Washington | 0-11399 | 31-1188630 | ||
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification Number) |
6800 Cintas Boulevard, P.O. Box 625737, Cincinnati, Ohio | 45262-5737 | |
(Address of Principal Executive Offices) | (Zip Code) |
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
(d) | Exhibits. |
Exhibit Number | Description | ||
99 | Press Release dated September 19, 2013 |
CINTAS CORPORATION | ||||
Date: September 19, 2013 | By: | /s/ William C. Gale | ||
William C. Gale | ||||
Senior Vice President and Chief Financial Officer |
Exhibit Number | Description | ||
99 | Press release dated September 19, 2013 |
Three Months Ended | ||||||||||
August 31, 2013 | August 31, 2012 | % Chng. | ||||||||
Revenue: | ||||||||||
Rental uniforms and ancillary products | $ | 792,866 | $ | 754,843 | 5.0% | |||||
Other services | 327,477 | 296,482 | 10.5% | |||||||
Total revenue | $ | 1,120,343 | $ | 1,051,325 | 6.6% | |||||
Costs and expenses: | ||||||||||
Cost of rental uniforms and ancillary products | $ | 454,731 | $ | 428,148 | 6.2% | |||||
Cost of other services | 199,632 | 177,302 | 12.6% | |||||||
Selling and administrative expenses | 325,910 | 306,581 | 6.3% | |||||||
Operating income | $ | 140,070 | $ | 139,294 | 0.6% | |||||
Interest income | $ | (68 | ) | $ | (77 | ) | (11.7)% | |||
Interest expense | 16,523 | 16,598 | (0.5)% | |||||||
Income before income taxes | $ | 123,615 | $ | 122,773 | 0.7% | |||||
Income taxes | 45,861 | 46,040 | (0.4)% | |||||||
Net income | $ | 77,754 | $ | 76,733 | 1.3% | |||||
Per share data: | ||||||||||
Basic earnings per share | $ | 0.63 | $ | 0.61 | 3.3% | |||||
Diluted earnings per share | $ | 0.63 | $ | 0.60 | 5.0% | |||||
Weighted average number of shares outstanding | 122,130 | 126,110 | ||||||||
Diluted average number of shares outstanding | 122,892 | 126,458 | ||||||||
Three Months Ended | ||||||||
August 31, 2013 | August 31, 2012 | |||||||
Rental uniforms and ancillary products gross margin | 42.6 | % | 43.3 | % | ||||
Other services gross margin | 39.0 | % | 40.2 | % | ||||
Total gross margin | 41.6 | % | 42.4 | % | ||||
Net margin | 6.9 | % | 7.3 | % | ||||
Depreciation and amortization | $ | 48,394 | $ | 46,442 | ||||
Capital expenditures | $ | 37,462 | $ | 47,438 |
Three Months Ended | ||||||
August 31, 2013 | August 31, 2012 | Growth % | ||||
A | B | G | ||||
Revenue | $1,120,343 | $1,051,325 | 6.6% | |||
G=(A-B)/B | ||||||
C | D | |||||
Workdays in the period | 65 | 66 | ||||
E | F | H | ||||
Revenue adjusted for workday difference | $1,137,579 | $1,051,325 | 8.2% | |||
H=(E-F)/F | ||||||
E=(A/C)*D | F=(B/D)*D |
As of | |||||||||||||||
August 31, 2013 | |||||||||||||||
Long-term debt | $ | 1,308,999 | |||||||||||||
Letters of credit | 85,117 | ||||||||||||||
Debt | $ | 1,394,116 | |||||||||||||
Rolling Twelve Months Ended August 31, 2013 | Three Months Ended August 31, 2013 | Three Months Ended May 31, 2013 | Three Months Ended February 28, 2013 | Three Months Ended November 30, 2012 | |||||||||||
Net Income | $ | 316,463 | $ | 77,754 | $ | 85,977 | $ | 74,705 | $ | 78,027 | |||||
Add back: | |||||||||||||||
Interest expense | 65,637 | 16,523 | 16,518 | 16,302 | 16,294 | ||||||||||
Taxes | 184,287 | 45,861 | 51,427 | 42,148 | 44,851 | ||||||||||
Depreciation | 167,893 | 42,571 | 42,422 | 41,921 | 40,979 | ||||||||||
Amortization | 23,436 | 5,823 | 5,829 | 5,911 | 5,873 | ||||||||||
EBITDA | $ | 757,716 | $ | 188,532 | $ | 202,173 | $ | 180,987 | $ | 186,024 | |||||
Debt / EBITDA | 1.8 |
As of | |||||||||||||||
August 31, 2012 | |||||||||||||||
Long-term debt | $ | 1,309,648 | |||||||||||||
Letters of credit | 85,719 | ||||||||||||||
Debt | $ | 1,395,367 | |||||||||||||
Rolling Twelve Months Ended August 31, 2012 | Three Months Ended August 31, 2012 | Three Months Ended May 31, 2012 | Three Months Ended February 29, 2012 | Three Months Ended November 30, 2011 | |||||||||||
Net Income | $ | 305,732 | $ | 76,733 | $ | 78,614 | $ | 76,035 | $ | 74,350 | |||||
Add back: | |||||||||||||||
Interest expense | 69,889 | 16,598 | 18,344 | 17,219 | 17,728 | ||||||||||
Taxes | 176,380 | 46,040 | 44,675 | 44,655 | 41,010 | ||||||||||
Depreciation | 157,896 | 40,342 | 40,265 | 38,644 | 38,645 | ||||||||||
Amortization | 34,201 | 6,100 | 8,814 | 9,416 | 9,871 | ||||||||||
EBITDA | $ | 744,098 | $ | 185,813 | $ | 190,712 | $ | 185,969 | $ | 181,604 | |||||
Debt / EBITDA | 1.9 |
Three Months Ended | ||||||||
August 31, 2013 | August 31, 2012 | |||||||
Net Cash Provided by Operations | $ | 82,559 | $ | 94,865 | ||||
Capital Expenditures | $ | (37,462 | ) | $ | (47,438 | ) | ||
Free Cash Flow | $ | 45,097 | $ | 47,427 |
SUPPLEMENTAL SEGMENT DATA | Rental Uniforms and Ancillary Products | Uniform Direct Sales | First Aid, Safety and Fire Protection | Document Management | Corporate | Total | ||||||||||||||||||
For the three months ended August 31, 2013 | ||||||||||||||||||||||||
Revenue | $ | 792,866 | $ | 107,462 | $ | 125,875 | $ | 94,140 | $ | — | $ | 1,120,343 | ||||||||||||
Gross margin | $ | 338,135 | $ | 29,714 | $ | 54,897 | $ | 43,234 | $ | — | $ | 465,980 | ||||||||||||
Selling and administrative expenses | $ | 220,742 | $ | 21,033 | $ | 43,451 | $ | 40,684 | $ | — | $ | 325,910 | ||||||||||||
Interest income | $ | — | $ | — | $ | — | $ | — | $ | (68 | ) | $ | (68 | ) | ||||||||||
Interest expense | $ | — | $ | — | $ | — | $ | — | $ | 16,523 | $ | 16,523 | ||||||||||||
Income (loss) before income taxes | $ | 117,393 | $ | 8,681 | $ | 11,446 | $ | 2,550 | $ | (16,455 | ) | $ | 123,615 | |||||||||||
Assets | $ | 2,842,058 | $ | 143,993 | $ | 410,633 | $ | 631,634 | $ | 282,859 | $ | 4,311,177 | ||||||||||||
For the three months ended August 31, 2012 | ||||||||||||||||||||||||
Revenue | $ | 754,843 | $ | 100,279 | $ | 110,841 | $ | 85,362 | $ | — | $ | 1,051,325 | ||||||||||||
Gross margin | $ | 326,695 | $ | 29,478 | $ | 47,791 | $ | 41,911 | $ | — | $ | 445,875 | ||||||||||||
Selling and administrative expenses | $ | 209,788 | $ | 20,737 | $ | 38,770 | $ | 37,286 | $ | — | $ | 306,581 | ||||||||||||
Interest income | $ | — | $ | — | $ | — | $ | — | $ | (77 | ) | $ | (77 | ) | ||||||||||
Interest expense | $ | — | $ | — | $ | — | $ | — | $ | 16,598 | $ | 16,598 | ||||||||||||
Income (loss) before income taxes | $ | 116,907 | $ | 8,741 | $ | 9,021 | $ | 4,625 | $ | (16,521 | ) | $ | 122,773 | |||||||||||
Assets | $ | 2,779,217 | $ | 125,094 | $ | 359,387 | $ | 563,172 | $ | 330,165 | $ | 4,157,035 | ||||||||||||
August 31, 2013 | May 31, 2013 | |||||||
(Unaudited) | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash & cash equivalents | $ | 278,670 | $ | 352,273 | ||||
Marketable securities | 4,189 | 5,680 | ||||||
Accounts receivable, net | 511,642 | 496,049 | ||||||
Inventories, net | 245,470 | 240,440 | ||||||
Uniforms and other rental items in service | 500,384 | 496,752 | ||||||
Income taxes, current | — | 9,102 | ||||||
Prepaid expenses | 31,934 | 24,530 | ||||||
Total current assets | 1,572,289 | 1,624,826 | ||||||
Property and equipment, at cost, net | 991,331 | 986,703 | ||||||
Goodwill | 1,531,006 | 1,517,560 | ||||||
Service contracts, net | 93,119 | 92,153 | ||||||
Other assets, net | 123,432 | 124,390 | ||||||
$ | 4,311,177 | $ | 4,345,632 | |||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 124,952 | $ | 121,029 | ||||
Accrued compensation and related liabilities | 43,247 | 78,050 | ||||||
Accrued liabilities | 235,237 | 271,821 | ||||||
Income taxes, current | 23,367 | — | ||||||
Deferred tax liability | 80,692 | 77,169 | ||||||
Long-term debt due within one year | 8,200 | 8,187 | ||||||
Total current liabilities | 515,695 | 556,256 | ||||||
Long-term liabilities: | ||||||||
Long-term debt due after one year | 1,300,799 | 1,300,979 | ||||||
Deferred income taxes | 214,221 | 210,483 | ||||||
Accrued liabilities | 84,451 | 76,422 | ||||||
Total long-term liabilities | 1,599,471 | 1,587,884 | ||||||
Shareholders’ equity: | ||||||||
Preferred stock, no par value: 100,000 shares authorized, none outstanding | — | — | ||||||
Common stock, no par value: 425,000,000 shares authorized FY14: 175,492,504 issued and 120,778,629 outstanding FY13: 174,786,010 issued and 122,281,507 outstanding | 217,107 | 186,332 | ||||||
Paid-in capital | 102,961 | 109,822 | ||||||
Retained earnings | 3,795,525 | 3,717,771 | ||||||
Treasury stock: FY14: 54,713,875 shares FY13: 52,504,503 shares | (1,957,533 | ) | (1,850,556 | ) | ||||
Other accumulated comprehensive income (loss): | ||||||||
Foreign currency translation | 50,666 | 51,312 | ||||||
Unrealized loss on derivatives | (13,851 | ) | (14,339 | ) | ||||
Other | 1,136 | 1,150 | ||||||
Total shareholders’ equity | 2,196,011 | 2,201,492 | ||||||
$ | 4,311,177 | $ | 4,345,632 |
Three Months Ended | ||||||||
August 31, 2013 | August 31, 2012 | |||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 77,754 | $ | 76,733 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation | 42,571 | 40,342 | ||||||
Amortization of intangible assets | 5,823 | 6,100 | ||||||
Stock-based compensation | 6,984 | 5,448 | ||||||
Deferred income taxes | 7,373 | 9,716 | ||||||
Change in current assets and liabilities, net of acquisitions of businesses: | ||||||||
Accounts receivable, net | (14,903 | ) | (7,128 | ) | ||||
Inventories, net | (5,258 | ) | 9,889 | |||||
Uniforms and other rental items in service | (4,150 | ) | (8,672 | ) | ||||
Prepaid expenses | (7,216 | ) | (5,392 | ) | ||||
Accounts payable | 2,915 | 16,278 | ||||||
Accrued compensation and related liabilities | (34,777 | ) | (50,793 | ) | ||||
Accrued liabilities | (27,215 | ) | (27,400 | ) | ||||
Income taxes payable | 32,658 | 29,744 | ||||||
Net cash provided by operating activities | 82,559 | 94,865 | ||||||
Cash flows from investing activities: | ||||||||
Capital expenditures | (37,462 | ) | (47,438 | ) | ||||
Proceeds from redemption of marketable securities | 35,233 | 24,720 | ||||||
Purchase of marketable securities and investments | (32,941 | ) | (36,970 | ) | ||||
Acquisitions of businesses, net of cash acquired | (32,216 | ) | (2,130 | ) | ||||
Other, net | 382 | 577 | ||||||
Net cash used in investing activities | (67,004 | ) | (61,241 | ) | ||||
Cash flows from financing activities: | ||||||||
Proceeds from issuance of debt | — | 250,000 | ||||||
Repayment of debt | (167 | ) | (225,154 | ) | ||||
Proceeds from exercise of stock-based compensation awards | 14,085 | 1,119 | ||||||
Repurchase of common stock | (106,977 | ) | (77,953 | ) | ||||
Other, net | 4,126 | (3,491 | ) | |||||
Net cash used in financing activities | (88,933 | ) | (55,479 | ) | ||||
Effect of exchange rate changes on cash and cash equivalents | (225 | ) | 1,247 | |||||
Net decrease in cash and cash equivalents | (73,603 | ) | (20,608 | ) | ||||
Cash and cash equivalents at beginning of period | 352,273 | 339,825 | ||||||
Cash and cash equivalents at end of period | $ | 278,670 | $ | 319,217 |