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 March 19, 2014 |
CINTAS CORPORATION | ||||
Date: March 19, 2014 | By: | /s/ William C. Gale | ||
William C. Gale | ||||
Senior Vice President and Chief Financial Officer |
Exhibit Number | Description | ||
99 | Press release dated March 19, 2014 |
Three Months Ended | ||||||||||
February 28, 2014 | February 28, 2013 | % Change | ||||||||
Revenue: | ||||||||||
Rental uniforms and ancillary products | $ | 801,702 | $ | 748,887 | 7.1% | |||||
Other services | 328,535 | 326,787 | 0.5% | |||||||
Total revenue | $ | 1,130,237 | $ | 1,075,674 | 5.1% | |||||
Costs and expenses: | ||||||||||
Cost of rental uniforms and ancillary products | $ | 450,086 | $ | 434,809 | 3.5% | |||||
Cost of other services | 201,026 | 198,924 | 1.1% | |||||||
Selling and administrative expenses | 328,963 | 308,918 | 6.5% | |||||||
Operating income | $ | 150,162 | $ | 133,023 | 12.9% | |||||
Interest income | $ | (44 | ) | $ | (132 | ) | (66.7)% | |||
Interest expense | 16,418 | 16,302 | 0.7% | |||||||
Income before income taxes | $ | 133,788 | $ | 116,853 | 14.5% | |||||
Income taxes | 49,186 | 42,148 | 16.7% | |||||||
Net income | $ | 84,602 | $ | 74,705 | 13.2% | |||||
Per share data: | ||||||||||
Basic earnings per share | $ | 0.70 | $ | 0.60 | 16.7% | |||||
Diluted earnings per share | $ | 0.69 | $ | 0.60 | 15.0% | |||||
Weighted average number of shares outstanding | 119,913 | 123,120 | ||||||||
Diluted average number of shares outstanding | 121,280 | 123,757 | ||||||||
Nine Months Ended | ||||||||||
February 28, 2014 | February 28, 2013 | % Change | ||||||||
Revenue: | ||||||||||
Rental uniforms and ancillary products | $ | 2,398,884 | $ | 2,259,569 | 6.2% | |||||
Other services | 995,449 | 927,816 | 7.3% | |||||||
Total revenue | $ | 3,394,333 | $ | 3,187,385 | 6.5% | |||||
Costs and expenses: | ||||||||||
Cost of rental uniforms and ancillary products | $ | 1,363,929 | $ | 1,301,859 | 4.8% | |||||
Cost of other services | 608,380 | 565,674 | 7.5% | |||||||
Selling and administrative expenses | 978,820 | 908,512 | 7.7% | |||||||
Operating income | $ | 443,204 | $ | 411,340 | 7.7% | |||||
Interest income | $ | (196 | ) | $ | (358 | ) | (45.3)% | |||
Interest expense | 49,426 | 49,194 | 0.5% | |||||||
Income before income taxes | $ | 393,974 | $ | 362,504 | 8.7% | |||||
Income taxes | 146,756 | 133,039 | 10.3% | |||||||
Net income | $ | 247,218 | $ | 229,465 | 7.7% | |||||
Per share data: | ||||||||||
Basic earnings per share | $ | 2.04 | $ | 1.84 | 10.9% | |||||
Diluted earnings per share | $ | 2.02 | $ | 1.83 | 10.4% | |||||
Weighted average number of shares outstanding | 120,658 | 124,483 | ||||||||
Diluted average number of shares outstanding | 121,814 | 124,901 | ||||||||
Three Months Ended | ||||||||
February 28, 2014 | February 28, 2013 | |||||||
Rental uniforms and ancillary products gross margin | 43.9 | % | 41.9 | % | ||||
Other services gross margin | 38.8 | % | 39.1 | % | ||||
Total gross margin | 42.4 | % | 41.1 | % | ||||
Net margin | 7.5 | % | 6.9 | % | ||||
Depreciation and amortization | $ | 48,364 | $ | 47,832 | ||||
Capital expenditures | $ | 36,830 | $ | 52,737 | ||||
Nine Months Ended | ||||||||
February 28, 2014 | February 28, 2013 | |||||||
Rental uniforms and ancillary products gross margin | 43.1 | % | 42.4 | % | ||||
Other services gross margin | 38.9 | % | 39.0 | % | ||||
Total gross margin | 41.9 | % | 41.4 | % | ||||
Net margin | 7.3 | % | 7.2 | % | ||||
Depreciation and amortization | $ | 145,285 | $ | 141,126 | ||||
Capital expenditures | $ | 113,615 | $ | 151,799 | ||||
Debt / EBITDA | 1.8 | 1.9 | ||||||
Three Months Ended | ||||||
February 28, 2014 | February 28, 2013 | Growth % | ||||
A | B | G | ||||
Revenue | $1,130,237 | $1,075,674 | 5.1% | |||
G=(A-B)/B | ||||||
C | D | |||||
Workdays in the period | 65 | 64 | ||||
E | F | H | ||||
Revenue adjusted for workday difference | $1,112,849 | $1,075,674 | 3.5% | |||
H=(E-F)/F | ||||||
E=(A/C)*D | F=(B/D)*D |
As of | |||||||||||||||
February 28, 2014 | |||||||||||||||
Long-term debt | $ | 1,301,156 | |||||||||||||
Letters of credit | 85,114 | ||||||||||||||
Debt | $ | 1,386,270 | |||||||||||||
Rolling Twelve Months Ended February 28, 2014 | Three Months Ended February 28, 2014 | Three Months Ended November 30, 2013 | Three Months Ended August 31, 2013 | Three Months Ended May 31, 2013 | |||||||||||
Net Income | $ | 333,195 | $ | 84,602 | $ | 84,862 | $ | 77,754 | $ | 85,977 | |||||
Add back: | |||||||||||||||
Interest expense | 65,944 | 16,418 | 16,485 | 16,523 | 16,518 | ||||||||||
Taxes | 198,183 | 49,186 | 51,709 | 45,861 | 51,427 | ||||||||||
Depreciation | 170,183 | 42,581 | 42,609 | 42,571 | 42,422 | ||||||||||
Amortization | 23,353 | 5,783 | 5,918 | 5,823 | 5,829 | ||||||||||
EBITDA | $ | 790,858 | $ | 198,570 | $ | 201,583 | $ | 188,532 | $ | 202,173 | |||||
Debt / EBITDA | 1.8 |
As of | |||||||||||||||
February 28, 2013 | |||||||||||||||
Long-term debt | $ | 1,309,330 | |||||||||||||
Letters of credit | 85,687 | ||||||||||||||
Debt | $ | 1,395,017 | |||||||||||||
Rolling Twelve Months Ended February 28, 2013 | Three Months Ended February 28, 2013 | Three Months Ended November 30, 2012 | Three Months Ended August 31, 2012 | Three Months Ended May 31, 2012 | |||||||||||
Net Income | $ | 308,079 | $ | 74,705 | $ | 78,027 | $ | 76,733 | $ | 78,614 | |||||
Add back: | |||||||||||||||
Interest expense | 67,538 | 16,302 | 16,294 | 16,598 | 18,344 | ||||||||||
Taxes | 177,714 | 42,148 | 44,851 | 46,040 | 44,675 | ||||||||||
Depreciation | 163,507 | 41,921 | 40,979 | 40,342 | 40,265 | ||||||||||
Amortization | 26,698 | 5,911 | 5,873 | 6,100 | 8,814 | ||||||||||
EBITDA | $ | 743,536 | $ | 180,987 | $ | 186,024 | $ | 185,813 | $ | 190,712 | |||||
Debt / EBITDA | 1.9 |
Nine Months Ended | ||||||||
February 28, 2014 | February 28, 2013 | |||||||
Net Cash Provided by Operations | $ | 385,773 | $ | 368,343 | ||||
Capital Expenditures | $ | (113,615 | ) | $ | (151,799 | ) | ||
Free Cash Flow | $ | 272,158 | $ | 216,544 |
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 February 28, 2014 | ||||||||||||||||||||||||
Revenue | $ | 801,702 | $ | 107,678 | $ | 126,743 | $ | 94,114 | $ | — | $ | 1,130,237 | ||||||||||||
Gross margin | $ | 351,616 | $ | 29,659 | $ | 55,131 | $ | 42,719 | $ | — | $ | 479,125 | ||||||||||||
Selling and administrative expenses | $ | 223,234 | $ | 20,405 | $ | 44,477 | $ | 40,847 | $ | — | $ | 328,963 | ||||||||||||
Interest income | $ | — | $ | — | $ | — | $ | — | $ | (44 | ) | $ | (44 | ) | ||||||||||
Interest expense | $ | — | $ | — | $ | — | $ | — | $ | 16,418 | $ | 16,418 | ||||||||||||
Income (loss) before income taxes | $ | 128,382 | $ | 9,254 | $ | 10,654 | $ | 1,872 | $ | (16,374 | ) | $ | 133,788 | |||||||||||
For the three months ended February 28, 2013 | ||||||||||||||||||||||||
Revenue | $ | 748,887 | $ | 126,129 | $ | 112,878 | $ | 87,780 | $ | — | $ | 1,075,674 | ||||||||||||
Gross margin | $ | 314,078 | $ | 36,829 | $ | 49,651 | $ | 41,383 | $ | — | $ | 441,941 | ||||||||||||
Selling and administrative expenses | $ | 211,531 | $ | 20,779 | $ | 39,121 | $ | 37,487 | $ | — | $ | 308,918 | ||||||||||||
Interest income | $ | — | $ | — | $ | — | $ | — | $ | (132 | ) | $ | (132 | ) | ||||||||||
Interest expense | $ | — | $ | — | $ | — | $ | — | $ | 16,302 | $ | 16,302 | ||||||||||||
Income (loss) before income taxes | $ | 102,547 | $ | 16,050 | $ | 10,530 | $ | 3,896 | $ | (16,170 | ) | $ | 116,853 | |||||||||||
For the nine months ended February 28, 2014 | ||||||||||||||||||||||||
Revenue | $ | 2,398,884 | $ | 337,023 | $ | 377,203 | $ | 281,223 | $ | — | $ | 3,394,333 | ||||||||||||
Gross margin | $ | 1,034,955 | $ | 94,510 | $ | 164,080 | $ | 128,479 | $ | — | $ | 1,422,024 | ||||||||||||
Selling and administrative expenses | $ | 663,110 | $ | 62,711 | $ | 131,395 | $ | 121,604 | $ | — | $ | 978,820 | ||||||||||||
Interest income | $ | — | $ | — | $ | — | $ | — | $ | (196 | ) | $ | (196 | ) | ||||||||||
Interest expense | $ | — | $ | — | $ | — | $ | — | $ | 49,426 | $ | 49,426 | ||||||||||||
Income (loss) before income taxes | $ | 371,845 | $ | 31,799 | $ | 32,685 | $ | 6,875 | $ | (49,230 | ) | $ | 393,974 | |||||||||||
Assets | $ | 2,852,065 | $ | 138,994 | $ | 419,647 | $ | 636,036 | $ | 353,699 | $ | 4,400,441 | ||||||||||||
For the nine months ended February 28, 2013 | ||||||||||||||||||||||||
Revenue | $ | 2,259,569 | $ | 336,611 | $ | 335,232 | $ | 255,973 | $ | — | $ | 3,187,385 | ||||||||||||
Gross margin | $ | 957,710 | $ | 96,513 | $ | 144,721 | $ | 120,908 | $ | — | $ | 1,319,852 | ||||||||||||
Selling and administrative expenses | $ | 622,205 | $ | 61,318 | $ | 115,516 | $ | 109,473 | $ | — | $ | 908,512 | ||||||||||||
Interest income | $ | — | $ | — | $ | — | $ | — | $ | (358 | ) | $ | (358 | ) | ||||||||||
Interest expense | $ | — | $ | — | $ | — | $ | — | $ | 49,194 | $ | 49,194 | ||||||||||||
Income (loss) before income taxes | $ | 335,505 | $ | 35,195 | $ | 29,205 | $ | 11,435 | $ | (48,836 | ) | $ | 362,504 | |||||||||||
Assets | $ | 2,814,686 | $ | 167,835 | $ | 392,820 | $ | 605,072 | $ | 245,686 | $ | 4,226,099 | ||||||||||||
February 28, 2014 | May 31, 2013 | |||||||
(Unaudited) | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash & cash equivalents | $ | 348,859 | $ | 352,273 | ||||
Marketable securities | 4,840 | 5,680 | ||||||
Accounts receivable, net | 529,668 | 496,049 | ||||||
Inventories, net | 256,132 | 240,440 | ||||||
Uniforms and other rental items in service | 498,649 | 496,752 | ||||||
Income taxes, current | — | 9,102 | ||||||
Prepaid expenses | 26,761 | 24,530 | ||||||
Total current assets | 1,664,909 | 1,624,826 | ||||||
Property and equipment, at cost, net | 981,197 | 986,703 | ||||||
Goodwill | 1,532,568 | 1,517,560 | ||||||
Service contracts, net | 83,972 | 92,153 | ||||||
Other assets, net | 137,795 | 124,390 | ||||||
$ | 4,400,441 | $ | 4,345,632 | |||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 117,336 | $ | 121,029 | ||||
Accrued compensation and related liabilities | 80,109 | 78,050 | ||||||
Accrued liabilities | 259,310 | 271,821 | ||||||
Income taxes, current | 9,018 | — | ||||||
Deferred tax liability | 86,396 | 77,169 | ||||||
Long-term debt due within one year | 633 | 8,187 | ||||||
Total current liabilities | 552,802 | 556,256 | ||||||
Long-term liabilities: | ||||||||
Long-term debt due after one year | 1,300,523 | 1,300,979 | ||||||
Deferred income taxes | 209,915 | 210,483 | ||||||
Accrued liabilities | 93,168 | 76,422 | ||||||
Total long-term liabilities | 1,603,606 | 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: 175,939,557 issued and 120,053,074 outstanding FY13: 174,786,010 issued and 122,281,507 outstanding | 233,927 | 186,332 | ||||||
Paid-in capital | 117,897 | 109,822 | ||||||
Retained earnings | 3,871,675 | 3,717,771 | ||||||
Treasury stock: FY14: 55,886,483 shares FY13: 52,504,503 shares | (2,015,018 | ) | (1,850,556 | ) | ||||
Other accumulated comprehensive income (loss): | ||||||||
Foreign currency translation | 47,585 | 51,312 | ||||||
Unrealized loss on derivatives | (13,166 | ) | (14,339 | ) | ||||
Other | 1,133 | 1,150 | ||||||
Total shareholders’ equity | 2,244,033 | 2,201,492 | ||||||
$ | 4,400,441 | $ | 4,345,632 |
Nine Months Ended | ||||||||
February 28, 2014 | February 28, 2013 | |||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 247,218 | $ | 229,465 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation | 127,761 | 123,242 | ||||||
Amortization of intangible assets | 17,524 | 17,884 | ||||||
Stock-based compensation | 22,248 | 16,660 | ||||||
Deferred income taxes | 8,733 | 31,905 | ||||||
Change in current assets and liabilities, net of acquisitions of businesses: | ||||||||
Accounts receivable, net | (34,024 | ) | (41,402 | ) | ||||
Inventories, net | (16,130 | ) | 4,437 | |||||
Uniforms and other rental items in service | (4,142 | ) | (28,803 | ) | ||||
Prepaid expenses | (1,892 | ) | 9 | |||||
Accounts payable | (7,037 | ) | 13,475 | |||||
Accrued compensation and related liabilities | 2,219 | (680 | ) | |||||
Accrued liabilities | 5,025 | (3,788 | ) | |||||
Income taxes payable | 18,270 | 5,939 | ||||||
Net cash provided by operating activities | 385,773 | 368,343 | ||||||
Cash flows from investing activities: | ||||||||
Capital expenditures | (113,615 | ) | (151,799 | ) | ||||
Proceeds from redemption of marketable securities | 49,635 | 97,651 | ||||||
Purchase of marketable securities and investments | (63,335 | ) | (135,398 | ) | ||||
Acquisitions of businesses, net of cash acquired | (32,965 | ) | (64,625 | ) | ||||
Other, net | (868 | ) | (662 | ) | ||||
Net cash used in investing activities | (161,148 | ) | (254,833 | ) | ||||
Cash flows from financing activities: | ||||||||
Proceeds from issuance of debt | — | 250,000 | ||||||
Repayment of debt | (8,010 | ) | (225,472 | ) | ||||
Proceeds from exercise of stock-based compensation awards | 29,286 | 7,156 | ||||||
Dividends paid | (93,314 | ) | (79,744 | ) | ||||
Repurchase of common stock | (164,462 | ) | (187,076 | ) | ||||
Other, net | 10,339 | (1,385 | ) | |||||
Net cash used in financing activities | (226,161 | ) | (236,521 | ) | ||||
Effect of exchange rate changes on cash and cash equivalents | (1,878 | ) | 656 | |||||
Net decrease in cash and cash equivalents | (3,414 | ) | (122,355 | ) | ||||
Cash and cash equivalents at beginning of period | 352,273 | 339,825 | ||||||
Cash and cash equivalents at end of period | $ | 348,859 | $ | 217,470 |