Cintas Corporation Announces Annual Dividend Increased for the 35th Consecutive Year
CINCINNATI - October 30, 2018 - Cintas Corporation (Nasdaq: CTAS) announced that the Company’s Board of Directors approved a $2.05 per share annual dividend at its meeting today, representing an increase of 26.5% over last year’s dividend. This is the 35th consecutive year that the annual dividend has increased, which is every year since Cintas went public in 1983. This dividend is payable on December 7, 2018 to shareholders of record as of November 9, 2018.
Scott D. Farmer, Cintas’ Chairman and Chief Executive Officer, stated, “Fiscal 2018 was a very successful year which included several noteworthy accomplishments, including the following:
- Sales growth of 21.7%, including organic growth of 7.1%;
- Reported earnings per diluted share from continuing operations of $7.03, representing growth of 68.6% over last year;
- Free cash flow of $692 million, representing growth of 41.1% over last year;
- Reduction of debt of $598 million;
- Significant progress on the integration of the G&K Services, Inc. (G&K) acquisition; and
- Continued progress on the implementation of an enterprise resource planning system
These accomplishments are the result of the hard work and dedication of our employee-partners, who have certainly demonstrated the Spirit of Cintas. We are also pleased with the start of fiscal 2019. On September 25, 2018, we announced first quarter results which exceeded our internal plans and demonstrated continued progress on our significant initiatives. These first quarter results led us to increase our fiscal 2019 guidance. Fiscal 2019 revenue guidance was raised from a range of $6.75 billion to $6.82 billion to a range of $6.80 billion to $6.855 billion. Fiscal 2019 earnings per diluted share from continuing operations was raised from a range of $7.00 to $7.15 to a range of $7.19 to $7.29. We expect another very successful year at Cintas marked by strong revenue and earnings growth as well as cash flow generation.”
Cintas also announced that the Board of Directors approved an additional share repurchase program under which the Company may repurchase up to $1.0 billion of Cintas common stock at market prices. The number of shares to be repurchased and the timing of the purchases will be determined at the discretion of the Board, and repurchases may be discontinued at any time.
As of October 30, 2018, the Company has $113 million available under its existing share buyback program that was authorized on August 2, 2016. Since the Board authorized that $500 million program, the Company has purchased 2.0 million shares at an average price of $192.02 for a total of $387 million. This program does not have an expiration date and will continue to be executed at the discretion of the Board. Collectively, as of October 30, 2018, Cintas has $1.113 billion available under the programs.
This press release contains non-GAAP financial measures within the meaning of Regulation G promulgated by the Securities and Exchange Commission. The Company provides these additional non-GAAP financial measures of cash flow and revenue and earnings guidance. 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 below.
Computation of Free Cash Flow
The following table provides a comparison of fiscal 2018 revenue and EPS to our fiscal 2019 guidance.
About Cintas Corporation
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 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.
For additional information, contact:
J. Michael Hansen, Executive Vice President and Chief Financial Officer - 513-972-2079
Paul F. Adler, Vice President and Treasurer - 513-972-4195