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 December 21, 2015 |
CINTAS CORPORATION | ||||
Date: December 21, 2015 | By: | /s/ J. Michael Hansen | ||
J. Michael Hansen | ||||
Vice President and Chief Financial Officer |
Exhibit Number | Description | ||
99 | Press release dated December 21, 2015 |
Revenue Guidance (dollar amounts in millions) | Fiscal 2015 | Fiscal 2016 Low End of Range | Growth vs. Fiscal 2015 | Fiscal 2016 High End of Range | Growth vs. Fiscal 2015 | |||||||||||
Revenue | $ | 4,476.9 | $ | 4,825.0 | 7.8% | $ | 4,880.0 | 9.0% |
EPS Guidance | Fiscal 2015 | Fiscal 2016 Low End of Range | Growth vs. Fiscal 2015 | Fiscal 2016 High End of Range | Growth vs. Fiscal 2015 | |||||||||||
EPS, excluding below items | $ | 3.35 | $ | 3.83 | 14.3% | $ | 3.90 | 16.4% | ||||||||
Impact of sale of stock in equity investment | 0.11 | |||||||||||||||
Impact of discontinued operations | 0.17 | |||||||||||||||
Total Reported Cintas EPS | $ | 3.63 |
Three Months Ended | ||||||||||
November 30, 2015 | November 30, 2014 | % Change | ||||||||
Revenue: | ||||||||||
Uniform rental and facility services | $ | 937,704 | $ | 891,475 | 5.2% | |||||
Other | 281,376 | 231,904 | 21.3% | |||||||
Total revenue | 1,219,080 | 1,123,379 | 8.5% | |||||||
Costs and expenses: | ||||||||||
Cost of uniform rental and facility services | 526,091 | 505,823 | 4.0% | |||||||
Cost of other | 165,589 | 136,132 | 21.6% | |||||||
Selling and administrative expenses | 327,051 | 299,841 | 9.1% | |||||||
Operating income | 200,349 | 181,583 | 10.3% | |||||||
Interest income | (111 | ) | (19 | ) | 484.2% | |||||
Interest expense | 16,171 | 15,929 | 1.5% | |||||||
Income before income taxes | 184,289 | 165,673 | 11.2% | |||||||
Income taxes | 68,836 | 61,972 | 11.1% | |||||||
Income from continuing operations | 115,453 | 103,701 | 11.3% | |||||||
Income from discontinued operations, net of tax | 229,647 | 16,711 | 1,274.2% | |||||||
Net income | $ | 345,100 | $ | 120,412 | 186.6% | |||||
Basic earnings per share: | ||||||||||
Continuing operations | $ | 1.05 | $ | 0.88 | 19.3% | |||||
Discontinued operations | 2.06 | 0.14 | 1,371.4% | |||||||
Basic earnings per share | $ | 3.11 | $ | 1.02 | 204.9% | |||||
Diluted earnings per share: | ||||||||||
Continuing operations | $ | 1.03 | $ | 0.86 | 19.8% | |||||
Discontinued operations | 2.03 | 0.14 | 1,350.0% | |||||||
Diluted earnings per share | $ | 3.06 | $ | 1.00 | 206.0% | |||||
Weighted average number of shares outstanding | 108,301 | 117,115 | ||||||||
Diluted average number of shares outstanding | 110,113 | 118,655 | ||||||||
Six Months Ended | ||||||||||
November 30, 2015 | November 30, 2014 | % Change | ||||||||
Revenue: | ||||||||||
Uniform rental and facility services | $ | 1,876,112 | $ | 1,765,173 | 6.3% | |||||
Other | 541,858 | 460,283 | 17.7% | |||||||
Total revenue | 2,417,970 | 2,225,456 | 8.7% | |||||||
Costs and expenses: | ||||||||||
Cost of uniform rental and facility services | 1,044,594 | 996,498 | 4.8% | |||||||
Cost of other | 321,832 | 269,588 | 19.4% | |||||||
Selling and administrative expenses | 665,688 | 614,299 | 8.4% | |||||||
Operating income | 385,856 | 345,071 | 11.8% | |||||||
Gain on sale of stock of an equity method investment | — | 21,739 | (100.0)% | |||||||
Interest income | (230 | ) | (72 | ) | 219.4% | |||||
Interest expense | 32,583 | 32,512 | 0.2% | |||||||
Income before income taxes | 353,503 | 334,370 | 5.7% | |||||||
Income taxes | 131,852 | 124,764 | 5.7% | |||||||
Income from continuing operations | 221,651 | 209,606 | 5.7% | |||||||
Income from discontinued operations, net of tax | 223,630 | 20,914 | 969.3% | |||||||
Net income | $ | 445,281 | $ | 230,520 | 93.2% | |||||
Basic earnings per share: | ||||||||||
Continuing operations | $ | 1.99 | $ | 1.78 | 11.8% | |||||
Discontinued operations | 2.01 | 0.18 | 1,016.7% | |||||||
Basic earnings per share | $ | 4.00 | $ | 1.96 | 104.1% | |||||
Diluted earnings per share: | ||||||||||
Continuing operations | $ | 1.96 | $ | 1.75 | 12.0% | |||||
Discontinued operations | 1.98 | 0.18 | 1,000.0% | |||||||
Diluted earnings per share | $ | 3.94 | $ | 1.93 | 104.1% | |||||
Weighted average number of shares outstanding | 109,455 | 116,887 | ||||||||
Diluted average number of shares outstanding | 111,140 | 118,334 | ||||||||
Three Months Ended | ||||||
November 30, 2015 | November 30, 2014 | |||||
Uniform rental and facility services gross margin | 43.9 | % | 43.3 | % | ||
Other gross margin | 41.2 | % | 41.3 | % | ||
Total gross margin | 43.3 | % | 42.9 | % | ||
Net margin, continuing operations | 9.5 | % | 9.2 | % | ||
Six Months Ended | ||||||
November 30, 2015 | November 30, 2014 | |||||
Uniform rental and facility services gross margin | 44.3 | % | 43.5 | % | ||
Other gross margin | 40.6 | % | 41.4 | % | ||
Total gross margin | 43.5 | % | 43.1 | % | ||
Net margin, continuing operations | 9.2 | % | 9.4 | % |
Three Months Ended | ||||||||
November 30, 2015 | November 30, 2014 | |||||||
Income from continuing operations | $ | 115,453 | $ | 103,701 | ||||
Less: income from continuing operations allocated to participating securities | 1,887 | 1,342 | ||||||
Income from continuing operations available to common shareholders | $ | 113,566 | $ | 102,359 | ||||
Basic weighted average common shares outstanding | 108,301 | 117,115 | ||||||
Effect of dilutive securities - employee stock options | 1,812 | 1,540 | ||||||
Diluted weighted average common shares outstanding | 110,113 | 118,655 | ||||||
Diluted earnings per share from continuing operations | $ | 1.03 | $ | 0.86 | ||||
Six Months Ended | ||||||||
November 30, 2015 | November 30, 2014 | |||||||
Income from continuing operations | $ | 221,651 | $ | 209,606 | ||||
Less: income from continuing operations allocated to participating securities | 3,629 | 1,933 | ||||||
Income from continuing operations available to common shareholders | $ | 218,022 | $ | 207,673 | ||||
Basic weighted average common shares outstanding | 109,455 | 116,887 | ||||||
Effect of dilutive securities - employee stock options | 1,685 | 1,447 | ||||||
Diluted weighted average common shares outstanding | 111,140 | 118,334 | ||||||
Diluted earnings per share from continuing operations | $ | 1.96 | $ | 1.75 |
Six Months Ended | ||||||
November 30, 2015 | November 30, 2014 | Growth % | ||||
A | B | G | ||||
Revenue | $2,417,970 | $2,225,456 | 8.7% | |||
G=(A-B)/B | ||||||
C | D | |||||
Workdays in the period | 131 | 130 | ||||
E | F | H | ||||
Revenue adjusted for workday difference | $2,399,512 | $2,225,456 | 7.8% | |||
H=(E-F)/F | ||||||
E=(A/C)*D | F=(B/D)*D |
Six Months Ended | ||||||||
November 30, 2015 | November 30, 2014 | |||||||
Net cash provided by operations | $ | 265,037 | $ | 292,573 | ||||
Capital expenditures | (121,817 | ) | (113,025 | ) | ||||
Free cash flow | $ | 143,220 | $ | 179,548 |
For the six months ended November 30, 2015 | As Reported (see Note 1) | Adjustments | As Adjusted | Increase | ||||||||||
Net income, continuing operations | $ | 221,651 | $ | — | $ | 221,651 | 13.1% | |||||||
Net income margin, continuing operations | 9.2 | % | 9.2 | % | ||||||||||
Diluted earnings per share, continuing operations | $ | 1.96 | $ | — | $ | 1.96 | 19.5% |
For the six months ended November 30, 2014 | As Reported (see Note 1) | Adjustments (see Note 2) | As Adjusted | |||||||||||
Net income, continuing operations | $ | 209,606 | $ | 13,630 | $ | 195,976 | ||||||||
Net income margin, continuing operations | 9.4 | % | 8.8 | % | ||||||||||
Diluted earnings per share, continuing operations | $ | 1.75 | $ | 0.11 | $ | 1.64 |
Uniform Rental and Facility Services | First Aid and Safety Services | All Other | Corporate(1) | Total | ||||||||||||||||
For the three months ended November 30, 2015 | ||||||||||||||||||||
Revenue | $ | 937,704 | $ | 120,438 | $ | 160,938 | $ | — | $ | 1,219,080 | ||||||||||
Gross margin | $ | 411,613 | $ | 52,027 | $ | 63,760 | $ | — | $ | 527,400 | ||||||||||
Selling and administrative expenses | $ | 242,318 | $ | 37,180 | $ | 47,553 | $ | — | $ | 327,051 | ||||||||||
Interest income | $ | — | $ | — | $ | — | $ | (111 | ) | $ | (111 | ) | ||||||||
Interest expense | $ | — | $ | — | $ | — | $ | 16,171 | $ | 16,171 | ||||||||||
Income (loss) before income taxes | $ | 169,295 | $ | 14,847 | $ | 16,207 | $ | (16,060 | ) | $ | 184,289 | |||||||||
For the three months ended November 30, 2014 | ||||||||||||||||||||
Revenue | $ | 891,475 | $ | 82,271 | $ | 149,633 | $ | — | $ | 1,123,379 | ||||||||||
Gross margin | $ | 385,652 | $ | 38,396 | $ | 57,376 | $ | — | $ | 481,424 | ||||||||||
Selling and administrative expenses | $ | 226,085 | $ | 26,619 | $ | 47,137 | $ | — | $ | 299,841 | ||||||||||
Interest income | $ | — | $ | — | $ | — | $ | (19 | ) | $ | (19 | ) | ||||||||
Interest expense | $ | — | $ | — | $ | — | $ | 15,929 | $ | 15,929 | ||||||||||
Income (loss) before income taxes | $ | 159,567 | $ | 11,777 | $ | 10,239 | $ | (15,910 | ) | $ | 165,673 | |||||||||
As of and for the six months ended November 30, 2015 | ||||||||||||||||||||
Revenue | $ | 1,876,112 | $ | 219,926 | $ | 321,932 | $ | — | $ | 2,417,970 | ||||||||||
Gross margin | $ | 831,518 | $ | 94,138 | $ | 125,888 | $ | — | $ | 1,051,544 | ||||||||||
Selling and administrative expenses | $ | 496,842 | $ | 70,699 | $ | 98,147 | $ | — | $ | 665,688 | ||||||||||
Interest income | $ | — | $ | — | $ | — | $ | (230 | ) | $ | (230 | ) | ||||||||
Interest expense | $ | — | $ | — | $ | — | $ | 32,583 | $ | 32,583 | ||||||||||
Income (loss) before income taxes | $ | 334,676 | $ | 23,439 | $ | 27,741 | $ | (32,353 | ) | $ | 353,503 | |||||||||
Assets | $ | 2,995,616 | $ | 426,673 | $ | 355,892 | $ | 672,611 | $ | 4,450,792 | ||||||||||
As of and for the six months ended November 30, 2014 | ||||||||||||||||||||
Revenue | $ | 1,765,173 | $ | 162,195 | $ | 298,088 | $ | — | $ | 2,225,456 | ||||||||||
Gross margin | $ | 768,675 | $ | 75,051 | $ | 115,644 | $ | — | $ | 959,370 | ||||||||||
Selling and administrative expenses | $ | 464,292 | $ | 54,127 | $ | 95,880 | $ | — | $ | 614,299 | ||||||||||
Gain on sale of stock of an equity method investment | $ | — | $ | — | $ | — | $ | 21,739 | $ | 21,739 | ||||||||||
Interest income | $ | — | $ | — | $ | — | $ | (72 | ) | $ | (72 | ) | ||||||||
Interest expense | $ | — | $ | — | $ | — | $ | 32,512 | $ | 32,512 | ||||||||||
Income (loss) before income taxes | $ | 304,383 | $ | 20,924 | $ | 19,764 | $ | (10,701 | ) | $ | 334,370 | |||||||||
Assets | $ | 2,907,484 | $ | 263,996 | $ | 336,604 | $ | 1,189,487 | $ | 4,697,571 |
November 30, 2015 | May 31, 2015 | |||||||
(Unaudited) | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 606,785 | $ | 417,073 | ||||
Marketable securities | 65,826 | 16,081 | ||||||
Accounts receivable, net | 549,190 | 496,130 | ||||||
Inventories, net | 251,477 | 226,211 | ||||||
Uniforms and other rental items in service | 542,531 | 534,005 | ||||||
Income taxes, current | — | 936 | ||||||
Assets held for sale | — | 21,341 | ||||||
Prepaid expenses and other current assets | 27,471 | 24,030 | ||||||
Total current assets | 2,043,280 | 1,735,807 | ||||||
Property and equipment, at cost, net | 916,544 | 871,421 | ||||||
Investments | 126,547 | 329,692 | ||||||
Goodwill | 1,273,594 | 1,195,612 | ||||||
Service contracts, net | 70,183 | 42,434 | ||||||
Other assets, net | 20,644 | 17,494 | ||||||
$ | 4,450,792 | $ | 4,192,460 | |||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 134,843 | $ | 109,607 | ||||
Accrued compensation and related liabilities | 65,886 | 88,423 | ||||||
Accrued liabilities | 443,713 | 309,935 | ||||||
Income taxes, current | 236,539 | — | ||||||
Liabilities held for sale | — | 704 | ||||||
Long-term debt due within one year | 250,000 | — | ||||||
Total current liabilities | 1,130,981 | 508,669 | ||||||
Long-term liabilities: | ||||||||
Long-term debt due after one year | 1,050,000 | 1,300,000 | ||||||
Deferred income taxes | 227,465 | 339,327 | ||||||
Accrued liabilities | 117,818 | 112,009 | ||||||
Total long-term liabilities | 1,395,283 | 1,751,336 | ||||||
Shareholders’ equity: | ||||||||
Preferred stock, no par value: 100,000 shares authorized, none outstanding | — | — | ||||||
Common stock, no par value: 425,000,000 shares authorized FY16: 179,217,524 issued and 108,103,084 outstanding FY15: 178,117,334 issued and 111,702,949 outstanding | 394,728 | 329,248 | ||||||
Paid-in capital | 165,653 | 157,183 | ||||||
Retained earnings | 4,557,245 | 4,227,620 | ||||||
Treasury stock: FY16: 71,114,440 shares FY15: 66,414,385 shares | (3,175,418 | ) | (2,773,125 | ) | ||||
Accumulated other comprehensive loss | (17,680 | ) | (8,471 | ) | ||||
Total shareholders’ equity | 1,924,528 | 1,932,455 | ||||||
$ | 4,450,792 | $ | 4,192,460 |
Six Months Ended | ||||||||
November 30, 2015 | November 30, 2014 | |||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 445,281 | $ | 230,520 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation | 73,130 | 70,451 | ||||||
Amortization of intangible assets | 7,764 | 7,702 | ||||||
Stock-based compensation | 40,241 | 24,785 | ||||||
Gain on Storage Transactions | (15,786 | ) | (34,137 | ) | ||||
Loss (gain) on investment in Shred-it Partnership | 24,288 | (6,619 | ) | |||||
Gain on sale of investment in Shred-it Partnership | (374,026 | ) | — | |||||
Gain on sale of stock of an equity method investment | — | (21,739 | ) | |||||
Deferred income taxes | (98,423 | ) | 10,346 | |||||
Change in current assets and liabilities, net of acquisitions of businesses: | ||||||||
Accounts receivable, net | (39,418 | ) | (12,747 | ) | ||||
Inventories, net | (19,841 | ) | 14,847 | |||||
Uniforms and other rental items in service | (10,893 | ) | (23,473 | ) | ||||
Prepaid expenses and other current assets | (2,369 | ) | (2,622 | ) | ||||
Accounts payable | 19,368 | 27,982 | ||||||
Accrued compensation and related liabilities | (22,771 | ) | (25,111 | ) | ||||
Accrued liabilities and other | 1,041 | 24,780 | ||||||
Income taxes, current | 237,451 | 7,608 | ||||||
Net cash provided by operating activities | 265,037 | 292,573 | ||||||
Cash flows from investing activities: | ||||||||
Capital expenditures | (121,817 | ) | (113,025 | ) | ||||
Proceeds from redemption of marketable securities | 212,081 | — | ||||||
Purchase of marketable securities and investments | (271,341 | ) | (11,978 | ) | ||||
Proceeds from Storage Transactions, net of cash contributed | 35,338 | 153,996 | ||||||
Proceeds from Shredding Transaction | — | 3,344 | ||||||
Proceeds from sale of investment in Shred-it Partnership | 578,257 | — | ||||||
Proceeds from sale of stock of an equity method investment | — | 29,933 | ||||||
Dividends received on equity method investment | — | 5,247 | ||||||
Acquisitions of businesses, net of cash acquired | (121,237 | ) | (3,015 | ) | ||||
Other, net | 1,987 | 1,681 | ||||||
Net cash provided by investing activities | 313,268 | 66,183 | ||||||
Cash flows from financing activities: | ||||||||
Repayment of debt | (16 | ) | (364 | ) | ||||
Proceeds from exercise of stock-based compensation awards | 17,444 | 22,472 | ||||||
Repurchase of common stock | (402,293 | ) | (63,573 | ) | ||||
Other, net | 646 | 1,758 | ||||||
Net cash used in financing activities | (384,219 | ) | (39,707 | ) | ||||
Effect of exchange rate changes on cash and cash equivalents | (4,374 | ) | (5,613 | ) | ||||
Net increase in cash and cash equivalents | 189,712 | 313,436 | ||||||
Cash and cash equivalents at beginning of period | 417,073 | 513,288 | ||||||
Cash and cash equivalents at end of period | $ | 606,785 | $ | 826,724 |