Cintas Announces Fiscal 2018 Third Quarter Results

Cintas (NASDAQ:CTAS) has announced its results for its fiscal Q3 2018 ended February 28, 2018.

As quoted in the press release:

Revenue for the third quarter was approximately $1.59 billion, an increase of 26.6% over last year’s third quarter. The organic revenue growth rate, which adjusts for the impacts of acquisitions and foreign currency exchange rate fluctuations, was 7.8%. The organic revenue growth rates for the Uniform Rental and Facility Services and First Aid and Safety Services reportable operating segments were 6.5% and 10.0%, respectively.

Operating income for the third quarter of $200 million increased 4.2% from last year’s third quarter operating income of $192 million. Operating income was reduced $10 million in the third quarter of fiscal 2018 and $9 million in the third quarter of fiscal 2017 by transaction and integration expenses related to the G&K Services, Inc. (G&K) acquisition. Operating income in the third quarter of fiscal 2018 was also reduced by a one-time cash payment to Cintas employees following the enactment of The Tax Cuts and Jobs Act (“Tax Act”) which was signed into legislation by the President on December 22, 2017. The one-time cash payment to employees amounted to an expense of approximately $40 million.

Scott D. Farmer, Cintas’ Chairman and Chief Executive Officer, stated, “We are pleased to report strong third quarter financial results. Each business unit contributed substantial revenue gains. Operating income, excluding G&K transaction and integration expenses and the one-time cash payment to employees, increased 24.0% over last year’s third quarter, resulting in an operating margin of 15.7%. We also made solid progress on two significant long-term investments. The first is the acquisition of G&K. We have now closed 60, or 95%, of redundant operations and have converted 65% of G&K locations to Cintas operating systems. The second is the implementation of an enterprise resource planning system. We continue to convert more operations to the system, 79 so far, and the roll-out remains on schedule. We will be a stronger company with this new technology.”

Mr. Farmer added, “The U.S. government recently passed a new tax law that will make U.S. companies more competitive globally. This tax reform is beneficial to our company, our shareholders, and many of our customers. We are happy to have shared this benefit with our employees, whom we call partners, in the form of a one-time cash payment. Cintas has accomplished much, and our motivated and engaged partners are one of the most important ingredients of our success.”

Click here to read the full press release.