Washington | 0-11399 | 31-1188630 | ||||||||||||
(State or Other Jurisdiction of Incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
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: | March 27, 2024 | By: | /s/ J. Michael Hansen | ||||||||||||||
J. Michael Hansen | |||||||||||||||||
Executive Vice President and Chief Financial Officer |
Three Months Ended | |||||||||||||||||
February 29, 2024 |
February 28, 2023 |
% Change |
|||||||||||||||
Revenue: | |||||||||||||||||
Uniform rental and facility services | $ | 1,876,642 | $ | 1,716,165 | 9.4% | ||||||||||||
Other | 529,531 | 473,821 | 11.8% | ||||||||||||||
Total revenue | 2,406,173 | 2,189,986 | 9.9% | ||||||||||||||
Costs and expenses: | |||||||||||||||||
Cost of uniform rental and facility services | 960,208 | 907,993 | 5.8% | ||||||||||||||
Cost of other | 258,117 | 247,962 | 4.1% | ||||||||||||||
Selling and administrative expenses | 667,048 | 587,219 | 13.6% | ||||||||||||||
Operating income | 520,800 | 446,812 | 16.6% | ||||||||||||||
Interest income | (930) | (373) | 149.3% | ||||||||||||||
Interest expense | 25,530 | 28,819 | (11.4)% | ||||||||||||||
Income before income taxes | 496,200 | 418,366 | 18.6% | ||||||||||||||
Income taxes | 98,621 | 92,539 | 6.6% | ||||||||||||||
Net income | $ | 397,579 | $ | 325,827 | 22.0% | ||||||||||||
Basic earnings per share | $ | 3.90 | $ | 3.19 | 22.3% | ||||||||||||
Diluted earnings per share | $ | 3.84 | $ | 3.14 | 22.3% | ||||||||||||
Basic weighted average common shares outstanding | 101,477 | 101,714 | |||||||||||||||
Diluted weighted average common shares outstanding | 103,187 | 103,418 |
Nine Months Ended | |||||||||||||||||
February 29, 2024 |
February 28, 2023 |
% Change |
|||||||||||||||
Revenue: | |||||||||||||||||
Uniform rental and facility services | $ | 5,554,009 | $ | 5,123,924 | 8.4% | ||||||||||||
Other | 1,571,671 | 1,407,374 | 11.7% | ||||||||||||||
Total revenue | 7,125,680 | 6,531,298 | 9.1% | ||||||||||||||
Costs and expenses: | |||||||||||||||||
Cost of uniform rental and facility services | 2,882,022 | 2,705,486 | 6.5% | ||||||||||||||
Cost of other | 772,691 | 741,222 | 4.2% | ||||||||||||||
Selling and administrative expenses | 1,949,928 | 1,752,724 | 11.3% | ||||||||||||||
Operating income | 1,521,039 | 1,331,866 | 14.2% | ||||||||||||||
Interest income | (2,121) | (872) | 143.2% | ||||||||||||||
Interest expense | 76,664 | 85,459 | (10.3)% | ||||||||||||||
Income before income taxes | 1,446,496 | 1,247,279 | 16.0% | ||||||||||||||
Income taxes | 289,219 | 245,470 | 17.8% | ||||||||||||||
Net income | $ | 1,157,277 | $ | 1,001,809 | 15.5% | ||||||||||||
Basic earnings per share | $ | 11.34 | $ | 9.82 | 15.5% | ||||||||||||
Diluted earnings per share | $ | 11.15 | $ | 9.65 | 15.5% | ||||||||||||
Basic weighted average common shares outstanding | 101,681 | 101,589 | |||||||||||||||
Diluted weighted average common shares outstanding | 103,347 | 103,363 |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
February 29, 2024 |
February 28, 2023 |
February 29, 2024 |
February 28, 2023 |
||||||||||||||||||||
Uniform rental and facility services gross margin |
48.8% | 47.1% | 48.1% | 47.2% | |||||||||||||||||||
Other gross margin | 51.3% | 47.7% | 50.8% | 47.3% | |||||||||||||||||||
Total gross margin | 49.4% | 47.2% | 48.7% | 47.2% | |||||||||||||||||||
Net income margin | 16.5% | 14.9% | 16.2% | 15.3% | |||||||||||||||||||
Nine Months Ended | |||||||||||
(In thousands) | February 29, 2024 |
February 28, 2023 |
|||||||||
Net cash provided by operations | $ | 1,386,741 | $ | 1,044,191 | |||||||
Capital expenditures | (307,558) | (224,116) | |||||||||
Free cash flow | $ | 1,079,183 | $ | 820,075 |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||
February 29, 2024 |
February 28, 2023 |
Growth % |
February 29, 2024 |
February 28, 2023 |
Growth % |
||||||||||||||||||||||||||||||
A | B | G | I | J | O | ||||||||||||||||||||||||||||||
Revenue | $ | 2,406,173 | $ | 2,189,986 | 9.9% | $ | 7,125,680 | $ | 6,531,298 | 9.1% | |||||||||||||||||||||||||
G=(A-B)/B | O=(I-J)/J | ||||||||||||||||||||||||||||||||||
C | D | K | L | ||||||||||||||||||||||||||||||||
Workdays in the period | 65 | 64 | 196 | 195 | |||||||||||||||||||||||||||||||
E | F | H | M | N | P | ||||||||||||||||||||||||||||||
Workday adjusted revenue growth |
$ | 2,369,155 | $ | 2,189,986 | 8.2% | $ | 7,089,324 | $ | 6,531,298 | 8.5% | |||||||||||||||||||||||||
E=(A/C)*D | F=(B/D)*D | H=(E-F)/F | M=(I/K)*L | N=(J/L)*L | P=(M-N)/N | ||||||||||||||||||||||||||||||
Acquisition and foreign currency exchange impact, net | (0.5)% | (0.3)% | |||||||||||||||||||||||||||||||||
Organic growth | 7.7% | 8.2% |
(In thousands) | Uniform Rental and Facility Services |
First Aid and Safety Services |
All Other |
Corporate | Total | ||||||||||||||||||||||||
For the three months ended February 29, 2024 | |||||||||||||||||||||||||||||
Revenue | $ | 1,876,642 | $ | 262,602 | $ | 266,929 | $ | — | $ | 2,406,173 | |||||||||||||||||||
Gross margin | $ | 916,434 | $ | 147,732 | $ | 123,682 | $ | — | $ | 1,187,848 | |||||||||||||||||||
Selling and administrative expenses | $ | 496,027 | $ | 90,015 | $ | 81,006 | $ | — | $ | 667,048 | |||||||||||||||||||
Interest income | $ | — | $ | — | $ | — | $ | (930) | $ | (930) | |||||||||||||||||||
Interest expense | $ | — | $ | — | $ | — | $ | 25,530 | $ | 25,530 | |||||||||||||||||||
Income (loss) before income taxes | $ | 420,407 | $ | 57,717 | $ | 42,676 | $ | (24,600) | $ | 496,200 | |||||||||||||||||||
For the three months ended February 28, 2023 | |||||||||||||||||||||||||||||
Revenue | $ | 1,716,165 | $ | 231,605 | $ | 242,216 | $ | — | $ | 2,189,986 | |||||||||||||||||||
Gross margin | $ | 808,172 | $ | 119,408 | $ | 106,451 | $ | — | $ | 1,034,031 | |||||||||||||||||||
Selling and administrative expenses | $ | 448,177 | $ | 72,137 | $ | 66,905 | $ | — | $ | 587,219 | |||||||||||||||||||
Interest income | $ | — | $ | — | $ | — | $ | (373) | $ | (373) | |||||||||||||||||||
Interest expense | $ | — | $ | — | $ | — | $ | 28,819 | $ | 28,819 | |||||||||||||||||||
Income (loss) before income taxes | $ | 359,995 | $ | 47,271 | $ | 39,546 | $ | (28,446) | $ | 418,366 | |||||||||||||||||||
For the nine months ended February 29, 2024 | |||||||||||||||||||||||||||||
Revenue | $ | 5,554,009 | $ | 789,696 | $ | 781,975 | $ | — | $ | 7,125,680 | |||||||||||||||||||
Gross margin | $ | 2,671,987 | $ | 438,824 | $ | 360,156 | $ | — | $ | 3,470,967 | |||||||||||||||||||
Selling and administrative expenses | $ | 1,445,440 | $ | 262,996 | $ | 241,492 | $ | — | $ | 1,949,928 | |||||||||||||||||||
Interest income | $ | — | $ | — | $ | — | $ | (2,121) | $ | (2,121) | |||||||||||||||||||
Interest expense | $ | — | $ | — | $ | — | $ | 76,664 | $ | 76,664 | |||||||||||||||||||
Income (loss) before income taxes | $ | 1,226,547 | $ | 175,828 | $ | 118,664 | $ | (74,543) | $ | 1,446,496 | |||||||||||||||||||
For the nine months ended February 28, 2023 | |||||||||||||||||||||||||||||
Revenue | $ | 5,123,924 | $ | 701,740 | $ | 705,634 | $ | — | $ | 6,531,298 | |||||||||||||||||||
Gross margin | $ | 2,418,438 | $ | 354,698 | $ | 311,454 | $ | — | $ | 3,084,590 | |||||||||||||||||||
Selling and administrative expenses | $ | 1,324,577 | $ | 221,086 | $ | 207,061 | $ | — | $ | 1,752,724 | |||||||||||||||||||
Interest income | $ | — | $ | — | $ | — | $ | (872) | $ | (872) | |||||||||||||||||||
Interest expense | $ | — | $ | — | $ | — | $ | 85,459 | $ | 85,459 | |||||||||||||||||||
Income (loss) before income taxes | $ | 1,093,861 | $ | 133,612 | $ | 104,393 | $ | (84,587) | $ | 1,247,279 |
February 29, 2024 |
May 31, 2023 |
||||||||||
(Unaudited) | |||||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 128,483 | $ | 124,149 | |||||||
Accounts receivable, net | 1,262,077 | 1,152,993 | |||||||||
Inventories, net | 451,215 | 506,604 | |||||||||
Uniforms and other rental items in service | 1,025,597 | 1,011,918 | |||||||||
Prepaid expenses and other current assets | 163,624 | 142,795 | |||||||||
Total current assets | 3,030,996 | 2,938,459 | |||||||||
Property and equipment, net | 1,505,810 | 1,396,476 | |||||||||
Investments | 294,261 | 247,191 | |||||||||
Goodwill | 3,212,432 | 3,056,201 | |||||||||
Service contracts, net | 335,863 | 346,574 | |||||||||
Operating lease right-of-use assets, net | 186,514 | 178,464 | |||||||||
Other assets, net | 412,999 | 382,991 | |||||||||
$ | 8,978,875 | $ | 8,546,356 | ||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | 307,941 | $ | 302,292 | |||||||
Accrued compensation and related liabilities | 182,669 | 239,086 | |||||||||
Accrued liabilities | 720,545 | 632,504 | |||||||||
Income taxes, current | 18,310 | 12,470 | |||||||||
Operating lease liabilities, current | 44,430 | 43,710 | |||||||||
Total current liabilities | 1,273,895 | 1,230,062 | |||||||||
Long-term liabilities: | |||||||||||
Debt due after one year | 2,474,908 | 2,486,405 | |||||||||
Deferred income taxes | 481,177 | 498,356 | |||||||||
Operating lease liabilities | 146,060 | 138,278 | |||||||||
Accrued liabilities | 368,752 | 329,269 | |||||||||
Total long-term liabilities | 3,470,897 | 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: 193,090,252 issued and 101,444,090 outstanding
FY 2023: 192,198,938 issued and 101,732,148 outstanding
|
2,246,329 | 2,031,542 | |||||||||
Retained earnings | 10,341,248 | 9,597,315 | |||||||||
Treasury stock:
FY 2024: 91,646,162 shares
FY 2023: 90,466,790 shares
|
(8,439,817) | (7,842,649) | |||||||||
Accumulated other comprehensive income | 86,323 | 77,778 | |||||||||
Total shareholders’ equity | 4,234,083 | 3,863,986 | |||||||||
$ | 8,978,875 | $ | 8,546,356 |
Nine Months Ended | |||||||||||
February 29, 2024 |
February 28, 2023 |
||||||||||
Cash flows from operating activities: | |||||||||||
Net income | $ | 1,157,277 | $ | 1,001,809 | |||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation | 207,637 | 190,801 | |||||||||
Amortization of intangible assets and capitalized contract costs | 119,815 | 113,281 | |||||||||
Stock-based compensation | 84,490 | 75,334 | |||||||||
Deferred income taxes | (21,366) | 22,001 | |||||||||
Change in current assets and liabilities, net of acquisitions of businesses: | |||||||||||
Accounts receivable, net | (109,040) | (132,473) | |||||||||
Inventories, net | 55,834 | (60,563) | |||||||||
Uniforms and other rental items in service | (9,060) | (85,991) | |||||||||
Prepaid expenses and other current assets and capitalized contract costs | (104,873) | (116,842) | |||||||||
Accounts payable | 5,771 | 32,851 | |||||||||
Accrued compensation and related liabilities | (58,511) | (32,666) | |||||||||
Accrued liabilities and other | 52,945 | 17,856 | |||||||||
Income taxes, current | 5,822 | 18,793 | |||||||||
Net cash provided by operating activities | 1,386,741 | 1,044,191 | |||||||||
Cash flows from investing activities: | |||||||||||
Capital expenditures | (307,558) | (224,116) | |||||||||
Purchases of investments | (7,592) | (4,618) | |||||||||
Acquisitions of businesses, net of cash acquired | (185,028) | (32,983) | |||||||||
Other, net | (3,100) | (6,894) | |||||||||
Net cash used in investing activities | (503,278) | (268,611) | |||||||||
Cash flows from financing activities: | |||||||||||
Payments of commercial paper, net | — | (62,200) | |||||||||
Repayment of debt | (13,450) | — | |||||||||
Proceeds from exercise of stock-based compensation awards | 1,275 | 2,941 | |||||||||
Dividends paid | (393,310) | (332,421) | |||||||||
Repurchase of common stock | (468,146) | (370,917) | |||||||||
Other, net | (5,839) | (11,996) | |||||||||
Net cash used in financing activities | (879,470) | (774,593) | |||||||||
Effect of exchange rate changes on cash and cash equivalents | 341 | (2,895) | |||||||||
Net increase (decrease) in cash and cash equivalents | 4,334 | (1,908) | |||||||||
Cash and cash equivalents at beginning of period | 124,149 | 90,471 | |||||||||
Cash and cash equivalents at end of period | $ | 128,483 | $ | 88,563 |