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 22, 2016 |
CINTAS CORPORATION | ||||
Date: March 22, 2016 | By: | /s/ J. Michael Hansen | ||
J. Michael Hansen | ||||
Vice President and Chief Financial Officer |
Exhibit Number | Description | ||
99 | Press release dated March 22, 2016 |
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 | $ | 4,860.0 | 8.6% | $ | 4,890.0 | 9.2% |
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 | $ | 3.98 | 18.8% | $ | 4.03 | 20.3% | ||||||||
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 | ||||||||||
February 29, 2016 | February 28, 2015 | % Change | ||||||||
Revenue: | ||||||||||
Uniform rental and facility services | $ | 936,565 | $ | 883,401 | 6.0% | |||||
Other | 279,518 | 225,446 | 24.0% | |||||||
Total revenue | 1,216,083 | 1,108,847 | 9.7% | |||||||
Costs and expenses: | ||||||||||
Cost of uniform rental and facility services | 524,656 | 501,273 | 4.7% | |||||||
Cost of other | 166,819 | 132,267 | 26.1% | |||||||
Selling and administrative expenses | 331,656 | 301,690 | 9.9% | |||||||
Operating income | 192,952 | 173,617 | 11.1% | |||||||
Interest income | (335 | ) | (96 | ) | 249.0% | |||||
Interest expense | 16,163 | 16,254 | (0.6)% | |||||||
Income before income taxes | 177,124 | 157,459 | 12.5% | |||||||
Income taxes | 59,845 | 57,128 | 4.8% | |||||||
Income from continuing operations | 117,279 | 100,331 | 16.9% | |||||||
Income (loss) from discontinued operations, net of tax | 62 | (5,448 | ) | 101.1% | ||||||
Net income | $ | 117,341 | $ | 94,883 | 23.7% | |||||
Basic earnings (loss) per share: | ||||||||||
Continuing operations | $ | 1.07 | $ | 0.86 | 24.4% | |||||
Discontinued operations | 0.00 | (0.05 | ) | 100.0% | ||||||
Basic earnings per share | $ | 1.07 | $ | 0.81 | 32.1% | |||||
Diluted earnings (loss) per share: | ||||||||||
Continuing operations | $ | 1.05 | $ | 0.85 | 23.5% | |||||
Discontinued operations | 0.00 | (0.05 | ) | 100.0% | ||||||
Diluted earnings per share | $ | 1.05 | $ | 0.80 | 31.3% | |||||
Weighted average number of shares outstanding | 107,843 | 116,178 | ||||||||
Diluted average number of shares outstanding | 109,463 | 117,867 | ||||||||
Nine Months Ended | ||||||||||
February 29, 2016 | February 28, 2015 | % Change | ||||||||
Revenue: | ||||||||||
Uniform rental and facility services | $ | 2,812,677 | $ | 2,648,574 | 6.2% | |||||
Other | 821,376 | 685,729 | 19.8% | |||||||
Total revenue | 3,634,053 | 3,334,303 | 9.0% | |||||||
Costs and expenses: | ||||||||||
Cost of uniform rental and facility services | 1,569,250 | 1,497,771 | 4.8% | |||||||
Cost of other | 488,651 | 401,855 | 21.6% | |||||||
Selling and administrative expenses | 997,344 | 915,989 | 8.9% | |||||||
Operating income | 578,808 | 518,688 | 11.6% | |||||||
Gain on sale of stock of an equity method investment | — | 21,739 | (100.0)% | |||||||
Interest income | (565 | ) | (168 | ) | 236.3% | |||||
Interest expense | 48,746 | 48,766 | 0.0% | |||||||
Income before income taxes | 530,627 | 491,829 | 7.9% | |||||||
Income taxes | 191,697 | 181,892 | 5.4% | |||||||
Income from continuing operations | 338,930 | 309,937 | 9.4% | |||||||
Income from discontinued operations, net of tax | 223,692 | 15,466 | 1,346.3% | |||||||
Net income | $ | 562,622 | $ | 325,403 | 72.9% | |||||
Basic earnings per share: | ||||||||||
Continuing operations | $ | 3.06 | $ | 2.64 | 15.9% | |||||
Discontinued operations | 2.02 | 0.13 | 1,453.8% | |||||||
Basic earnings per share | $ | 5.08 | $ | 2.77 | 83.4% | |||||
Diluted earnings per share: | ||||||||||
Continuing operations | $ | 3.01 | $ | 2.60 | 15.8% | |||||
Discontinued operations | 1.99 | 0.13 | 1,430.8% | |||||||
Diluted earnings per share | $ | 5.00 | $ | 2.73 | 83.2% | |||||
Weighted average number of shares outstanding | 108,923 | 116,653 | ||||||||
Diluted average number of shares outstanding | 110,612 | 118,214 | ||||||||
Three Months Ended | ||||||
February 29, 2016 | February 28, 2015 | |||||
Uniform rental and facility services gross margin | 44.0 | % | 43.3 | % | ||
Other gross margin | 40.3 | % | 41.3 | % | ||
Total gross margin | 43.1 | % | 42.9 | % | ||
Net margin, continuing operations | 9.6 | % | 9.0 | % | ||
Nine Months Ended | ||||||
February 29, 2016 | February 28, 2015 | |||||
Uniform rental and facility services gross margin | 44.2 | % | 43.4 | % | ||
Other gross margin | 40.5 | % | 41.4 | % | ||
Total gross margin | 43.4 | % | 43.0 | % | ||
Net margin, continuing operations | 9.3 | % | 9.3 | % |
Three Months Ended | ||||||||
February 29, 2016 | February 28, 2015 | |||||||
Income from continuing operations | $ | 117,279 | $ | 100,331 | ||||
Less: income from continuing operations allocated to participating securities | 1,871 | 733 | ||||||
Income from continuing operations available to common shareholders | $ | 115,408 | $ | 99,598 | ||||
Basic weighted average common shares outstanding | 107,843 | 116,178 | ||||||
Effect of dilutive securities - employee stock options | 1,620 | 1,689 | ||||||
Diluted weighted average common shares outstanding | 109,463 | 117,867 | ||||||
Diluted earnings per share from continuing operations | $ | 1.05 | $ | 0.85 | ||||
Nine Months Ended | ||||||||
February 29, 2016 | February 28, 2015 | |||||||
Income from continuing operations | $ | 338,930 | $ | 309,937 | ||||
Less: income from continuing operations allocated to participating securities | 5,500 | 2,666 | ||||||
Income from continuing operations available to common shareholders | $ | 333,430 | $ | 307,271 | ||||
Basic weighted average common shares outstanding | 108,923 | 116,653 | ||||||
Effect of dilutive securities - employee stock options | 1,689 | 1,561 | ||||||
Diluted weighted average common shares outstanding | 110,612 | 118,214 | ||||||
Diluted earnings per share from continuing operations | $ | 3.01 | $ | 2.60 |
Nine Months Ended | ||||||
February 29, 2016 | February 28, 2015 | Growth % | ||||
A | B | G | ||||
Revenue | $3,634,053 | $3,334,303 | 9.0% | |||
G=(A-B)/B | ||||||
C | D | |||||
Workdays in the period | 196 | 195 | ||||
E | F | H | ||||
Revenue adjusted for workday difference | $3,615,512 | $3,334,303 | 8.4% | |||
H=(E-F)/F | ||||||
E=(A/C)*D | F=(B/D)*D |
Nine Months Ended | ||||||||
February 29, 2016 | February 28, 2015 | |||||||
Net cash provided by operations | $ | 297,154 | $ | 377,646 | ||||
Capital expenditures | (207,502 | ) | (163,040 | ) | ||||
Free cash flow | $ | 89,652 | $ | 214,606 |
For the nine months ended February 29, 2016 | As Reported (see Note 1) | Adjustments | As Adjusted | Increase | ||||||||||
Net income, continuing operations | $ | 338,930 | $ | — | $ | 338,930 | 14.4% | |||||||
Net income margin, continuing operations | 9.3 | % | 9.3 | % | ||||||||||
Diluted earnings per share, continuing operations | $ | 3.01 | $ | — | $ | 3.01 | 20.9% |
For the nine months ended February 28, 2015 | As Reported (see Note 1) | Adjustments (see Note 2) | As Adjusted | |||||||||||
Net income, continuing operations | $ | 309,937 | $ | 13,630 | $ | 296,307 | ||||||||
Net income margin, continuing operations | 9.3 | % | 8.9 | % | ||||||||||
Diluted earnings per share, continuing operations | $ | 2.60 | $ | 0.11 | $ | 2.49 |
Uniform Rental and Facility Services | First Aid and Safety Services | All Other | Corporate(1) | Total | ||||||||||||||||
For the three months ended February 29, 2016 | ||||||||||||||||||||
Revenue | $ | 936,565 | $ | 119,064 | $ | 160,454 | $ | — | $ | 1,216,083 | ||||||||||
Gross margin | $ | 411,909 | $ | 50,241 | $ | 62,458 | $ | — | $ | 524,608 | ||||||||||
Selling and administrative expenses | $ | 244,407 | $ | 37,607 | $ | 49,642 | $ | — | $ | 331,656 | ||||||||||
Interest income | $ | — | $ | — | $ | — | $ | (335 | ) | $ | (335 | ) | ||||||||
Interest expense | $ | — | $ | — | $ | — | $ | 16,163 | $ | 16,163 | ||||||||||
Income (loss) before income taxes | $ | 167,502 | $ | 12,634 | $ | 12,816 | $ | (15,828 | ) | $ | 177,124 | |||||||||
For the three months ended February 28, 2015 | ||||||||||||||||||||
Revenue | $ | 883,401 | $ | 79,471 | $ | 145,975 | $ | — | $ | 1,108,847 | ||||||||||
Gross margin | $ | 382,128 | $ | 37,584 | $ | 55,595 | $ | — | $ | 475,307 | ||||||||||
Selling and administrative expenses | $ | 229,963 | $ | 26,286 | $ | 45,441 | $ | — | $ | 301,690 | ||||||||||
Interest income | $ | — | $ | — | $ | — | $ | (96 | ) | $ | (96 | ) | ||||||||
Interest expense | $ | — | $ | — | $ | — | $ | 16,254 | $ | 16,254 | ||||||||||
Income (loss) before income taxes | $ | 152,165 | $ | 11,298 | $ | 10,154 | $ | (16,158 | ) | $ | 157,459 | |||||||||
As of and for the nine months ended February 29, 2016 | ||||||||||||||||||||
Revenue | $ | 2,812,677 | $ | 338,990 | $ | 482,386 | $ | — | $ | 3,634,053 | ||||||||||
Gross margin | $ | 1,243,427 | $ | 144,379 | $ | 188,346 | $ | — | $ | 1,576,152 | ||||||||||
Selling and administrative expenses | $ | 741,249 | $ | 108,306 | $ | 147,789 | $ | — | $ | 997,344 | ||||||||||
Interest income | $ | — | $ | — | $ | — | $ | (565 | ) | $ | (565 | ) | ||||||||
Interest expense | $ | — | $ | — | $ | — | $ | 48,746 | $ | 48,746 | ||||||||||
Income (loss) before income taxes | $ | 502,178 | $ | 36,073 | $ | 40,557 | $ | (48,181 | ) | $ | 530,627 | |||||||||
Assets | $ | 3,050,138 | $ | 436,390 | $ | 357,863 | $ | 386,819 | $ | 4,231,210 | ||||||||||
As of and for the nine months ended February 28, 2015 | ||||||||||||||||||||
Revenue | $ | 2,648,574 | $ | 241,666 | $ | 444,063 | $ | — | $ | 3,334,303 | ||||||||||
Gross margin | $ | 1,150,803 | $ | 112,635 | $ | 171,239 | $ | — | $ | 1,434,677 | ||||||||||
Selling and administrative expenses | $ | 694,255 | $ | 80,413 | $ | 141,321 | $ | — | $ | 915,989 | ||||||||||
Gain on sale of stock of an equity method investment | $ | — | $ | — | $ | — | $ | 21,739 | $ | 21,739 | ||||||||||
Interest income | $ | — | $ | — | $ | — | $ | (168 | ) | $ | (168 | ) | ||||||||
Interest expense | $ | — | $ | — | $ | — | $ | 48,766 | $ | 48,766 | ||||||||||
Income (loss) before income taxes | $ | 456,548 | $ | 32,222 | $ | 29,918 | $ | (26,859 | ) | $ | 491,829 | |||||||||
Assets | $ | 2,908,813 | $ | 264,357 | $ | 340,705 | $ | 752,471 | $ | 4,266,346 |
February 29, 2016 | May 31, 2015 | |||||||
(Unaudited) | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 315,116 | $ | 417,073 | ||||
Marketable securities | 71,703 | 16,081 | ||||||
Accounts receivable, net | 550,748 | 496,130 | ||||||
Inventories, net | 255,203 | 226,211 | ||||||
Uniforms and other rental items in service | 539,401 | 534,005 | ||||||
Income taxes, current | — | 936 | ||||||
Assets held for sale | — | 21,341 | ||||||
Prepaid expenses and other current assets | 26,653 | 24,030 | ||||||
Total current assets | 1,758,824 | 1,735,807 | ||||||
Property and equipment, at cost, net | 964,680 | 871,421 | ||||||
Investments | 118,607 | 329,692 | ||||||
Goodwill | 1,284,434 | 1,195,612 | ||||||
Service contracts, net | 86,380 | 42,434 | ||||||
Other assets, net | 18,285 | 17,494 | ||||||
$ | 4,231,210 | $ | 4,192,460 | |||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 151,833 | $ | 109,607 | ||||
Accrued compensation and related liabilities | 84,992 | 88,423 | ||||||
Accrued liabilities | 319,438 | 309,935 | ||||||
Income taxes, current | 52,541 | — | ||||||
Liabilities held for sale | — | 704 | ||||||
Long-term debt due within one year | 250,000 | — | ||||||
Total current liabilities | 858,804 | 508,669 | ||||||
Long-term liabilities: | ||||||||
Long-term debt due after one year | 1,050,000 | 1,300,000 | ||||||
Deferred income taxes | 240,714 | 339,327 | ||||||
Accrued liabilities | 131,586 | 112,009 | ||||||
Total long-term liabilities | 1,422,300 | 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: 179,368,804 issued and 107,064,235 outstanding FY15: 178,117,334 issued and 111,702,949 outstanding | 399,927 | 329,248 | ||||||
Paid-in capital | 184,442 | 157,183 | ||||||
Retained earnings | 4,674,975 | 4,227,620 | ||||||
Treasury stock: FY16: 72,304,569 shares FY15: 66,414,385 shares | (3,275,564 | ) | (2,773,125 | ) | ||||
Accumulated other comprehensive loss | (33,674 | ) | (8,471 | ) | ||||
Total shareholders’ equity | 1,950,106 | 1,932,455 | ||||||
$ | 4,231,210 | $ | 4,192,460 |
Nine Months Ended | ||||||||
February 29, 2016 | February 28, 2015 | |||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 562,622 | $ | 325,403 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation | 110,535 | 104,950 | ||||||
Amortization of intangible assets | 12,136 | 11,090 | ||||||
Stock-based compensation | 57,169 | 36,016 | ||||||
Gain on Storage Transactions | (15,786 | ) | (35,036 | ) | ||||
Loss on investment in Shred-it Partnership | 24,288 | 4,570 | ||||||
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 | (74,540 | ) | 15,428 | |||||
Change in current assets and liabilities, net of acquisitions of businesses: | ||||||||
Accounts receivable, net | (41,523 | ) | (3,168 | ) | ||||
Inventories, net | (24,009 | ) | 15,370 | |||||
Uniforms and other rental items in service | (6,905 | ) | (22,203 | ) | ||||
Prepaid expenses and other current assets | (1,580 | ) | (1,609 | ) | ||||
Accounts payable | 37,370 | (33,615 | ) | |||||
Accrued compensation and related liabilities | (3,731 | ) | (7,086 | ) | ||||
Accrued liabilities and other | (18,301 | ) | 1,841 | |||||
Income taxes, current | 53,435 | (12,566 | ) | |||||
Net cash provided by operating activities | 297,154 | 377,646 | ||||||
Cash flows from investing activities: | ||||||||
Capital expenditures | (207,502 | ) | (163,040 | ) | ||||
Proceeds from redemption of marketable securities | 327,779 | 18,711 | ||||||
Purchase of marketable securities and investments | (384,796 | ) | (79,947 | ) | ||||
Proceeds from Storage Transactions, net of cash contributed | 35,338 | 154,891 | ||||||
Proceeds from Shredding Transactions | 578,257 | 3,344 | ||||||
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 | (151,731 | ) | (13,798 | ) | ||||
Other, net | 4,433 | 1,583 | ||||||
Net cash provided by (used in) investing activities | 201,778 | (43,076 | ) | |||||
Cash flows from financing activities: | ||||||||
Repayment of debt | (16 | ) | (456 | ) | ||||
Proceeds from exercise of stock-based compensation awards | 22,260 | 31,956 | ||||||
Dividends paid | (115,273 | ) | (201,941 | ) | ||||
Repurchase of common stock | (502,439 | ) | (314,648 | ) | ||||
Other, net | 1,153 | 3,139 | ||||||
Net cash used in financing activities | (594,315 | ) | (481,950 | ) | ||||
Effect of exchange rate changes on cash and cash equivalents | (6,574 | ) | (7,588 | ) | ||||
Net decrease in cash and cash equivalents | (101,957 | ) | (154,968 | ) | ||||
Cash and cash equivalents at beginning of period | 417,073 | 513,288 | ||||||
Cash and cash equivalents at end of period | $ | 315,116 | $ | 358,320 |