Cintas Corporation (Nasdaq: CTAS) today reported results
for its fiscal 2024 fourth quarter ended May 31, 2024. Revenue for
the fourth quarter of fiscal 2024 was $2.47 billion compared to
$2.28 billion in last year’s fourth quarter, an increase of 8.2%.
The organic revenue growth rate for the fourth quarter of fiscal
2024, which adjusts for the impacts of acquisitions, foreign
currency exchange rate fluctuations and workday differences, was
7.5%.
Gross margin for the fourth quarter of fiscal 2024 was $1,215.4
million compared to $1,088.8 million in last year’s fourth quarter,
an increase of 11.6%. Gross margin as a percentage of revenue was
49.2% for the fourth quarter of fiscal 2024 compared to 47.7% in
last year's fourth quarter, an increase of 150 basis points.
Operating income for the fourth quarter of fiscal 2024 was
$547.6 million compared to $470.8 million in last year's fourth
quarter, an increase of 16.3%. Operating income as a percentage of
revenue was 22.2% in the fourth quarter of fiscal 2024 compared to
20.6% in last year's fourth quarter.
Net income was $414.3 million for the fourth quarter of fiscal
2024 compared to $346.2 million in last year's fourth quarter.
Fourth quarter of fiscal 2024 diluted earnings per share (EPS) was
$3.99 compared to $3.33 in last year's fourth quarter, an increase
of 19.8%.
For the fiscal year ended May 31, 2024, revenue was $9.60
billion compared to $8.82 billion for fiscal 2023, an increase of
8.9%. Operating income for fiscal 2024 was $2.07 billion compared
to $1.80 billion for fiscal 2023, an increase of 14.8%. Operating
income as a percent of revenue was 21.6% in fiscal 2024 compared to
20.4% in fiscal 2023. Diluted EPS for fiscal 2024 was $15.15
compared to $12.99 in fiscal 2023, an increase of 16.6%.
Cash flow from operating activities was $2.08 billion in fiscal
2024 compared to $1.60 billion in fiscal 2023, an increase of
30.2%. Cintas spent $409.5 million on capital expenditures in
fiscal 2024, which is 4.3% as a percentage of revenue. Cintas
acquired businesses for a total of $186.8 million in fiscal 2024.
During fiscal 2024, Cintas paid cash dividends of $530.9 million,
an increase of 18.0% over fiscal 2023. During fiscal 2024, and as
of July 17, 2024, Cintas purchased 1,623,870 shares of Cintas
common stock at an average price of $609.04 per share, for a total
purchase price of $1.0 billion.
Todd M. Schneider, Cintas' President and Chief Executive
Officer, stated, "Our strong fourth quarter results conclude
another successful fiscal year of robust revenue growth and margin
expansion, including an all-time high in operating income as a
percent of revenue. Strong cash generation continued to fuel our
balanced capital allocation strategy, focusing on new products and
services for our customers and new technology to further enhance
our position for the long-term, investing in strategic acquisitions
and on returning capital to shareholders. We believe our results
demonstrate the Cintas value proposition continues to resonate - we
have a product or service to help nearly every business across
North America focus on what they do best, while we take care of
their image, safety, cleanliness and compliance needs."
"Our fiscal 2025 outlook reflects our continued confidence in
our strategy. We remain focused on delivering outstanding customer
experiences, nurturing the differentiated Cintas culture that
drives our employee-partners and our success, and achieving growth
and margin expansion aided by superior operations and investments
in technology."
For fiscal 2025, revenue is expected to be in the range of
$10.16 billion to $10.31 billion. Please keep in mind there are two
fewer workdays in fiscal 2025 compared to fiscal 2024. The
following table helps illustrate the impact of two fewer
workdays:
Fiscal 2025
Fiscal 2025
(in millions)
Fiscal 2024
Low end of Range
Growth vs. 2024
High end of Range
Growth vs. 2024
A
B
E
H
I
Total revenue guidance
$
9,596.6
$
10,160.0
5.9%
$
10,310.0
7.4%
E=(B-A)/A
I=(H-A)/A
C
D
D
Workdays in the period
262
260
260
A
F
G
J
K
Workday adjusted revenue growth
$
9,596.6
$
10,238.2
6.7%
$
10,389.3
8.3%
F=(B/D)*C
E=(F-A)/A
F=(H/D)*C
K=(J-A)/A
Acquisition impact
(0.3)%
(0.3)%
Organic revenue growth
6.4%
8.0%
Please note the following regarding the total revenue
guidance:
- Guidance does not assume any future acquisitions;
- Guidance assumes a constant foreign currency exchange
rate.
For fiscal 2025, diluted EPS is expected to be in the range of
$16.25 to $16.75.
Fiscal 2025
Fiscal 2025
Fiscal 2024
Low end of Range
Growth vs. 2024
High end of Range
Growth vs. 2024
Diluted EPS guidance
$
15.15
$
16.25
7.3%
$
16.75
10.6%
Please note the following regarding diluted EPS guidance:
- Fiscal year 2025 interest, net is expected to be approximately
$106.0 million compared to $95.0 million in fiscal year 2024,
predominately as a result of higher variable rate debt used to
complete a portion of the previously mentioned share buybacks
through July 17, 2024. This may change as a result of future share
buybacks or acquisition activity;
- Our fiscal 2025 effective tax rate is expected to be 20.4%, the
same compared to fiscal 2024;
- Guidance does not include any future share buybacks or
significant economic disruptions or downturn.
On May 2, 2024, Cintas announced that its Board of Directors
approved a four-for-one split of its common stock. Shareholders of
record, as of September 4, 2024, will receive three additional
shares for each share held, which will be distributed after market
close on September 11, 2024. Cintas anticipates its common stock to
begin trading at the split-adjusted price on September 12, 2024.
Our financial results for the first quarter of fiscal 2025 will be
reported after the completion of the stock split.
The following table shows our fiscal 2024 diluted EPS and our
fiscal 2025 diluted EPS outlook on a proforma basis after the
impact of the recently announced common stock split.
Fiscal 2025
Fiscal 2025
($s in millions, except EPS)
Fiscal 2024
Low end of Range
Growth vs. 2024
High end of Range
Growth vs. 2024
Diluted EPS guidance
$
15.15
$
16.25
7.3%
$
16.75
10.6%
Net income allocated to common
shareholders,
as reported
$
1,565.7
Proforma basic weighted average common
shares outstanding
406.6
Proforma effect of dilutive securities -
employee stock options
6.9
Proforma diluted weighted average common
shares
outstanding
413.5
Proforma diluted earnings per share
$
3.79
$
4.06
7.1%
$
4.19
10.6%
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 products and services that help
keep their customers’ facilities and employees clean, safe and
looking their best. With offerings including uniforms, mats, mops,
restroom supplies, first aid and safety products, fire
extinguishers and testing, and safety 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
Nasdaq-100 Index.
Cintas will host a live webcast to review the fiscal 2024 fourth
quarter and fiscal year results today at 10:00 a.m., Eastern Time.
The webcast will be available to the public on Cintas' website at
www.Cintas.com. A replay of the webcast will be available
approximately two hours after the completion of the live call and
will remain available for two weeks.
CAUTION CONCERNING FORWARD-LOOKING STATEMENTS
This Press Release contains forward-looking statements regarding
our future business plans and expectations. 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, 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; supply chain
constraints and macroeconomic conditions, including inflationary
pressures and higher interest rates; 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; our ability to
meet our aspirations relating to environmental, social and
governance (ESG) opportunities, improvements and efficiencies; the
cost, results and ongoing assessment of internal controls for
financial reporting; the effect of new accounting pronouncements;
risks associated with cybersecurity threats, including disruptions
caused by the inaccessibility of computer systems data and
cybersecurity management, 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 including global health
pandemics; the amount and timing of repurchases of our common
stock, if any; changes in global 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, except otherwise as required by law. 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, 2023
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
Consolidated Condensed
Statements of Income
(Unaudited)
(In thousands except per share
data)
Three Months Ended
May 31, 2024
May 31, 2023
% Change
Revenue:
Uniform rental and facility services
$
1,911,190
$
1,773,206
7.8%
Other
559,745
511,265
9.5%
Total revenue
2,470,935
2,284,471
8.2%
Costs and expenses:
Cost of uniform rental and facility
services
983,049
926,689
6.1%
Cost of other
272,437
269,004
1.3%
Selling and administrative expenses
667,855
617,980
8.1%
Operating income
547,594
470,798
16.3%
Interest income
(3,621
)
(844
)
329.0%
Interest expense
24,076
25,773
(6.6)%
Income before income taxes
527,139
445,869
18.2%
Income taxes
112,824
99,668
13.2%
Net income
$
414,315
$
346,201
19.7%
Basic earnings per share
$
4.06
$
3.39
19.8%
Diluted earnings per share
$
3.99
$
3.33
19.8%
Basic weighted average common shares
outstanding
101,545
101,788
Diluted weighted average common shares
outstanding
103,332
103,418
Cintas Corporation
Consolidated Condensed
Statements of Income
(In thousands except per share
data)
Twelve Months Ended
May 31, 2024
May 31, 2023
% Change
Revenue:
Uniform rental and facility services
$
7,465,199
$
6,897,130
8.2%
Other
2,131,416
1,918,639
11.1%
Total revenue
9,596,615
8,815,769
8.9%
Costs and expenses:
Cost of uniform rental and facility
services
3,865,071
3,632,175
6.4%
Cost of other
1,045,128
1,010,226
3.5%
Selling and administrative expenses
2,617,783
2,370,704
10.4%
Operating income
2,068,633
1,802,664
14.8%
Interest income
(5,742
)
(1,716
)
234.6%
Interest expense
100,740
111,232
(9.4)%
Income before income taxes
1,973,635
1,693,148
16.6%
Income taxes
402,043
345,138
16.5%
Net income
$
1,571,592
$
1,348,010
16.6%
Basic earnings per share
$
15.40
$
13.21
16.6%
Diluted earnings per share
$
15.15
$
12.99
16.6%
Basic weighted average common shares
outstanding
101,653
101,645
Diluted weighted average common shares
outstanding
103,367
103,377
CINTAS CORPORATION SUPPLEMENTAL DATA
Gross Margin and Net Income Margin
Results
Three Months Ended
Twelve Months Ended
May 31, 2024
May 31, 2023
May 31, 2024
May 31, 2023
Uniform rental and facility services gross
margin
48.6%
47.7%
48.2%
47.3%
Other gross margin
51.3%
47.4%
51.0%
47.3%
Total gross margin
49.2%
47.7%
48.8%
47.3%
Net income margin
16.8%
15.2%
16.4%
15.3%
Reconciliation of Non-GAAP Financial
Measures
The press release contains non-GAAP financial measures within
the meaning of the rules promulgated by the U.S. 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 these
additional non-GAAP financial measures of free cash flow and
organic 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
below.
Computation of Free Cash Flow
Twelve Months Ended
(In thousands)
May 31, 2024
May 31, 2023
Net cash provided by operations
$
2,079,781
$
1,597,814
Capital expenditures
(409,469
)
(331,109
)
Free cash flow
$
1,670,312
$
1,266,705
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 Organic Revenue
Growth
Twelve Months Ended
May 31, 2024
May 31, 2023
Growth %
A
B
G
Revenue
$
9,596,615
$
8,815,769
8.9%
G=(A-B)/B
C
D
Workdays in the period
262
261
E
F
H
Workday adjusted revenue growth
$
9,559,987
$
8,815,769
8.4%
E=(A/C)*D
F=(B/D)*D
H=(E-F)/F
Acquisition and foreign currency exchange
impact, net
(0.4)%
Organic revenue growth
8.0%
Management believes that organic 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 and
excludes the impact from acquisitions and foreign currency exchange
rate fluctuations.
SUPPLEMENTAL SEGMENT DATA
(In thousands)
Uniform Rental and Facility
Services
First Aid and Safety Services
All Other
Total
For the three months ended May 31,
2024
Revenue
$
1,911,190
$
277,638
$
282,107
$
2,470,935
Gross margin
$
928,141
$
153,832
$
133,476
$
1,215,449
Selling and administrative expenses
$
495,187
$
90,507
$
82,161
$
667,855
Operating income
$
432,954
$
63,325
$
51,315
$
547,594
For the three months ended May 31,
2023
Revenue
$
1,773,206
$
249,756
$
261,509
$
2,284,471
Gross margin
$
846,517
$
127,390
$
114,871
$
1,088,778
Selling and administrative expenses
$
461,621
$
80,312
$
76,047
$
617,980
Operating income
$
384,896
$
47,078
$
38,824
$
470,798
For the twelve months ended May 31,
2024
Revenue
$
7,465,199
$
1,067,334
$
1,064,082
$
9,596,615
Gross margin
$
3,600,128
$
592,656
$
493,632
$
4,686,416
Selling and administrative expenses
$
1,940,627
$
353,503
$
323,653
$
2,617,783
Operating income
$
1,659,501
$
239,153
$
169,979
$
2,068,633
For the twelve months ended May 31,
2023
Revenue
$
6,897,130
$
951,496
$
967,143
$
8,815,769
Gross margin
$
3,264,955
$
482,088
$
426,325
$
4,173,368
Selling and administrative expenses
$
1,786,198
$
301,398
$
283,108
$
2,370,704
Operating income
$
1,478,757
$
180,690
$
143,217
$
1,802,664
Cintas Corporation
Consolidated Condensed Balance
Sheets
(In thousands except per share
data)
May 31, 2024
May 31, 2023
ASSETS
Current assets:
Cash and cash equivalents
$
342,015
$
124,149
Accounts receivable, net
1,244,182
1,152,993
Inventories, net
410,201
506,604
Uniforms and other rental items in
service
1,040,144
1,011,918
Prepaid expenses and other current
assets
148,665
142,795
Total current assets
3,185,207
2,938,459
Property and equipment, net
1,534,168
1,396,476
Investments
302,212
247,191
Goodwill
3,212,424
3,056,201
Service contracts, net
321,902
346,574
Operating lease right-of-use assets,
net
187,953
178,464
Other assets, net
424,951
382,991
$
9,168,817
$
8,546,356
LIABILITIES AND SHAREHOLDERS’
EQUITY
Current liabilities:
Accounts payable
$
339,166
$
302,292
Accrued compensation and related
liabilities
214,130
239,086
Accrued liabilities
761,283
632,504
Income taxes, current
18,618
12,470
Operating lease liabilities, current
45,727
43,710
Debt due within one year
449,595
—
Total current liabilities
1,828,519
1,230,062
Long-term liabilities:
Debt due after one year
2,025,934
2,486,405
Deferred income taxes
475,512
498,356
Operating lease liabilities
146,824
138,278
Accrued liabilities
375,656
329,269
Total long-term liabilities
3,023,926
3,452,308
Shareholders’ equity:
Preferred stock, no par value:
100,000 shares authorized, none
outstanding
—
—
Common stock, no par value, and paid-in
capital:
425,000,000 shares authorized
FY 2024: 193,274,296 issued and
101,251,994 outstanding
FY 2023: 192,198,938 issued and
101,732,148 outstanding
2,305,301
2,031,542
Retained earnings
10,617,955
9,597,315
Treasury stock:
FY 2024: 92,022,302 shares
FY 2023: 90,466,790 shares
(8,698,085
)
(7,842,649
)
Accumulated other comprehensive income
91,201
77,778
Total shareholders’ equity
4,316,372
3,863,986
$
9,168,817
$
8,546,356
Cintas Corporation
Consolidated Condensed
Statements of Cash Flows
(In thousands)
Twelve Months Ended
May 31, 2024
May 31, 2023
Cash flows from operating
activities:
Net income
$
1,571,592
$
1,348,010
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation
280,866
257,041
Amortization of intangible assets and
capitalized contract costs
161,518
152,121
Stock-based compensation
116,986
103,621
Deferred income taxes
(28,912
)
23,233
Change in current assets and liabilities,
net of acquisitions of businesses:
Accounts receivable, net
(91,399
)
(151,771
)
Inventories, net
95,766
(35,658
)
Uniforms and other rental items in
service
(22,815
)
(98,252
)
Prepaid expenses and other current assets
and capitalized contract costs
(117,674
)
(132,173
)
Accounts payable
36,896
53,369
Accrued compensation and related
liabilities
(27,013
)
2,711
Accrued liabilities and other
97,750
41,314
Income taxes, current
6,220
34,248
Net cash provided by operating
activities
2,079,781
1,597,814
Cash flows from investing
activities:
Capital expenditures
(409,469
)
(331,109
)
Purchases of investments
(7,546
)
(4,566
)
Acquisitions of businesses, net of cash
acquired
(186,837
)
(46,357
)
Other, net
(4,779
)
(6,640
)
Net cash used in investing activities
(608,631
)
(388,672
)
Cash flows from financing
activities:
Payments of commercial paper, net
—
(261,200
)
Repayment of debt
(13,450
)
(50,000
)
Proceeds from exercise of stock-based
compensation awards
1,370
3,021
Dividends paid
(530,909
)
(449,917
)
Repurchase of common stock
(700,033
)
(398,865
)
Other, net
(10,468
)
(15,875
)
Net cash used in financing activities
(1,253,490
)
(1,172,836
)
Effect of exchange rate changes on cash
and cash equivalents
206
(2,628
)
Net increase in cash and cash
equivalents
217,866
33,678
Cash and cash equivalents at beginning of
year
124,149
90,471
Cash and cash equivalents at end of
year
$
342,015
$
124,149
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240718043928/en/
J. Michael Hansen, Executive Vice President & Chief
Financial Officer - 513-972-2079 Jared S. Mattingley, Vice
President, Treasurer & Investor Relations - 513-972-4195
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