Mason, Ohio-based distributor Cintas Corporation (PPAI 303547) has released the results of its fiscal 2019 first quarter, which ended August 31. Revenue for the quarter was $1.7 billion, an increase of 5.4 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 5.2 percent.
“We are pleased with our start to fiscal 2019 and look forward to another successful year,” says
Scott D. Farmer, Cintas’ chairman and chief executive officer. “We remain focused on integrating the G&K acquisition, continuing the implementation of our enterprise resource planning system and increasing the number of businesses we help get ‘Ready for the Workday.’”
Cintas’ operating income for the quarter was $265.2 million, up 6.5 percent from fiscal year 2018’s first- quarter operating income of $249.1 million. The company reports that operating income for the first quarter of fiscal 2019 was negatively impacted by $19 million in stock-based compensation expenses related to a change in its retirement policy in which the retirement age and tenure requirements were reduced. Operating income was also negatively affected by integration expenses of $4.9 million in the first quarter of fiscal 2019 and $4 million in the first quarter of fiscal 2018 related to the acquisition of G&K Services, Inc.
The company reports net income from continuing operations for the quarter of $212.5 million, a 31.9 percent increase from the same quarter last year. Earnings per diluted share (EPS) from continuing operations for the first quarter of fiscal 2019 were $1.89, an increase of 30.3 percent from last year. Cintas notes that net income and EPS from continuing operations were positively impacted by a lower effective tax rate in this fiscal year’s first quarter compared to last fiscal year’s first quarter primarily from the enactment of The Tax Cuts and Jobs Act.
Farmer adds, “Following our first-quarter results, we are increasing our annual guidance for fiscal 2019. We are raising our revenue guidance from a range of $6.75 billion to $6.82 billion to a range of $6.8 billion to $6.855 billion, and EPS from continuing operations from a range of $7 to $7.15 to a range of $7.19 to $7.29. Fiscal 2019 guidance excludes any future integration expenses related to the acquired G&K business.”
