Cintas Corporation Announces Fiscal 2022 Fourth Quarter and Full Year Results
CINCINNATI - July 14, 2022 -- Cintas Corporation (Nasdaq: CTAS) today reported results for its fiscal 2022 fourth quarter ended May 31, 2022. Revenue for the fourth quarter of fiscal 2022 was $2.07 billion compared to $1.84 billion in last year’s fourth quarter, an increase of 13.0%. The organic revenue growth rate for the fourth quarter of fiscal 2022, which adjusts for the impacts of acquisitions, divestitures and foreign currency exchange rate fluctuations, was 12.7%. The organic revenue growth rates for the Uniform Rental and Facility Services and First Aid and Safety Services reportable operating segments were 10.5% and 15.1%, respectively.
Gross margin for the fourth quarter of fiscal 2022 was $946.2 million compared to $859.1 million in last year’s fourth quarter, an increase of 10.1%. Gross margin as a percentage of revenue was 45.6% for the fourth quarter of fiscal 2022 compared to 46.8% in last year's fourth quarter. Operating income for the fourth quarter of fiscal 2022 was $404.4 million compared to $356.4 million in last year's fourth quarter, an increase of 13.5%. Operating income as a percentage of revenue was 19.5% in the fourth quarter of fiscal 2022 compared to 19.4% in last year's fourth quarter.
Net income was $294.5 million for the fourth quarter of fiscal 2022 compared to $267.7 million in last year's fourth quarter. Fourth quarter of fiscal 2022 diluted earnings per share (EPS) were $2.81 compared to $2.47 in last year's fourth quarter, an increase of 13.8%.
Fiscal 2022 fourth quarter free cash flow, defined as net cash provided by operating activities less capital expenditures, increased 15.2% compared to fiscal 2021, to $475.7 million. On June 15, 2022, Cintas paid shareholders an aggregate of $98.2 million in quarterly cash dividends. During the fourth quarter of fiscal 2022 and through July 13, 2022, Cintas purchased $496.5 million of Cintas common stock under its buyback program.
Todd M. Schneider, Cintas' President and Chief Executive Officer, stated, "We are pleased with our fourth quarter financial results which were led by a strong increase in revenue. Challenged with finding labor to run their businesses, heightened concerns over sanitization, and inflationary labor and purchasing costs, businesses increasingly outsource to Cintas to help them get Ready for the Workday®. We provide products and services better, faster, and economically, enabling businesses to concentrate on their core competencies."
For the fiscal year ended May 31, 2022, revenue was $7.85 billion, compared to $7.12 billion for fiscal 2021, an increase of 10.4%. Diluted EPS for fiscal 2022 was $11.65 compared to $10.24 in fiscal 2021, an increase of 13.8%. Fiscal year 2022 diluted EPS included a gain on sale of operating assets and a gain on an equity method investment transaction. Adjusted to exclude the gains, diluted EPS for fiscal 2022 was $11.28, an increase of 10.2%. For the fiscal year ended May 31, 2022, free cash flow was $1.30 billion, an increase of 6.5% compared to the fiscal year ended May 31, 2021.
Mr. Schneider continued, "We achieved significant accomplishments this fiscal year despite significant inflation, including delivering upon our stated financial goals of mid- to high-single digit organic revenue growth rates, incremental operating margins in the range of 20% to 30%, double-digit EPS growth, and the allocation of capital to improve shareholder returns. We achieved these great results by productively selling new business, penetrating existing customers with more products and services, providing excellent service, driving operational efficiencies, and obtaining price increases. I thank our employees, whom we call "partners", for their continued focus on our customers, our shareholders, and each other."
Mr. Schneider concluded, "For our fiscal year 2023, we expect revenue to be in the range of $8.47 billion to $8.58 billion and diluted EPS to be in the range of $11.90 to $12.30. The following table provides a comparison of fiscal 2022 revenue and diluted EPS to fiscal 2023 guidance.
- Fiscal year 2023 operating income is expected to be in the range of $1.68 billion to $1.73 billion, compared to $1.55 billion in fiscal 2022 adjusted to exclude the gains in the table above.
- Fiscal year 2023 interest expense is expected to be approximately $110.0 million, compared to $88.8 million in fiscal year 2022, due in part to higher interest rates.
- Fiscal year 2023 effective tax rate is expected to be approximately 20.0% compared to a rate of 17.9% in fiscal 2022, after excluding the gains and their related tax impacts from the reported rate of 17.5%. The expected higher effective tax rate will negatively impact fiscal 2023 diluted EPS by approximately $0.32 and diluted EPS growth by approximately 290 basis points.
- Our diluted EPS guidance includes share buybacks through July 13, 2022 but does not include the impact of any future share buybacks.
- We remain in a dynamic environment that can continue to change. Our guidance assumes a stable economy and excludes COVID-19 pandemic-related setbacks or economic downturns."
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 products and services that help keep their customers’ facilities and employees clean, safe and looking their best. With offerings including uniforms, mats, mops, restroom supplies, first aid and safety products, fire extinguishers and testing, and safety training, Cintas helps customers get Ready for the Workday®. The Company is also the creator of the Total Clean Program™ — a first-of-its-kind service that includes scheduled delivery of essential cleaning supplies, hygienically clean laundering, and sanitizing and disinfecting products and services. 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 Nasdaq-100 Index.
Cintas will host a live webcast to review the fiscal 2022 fourth quarter and full year results today at 10:00 a.m., Eastern Time. The webcast will be available to the public on Cintas' website at www.Cintas.com. A replay of the webcast will be available approximately two hours after the completion of the live call and will remain available for two weeks.
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; 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; the effect on operations of exchange rate fluctuations, tariffs and other political, economic and regulatory risks, including the risk of recession; 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; the effect of new accounting pronouncements; 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 including viral pandemics such as the COVID-19 coronavirus; 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, 2021 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 - Treasurer & Investor Relations - 513-972-4195