What were the major strategic changes in fiscal year 2015?

The most significant strategic change was the restructuring of the Document Management Services segment. Cintas completed a partnership transaction for its Shredding business with Shred-it International Inc. and sold its Storage business. These actions resulted in deconsolidation and exclusion of these businesses from continuing operations for fiscal year 2015, allowing the company to focus on its core segments: Rental Uniforms and Ancillary Products, Uniform Direct Sales, and First Aid, Safety and Fire Protection Services.

How did the deconsolidation of Shredding and sale of Storage impact the financial results?

The deconsolidation of Shredding and sale of Storage significantly impacted year-over-year revenue comparisons. While total revenue saw a modest increase, the organic growth rate of 7.1% highlights the underlying strength of the continuing operations. The company also recognized a gain on the deconsolidation of Shredding and a gain on the sale of Storage, which contributed to net income, but the core operational performance in the primary segments drove the sustained growth in earnings per share.

What is Cintas' approach to returning capital to shareholders?

Cintas demonstrates a strong commitment to shareholder returns. In fiscal year 2015, the company increased its dividend to $1.70 per share, which included a special dividend reflecting proceeds from the Shredding Transaction. Furthermore, Cintas actively engaged in share repurchases, initiating a new $500 million buyback program in January 2015 and repurchasing approximately $237.1 million worth of shares by the end of the fiscal year. This strategy reflects confidence in the company's financial health and value proposition.

What are the primary risks Cintas faces according to the 10-K?

Key risks identified include negative global economic factors impacting demand, increased competition leading to potential price reductions, difficulties in opening new cost-effective facilities, risks associated with acquisitions and integration, rising fuel and energy costs, potential unionization campaigns, supplier risks, foreign currency exchange fluctuations, regulatory compliance failures, and ongoing litigation. Additionally, the company highlighted the risk associated with the pending sale of its investment in the Shred-It Partnership.

CTAS 10-K FY2015 Annual Report — Revenue, Net Income, EPS

Summary

Cintas Corporation's 2015 10-K filing shows a company focused on its core uniform rental and ancillary services, which form the largest segment by revenue. The company has undergone significant structural changes, notably the deconsolidation of its Document Management Services segment, which included the sale of its Shredding business via a partnership with Shred-it and the sale of its Storage business. These transactions, while impacting reported revenue comparisons, are part of a strategy to streamline operations and focus on core competencies. Financially, Cintas demonstrated steady revenue growth, albeit modest in the reported year, with organic growth being a key driver. The company's profitability remains strong, supported by efficient operations within its main segments. Cintas also continued its commitment to shareholder returns through dividend increases and significant share repurchases, underscoring financial discipline and confidence in its business outlook. The company navigates various risks including competition, economic conditions, and operational costs, but its diversified customer base and strong market position provide resilience.

Financial Highlights

54 data points

Beta

Revenue

$4.37B

0.4% Gross Margin

Net Income

$430.62M

0.1% Net Margin

EPS (Diluted)

$0.91

Total Assets

$4.19B

Cash & Equivalents

$417.07M

Free Cash Flow

$362.56M

Financial Statements

Beta

Revenue	$4.37B
Gross Profit	$1.89B
SG&A Expenses	$1.21B
Operating Income	$683.64M
Interest Expense	$65.16M
Net Income	$430.62M
EPS (Basic)	$0.92
EPS (Diluted)	$0.91
Shares Outstanding (Basic)	463.60M
Shares Outstanding (Diluted)	470.17M

Key Highlights

1Total revenue for the fiscal year ended May 31, 2015, reached $4.48 billion, a slight increase of 0.2% over the prior year, driven by 7.1% organic revenue growth.
2The 'Rental Uniforms and Ancillary Products' segment remains the largest revenue contributor, accounting for approximately 77.2% of total revenue in fiscal year 2015.
3Cintas completed the deconsolidation of its Shredding business through a partnership with Shred-it in April 2014 and sold its Storage business, with results from these segments excluded from continuing operations for fiscal 2015.
4Net income from continuing operations increased by 9.0% to $408.1 million in fiscal year 2015, with diluted EPS from continuing operations rising by 12.8% to $3.44.
5The company returned significant value to shareholders through a dividend increase to $1.70 per share in fiscal 2015 (including a special dividend) and substantial share repurchases totaling $237.1 million under its new buyback program initiated in January 2015.
6Cintas maintained effective internal controls over financial reporting as audited by Ernst & Young LLP.
7The company's outlook is positive, supported by strong execution in its core businesses and a continued focus on customer penetration and broadening its customer base.

CINTAS CORP Annual Report, Year Ended May 31, 2015

Summary

Financial Highlights

Key Highlights

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