.

Defendants have 60 days from the filing of the amended complaint to move, answer or otherwise respond to the amended complaint.

On July 29, 2025 and August 5, 2025, respectively, purported Vestis shareholders commenced derivative actions against certain of Vestis’ current and former directors and former officers, in the United States District Court for the Southern District of New York.

The cases are captioned Gribe v.

Scott, et al., Case No.

1:25-cv-06234 and Hollin v.

Scott, et al., Case No.

1:25-cv-06414.

Both complaints seek unspecified damages on behalf of Vestis and certain other relief, such as certain reforms to corporate governance and internal procedures.

The complaints (in which Vestis is named as a nominal

defendant) contain similar allegations to the parallel securities class action pending in the same court, entitled Board of Trustees of the Police Officers’ Retirement Plan and Trust Fund for the City of Miramar v.

Vestis Corporation, et al.

(formerly Torres v.

Vestis Corporation, et al.), Case No.

1:25-cv-04844.

The complaints also allege, among other things, claims against the individual defendants for violation of Section 14(a) of the Exchange Act, unjust enrichment, abuse of control, gross mismanagement, waste of corporate assets, and claims against Vestis' former officers for contribution under Section 10(b) of the Securities Exchange Act of 1934.

On August 22, 2025, Gribe and Hollin made a motion to consolidate their cases, to appoint lead counsel, and to stay the consolidated derivative action.

On August 26, 2025, the Court granted the motion, thereby:

(i) consolidating the Gribe and Hollin cases under the caption In re Vestis Corporate Derivative Litigation, Case No.

1:25-cv-06234-GHW, (ii) appointing lead counsel for the consolidated derivative action, and (iii) staying the consolidated derivative action pending further order of the Court.

On October 29, 2025, plaintiff Hollin filed a notice of voluntary dismissal of his case against the Company.

On November 13, 2025, the Court entered an order dismissing Hollin’s individual claims from the consolidated derivative action.

On September 10, 2025 and October 6, 2025, respectively, purported Vestis shareholders commenced derivative actions against certain of Vestis’ current and former directors and former officers, in the United States District Court for the Northern District of Georgia.

Those cases are captioned Harms v.

Scott, et al., Case No.

1:25-cv-05156-TWT and Dove v.

Scott, et al., Case No.

1:25-cv-057331-TWT.

Both complaints seek unspecified damages on behalf of Vestis and certain other relief, such as certain reforms to corporate governance and internal procedures.

The complaints (in which Vestis is named as a nominal defendant) contain similar allegations to the securities class actions, entitled Plumbers, Pipefitters and Apprentices Local No.

112 Pension Fund v.

Vestis Corporation, et al., Case No.

1:24-cv-02175-SDG, also pending in the Northern District of Georgia and Board of Trustees of the Police Officers’ Retirement Plan and Trust Fund for the City of Miramar v.

Vestis Corporation, et al., Case No.

1:25-cv-04844, pending in the United States District Court for the Southern District of New York.

The complaints also allege, among other things, claims against the individual defendants for violation of Section 14(a) of the Exchange Act, aiding and abetting breach of fiduciary duty, unjust enrichment, waste of corporate assets, and claims against Vestis' former officers for contribution under Sections 10(b) and 21A of the Securities Exchange Act of 1934.

In the consolidated derivative action entitled In re Vestis Corporation Derivative Litigation, Case No.

1:25-cv-02726-TWT (described above), Harms and Dove filed a motion to vacate the leadership structure ordered by the court, on September 11, 2025.

That motion to vacate is currently pending.

BUSINESS SEGMENTS:

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Corporate includes administrative expenses not specifically allocated to an individual segment.

The Company evaluates the performance of each operating segment based on several factors of which the primary financial measure is operating income.

The accounting policies of the operating segments are the same as those described in Note 1 "Nature of Business, Basis of Presentation and Summary of Significant Accounting Policies".

Financial information by segment is as follows (in thousands):

Fiscal Year Ended

Revenue September 27, 2024 September 29, 2023 September 30, 2022

United States $ 2,555,922 $ 2,575,352 $ 2,447,027

Canada 249,898 249,934 239,978

$ 2,805,820 $ 2,825,286 $ 2,687,005

Fiscal Year Ended

Operating Income (Loss) September 27, 2024 September 29, 2023 September 30, 2022

United States $ 264,709 $ 303,762 $ 242,971

Canada 8,162 13,707 18,008

Total Segment Operating Income 272,871 317,469 260,979

The CODM (the Chief Operating Officer) evaluates the performance of its reportable segments, based primarily on segment operating income, and uses this information to make strategic decisions and to allocate resources.

The accounting policies of the reportable segments are the same as those described in Note 1 "Nature of Business, Basis of Presentation and Summary of Significant Accounting Policies."

Financial information by reportable segment is as follows (in thousands):

United States Canada Total

Year Ended October 3, 2025

Revenue $ 2,489,376 $ 245,463 $ 2,734,839

Cost of services provided (exclusive of depreciation and amortization) 1,831,811 178,271 2,010,082

Depreciation and amortization 131,362 10,051 141,413

Selling, general and administrative expenses 372,192 48,187 420,379

Reportable segment operating income 154,011 8,954 162,965

Corporate and other ( 98,534 )

Gain (Loss) on Sale of Equity Investments, net ( 2,784 )

Interest Expense, Net ( 92,264 )

Other (Expense) Income, net ( 13,689 )

(Loss) Income Before Income Taxes $ ( 44,306 )

Capital expenditures $ 54,563 $ 3,897 $ 58,460

Property and equipment - Reportable Segments $ 573,709 $ 74,171 $ 647,880

- Corporate 15,582

Total Operating Income $ 157,951 $ 217,909 $ 192,243

Fiscal Year Ended

Reconciliation to Income Before Income Taxes September 27, 2024 September 29, 2023 September 30, 2022

Total Operating Income $ 157,951 $ 217,909 $ 192,243

Gain on Sale of Equity Investment, net — ( 51,831 ) —

- Total $ 663,462

Total assets - Reportable Segments $ 2,605,553 $ 263,805 $ 2,869,358

- Corporate 37,542

- Total $ 2,906,900

United States Canada Total

Year Ended September 27, 2024

Revenue $ 2,555,922 $ 249,898 $ 2,805,820

Cost of services provided (exclusive of depreciation and amortization) 1,811,089 178,783 1,989,872

Depreciation and amortization 129,201 11,331 140,532

Selling, general and administrative expenses 350,923 51,622 402,545

Reportable segment operating income 264,709 8,162 272,871

Corporate and other ( 114,920 )

Gain (Loss) on Sale of Equity Investments, net —

Interest Expense, Net ( 126,563 )

Other (Income) Expense, net ( 642 ) ( 2,099 ) ( 2,264 )

Other (Expense) Income, net 642

Income Before Income Taxes $ 32,030

Fiscal Year Ended

Depreciation and Amortization September 27, 2024 September 29, 2023 September 30, 2022

United States $ 129,201 $ 125,167 $ 122,347

Canada 11,331 10,819 11,484

Corporate 249 518 521

$ 140,781 $ 136,504 $ 134,352

Fiscal Year Ended

Capital Expenditures September 27, 2024 September 29, 2023 September 30, 2022

United States $ 75,112 $ 72,353 $ 72,197

Canada 3,793 5,517 4,252

$ 78,905 $ 77,870 $ 76,449

Property and Equipment, net September 27, 2024 September 29, 2023

United States $ 580,060 $ 578,997

Canada 68,138 72,907

Capital expenditures $ 75,112 $ 3,793 $ 78,905

Property and equipment - Reportable Segments $ 580,060 $ 68,138 $ 648,198

- Corporate 22,660

$ 670,858 $ 664,531

Total Assets September 27, 2024 September 29, 2023

United States $ 2,629,457 $ 2,863,616

Canada 268,800 266,804

- Total $ 670,858

Total assets - Reportable Segments $ 2,629,457 $ 268,800 $ 2,898,257

- Corporate 34,130

$ 2,932,387 $ 3,157,124

- Total $ 2,932,387

United States Canada Total

Year Ended September 29, 2023

Revenue $ 2,575,352 $ 249,934 $ 2,825,286

Cost of services provided (exclusive of depreciation and amortization) 1,797,371 172,844 1,970,215

Depreciation and amortization 125,167 10,819 135,986

Selling, general and administrative expenses 349,052 52,564 401,616

Reportable segment operating income 303,762 13,707 317,469

Corporate and other ( 99,560 )

Gain (Loss) on Sale of Equity Investments, net 51,831

Interest Expense, Net ( 2,109 )

Other (Expense) Income, net 2,099

Income Before Income Taxes $ 269,730

Capital expenditures $ 72,353 $ 5,517 $ 77,870

No individual customer accounted for more than 10% of revenues

INCOME TAXES:

The components of Income Before Income Taxes by source of income are as follows (in thousands):

The components of (Loss) Income Before Income Taxes by source of income are as follows (in thousands):

Fiscal Year Ended

September 27, 2024 September 29, 2023 September 30, 2022

October 3, 2025 September 27, 2024 September 29, 2023

United States $ ( 51,995 ) $ 24,683 $ 254,027

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$ ( 44,306 ) $ 32,030 $ 269,730

The Provision for Income Taxes consists of (in thousands):

The (Benefit) Provision for Income Taxes consists of (in thousands):

Fiscal Year Ended

September 27, 2024 September 29, 2023 September 30, 2022

October 3, 2025 September 27, 2024 September 29, 2023

Federal $ 5,213 $ 22,949 $ 29,704

7 unchanged sentences

$ ( 4,083 ) $ 11,060 $ 56,572

The Provision for Income Taxes varies from the amount determined by applying the United States Federal statutory rate to Income Before Income Taxes as a result of the following (all percentages are as a percentage of Income Before Income Taxes):

The (Benefit) Provision for Income Taxes varies from the amount determined by applying the United States Federal statutory rate to Income Before Income Taxes as a result of the following (all percentages are as a percentage of (Loss) Income Before Income Taxes):

Fiscal Year Ended

September 27, 2024 September 29, 2023 September 30, 2022

October 3, 2025 September 27, 2024 September 29, 2023

United States statutory income tax rate 21.0 % 21.0 % 21.0 %

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Effective income tax rate 9.2 % 34.5 % 21.0 %

As of September 27, 2024 and September 29, 2023, the components of Deferred Income Taxes are as follows (in thousands):

September 27, 2024 September 29, 2023

As of October 3, 2025 and September 27, 2024, the components of Deferred Income Taxes are as follows (in thousands):

October 3, 2025 September 27, 2024

Deferred tax assets:

18 unchanged sentences

Net deferred tax liability $ 175,574 $ 189,904

Deferred tax assets of $ 1.6 million and $ 0 million as of September 27, 2024 and September 29, 2023, respectively, are included in "Other Assets" on the Consolidated and Combined Balance Sheets.

Deferred tax liabilities of $ 191.5 million and $ 217.6 million as of September 27, 2024 and September 29, 2023, respectively, are included in "Deferred Income Taxes" on the Consolidated and Combined Balance Sheets.

In connection with the Separation, the

Company's net deferred tax liabilities decreased by $ 8.5 million, primarily related to shared-based compensation, inventoriable costs and tax attributes that were not part of the Company while consolidated with Aramark.

Deferred tax assets of $ 1.8 million and $ 1.6 million as of October 3, 2025 and September 27, 2024, respectively, are included in "Other Assets" on the Consolidated Balance Sheets.

Deferred tax liabilities of $ 177.3 million and $ 191.5 million as of October 3, 2025 and September 27, 2024, respectively, are included in "Deferred Income Taxes" on the Consolidated Balance Sheets.

As of each reporting date, the Company considers existing evidence, both positive and negative, that could impact the need for valuation allowances against deferred tax assets.

As of September 27, 2024, the Company has $ 4.7 million of United States foreign tax credit carryforwards from periods prior to the Separation.

As of October 3, 2025, the Company has $ 4.7 million of United States foreign tax credit carryforwards from periods prior to the Separation.

However, the Company maintains a full valuation allowance against these credit carryforwards.

The Company assessed the remaining deferred tax assets and believes it is more-likely-than-not that they are realizable.

As of September 27, 2024, the Company had $ 2 million of tax-effected state net operating loss carryforwards.

As of October 3, 2025, the Company had $ 2.7 million of tax-effected state net operating loss carryforwards.

The earliest expiration of the state net operating loss carryforwards is fiscal 2029 and the Company believes all carryforwards will be utilized prior to expiration.

A reconciliation of the beginning and ending amount of valuation allowances follows (in thousands):

September 27, 2024 September 29, 2023 September 30, 2022

October 3, 2025 September 27, 2024 September 29, 2023

Balance, beginning of year $ 4,662 $ — $ —

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Adjustments to Aramark’s consolidated and combined federal and state tax returns could affect the tax attributes allocated to the Company under the Tax Matters Agreement.

While it is often difficult to predict the timing or resolution of a particular tax matter, the Company does not anticipate any adjustments resulting from United States federal, state or foreign tax audits that would result in a material change to the financial condition or results of operations.

Currently, none of the Company’s income tax returns are under examination by a taxing authority.

With few exceptions, the Company is no longer subject to foreign or state and local tax examinations by tax authorities for fiscal years before 2021.

Undistributed earnings and profits ("E&P") of our foreign subsidiaries amounted to $ 21.7 million as of September 27, 2024.

Undistributed earnings and profits ("E&P") of our foreign subsidiaries amounted to $ 33.5 million as of October 3, 2025.

Currently, $ 33.5 million of the undistributed E&P of our foreign subsidiaries is considered to be indefinitely reinvested and, accordingly, no deferred income taxes have been provided thereon.

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The unrecorded withholding tax on undistributed E&P is not significant to the Consolidated and Combined Financial Statements.

The total amount of unrecognized tax benefits that, if recognized, would impact the effective tax rate, was approximately $ 0.4 million, $ 4.4 million, and $ 3.0 million as of September 27, 2024, September 29, 2023 and September 30, 2022, respectively.

In connection with the Separation, our unrecognized benefits with respect to our uncertain tax positions decreased by $ 4.2 million as these remained the obligation of Aramark under the Tax Matters Agreement.

The total amount of unrecognized tax benefits that, if recognized, would impact the effective tax rate, was approximately $ 0.4 million, $ 0.4 million, and $ 4.4 million as of October 3, 2025, September 27, 2024 and September 29, 2023, respectively.

In connection with the Separation, our unrecognized benefits with respect to our uncertain tax positions decreased by $ 4.2 million during fiscal 2024 as these remained the obligation of Aramark under the Tax Matters Agreement.

A reconciliation of the beginning and ending amount of gross unrecognized tax benefits follows (in thousands):

September 27, 2024 September 29, 2023 September 30, 2022

October 3, 2025 September 27, 2024 September 29, 2023

Balance, beginning of year $ 412 $ 4,392 $ 2,963

Additions based on tax positions taken in the current year 73 195 554

Additions for tax positions taken in prior years — 875 —

Additions (Subtractions) for tax positions taken in prior years ( 51 ) — 875

Separation related adjustments — ( 4,175 ) —

Balance, end of year $ 434 $ 412 $ 4,392

The Company has $ 0.1 million, $ 1.1 million and $ 0.2 million accrued for interest and penalties as of September 27, 2024, September 29, 2023 and September 30, 2022, respectively, in the Consolidated and Combined Balance Sheets.

Interest and penalties related to unrecognized tax benefits are recorded in "Provision for Income Taxes" on the Consolidated and Combined Statements of Income.

It is reasonably possible that the amount of unrecognized benefits with respect to certain of our unrecognized tax positions will change within the next 12 months.

The Company has $ 0.1 million and $ 0.1 million accrued for interest and penalties as of October 3, 2025 and September 27, 2024, respectively, in the Consolidated Balance Sheets.

Interest and penalties related to unrecognized tax benefits are recorded in "(Benefit) Provision for Income Taxes" on the Consolidated and Combined Statements of Income.

It is reasonably possible that the amount of unrecognized benefits with respect to certain of our unrecognized tax positions

will change within the next 12 months.

At this time, the Company does not anticipate the amount of gross unrecognized tax positions to decrease within the next 12 months.

During the fiscal years ended September 27, 2024, September 29, 2023 and September 30, 2022 , the Company paid cash for inco me taxes, net of refunds received, of $ 19.1 million, $ 0.2 million, and $ 3.5 million, respectively.

During fiscal 2025, fiscal 2024 and fiscal 2023 , the Company paid cash for inco me taxes, net of refunds received, of $ 26.5 million, $ 19.1 million, and $ 0.2 million, respectively.

On July 4, 2025, the United States enacted the One Big Beautiful Bill Act (“Act”), a comprehensive legislative package that includes significant changes to federal tax policy.

The Act, among other corporate provisions, includes the permanent extension of 100% bonus depreciation and the repeal of mandatory capitalization of domestic research and experimental expenditures.

The new law has a range of effective dates, with certain changes taking effect in fiscal year 2025 and others that become effective in future periods.

For the provisions effective for the fiscal year ended October 3, 2025, the Company included the beneficial impacts of the Act.

SHARE-BASED COMPENSATION:

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All awards granted under Aramark Stock Plan were approved by Aramark’s Compensation Committee of the Board of Directors or another committee authorized by Aramark’s Board of Directors.

The following disclosure for the fiscal years ended September 29, 2023 and September 30, 2022 represents share-based compensation attributable to the Company based on the awards and terms previously granted to Company employees under Aramark’s share-based payment plans and is representative of only those employees who are dedicated to the Company.

Stock compensation expense for FY 2023 in the following table represents share-based compensation attributable to the Company based on the awards and terms previously granted to Company employees under Aramark’s share-based payment plans and is representative of only those employees who were dedicated to the Company.

Share-based compensation expense allocated to the Company for Aramark corporate employees who were not dedicated to the Company are included as a component of General Corporate Expenses.

The allocation of share-based compensation expense for Aramark corporate employees was $ 3.9 million and $ 4.2 million, respectively in fiscal 2023 and 2022.

The following table summarizes the share-based compensation expense (reversal) and related information for Time-Based Options (“TBOs”), Time-Based Restricted Stock Units (“RSUs”), Performance Stock Units (“PSUs”), Deferred Stock Units (“DSUs”) and Employee Stock Purchase Plan (“ESPP”) classified as “Selling, general and administrative expenses” on the Consolidated and Combined Statements of Income (in thousands).

The allocation of share-based compensation expense for the Aramark corporate employees was $ 3.9 million in fiscal 2023.

The following table summarizes the share-based compensation expense (reversal) and related information for time-based options (“TBOs”), time-based restricted stock units (“RSUs”), performance stock units (“PSUs”), deferred stock units (“DSUs”) and the Employee Stock Purchase Plan (“ESPP”) classified as “Selling, general and administrative expenses” on the Consolidated and Combined Statements of Income (in thousands).

Fiscal Year Ended

September 27, 2024 September 29, 2023 September 30, 2022

October 3, 2025 September 27, 2024 September 29, 2023

$ 4,688 $ 3,960 $ 1,125

4 unchanged sentences

__________________

(1) Share-based compensation expense for TBOs increased during fiscal 2024 compared to fiscal 2023 due to an increase in annual grants issued in fiscal 2024 compared to fiscal 2023.

(2) Share-based compensation expense for RSUs decreased during fiscal 2024 compared to fiscal 2023 due to a decrease in annual grants in fiscal 2024 compared to prior years.

(3) Share-based compensation expense for PSUs increased during fiscal 2024 compared to fiscal 2023 due to an increase in annual grants issued in fiscal 2024 compared to fiscal 2023.

(4) Share-based compensation expense related to DSUs increased during fiscal 2024 compared to fiscal 2023 due to the issuance of new DSU grants in fiscal 2024.

(1) The increase in share-based compensation expense related to TBOs during both fiscal 2025 and fiscal 2024 compared to the respective prior year were each due to increases in grants in those years, when compared with the respective prior period.

(2) Share-based compensation expense for RSUs increased in fiscal 2025 compared to fiscal 2024 due to an increase in the number of RSU grants in fiscal 2025.

The decrease during fiscal 2024 compared to fiscal 2023 was due to a decrease in RSU awards in fiscal 2024 compared to prior years.

(3) Share-based compensation expense for PSUs decreased in fiscal 2025 due to adjustments to reflect expected payouts.

The increase during fiscal 2024 compared to fiscal 2023 was due to an increase in grants issued in fiscal 2024 compared to fiscal 2023.

(4) No DSUs were granted in fiscal 2025 or fiscal 2023.

(5) Share-based compensation expense related to the ESPP decreased during fiscal 2024 compared to fiscal 2023 as the Company does not have an ESPP.

(5) The Company does not currently have an ESPP.

No compensation expense was capitalized.

The Company records forfeitures as they occur.

The below table summarizes the unrecognized compensation expense as of September 27, 2024 related to non-vested awards and the weighted-average period they are expected to be recognized:

The below table summarizes the unrecognized compensation expense as of October 3, 2025 related to non-vested awards and the weighted-average period they are expected to be recognized:

Unrecognized Compensation Expense

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The Company granted TBOs to the Company's executives and directors on October 2, 2023.

Additionally, the Company’s annual TBO grants for fiscal 2024 were awarded in December 2023.

Aramark’s annual TBO grants for fiscal 2023 were awarded in November 2022, while Aramark’s annual TBO grants for fiscal 2022 were awarded in November 2021.

The fiscal 2024 and 2022 TBO grants vest solely based upon continued employment over a three-year time period.

Additionally, the Company’s annual TBO grants for fiscal 2025 and fiscal 2024 were awarded in November 2024 and December 2023, respectively.

Aramark’s annual TBO grants for fiscal 2023 were awarded in November 2022.

The fiscal 2025 and fiscal 2024 TBO grants vest solely based upon continued employment over a three-year time period.

The fiscal 2023 TBO grants vest solely based upon continued employment over a four-year time period.

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The fair value of the TBOs granted was estimated using the Black-Scholes option pricing model.

For fiscal 2024 TBO grants, the expected volatility was derived from a peer group’s historical volatility as Vestis did not have sufficient historical volatility based on the expected term of the underlying options.

For fiscal 2023 and 2022 TBO grants, the expected volatility is based on the historic volatility of Aramark’s stock price over the expected term of the stock options.

For fiscal 2024 TBO grants, the expected dividend yield was 0.0% for the October 2, 2023 grants as the Company had not declared a dividend prior to the grant date, and was 0.8 % for the December 6, 2023 grants based on the dividend announced by the Company on November 29, 2023.

For the fiscal 2025 and fiscal 2024 TBO grants, the expected volatility was derived from a peer group’s historical volatility as Vestis did not have sufficient historical volatility based on the expected term of the underlying options.

For the fiscal 2023 TBO grants, the expected volatility was based on the historic volatility of Aramark’s stock price over the expected term of the stock options.

For the fiscal 2025 TBO grants, the expected dividend yield was between 0.87 % and 1.18 %.

For the fiscal 2024 TBO grants, the expected dividend yield was 0.0 % for the October 2, 2023 grants as the Company had not declared a dividend prior to the grant date, and was 0.8 % for the December 6, 2023 grants based on the dividend announced by the Company on November 29, 2023.

The expected life represents the period of time that options granted are expected to be outstanding and is calculated using the simplified method, as permitted under SEC rules and regulations, due to the method providing a reasonable estimate in comparison to actual experience.

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The unvested TBOs are subject to forfeiture if employment is terminated other than due to death, disability or retirement, and the TBOs are nontransferable while subject to forfeiture.

Cash received from TBOs exercised for the fiscal year ended September 27, 2024 was $ 0.1 million.

No cash was received from the exercise of stock options for the fiscal year ended October 3, 2025.

For the fiscal year ended September 27, 2024, cash received from TBOs exercised was approximately $ 0.1 million.

The table below presents the weighted average assumptions and related valuations for TBOs.

Fiscal Year Ended

September 27, 2024 September 29, 2023 September 30, 2022

October 3, 2025 September 27, 2024 September 29, 2023

Expected volatility 31.3 % - 31.8 %

Expected dividend yield 0.0 % - 0.8 %

32.3 % - 33.5 %

Expected dividend yield 0.9 % - 1.2 %

1.0 % - 1.2 %

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Outstanding at September 27, 2024 1,928 $ 19.20 $ 44 8.4

Exercisable at September 27, 2024 273 $ 18.24 $ 44 4.8

Expected to vest at September 27, 2024 1,655 $ 19.35 $ — 9.0

Granted 1,104 $ 15.78

Exercised ( 23 ) $ 14.33

Forfeited and expired ( 1,666 ) $ 18.60

Outstanding at October 03, 2025 1,343 $ 17.28 $ — 8.0

Exercisable at October 03, 2025 196 $ 18.76 $ — 5.6

Expected to vest at October 03, 2025 1,147 $ 16.95 $ — 8.5

__________________

(1) On October 2, 2023 our common stock began regular-way trading on the New York Stock Exchange (“NYSE”).

(1) On October 2, 2023, our common stock began trading on the New York Stock Exchange (“NYSE”).

The shares outstanding as of October 2, 2023 pertain to Aramark equity awards issued by Aramark in prior periods to employees of the Company that were converted to Vestis equity awards as part of the Separation.

Fiscal Year Ended

September 27, 2024 September 29, 2023 September 30, 2022

October 3, 2025 September 27, 2024 September 29, 2023

Total intrinsic value exercised (in thousands) $ 25 $ 63 $ 2,040

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Time-Based Restricted Stock Units

The Company granted RSUs to the Company's executives and directors on October 2, 2023.

Additionally, the Company’s annual RSU grants for fiscal 2024 were awarded in December 2023.

Aramark’s annual RSU grants for fiscal 2023 were awarded in November 2022, while Aramark’s annual RSU grants for fiscal 2022 were awarded in November 2021.

For RSU grants awarded during fiscal 2024 and fiscal 2022, the RSU agreement provides that 33 % of each grant will vest and be settled in shares on each of the first three anniversaries of the date of grant, subject to the participant’s continued employment through each such anniversary.

For RSU grants awarded in fiscal 2023, the RSU agreement provides that 25 % of each grant will vest and be settled in shares on each of the first four anniversaries of the grant date, subject to the participant’s continued employment through each such anniversary.

The grant-date fair value of RSUs granted in fiscal 2024 is based on the fair value of the Company’s common stock.

The grant-date fair value of RSUs granted in fiscal 2023 and 2022 is based on the fair value of Aramark’s common stock.

Participants holding RSUs will receive the benefit of any dividends paid on shares in the form of additional RSUs.

The Company granted RSUs to its executives and directors on October 2, 2023.

Additionally, the Company’s annual RSU grants for fiscal 2025 and fiscal 2024 were awarded in November 2024 and December 2023, respectively.

Aramark’s annual RSU grants for fiscal 2023 were awarded in November 2022.

Except for a fiscal 2025 RSU grant to the Company’s Chief Executive Officer and RSUs granted to certain associates on August 25, 2025, RSU agreements for grants awarded during fiscal 2025 and fiscal 2024, provide for vesting and settlement in shares of 33 % of each grant on each anniversary of the grant date, subject to the respective participant’s continued employment through each such anniversary.

For the RSUs granted to the Company’s Chief Executive Officer, the agreement specifies 100 % vesting on the third anniversary of the grant date.

For the RSUs that were granted on August 25, 2025, two-thirds are scheduled to vest on the second anniversary of the grant date, while the remaining one-third is scheduled to vest on the third anniversary of the grant date.

For RSU grants awarded in fiscal 2023, the RSU agreement provides for vesting and settlement in shares of 25 % of each grant on each anniversary of the grant date, subject to the participant’s continued employment through each such anniversary.

The grant-date fair value of RSUs granted in fiscal 2025 and fiscal 2024 were based on the fair value of the Company’s common stock.

The grant-date fair value of RSUs granted in fiscal 2023 were based on the fair value of Aramark’s common stock.

Participants holding RSUs receive the benefit of any dividends paid on shares in the form of

additional RSUs.

The unvested RSUs are subject to forfeiture if employment is terminated other than due to death, disability or retirement, and the RSUs are nontransferable while subject to forfeiture.

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Outstanding at September 27, 2024 838 $ 18.22

Granted 2,195 $ 8.56

Vested ( 484 ) $ 17.95

Forfeited ( 399 ) $ 14.70

Outstanding at October 03, 2025 2,150 $ 9.07

__________________

(1) On October 2, 2023 our common stock began regular-way trading on the New York Stock Exchange (“NYSE”).

(1) On October 2, 2023, our common stock began trading on the New York Stock Exchange (“NYSE”).

Fiscal Year Ended

September 27, 2024 September 29, 2023 September 30, 2022

October 3, 2025 September 27, 2024 September 29, 2023

Total fair value that vested (in thousands) $ 8,680 $ 6,950 $ 9,396

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Additionally, on October 2, 2023 and December 6, 2023 Vestis granted PSUs subject to the level of achievement of cumulative adjusted EBITDA, cumulative adjusted free cash flow conversion rate and a total shareholder return modifier for the cumulative performance period of three years and the participant’s continued employment with Vestis.

Vestis is accounting for the October 2, 2023 grants that do not include a market condition as performance-based awards, with grant date fair value based on the fair value of Vestis' common stock.

Vestis is accounting for the October 2, 2023 and December 6, 2023 grants that include a market condition as performance-based awards, with a market condition, valued utilizing the Monte Carlo Simulation pricing model, which calculates multiple potential outcomes for an award and establishes fair value based on the most likely outcome.

The unvested PSUs are subject to forfeiture if employment is terminated other than due to death, disability or retirement, and the PSUs are nontransferable while subject to forfeiture.

Vestis accounted for the October 2, 2023 grants that did not include a market condition as performance-based awards, with grant date fair value based on the fair value of Vestis' common stock.

Vestis accounted for the October 2, 2023 and December 6, 2023 grants that include a market condition as performance-based awards, with a market condition, valued utilizing the Monte Carlo Simulation pricing model, which calculated multiple potential outcomes for the awards and established fair value based on the most likely outcome, at the time.

Any unvested PSUs are subject to forfeiture if employment is terminated other than due to death, disability or retirement, and the PSUs are nontransferable while subject to forfeiture.

Performance Stock Units Units

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Outstanding at September 27, 2024 698 $ 18.76

Granted 346 $ 16.74

Forfeited ( 394 ) $ 18.14

Outstanding at October 03, 2025 650 $ 17.90

__________________

(1) On October 2, 2023 our common stock began regular-way trading on the New York Stock Exchange (“NYSE”).

(1) On October 2, 2023, our common stock began trading on the New York Stock Exchange (“NYSE”).

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DSUs are issued only to non-employee members of the Board of Directors and represent the right to receive shares of the Company's common stock in the future.

Each DSU will be converted to one share of the Company's common stock on the first day of the seventh month after which such director ceases to serve as a member of the Board of Directors.

Each DSU converts to one share of the Company's common stock on the first day of the seventh month after which such director ceases to serve as a member of the Board of Directors.

The grant-date fair value of DSUs is based on the fair value of the Company's common stock.

On October 2, 2023 the Company granted 65,850 DSUs which vested immediately and 19,208 DSUs which vested January 31, 2024.

On October 2, 2023, the Company granted 65,850 DSUs which vested immediately and 19,208 DSUs which vested on January 31, 2024.

In addition, directors may elect to defer their cash retainer payable in the next calendar year into a fixed income fund which will be paid in cash no less than three years after the cash retainer is deferred or payable upon the first day of the seven th month after which such director ceases to serve as a member of the Board of Directors.

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"Nature of Business, Basis of Presentation and Summary of Significant Accounting Policies", the Separation resulted in the initial issuance of approximately 131.2 million shares of Vestis common stock.

For purposes of computing basic and diluted earnings per common share for the fiscal years ended September 29, 2023 and September 30, 2022, the number of Vestis common shares issued upon completion of the Separation were used to reflect the outstanding shares.

The outstanding shares used in the computation of basic and diluted earnings per common share for the fiscal years ended October 3, 2025, September 27, 2024 and September 29, 2023, include the number of Vestis common shares issued upon completion of the Separation.

The following table sets forth the computation of basic and diluted earnings per share attributable to the Company's stockholders (in thousands, except per share data):

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2024 September 29,

2023 September 30,

Net Income $ ( 40,223 ) $ 20,970 $ 213,158

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Accumulated Other Comprehensive Loss

The changes in each component of accumulated other comprehensive loss, net of tax, for the fiscal years ended September 27, 2024, September 29, 2023 and September 30, 2022 were as follows (in thousands):

Fiscal Year Ended September 29, 2024

The changes in each component of accumulated other comprehensive loss, net of tax, for the fiscal years ended October 3, 2025, September 27, 2024 and September 29, 2023 were as follows (in thousands):

Fiscal Year Ended October 3, 2025

Foreign Currency Translation Pension-related Total Accumulated Other Comprehensive Loss

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Other comprehensive income (loss) ( 6,416 ) ( 450 ) ( 6,866 )

Balance as of September 27, 2024 $ ( 23,812 ) $ ( 5,099 ) $ ( 28,911 )

Amounts reclassified from accumulated other comprehensive income 9,450 — 9,450

Other comprehensive income (loss) 3,034 ( 450 ) 2,584

Balance as of October 3, 2025 $ ( 20,778 ) $ ( 5,549 ) $ ( 26,327 )

Fiscal Year Ended September 27, 2024

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Foreign Currency Translation Pension-related Total Accumulated Other Comprehensive Loss

Balance as of October 01, 2021 $ ( 5,495 ) $ ( 6,111 ) $ ( 11,606 )

Other comprehensive loss before reclassification ( 21,771 ) ( 1,311 ) ( 23,082 )

Amounts reclassified from accumulated other comprehensive loss — 3,008 3,008

Net current period other comprehensive (loss) income ( 21,771 ) 1,697 ( 20,074 )

Balance as of September 30, 2022 $ ( 27,266 ) $ ( 4,414 ) $ ( 31,680 )

For the fiscal year ended September 30, 2022 $ 3.0 million was reclassified from Accumulated other comprehensive loss” in the Combined Balance Sheet and into “Interest expense, net” within the Combined Statement of Income for the wind-up of one of the Company’s defined benefit pension plans.

The Company declared and paid a quarterly cash dividend of $ 0.035 per common share to its shareholders of record for the first, second, and third quarters of fiscal 2024 of $ 4.6 million each quarter.

On August 19, 2024 , the Company announced that its Board of Directors declared a quarterly cash dividend of $ 0.035 per common share payable on October 3, 2024 to shareholders of record at the close of business on September 13, 2024.

The dividend payable of $ 4.6 million was recorded within "Accrued expenses and other current liabilities" on the Consolidated Balance Sheet as of September 27, 2024.

The amount and timing of any future dividend payment is subject to the approval of the Company's Board of Directors.

The Company’s Board of Directors declared a quarterly cash dividend of $ 0.035 per common share payable on January 6, 2025 to shareholders of record at the close of business on December 13, 2024.

Other comprehensive income (loss) 1,162 ( 655 ) 507

Balance as of September 29, 2023 $ ( 26,104 ) $ ( 5,069 ) $ ( 31,173 )

The Company paid dividends in the amount of $ 13.8 million each during fiscal 2025 and fiscal 2024 (each amount representing $ 0.035 per share).

Dividends declared for fiscal 2025 and fiscal 2024 were $ 9.2 million and $ 18.4 million, respectively.

Dividends that were declared in fiscal 2024 and paid in fiscal 2025 of $ 4.6 million were recorded within "Accrued expenses and other current liabilities" on the Consolidated Balance Sheet as of September 27, 2024.

As part of the May 1, 2025 amendment to the Company’s Credit Agreement disclosed in Note 4, Borrowings, the Company agreed to restrict all dividends and share repurchases until the earlier of (i) any fiscal quarter ending after October 2, 2026 so long as the Company is then in compliance with the financial covenants and (ii) when the Company achieves a net leverage ratio below or equal to 4.50 x as of the last day of two consecutive quarters through the end of fiscal 2026.

RELATED PARTY TRANSACTIONS AND PARENT COMPANY INVESTMENT

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Corporate Allocations

The Company’s Combined Financial Statements for the fiscal years ended September 29, 2023 and September 30, 2022 include general corporate expenses of Aramark, which were not historically allocated to the Company for certain support functions that are provided on a centralized basis by Aramark and are not recorded at the Company level, such as expenses related to finance, supply chain, human resources, information technology, share-based compensation, insurance and legal, among others (collectively, “General Corporate Expenses”).

For purposes of these Combined Financial Statements, General Corporate Expenses have been allocated to the Company.

General Corporate Expenses are included in the Combined Statements of Income in “Selling, general and administrative expenses” with the impact related to Aramark’s gasoline, diesel and natural gas derivative agreements included in “Cost of services provided”.

These expenses have been allocated to the Company on the basis of direct usage where identifiable, with the remainder allocated on a pro rata basis of revenues, headcount or other drivers.

Management believes the assumptions underlying the Combined Financial Statements, including the assumptions regarding allocating General Corporate Expenses from Aramark, are reasonable.

Nevertheless, the Combined Financial Statements may not include all of the actual expenses that would have been incurred and may not reflect the Company’s combined results of operations, financial position and cash flows had it been a standalone public company during the periods presented.

The Company’s Combined Financial Statements for fiscal 2023 include general corporate expenses of Aramark, which were not historically allocated to the Company for certain support functions that were provided on a centralized basis by Aramark and are not recorded at the Company level, such as expenses related to finance, supply chain, human resources, information technology, share-based compensation, insurance and legal, among others (collectively, “General Corporate Expenses”).

For purposes of the Combined Financial Statements for the year ended September 29, 2023, General Corporate Expenses were allocated to the Company.

General Corporate Expenses are included in the Combined Statements of Income in “Selling, general and administrative expenses” while the impact related to Aramark’s gasoline, diesel and natural gas derivative agreements are included in “Cost of services provided.” These expenses were allocated to the Company on the basis of direct usage where identifiable, with the remainder allocated based on revenues, headcount or other drivers.

Management believes the assumptions underlying the Combined Financial Statements, including the assumptions regarding allocating General Corporate Expenses from Aramark, were reasonable.

Nevertheless, the

Combined Financial Statements may not include all of the actual expenses that would have been incurred and may not reflect the Company’s combined results of operations, financial position and cash flows had it been a standalone public company during the periods presented.

Actual costs that would have been incurred if the Company had been a standalone public company would depend on multiple factors, including organizational structure and strategic decisions made in various areas, including information technology and infrastructure.

During the years ended September 29, 2023 and September 30, 2022, General Corporate Expenses allocated to the Company were $ 24.4 million and $ 37.5 million, respectively.

During fiscal 2023, General Corporate Expenses allocated to the Company totaled $ 24.4 million.

Transactions with the Parent

In the ordinary course of business, the Company provided uniforms to certain food and support services contracts of Aramark in the United States and Canada, the terms of which were at fair market value.

During the years ended September 29, 2023 and September 30, 2022, these related party revenues were $ 54.6 million and $ 47.6 million, respectively, with related costs of $ 49.7 million and $ 43.3 million, respectively.

Amounts receivable from Aramark for such revenues as of September 29, 2023 were $ 1.2 million.

In the ordinary course of business, the Company provided uniforms related to certain food and support services contracts of Aramark in the United States and Canada, the terms of which were at fair market value.

During fiscal 2023, these related party revenues and related costs were $ 54.6 million and $ 49.7 million, respectively.

Parent Company Investment

All significant intercompany transactions between the Company and Aramark have been included in the Combined Financial Statements for the fiscal years ended September 29, 2023 and September 30, 2022.

The total net effect of these intercompany transactions is reflected in the Combined Statements of Cash Flows as a financing activity and in the Combined Balance Sheets as “Net parent investment.”

All significant intercompany transactions between the Company and Aramark are included in the Combined Financial Statements for fiscal 2023.

The total net effect of these intercompany transactions is reflected in the Combined Statements of Cash Flows as a financing activity.

After Separation

On September 30, 2023, the Separation was completed through the Distribution of the Company’s common stock to Aramark shareholders who held shares of Aramark common stock as of the close of business on September 20, 2023, the record date for the Distribution, which resulted in the issuance of approximately 131.2 million shares of common stock.

As a result of the Distribution, Aramark shareholders received one share of the Company’s common stock for every two shares of common stock, par value $ 0.01 , of Aramark.

As a result of the Distribution, Aramark’s shareholders received one share of the Company’s common stock for every two shares of common stock, par value $ 0.01 , of Aramark.

On October 2, 2023, the Company began trading as an independent, publicly traded company under the stock symbol “VSTS” on the NYSE.

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federal income tax purposes, including specific restrictions on its ability to pursue or enter into acquisition, merger, sale and redemption transactions with respect to the Company’s stock.

Employee Matters Agreement - governs the allocation of liabilities and responsibilities relating to employment matters, employee compensation and benefits plans and programs and other related matters.

For the fiscal year ended September 27, 2024 , the Company paid $ 10.7 million, respectively, to Aramark under the various agreements described above.

As of September 27, 2024, current amounts due from and to Aramark were not material .

Employee Matters Agreement - governs the allocation of liabilities and responsibilities relating to employment matters, employee compensation and benefit plans and programs and other related matters.

For fiscal 2024 , the Company paid $ 10.7 million to Aramark under the various agreements described above.

As of October 3, 2025, current amounts due from and to Aramark, related to the above agreements, were not material .

ACCOUNTS RECEIVABLE SECURITIZATION FACILITY:

On August 2, 2024, Vestis Services, LLC (“Vestis Services”) and certain other subsidiaries (together with Vestis Services, the “Originators”) entered into a three-year $ 250 million accounts receivable securitization facility (the “A/R Facility”).

Under the A/R Facility, the Originators transfer accounts receivable and certain related assets (collectively, the “Receivables”) to VS Financing, LLC, a bankruptcy remote special purpose entity (“SPE”) formed as a wholly-owned subsidiary of Vestis Services, who in turn, may sell Receivables to one or more financial institutions party to the facility

(“Purchasers”).

Transfers of the Receivables from the SPE to the Purchasers are accounted for as a sale of financial assets, and those accounts receivable are derecognized from the consolidated financial statements.

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The A/R Facility is scheduled to terminate on August 2, 2027 , unless terminated earlier pursuant to its terms.

As of September 27, 2024, the total value of accounts receivable sold from SPE to the Purchaser under the A/R Facility and derecognized from the Company's Consolidated Balance Sheet was $ 229.0 million , Additionally, during the year ended September 27, 2024, the Company transferred accounts receivable of $ 585.5 million to the SPE and the Company collected $ 198.7 million of accounts receivable transferre d to the SPE under the A/R Facility.

As of October 3, 2025, the total value of accounts receivable sold from SPE to the Purchaser under the A/R Facility and derecognized from the Company's Consolidated Balance Sheet was $ 202.5 million , Additionally, during the year ended October 3, 2025, the Company transferred accounts receivable of $ 2,529.1 million to the SPE and the Company collected $ 2,561.7 million of accounts receivable transferre d to the SPE under the A/R Facility.

The Company continuously transfers receivables to the SPE and the SPE transfers ownership and control of certain receivables that meet certain qualifying conditions which are sold to the Purchasers in exchange for cash.

Unsold accounts receivable of $ 157.8 million were pledged by the SPE as collateral to the Purchasers as of September 27, 2024.

The Company incurred fees for the A/R Facility of $ 1.7 million for the year ended September 27, 2024, which were reflected within “Other (Income), net ” in the Consolidated Statement of Income.

The fees are due to the Purchaser and relate to the monthly utilization of the A/R Facility.

Additionally, the Company incurred approximately $ 1.4 million of costs in connection with the A/R Facility which are reco rded within “Other Assets” in the Consolidated Balance Sheet and are amortized straight-line to “ Other (Income), net ” over the term of the related A/R Facility.

Cash activity related to the facility is reflected in “Net cash provided by operating activities” in the Consolidated Statement of Cash Flows.

Unsold accounts receivable of $ 151.6 million were pledged by the SPE as collateral to the Purchasers as of October 3, 2025.

The Company incurred fees for the A/R Facility of $ 13.0 million and $ 1.7 million for the year ended October 3, 2025 and September 27, 2024, respectively, which are reflected within “Other Expense (Income), net ” in the Consolidated Statements of Income.

The fees are paid or payable to the Purchaser and relate to the monthly utilization of the A/R Facility.

Additionally, the Company incurred approximately $ 1.4 million of costs in connection with the A/R Facility which were reco rded within “Other Assets” in the Consolidated Balance Sheet and are being amortized on the straight-line basis to “ Other Expense (Income), net ” over the term of the related A/R Facility.

Cash activity related to the A/R Facility is reflected in “Net cash provided by operating activities” in the Consolidated Statements of Cash Flows.

SUBSEQUENT EVENTS:

On October 4, 2024, the Company sold its equity stake in Aramark Uniform Services Japan Corporation for approximately $ 36.8 million.

The Company will use the net proceeds from the transaction towards debt repayment.

During the first quarter of fiscal 2026, we approved and initiated a multi-year business transformation and restructuring plan (the “Plan”) to support the Company’s initiatives to make the Company more agile, efficient and customer focused.

Developed in collaboration with leading third-party advisors, the Plan is structured around three strategic priorities:

Commercial Excellence, Operational Excellence and Asset and Network Optimization.

These priorities establish a clear framework for near-term performance improvement and long-term value creation through disciplined execution, continuous improvement and a relentless focus on serving customers.

Plan implementation has recently begun and is expected to generate annual operating cost savings of at least $ 75 million by the end of fiscal 2026 and to also enhance revenue.

Currently we anticipate that the Plan will be substantially complete by the end of fiscal 2027 and we estimate costs of the Plan to be in the range of $ 25 million to $ 30 million, with approximately $ 20 million related to third-party consulting and support, and up to $ 10 million in severance and related costs.

The estimate of the charges that the Company expects to incur in connection with the Plan, and the timing thereof, are subject to a number of assumptions and actual amounts may differ materially from estimates.

In addition, the Company may incur other charges not currently contemplated due to unanticipated events that may occur, including in connection with the implementation of the Plan.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure .

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data