Cintas Corporation Reports Revenue Up In Fiscal 2020’s Second Quarter
Cintas Corporation (PPAI 303547, D12) has reported results for its fiscal 2020 second quarter, which ended November 30, 2019. The Cincinnati, Ohio-headquartered company’s revenue for the quarter was $1.84 billion, up 7.3 percent over last year’s second quarter.
"We are pleased with our second quarter and year-to-date performance,” says Scott D. Farmer, Cintas' chairman and CEO. “The company is on pace to achieve another year of strong growth in revenue, earnings and cash-flow generation. I thank our employee-partners for the consistently high execution that helps get our customers ready for the workday.”
Cintas’ organic revenue growth rate, which adjusts for the impacts of acquisitions and foreign currency exchange rate fluctuations, was also 7.3 percent. The organic revenue growth rate for the Uniform Rental and Facility Services operating segment was 5.8 percent, and the organic revenue growth rate for the First Aid and Safety Services operating segment was 10.6 percent.
Gross margin for the second quarter of fiscal 2020 of $852.4 million increased 10 percent from last year’s second quarter. As a percentage of revenue, Cintas’s gross margin was 46.2 percent for the second quarter of fiscal 2020 compared to 45.1 percent in the second quarter of fiscal 2019. Uniform Rental and Facility Services operating segment gross margin as a percentage of revenue improved 130 basis points from last year’s second quarter to 46.6 percent, and the First Aid and Safety Services operating segment gross margin as a percentage of revenue improved 40 basis points to 48.4 percent.
Operating income for the second quarter of fiscal 2020 of $334.5 million increased 21.3 percent from last year’s second quarter operating income of $275.6 million. Operating income as a percentage of revenue was 18.1 percent in the second quarter of fiscal 2020 compared to 16 percent in the second quarter of fiscal 2019. Operating income in the second quarter of fiscal 2019 was impacted by non-recurring integration expenses related to the G&K Services, Inc. acquisition of $7.8 million, or 50 basis points.
The company’s net income from continuing operations was $246.4 million for the second quarter of fiscal 2020, and earnings per diluted share (EPS) from continuing operations were $2.27. Net income from continuing operations was $243 million in the second quarter of fiscal 2019, and EPS from continuing operations were $2.18. Fiscal 2019 second quarter EPS from continuing operations included a one-time gain on the sale of a cost method investment of $0.47 and non-recurring G&K integration expenses of $0.05.
Farmer adds, “Earlier this month, on December 6, we paid an annual dividend of $2.55 per share, an increase of 24.4 percent over last year’s annual dividend. We have increased the annual dividend for 36 consecutive years. In the past 10 years, the annual dividend per share increased at a compound annual growth rate of 18.2 percent.
“We are increasing our fiscal 2020 financial guidance. We are raising our annual revenue expectations from a range of $7.28 billion to $7.32 billion to a range of $7.29 billion to $7.33 billion and EPS from a range of $8.47 to $8.57 to a range of $8.65 to $8.75. This financial guidance does not include any future share buybacks. It does incorporate the impact of having one less workday in fiscal 2020 compared to fiscal 2019.”