Vestis Corp 10-K

Item 8. Financial Statements and Supplementary Data. INDEX TO THE FINANCIAL STATEMENTS Report of Deloitte & Touche LLP, Independent Registered Public Accounting Firm (PCAOB ID 34 ) 48 Consolidated and Combined Statements of Income for the fiscal years ended October 3, 2025 , September 27, 2024, and September 29, 2023 52 Consolidated and Combined Statements of Comprehensive Income for the fiscal years ended October 3, 2025 , September 27, 2024, and September 29, 2023 53 Consolidated Balance Sheets as of October 3, 2025 and September 27, 2024 54 Consolidated and Combined Statements of Changes in Equity for the fiscal years ended October 3, 2025 , September 27, 2024, and September 29, 2023 55 Consolidated and Combined Statements of Cash Flows for the fiscal years ended October 3, 2025 , September 27, 2024, and September 29, 2023 56 Notes to Consolidated and Combined Financial Statements 57 Note 1. Nature of Business, Basis of Presentation and Summary of Significant Accounting Policies 57 Note 2. Severance 65 Note 3. Goodwill and Other Intangible Assets 66 Note 4. Borrowings 67 Note 5. Derivative Instruments 71 Note 6. Revenue Recognition 71 Note 7. Leases 72 Note 8. Employee Pension and Profit Sharing Plans 74 Note 9. Commitments and Contingencies 75 Note 10. Business Segments 78 Note 11. Income Taxes 80 Note 12. Share-Based Compensation 83 Note 13. Earnings Per Share 87 Note 14. Equity 87 Note 15. Related Party Transactions and Parent Company Investment 88 Note 16. Accounts Receivable Securitization Facility 90 Note 17. Subsequent Events 90 47 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and the Board of Directors of Vestis Corporation Opinion on the Financial Statements 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 These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. 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 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 48 Table of Contents 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 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. 49 Table of Contents /s/ Deloitte & Touche LLP Atlanta, Georgia December 2, 2025 We have served as the Company’s auditor since 2023. 50 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and the Board of Directors of Vestis Corporation 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 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 The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ Deloitte & Touche LLP Atlanta, Georgia December 2, 2025 51 Table of Contents VESTIS CORPORATION 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) 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. 52 Table of Contents 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. 53 Table of Contents 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 ASSETS Current Assets: Cash and cash equivalents $ 29,748 $ 31,010 Receivables (net of allowances: $ 32,677 ; $ 19,804 , respectively) 162,295 177,271 Inventories, net 179,020 164,913 Rental merchandise in service, net 405,625 396,094 Other current assets 73,343 43,981 Total current assets 850,031 813,269 Property and Equipment, at cost: Land, buildings and improvements 565,677 590,972 Equipment 1,172,877 1,168,142 1,738,554 1,759,114 Less - Accumulated depreciation ( 1,075,092 ) ( 1,088,256 ) Total property and equipment, net 663,462 670,858 Goodwill 961,732 963,844 Other Intangible Assets, net 188,837 212,773 Operating Lease Right-of-use Assets 85,108 73,530 Other Assets 157,730 198,113 Total Assets $ 2,906,900 $ 2,932,387 LIABILITIES AND EQUITY Current Liabilities: Current maturities of financing lease obligations $ 35,234 $ 31,347 Current operating lease liabilities 20,189 19,886 Accounts payable 158,362 163,054 Accrued payroll and related expenses 93,897 96,768 Accrued expenses and other current liabilities 101,282 145,047 Total current liabilities 408,964 456,102 Long-Term Borrowings 1,155,143 1,147,733 Noncurrent Financing Lease Obligations 131,071 115,325 Noncurrent Operating Lease Liabilities 77,032 66,111 Deferred Income Taxes 177,337 191,465 Other Noncurrent Liabilities 91,709 52,600 Total Liabilities 2,041,256 2,029,336 Commitments and Contingencies (see Note 9) Equity: 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 1,319 1,315 Additional paid-in capital 937,531 928,082 (Accumulated deficit) retained earnings ( 46,879 ) 2,565 Accumulated other comprehensive loss ( 26,327 ) ( 28,911 ) Total Equity 865,644 903,051 Total Liabilities and Equity $ 2,906,900 $ 2,932,387 Th e accompanying notes are an integral part of these Consolidated and Combined Financial Statements. 54 Table of Contents VESTIS CORPORATION CONSOLIDATED AND COMBINED STATEMENTS OF CHANGES IN EQUITY FOR THE FISCAL YEARS ENDED OCTOBER 3, 2025, SEPTEMBER 27, 2024 AND SEPTEMBER 29, 2023 (in thousands) Common Stock Shares Outstanding Par Value Additional Paid-In Capital Retained Earnings (Accumulated deficit) Net Parent Investment Accumulated Other Comprehensive Loss Total Parent’s Equity 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 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. 55 Table of Contents VESTIS CORPORATION CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS 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 Cash flows from 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) loss on sale of equity investment, net 2,784 — ( 51,831 ) Deferred income taxes ( 13,398 ) ( 19,576 ) 14,370 Share-based compensation expense 11,565 16,336 14,467 Asset write-downs 1,169 980 7,698 (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 — Changes in operating assets and liabilities: Receivables, net 14,002 215,814 ( 23,612 ) Inventories, net ( 13,725 ) 9,868 8,929 Rental merchandise in service, net ( 10,644 ) 3,126 ( 5,334 ) Other current assets ( 25,116 ) ( 2,684 ) 952 Accounts payable ( 267 ) 21,665 ( 32,888 ) Accrued expenses and other current liabilities ( 12,371 ) 80,561 ( 7,928 ) Changes in other noncurrent liabilities 8,540 ( 16,212 ) ( 944 ) Changes in other assets ( 4,031 ) ( 9,482 ) ( 8,715 ) Other operating activities ( 220 ) 33 ( 7,849 ) Net cash provided by operating activities 64,229 471,788 256,977 Cash flows from investing activities: Purchases of property and equipment and other ( 58,460 ) ( 78,905 ) ( 77,870 ) Proceeds from disposals of property and equipment 5,524 5,269 11,180 Proceeds from sale of equity investment 37,659 — 51,869 Other investing activities ( 4,540 ) — 75 Net cash used in investing activities ( 19,817 ) ( 73,636 ) ( 14,746 ) Cash flows from financing activities: Proceeds from long-term borrowings 167,000 798,000 1,500,000 Payments of long-term borrowings ( 161,000 ) ( 1,137,500 ) — Payments of financing lease obligations ( 34,496 ) ( 30,608 ) ( 27,601 ) Dividend payments ( 13,822 ) ( 13,801 ) — Debt issuance costs ( 1,628 ) ( 11,134 ) ( 13,749 ) Other financing activities ( 2,111 ) ( 1,881 ) — Net cash distributions to Parent — ( 6,051 ) ( 1,688,919 ) Net cash used in financing activities ( 46,057 ) ( 402,975 ) ( 230,269 ) Effect of foreign exchange rates on cash and cash equivalents 383 ( 218 ) 353 Increase (Decrease) in cash and cash equivalents ( 1,262 ) ( 5,041 ) 12,315 Cash and cash equivalents, beginning of period 31,010 36,051 23,736 Cash and cash equivalents, end of period $ 29,748 $ 31,010 $ 36,051 The accompanying notes are an integral part of these Consolidated and Combined Financial Statements. 56 Table of Contents VESTIS CORPORATION NOTES TO THE CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS NOTE 1. NATURE OF BUSINESS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: 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. The Company’s customer base participates in a wide variety of industries, including manufacturing, hospitality, retail, government, automotive, healthcare, food processing and pharmaceuticals. The Company serves customers ranging from small, family-owned operations with a single location to large corporations and national franchises with multiple locations. The Company’s customers value the uniforms and workplace supplies it delivers as its services and products can help them reduce operating costs, enhance their brand image, maintain a safe and clean workplace and focus on their core business. The Company leverages its broad footprint and its supply chain, delivery fleet and route logistics capabilities to serve customers on a recurring basis, typically weekly, and primarily through multi-year contracts. In addition, the Company offers customized uniforms through direct sales agreements, typically for large, regional or national companies. The Company manages and evaluates its business activities based on geography and, as a result, determined that its United States and Canada businesses are its operating segments. 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. 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 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’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. Our common stock is listed under the symbol “VSTS” on the NYSE. In connection with the Separation, the Company entered into or adopted several agreements that provide a framework for the relationship between the Company and Aramark. See Note 15. " Related Party Transactions and Parent Company Investment " for more information on these agreements. During the fiscal year ended September 27, 2024 , certain Separation-related adjustments were recorded which included a net increase in total equity of $ 6.4 million. These adjustments primarily consisted of: (a) cash transfers paid to Aramark of $ 6.1 million to settle transactions related to the Separation, and (b) adjustments to the Company's deferred income tax liabilities totaling a $ 12.7 million net increase. Basis of Presentation The Consolidated and Combined Financial Statements (the "Financial Statements") were prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). 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. The assets, liabilities, revenue and expenses of the Company prior to the Separation have been reflected as Combined Financial Statements on a historical cost basis, as included in the consolidated financial statements of Aramark, using the historical accounting policies applied by Aramark. 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 and cash 57 Table of Contents 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 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 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. After the Separation, Vestis became a standalone public company and the Consolidated Financial Statements were prepared in accordance with U.S. GAAP and pursuant to the rules and regulations of the SEC. These Consolidated and Combined Financial Statements reflect, in the opinion of management, all material adjustments (which include only normal recurring adjustments) necessary to fairly state, in all material respects, our financial position, results of operations and cash flows for the periods presented. All intercompany transactions and balances within the Company have been eliminated. Fiscal Year The Company’s fiscal year is the 52- or 53-week period which ends on the Friday nearest to September 30th. 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 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 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 58 Table of Contents 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 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. Other new accounting pronouncements recently issued or newly effective were not applicable to the Company, did not have a material impact on the Consolidated and Combined Financial Statements or are not expected to have a material impact on the Consolidated and Combined Financial Statements. Revenue Recognition The Company generates and recognizes over 95 % of its total revenue from route servicing contracts on both uniforms, which the Company generally manufactures, and workplace supplies, such as mats, towels, and linens that are procured from third-party suppliers. Revenue from these contracts represent a single-performance obligation and are recognized over time as services are performed based on the nature of services provided and contractual rates (output method). The Company generates its remaining revenue primarily from the direct sale of uniforms to customers, with such revenue being recognized when the Company’s performance obligation is satisfied, typically upon the transfer of control of the promised product to the customer. Revenue is recognized in an amount that reflects the consideration the Company expects to be entitled to in exchange for the services or products described above and is presented net of sales and other taxes we collect on behalf of governmental authorities. Certain customer route servicing contracts include terms and conditions that include components of variable consideration, which are typically in the form of consideration paid to a customer based on performance metrics specified within the contract. Some contracts provide for customer discounts or rebates that can be earned through the achievement of specified volume levels. Each component of variable consideration is earned based on the Company’s actual performance during the measurement period specified within the contract. To determine the transaction price, the Company estimates the variable consideration using the most likely amount method, based on the specific contract provisions and known performance results during the relevant measurement period. When assessing if variable consideration should be limited, the Company evaluates the likelihood of whether uncontrollable circumstances could result in a significant reversal of revenue. The Company’s performance period generally corresponds with the monthly invoice period. No significant constraints on the Company’s revenue recognition were applied during fiscal 2025, fiscal 2024 or fiscal 2023. 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 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” (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 The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts in the Consolidated and Combined Financial Statements and accompanying notes. 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 59 Table of Contents historical information, current trends and information available from other sources. Actual results could materially differ from those estimates. Fair Value of Financial Assets and Financial Liabilities 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. The hierarchical levels related to the subjectivity of the valuation inputs are defined as follows: • Level 1 —inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets • Level 2 —inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument • Level 3 —inputs to the valuation methodology are unobservable and significant to the fair value measurement Recurring Fair Value Measurements The Company’s financial instruments consist primarily of cash and cash equivalents, accounts receivable, accounts payable, financing leases and borrowings. Management believes that the carrying value of cash and cash equivalents, accounts receivable, accounts payable, financing leases and borrowings are representative of their respective fair values. All derivatives are recognized as either assets or liabilities on the balance sheet at fair value at the end of each quarter (refer to Note 5. "Derivative Instruments" for additional information). Nonrecurring Fair Value Measurements The Company’s assets measured at fair value on a nonrecurring basis include long-lived assets, indefinite-lived intangible assets and goodwill. The Company reviews the carrying amounts of such assets at least annually or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Any resulting asset impairment would require that the asset be recorded at its fair value. The resulting fair value measurement of the assets are considered to be Level 3 measurements. Acquisitions 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). 60 Table of Contents The summary of the components of comprehensive income (loss) is as follows (in thousands): Fiscal Year Ended 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 (Loss) Income $ ( 40,223 ) $ 20,970 $ 213,158 Pension plan adjustments ( 660 ) 210 ( 450 ) ( 39 ) 9 ( 30 ) ( 884 ) 229 ( 655 ) Foreign currency translation adjustments 3,034 — 3,034 2,292 — 2,292 2,251 ( 1,089 ) 1,162 Other Comprehensive Income (Loss) 2,374 210 2,584 2,253 9 2,262 1,367 ( 860 ) 507 Comprehensive (Loss) Income $ ( 37,639 ) $ 23,232 $ 213,665 Accumulated other comprehensive loss consists of the following (in thousands): October 3, 2025 September 27, 2024 Pension plan adjustments $ ( 5,549 ) $ ( 5,099 ) Foreign currency translation adjustments ( 20,778 ) ( 23,812 ) $ ( 26,327 ) $ ( 28,911 ) Currency Translation The Company’s Canadian subsidiary’s functional currency is the local currency of operations, and the net assets of its Canadian operations are translated into U.S. dollars using current exchange rates. Translation differences are included as a component of accumulated other comprehensive income or loss in equity. Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. Receivables 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 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 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 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 October 3, 2025 September 27, 2024 Balance, beginning of year $ 19,804 $ 25,066 Additions: Charged to Income 56,851 33,705 Reductions: Deductions from Reserves (1) ( 43,978 ) ( 38,967 ) Balance, end of year (2) $ 32,677 $ 19,804 __________________ 61 Table of Contents (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 The Company accounts for transfers of its financial assets in accordance with Accounting Standards Codification ("ASC") Topic No. 860, Transfers and Servicing. When a transfer meets all the requirements for a sale of a financial asset, the Company derecognizes the financial asset. Inventories Inventories are valued at the lower of cost (principally the first-in, first-out method) or net realizable value. The Company records valuation adjustments to its inventories if the cost of inventory on hand exceeds the amount it expects to realize from the ultimate sale or disposal of the inventory. These estimates are based on management’s judgment regarding future demand and market conditions and analysis of historical experience. 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): October 3, 2025 September 27, 2024 Raw Materials $ 41,167 $ 35,210 Work in Process 1,128 959 Finished Goods 136,725 128,744 $ 179,020 $ 164,913 Rental Merchandise in Service Rental merchandise in service represents personalized work apparel, linens and other rental items in service. 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. These factors are critical to determining the amount of rental merchandise in service and related Cost of services provided (exclusive of depreciation and amortization) that are presented in the Consolidated and Combined Financial Statements. 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 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 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. 62 Table of Contents Property and Equipment and Operating Lease Right-of-use Assets Property and equipment are stated at cost and are depreciated over their estimated useful lives on a straight-line basis. When a decision has been made to dispose of property and equipment prior to the end of the previously estimated useful life, depreciation estimates are revised to reflect the use of the asset over the shortened estimated useful life. Gains and losses on dispositions are included in operating results. 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 $ 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 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 “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. “Revenue Recognition”). Computer software costs represent capitalized costs incurred to purchase or develop software for internal use, and are amortized over the estimated useful life of the software, generally a period of three to 10 years. The Company accounts for investments in unconsolidated entities where it exercises significant influence but does not have control, using the equity method. Under the equity method of accounting, the Company recognizes its share of the investee’s net income or loss. 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 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). 63 Table of Contents Other Noncurrent Liabilities “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 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.” Insurance 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. The Captive was subject to regulations within its domicile of Bermuda, including regulations established by the Bermuda Monetary Authority (the “BMA”) relating to levels of liquidity and solvency as such concepts are defined by the BMA. The Captive was in compliance with these regulations as of September 29, 2023. Prior to the Separation, Aramark allocated certain costs associated to the Captive to the Company. The Company did not recognize liabilities related to claims from general liability, automobile liability and workers’ compensation liability on the Combined Balance Sheet as of September 29, 2023 as Aramark’s Captive subsidiary was the primary responsible party related to these obligations. Aramark’s Captive insurance subsidiary had estimated reserves of approximately $ 68.4 million at September 29, 2023 related to claims arising from the Company’s operations. Aramark’s reserves for retained costs associated with Aramark’s casualty program were estimated through actuarial methods, with the assistance of third-party actuaries, using loss development assumptions based on claims history. The Company entered into an independent general liability, automobile liability, workers’ compensation liability insurance policy effec tive September 29, 2023. 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 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. Commitments and Contingencies). 64 Table of Contents Income Taxes The Company’s operations were included in Aramark’s U.S. federal and state tax returns for taxable periods through the Company’s Separation from Aramark on September 30, 2023. With respect to such taxable periods, income taxes on the Company’s financial statements were calculated on a separate tax return basis. Beginning after the Separation, the Company is filing tax returns separate from Aramark, and its deferred taxes and effective tax rates may differ from those of the historical periods. 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 (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. Deferred tax assets and liabilities are measured using enacted tax laws and rates expected to apply to taxable income in the years in which the deferred tax assets or liabilities are expected to be realized or settled. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than fifty percent likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company accounts for deferred income taxes related to executive compensation deductions that are limited by IRC 162(m) by first allocating available tax deductions to stock-based compensation and then cash compensation. The Company elects to treat global intangible low-taxed income (GILTI) inclusions as a current-period expense when incurred. 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 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. Interest Expense, net “Interest Expense, net” as presented in the Consolidated and Combined Statements of Income is primarily comprised of interest expense on borrowings (see Note 4. Borrowings) and interest expense recognized on financing leases (see Note 7. Leases). 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. NOTE 2. SEVERANCE: 65 Table of Contents 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 27, 2024, which are included in “Accrued payroll and related expenses” on the Consolidated Balance Sheets. (dollars in thousands) September 29, 2023 Charges Payments and Other September 27, 2024 Fiscal 2024 Severance $ — $ 5,240 $ ( 2,679 ) $ 2,561 Fiscal 2023 Severance 3,414 — ( 3,272 ) 142 Total $ 3,414 $ 5,240 $ ( 5,951 ) $ 2,703 NOTE 3. GOODWILL AND OTHER INTANGIBLE ASSETS: 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 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 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. 66 Table of Contents 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 Canada 67,607 — ( 2,112 ) 65,495 Total $ 963,844 $ — $ ( 2,112 ) $ 961,732 Changes in total goodwill during fiscal 2024 are as follows (in thousands): September 29, 2023 Acquisitions Translation September 27, 2024 United States $ 896,237 $ — $ — $ 896,237 Canada 67,306 — 301 67,607 $ 963,543 $ — $ 301 $ 963,844 Other intangible assets consist of (in thousands): October 3, 2025 September 27, 2024 Gross Amount Accumulated Amortization Net Amount Gross Amount Accumulated Amortization Net Amount Customer relationship assets $ 387,602 $ ( 214,835 ) $ 172,767 $ 383,887 $ ( 187,699 ) $ 196,188 Trade names 16,070 — 16,070 16,585 — 16,585 $ 403,672 $ ( 214,835 ) $ 188,837 $ 400,472 $ ( 187,699 ) $ 212,773 Customer relationship assets are being amortized principally on a straight-line basis over the expected period of benefit with a weighted average life of approximately 14 years. The Canadian Linen trade name, which is our sole trade name, is an indefinite-lived intangible asset and is not amortized, but is evaluated for impairment at least annually or more frequently if events or changes in circumstances indicate that it is more likely than not that the asset is impaired. 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 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 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 2027 26,500 2028 25,098 2029 24,145 2030 23,167 NOTE 4. BORROWINGS: Long-term borrowings, net, are summarized in the following table (in thousands): 67 Table of Contents 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 Unamortized debt issuance costs ( 11,959 ) ( 13,164 ) Discounts ( 1,398 ) ( 1,603 ) Less - current portion — — Long-term borrowings, net of current portion $ 1,155,143 $ 1,147,733 Credit Agreement On September 29, 2023, the Company and certain of its subsidiaries entered into a credit agreement (the “Credit Agreement”). The Credit Agreement was initially comprised of an $ 800 million term loan A-1 due September 29, 2025 (“Term Loan A-1”), a $ 700 million term loan A-2 due September 29, 2028 (“Term Loan A-2”), and a revolving credit facility available for loans in United States dollars and Canadian dollars with aggregate commitments of $ 300 million and a maturity of September 29, 2028 (the “Revolving Credit Facility”). The Company used approximately $ 1,457 million of the proceeds from the senior secured term loans to transfer cash to Aramark in connection with the separation and distribution. 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 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 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 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. The Revolving Credit Facility is subject to a commitment fee ranging from a rate of 0.20 % to 0.30 % per annum. The actual rate within the range is based on a Consolidated Total Net Leverage Ratio, as defined in the Credit Agreement. 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 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. 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. Interest 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 68 Table of Contents 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 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. Prepayment 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. 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; provided, further, that such prepayment shall only be required to the extent net cash proceeds during the applicable fiscal year exceeds the greater of (a) $ 30,000,000 and (b) 7.5 % of Covenant Adjusted EBITDA; • 100 % of the net cash proceeds of all casualty events with respect to any equipment, fixed assets, or real property constituting collateral; provided, that such prepayment shall only be required to the extent proceeds related to the event exceed $ 10 million and are not reinvested within the reinvestment period; and • 100 % of the net cash proceeds of any incurrence of debt, but excluding proceeds from certain debt permitted under the Credit Agreement. 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. 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: incur additional indebtedness; issue preferred stock or provide guarantees; create liens on assets; engage in mergers or consolidations; sell or dispose of assets; pay dividends, make distributions or repurchase its capital stock; engage in certain transactions with affiliates; make investments, loans or advances; create restrictions on the payment of dividends or other amounts to the Company from its restricted subsidiaries; amend material agreements governing the Company’s or guarantors’ subordinated debt; repay or repurchase any subordinated debt, except as scheduled or at maturity; make certain acquisitions; change the Company’s or its restricted subsidiaries’ fiscal year; and fundamentally change the Company’s or its restricted subsidiaries’ business. The Credit Agreement also contains certain customary affirmative covenants, such as financial and other reporting, and certain events of default. 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 69 Table of Contents 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. On May 1, 2025, the Company entered into Amendment No. 2 to its Credit Agreement (“Amendment No. 2”). 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. 2. 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. Guarantees 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. Debt Maturities At October 3, 2025, annual maturities on long-term borrowings maturing in the next five fiscal years and thereafter are as follows (in thousands): 2026 $ — 2027 — 2028 503,500 2029 — 2030 — Thereafter 665,000 Total $ 1,168,500 70 Table of Contents NOTE 5. DERIVATIVE INSTRUMENTS: Prior to the Separation, Aramark entered into contractual derivative arrangements to manage changes in market conditions related to exposure to fluctuating gasoline, diesel and natural gas fuel prices at the Company. These derivative arrangements transferred in-kind to the Company upon the execution of the Separation and Distribution Agreement between the Company and Aramark, which was effective upon the Separation on September 30, 2023. 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 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 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. 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 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 NOTE 6. REVENUE RECOGNITION: Disaggregation of Revenue The following table presents revenue disaggregated by revenue source (in thousands): Fiscal Year Ended October 3, 2025 September 27, 2024 September 29, 2023 United States: Uniforms $ 957,042 $ 1,037,608 $ 1,067,825 Workplace Supplies 1,532,334 1,518,314 1,507,527 Total United States 2,489,376 2,555,922 2,575,352 Canada: Uniforms $ 91,565 $ 96,864 $ 100,403 Workplace Supplies 153,898 153,034 149,531 Total Canada 245,463 249,898 249,934 Total Revenue $ 2,734,839 $ 2,805,820 $ 2,825,286 71 Table of Contents Contract Balances The Company defers sales commissions earned by its sales force that are considered to be incremental and recoverable costs of obtaining a contract. The deferred costs are amortized using the portfolio approach on a straight-line basis over the average period of benefit, approximately nine years , and are assessed for impairment on a periodic basis. Determination of the amortization period and the subsequent assessment for impairment of the contract cost asset requires judgment. The Company expenses sales commissions as incurred if the amortization period is one year or less. 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. NOTE 7. LEASES: The Company has lease arrangements primarily related to real estate, vehicles and equipment, which generally have terms of one to 20 years. Finance leases primarily relate to vehicles. The Company assesses whether an arrangement is a lease, or contains a lease, upon inception of the related contract. 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 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 lease. 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. Deferred rent, tenant improvement allowances and prepaid rent are included in the operating lease right-of-use asset balances. Lease expense is recognized on a straight-line basis over the expected lease term. The Company has lease agreements with lease and non-lease components. Non-lease components are combined with the related lease components and accounted for as lease components for all classes of underlying assets. Variable lease payments, which primarily consist of real estate taxes, common area maintenance charges, insurance costs and other operating expenses, are not included in the operating lease right-of-use asset or operating lease liability balances and are recognized in the period in which the expenses are incurred. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain they will be exercised or not, respectively. Options to extend lease terms that are reasonably certain of exercise are recognized as part of the operating lease right-of-use asset and operating lease liability balances. The Company is required to discount its future minimum lease payments using the interest rate implicit in the lease or, if that rate cannot be readily determined, the incremental borrowing rate. 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. 72 Table of Contents 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 Assets: Operating Operating Lease Right-of-use Assets $ 85,108 $ 73,530 Finance Property and Equipment, net 144,288 131,041 Total lease assets $ 229,396 $ 204,571 Liabilities: Current Operating Current operating lease liabilities $ 20,189 $ 19,886 Finance Current maturities of financing lease obligations 35,234 31,347 Noncurrent Operating Noncurrent Operating Lease Liabilities 77,032 66,111 Finance Noncurrent Financing Lease Obligations 131,071 115,325 Total lease liabilities $ 263,526 $ 232,669 Weighted average remaining lease term (in years) Operating leases 5.8 6.1 Finance leases 5.8 5.7 Weighted average discount rate Operating leases 6.9 % 6.1 % Finance leases 4.7 % 4.6 % The following table summarizes the location of lease related costs in the Consolidated and Combined Statements of Income (in thousands): Fiscal Year Ended Lease Cost Income Statement Location October 3, 2025 September 27, 2024 September 29, 2023 Operating lease cost : Fixed lease costs Cost of services provided (exclusive of depreciation and amortization) / Selling, general and administrative expenses $ 24,847 $ 23,359 $ 23,119 Variable lease costs Cost of services provided (exclusive of depreciation and amortization) / Selling, general and administrative expenses 12,974 10,447 9,888 Short-term lease costs Cost of services provided (exclusive of depreciation and amortization) / Selling, general and administrative expenses 7,171 8,698 8,175 Finance lease cost (1): Amortization of right-of-use-assets Depreciation and amortization 33,747 31,647 30,360 Interest on lease liabilities Interest Expense, net 7,107 5,784 4,174 Net lease cost $ 85,846 $ 79,935 $ 75,716 __________________ (1) Excludes variable lease costs, which are immaterial. 73 Table of Contents Supplemental cash flow information related to leases for the periods reported is as follows (in thousands): Fiscal Year Ended October 3, 2025 September 27, 2024 September 29, 2023 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases (1) $ 25,224 $ 19,871 $ 24,208 Operating cash flows from finance leases 7,107 5,784 4,174 Financing cash flows from finance leases 34,496 30,608 27,601 Lease assets obtained in exchange for lease obligations: Operating leases 30,441 35,997 12,640 Finance leases 55,625 44,916 42,581 __________________ (1) For fiscal 2025, excludes cash paid for variable and short-term lease costs of $ 13.0 million and $ 7.2 million, respectively, that are not included within the measurement of lease liabilities. For fiscal 2024, excludes cash paid for variable and short-term lease costs of $ 10.4 million and $ 8.7 million, respectively, that are not included within the measurement of lease liabilities. 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 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 2026 $ 27,921 $ 42,293 $ 70,214 2027 24,505 38,710 63,215 2028 20,733 33,196 53,929 2029 16,118 27,875 43,993 2030 11,266 43,643 54,909 Thereafter 25,719 6,159 31,878 Total future minimum lease payments $ 126,262 $ 191,876 $ 318,138 Less: Interest ( 29,041 ) ( 25,571 ) ( 54,612 ) Present value of lease liabilities $ 97,221 $ 166,305 $ 263,526 NOTE 8. EMPLOYEE PENSION AND PROFIT SHARING PLANS: Defined Contribution Retirement Plans In the United States and Canada, the Company maintains qualified contributory defined contribution retirement plans for all Company employees meeting certain eligibility requirements, with Company contributions to the plans based on earnings performance or salary level. The total expense of the above plans for Company employees for fiscal 2025, fiscal 2024 and fiscal 2023 was $ 5.4 million, $ 9.0 million and $ 9.1 million, respectively, which 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. Multiemployer Defined Benefit Pension Plans The Company contributes to a number of multiemployer defined benefit pension plans under the terms of collective-bargaining agreements (“CBAs”) that cover its union-represented employees. The risks of participating in these multiemployer plans are different from single-employer plans in the following respects: 1. Assets contributed to the multiemployer plan by one employer may be used to provide benefits to employees of other participating employers. 74 Table of Contents 2. If a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers. 3. If the Company chooses to stop participating in some of its multiemployer plans, the Company may be required to pay those plans an amount based on the underfunded status of the plan, referred to as a withdrawal liability. The Company’s participation in these plans for fiscal 2025 is outlined in the table below. 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. The zone status is based on information that the Company received from the plan and is certified by the plan’s actuary. Among other factors, plans in the critical and declining zone are generally less than 65% funded and projected to become insolvent in the next 15 or 20 years depending on the ratio of active to inactive participants, plans in the critical zone are generally less than 65% funded, and plans in the green zone are at least 80% funded. The “FIP/RP Status Pending/Implemented” column indicates plans for which a financial improvement plan (FIP) or a rehabilitation plan (RP) is either pending or has been implemented. The contributions columns represent the recurring, required contributions made by the Company, which are typically based upon the number of employees participating within the plan. The last column lists the expiration date(s) of the CBA(s) to which the plans are subject. There have been no significant changes that affect the comparability of fiscal 2025, fiscal 2024 and fiscal 2023 contributions. 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) Pension Fund EIN/Pension Plan Number 2025 2024 FIP/RP Status Pending/ Implemented 2025 2024 2023 Surcharge Imposed Range of Expiration Dates of CBAs National Retirement Fund 13-6130178/ 001 Critical Critical Implemented $ 3,486 $ 3,219 $ 2,994 No 5/10/2024 - 4/7/2028 Central States SE and SW Areas Pension Plan 36-6044243/ 001 Critical Critical Implemented 4,621 4,440 4,213 No 7/19/2024 - 9/22/2028 Retail, Wholesale and Department Store International Union and Industry Pension Fund (1) 63-0708442/ 001 Critical and Declining Critical and Declining Implemented 420 404 413 No 4/18/2025 - 5/22/2026 Local No. 731, I.B. of T. Pension Fund 36-6513567/ 001 Green Green N/A 1,196 1,166 1,129 No 5/1/2026 Other funds 9,932 9,406 9,009 Total contributions $ 19,655 $ 18,635 $ 17,758 __________________ (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: Pension Funds Contributions to the plan exceeded more than 5% of total contributions (as of the plan’s year-end) 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 NOTE 9. COMMITMENTS AND CONTINGENCIES: 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 75 Table of Contents 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. The Company is involved with environmental investigation and remediation activities at certain sites that it currently or formerly owned or operated or to which it sent waste for disposal (including sites which were previously owned and/or operated by businesses acquired by the Company or sites to which such businesses sent waste for disposal). 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. 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 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. The Company has identified certain conditional asset retirement obligations at various current and closed facilities. These obligations relate primarily to asbestos abatement, underground storage tank closures and restoration of leased properties to the original condition. Using investigative, remediation and disposal methods that are currently available to the Company, the estimated costs of these obligations were accrued. 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. (“Cake Love”) commenced a putative class action lawsuit against AmeriPride Services, LLC (“AmeriPride”), a subsidiary of Vestis, in the United States District Court for the District of Minnesota. The lawsuit was subsequently updated to add an additional named plaintiff, Q-Mark Manufacturing, Inc. (“Q-Mark” and, together with Cake Love, the “Plaintiffs”). 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. The Company intends to vigorously defend these matters. On May 17, 2024, a purported Vestis shareholder commenced a putative class action lawsuit against Vestis and certain of its officers, in the United States District Court for the Northern District of Georgia, captioned Plumbers, Pipefitters and Apprentices Local No. 112 Pension Fund v. Vestis Corporation, et al., Case No. 1: 24-cv-02175-SDG. 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, 76 Table of Contents 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 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. Vestis Corp., Case No. 2024-0600-JTL . The lawsuit is purportedly brought on behalf of Vestis’ shareholders. The complaint alleges a single claim for declaratory judgment, seeking to invalidate and void Section II.5(d) of Vestis’ Amended and Restated Bylaws, effective September 29, 2023. On October 7, 2024, the Court granted a stipulation to consolidate multiple related actions involving similar company defendants, including the Vestis action, solely for purposes of adjudicating an omnibus motion to dismiss the complaints in each of those actions. On October 11, 2024, Vestis and the other consolidated defendants filed an omnibus motion to dismiss. 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 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 77 Table of Contents 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 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 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 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 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. NOTE 10. BUSINESS SEGMENTS: The Company manages and evaluates its business activities based on geography and, as a result, determined that its United States and Canada businesses are its operating segments. The United States and Canada operating segments both provide a full range of uniform programs, restroom supply services and first-aid and safety products, as well as ancillary items such as floor mats, towels and linens. The Company’s operating segments are also its reportable segments. Corporate includes administrative expenses not specifically allocated to an individual segment. 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." 78 Table of Contents 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 $ 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 (Expense) Income, net 642 Income Before Income Taxes $ 32,030 Capital expenditures $ 75,112 $ 3,793 $ 78,905 Property and equipment - Reportable Segments $ 580,060 $ 68,138 $ 648,198 - Corporate 22,660 - Total $ 670,858 Total assets - Reportable Segments $ 2,629,457 $ 268,800 $ 2,898,257 - Corporate 34,130 - Total $ 2,932,387 79 Table of Contents 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 NOTE 11. INCOME TAXES: The components of (Loss) Income Before Income Taxes by source of income are as follows (in thousands): Fiscal Year Ended October 3, 2025 September 27, 2024 September 29, 2023 United States $ ( 51,995 ) $ 24,683 $ 254,027 Non-United States 7,689 7,347 15,703 $ ( 44,306 ) $ 32,030 $ 269,730 The (Benefit) Provision for Income Taxes consists of (in thousands): Fiscal Year Ended October 3, 2025 September 27, 2024 September 29, 2023 Current: Federal $ 5,213 $ 22,949 $ 29,704 State and local ( 369 ) 3,283 10,126 Foreign 4,471 4,404 2,372 9,315 30,636 42,202 Deferred: Federal ( 14,310 ) ( 14,899 ) 10,350 State and local ( 139 ) ( 3,019 ) 2,860 Foreign 1,051 ( 1,658 ) 1,160 ( 13,398 ) ( 19,576 ) 14,370 $ ( 4,083 ) $ 11,060 $ 56,572 80 Table of Contents 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 October 3, 2025 September 27, 2024 September 29, 2023 United States statutory income tax rate 21.0 % 21.0 % 21.0 % Increase (decrease) in taxes, resulting from: State income taxes, net of Federal tax benefit 2.1 5.0 3.8 Foreign taxes ( 1.8 ) 2.6 ( 0.1 ) Separation related adjustments ( 5.8 ) ( 2.9 ) — Permanent book/tax differences ( 5.0 ) 3.8 0.3 Nontaxable gain on foreign subsidiary disposition — — ( 4.0 ) Uncertain tax positions ( 0.1 ) 0.7 0.5 Deferred tax on foreign investments — 4.3 — Share-based compensation ( 3.8 ) 3.5 — Tax credits & other 2.6 ( 3.5 ) ( 0.5 ) Effective income tax rate 9.2 % 34.5 % 21.0 % 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: Accruals and allowances 25,351 22,777 Employee compensation 13,478 18,485 Operating lease right-of-use liability 23,316 19,924 Business interest expense carryforward 34,591 16,795 Research and development expenses 9,876 5,622 NOL/credit carryforward and other 8,185 7,290 Deferred tax asset 114,797 90,893 Valuation allowances $ ( 4,662 ) $ ( 4,662 ) Deferred tax asset (net of valuation allowance) 110,135 86,231 Deferred tax liabilities: Property and equipment 65,201 59,461 Other intangible assets including goodwill 90,417 83,247 Rental merchandise in service 82,500 78,542 Operating lease asset 18,767 16,746 Capitalized contract costs 19,061 24,541 Internally developed software 8,072 7,846 Other $ 1,691 $ 5,752 Deferred tax liability 285,709 276,135 Net deferred tax liability $ 175,574 $ 189,904 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. 81 Table of Contents 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 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 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): October 3, 2025 September 27, 2024 September 29, 2023 Balance, beginning of year $ 4,662 $ — $ — Separation related adjustments — 4,662 — Balance, end of year $ 4,662 $ 4,662 $ — Under the Tax Matters Agreement, the Company is responsible for income taxes on prior period returns filed on a separate company basis in state, local, and foreign jurisdictions. Prior to the Separation, the Company was included on Aramark’s United States federal and various state consolidated and combined tax returns that remain the responsibility of Aramark. 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 its 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 $ 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. Upon distribution of those earnings to the U.S. in the form of dividends or otherwise, the Company could be subject to U.S. state and local taxes and withholding taxes payable in various jurisdictions, which may be partially offset by a U.S. foreign tax credit. 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, $ 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): 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 (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 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 82 Table of Contents 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 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. NOTE 12. SHARE-BASED COMPENSATION: On September 30, 2023, Aramark completed the previously announced spin-off of Vestis 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, which resulted in previous Aramark equity awards being converted to Vestis equity awards. Additionally, the Company adopted the Vestis Corporation 2023 Long-Term Incentive Plan (“LTIP”) effective as of September 30, 2023. The Compensation and Human Resources Committee of the Board of Directors approves grants under the LTIP. Under the LTIP, we are authorized to issue up to 15.0 million shares for future Vestis equity awards and issued approximately 1.7 million shares related to the conversion of Aramark equity awards outstanding as of September 30, 2023 into Vestis equity awards upon the Separation from Aramark. Prior to the Separation, the Company had no share-based compensation plans. Certain employees of the Company historically participated in Aramark’s Stock Incentive Plan (“Aramark Stock Plan”) prior to the Separation. 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. 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 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 October 3, 2025 September 27, 2024 September 29, 2023 TBOs (1) $ 4,688 $ 3,960 $ 1,125 RSUs (2) 7,774 6,654 8,013 PSUs (3) ( 897 ) 4,264 866 DSUs (4) — 1,458 — ESPP (5) — — 597 $ 11,565 $ 16,336 $ 10,601 Income tax benefit related to share-based compensation $ 3,342 $ 3,180 $ 2,568 __________________ (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. 83 Table of Contents (4) No DSUs were granted in fiscal 2025 or fiscal 2023. (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 October 3, 2025 related to non-vested awards and the weighted-average period they are expected to be recognized: Unrecognized Compensation Expense (in thousands) Weighted-Average Period (Years) TBOs $ 3,494 1.91 RSUs 14,024 1.83 PSUs $ 256 1.35 Total $ 17,774 Stock Options Time-Based Options The Company granted TBOs to the Company's executives and directors on October 2, 2023. 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. All TBOs remain exercisable for 10 years from the date of grant. The fair value of the TBOs granted was estimated using the Black-Scholes option pricing model. 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. The simplified method uses the midpoint between an option’s vesting date and contractual term. The risk-free rate is based on the United States Treasury security with terms equal to the expected life of the option as of the grant date. Compensation expense for TBOs is recognized on a straight-line basis over the vesting period during which employees perform related services. 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. 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 October 3, 2025 September 27, 2024 September 29, 2023 Expected volatility 31.3 % - 31.8 % 32.3 % - 33.5 % 42.0 % Expected dividend yield 0.9 % - 1.2 % — % - 0.8 % 1.0 % - 1.2 % Expected life (in years) 6.0 - 6.0 6.0 - 6.5 6.3 Risk-free interest rate 4.1 % - 4.4 % 4.1 % - 4.7 % 3.7 % - 4.2 % Weighted-average grant-date fair value $ 6.9 $ 6.5 $ 16.9 84 Table of Contents A summary of TBO activity is presented below: Options Shares (000s) Weighted-Average Exercise Price Aggregate Intrinsic Value ($000s) Weighted-Average Remaining Term (Years) Outstanding at October 2, 2023 (1) 523 $ 18.59 Granted 1,768 $ 19.42 Exercised ( 10 ) $ 13.88 Forfeited and expired ( 353 ) $ 19.57 Outstanding at September 27, 2024 1,928 $ 19.20 $ 44 8.4 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 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 October 3, 2025 September 27, 2024 September 29, 2023 Total intrinsic value exercised (in thousands) $ 25 $ 63 $ 2,040 Total fair value that vested (in thousands) 1,172 774 1,106 Time-Based Restricted Stock Units 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 85 Table of Contents 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. Restricted Stock Units Units (000s) Weighted Average Grant-Date Fair Value Outstanding at October 2, 2023 (1) 850 $ 18.90 Granted 492 $ 17.71 Vested ( 369 ) $ 18.81 Forfeited ( 135 ) $ 19.08 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 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 October 3, 2025 September 27, 2024 September 29, 2023 Total fair value that vested (in thousands) $ 8,680 $ 6,950 $ 9,396 Performance Stock Units Under the LTIP, Vestis is authorized to grant PSUs to its employees. A participant is eligible to become vested in a number of PSUs equal to a percentage, higher or lower, of the target number of PSUs granted based on the level of Vestis’ achievement of the performance condition. During fiscal 2024, Vestis granted PSUs on October 2, 2023 subject to the level of achievement of adjusted EBITDA margin percentage and revenue growth (measured as compound annual growth rate) over three years with no additional market conditions. 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 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 (000s) Weighted Average Grant-Date Fair Value Outstanding at October 2, 2023 (1) 177 $ 21.87 Granted 663 $ 17.86 Vested — $ — Forfeited ( 142 ) $ 18.63 Outstanding at September 27, 2024 698 $ 18.76 Granted 346 $ 16.74 Vested — $ — Forfeited ( 394 ) $ 18.14 Outstanding at October 03, 2025 650 $ 17.90 __________________ 86 Table of Contents (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. Deferred Stock Units 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 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 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. NOTE 13. EARNINGS PER SHARE: Basic earnings per share is computed using the weighted average number of common shares outstanding during the periods presented. Diluted earnings per share is computed using the weighted average number of common shares outstanding adjusted to include the potentially dilutive effect of stock awards. On September 30, 2023, the Company separated from Aramark. As referenced in Note 1. "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. 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): Fiscal Year Ended October 3, 2025 September 27, 2024 September 29, 2023 Earnings: Net Income $ ( 40,223 ) $ 20,970 $ 213,158 Shares: Basic weighted-average shares outstanding 131,751 131,506 130,725 Effect of dilutive securities — 281 — Diluted weighted-average shares outstanding 131,751 131,787 130,725 Basic Earnings Per Share $ ( 0.31 ) $ 0.16 $ 1.63 Diluted Earnings Per Share $ ( 0.31 ) $ 0.16 $ 1.63 Antidilutive securities (1) — 2,337 — __________________ (1) Diluted earnings per share excludes certain shares issuable under share-based compensation plans because the effect would have been antidilutive . NOTE 14. EQUITY: Accumulated Other Comprehensive Loss 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): 87 Table of Contents Fiscal Year Ended October 3, 2025 Foreign Currency Translation Pension-related Total Accumulated Other Comprehensive Loss Balance as of September 27, 2024 $ ( 23,812 ) $ ( 5,099 ) $ ( 28,911 ) Other comprehensive income (loss) ( 6,416 ) ( 450 ) ( 6,866 ) 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 Foreign Currency Translation Pension-related Total Accumulated Other Comprehensive Loss Balance as of September 29, 2023 $ ( 26,104 ) $ ( 5,069 ) $ ( 31,173 ) Other comprehensive income (loss) 2,292 ( 30 ) 2,262 Balance as of September 27, 2024 $ ( 23,812 ) $ ( 5,099 ) $ ( 28,911 ) Fiscal Year Ended September 29, 2023 Foreign Currency Translation Pension-related Total Accumulated Other Comprehensive Loss Balance as of September 30, 2022 $ ( 27,266 ) $ ( 4,414 ) $ ( 31,680 ) Other comprehensive income (loss) 1,162 ( 655 ) 507 Balance as of September 29, 2023 $ ( 26,104 ) $ ( 5,069 ) $ ( 31,173 ) Dividends 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. NOTE 15. RELATED PARTY TRANSACTIONS AND PARENT COMPANY INVESTMENT Prior to Separation Corporate Allocations 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 88 Table of Contents 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 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 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 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’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. In connection with the Separation, the Company entered into or adopted several agreements that provide a framework for the relationship between the Company and Aramark, including, but not limited to the following: Separation and Distribution Agreement - governs the rights and obligations of the parties regarding the distribution following the completion of the separation, including the transfer of assets and assumption of liabilities, and establishes certain rights and obligations between the Company and Aramark following the distribution, including procedures with respect to claims subject to indemnification and related matters. Transition Services Agreement - governs services between the Company and Aramark and their respective affiliates to provide each other on an interim, transitional basis, various services, including, but not limited to, administrative, information technology and cybersecurity support services and certain finance, treasury, tax and governmental function services. The services commenced on the distribution date and terminate no later than 24 months following the distribution date. As of September 27, 2024, the services under the Transition Services Agreement were completed. Tax Matters Agreement - governs the parties’ respective rights, responsibilities and obligations with respect to tax liabilities and benefits, tax attributes, the preparation and filing of tax returns, the control of audits and other tax proceedings and other matters regarding taxes. In addition, the Company is restricted from taking certain actions that could prevent the distribution and certain related transactions from being tax-free for U.S. 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 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 . 89 Table of Contents NOTE 16. 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. Other than collection and administrative responsibilities, Originators have no continuing involvement in the transferred Receivables. The Receivables, once sold to the SPE, are no longer available to satisfy creditors of any Originator in the event of its bankruptcy. These sales are priced at the face value of the relevant accounts receivable less a fair market value discount. The A/R Facility is structured on a revolving basis under which cash collections from Receivables are used to fund additional purchases of Receivables. The future outstanding balance of Receivables that will be sold is expected to vary based on the level of originations and other factors. The Purchasers benefit from the SPE’s guarantee of repayment on Receivables transferred as well as its pledge of additional Receivables as collateral. The Company has agreed to guarantee the performance of the Originators’ respective obligations under the A/R Facility. Neither the Company (except for the SPE referenced above) nor the Originators guarantees the collectability of the Receivables under the A/R Facility. The Company controls and therefore consolidates the SPE in its consolidated financial statements. The A/R Facility is scheduled to terminate on August 2, 2027 , unless terminated earlier pursuant to its terms. 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 $ 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. NOTE 17. SUBSEQUENT EVENTS: 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. 90 Table of Contents Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure . None.