Cintas Q3 Revenues Up 26.6 Percent Over Same Period In 2017
Mason, Ohio-based Cintas Corporation (PPAI 303547) has released the results of its fiscal 2018 third quarter, which ended February 28. The distributor’s revenues for third quarter were approximately $1.59 billion, an increase of 26.6 percent over last year’s third quarter. Accounting for the impacts of acquisitions and foreign currency exchange rate fluctuations, growth was 7.8 percent—with the company’s uniform rental and facility services, and first aid and safety services operating segments reporting growth of 6.5 percent and 10 percent, respectively.
Operating income for the third quarter was $200 million, an increase of 4.2 percent from last year’s third quarter 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. 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. The one-time cash payment to employees amounted to an expense of approximately $40 million.
“We are pleased to report strong third quarter financial results,” says Scott D. Farmer, Cintas’ chairman and chief executive officer. “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 percent over last year’s third quarter, resulting in an operating margin of 15.7 percent. 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 percent, of redundant operations and have converted 65 percent 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 rollout remains on schedule. We will be a stronger company with this new technology.”