A：The highlights of Fi House Corporation's fourth quarter and full year fiscal 2026 results include robust top line growth, strong profitability, an organic revenue growth rate of 8.4%, gross margin of 51% for the quarter, operating income as a percent of revenue at 23.2%, and diluted earnings per share of $1.26. For the full year, revenue was $11.26 billion, with organic revenue growth of 8.3%, gross margin at 50.7%, and an operating margin of 23.1% (23.3% adjusted for transaction expenses). Adjusted diluted earnings per share for the year were $4.94, up 12.3% compared to the prior year.

A：The projected revenue for fiscal 2027 is in the range of $12.1 billion to $12.25 billion, indicating a growth of 7.4% to 8.7% over fiscal 2026. The expected adjusted diluted EPS for the fiscal 2027 is between $2.53 and $5.50, representing growth of 8.5% to 11.3% compared to the prior year.

A：The acquisition of Unifirst is pending pending regulatory clearances in the U.S. and Canada and other customary closing conditions. The merger was approved by Unifirst shareholders in June but regulatory processes are still ongoing. The company remains optimistic that the deal will close during the second half of Calendar Year 2023, but will not provide any additional commentary on the process until such time as it is complete.

A：In the fourth quarter, strong results were observed across all business segments with organic growth rates of 13.2% for uniform rental facility services, 10.7% for safety services, and a decrease of 4% for uniform direct sale. The revenue mix for the uniform rental facility services segment included 47% from uniform rental, 20% from dust control, 16% from laundry services, 3% from shop towels, 11% from line including tows, and 3% from catalog sales.

A：Fi House Corporation's value proposition is resonating well in the market, as businesses across various industries seek reliable business partners to manage operations and ensure consistent service. The company serves a diversified customer base and its solutions are widely utilized in strategic, critical markets such as healthcare, hospitality, education, and state local government. This demand creates ongoing opportunities for growth and underscores the company's ability to drive growth across economic cycles.

A：The return of $1.7 billion to shareholders via dividend and share repurchases was significant, representing one of the largest returns of capital for a fiscal year, emphasizing the company's commitment to shareholder return.

A：The fiscal 2027 guidance ranges include revenue and adjusted EPS. The guidance assumes one more work day in fiscal 2027 than in fiscal 2026, constant foreign currency exchange rate, net interest expense around $105 million, and an effective tax rate similar to fiscal 2026. It does not include the impact of future share buybacks or significant economic disruptions.

A：An additional work day in fiscal 2027 compared to 2026 is expected to positively impact total growth by about Ryan points.

A：Moving into fiscal 2027, the company remains encouraged by the momentum in its business and is focused on delivering exceptional service to customers while continuing to invest in the company and its people to support sustainable growth and profitability.

A：The company's historical performance, with 55 out of 57 years of positive results, is seen as a testament to its strategy and its ability to provide critical value to customers in the areas of image safety, cleanliness, and compliance. This track record reflects the company's dedication and commitment to sustainable success.

A：The total addressable market for the company is massive, particularly when GDP is thriving and employment is strong. This indicates that there are virtually endless opportunities for the company as it helps customers run better businesses.

A：The projected growth for fiscal year 2027 is in the guidance range of 30% to 32% incremental margins, which aligns with the company's stated range of 25% to 35%. The guidance implies EPS growth of 10% and is supported by strong top-line revenue growth and operational initiatives that positively impact margins.

A：The company performed well with incremental margins effectively script in the past quarter. The full-year results had incremental margins right at 30%, which is in line with the expectations and guidance for fiscal year 2027. The company feels good about the guidance and approach, despite the non-linear nature of business performance.

A：When projecting future operating margins, the company looks at the range of the revenue guide to arrive at the implied incremental margins. They also consider the impact of energy costs, which have been factored into the guide, and the company has confidence in offsetting any headwinds with operational initiatives. The company's assumptions include an uptick in energy expenses next year, similar to the impact seen in Q4.

A：Customer budgets and purchasing behaviors have been a focus for the company. They were quite pleased with the growth rates achieved for the year and identified the key contributors to growth. Trends in customer behavior and budget allocations are crucial factors for the company's strategic planning and financial outlook for fiscal 2027.

A：The key factors contributing to the company's success and growth include the performance of employee partners, the company's culture acting as a differentiator, the significant market opportunity in North America, and the value proposition's resonance across economic cycles, especially in times of macro uncertainty.

A：The effectiveness of the company's new business strategies is indicated by a strong new business performance and a high rate of customer retention expected to be at or near all-time highs. Additionally, pricing is at or slightly above historical levels, and the penetration of current production across sales is performing well.

A：The company has managed supply chain pressures by focusing on sourcing through multiple vendors and leveraging a diverse geographical supply base, which is a strategic advantage. They have also worked on extracting inefficiencies from the business. The company expects gross margin expansion to be affected by revenue growth, route density, and capacity utilization. While there is some expected variability in gross margins from quarter to quarter, the focus remains on managing material costs and operational efficiencies to drive profitability.

A：The company's strategy for rental business penetration involves establishing relationships with customers through various products and services and expanding those relationships over time. They have had success across all product lines and verticals, without a specific focus on any single area. One example provided shows how a long-standing customer was convinced of the benefits of the rental program and additional products, leading to further penetration in the rental business and cross-selling opportunities.

A：The first aid business grew by 13.2% organically in the recent quarter, outperforming the previous year's growth. The team is executing at a high level, and while the company doesn't disclose too much about new products to maintain a competitive advantage, the businesses, including first aid, are constantly working on improving and adding new products. The first aid business is seeing strong performance as it is able to redirect spending from customers who are seeking better solutions for their needs.

A：The speaker indicates that there will be some variability of gross margin in the fire business moving forward, which may be impacted by revenue mix in a particular quarter. Additionally, as they are building out their national footprint in fire protection and making strategic acquisitions, some of those acquisitions may initially run at productivity numbers and profitability that are far below Cinco, and it will take time to implement their playbook and achieve Simpa performance standards. The upcoming fiscal year will have an N-Sap implementation in fire that is expected to cause a 100 basis point annual headwind for the fire protection business.

A：Automation has historically been a part of the company's business, with their customers and their own internal operations benefiting from it. The company is continuing to automate across its facilities. However, they are not in the technology business, but technology plays a role for them and their customers, especially in manufacturing as opposed to services. The company sees automation as increasingly significant in their customer base, which has shifted from 70% goods-producing to 30% over the past 25 years, while the service sector has grown. They anticipate that as more manufacturing processes get automated, there may be some headwinds, as well as opportunities to redirect those savings to their business and improve service.

A：The speaker mentions that the company's pricing is generally in line with historical levels and is not materially elevated. The company's pricing philosophy is to maintain long-term value for customers, but acknowledges that as a result of persistent and historically high levels of wage increases, price increases may be necessary. However, the company does not view pricing as a large component of their growth strategy and does not take an aggressive approach to it.

A：The company views the fire business as having a massive opportunity to grow into a national platform due to the legal requirement for fire protection, resulting in a 'word beyond massive' market. The fire business is focused on providing services for existing customers and has a significant runway for growth. They are investing appropriately to build a national footprint, facing short-term headwinds on margins but considering the large opportunity. Technology will also play a role in providing value to both their people and customers.

A：The company's CapEx for the year came in at 3.5% of revenue, within the stated range of 3.5 to 4%. While CapEx can vary from quarter to quarter and year to year based on the timing of different initiatives, one such initiative mentioned is operational excellence, which focuses on increasing capacity without investing in capital through process improvement and engineering. Jim also mentioned that operational excellence is centered on increasing production capacity without investing in capital. They expect to maintain the 3 to 3.5% CapEx range in fiscal year 27 and beyond. They do not expect any significant variation in CapEx due to the pending acquisition and are running their business in the normal course, without specifically saving for the acquisition in CapEx.

A：The healthcare business is performing well, growing faster than the average for the company. It is seen as a key vertical with investments in technology and dedicated routing structures contributing to better customer service.

A：Recent investments have led to healthy margin expansion, with an increase of 120 basis points in the last quarter, suggesting that these investments are starting to pay off. However, the company expects incremental investments to be smaller than in the past year and to fluctuate from quarter to quarter while focusing on long-term growth.

A：The company expects to continue investing as it sees opportunities ahead. They anticipate maintaining strong growth, with mid to high single-digit growth rates, margin expansion, and 10 plus percent EPS growth over time, rather than focusing on short-term quarterly performance.

A：The company has an additional workday in fiscal year 27 compared to fiscal year 26, which is expected to result in about 40 basis points on revenue growth. Each quarter has at least one extra workday compared to the prior year, with the exception of the second quarter.

A：The company is focused on business efficiencies and supply chain improvements, which include initiatives to eliminate inefficiencies and run a better business. There is a culture of positive discontent aimed at constant improvement, and the company continually identifies new initiatives to stay competitive and ahead of the market.

A：Visibility on hiring trends is varied across different verticals. While healthcare has been strong, the company also observes performance in other sectors that are doing better than others. They have chosen well in their verticals, which are performing well on the employment side, but they help customers in many different ways, with the customer base demonstrating varied trends.