Summary
Cintas Corporation (CTAS) reported solid performance for the second quarter of fiscal year 2015, ending November 29, 2014. The company demonstrated consistent revenue growth, driven primarily by its core Rental Uniforms and Ancillary Products segment, which saw an organic increase of 8.1% year-over-year. This growth was bolstered by new business acquisition and increased penetration within existing customer relationships, indicating the effectiveness of Cintas' sales strategy and strong customer service. While overall revenue remained relatively flat due to the deconsolidation of its shredding business, the underlying operational strength is evident. Profitability improved significantly, with net income from continuing operations increasing by 22.5% for the quarter, leading to a notable 24.6% rise in diluted earnings per share from continuing operations. This performance reflects improved gross margins and disciplined management of selling and administrative expenses, particularly within the flagship Rental Uniforms and Ancillary Products segment. The company also continued its commitment to shareholder returns through share repurchases and dividend payments.
Financial Highlights
49 data points| Revenue | $1.12B |
| Gross Profit | $481.42M |
| SG&A Expenses | $299.84M |
| Operating Income | $181.58M |
| Interest Expense | $15.93M |
| Net Income | $120.41M |
| EPS (Basic) | $0.26 |
| EPS (Diluted) | $0.25 |
| Shares Outstanding (Basic) | 468.46M |
| Shares Outstanding (Diluted) | 474.62M |
Key Highlights
- 1Total revenue for the three months ended November 30, 2014, was approximately equal to the prior year, but organic revenue increased by 7.2%.
- 2Rental Uniforms and Ancillary Products segment revenue grew by 7.6%, with an organic increase of 8.1%, driven by new sales and deeper customer penetration.
- 3Net income from continuing operations increased by 22.5% to $103.4 million compared to the prior year period.
- 4Diluted earnings per share from continuing operations rose by 24.6% to $0.86.
- 5Gross margin for the Rental Uniforms and Ancillary Products segment improved to 44.8% from 42.9% in the prior year.
- 6The company repurchased approximately 0.8 million shares of common stock for $49.7 million during the six months ended November 30, 2014, as part of its ongoing share buyback program.
- 7Cintas declared a total dividend of $1.70 per share, paid on December 5, 2014.