Company Announcements

Cintas Corporation Announces Record Fiscal 2019 Results

Source: Business Wire

Marks 48 th Year of Record Revenue and Net Income In Past 50 Years

CINCINNATI--(BUSINESS WIRE)--Jul. 16, 2019-- Cintas Corporation (Nasdaq: CTAS) today reported record revenue and net income for its fiscal 2019 fourth quarter and full year ended May 31, 2019.

Revenue for the fourth quarter of fiscal 2019 was $1.79 billion, an increase of 7.4% over last year’s fourth quarter. The organic revenue growth rate, which adjusts for the impacts of acquisitions and foreign currency exchange rate fluctuations, was 7.6%. The organic revenue growth rate for the Uniform Rental and Facility Services operating segment was 6.8%, and the organic revenue growth rate for the First Aid and Safety Services operating segment was 10.7%.

Gross margin for the fourth quarter of fiscal 2019 of $823.6 million increased 9.5% from last year’s fourth quarter. Gross margin as a percentage of revenue was 45.9% for the fourth quarter of fiscal 2019 compared to 45.1% in the fourth quarter of last fiscal year. Uniform Rental and Facility Services operating segment gross margin as a percentage of revenue improved 100 basis points from last year’s fourth quarter to 46.0%, and the First Aid and Safety Services operating segment gross margin percentage improved 70 basis points to 47.7%.

Operating income for the fourth quarter of fiscal 2019 of $314.4 million increased 18.4% from last year’s fourth quarter operating income of $265.5 million. Operating income as a percentage of revenue was 17.5% in the fourth quarter of fiscal 2019 compared to 15.9% in the fourth quarter of fiscal 2018. Operating income was negatively impacted by integration expenses related to the G&K Services, Inc. (G&K) acquisition by $0.9 million in the fourth quarter of fiscal 2019 and $15.0 million in the fourth quarter of fiscal 2018. Excluding the integration expenses related to the G&K acquisition, operating income as a percentage of revenue was 17.6% in the fourth quarter of fiscal 2019 compared to 16.8% in the fourth quarter of last fiscal year.

Net income from continuing operations was $226.2 million for the fourth quarter of fiscal 2019, compared to $189.3 million in the fourth quarter of fiscal 2018, an increase of 19.5%. Earnings per diluted share (EPS) from continuing operations were $2.06 for the fourth quarter of fiscal 2019, compared to $1.68 in the prior year fourth quarter. G&K acquisition integration expenses negatively impacted EPS in the fourth quarter of fiscal year 2019 and 2018 by $0.01 and $0.09, respectively. Excluding the integration expenses related to the G&K acquisition, adjusted EPS from continuing operations for the fourth quarter were $2.07 compared to $1.77 for last year's fourth quarter, an increase of 16.9%.

For the fiscal year ended May 31, 2019, revenue was $6.89 billion, an increase of 6.4% over the prior fiscal year. The organic revenue growth rate was 6.5%. Earnings per diluted share from continuing operations for fiscal 2019 were $7.97 compared to $7.03 for last fiscal year. Fiscal 2019 EPS included a benefit of $0.47 from a non-recurring gain on the sale of an investment. Fiscal 2018 EPS included a benefit of $1.59 from the enactment of the Tax Cuts and Jobs Act (Tax Act) but was partially offset by $0.24 due to a one-time cash payment to Cintas employees following the enactment of the Tax Act. In addition, fiscal 2019 and 2018 EPS included a negative impact of $0.10 and $0.26, respectively, from integration expenses related to the G&K acquisition. Excluding the aforementioned items, adjusted EPS from continuing operations for fiscal year 2019 were $7.60 compared to $5.94 in fiscal year 2018, an increase of 27.9%.

The following table provides a comparison of fiscal 2019 fourth quarter EPS to fiscal 2018 fourth quarter EPS:

 

Three Months Ended

 

May 31,
2019

 

May 31,
2018

 

Growth vs.
FY 2018

 

 

 

 

 

 

EPS - continuing operations

$

 

2.06

 

 

$

 

1.68

 

 

 

G&K integration expenses

 

0.01

 

 

 

0.09

 

 

 

EPS excluding above items

$

 

2.07

 

 

$

 

1.77

 

 

16.9

%

 

 

 

 

 

 

 

Twelve Months Ended

 

May 31,
2019

 

May 31,
2018

 

Growth vs.
FY 2018

 

 

 

 

 

 

EPS - continuing operations

$

 

7.97

 

 

$

 

7.03

 

 

 

G&K integration expenses

 

0.10

 

 

 

0.26

 

 

 

One-time cash payment to employees

 

 

0.24

 

 

 

Non-recurring gain on sale of investment

 

(0.47

)

 

 

 

 

One-time deferred tax benefit of Tax Act

 

(1.59

)

 

 

EPS excluding above items

$

 

7.60

 

 

$

 

5.94

 

 

27.9

%

Scott D. Farmer, Cintas' Chairman and Chief Executive Officer, stated, "We are pleased with these fourth quarter financial results which conclude a very successful year. For the ninth consecutive year, our organic revenue growth was in the mid- to high- single digits and EPS grew double digits when adjusted for one-time and special items. Additionally, our strong cash flow and balance sheet enabled us to deploy cash to increase shareholder value. In fiscal 2019 we paid an annual dividend of $220.8 million that increased 26.5% over the prior year, and we purchased 4.8 million shares of company stock in a total amount of $953.4 million."

Mr. Farmer added, “The Cintas story is one of growth. We have grown revenue and profit 48 of the past 50 years. Our opportunity for continued growth is great. We have a product or service to help nearly every business get Ready for the Workday TM. All businesses care about image, safety, cleanliness or compliance, and businesses continue to outsource to concentrate on their core competency. We remain well-positioned to benefit from these tailwinds.”

Mr. Farmer concluded, “For our fiscal 2020, we expect revenue to be in the range of $7.24 billion to $7.31 billion and EPS from continuing operations to be in the range of $8.30 to $8.45. This guidance does not include any potential deterioration in the U.S. economy or future share buybacks.”

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

 

 

$

7,240.0

 

5.0

%

$

7,310.0

 

6.1

%

 

 

 

 

 

 

 

 

 

 

 

Growth on Constant Workday Basis (1)

 

 

 

 

5.4

%

 

 

6.5

%

 

 

 

 

 

 

 

 

 

 

 

Fiscal 2020 Earnings Per Share Guidance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EPS - continuing operations

$

7.97

 

 

$

8.30

 

 

 

$

8.45

 

 

 

G&K integration expenses

0.10

 

 

 

 

 

 

 

 

 

 

Non-recurring gain on sale of investment

(0.47

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EPS Guidance (2) (3)

$

7.60

 

 

$

8.30

 

9.2

%

$

8.45

 

11.2

%

(1)

 

Fiscal 2020 contains one less workday than fiscal 2019. One less workday negatively impacts revenue growth by 40 basis points.

   

(2)

 

One less workday negatively impacts fiscal 2020 EPS guidance by about $0.06 and EPS growth by about 90 basis points.

   

(3)

 

Fiscal 2020 guidance assumes an effective tax rate of 21.0% compared to a rate of 19.9% for fiscal 2019. The higher effective tax rate negatively impacts fiscal 2020 EPS guidance by about $0.14 and EPS growth by about 180 basis points.

About Cintas

Cintas Corporation helps more than one million businesses of all types and sizes get Ready™ to open their doors with confidence every day by providing a wide range of products and services that enhance our customers’ image and help keep their facilities and employees clean, safe and looking their best. With products and services including uniforms, floor care, restroom supplies, first aid and safety products, fire extinguishers and testing, and safety and compliance training, Cintas helps customers get Ready for the Workday™. Headquartered in Cincinnati, Cintas is a publicly held Fortune 500 company traded over the Nasdaq Global Select Market under the symbol CTAS and is a component of both the Standard & Poor’s 500 Index and the Nasdaq-100 Index.

CAUTION CONCERNING FORWARD-LOOKING STATEMENTS

The Private Securities Litigation Reform Act of 1995 provides a safe harbor from civil litigation for forward-looking statements. Forward-looking statements may be identified by words such as “estimates,” “anticipates,” “predicts,” “projects,” “plans,” “expects,” “intends,” “target,” “forecast,” “believes,” “seeks,” “could,” “should,” “may” and “will” or the negative versions thereof and similar words, terms and expressions and by the context in which they are used. Such statements are based upon current expectations of Cintas and speak only as of the date made. You should not place undue reliance on any forward-looking statement. We cannot guarantee that any forward-looking statement will be realized. These statements are subject to various risks, uncertainties, potentially inaccurate assumptions and other factors that could cause actual results to differ from those set forth in or implied by this Press Release. Factors that might cause such a difference include, but are not limited to, risks inherent with the G&K transaction in the achievement of cost synergies and the timing thereof, including whether the transaction will be accretive and within the expected timeframe and the actual amounts of future integration expenses; the possibility of greater than anticipated operating costs including energy and fuel costs; lower sales volumes; loss of customers due to outsourcing trends; the performance and costs of integration of acquisitions, including G&K; fluctuations in costs of materials and labor including increased medical costs; costs and possible effects of union organizing activities; failure to comply with government regulations concerning employment discrimination, employee pay and benefits and employee health and safety; the effect on operations of exchange rate fluctuations, tariffs and other political, economic and regulatory risks; uncertainties regarding any existing or newly-discovered expenses and liabilities related to environmental compliance and remediation; the cost, results and ongoing assessment of internal controls for financial reporting required by the Sarbanes-Oxley Act of 2002; the effect of new accounting pronouncements; costs of our SAP system implementation; disruptions caused by the inaccessibility of computer systems data, including cybersecurity risks; the initiation or outcome of litigation, investigations or other proceedings; higher assumed sourcing or distribution costs of products; the disruption of operations from catastrophic or extraordinary events; the amount and timing of repurchases of our common stock, if any; changes in federal and state tax and labor laws; and the reactions of competitors in terms of price and service. Cintas undertakes no obligation to publicly release any revisions to any forward-looking statements or to otherwise update any forward-looking statements whether as a result of new information or to reflect events, circumstances or any other unanticipated developments arising after the date on which such statements are made. A further list and description of risks, uncertainties and other matters can be found in our Annual Report on Form 10-K for the year ended May 31, 2018 and in our reports on Forms 10-Q and 8-K. The risks and uncertainties described herein are not the only ones we may face. Additional risks and uncertainties presently not known to us or that we currently believe to be immaterial may also harm our business.

Cintas Corporation

Consolidated Condensed Statements of Income

(Unaudited)

(In thousands except per share data)

 

Three Months Ended

 

May 31,
2019

 

May 31,
2018

 

%
Change

Revenue:

 

 

 

 

 

Uniform rental and facility services

$

 

1,428,392

 

 

$

 

1,342,786

 

 

6.4

%

Other

 

365,338

 

 

 

326,764

 

 

11.8

%

Total revenue

 

1,793,730

 

 

 

1,669,550

 

 

7.4

%

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

Cost of uniform rental and facility services

 

771,056

 

 

 

737,998

 

 

4.5

%

Cost of other

 

199,109

 

 

 

179,214

 

 

11.1

%

Selling and administrative expenses

 

508,240

 

 

 

471,807

 

 

7.7

%

G&K Services, Inc. integration expenses

 

914

 

 

 

15,031

 

 

(93.9

)%

 

 

 

 

 

 

Operating income

 

314,411

 

 

 

265,500

 

 

18.4

%

 

 

 

 

 

 

Interest income

 

(271

)

 

 

(370

)

 

(26.8

)%

Interest expense

 

25,782

 

 

 

24,828

 

 

3.8

%

 

 

 

 

 

 

Income before income taxes

 

288,900

 

 

 

241,042

 

 

19.9

%

Income taxes

 

62,729

 

 

 

51,744

 

 

21.2

%

Income from continuing operations

 

226,171

 

 

 

189,298

 

 

19.5

%

Loss from discontinued operations, net of tax

 

(52

)

 

 

(3,127

)

 

(98.3

)%

Net income

$

 

226,119

 

 

$

 

186,171

 

 

21.5

%

 

 

 

 

 

 

Basic earnings (loss) per share:

 

 

 

 

 

Continuing operations

$

 

2.13

 

 

$

 

1.74

 

 

22.4

%

Discontinued operations

 

0.00

 

 

 

(0.03

)

 

(100.0

)%

Basic earnings per share

$

 

2.13

 

 

$

 

1.71

 

 

24.6

%

 

 

 

 

 

 

Diluted earnings (loss) per share:

 

 

 

 

 

Continuing operations

$

 

2.06

 

 

$

 

1.68

 

 

22.6

%

Discontinued operations

 

0.00

 

 

 

(0.02

)

 

(100.0

)%

Diluted earnings per share

$

 

2.06

 

 

$

 

1.66

 

 

24.1

%

 

 

 

 

 

 

Weighted average number of shares outstanding

 

105,018

 

 

 

106,879

 

 

 

Diluted average number of shares outstanding

 

108,339

 

 

 

110,574

 

 

 

Cintas Corporation

Consolidated Condensed Statements of Income

(In thousands except per share data)

 

Twelve Months Ended

 

May 31,
2019

 

May 31,
2018

 

%
Change

Revenue:

 

 

 

 

 

Uniform rental and facility services

$

 

5,552,430

 

 

$

 

5,247,124

 

 

5.8

%

Other

 

1,339,873

 

 

 

1,229,508

 

 

9.0

%

Total revenue

 

6,892,303

 

 

 

6,476,632

 

 

6.4

%

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

Cost of uniform rental and facility services

 

3,027,599

 

 

 

2,886,959

 

 

4.9

%

Cost of other

 

736,116

 

 

 

681,150

 

 

8.1

%

Selling and administrative expenses

 

1,980,644

 

 

 

1,916,792

 

 

3.3

%

G&K Services, Inc. integration expenses

 

14,410

 

 

 

41,897

 

 

(65.6

)%

 

 

 

 

 

 

Operating income

 

1,133,534

 

 

 

949,834

 

 

19.3

%

 

 

 

 

 

 

Gain on sale of a cost method investment

 

69,373

 

 

 

 

100.0

%

 

 

 

 

 

 

Interest income

 

(1,228

)

 

 

(1,342

)

 

(8.5

)%

Interest expense

 

101,736

 

 

 

110,175

 

 

(7.7

)%

 

 

 

 

 

 

Income before income taxes

 

1,102,399

 

 

 

841,001

 

 

31.1

%

Income taxes

 

219,764

 

 

 

57,069

 

 

285.1

%

Income from continuing operations

 

882,635

 

 

 

783,932

 

 

12.6

%

Income from discontinued operations, net of tax

 

2,346

 

 

 

58,654

 

 

(96.0

)%

Net income

$

 

884,981

 

 

$

 

842,586

 

 

5.0

%

 

 

 

 

 

 

Basic earnings per share:

 

 

 

 

 

Continuing operations

$

 

8.23

 

 

$

 

7.24

 

 

13.7

%

Discontinued operations

 

0.02

 

 

 

0.54

 

 

(96.3

)%

Basic earnings per share

$

 

8.25

 

 

$

 

7.78

 

 

6.0

%

 

 

 

 

 

 

Diluted earnings per share:

 

 

 

 

 

Continuing operations

$

 

7.97

 

 

$

 

7.03

 

 

13.4

%

Discontinued operations

 

0.02

 

 

 

0.53

 

 

(96.2

)%

Diluted earnings per share

$

 

7.99

 

 

$

 

7.56

 

 

5.7

%

 

 

 

 

 

 

Weighted average number of shares outstanding

 

106,080

 

 

 

106,593

 

 

 

Diluted average number of shares outstanding

 

109,495

 

 

 

109,810

 

 

 

CINTAS CORPORATION SUPPLEMENTAL DATA

 

Gross Margin Results

 

Three Months Ended

 

May 31,
2019

 

May 31,
2018

 

 

 

 

Uniform rental and facility services gross margin

46.0

%

 

45.0

%

Other gross margin

45.5

%

 

45.2

%

Total gross margin

45.9

%

 

45.1

%

Net income margin, continuing operations

12.6

%

 

11.3

%

 

 

 

 

 

Twelve Months Ended

 

May 31,
2019

 

May 31,
2018

 

 

 

 

Uniform rental and facility services gross margin

45.5

%

 

45.0

%

Other gross margin

45.1

%

 

44.6

%

Total gross margin

45.4

%

 

44.9

%

Net income margin, continuing operations

12.8

%

 

12.1

%

Reconciliation of Non-GAAP Financial Measures and Regulation G Disclosure

The press release contains non-GAAP financial measures within the meaning of Regulation G promulgated by the Securities and Exchange Commission. To supplement its consolidated condensed financial statements presented in accordance with U.S. generally accepted accounting principles (GAAP), the Company provides the additional non-GAAP financial measures of earnings per diluted share, cash flow and workday adjusted revenue growth. The Company believes that these non-GAAP financial measures are appropriate to enhance understanding of its past performance as well as prospects for future performance. A reconciliation of the differences between these non-GAAP financial measures with the most directly comparable financial measures calculated in accordance with GAAP are shown in the tables within the narrative of the press release or below.

Earnings Per Share Results

 

Three Months Ended

 

May 31,
2019

 

May 31,
2018

 

Growth vs.
FY 2018

EPS - continuing operations

$

2.06

 

 

$

1.68

 

 

 

G&K Services, Inc. integration expenses

0.01

 

 

0.09

 

 

 

EPS excluding above items

$

2.07

 

 

$

1.77

 

 

16.9%

 

 

 

 

 

 

 

Twelve Months Ended

 

May 31,
2019

 

May 31,
2018

 

Growth vs.
FY 2018

EPS - continuing operations

$

7.97

 

 

$

7.03

 

 

 

G&K Services, Inc. integration expenses

0.10

 

 

0.26

 

 

 

One-time cash payment to employees

 

 

0.24

 

 

 

Non-recurring gain on sale of investment

(0.47

)

 

 

 

 

One-time deferred tax benefit of Tax Act

 

 

(1.59

)

 

 

EPS excluding above items

$

7.60

 

 

$

5.94

 

 

27.9%

Computation of Free Cash Flow

 

Twelve Months Ended

 

May 31,
2019

 

May 31,
2018

Net cash provided by operations

$

1,067,862

 

 

$

964,160

 

Capital expenditures

(276,719

)

 

(271,699

)

Free cash flow

$

791,143

 

 

$

692,461

 

Management uses free cash flow to assess the financial performance of the Company. Management believes that free cash flow is useful to investors because it relates the operating cash flow of the Company to the capital that is spent to continue, improve and grow business operations.

Computation of Growth on a Constant Workday Basis

 

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)

A

 

B

 

C

 

D

 

E

Revenue Guidance

$

6,892.3

 

$

7,240.0

 

5.0%

 

$

7,310.0

 

6.1%

 

 

 

 

 

C=(B-A)/A

 

 

 

E=(D-A)/A

 

F

 

G

 

 

 

G

 

 

Workdays in the period

261

 

260

 

 

 

260

 

 

 

H

 

I

 

J

 

K

 

L

Revenue Adjusted for Workday Difference

$

6,892.3

 

$

7,267.8

 

5.4%

 

$

7,338.1

 

6.5%

 

H=(A/F)*F

 

I=(B/G)*F

 

J=(I-H)/H

 

K=(D/G)*F

 

L=(K-H)/H

Management believes that workday adjusted revenue growth is valuable to investors because it reflects the revenue performance compared to a prior period with the same number of revenue generating days.

SUPPLEMENTAL SEGMENT DATA

 

 

Uniform Rental
and Facility
Services

 

First Aid
and Safety
Services

 

All
Other

 

Corporate

 

Total

 

 

 

 

 

 

 

 

 

 

 

For the three months ended May 31, 2019

 

 

 

 

 

 

 

 

Revenue

 

$

1,428,392

 

 

$

163,535

 

 

$

201,803

 

 

$

 

 

$

1,793,730

 

Gross margin

 

$

657,336

 

 

$

78,029

 

 

$

88,200

 

 

$

 

 

$

823,565

 

Selling and administrative expenses

 

$

393,275

 

 

$

52,878

 

 

$

62,087

 

 

$

 

 

$

508,240

 

G&K Services, Inc. integration expenses

 

$

914

 

 

$

 

 

$

 

 

$

 

 

$

914

 

Interest income

 

$

 

 

$

 

 

$

 

 

$

(271

)

 

$

(271

)

Interest expense

 

$

 

 

$

 

 

$

 

 

$

25,782

 

 

$

25,782

 

Income (loss) before income taxes

 

$

263,147

 

 

$

25,151

 

 

$

26,113

 

 

$

(25,511

)

 

$

288,900

 

 

 

 

 

 

 

 

 

 

 

 

For the three months ended May 31, 2018

 

 

 

 

 

 

 

 

Revenue

 

$

1,342,786

 

 

$

147,707

 

 

$

179,057

 

 

$

 

 

$

1,669,550

 

Gross margin

 

$

604,788

 

 

$

69,402

 

 

$

78,148

 

 

$

 

 

$

752,338

 

Selling and administrative expenses

 

$

368,144

 

 

$

48,275

 

 

$

55,388

 

 

$

 

 

$

471,807

 

G&K Services, Inc. integration expenses

 

$

15,031

 

 

$

 

 

$

 

 

$

 

 

$

15,031

 

Interest income

 

$

 

 

$

 

 

$

 

 

$

(370

)

 

$

(370

)

Interest expense

 

$

 

 

$

 

 

$

 

 

$

24,828

 

 

$

24,828

 

Income (loss) before income taxes

 

$

221,613

 

 

$

21,127

 

 

$

22,760

 

 

$

(24,458

)

 

$

241,042

 

 

 

 

 

 

 

 

 

 

 

 

For the twelve months ended May 31, 2019

 

 

 

 

 

 

 

 

Revenue

 

$

5,552,430

 

 

$

619,470

 

 

$

720,403

 

 

$

 

 

$

6,892,303

 

Gross margin

 

$

2,524,831

 

 

$

297,074

 

 

$

306,683

 

 

$

 

 

$

3,128,588

 

Selling and administrative expenses

 

$

1,533,711

 

 

$

206,990

 

 

$

239,943

 

 

$

 

 

$

1,980,644

 

G&K Services, Inc. integration expenses

 

$

14,410

 

 

$

 

 

$

 

 

$

 

 

$

14,410

 

Gain on sale of a cost method investment

 

$

 

 

$

 

 

$

 

 

$

69,373

 

 

$

69,373

 

Interest income

 

$

 

 

$

 

 

$

 

 

$

(1,228

)

 

$

(1,228

)

Interest expense

 

$

 

 

$

 

 

$

 

 

$

101,736

 

 

$

101,736

 

Income (loss) before income taxes

 

$

976,710

 

 

$

90,084

 

 

$

66,740

 

 

$

(31,135

)

 

$

1,102,399

 

 

 

 

 

 

 

 

 

 

 

 

For the twelve months ended May 31, 2018

 

 

 

 

 

 

 

 

Revenue

 

$

5,247,124

 

 

$

564,706

 

 

$

664,802

 

 

$

 

 

$

6,476,632

 

Gross margin

 

$

2,360,165

 

 

$

265,785

 

 

$

282,573

 

 

$

 

 

$

2,908,523

 

Selling and administrative expenses

 

$

1,500,644

 

 

$

190,567

 

 

$

225,581

 

 

$

 

 

$

1,916,792

 

G&K Services, Inc. integration expenses

 

$

41,897

 

 

$

 

 

$

 

 

$

 

 

$

41,897

 

Interest income

 

$

 

 

$

 

 

$

 

 

$

(1,342

)

 

$

(1,342

)

Interest expense

 

$

 

 

$

 

 

$

 

 

$

110,175

 

 

$

110,175

 

Income (loss) before income taxes

 

$

817,624

$

75,218

$

56,992

$

(108,833

)

$

841,001

Cintas Corporation

Consolidated Condensed Balance Sheets

(In thousands except per share data)

 

May 31,
2019

 

May 31,
2018

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

96,645

 

 

$

138,724

 

Accounts receivable, net

910,120

 

 

804,583

 

Inventories, net

334,589

 

 

280,347

 

Uniforms and other rental items in service

784,133

 

 

702,261

 

Income taxes, current

7,475

 

 

19,634

 

Prepaid expenses and other current assets

103,318

 

 

32,383

 

Total current assets

2,236,280

 

 

1,977,932

 

 

 

 

 

Property and equipment, net

1,430,685

 

 

1,382,730

 

 

 

 

 

Investments

192,346

 

 

175,581

 

Goodwill

2,842,441

 

 

2,846,888

 

Service contracts, net

494,595

 

 

545,768

 

Other assets, net

240,315

 

 

29,315

 

 

$

7,436,662

 

 

$

6,958,214

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

226,020

 

 

$

215,074

 

Accrued compensation and related liabilities

155,509

 

 

140,654

 

Accrued liabilities

433,940

 

 

420,129

 

Debt due within one year

312,264

 

 

 

Total current liabilities

1,127,733

 

 

775,857

 

 

 

 

 

Long-term liabilities:

 

 

 

Debt due after one year

2,537,507

 

 

2,535,309

 

Deferred income taxes

438,179

 

 

352,581

 

Accrued liabilities

330,522

 

 

277,941

 

Total long-term liabilities

3,306,208

 

 

3,165,831

 

 

 

 

 

Shareholders’ equity:

 

 

 

Preferred stock, no par value:

 

 

 

100,000 shares authorized, none outstanding

Common stock, no par value:

840,328

 

 

618,464

 

425,000,000 shares authorized

FY19: 184,790,626 issued and 103,284,401 outstanding

FY18: 182,723,471 issued and 106,326,383 outstanding

Paid-in capital

227,928

 

 

245,211

 

Retained earnings

6,691,236

 

 

5,837,827

 

Treasury stock:

(4,717,619

)

 

(3,701,319

)

FY19: 81,506,225 shares

FY18: 76,397,088 shares

Accumulated other comprehensive (loss) income

(39,152

)

 

16,343

 

Total shareholders’ equity

3,002,721

 

 

3,016,526

$

7,436,662

$

6,958,214

Cintas Corporation

Consolidated Condensed Statements of Cash Flows

(In thousands)

 

Twelve Months Ended

 

May 31,
2019

 

 

May 31,
2018

Cash flows from operating activities:

 

 

 

 

Net income

$

884,981

 

 

$

842,586

 

 

 

 

 

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

Depreciation

223,631

 

 

 

215,476

 

Amortization of intangible assets and capitalized contract costs

136,462

 

 

 

63,940

 

Stock-based compensation

139,210

 

 

 

112,835

 

Gain on sale of a cost method investment

(69,373

)

 

 

 

Gain on sale of business

(3,200

)

 

 

(96,400

)

Deferred income taxes

31,708

 

 

 

(119,295

)

Change in current assets and liabilities, net of acquisitions of businesses:

 

 

 

 

Accounts receivable, net

(94,918

)

 

 

(66,267

)

Inventories, net

(60,039

)

 

 

(3,323

)

Uniforms and other rental items in service

(90,228

)

 

 

(64,299

)

Prepaid expenses and other current assets and capitalized contract costs

(100,765

)

 

 

(15,526

)

Accounts payable

12,276

 

 

 

35,275

 

Accrued compensation and related liabilities

15,321

 

 

 

(9,392

)

Accrued liabilities and other

30,910

 

 

 

42,468

 

Income taxes, current

11,886

 

 

 

26,082

 

Net cash provided by operating activities

1,067,862

 

 

 

964,160

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

Capital expenditures

(276,719

)

 

 

(271,699

)

Proceeds from redemption of marketable securities and investments

 

 

 

179,857

 

Purchase of marketable securities and investments

(17,841

)

 

 

(153,708

)

Proceeds from sale of a cost method investment

73,342

 

 

 

 

Proceeds from sale of business

3,200

 

 

 

127,835

 

Acquisitions of businesses, net of cash acquired

(9,813

)

 

 

(19,346

)

Other, net

(7,807

)

 

 

1,363

 

Net cash used in investing activities

(235,638

)

 

 

(135,698

)

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

Issuance (payments) of commercial paper, net

112,500

 

 

 

(50,500

)

Proceeds from issuance of debt, net

200,000

 

 

 

 

Repayment of debt

 

 

 

(550,000

)

Proceeds from exercise of stock-based compensation awards

65,371

 

 

 

41,848

 

Dividends paid

(220,764

)

 

 

(175,589

)

Repurchase of common stock

(1,016,300

)

 

 

(127,319

)

Other, net

(14,112

)

 

 

(2,580

)

Net cash used in financing activities

(873,305

)

 

 

(864,140

)

 

 

 

 

 

Effect of exchange rate changes on cash and cash equivalents

(998

)

 

 

5,136

 

 

 

 

 

 

Net decrease in cash and cash equivalents

(42,079

)

 

 

(30,542

)

Cash and cash equivalents at beginning of year

138,724

 

 

 

169,266

 

Cash and cash equivalents at end of year

$

96,645

 

 

$

138,724

 

 

Source: Cintas Corporation

J. Michael Hansen, Executive Vice President and Chief Financial Officer - 513-972-2079
Paul F. Adler, Vice President and Treasurer - 513-972-4195

© Business Wire, Inc. All Rights Reserved.