Washington | 0-11399 | 31-1188630 | ||||||||||||
(State or Other Jurisdiction of Incorporation) |
(Commission File Number) | (IRS Employer Identification Number) |
6800 Cintas Boulevard, P.O. Box 625737, | |||||||||||
Cincinnati, | Ohio | 45262-5737 | |||||||||
(Address of Principal Executive Offices) | (Zip Code) |
☐ |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | ||||
☐ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | ||||
☐ |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | ||||
☐ |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Title of each class |
Trading symbol(s) |
Name of each exchange on which registered |
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Common stock, no par value | CTAS | The NASDAQ Stock Market LLC | ||||||||||||
(NASDAQ Global Select Market) |
Exhibit Number |
Description | ||||||||||
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
CINTAS CORPORATION | |||||||||||||||||
Date: | July 13, 2023 | By: | /s/ J. Michael Hansen | ||||||||||||||
J. Michael Hansen | |||||||||||||||||
Executive Vice President and Chief Financial Officer |
Three Months Ended | |||||||||||||||||
May 31, 2023 |
May 31, 2022 |
% Change |
|||||||||||||||
Revenue: | |||||||||||||||||
Uniform rental and facility services | $ | 1,773,206 | $ | 1,630,213 | 8.8% | ||||||||||||
Other | 511,265 | 444,473 | 15.0% | ||||||||||||||
Total revenue | 2,284,471 | 2,074,686 | 10.1% | ||||||||||||||
Costs and expenses: | |||||||||||||||||
Cost of uniform rental and facility services | 926,689 | 885,789 | 4.6% | ||||||||||||||
Cost of other | 269,004 | 242,702 | 10.8% | ||||||||||||||
Selling and administrative expenses | 617,980 | 541,759 | 14.1% | ||||||||||||||
Operating income | 470,798 | 404,436 | 16.4% | ||||||||||||||
Interest income | (844) | (74) | 1,040.5% | ||||||||||||||
Interest expense | 25,773 | 23,058 | 11.8% | ||||||||||||||
Income before income taxes | 445,869 | 381,452 | 16.9% | ||||||||||||||
Income taxes | 99,668 | 86,991 | 14.6% | ||||||||||||||
Net income | $ | 346,201 | $ | 294,461 | 17.6% | ||||||||||||
Basic earnings per share | $ | 3.39 | $ | 2.87 | 18.1% | ||||||||||||
Diluted earnings per share | $ | 3.33 | $ | 2.81 | 18.5% | ||||||||||||
Basic weighted average common shares outstanding | 101,788 | 102,375 | |||||||||||||||
Diluted weighted average common shares outstanding | 103,418 | 104,427 |
Twelve Months Ended | |||||||||||||||||
May 31, 2023 |
May 31, 2022 |
% Change |
|||||||||||||||
Revenue: | |||||||||||||||||
Uniform rental and facility services | $ | 6,897,130 | $ | 6,226,980 | 10.8% | ||||||||||||
Other | 1,918,639 | 1,627,479 | 17.9% | ||||||||||||||
Total revenue | 8,815,769 | 7,854,459 | 12.2% | ||||||||||||||
Costs and expenses: | |||||||||||||||||
Cost of uniform rental and facility services | 3,632,175 | 3,316,433 | 9.5% | ||||||||||||||
Cost of other | 1,010,226 | 905,780 | 11.5% | ||||||||||||||
Selling and administrative expenses | 2,370,704 | 2,044,876 | 15.9% | ||||||||||||||
Operating income | 1,802,664 | 1,587,370 | 13.6% | ||||||||||||||
Interest income | (1,716) | (242) | 609.1% | ||||||||||||||
Interest expense | 111,232 | 88,844 | 25.2% | ||||||||||||||
Income before income taxes | 1,693,148 | 1,498,768 | 13.0% | ||||||||||||||
Income taxes | 345,138 | 263,011 | 31.2% | ||||||||||||||
Net income | $ | 1,348,010 | $ | 1,235,757 | 9.1% | ||||||||||||
Basic earnings per share | $ | 13.21 | $ | 11.92 | 10.8% | ||||||||||||
Diluted earnings per share | $ | 12.99 | $ | 11.65 | 11.5% | ||||||||||||
Basic weighted average common shares outstanding | 101,645 | 103,172 | |||||||||||||||
Diluted weighted average common shares outstanding | 103,377 | 105,523 |
Three Months Ended | Twelve Months Ended | ||||||||||||||||||||||
May 31, 2023 |
May 31, 2022 |
May 31, 2023 |
May 31, 2022 |
||||||||||||||||||||
Uniform rental and facility services gross margin | 47.7% | 45.7% | 47.3% | 46.7% | |||||||||||||||||||
Other gross margin | 47.4% | 45.4% | 47.3% | 44.3% | |||||||||||||||||||
Total gross margin | 47.7% | 45.6% | 47.3% | 46.2% | |||||||||||||||||||
Net income margin | 15.2% | 14.2% | 15.3% | 15.7% | |||||||||||||||||||
Twelve Months Ended | ||||||||||||||||||||
(In thousands) | May 31, 2023 |
% of Revenue |
May 31, 2022 |
% of Revenue |
Growth vs. Fiscal 2022 |
|||||||||||||||
Operating income | $ | 1,802,664 | 20.4% | $ | 1,587,370 | 20.2% | 13.6% | |||||||||||||
Gain on sale of operating assets | — | (12,129) | ||||||||||||||||||
Gain on equity method investment transaction (1) |
— | (30,151) | ||||||||||||||||||
Operating income excluding above item | $ | 1,802,664 | 20.4% | $ | 1,545,090 | 19.7% | 16.7% |
Twelve Months Ended | ||||||||||||||
May 31, 2023 |
May 31, 2022 |
Growth vs.
Fiscal 2022
|
||||||||||||
Diluted EPS | $ | 12.99 | $ | 11.65 | 11.5% | |||||||||
Pre-tax gain and the related tax benefit on sale of operating assets | — | (0.09) | ||||||||||||
Pre-tax gain and the related tax benefit on equity method
investment transaction (1)
|
— | (0.28) | ||||||||||||
Diluted EPS excluding above items | $ | 12.99 | $ | 11.28 | 15.2% | |||||||||
Twelve Months Ended | |||||||||||
(In thousands) | May 31, 2023 |
May 31, 2022 |
|||||||||
Net cash provided by operations | $ | 1,597,814 | $ | 1,537,625 | |||||||
Capital expenditures | (331,109) | (240,672) | |||||||||
Free cash flow | $ | 1,266,705 | $ | 1,296,953 |
(In thousands) | Uniform Rental and Facility Services |
First Aid and Safety Services |
All Other |
Corporate | Total | ||||||||||||||||||||||||
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 | |||||||||||||||||||
Interest income | $ | — | $ | — | $ | — | $ | (844) | $ | (844) | |||||||||||||||||||
Interest expense | $ | — | $ | — | $ | — | $ | 25,773 | $ | 25,773 | |||||||||||||||||||
Income (loss) before income taxes | $ | 384,896 | $ | 47,078 | $ | 38,824 | $ | (24,929) | $ | 445,869 | |||||||||||||||||||
For the three months ended May 31, 2022 | |||||||||||||||||||||||||||||
Revenue | $ | 1,630,213 | $ | 218,224 | $ | 226,249 | $ | — | $ | 2,074,686 | |||||||||||||||||||
Gross margin | $ | 744,424 | $ | 100,680 | $ | 101,091 | $ | — | $ | 946,195 | |||||||||||||||||||
Selling and administrative expenses | $ | 413,921 | $ | 68,026 | $ | 59,812 | $ | — | $ | 541,759 | |||||||||||||||||||
Interest income | $ | — | $ | — | $ | — | $ | (74) | $ | (74) | |||||||||||||||||||
Interest expense | $ | — | $ | — | $ | — | $ | 23,058 | $ | 23,058 | |||||||||||||||||||
Income (loss) before income taxes | $ | 330,503 | $ | 32,654 | $ | 41,279 | $ | (22,984) | $ | 381,452 | |||||||||||||||||||
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 | |||||||||||||||||||
Interest income | $ | — | $ | — | $ | — | $ | (1,716) | $ | (1,716) | |||||||||||||||||||
Interest expense | $ | — | $ | — | $ | — | $ | 111,232 | $ | 111,232 | |||||||||||||||||||
Income (loss) before income taxes | $ | 1,478,757 | $ | 180,690 | $ | 143,217 | $ | (109,516) | $ | 1,693,148 | |||||||||||||||||||
For the twelve months ended May 31, 2022 | |||||||||||||||||||||||||||||
Revenue | $ | 6,226,980 | $ | 832,458 | $ | 795,021 | $ | — | $ | 7,854,459 | |||||||||||||||||||
Gross margin | $ | 2,910,547 | $ | 372,193 | $ | 349,506 | $ | — | $ | 3,632,246 | |||||||||||||||||||
Selling and administrative expenses | $ | 1,557,057 | $ | 265,430 | $ | 222,389 | $ | — | $ | 2,044,876 | |||||||||||||||||||
Interest income | $ | — | $ | — | $ | — | $ | (242) | $ | (242) | |||||||||||||||||||
Interest expense | $ | — | $ | — | $ | — | $ | 88,844 | $ | 88,844 | |||||||||||||||||||
Income (loss) before income taxes | $ | 1,353,490 | $ | 106,763 | $ | 127,117 | $ | (88,602) | $ | 1,498,768 |
May 31, 2023 |
May 31, 2022 |
||||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 124,149 | $ | 90,471 | |||||||
Accounts receivable, net | 1,152,993 | 1,006,220 | |||||||||
Inventories, net | 506,604 | 472,150 | |||||||||
Uniforms and other rental items in service | 1,011,918 | 916,706 | |||||||||
Income taxes, current | — | 21,708 | |||||||||
Prepaid expenses and other current assets | 142,795 | 124,728 | |||||||||
Total current assets | 2,938,459 | 2,631,983 | |||||||||
Property and equipment, net | 1,396,476 | 1,323,673 | |||||||||
Investments | 247,191 | 242,873 | |||||||||
Goodwill | 3,056,201 | 3,042,976 | |||||||||
Service contracts, net | 346,574 | 391,638 | |||||||||
Operating lease right-of-use assets, net | 178,464 | 170,003 | |||||||||
Other assets, net | 382,991 | 344,110 | |||||||||
$ | 8,546,356 | $ | 8,147,256 | ||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | 302,292 | $ | 251,504 | |||||||
Accrued compensation and related liabilities | 239,086 | 236,992 | |||||||||
Accrued liabilities | 632,504 | 588,948 | |||||||||
Income taxes, current | 12,470 | — | |||||||||
Operating lease liabilities, current | 43,710 | 43,872 | |||||||||
Debt due within one year | — | 311,574 | |||||||||
Total current liabilities | 1,230,062 | 1,432,890 | |||||||||
Long-term liabilities: | |||||||||||
Debt due after one year | 2,486,405 | 2,483,932 | |||||||||
Deferred income taxes | 498,356 | 473,777 | |||||||||
Operating lease liabilities | 138,278 | 129,064 | |||||||||
Accrued liabilities | 329,269 | 319,397 | |||||||||
Total long-term liabilities | 3,452,308 | 3,406,170 | |||||||||
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 2023: 192,198,938 issued and 101,732,148 outstanding
FY 2022: 190,837,921 issued and 101,711,215 outstanding
|
2,031,542 | 1,771,917 | |||||||||
Retained earnings | 9,597,315 | 8,719,163 | |||||||||
Treasury stock:
FY 2023: 90,466,790 shares
FY 2022: 89,126,706 shares
|
(7,842,649) | (7,290,801) | |||||||||
Accumulated other comprehensive income | 77,778 | 107,917 | |||||||||
Total shareholders’ equity | 3,863,986 | 3,308,196 | |||||||||
$ | 8,546,356 | $ | 8,147,256 |
Twelve Months Ended | |||||||||||
May 31, 2023 |
May 31, 2022 |
||||||||||
Cash flows from operating activities: | |||||||||||
Net income | $ | 1,348,010 | $ | 1,235,757 | |||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation | 257,041 | 249,376 | |||||||||
Amortization of intangible assets and capitalized contract costs | 152,121 | 150,325 | |||||||||
Stock-based compensation | 103,621 | 109,308 | |||||||||
Gain on equity method investment transaction | — | (30,151) | |||||||||
Gain on sale of operating assets | — | (12,129) | |||||||||
Deferred income taxes | 23,233 | 52,110 | |||||||||
Change in current assets and liabilities, net of acquisitions of businesses: | |||||||||||
Accounts receivable, net | (151,771) | (100,392) | |||||||||
Inventories, net | (35,658) | 16,194 | |||||||||
Uniforms and other rental items in service | (98,252) | (111,332) | |||||||||
Prepaid expenses and other current assets and capitalized contract costs | (132,173) | (28,581) | |||||||||
Accounts payable | 53,369 | 22,697 | |||||||||
Accrued compensation and related liabilities | 2,711 | (3,625) | |||||||||
Accrued liabilities and other | 41,314 | (9,241) | |||||||||
Income taxes, current | 34,248 | (2,691) | |||||||||
Net cash provided by operating activities | 1,597,814 | 1,537,625 | |||||||||
Cash flows from investing activities: | |||||||||||
Capital expenditures | (331,109) | (240,672) | |||||||||
Purchases of investments | (4,566) | (6,076) | |||||||||
Proceeds from sale of operating assets, net of cash disposed | — | 15,347 | |||||||||
Acquisitions of businesses, net of cash acquired | (46,357) | (164,228) | |||||||||
Other, net | (6,640) | (7,006) | |||||||||
Net cash used in investing activities | (388,672) | (402,635) | |||||||||
Cash flows from financing activities: | |||||||||||
(Payments) issuance of commercial paper, net | (261,200) | 261,200 | |||||||||
Proceeds from issuance of debt, net | — | 1,190,506 | |||||||||
Repayment of debt | (50,000) | (1,200,000) | |||||||||
Proceeds from exercise of stock-based compensation awards | 3,021 | 117,737 | |||||||||
Dividends paid | (449,917) | (375,119) | |||||||||
Repurchase of common stock | (398,865) | (1,525,873) | |||||||||
Other, net | (15,875) | (6,394) | |||||||||
Net cash used in financing activities | (1,172,836) | (1,537,943) | |||||||||
Effect of exchange rate changes on cash and cash equivalents | (2,628) | (216) | |||||||||
Net increase (decrease) in cash and cash equivalents | 33,678 | (403,169) | |||||||||
Cash and cash equivalents at beginning of year | 90,471 | 493,640 | |||||||||
Cash and cash equivalents at end of year | $ | 124,149 | $ | 90,471 |