Cintas(CTAS)2024-09-25 12:30Revenue Growth - Revenue for Q1 fiscal 2025 was $2.50 billion, a 6.8% increase compared to $2.34 billion in Q1 fiscal 2024, with organic revenue growth of 8.0%[1] - Total revenue increased by 6.8% to $2,501.6 million compared to $2,342.3 million in the prior year[12] - Uniform rental and facility services revenue grew by 5.9% to $1,933.8 million[12] - Other revenue increased by 10.1% to $567.7 million[12] - Organic revenue growth was 8.0%, excluding acquisition and foreign currency impacts[16] - Workday adjusted revenue growth was 8.4%[16] - Workday-adjusted revenue growth for fiscal 2025 is projected at 7.3% to 8.4%, with organic revenue growth expected to be 7.0% to 8.1%[6] Profitability and Margins - Gross margin increased by 9.7% to $1.25 billion, with gross margin as a percentage of revenue rising to 50.1%, up 140 basis points from 48.7% in Q1 fiscal 2024[2] - Operating income grew 12.1% to $561.0 million, with operating income as a percentage of revenue increasing to 22.4% from 21.4% in Q1 fiscal 2024[2] - Net income rose 17.4% to $452.0 million, with diluted EPS increasing 18.3% to $1.10 compared to $0.93 in Q1 fiscal 2024[3] - Net income rose by 17.4% to $452.0 million from $385.1 million in the previous year[12] - Operating income improved by 12.1% to $561.0 million[12] - Total gross margin expanded to 50.1% from 48.7% in the prior year[13] - Net income margin increased to 18.1% from 16.4%[13] - Net income increased to $452,033 thousand for the three months ended August 31, 2024, compared to $385,085 thousand in the same period last year[20] Cash Flow and Financial Activities - Cash flow from operating activities increased 38.5% to $466.7 million, with $473.6 million spent on share repurchases and a 15.6% increase in quarterly dividend payments to $157.9 million[4] - Free cash flow surged by 62.4% to $373.8 million from $230.2 million[15] - Net cash provided by operating activities rose to $466,732 thousand from $336,945 thousand year-over-year[20] - Capital expenditures decreased to $92,921 thousand from $106,697 thousand in the previous year[20] - Acquisitions of businesses, net of cash acquired, dropped significantly to $9,436 thousand from $55,651 thousand[20] - Repurchase of common stock surged to $614,802 thousand from $73,276 thousand[20] - Dividends paid increased to $138,237 thousand from $117,565 thousand[20] - Net cash used in financing activities jumped to $592,792 thousand from $202,375 thousand[20] - Cash and cash equivalents at the end of the period stood at $101,373 thousand, up from $88,126 thousand[20] Guidance and Projections - Cintas raised its full fiscal year revenue guidance to a range of $10.22 billion to $10.32 billion, up from $10.16 billion to $10.31 billion, and diluted EPS guidance to $4.17 to $4.25, up from $4.06 to $4.19[5][7] - Workday-adjusted revenue growth for fiscal 2025 is projected at 7.3% to 8.4%, with organic revenue growth expected to be 7.0% to 8.1%[6] - Fiscal 2025 interest expense is expected to be $101.0 million, up from $95.0 million in fiscal 2024, primarily due to higher variable rate debt for share buybacks[9] - The effective tax rate for fiscal 2025 is expected to remain at 20.4%, consistent with fiscal 2024[9] - Cintas' guidance assumes no future acquisitions, a constant foreign currency exchange rate, and no significant economic disruptions[6][7]