Cintas(CTAS) - 2025 Q3 - Quarterly Report

Part I. Financial Information Financial Statements This section presents the unaudited consolidated financial statements for the periods ended February 2025 and 2024, adjusted for a stock split - The financial statements are unaudited and should be read in conjunction with the company's 2024 Annual Report on Form 10-K[24] - All share and per-share amounts have been retroactively adjusted to reflect a four-for-one stock split effective September 2024[26] Consolidated Condensed Statements of Income Key Income Statement Data (in thousands, except per share data) | Metric | Three Months Ended Feb 28, 2025 | Three Months Ended Feb 29, 2024 | YoY Change | Nine Months Ended Feb 28, 2025 | Nine Months Ended Feb 29, 2024 | YoY Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Total Revenue | $2,609,159 | $2,406,173 | +8.4% | $7,672,529 | $7,125,680 | +7.7% | | Operating Income | $609,853 | $520,800 | +17.1% | $1,762,274 | $1,521,039 | +15.9% | | Net Income | $463,497 | $397,579 | +16.6% | $1,364,025 | $1,157,277 | +17.9% | | Diluted EPS | $1.13 | $0.96 | +17.7% | $3.31 | $2.79 | +18.6% | Consolidated Condensed Balance Sheets Key Balance Sheet Data (in thousands) | Metric | Feb 28, 2025 | May 31, 2024 | | :--- | :--- | :--- | | Total Current Assets | $3,341,428 | $3,185,207 | | Goodwill | $3,353,553 | $3,212,424 | | Total Assets | $9,611,136 | $9,168,817 | | Total Current Liabilities | $1,941,146 | $1,828,519 | | Total Debt (Current + Long-term) | $2,477,392 | $2,475,529 | | Total Liabilities | $5,018,888 | $4,852,445 | | Total Shareholders' Equity | $4,592,248 | $4,316,372 | Consolidated Condensed Statements of Cash Flows Cash Flow Summary for the Nine Months Ended (in thousands) | Cash Flow Activity | Feb 28, 2025 | Feb 29, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $1,530,156 | $1,386,741 | | Net cash used in investing activities | ($474,372) | ($503,278) | | Net cash used in financing activities | ($1,150,581) | ($879,470) | | Net (decrease) increase in cash | ($98,587) | $4,334 | | Cash and cash equivalents at end of period | $243,428 | $128,483 | Notes to Consolidated Condensed Financial Statements This section details accounting policies, revenue recognition, leases, acquisitions, and a significant legal settlement Management's Discussion and Analysis of Financial Condition and Results of Operations Management analyzes financial performance, highlighting strong revenue growth, improved margins, and segment results - The company's strategy focuses on customer penetration, geographic expansion, and strategic acquisitions to maximize long-term value[72][73][74] Consolidated Performance Summary - Nine Months Ended Feb 28, 2025 | Metric | Amount | YoY Change | Organic Growth | | :--- | :--- | :--- | :--- | | Total Revenue | $7,672.5M | +7.7% | +7.7% | | Operating Income | $1,762.3M | +15.9% | N/A | | Operating Margin | 23.0% | +170 bps | N/A | | Net Income | $1,364.0M | +17.9% | N/A | | Diluted EPS | $3.31 | +18.6% | N/A | Results of Operations Revenue grew 8.4% in Q3 and 7.7% over nine months, driven by organic growth and improved operating margins Q3 FY25 vs Q3 FY24 Performance | Metric | Q3 FY25 | Q3 FY24 | YoY Change | | :--- | :--- | :--- | :--- | | Total Revenue | $2,609.2M | $2,406.2M | +8.4% | | Organic Revenue Growth | 7.9% | N/A | N/A | | Operating Income | $609.9M | $520.8M | +17.1% | | Operating Margin | 23.4% | 21.6% | +180 bps | | Diluted EPS | $1.13 | $0.96 | +17.7% | Segment Revenue Growth - Q3 FY25 | Segment | Revenue Growth | Organic Growth | | :--- | :--- | :--- | | Uniform Rental & Facility Services | +7.7% | +7.0% | | First Aid & Safety Services | +14.9% | +15.0% | | Other | +11.0% | +10.7% | Liquidity and Capital Resources Operating cash flow increased to $1.53 billion, funding capex, acquisitions, buybacks, and dividends - For the nine months ended Feb 28, 2025, the company repurchased $678.1 million of its common stock and paid $453.7 million in dividends[116][117][118] - As of February 28, 2025, the company had $2.49 billion in total debt outstanding and maintained investment-grade credit ratings[119][122] Cash Flow Summary - Nine Months Ended (in millions) | Activity | Feb 28, 2025 | Feb 29, 2024 | | :--- | :--- | :--- | | Operating Cash Flow | $1,530.2 | $1,386.7 | | Investing Cash Flow | ($474.4) | ($503.3) | | Financing Cash Flow | ($1,150.6) | ($879.5) | Quantitative and Qualitative Disclosures About Market Risk The company's primary market risk exposures are to interest rates and the Canadian dollar - Cintas is exposed to market risk from interest rates and foreign currency, with the Canadian dollar being the primary foreign currency exposure[133][134] Controls and Procedures Management concluded that disclosure controls and procedures were effective with no material changes to internal controls - Management concluded that as of February 28, 2025, the company's disclosure controls and procedures were effective[137] - No changes occurred during the quarter that materially affected the company's internal control over financial reporting[138] Part II. Other Information Legal Proceedings The company reached an agreement for a class action lawsuit involving a one-time payment of $45.0 million - Information regarding material legal proceedings is incorporated by reference from Note 12 of the financial statements[141] - An agreement in principle was reached in the City of Laurel lawsuit, requiring a one-time payment of $45.0 million, which has been accrued[68] Issuer Purchases of Equity Securities The company repurchased 134,475 shares in Q3 to cover employee taxes, with $1.47 billion remaining under buyback programs - The company has two active $1.0 billion share buyback programs, with no purchases made under the July 2024 program through February 28, 2025[146] Share Repurchases for Q3 FY2025 | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | Dec 2024 | 36,128 | $201.94 | | Jan 2025 | 66,887 | $192.52 | | Feb 2025 | 31,460 | $204.65 | | Total | 134,475 | $197.89 | Other Information No directors or officers adopted or terminated Rule 10b5-1 trading arrangements during the quarter - No directors or officers adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the quarter[145] Exhibits This section lists filed exhibits, including officer certifications and financial statements in Inline XBRL format - The report includes required officer certifications and financial statements in Inline XBRL format[149]