Summary

  • Cintas Corp. provides corporate identity uniforms through rental and sales programs.
  • The company offers rental apparel programs that include professional laundering, inspection and delivery.
  • The company serving more than one million businesses primarily in the United States (U.S.), as well as Canada and Latin America.
  • Cintas has 474 facilities located in 336 cities.

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Cintas Corp. (Nasdaq: CTAS, LSE: 0HYJ) provides corporate identity uniforms through rental and sales programs. The company offer rental apparel programs that include professional laundering, inspection and delivery. Headquartered in Cincinnati, Ohio, its Fortune 500 company serves more than one million businesses in all types of industries.

Recent Developments

Cintas honored among FORTUNE’S world’s most admired companies.1

Feb. 21, 2023; Cintas Corporation has been honored as one of FORTUNE’S 2023 World’s Most Admired Companies. This is the 15th time that Cintas has been recognized by FORTUNE among its Most Admired Companies surveys.

Cintas is currently listed on two other FORTUNE corporate rankings: the 2022 Fortune 500 and the 2022 Fortune Global 2000. Additionally, Cintas was recently recognized for its corporate citizenship and sustainable business model with its repeat inclusion on Newsweek’s list of America’s Most Responsible Companies in 2023. 

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Financial Highlights

Fiscal 2023 Second Quarter Results2

December 21, 2022 -- Cintas Corporation reported results for its fiscal 2023 second quarter ended November 30, 2022. Revenue for the second quarter of fiscal 2023 was $2.17 billion compared to $1.92 billion in last year’s second quarter, an increase of 13.1%. The organic revenue growth rate for the second quarter of fiscal 2023, which adjusts for the impacts of acquisitions, divestitures and foreign currency exchange rate fluctuations, was 12.8%.

Gross margin for the second quarter of fiscal 2023 was $1,022.4 million compared to $885.1 million in last year’s second quarter, an increase of 15.5%. Gross margin as a percentage of revenue was 47.0% for the second quarter of fiscal 2023 compared to 46.0% in last year's second quarter, an increase of 100 basis points. Energy expenses comprised of gasoline, natural gas and electricity were 10 basis points higher during the second quarter of fiscal 2023 compared to last year's second quarter.

Operating income for the second quarter of fiscal 2023 was $444.9 million compared to $381.2 million in last year's second quarter, an increase of 16.7%. Operating income as a percentage of revenue was 20.5% in the second quarter of fiscal 2023 compared to 19.8% in last year's second quarter, an increase of 70 basis points.

Net income was $324.3 million for the second quarter of fiscal 2023 compared to $294.7 million in last year's second quarter, an increase of 10.1%. Second quarter of fiscal 2023 diluted earnings per share (EPS) was $3.12 compared to $2.76 in last year's second quarter, an increase of 13.0%.

Fiscal Year 2022 Result

For the fiscal year ended May 31, 2022, total revenue was $7.9 billion, an increase of 10.4% over the prior fiscal year. Revenue increased organically by 10.2% as a result of increased sales volume. Organic growth adjusts for the impact of acquisitions, divestitures and foreign currency exchange rate fluctuations. Total revenue was positively impacted by 0.1% due primarily to acquisitions and by 0.1% due to foreign currency exchange rate fluctuations.

Selling and administrative expenses increased $115.7 million, to 26.0% as a percent of revenue, compared to 27.1% in fiscal 2021. The improvement as a percent of revenue was primarily due to lower labor expense as a percent of revenue as well as a $12.1 million gain on the sale of certain operating assets and a $30.2 million gain on an equity method investment transaction recorded in fiscal 2022. The impacts from the gains recorded in fiscal 2022 were partially offset by the $22.0 million gain on the sale of certain operating assets recorded in fiscal 2021.

Net interest expense (interest expense less interest income) was $88.6 million in fiscal 2022 compared to $97.7 million in fiscal 2021. The change was primarily due to the replacement of the $250.0 million of senior notes with an interest rate of 4.30% that matured on June 1, 2021, with lower interest rate bearing commercial paper.

Income before income taxes was $1,498.8 million, an increase of $211.0 million, or 16.4%, compared to fiscal 2021. The increase in income before income taxes was primarily due to revenue growth and the decrease in selling and administrative expenses as a percent of revenue in fiscal 2022. Income before income taxes also benefited from the previously mentioned one-time gains recorded in fiscal 2022.

Net income from continuing operations for fiscal 2022 of $1,235.8 million was a 11.2% increase compared to fiscal 2021. Diluted earnings per share from continuing operations of $11.65 was a 13.8% increase compared to fiscal 2021 diluted earnings per share from continuing operations of $10.24. Diluted earnings per share from continuing operations increased primarily due to the increase in net income combined with the decrease in diluted weighted average common shares outstanding. The decrease in diluted weighted average common shares outstanding resulted from purchasing an aggregate of approximately 3.7 million shares of common stock under the Board approved share buyback programs during fiscal 2022.

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Company Overview

Headquartered in Cincinnati, Ohio, Cintas Corporation provides highly specialized products and services. The company offer rental apparel programs that include professional laundering, inspection and delivery -- along with stylish apparel purchase collections that combine custom designs with ready-to-wear styles. The company replenish essential cleaning supplies and hand sanitizer, and stock restrooms with hygiene and paper products. The company routinely deliver freshly laundered entrance mats and reusable microfiber products, and apply disinfectant spray and sanitizer spray to common touchpoints and surfaces. The company restock first aid & safety supplies and PPE, and test and inspect fire protection equipment.3

Cintas’ reportable operating segments are the Uniform Rental and Facility Services operating segment and the First Aid and Safety Services operating segment. The Uniform Rental and Facility Services reportable operating segment consists of the rental and servicing of uniforms and other garments, including flame resistant clothing, mats, mops and shop towels and other ancillary items. In addition to these rental items, restroom cleaning services and supplies and the sale of items from its catalogs to its customers on route are included within this reportable operating segment. The First Aid and Safety Services reportable operating segment consists of first aid and safety products and services. The remainder of Cintas’ business, which consists of the Fire Protection Services operating segment and the Uniform Direct Sale operating segment, is included in All Other

Plants and Facilities

Cintas occupies 474 facilities located in 336 cities. Cintas leases 245 of these facilities for various terms ranging from monthly to the year 2033. Cintas expects that it will be able to renew or replace its leases on satisfactory terms. Of the five manufacturing facilities noted below, all but one are owned by Cintas. The principal executive office in Cincinnati, Ohio.

Cintas operates 12 distribution centers and five manufacturing facilities. Cintas also operates first aid and safety and fire protection facilities and direct sales offices. Cintas considers the facilities it operates to be adequate for their intended use. Cintas owns or leases approximately 20,000 vehicles which are used for the route-based services and by the sales and management employee-partners.

Type of FacilityNo of Facilities
Rental Processing Plants205
Rental Branches134
First Aid and Safety Facilities64
All Other Facilities54
Distribution Centers12
Manufacturing Facilities5
Total474

Products & Services

Cintas Corporation serving more than one million businesses of all types and sizes, primarily in the United States (U.S.), as well as Canada and Latin America by providing a wide range of products and services. With products and services including uniforms, mats, mops, restroom supplies, first aid and safety products, fire extinguishers and testing, and safety training.

  • Uniforms & Apparel
  • Training & Compliance
  • Fire Protection
  • Facility Services
  • Promotional Products
  • Flame Resistant Clothing
  • First Aid & Safety

Company History

The company was founded in 1929 by Richard Farmer as the Acme Industrial Laundry Company in Cincinnati, Ohio, and the company has undergone several name changes and acquisitions since then.4

YearMilestone
1929

Richard Farmer founded the Acme Industrial Laundry Company in Cincinnati, Ohio, which later

 became Cintas Corporation.

1958The company's name was changed to "Uniform Rental Division" as it began to focus on uniform rental services.
1968Cintas Corporation went public and started trading on the NASDAQ stock exchange.
1985The company's name was changed to "Cintas Corporation" to better reflect the company's diversification beyond uniform rental services.
1992Cintas Corporation acquired competitor G&K Services, expanding its presence in the uniform rental industry.
2003The company expanded its services to include first aid and safety products with the acquisition of Zee Medical.
2004Cintas Corporation became a component of the S&P 500 index.
2010The company expanded into Canada through the acquisition of Canadian uniform rental company, Mustang Express.
2011Cintas Corporation entered the document management industry with the acquisition of the Document Shredding Company.
2014The company acquired Zep Inc.'s industrial cleaning business, expanding its services to include cleaning chemicals.
2017Cintas Corporation acquired G&K Services' operations in Canada, the United Kingdom, and the Netherlands.

References

  1. ^ https://www.cintas.com/news/press-releases/cintas-honored-among-fortune-s-world-s-most-admired-companies/
  2. ^ https://www.cintas.com/news/press-releases/cintas-corporation-announces-fiscal-2023-second-quarter-results/
  3. ^ https://fintel.io/doc/sec-cintas-corp-723254-10k-2022-july-27-19200-9134
  4. ^ https://www.cintascares.com/company-timeline/
Created by Asif Farooqui on 2023/03/06 17:08
     
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