Vestis Corporation (NYSE:VSTS) Q2 2024 Earnings Call Transcript

Ricky Dillon: Thanks. Yes, we do expect free cash flow to remain strong for the year, consistent with what we talked about. We believe this model and our efforts will allow us to continue to generate cash the way we have in the front half despite the EBITDA reduction. We will continue to focus on working capital that’s driving improved receivables collections and days sales outstanding and continuing our sales and ops planning efforts and used fill rate from a rental product perspective and so reducing that investment in merchandise inventory. Kim talked about the $10 million gain there and the fact that we’re well ahead of our planned rate. So we feel really good about the opportunities we have in the back half to continue to scale and drive incremental free cash flow.

When you look at what are going to be the uses of that cash, we still expect to spend 3% of revenue on CapEx as we discussed. So we’re not changing that. We’ll continue to invest in the business as we talked about before and we do expect to continue to make voluntary debt payments in the back half, leveraging our free cash flow strength as well as we also obviously committed, have been committed to paying the quarterly dividend.

Operator: This concludes the Q&A portion of today’s call. I would now like to turn the floor over to Kim Scott, President and CEO, for closing remarks.

Kimberly Scott: Thank you. I’d like to thank everyone for joining the call today and I want to close by reiterating that we remain fully committed to our strategy, and we are confident in the long-term value creation opportunity here at Vestis. So thank you for joining.

Operator: Thank you. This concludes today’s Vestis Corporation fiscal second quarter 2024 Earnings conference call. Please disconnect your line at this time, and have a wonderful day.