Cintas Corporation Announces Fiscal 2012 Third Quarter Results
CINCINNATI, March 20, 2012 — Cintas Corporation (Nasdaq:CTAS) today reported results for its third quarter ended February 29, 2012. Revenue for the third quarter was $1.01 billion, representing a 7.9% increase compared to last year’s third quarter. Organic growth, which adjusts for the impact of acquisitions and the impact of one additional workday compared to last year’s third quarter, was 5.9%. Recycled paper prices, which declined rapidly during our second fiscal quarter, remained at a relatively low level and negatively impacted revenue growth in our Document Management segment. This decline in recycled paper prices negatively impacted consolidated revenue growth by $5.6 million, or 0.6%, compared to last year’s third quarter.
The Company’s third quarter operating income of $137.5 million was a 26.3% improvement as compared to last year’s third quarter. Net income increased 28.7% to $76.0 million as compared to $59.1 million in last year’s third quarter. Earnings per diluted share for the third quarter were $0.58, a 41.5% increase over the $0.41 earnings per diluted share reported in last year’s third quarter. This was the fifth consecutive quarter that operating income and earnings per diluted share grew in excess of 25%.
Scott D. Farmer, Chief Executive Officer, stated, “Our results continue to reflect our focus on selling value and growing our business profitably. This high quality growth led us to our third quarter operating margin of 13.6%, which is a nice improvement over both last year’s third quarter operating margin of 11.6% and our second quarter operating margin of 13.0%. Our Rental Uniforms and Ancillary Products operating segment, which accounts for 71% of our consolidated revenue, had an operating margin of 15.6%, an improvement over the 12.9% operating margin from last year’s third quarter.”
Mr. Farmer added, “We continue to be pleased with the performance of all of our businesses and the execution of our game plan by our very talented team of employees, who we call partners.”
The effective tax rates for the third quarter of fiscal 2012 and fiscal 2011 were 37.0% and 38.9%, respectively. We expect the effective tax rate for the entire 2012 fiscal year to be approximately 37.0%, as compared to 37.1% for the entire 2011 fiscal year.
Mr. Farmer concluded, “As we enter our fourth quarter, we remain confident in our ability to execute our game plan of selling profitable business, managing our cost structure and improving efficiencies through process improvement. As a result, we are updating our fiscal 2012 guidance with revenue in the range of $4.09 billion to $4.12 billion and earnings per diluted share in the range of $2.24 to $2.27. This guidance assumes no significant deterioration in the current U.S. economy.”
Headquartered in Cincinnati, Cintas Corporation provides highly specialized services to businesses of all types primarily throughout North America. Cintas designs, manufactures and implements corporate identity uniform programs, and provides entrance mats, restroom supplies, promotional products, first aid, safety, fire protection products and services and document management services for approximately 900,000 businesses. Cintas is a publicly held company traded over the Nasdaq Global Select Market under the symbol CTAS and is a component of the Standard & Poor’s 500 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, 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, 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, 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, disruptions caused by the inaccessibility of computer systems data, 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, the reactions of competitors in terms of price and service and the finalization of our financial statements for the quarter ended February 29, 2012. 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, 2011 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.
For additional information, contact:
William C. Gale
Sr. Vice President-Finance and Chief Financial Officer
J. Michael Hansen
Vice President and Treasurer