Cintas Corporation (CTAS - Free Report) posted better-than-expected fourth-quarter fiscal 2019 (ended May 2019) results, with both earnings and revenues surpassing the Zacks Consensus Estimate.
Earnings/Revenues
Net income from continuing operations for the quarter jumped 19.5% to a record level of $226.2 million from $189.3 million in the year-ago quarter. Notably, adjusted earnings came in at $2.07 per share, up 16.9% year over year. Also, the bottom line surpassed the Zacks Consensus Estimate of $1.94.
Revenues increased 7.4% year over year to a record level of $1,793.7 million. The metric also improved 7.6% organically. Moreover, the top line surpassed the consensus estimate of $1,782 million.
For fiscal 2019, net income and earnings per share from continuing operations were $882.6 million and $7.97, respectively, compared with $783.9 million and $7.03 last fiscal. The company reported adjusted earnings of $7.60 per share for fiscal 2019. Revenues for the year were $6,892.3 million compared with $6,476.6 million in fiscal 2018. The increase was driven by an organic growth rate of 6.5%.
Segmental Breakup
The Uniform Rental and Facility Services segment generated revenues worth $1,428.4 million in the fiscal fourth quarter, up 6.4% year over year. First Aid and Safety Services segment’s top line improved 10.7% year over year to $163.5 million. Aggregate revenues from Other businesses came in at $201.8 million, up 12.7%.
Costs/Margins
Aggregate cost and expenses for the fiscal fourth quarter was $1,479.3 million, up 5.4% year over year. Gross profit margin improved 80 basis points (bps) to 45.9%.
Selling and administrative expenses were up 7.7% year over year to $508.2 million in the reported quarter. Integration expenses related to G&K Services, Inc. (acquired in March 2017) declined 93.9% year over year to $0.9 million. Operating margin in the reported quarter was 17.5%, up 160 bps.
Balance Sheet/Cash Flow
At the end of the fiscal fourth quarter, cash and cash equivalents came in at $96.6 million compared with $138.7 million at the end of prior fiscal year. Long-term debt increased to $3,306.2 million from $3,165.8 million recorded a year ago.
For fiscal 2019, the company generated $1,067.8 million cash from operating activities, up 10.8% year over year. Capital expenditures were $276.8 million, up 1.9% year over year.
In fiscal 2019, Cintas repurchased common stock worth $1,016.3 million under its buyback program. Notably, the company paid an annual dividend of $220.8 million during fiscal 2019.
Outlook
For fiscal 2020 (ending May 2020), revenues are expected in the range of $7.24-$7.31 billion while earnings from continuing operations are expected to be between $8.30 and $8.45 per share.
Zacks Rank & Key Picks
Cintas currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the same space are Roper Technologies, Inc (ROP - Free Report) , DXP Enterprises, Inc (DXPE - Free Report) and Tetra Tech, Inc (TTEK - Free Report) . While Roper sports a Zacks Rank #1 (Strong Buy), DXP Enterprises and Tetra Tech carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Roper exceeded estimates in each of the trailing four quarters, the average being 8.43%.
DXP Enterprises surpassed estimates thrice in the trailing four quarters, the average being 48.47%.
Tetra Tech surpassed estimates in each of the trailing four quarters, the average being 8.22%.
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Cintas Corporation (CTAS - Free Report) posted better-than-expected fourth-quarter fiscal 2019 (ended May 2019) results, with both earnings and revenues surpassing the Zacks Consensus Estimate.
Earnings/Revenues
Net income from continuing operations for the quarter jumped 19.5% to a record level of $226.2 million from $189.3 million in the year-ago quarter. Notably, adjusted earnings came in at $2.07 per share, up 16.9% year over year. Also, the bottom line surpassed the Zacks Consensus Estimate of $1.94.
Revenues increased 7.4% year over year to a record level of $1,793.7 million. The metric also improved 7.6% organically. Moreover, the top line surpassed the consensus estimate of $1,782 million.
For fiscal 2019, net income and earnings per share from continuing operations were $882.6 million and $7.97, respectively, compared with $783.9 million and $7.03 last fiscal. The company reported adjusted earnings of $7.60 per share for fiscal 2019. Revenues for the year were $6,892.3 million compared with $6,476.6 million in fiscal 2018. The increase was driven by an organic growth rate of 6.5%.
Segmental Breakup
The Uniform Rental and Facility Services segment generated revenues worth $1,428.4 million in the fiscal fourth quarter, up 6.4% year over year. First Aid and Safety Services segment’s top line improved 10.7% year over year to $163.5 million. Aggregate revenues from Other businesses came in at $201.8 million, up 12.7%.
Costs/Margins
Aggregate cost and expenses for the fiscal fourth quarter was $1,479.3 million, up 5.4% year over year. Gross profit margin improved 80 basis points (bps) to 45.9%.
Selling and administrative expenses were up 7.7% year over year to $508.2 million in the reported quarter. Integration expenses related to G&K Services, Inc. (acquired in March 2017) declined 93.9% year over year to $0.9 million. Operating margin in the reported quarter was 17.5%, up 160 bps.
Balance Sheet/Cash Flow
At the end of the fiscal fourth quarter, cash and cash equivalents came in at $96.6 million compared with $138.7 million at the end of prior fiscal year. Long-term debt increased to $3,306.2 million from $3,165.8 million recorded a year ago.
For fiscal 2019, the company generated $1,067.8 million cash from operating activities, up 10.8% year over year. Capital expenditures were $276.8 million, up 1.9% year over year.
In fiscal 2019, Cintas repurchased common stock worth $1,016.3 million under its buyback program. Notably, the company paid an annual dividend of $220.8 million during fiscal 2019.
Outlook
For fiscal 2020 (ending May 2020), revenues are expected in the range of $7.24-$7.31 billion while earnings from continuing operations are expected to be between $8.30 and $8.45 per share.
Zacks Rank & Key Picks
Cintas currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the same space are Roper Technologies, Inc (ROP - Free Report) , DXP Enterprises, Inc (DXPE - Free Report) and Tetra Tech, Inc (TTEK - Free Report) . While Roper sports a Zacks Rank #1 (Strong Buy), DXP Enterprises and Tetra Tech carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Roper exceeded estimates in each of the trailing four quarters, the average being 8.43%.
DXP Enterprises surpassed estimates thrice in the trailing four quarters, the average being 48.47%.
Tetra Tech surpassed estimates in each of the trailing four quarters, the average being 8.22%.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.
This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.
See their latest picks free >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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