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: | December 21, 2023 | By: | /s/ J. Michael Hansen | ||||||||||||||
J. Michael Hansen | |||||||||||||||||
Executive Vice President and Chief Financial Officer |
Three Months Ended | |||||||||||||||||
November 30, 2023 |
November 30, 2022 |
% Change |
|||||||||||||||
Revenue: | |||||||||||||||||
Uniform rental and facility services | $ | 1,850,542 | $ | 1,709,987 | 8.2% | ||||||||||||
Other | 526,635 | 464,871 | 13.3% | ||||||||||||||
Total revenue | 2,377,177 | 2,174,858 | 9.3% | ||||||||||||||
Costs and expenses: | |||||||||||||||||
Cost of uniform rental and facility services | 974,231 | 906,727 | 7.4% | ||||||||||||||
Cost of other | 261,398 | 245,684 | 6.4% | ||||||||||||||
Selling and administrative expenses | 641,865 | 577,513 | 11.1% | ||||||||||||||
Operating income | 499,683 | 444,934 | 12.3% | ||||||||||||||
Interest income | (769) | (344) | 123.5% | ||||||||||||||
Interest expense | 26,590 | 28,920 | (8.1)% | ||||||||||||||
Income before income taxes | 473,862 | 416,358 | 13.8% | ||||||||||||||
Income taxes | 99,249 | 92,065 | 7.8% | ||||||||||||||
Net income | $ | 374,613 | $ | 324,293 | 15.5% | ||||||||||||
Basic earnings per share | $ | 3.67 | $ | 3.18 | 15.4% | ||||||||||||
Diluted earnings per share | $ | 3.61 | $ | 3.12 | 15.7% | ||||||||||||
Basic weighted average common shares outstanding | 101,667 | 101,637 | |||||||||||||||
Diluted weighted average common shares outstanding | 103,266 | 103,356 |
Six Months Ended | |||||||||||||||||
November 30, 2023 |
November 30, 2022 |
% Change |
|||||||||||||||
Revenue: | |||||||||||||||||
Uniform rental and facility services | $ | 3,677,367 | $ | 3,407,759 | 7.9% | ||||||||||||
Other | 1,042,140 | 933,553 | 11.6% | ||||||||||||||
Total revenue | 4,719,507 | 4,341,312 | 8.7% | ||||||||||||||
Costs and expenses: | |||||||||||||||||
Cost of uniform rental and facility services | 1,921,814 | 1,797,493 | 6.9% | ||||||||||||||
Cost of other | 514,574 | 493,260 | 4.3% | ||||||||||||||
Selling and administrative expenses | 1,282,880 | 1,165,505 | 10.1% | ||||||||||||||
Operating income | 1,000,239 | 885,054 | 13.0% | ||||||||||||||
Interest income | (1,191) | (499) | 138.7% | ||||||||||||||
Interest expense | 51,134 | 56,640 | (9.7)% | ||||||||||||||
Income before income taxes | 950,296 | 828,913 | 14.6% | ||||||||||||||
Income taxes | 190,598 | 152,931 | 24.6% | ||||||||||||||
Net income | $ | 759,698 | $ | 675,982 | 12.4% | ||||||||||||
Basic earnings per share | $ | 7.43 | $ | 6.63 | 12.1% | ||||||||||||
Diluted earnings per share | $ | 7.32 | $ | 6.51 | 12.4% | ||||||||||||
Basic weighted average common shares outstanding | 101,781 | 101,530 | |||||||||||||||
Diluted weighted average common shares outstanding | 103,418 | 103,343 |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
November 30, 2023 |
November 30, 2022 |
November 30, 2023 |
November 30, 2022 |
||||||||||||||||||||
Uniform rental and facility services gross margin |
47.4% | 47.0% | 47.7% | 47.3% | |||||||||||||||||||
Other gross margin | 50.4% | 47.2% | 50.6% | 47.2% | |||||||||||||||||||
Total gross margin | 48.0% | 47.0% | 48.4% | 47.2% | |||||||||||||||||||
Net income margin | 15.8% | 14.9% | 16.1% | 15.6% | |||||||||||||||||||
Six Months Ended | |||||||||||
(In thousands) | November 30, 2023 |
November 30, 2022 |
|||||||||
Net cash provided by operations | $ | 729,631 | $ | 619,149 | |||||||
Capital expenditures | (200,527) | (146,404) | |||||||||
Free cash flow | $ | 529,104 | $ | 472,745 |
(In thousands) | Uniform Rental and Facility Services |
First Aid and Safety Services |
All Other |
Corporate | Total | ||||||||||||||||||||||||
For the three months ended November 30, 2023 | |||||||||||||||||||||||||||||
Revenue | $ | 1,850,542 | $ | 266,401 | $ | 260,234 | $ | — | $ | 2,377,177 | |||||||||||||||||||
Gross margin | $ | 876,311 | $ | 145,316 | $ | 119,921 | $ | — | $ | 1,141,548 | |||||||||||||||||||
Selling and administrative expenses | $ | 476,700 | $ | 86,785 | $ | 78,380 | $ | — | $ | 641,865 | |||||||||||||||||||
Interest income | $ | — | $ | — | $ | — | $ | (769) | $ | (769) | |||||||||||||||||||
Interest expense | $ | — | $ | — | $ | — | $ | 26,590 | $ | 26,590 | |||||||||||||||||||
Income (loss) before income taxes | $ | 399,611 | $ | 58,531 | $ | 41,541 | $ | (25,821) | $ | 473,862 | |||||||||||||||||||
For the three months ended November 30, 2022 | |||||||||||||||||||||||||||||
Revenue | $ | 1,709,987 | $ | 235,974 | $ | 228,897 | $ | — | $ | 2,174,858 | |||||||||||||||||||
Gross margin | $ | 803,260 | $ | 119,153 | $ | 100,034 | $ | — | $ | 1,022,447 | |||||||||||||||||||
Selling and administrative expenses | $ | 434,165 | $ | 73,658 | $ | 69,690 | $ | — | $ | 577,513 | |||||||||||||||||||
Interest income | $ | — | $ | — | $ | — | $ | (344) | $ | (344) | |||||||||||||||||||
Interest expense | $ | — | $ | — | $ | — | $ | 28,920 | $ | 28,920 | |||||||||||||||||||
Income (loss) before income taxes | $ | 369,095 | $ | 45,495 | $ | 30,344 | $ | (28,576) | $ | 416,358 | |||||||||||||||||||
For the six months ended November 30, 2023 | |||||||||||||||||||||||||||||
Revenue | $ | 3,677,367 | $ | 527,094 | $ | 515,046 | $ | — | $ | 4,719,507 | |||||||||||||||||||
Gross margin | $ | 1,755,553 | $ | 291,092 | $ | 236,474 | $ | — | $ | 2,283,119 | |||||||||||||||||||
Selling and administrative expenses | $ | 949,414 | $ | 172,980 | $ | 160,486 | $ | — | $ | 1,282,880 | |||||||||||||||||||
Interest income | $ | — | $ | — | $ | — | $ | (1,191) | $ | (1,191) | |||||||||||||||||||
Interest expense | $ | — | $ | — | $ | — | $ | 51,134 | $ | 51,134 | |||||||||||||||||||
Income (loss) before income taxes | $ | 806,139 | $ | 118,112 | $ | 75,988 | $ | (49,943) | $ | 950,296 | |||||||||||||||||||
For the six months ended November 30, 2022 | |||||||||||||||||||||||||||||
Revenue | $ | 3,407,759 | $ | 470,135 | $ | 463,418 | $ | — | $ | 4,341,312 | |||||||||||||||||||
Gross margin | $ | 1,610,266 | $ | 235,290 | $ | 205,003 | $ | — | $ | 2,050,559 | |||||||||||||||||||
Selling and administrative expenses | $ | 876,400 | $ | 148,949 | $ | 140,156 | $ | — | $ | 1,165,505 | |||||||||||||||||||
Interest income | $ | — | $ | — | $ | — | $ | (499) | $ | (499) | |||||||||||||||||||
Interest expense | $ | — | $ | — | $ | — | $ | 56,640 | $ | 56,640 | |||||||||||||||||||
Income (loss) before income taxes | $ | 733,866 | $ | 86,341 | $ | 64,847 | $ | (56,141) | $ | 828,913 |
November 30, 2023 |
May 31, 2023 |
||||||||||
(Unaudited) | |||||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 85,556 | $ | 124,149 | |||||||
Accounts receivable, net | 1,273,974 | 1,152,993 | |||||||||
Inventories, net | 474,840 | 506,604 | |||||||||
Uniforms and other rental items in service | 1,035,717 | 1,011,918 | |||||||||
Prepaid expenses and other current assets | 166,652 | 142,795 | |||||||||
Total current assets | 3,036,739 | 2,938,459 | |||||||||
Property and equipment, net | 1,463,826 | 1,396,476 | |||||||||
Investments | 270,006 | 247,191 | |||||||||
Goodwill | 3,120,506 | 3,056,201 | |||||||||
Service contracts, net | 329,511 | 346,574 | |||||||||
Operating lease right-of-use assets, net | 179,154 | 178,464 | |||||||||
Other assets, net | 414,127 | 382,991 | |||||||||
$ | 8,813,869 | $ | 8,546,356 | ||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | 316,697 | $ | 302,292 | |||||||
Accrued compensation and related liabilities | 154,452 | 239,086 | |||||||||
Accrued liabilities | 619,288 | 632,504 | |||||||||
Income taxes, current | 13,102 | 12,470 | |||||||||
Operating lease liabilities, current | 44,063 | 43,710 | |||||||||
Debt due within one year | 210,000 | — | |||||||||
Total current liabilities | 1,357,602 | 1,230,062 | |||||||||
Long-term liabilities: | |||||||||||
Debt due after one year | 2,474,287 | 2,486,405 | |||||||||
Deferred income taxes | 497,198 | 498,356 | |||||||||
Operating lease liabilities | 138,936 | 138,278 | |||||||||
Accrued liabilities | 351,365 | 329,269 | |||||||||
Total long-term liabilities | 3,461,786 | 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: 192,861,307 issued and 101,347,603 outstanding
FY 2023: 192,198,938 issued and 101,732,148 outstanding
|
2,179,951 | 2,031,542 | |||||||||
Retained earnings | 10,081,267 | 9,597,315 | |||||||||
Treasury stock:
FY 2024: 91,513,704 shares
FY 2023: 90,466,790 shares
|
(8,360,076) | (7,842,649) | |||||||||
Accumulated other comprehensive income | 93,339 | 77,778 | |||||||||
Total shareholders’ equity | 3,994,481 | 3,863,986 | |||||||||
$ | 8,813,869 | $ | 8,546,356 |
Six Months Ended | |||||||||||
November 30, 2023 |
November 30, 2022 |
||||||||||
Cash flows from operating activities: | |||||||||||
Net income | $ | 759,698 | $ | 675,982 | |||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation | 136,803 | 126,561 | |||||||||
Amortization of intangible assets and capitalized contract costs | 79,235 | 74,693 | |||||||||
Stock-based compensation | 53,182 | 51,537 | |||||||||
Deferred income taxes | (7,105) | 18,565 | |||||||||
Change in current assets and liabilities, net of acquisitions of businesses: | |||||||||||
Accounts receivable, net | (120,881) | (133,897) | |||||||||
Inventories, net | 32,093 | (43,266) | |||||||||
Uniforms and other rental items in service | (21,649) | (73,475) | |||||||||
Prepaid expenses and other current assets and capitalized contract costs | (80,056) | (85,532) | |||||||||
Accounts payable | 14,981 | 61,421 | |||||||||
Accrued compensation and related liabilities | (86,725) | (28,212) | |||||||||
Accrued liabilities and other | (30,453) | (33,352) | |||||||||
Income taxes, current | 508 | 8,124 | |||||||||
Net cash provided by operating activities | 729,631 | 619,149 | |||||||||
Cash flows from investing activities: | |||||||||||
Capital expenditures | (200,527) | (146,404) | |||||||||
Purchases of investments | (7,475) | (5,182) | |||||||||
Acquisitions of businesses, net of cash acquired | (73,997) | (15,457) | |||||||||
Other, net | (196) | (4,381) | |||||||||
Net cash used in investing activities | (282,195) | (171,424) | |||||||||
Cash flows from financing activities: | |||||||||||
Issuance of commercial paper, net | 210,000 | 124,046 | |||||||||
Repayment of debt | (13,450) | — | |||||||||
Proceeds from exercise of stock-based compensation awards | 929 | 2,125 | |||||||||
Dividends paid | (255,839) | (215,017) | |||||||||
Repurchase of common stock | (423,128) | (348,682) | |||||||||
Other, net | (4,322) | (8,840) | |||||||||
Net cash used in financing activities | (485,810) | (446,368) | |||||||||
Effect of exchange rate changes on cash and cash equivalents | (219) | (2,029) | |||||||||
Net decrease in cash and cash equivalents | (38,593) | (672) | |||||||||
Cash and cash equivalents at beginning of period | 124,149 | 90,471 | |||||||||
Cash and cash equivalents at end of period | $ | 85,556 | $ | 89,799 |