News

Aramark reports second quarter revenue decline, to offer $1.25 in senior notes due 2025

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April 22, 2020

Aramark, a global provider of foodservice, facilities management and uniforms, reported a $325 million decline in the fiscal second quarter in unaudited, preliminary results in conjunction with a proposed offering of debt securities, according to a pair of press releases.

While there was underlying revenue growth in the overall business in the fiscal second quarter, total company revenues decreased approximately $325 million with a corresponding adjusted operating income decline of approximately $70 million related to COVID-19.

To limit this drop through in the coming periods, Aramark implemented at the end of the quarter cost-saving initiatives — including renegotiations of client contracts, salary and other compensation adjustments and reductions to general corporate expenses — that are expected to result in an operating income drop through of approximately 20% in the immediate term with additional flexibility to drive drop through even lower to approximately 15% as future market conditions warrant. 

Aramark also plans to privately offer $1.25 million aggregate principal amount of senior unsecured notes due 2025, according to a press release. The issuer intends to use the net proceeds from the offering for general corporate purposes. 

The offering is being made in reliance upon an exemption from the registration requirements of the Securities Act of 1933, as amended, to investors who are reasonably believed to be qualified institutional buyers in accordance with Rule 144A under the Securities Act or to investors outside the United States in accordance with Regulation S under the Securities Act.