Cincinnati, Ohio-based distributor Cintas Corporation (PPAI 303547) has reported revenue results for its fiscal 2018 first quarter, which ended August 31, at $1.61 billion, an increase of 27.2 percent over last year’s first quarter. The organic growth rate, which adjusts for the impacts of acquisitions and foreign currency exchange rate fluctuations, was 8.3 percent—the organic growth rates for the reportable operating segments of Uniform Rental and Facility Services, and First Aid and Safety Services, were 8.1 percent and 11.9 percent respectively.
“Our revenue growth rate of 27.2 percent was driven largely by our acquisition of G&K Services,” says Scott D. Farmer, Cintas’ chairman and chief executive officer. “The integration of G&K continues to proceed as expected, and we remain on track to meet the acquisition’s financial and non-financial objectives. In addition, we remain focused on our vision of increasing the number of businesses we help get Ready for the Workday™ and of adding greater value to our existing customers by providing them with more of our industry-leading products and services. Our high organic growth rates are evidence of this focus. I thank our employees, whom we call partners, for their continued solid execution.”
The company’s operating income for the first quarter, $249.1 million, is up 22.1 percent from last year’s first quarter operating income of $203.9 million. Operating income was negatively affected by transaction and integration expenses related to the G&K Services, Inc. (G&K) acquisition by $4 million in the first quarter of fiscal 2018 and $2.8 million in the first quarter of fiscal 2017.
Cintas’ net income from continuing operations for the first quarter of $161.1 million increased 18.3 percent from last year’s first quarter. Earnings per diluted share (EPS) from continuing operations for the first quarter were $1.45 compared to $1.24 for last year’s first quarter, an increase of 16.9 percent. Fiscal 2018 and fiscal 2017 first quarter EPS included a negative impact of $0.03 and $0.02, respectively, from transaction and integration expenses related to the G&K acquisition.
Farmer adds, “As a result of our first quarter results, we are increasing our annual guidance for fiscal 2018. We expect revenue to be in the range of $6.325 billion to $6.4 billion and EPS from continuing operations to be in the range of $5.30 to $5.38. Fiscal 2018 guidance excludes any future transaction and integration expenses related to the acquired G&K business. The guidance does, however, include our preliminary estimates of the negative impact from the major hurricanes affecting Texas, Florida, Puerto Rico and surrounding areas. Based on an early assessment, we estimate fiscal 2018 revenue to be reduced by approximately $10 million to $15 million and EPS to be reduced by approximately $0.05 to $0.08. These estimates are subject to change as more information becomes available.”
