Aramark (NYSE:ARMK) Q4 2019 Earnings Conference Call - Final Transcript
Nov 19, 2019 • 08:30 am ET
approximately $85 million of one-time costs related to spending on integration and the HCT divestiture closing costs. For the fiscal year, we reduced net debt by $593 million from a combination of free cash flow and approximately $200 million in proceeds from the sale of the Healthcare Technologies business, and that led to a leverage ratio of 3.86 times, that's an improvement of 21 basis points from the prior year.
We ended the year with a noteworthy financial flexibility and no significant maturities due until 2024. We will remain opportunistic about extending the balance sheet maturities and lowering our cost of financing as market conditions warrant. Overall, our performance in 2019 helps build a stronger platform for the future. We are encouraged about the road ahead as we work to accelerate revenue growth, while remaining cognizant of the longer-term opportunities that are still in front of us to improve profitability, grow earnings, increase returns on capital, accelerate free cash flow, and reduce debt.
We will constantly assess the propriety of the current portfolio of businesses as well as our capital allocation decisions and capital structure, and most importantly, we will not be reticent to invest when we have good opportunities to realize and create long-term value for our shareholders.
Now, let me begin with a few items for consideration specific to 2020. First, on revenue, we will take another step forward in simplifying our financials on a year-over-year basis. Starting next quarter, revenue growth will no longer be impacted by the accounting change from ASC 606, and additionally, we will return to using the terminology of organic revenue growth now that we have completely lapped the acquisitions of Avendra and AmeriPride. Second, the 2020 fiscal year and fourth quarter results will contain an extra or a 53rd week when compared to prior-period results. Our guidance provided is based on 52 weeks for year-over-year comparability purposes.
The Company's metrics for organic revenue, adjusted operating income, adjusted net income and adjusted earnings per share growth will be adjusted for the extra week and identified in the non-GAAP reconciliations of financial measures. Prior to the adjustment, the 53rd week is expected to have a full-year benefit of approximately 2% on each of these metrics. However, for free cash flow, the 53rd week, not the full year, will be moderately negative as outflows from an extra week of interest and tax payments, payroll and client commissions offset additional collections, and we will work very diligently to minimize this negative impact over the course of the year.
Finally, our initial outlook for 2020 excludes any significant change to the current set of macroeconomic conditions. With all that said, we currently expect organic revenue growth of approximately 3%and that's expected to consistently improve as the year progresses. Adjusted EPS growth that will benefit from the continued business operating momentum we saw in the latter part of 2019, productivity improvements, and lower interest expense as well as approximately$35 million and further synergy capture from the Avendra and