CINTAS CORPORATION ANNOUNCES FISCAL 2020 FOURTH QUARTER AND FULL YEAR RESULTS

CINCINNATI, July 23, 2020 -- Cintas Corporation (Nasdaq: CTAS) today reported results for its fiscal 2020 fourth quarter ended May 31, 2020. Revenue for the fourth quarter of fiscal 2020 was $1.62 billion, a decrease of 9.7% over last year’s fourth quarter. Earnings per diluted share (EPS) from continuing operations were $1.35 in the fourth quarter of fiscal 2020, a decrease of 34.5% over last year's fourth quarter EPS. Net cash provided by operating activities for the fourth quarter of fiscal 2020 was $356.9 million. Free cash flow, which is defined as net cash provided by operating activities less capital expenditures, in the fourth quarter was the highest of fiscal 2020, totaling $316.0 million. 

 

Organic revenue for the fiscal 2020 fourth quarter ended May 31, 2020, which is adjusted for acquisitions, foreign currency exchange rate fluctuations, and differences in the number of workdays, declined 8.4%. from last year's fourth quarter. Organic revenue for the Uniform Rental and Facility Services operating segment declined 9.6%. Organic revenue for the First Aid and Safety Services operating segment increased 21.9%. 

 

Scott D. Farmer, Cintas' Chairman and Chief Executive Officer, stated, "The COVID-19 coronavirus (COVID-19) pandemic was a significant disruption to the economy as well as to our business in our fiscal 2020 fourth quarter. The government-required closure of many businesses certainly had an impact on our fiscal 2020 fourth quarter financial results. Our priorities have been to keep our employees, whom we call "partners", healthy and safe and to remain committed to serving our customers in any way possible." 

 

Gross margin for the fourth quarter of fiscal 2020 of $707.8 million decreased 14.1% from last year’s fourth quarter. Gross margin as a percentage of revenue was 43.7% for the fourth quarter of fiscal 2020 compared to 45.9% in the fourth quarter of fiscal 2019. 

 

Operating income for the fourth quarter of fiscal 2020 of $207.4 million decreased 34.0% from last year’s fourth quarter operating income of $314.4 million. Operating income as a percentage of revenue was 12.8% in the fourth quarter of fiscal 2020 compared to 17.5% in the fourth quarter of fiscal 2019. Fourth quarter of fiscal 2020 operating income was affected by many items caused by the COVID-19 pandemic, including additional reserves on accounts receivable and inventory; severance and asset impairment expenses; and lower incentive compensation expense. 

 

Net income from continuing operations was $144.6 million for the fourth quarter of fiscal 2020, and EPS from continuing operations were $1.35. Net income from continuing operations was $226.2 million in the fourth quarter of fiscal 2019, and EPS from continuing operations were $2.06.

 

Net cash provided by operating activities for the fourth quarter of fiscal 2020 was $356.9 million compared to $397.1 million in last year's fourth quarter. Fourth quarter free cash flow was $316.0 million compared to $328.2 in last year's fourth quarter. 

 

For the fiscal year ended May 31, 2020, revenue was $7.09 billion, an increase of 2.8% over the prior fiscal year. The organic revenue growth rate was 3.1%. EPS from continuing operations for fiscal 2020 were $8.11 compared to $7.99 for last fiscal year. For the fiscal year ended May 31, 2020, free cash flow was $1.06 billion, an increase of 34.1% compared to the fiscal year ended May 31, 2019. Revenue and EPS have grown 49 of the past 51 years.  

 

Mr. Farmer commented, “Visibility to future financial performance remains impaired due to the COVID-19 pandemic. The recent increase in people contracting the virus and the actions governments are taking again in response only add to the uncertainty of the pace of the economic recovery. Therefore, we are not providing fiscal year financial guidance at this time. However, since we are more than halfway through our fiscal 2021 first quarter, we will provide our first quarter financial estimates. We expect our first quarter revenue to be in the range of $1.675 billion to $1.700 billion and EPS to be in the range of $2.00 to $2.20. Despite the uncertainty, I'm confident in our ability to manage the short-term volatility and maintain focus on our long-term objectives."  

 

Mr. Farmer concluded, “Our employee-partners have been consistent and diligent in their care of each other and our customers, providing essential products and services. I'm proud of their ability to persevere and adapt in the midst of unprecedented adversity. In addition, I'm excited as ever about our principal objective of exceeding our customers' expectations to maximize the long-term value of Cintas. Our value proposition of getting businesses Ready for the Workday® by providing essential, unparalleled image, safety, cleanliness and compliance has never resonated more than it does today. A new trend of a greater focus on health, readiness, and outsourcing of non-core activities is underway. Cintas is well-positioned to benefit from the new normal.”

 

About Cintas

 

Cintas Corporation helps more than one million businesses of all types and sizes get READY™ to open their doors with confidence every day by providing a wide range of products and services that enhance our customers’ image and help keep their facilities and employees clean, safe and looking their best. With products and services including uniforms, mats, mops, restroom supplies, first aid and safety products, fire extinguishers and testing, and training and compliance courses, Cintas helps customers get Ready for the Workday®. Headquartered in Cincinnati, Cintas is a publicly held Fortune 500 company traded over the Nasdaq Global Select Market under the symbol CTAS and is a component of both the Standard & Poor’s 500 Index and the Nasdaq-100 Index.