Cintas Corporation ( CTAS Quick Quote CTAS - Free Report) has reported impressive results for the third quarter of fiscal 2021 (ended Feb 28, 2021). Its earnings beat estimates by 7.2% and sales exceeded the same by 1.1%. The company’s earnings in the reported quarter were $2.37 per share, surpassing the Zacks Consensus Estimate of $2.21. On a year-over-year basis, the bottom line increased 9.7% from the year-ago figure of $2.16. Lower costs and expenses more than offset the impacts of lower revenues. Revenue Details In the quarter under review, Cintas’ net sales were $1,777.1 million, reflecting a decline of 1.9% from the year-ago quarter. Organic sales in the quarter were flat year over year. Pandemic and adverse weather conditions impacted the top-line results. However, the top line surpassed the Zacks Consensus Estimate of $1,757 million. The company has two reportable segments — Uniform Rental and Facility Services, and First Aid and Safety Services. Other businesses like Uniform Direct Sale and Fire Protection Services are included in All Other. Quarterly sales data is briefly discussed below. Revenues from the Uniform Rental and Facility Services segment (representing 79.8% of the reported quarter’s net sales) were $1,417.9 million, decreasing 2.1% year over year. Organic sales in the quarter were flat year over year. Revenues from the First Aid and Safety Services segment (representing 11.2% of the reported quarter’s net sales) totaled $198.5 million, increasing 16.4% year over year. Organic sales in the quarter increased 17% year over year. Revenues from the All Other business (representing 9% of the reported quarter’s net sales) were $160.7 million, decreasing 16.3% year over year. Margin Profile In the quarter under review, Cintas’ cost of sales (comprising costs related to uniform rental and facility services as well as others) decreased 1.9% year over year to $967.5 million. It represented 54.5% of net sales. Gross profit in the quarter decreased 1.8% year over year to $809.5 million. Gross margin was at 45.6%. Selling and administrative expenses totaled $483.1 million, reflecting a 5.2% decline from the year-ago figure. It represented 27.2% of net sales. Operating margin in the quarter increased 100 basis points year over year to 18.4%. Interest expenses decreased 5.4% to $24.6 million. Balance Sheet and Cash Flow Exiting the quarter, Cintas’ cash and cash equivalents were $553.6 million, down 21.3% from $703.2 million at the end of the previous quarter. Long-term debt was at $2,291.4 million, reflecting a slight increase from the previous quarter. In the first nine months of fiscal 2021, the company generated net cash of $904.8 million from operating activities, decreasing 3.2% from the prior-year period. Capital expenditure totaled $100.4 million, reflecting a year-over-year decline of 47%. Free cash flow increased 7.9% year over year to $804.4 million. During the first nine months of the year, the company repurchased shares worth $154.5 million, down 40.9% from the year-ago period. Dividend payments totaled $371.8 million versus $268 million in the first nine months of fiscal 2020. Outlook
For the fourth quarter of fiscal 2021 (ending May 2021), Cintas anticipates revenues of $1.80-$1.83 billion and earnings per share of $2.20-$2.40.