ACCOUNTS RECEIVABLE SECURITIZATION FACILITY

12 Months Ended

Oct. 03, 2025

Debt Disclosure [Abstract]

ACCOUNTS RECEIVABLE SECURITIZATION FACILITY

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 transferred 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 recorded 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.