01—Abstract
Summary
Summary of the 10-Q filed October 7, 2021. Cited figures are marked; the original filing is the authoritative source.
Cintas Corporation reported a solid fiscal first quarter for the period ending August 31, 2021, demonstrating resilient top-line growth and improved profitability.
Total revenue increased by 8.6% year-over-year to $1.9 billiona, driven by broad-based growth across its Uniform Rental and Facility Services segment, which saw an 8.2% increase in revenue. The company also experienced a positive organic revenue growth of 8.6%, indicating strong underlying business performance. Profitability saw a significant boost, with operating income rising to $394.1 million, representing 20.8% of revenue, up from 20.0% in the prior year period.
This margin expansion was attributed to both cost of sales and selling and administrative expenses decreasing as a percentage of revenue. Net income grew by 10.4% to $331.2 millionb, leading to a 11.9% increase in diluted earnings per share to $3.11.
The company also continues to actively return capital to shareholders through share repurchases and a recently increased dividend. Despite a temporary decrease in cash and cash equivalents, the company maintains a strong liquidity position and access to a substantial credit facility.
02—Key points
Key Highlights
- Total revenue grew 8.6% to $1.9 billion for the three months ended August 31, 2021, compared to $1.75 billion in the prior year period.
- Uniform Rental and Facility Services segment revenue increased by 8.2% to $1.51 billion.
- Operating income increased by 12.7% to $394.1 million, with operating margin expanding 80 basis points to 20.8%.
- Net income rose 10.4% to $331.2 million.
- Diluted earnings per share increased by 11.9% to $3.11.
- The company repurchased approximately $581 million in common stock under its buyback program during the period and announced a new $1.5 billion program.
- Dividends paid increased, with a declared dividend of $0.95 per share.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2022filed October 7, 2021Financial Statements
Q1 FY2022 against Q1 FY2021
| Line item | Q1 FY2022Q1 FY2021 | Change |
|---|---|---|
| Revenue | $1.90B$1.75B | +8.6% |
| SG&A Expenses | $508.65M$476.50M | +6.7% |
| Operating Income | $394.10M$349.71M | +12.7% |
| Interest Expense | $21.85M$24.55M | −11.0% |
| Net Income | $331.18M$300.00M | +10.4% |
| EPS (Basic) | $0.80$0.71 | +11.5% |
| EPS (Diluted) | $0.78$0.69 | +11.9% |
| Shares Outstanding (Basic) | 413.18M416.44M | −0.8% |
| Shares Outstanding (Diluted) | 423.78M428.52M | −1.1% |
05—Questions
Frequently Asked Questions
How did Cintas' revenue perform in the first quarter of fiscal year 2022?
Cintas reported a strong revenue performance, with total revenue increasing by 8.6% to $1.9 billion for the three months ended August 31, 2021, compared to $1.75 billion in the same period of the prior year. The Uniform Rental and Facility Services segment, the company's largest, saw an 8.2% increase in revenue.
What drove the increase in profitability?
Profitability improved due to a combination of factors. Operating income increased by 12.7% to $394.1 million, and the operating margin expanded by 80 basis points to 20.8%. This was driven by cost of sales and selling and administrative expenses decreasing as a percentage of revenue, alongside an overall revenue increase.
How is Cintas returning capital to shareholders?
Cintas continues to actively return capital to shareholders. During the quarter, the company completed its previous $1 billion share buyback program and announced a new $1.5 billion program. Additionally, the company declared and paid a dividend of $0.95 per share.
What is the company's liquidity position?
While cash and cash equivalents decreased to $79.7 million at the end of the period, the company maintains a strong liquidity position with access to a $1.0 billion revolving credit facility. Management believes they have sufficient liquidity to operate and fund growth initiatives, including acquisitions and dividends.
06—Continue