Vestis (VSTS) risk factors, FY2024 10-K

Operational Risks

1. 01Unfavorable economic conditions have in the past adversely affected, are currently adversely affecting and in the future could adversely affect our business, financial condition or results of operations
2. 02Increases in fuel and energy costs could materially and adversely affect our business, financial condition or results of operations
3. 03Our failure to retain our current customers, renew our existing customer contracts on comparable terms and obtain new customer contracts could adversely affect our business, financial condition or results of operations
4. 04Natural disasters, global calamities, climate change, political unrest and other adverse incidents beyond our control could adversely affect our business, financial condition or results of operations
5. 05Competition in our industry could adversely affect our business, financial condition or results of operations
6. 06We may be adversely affected if customers reduce their outsourcing or use of preferred vendors
7. 07Risks associated with our suppliers and service providers could adversely affect our business, financial condition or results of operations
8. 08Our contracts may be subject to challenge by our customers, which, if determined adversely, could affect our business, financial condition or results of operations
9. 09Our expansion strategy involves risks
10. 10Our international business faces risks that could have an effect on our business, financial condition or results of operations
11. 11Our business may suffer if we are unable to hire and retain sufficient qualified personnel or if labor costs increase
12. 12Continued or further unionization of our workforce may increase our costs and work stoppages could damage our business
13. 13We may incur significant liability as a result of our participation in multiemployer-defined benefit pension plans

Legal, Regulatory, Safety and Security Risks

1. 14If we fail to comply with requirements imposed by applicable law or other governmental regulations, we could become subject to lawsuits, investigations and other liabilities and restrictions on our operations that could significantly and adversely affect our business, financial condition or results of operations
2. 15Environmental regulations may subject us to significant liability and limit our ability to grow
3. 16to the settlement of, actions or claims relating to the handling and disposal of wastes or hazardous materials. We may, in the future, be required to expend material financial amounts to rectify the consequences of any such events
4. 17Unanticipated changes in tax law could adversely impact our financial results
5. 18Our operations and reputation may be adversely affected by disruptions to or breaches of our information systems or if our data is otherwise compromised
6. 19We expect that stakeholder expectations relating to environmental, social and governance (“ESG”) considerations may expose us to liabilities, increased costs, reputational harm and other adverse effects on our business
7. 20We are subject to legal proceedings that may adversely affect our business, financial condition or results of operations

Risks Related to Our Indebtedness

1. 21We have debt obligations that could adversely affect our business and profitability and our ability to meet other obligations
2. 22Our variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly and potentially limit our ability to effectively refinance our indebtedness as it matures
3. 23indebtedness and may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful
4. 24Our debt agreements contain restrictions that limit our flexibility in operating our business

Risks related to accounts receivable securitization facility

1. 25Our reliance on an accounts receivable securitization facility subjects us to certain risks that could adversely affect our financial condition and results of operations

Risks Related to the Separation

1. 26We have limited history of operating as an independent company, and our historical financial information prior to the Separation is not necessarily representative of the results that we would have achieved as a separate, publicly traded company and may not be a reliable indicator of our future results
2. 27may be more volatile, and we may need to obtain additional financing from banks, through public offerings or private placements of debt or equity securities, strategic relationships or other arrangements, which may or may not be available and may be more costly
3. 28We are repositioning our brand to remove the Aramark name, which could adversely affect our ability to attract and maintain customers
4. 29We may be affected by restrictions under the tax matters agreement, including on our ability to engage in certain corporate transactions for a two-year period after the Separation, in order to avoid triggering significant tax-related liabilities
5. 30We may be held liable to Aramark if we fail to perform under our agreements with Aramark which may negatively affect our business, financial condition or results of operations
6. 31If there is a determination that the Separation or certain related transactions are taxable for U.S. federal income tax purposes, we could incur significant liabilities pursuant to our indemnification obligations under the tax matters agreement
7. 32Satisfaction of indemnification obligations following the Separation could have a material adverse effect on our cash flows and our business, financial condition or results of operations
8. 33There can be no assurance that we will have access to the capital markets on terms acceptable to us

Risks Related to our Common Stock

1. 34Your percentage of ownership in Vestis may be diluted in the future
2. 35We cannot guarantee the timing, declaration, amount or payment of dividends on our common stock
3. 36Anti-takeover provisions could enable our Board of Directors to resist a takeover attempt by a third party and limit the power of our stockholders
4. 37Our amended and restated certificate of incorporation designate the state courts within the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by Vestis stockholders, which could discourage lawsuits against Vestis and our directors and officers