Cintas Corporation Announces Fiscal 2020 Second Quarter Results
Cintas Corporation (Nasdaq: CTAS) today reported results for its fiscal 2020 second quarter ended November 30, 2019.
Revenue for the second quarter of fiscal 2020 was $1.84 billion, an increase of 7.3% over last year’s second quarter. The organic revenue growth rate, which adjusts for the impacts of acquisitions and foreign currency exchange rate fluctuations, was also 7.3%. The organic revenue growth rate for the Uniform Rental and Facility Services operating segment was 5.8%, and the organic revenue growth rate for the First Aid and Safety Services operating segment was 10.6%.
Gross margin for the second quarter of fiscal 2020 of $852.4 million increased 10.0% from last year’s second quarter. Gross margin as a percentage of revenue was 46.2% for the second quarter of fiscal 2020 compared to 45.1% in the second quarter of fiscal 2019. Uniform Rental and Facility Services operating segment gross margin as a percentage of revenue improved 130 basis points from last year’s second quarter to 46.6%, and the First Aid and Safety Services operating segment gross margin as a percentage of revenue improved 40 basis points to 48.4%.
Operating income for the second quarter of fiscal 2020 of $334.5 million increased 21.3% from last year’s second quarter operating income of $275.6 million. Operating income as a percentage of revenue was 18.1% in the second quarter of fiscal 2020 compared to 16.0% in the second quarter of fiscal 2019. Operating income in the second quarter of fiscal 2019 was impacted by non-recurring integration expenses related to the G&K Services, Inc. (G&K) acquisition of $7.8 million, or 50 basis points.
Net income from continuing operations was $246.4 million for the second quarter of fiscal 2020, and earnings per diluted share (EPS) from continuing operations were $2.27. Net income from continuing operations was $243.0 million in the second quarter of fiscal 2019, and EPS from continuing operations were $2.18. Fiscal 2019 second quarter EPS from continuing operations included a one-time gain on the sale of a cost method investment of $0.47 and non-recurring G&K integration expenses of $0.05.
The following table provides a comparison of fiscal 2020 second quarter EPS to fiscal 2019 second quarter EPS:
|
Three Months Ended |
|||||||||
|
November 30, 2019 |
|
November 30, 2018 |
|
Growth vs. Fiscal 2019 |
|||||
|
|
|
|
|
|
|||||
EPS - continuing operations |
$ |
2.27 |
|
|
$ |
2.18 |
|
|
|
|
G&K integration expenses |
— |
|
|
0.05 |
|
|
|
|||
One-time gain on sale of investment |
— |
|
|
(0.47 |
) |
|
|
|||
EPS excluding above items |
$ |
2.27 |
|
|
$ |
1.76 |
|
|
29.0% |
|
|
|
|
|
|
|
|||||
|
Six Months Ended |
|||||||||
|
November 30, 2019 |
|
November 30, 2018 |
|
Growth vs. Fiscal 2019 |
|||||
|
|
|
|
|
|
|||||
EPS - continuing operations |
$ |
4.60 |
|
|
$ |
4.07 |
|
|
|
|
G&K integration expenses |
— |
|
|
0.09 |
|
|
|
|||
One-time gain on sale of investment |
— |
|
|
(0.47 |
) |
|
|
|||
EPS excluding above items |
$ |
4.60 |
|
|
$ |
3.69 |
|
|
24.7% |
|
Scott D. Farmer, Cintas' Chairman and Chief Executive Officer, stated, "We are pleased with our second quarter and year-to-date performance. The Company is on pace to achieve another year of strong growth in revenue, earnings and cash flow generation. I thank our employee-partners for the consistently high execution that helps get our customers Ready for the Workday™.”
Mr. Farmer added, “Earlier this month, on December 6th, we paid an annual dividend of $2.55 per share, an increase of 24.4% over last year’s annual dividend. We have increased the annual dividend for 36 consecutive years. In the past 10 years, the annual dividend per share increased at a compound annual growth rate of 18.2%.”
Mr. Farmer concluded, “We are increasing our fiscal 2020 financial guidance. We are raising our annual revenue expectations from a range of $7.28 billion to $7.32 billion to a range of $7.29 billion to $7.33 billion and EPS from a range of $8.47 to $8.57 to a range of $8.65 to $8.75. This financial guidance does not include any future share buybacks. It does incorporate the impact of having one less workday in fiscal 2020 compared to fiscal 2019.”
The following table provides a comparison of fiscal 2020 revenue and EPS guidance to fiscal 2019 actual results:
|
Fiscal 2019 |
|
Fiscal 2020 Low End of Range |
|
Growth vs. 2019 |
|
Fiscal 2020 High End of Range |
|
Growth vs. 2019 |
||||||
|
|
|
|
|
|
|
|
|
|
||||||
Fiscal 2020 Revenue Guidance |
|
|
|
|
|
|
|
|
|
||||||
($s in millions) |
|
|
|
|
|
|
|
|
|
||||||
Revenue guidance |
$ |
6,892.3 |
|
|
$ |
7,290.0 |
|
|
5.8% |
|
$ |
7,330.0 |
|
|
6.4% |
|
|
|
|
|
|
|
|
|
|
||||||
Growth on constant workday basis (1) |
|
|
|
|
6.2% |
|
|
|
6.8% |
||||||
|
|
|
|
|
|
|
|
|
|
||||||
Fiscal 2020 Earnings Per Share Guidance |
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||
EPS - continuing operations |
$ |
7.97 |
|
|
$ |
8.65 |
|
|
|
|
$ |
8.75 |
|
|
|
G&K integration expenses |
0.10 |
|
|
— |
|
|
|
|
— |
|
|
|
|||
One-time gain on sale of investment |
(0.47 |
) |
|
— |
|
|
|
|
— |
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
||||||
EPS guidance (2) |
$ |
7.60 |
|
|
$ |
8.65 |
|
|
13.8% |
|
$ |
8.75 |
|
|
15.1% |
(1) |
Fiscal 2020 contains one less workday than fiscal 2019. One less workday negatively impacts revenue growth by 40 basis points. |
|
(2) |
One less workday negatively impacts fiscal 2020 EPS guidance by about $0.06 and EPS growth by about 90 basis points. |
About Cintas
Cintas Corporation helps more than one million businesses of all types and sizes get Ready™ to open their doors with confidence every day by providing a wide range of products and services that enhance our customers’ image and help keep their facilities and employees clean, safe and looking their best. With products and services including uniforms, floor care, restroom supplies, first aid and safety products, fire extinguishers and testing, and safety and compliance training, Cintas helps customers get Ready for the Workday™. Headquartered in Cincinnati, Cintas is a publicly held Fortune 500 company traded over the Nasdaq Global Select Market under the symbol CTAS and is a component of both the Standard & Poor’s 500 Index and the Nasdaq-100 Index.
CAUTION CONCERNING FORWARD-LOOKING STATEMENTS
The Private Securities Litigation Reform Act of 1995 provides a safe harbor from civil litigation for forward-looking statements. Forward-looking statements may be identified by words such as “estimates,” “anticipates,” “predicts,” “projects,” “plans,” “expects,” “intends,” “target,” “forecast,” “believes,” “seeks,” “could,” “should,” “may” and “will” or the negative versions thereof and similar words, terms and expressions and by the context in which they are used. Such statements are based upon current expectations of Cintas and speak only as of the date made. You should not place undue reliance on any forward-looking statement. We cannot guarantee that any forward-looking statement will be realized. These statements are subject to various risks, uncertainties, potentially inaccurate assumptions and other factors that could cause actual results to differ from those set forth in or implied by this Press Release. Factors that might cause such a difference include, but are not limited to, risks inherent with the G&K transaction in the achievement of cost synergies and the timing thereof, including whether the transaction will be accretive and within the expected timeframe and the actual amounts of future integration expenses; the possibility of greater than anticipated operating costs including energy and fuel costs; lower sales volumes; loss of customers due to outsourcing trends; the performance and costs of integration of acquisitions, including G&K; fluctuations in costs of materials and labor including increased medical costs; costs and possible effects of union organizing activities; failure to comply with government regulations concerning employment discrimination, employee pay and benefits and employee health and safety; the effect on operations of exchange rate fluctuations, tariffs and other political, economic and regulatory risks; uncertainties regarding any existing or newly-discovered expenses and liabilities related to environmental compliance and remediation; the cost, results and ongoing assessment of internal controls for financial reporting required by the Sarbanes-Oxley Act of 2002; the effect of new accounting pronouncements; costs of our SAP system implementation; disruptions caused by the inaccessibility of computer systems data, including cybersecurity risks; the initiation or outcome of litigation, investigations or other proceedings; higher assumed sourcing or distribution costs of products; the disruption of operations from catastrophic or extraordinary events; the amount and timing of repurchases of our common stock, if any; changes in federal and state tax and labor laws; and the reactions of competitors in terms of price and service. Cintas undertakes no obligation to publicly release any revisions to any forward-looking statements or to otherwise update any forward-looking statements whether as a result of new information or to reflect events, circumstances or any other unanticipated developments arising after the date on which such statements are made. A further list and description of risks, uncertainties and other matters can be found in our Annual Report on Form 10-K for the year ended May 31, 2019 and in our reports on Forms 10-Q and 8-K. The risks and uncertainties described herein are not the only ones we may face. Additional risks and uncertainties presently not known to us or that we currently believe to be immaterial may also harm our business.
Cintas Corporation
|
|||||||||
|
Three Months Ended |
||||||||
|
November 30,
|
|
November 30,
|
|
%
|
||||
Revenue: |
|
|
|
|
|
||||
Uniform rental and facility services |
$ |
1,469,976 |
|
|
$ |
1,390,778 |
|
|
5.7% |
Other |
373,773 |
|
|
327,490 |
|
|
14.1% |
||
Total revenue |
1,843,749 |
|
|
1,718,268 |
|
|
7.3% |
||
|
|
|
|
|
|
||||
Costs and expenses: |
|
|
|
|
|
||||
Cost of uniform rental and facility services |
784,937 |
|
|
761,119 |
|
|
3.1% |
||
Cost of other |
206,421 |
|
|
181,991 |
|
|
13.4% |
||
Selling and administrative expenses |
517,927 |
|
|
491,671 |
|
|
5.3% |
||
G&K Services, Inc. integration expenses |
— |
|
|
7,847 |
|
|
(100.0)% |
||
|
|
|
|
|
|
||||
Operating income |
334,464 |
|
|
275,640 |
|
|
21.3% |
||
|
|
|
|
|
|
||||
Gain on sale of a cost method investment |
— |
|
|
69,373 |
|
|
(100.0)% |
||
|
|
|
|
|
|
||||
Interest income |
(283 |
) |
|
(391 |
) |
|
(27.6)% |
||
Interest expense |
26,177 |
|
|
24,880 |
|
|
5.2% |
||
|
|
|
|
|
|
||||
Income before income taxes |
308,570 |
|
|
320,524 |
|
|
(3.7)% |
||
Income taxes |
62,127 |
|
|
77,530 |
|
|
(19.9)% |
||
Income from continuing operations |
246,443 |
|
|
242,994 |
|
|
1.4% |
||
(Loss) income from discontinued operations, net of tax |
(323 |
) |
|
19 |
|
|
(1,800.0)% |
||
Net income |
$ |
246,120 |
|
|
$ |
243,013 |
|
|
1.3% |
|
|
|
|
|
|
||||
Basic earnings per share: |
|
|
|
|
|
||||
Continuing operations |
$ |
2.35 |
|
|
$ |
2.25 |
|
|
4.4% |
Discontinued operations |
0.00 |
|
|
0.00 |
|
|
—% |
||
Basic earnings per share |
$ |
2.35 |
|
|
$ |
2.25 |
|
|
4.4% |
|
|
|
|
|
|
||||
Diluted earnings per share: |
|
|
|
|
|
||||
Continuing operations |
$ |
2.27 |
|
|
$ |
2.18 |
|
|
4.1% |
Discontinued operations |
0.00 |
|
|
0.00 |
|
|
—% |
||
Diluted earnings per share |
$ |
2.27 |
|
|
$ |
2.18 |
|
|
4.1% |
|
|
|
|
|
|
||||
Weighted average number of shares outstanding |
103,959 |
|
|
106,475 |
|
|
|
||
Diluted average number of shares outstanding |
107,335 |
|
|
109,874 |
|
|
|
||
Cintas Corporation
|
|||||||||
|
Six Months Ended |
||||||||
|
November 30,
|
|
November 30,
|
|
%
|
||||
Revenue: |
|
|
|
|
|
||||
Uniform rental and facility services |
$ |
2,924,503 |
|
|
$ |
2,765,716 |
|
|
5.7% |
Other |
730,385 |
|
|
650,527 |
|
|
12.3% |
||
Total revenue |
3,654,888 |
|
|
3,416,243 |
|
|
7.0% |
||
|
|
|
|
|
|
||||
Costs and expenses: |
|
|
|
|
|
||||
Cost of uniform rental and facility services |
1,553,613 |
|
|
1,507,572 |
|
|
3.1% |
||
Cost of other |
399,742 |
|
|
358,801 |
|
|
11.4% |
||
Selling and administrative expenses |
1,060,923 |
|
|
996,305 |
|
|
6.5% |
||
G&K Services, Inc. integration expenses |
— |
|
|
12,697 |
|
|
(100.0)% |
||
|
|
|
|
|
|
||||
Operating income |
640,610 |
|
|
540,868 |
|
|
18.4% |
||
|
|
|
|
|
|
||||
Gain on sale of a cost method investment |
— |
|
|
69,373 |
|
|
(100.0)% |
||
|
|
|
|
|
|
||||
Interest income |
(445 |
) |
|
(887 |
) |
|
(49.8)% |
||
Interest expense |
53,498 |
|
|
49,184 |
|
|
8.8% |
||
|
|
|
|
|
|
||||
Income before income taxes |
587,557 |
|
|
561,944 |
|
|
4.6% |
||
Income taxes |
90,302 |
|
|
106,403 |
|
|
(15.1)% |
||
Income from continuing operations |
497,255 |
|
|
455,541 |
|
|
9.2% |
||
Loss from discontinued operations, net of tax |
(323 |
) |
|
(13 |
) |
|
2,384.6% |
||
Net income |
$ |
496,932 |
|
|
$ |
455,528 |
|
|
9.1% |
|
|
|
|
|
|
||||
Basic earnings per share: |
|
|
|
|
|
||||
Continuing operations |
$ |
4.75 |
|
|
$ |
4.21 |
|
|
12.8% |
Discontinued operations |
0.00 |
|
|
0.00 |
|
|
—% |
||
Basic earnings per share |
$ |
4.75 |
|
|
$ |
4.21 |
|
|
12.8% |
|
|
|
|
|
|
||||
Diluted earnings per share: |
|
|
|
|
|
||||
Continuing operations |
$ |
4.60 |
|
|
$ |
4.07 |
|
|
13.0% |
Discontinued operations |
0.00 |
|
|
0.00 |
|
|
—% |
||
Diluted earnings per share |
$ |
4.60 |
|
|
$ |
4.07 |
|
|
13.0% |
|
|
|
|
|
|
||||
Weighted average number of shares outstanding |
103,638 |
|
|
106,652 |
|
|
|
||
Diluted average number of shares outstanding |
107,114 |
|
|
110,257 |
|
|
|
||
CINTAS CORPORATION SUPPLEMENTAL DATA |
|||
Gross Margin Results |
|||
|
Three Months Ended |
||
|
November 30,
|
|
November 30,
|
|
|
|
|
Uniform rental and facility services gross margin |
46.6% |
|
45.3% |
Other gross margin |
44.8% |
|
44.4% |
Total gross margin |
46.2% |
|
45.1% |
Net income margin, continuing operations |
13.4% |
|
14.1% |
|
|
|
|
|
Six Months Ended |
||
|
November 30,
|
|
November 30,
|
|
|
|
|
Uniform rental and facility services gross margin |
46.9% |
|
45.5% |
Other gross margin |
45.3% |
|
44.8% |
Total gross margin |
46.6% |
|
45.4% |
Net income margin, continuing operations |
13.6% |
|
13.3% |
Reconciliation of Non-GAAP Financial Measures and Regulation G Disclosure
The press release contains non-GAAP financial measures within the meaning of Regulation G promulgated by the Securities and Exchange Commission. To supplement its consolidated condensed financial statements presented in accordance with U.S. generally accepted accounting principles (GAAP), the Company provides the additional non-GAAP financial measures of earnings per diluted share, cash flow and workday adjusted revenue growth. The Company believes that these non-GAAP financial measures are appropriate to enhance understanding of its past performance as well as prospects for future performance. A reconciliation of the differences between these non-GAAP financial measures with the most directly comparable financial measures calculated in accordance with GAAP are shown in the tables within the narrative of the press release or below.
Earnings Per Share Results |
|||||||||
|
Three Months Ended |
||||||||
|
November 30,
|
|
November 30,
|
|
Growth vs.
|
||||
EPS - continuing operations |
$ |
2.27 |
|
|
$ |
2.18 |
|
|
|
G&K Services, Inc. integration expenses |
— |
|
|
0.05 |
|
|
|
||
One-time gain on sale of investment |
— |
|
|
(0.47 |
) |
|
|
||
EPS excluding above items |
$ |
2.27 |
|
|
$ |
1.76 |
|
|
29.0% |
|
|
|
|
|
|
||||
|
Six Months Ended |
||||||||
|
November 30,
|
|
November 30,
|
|
Growth vs.
|
||||
EPS - continuing operations |
$ |
4.60 |
|
|
$ |
4.07 |
|
|
|
G&K Services, Inc. integration expenses |
— |
|
|
0.09 |
|
|
|
||
One-time gain on sale of investment |
— |
|
|
(0.47 |
) |
|
|
||
EPS excluding above items |
$ |
4.60 |
|
|
$ |
3.69 |
|
|
24.7% |
Computation of Free Cash Flow |
|||||||
|
Six Months Ended |
||||||
|
November 30,
|
|
November 30,
|
||||
Net cash provided by operations |
$ |
571,351 |
|
|
$ |
344,567 |
|
Capital expenditures |
(126,167 |
) |
|
(137,614 |
) |
||
Free cash flow |
$ |
445,184 |
|
|
$ |
206,953 |
|
Management uses free cash flow to assess the financial performance of the Company. Management believes that free cash flow is useful to investors because it relates the operating cash flow of the Company to the capital that is spent to continue, improve and grow business operations.
Computation of Growth on a Constant Workday Basis |
|||||||||||||||||||
|
Three Months Ended |
|
Six Months Ended |
||||||||||||||||
|
November 30,
|
|
November 30,
|
|
Growth
|
|
November 30,
|
|
November 30,
|
|
Growth
|
||||||||
|
A |
|
B |
|
G |
|
I |
|
J |
|
O |
||||||||
Revenue |
$ |
1,843,749 |
|
|
$ |
1,718,268 |
|
|
7.3% |
|
$ |
3,654,888 |
|
|
$ |
3,416,243 |
|
|
7.0% |
|
|
|
|
|
G=(A-B)/B |
|
|
|
|
|
O=(I-J)/J |
||||||||
|
C |
|
D |
|
|
|
K |
|
L |
|
|
||||||||
Workdays in the period |
65 |
|
65 |
|
|
|
130 |
|
131 |
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
E |
|
F |
|
H |
|
M |
|
N |
|
P |
||||||||
Revenue adjusted for workday difference |
$ |
1,843,749 |
|
|
$ |
1,718,268 |
|
|
7.3% |
|
$ |
3,683,003 |
|
|
$ |
3,416,243 |
|
|
7.8% |
|
E=(A/C)*D |
|
F=(B/D)*D |
|
H=(E-F)/F |
|
M=(I/K)*L |
|
N=(J/L)*L |
|
P=(M-N)/N |
||||||||
|
Fiscal
|
|
Fiscal 2020
|
|
Growth
|
|
Fiscal 2020
|
|
Growth
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||
Fiscal 2020 Revenue Guidance |
|
|
|
|
|
|
|
|
|
||||||
($s in millions) |
A |
|
B |
|
C |
|
D |
|
E |
||||||
Revenue guidance |
$ |
6,892.3 |
|
|
$ |
7,290.0 |
|
|
5.8% |
|
$ |
7,330.0 |
|
|
6.4% |
|
|
|
|
|
C=(B-A)/A |
|
|
|
E=(D-A)/A |
||||||
|
F |
|
G |
|
|
|
G |
|
|
||||||
Workdays in the period |
261 |
|
260 |
|
|
|
260 |
|
|
||||||
|
H |
|
I |
|
J |
|
K |
|
L |
||||||
Revenue guidance adjusted for workday difference |
$ |
6,892.3 |
|
|
$ |
7,318.0 |
|
|
6.2% |
|
$ |
7,358.2 |
|
|
6.8% |
|
H=(A/F)*F |
|
I=(B/G)*F |
|
J=(I-H)/H |
|
K=(D/G)*F |
|
L=(K-H)/H |
||||||
Management believes that workday adjusted revenue growth is valuable to investors because it reflects the revenue performance compared to a prior period with the same number of revenue generating days.
SUPPLEMENTAL SEGMENT DATA |
|||||||||||||||||||
|
Uniform Rental
|
|
First Aid
|
|
All
|
|
Corporate |
|
Total |
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
For the three months ended November 30, 2019 |
|
|
|
|
|
|
|
|
|||||||||||
Revenue |
$ |
1,469,977 |
|
|
$ |
169,667 |
|
|
$ |
204,105 |
|
|
$ |
— |
|
|
$ |
1,843,749 |
|
Gross margin |
$ |
685,040 |
|
|
$ |
82,074 |
|
|
$ |
85,277 |
|
|
$ |
— |
|
|
$ |
852,391 |
|
Selling and administrative expenses |
$ |
398,680 |
|
|
$ |
57,434 |
|
|
$ |
61,813 |
|
|
$ |
— |
|
|
$ |
517,927 |
|
Interest income |
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(283 |
) |
|
$ |
(283 |
) |
Interest expense |
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
26,177 |
|
|
$ |
26,177 |
|
Income (loss) before income taxes |
$ |
286,360 |
|
|
$ |
24,640 |
|
|
$ |
23,464 |
|
|
$ |
(25,894 |
) |
|
$ |
308,570 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
For the three months ended November 30, 2018 |
|
|
|
|
|
|
|
|
|||||||||||
Revenue |
$ |
1,390,778 |
|
|
$ |
153,348 |
|
|
$ |
174,142 |
|
|
$ |
— |
|
|
$ |
1,718,268 |
|
Gross margin |
$ |
629,659 |
|
|
$ |
73,670 |
|
|
$ |
71,829 |
|
|
$ |
— |
|
|
$ |
775,158 |
|
Selling and administrative expenses |
$ |
378,921 |
|
|
$ |
52,342 |
|
|
$ |
60,408 |
|
|
$ |
— |
|
|
$ |
491,671 |
|
G&K Services, Inc. integration expenses |
$ |
7,847 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
7,847 |
|
Gain on sale of a cost method investment |
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
69,373 |
|
|
$ |
69,373 |
|
Interest income |
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(391 |
) |
|
$ |
(391 |
) |
Interest expense |
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
24,880 |
|
|
$ |
24,880 |
|
Income before income taxes |
$ |
242,891 |
|
|
$ |
21,328 |
|
|
$ |
11,421 |
|
|
$ |
44,884 |
|
|
$ |
320,524 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
For the six months ended November 30, 2019 |
|
|
|
|
|
|
|
|
|||||||||||
Revenue |
$ |
2,924,504 |
|
|
$ |
341,757 |
|
|
$ |
388,627 |
|
|
$ |
— |
|
|
$ |
3,654,888 |
|
Gross margin |
$ |
1,370,891 |
|
|
$ |
166,361 |
|
|
$ |
164,281 |
|
|
$ |
— |
|
|
$ |
1,701,533 |
|
Selling and administrative expenses |
$ |
815,520 |
|
|
$ |
116,952 |
|
|
$ |
128,451 |
|
|
$ |
— |
|
|
$ |
1,060,923 |
|
Interest income |
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(445 |
) |
|
$ |
(445 |
) |
Interest expense |
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
53,498 |
|
|
$ |
53,498 |
|
Income (loss) before income taxes |
$ |
555,371 |
|
|
$ |
49,409 |
|
|
$ |
35,830 |
|
|
$ |
(53,053 |
) |
|
$ |
587,557 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
For the six months ended November 30, 2018 |
|
|
|
|
|
|
|
|
|||||||||||
Revenue |
$ |
2,765,716 |
|
|
$ |
306,765 |
|
|
$ |
343,762 |
|
|
$ |
— |
|
|
$ |
3,416,243 |
|
Gross margin |
$ |
1,258,144 |
|
|
$ |
147,155 |
|
|
$ |
144,571 |
|
|
$ |
— |
|
|
$ |
1,549,870 |
|
Selling and administrative expenses |
$ |
771,022 |
|
|
$ |
103,844 |
|
|
$ |
121,439 |
|
|
$ |
— |
|
|
$ |
996,305 |
|
G&K Services, Inc. integration expenses |
$ |
12,697 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
12,697 |
|
Gain on sale of a cost method investment |
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
69,373 |
|
|
$ |
69,373 |
|
Interest income |
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(887 |
) |
|
$ |
(887 |
) |
Interest expense |
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
49,184 |
|
|
$ |
49,184 |
|
Income before income taxes |
$ |
474,425 |
|
$ |
43,311 |
|
$ |
23,132 |
|
$ |
21,076 |
|
$ |
561,944 |
|
||||
Cintas Corporation
|
|||||||
|
November 30,
|
|
May 31,
|
||||
|
(Unaudited) |
|
|
||||
ASSETS |
|
|
|
||||
Current assets: |
|
|
|
||||
Cash and cash equivalents |
$ |
226,535 |
|
|
$ |
96,645 |
|
Accounts receivable, net |
949,122 |
|
|
910,120 |
|
||
Inventories, net |
348,304 |
|
|
334,589 |
|
||
Uniforms and other rental items in service |
817,859 |
|
|
784,133 |
|
||
Income taxes, current |
24,878 |
|
|
7,475 |
|
||
Prepaid expenses and other current assets |
123,589 |
|
|
103,318 |
|
||
Total current assets |
2,490,287 |
|
|
2,236,280 |
|
||
|
|
|
|
||||
Property and equipment, net |
1,425,584 |
|
|
1,430,685 |
|
||
|
|
|
|
||||
Investments |
218,873 |
|
|
192,346 |
|
||
Goodwill |
2,852,801 |
|
|
2,842,441 |
|
||
Service contracts, net |
469,933 |
|
|
494,595 |
|
||
Operating lease right-of-use assets, net |
169,233 |
|
|
— |
|
||
Other assets, net |
260,626 |
|
|
240,315 |
|
||
|
$ |
7,887,337 |
|
|
$ |
7,436,662 |
|
|
|
|
|
||||
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
||||
Current liabilities: |
|
|
|
||||
Accounts payable |
$ |
254,611 |
|
|
$ |
226,020 |
|
Accrued compensation and related liabilities |
124,349 |
|
|
155,509 |
|
||
Accrued liabilities |
674,240 |
|
|
433,940 |
|
||
Operating lease liabilities, current |
44,263 |
|
|
— |
|
||
Debt due within one year |
199,788 |
|
|
312,264 |
|
||
Total current liabilities |
1,297,251 |
|
|
1,127,733 |
|
||
|
|
|
|
||||
Long-term liabilities: |
|
|
|
||||
Debt due after one year |
2,538,606 |
|
|
2,537,507 |
|
||
Deferred income taxes |
443,857 |
|
|
438,179 |
|
||
Operating lease liabilities |
130,580 |
|
|
— |
|
||
Accrued liabilities |
372,073 |
|
|
330,522 |
|
||
Total long-term liabilities |
3,485,116 |
|
|
3,306,208 |
|
||
|
|
|
|
||||
Shareholders’ equity: |
|
|
|
||||
Preferred stock, no par value: |
— |
|
|
— |
|
||
100,000 shares authorized, none outstanding |
|||||||
Common stock, no par value: |
1,066,814 |
|
|
840,328 |
|
||
425,000,000 shares authorized |
|||||||
FY 2020: 186,298,161 issued and 103,702,675 outstanding |
|||||||
FY 2019: 184,790,626 issued and 103,284,401 outstanding |
|||||||
Paid-in capital |
134,041 |
|
|
227,928 |
|
||
Retained earnings |
6,917,310 |
|
|
6,691,236 |
|
||
Treasury stock: |
(4,976,360 |
) |
|
(4,717,619 |
) |
||
FY 2020: 82,595,486 shares |
|||||||
FY 2019: 81,506,225 shares |
|||||||
Accumulated other comprehensive loss |
(36,835 |
) |
|
(39,152 |
) |
||
Total shareholders’ equity |
3,104,970 |
|
|
3,002,721 |
|
||
|
$ |
7,887,337 |
|
$ |
7,436,662 |
||
Cintas Corporation
|
|||||||
|
Six Months Ended |
||||||
|
November 30,
|
|
November 30,
|
||||
Cash flows from operating activities: |
|
|
|
||||
Net income |
$ |
496,932 |
|
|
$ |
455,528 |
|
|
|
|
|
||||
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
||||
Depreciation |
115,367 |
|
|
107,112 |
|
||
Amortization of intangible assets and capitalized contract costs |
70,963 |
|
|
67,559 |
|
||
Stock-based compensation |
69,398 |
|
|
74,784 |
|
||
Gain on sale of a cost method investment |
— |
|
|
(69,373 |
) |
||
Deferred income taxes |
7,632 |
|
|
19,227 |
|
||
Change in current assets and liabilities, net of acquisitions of businesses: |
|
|
|
||||
Accounts receivable, net |
(37,940 |
) |
|
(85,748 |
) |
||
Inventories, net |
(13,402 |
) |
|
(53,227 |
) |
||
Uniforms and other rental items in service |
(32,744 |
) |
|
(57,684 |
) |
||
Prepaid expenses and other current assets and capitalized contract costs |
(68,409 |
) |
|
(58,161 |
) |
||
Accounts payable |
28,055 |
|
|
(1,955 |
) |
||
Accrued compensation and related liabilities |
(29,326 |
) |
|
(20,969 |
) |
||
Accrued liabilities and other |
(17,883 |
) |
|
(15,322 |
) |
||
Income taxes, current |
(17,292 |
) |
|
(17,204 |
) |
||
Net cash provided by operating activities |
571,351 |
|
|
344,567 |
|
||
|
|
|
|
||||
Cash flows from investing activities: |
|
|
|
||||
Capital expenditures |
(126,167 |
) |
|
(137,614 |
) |
||
Purchase of investments |
(10,121 |
) |
|
(14,071 |
) |
||
Proceeds from sale of a cost method investment |
— |
|
|
73,342 |
|
||
Proceeds from sale of assets |
13,300 |
|
|
— |
|
||
Acquisitions of businesses, net of cash acquired |
(6,582 |
) |
|
(6,580 |
) |
||
Other, net |
(2,103 |
) |
|
(1,717 |
) |
||
Net cash used in investing activities |
(131,673 |
) |
|
(86,640 |
) |
||
|
|
|
|
||||
Cash flows from financing activities: |
|
|
|
||||
(Payments) issuance of commercial paper, net |
(112,500 |
) |
|
173,500 |
|
||
Proceeds from exercise of stock-based compensation awards |
63,201 |
|
|
32,612 |
|
||
Repurchase of common stock |
(258,741 |
) |
|
(508,129 |
) |
||
Other, net |
(1,952 |
) |
|
(5,362 |
) |
||
Net cash used in financing activities |
(309,992 |
) |
|
(307,379 |
) |
||
|
|
|
|
||||
Effect of exchange rate changes on cash and cash equivalents |
204 |
|
|
(793 |
) |
||
|
|
|
|
||||
Net increase (decrease) in cash and cash equivalents |
129,890 |
|
|
(50,245 |
) |
||
Cash and cash equivalents at beginning of period |
96,645 |
|
|
138,724 |
|
||
Cash and cash equivalents at end of period |
$ |
226,535 |
|
|
$ |
88,479 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20191217005810/en/
