Market Overview

Cintas Corporation Announces Fiscal 2020 First Quarter Results

Share:

Cintas Corporation (NASDAQ:CTAS) today reported results for its fiscal 2020 first quarter ended August 31, 2019.

Revenue for the first quarter of fiscal 2020 was $1.81 billion, an increase of 6.7% over last year's first quarter. The organic revenue growth rate, which adjusts for the impacts of acquisitions, foreign currency exchange rate fluctuations, and differences in the number of workdays, was 8.3%. The organic revenue growth rate for the Uniform Rental and Facility Services operating segment was 7.5%, and the organic revenue growth rate for the First Aid and Safety Services operating segment was 13.8%.

Gross margin for the first quarter of fiscal 2020 of $849.1 million increased 9.6% from last year's first quarter. Gross margin as a percentage of revenue was 46.9% for the first quarter of fiscal 2020 compared to 45.6% in the first quarter of fiscal 2019. Uniform Rental and Facility Services operating segment gross margin as a percentage of revenue improved 150 basis points from last year's first quarter to 47.2%, and the First Aid and Safety Services operating segment gross margin as a percentage of revenue improved 110 basis points to 49.0%.

Operating income for the first quarter of fiscal 2020 of $306.1 million increased 15.4% from last year's first quarter operating income of $265.2 million. Operating income as a percentage of revenue was 16.9% in the first quarter of fiscal 2020 compared to 15.6% in the first quarter of fiscal 2019. Operating income in the first quarter of fiscal 2019 was negatively impacted by integration expenses related to the G&K Services, Inc. (G&K) acquisition by $4.9 million, or 30 basis points.

Net income from continuing operations was $250.8 million for the first quarter of fiscal 2020, compared to $212.5 million in the first quarter of fiscal 2019, an increase of 18.0%. Earnings per diluted share (EPS) from continuing operations were $2.32 for the first quarter of fiscal 2020, compared to $1.89 in the prior year first quarter. G&K acquisition integration expenses negatively impacted EPS in the first quarter of fiscal year 2019 by $0.04.

The following table provides a comparison of fiscal 2020 first quarter EPS to fiscal 2019 first quarter EPS:

 

Three Months Ended

 

August 31,

2019

 

August 31,

2018

 

Growth vs.

FY 2019

 

 

 

 

 

 

EPS - continuing operations

$

2.32

 

 

$

1.89

 

 

 

G&K integration expenses

 

0.00

 

 

 

0.04

 

 

 

EPS excluding above items

$

2.32

 

 

$

1.93

 

 

20.2%

Scott D. Farmer, Cintas' Chairman and Chief Executive Officer, stated, "We are pleased with our start to fiscal 2020. Our employee-partners continue to execute well on our game plan and on our important initiatives, and we look forward to another successful year."

Mr. Farmer concluded, "We are increasing our fiscal 2020 financial guidance. We are raising our annual revenue expectations from a range of $7.24 billion to $7.31 billion to a range of $7.28 billion to $7.32 billion and EPS from a range of $8.30 to $8.45 to a range of $8.47 to $8.57. This financial guidance does not include any potential deterioration in the U.S. economy or future share buybacks. It does incorporate the impact of having one less workday in fiscal 2020 compared to fiscal 2019."

The following table provides a comparison of fiscal 2020 revenue and EPS guidance to fiscal 2019 actual results:

<

 

Fiscal

2019

 

Fiscal 2020

Low End

of Range

 

Growth

vs.

2019

 

Fiscal 2020

High End

of Range

 

Growth

vs.

2019

 

 

 

 

 

 

 

 

 

 

Fiscal 2020 Revenue Guidance

 

 

 

 

 

 

 

 

 

($s in millions)

 

 

 

 

 

 

 

 

 

Revenue guidance

$

6,892.3

 

 

$

7,280.0

 

 

5.6%

 

$

7,320.0

 

 

6.2%

 

 

 

 

 

 

 

 

 

 

Growth on constant workday basis (1)

 

 

 

 

6.0%

 

 

 

6.6%

 

 

 

 

 

 

 

 

 

 

Fiscal 2020 Earnings Per Share Guidance

 

 

 

 

 

 

 

 

 

 

View Comments and Join the Discussion!
 
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com