Cintas Reports Revenues Down, Earnings Up In Fiscal First-Quarter Report
Distributor Cintas Corporation (PPAI 303547, D12) has released results for its fiscal 2021 first quarter, which ended August 31, 2020. Revenue for the quarter was $1.75 billion, a decrease of 3.6 percent from last year’s first quarter. Earnings per diluted share (EPS) were $2.78 in the first quarter of fiscal 2021, an increase of 19.8 percent from last year's first quarter diluted EPS.
"The COVID-19 pandemic remains a significant disruption to the economy and our business,” says Scott D. Farmer, Cintas' chairman and CEO. “Our objectives include keeping our employees, whom we call partners, healthy and safe, and serving our customers in any way possible. I am pleased with our performance on both priorities, and I thank our employee-partners for their unwavering passion, strong work ethic and commitment."
The Cincinnati, Ohio-headquartered distributor also reports that organic revenue for the first quarter of fiscal 2021, which is adjusted for acquisitions, foreign currency exchange rate fluctuations and differences in the number of workdays, declined five percent from last year's first quarter. Organic revenue for the Uniform Rental and Facility Services operating segment declined 5.4 percent, while organic revenue for the First Aid and Safety Services operating segment increased 17.1 percent.
Gross margin for the quarter, $826.2 million, decreased 2.7 percent from last year’s first quarter. Gross margin as a percentage of revenue increased 40 basis points to 47.3 percent for the first quarter of fiscal 2021 compared to 46.9 percent in the first quarter of fiscal 2020.
Operating income for the fiscal first quarter was $349.7 million, up 14.2 percent from last year’s first quarter operating income of $306.1 million. Operating income as a percentage of revenue was 20 percent compared to 16.9 percent last year. Net income was $300 million in the quarter, an increase of 19.6 percent from last year's $250.8 million.
Net cash provided by operating activities for the first quarter of fiscal 2021 of $312.3 million increased 12.8 percent from last year's first quarter net cash provided by operating activities of $276.9 million. Free cash flow, which is defined as net cash provided by operating activities less capital expenditures, for the quarter was $281.4 million, an increase of 32.6 percent from last year's first quarter.
Farmer adds, “Visibility to future financial performance remains impaired due to the COVID-19 pandemic. Therefore, we are not providing fiscal year financial guidance at this time. However, we will provide our second quarter financial estimates. We expect our second quarter revenue to be in the range of $1.725 billion to $1.750 billion and diluted EPS to be in the range of $2.00 to $2.20. Despite the short-term uncertainty, I'm confident in our ability to continue to manage the volatility while maintaining focus on our compelling long-term objectives. Our value proposition of getting businesses ‘Ready for the Workday’ by providing essential, unparalleled image, safety, cleanliness and compliance resonates loudly in a society focused on health, readiness and outsourcing of non-core activities.”