ctas-20240831

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q


☑	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended	August 31, 2024


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
			For the transition period from to

Commission file number 0-11399

Cintas Corporation

(Exact name of registrant as specified in its charter)


Washington						31-1188630
(State or Other Jurisdiction of Incorporation or Organization)						(IRS Employer Identification Number)


6800 Cintas Boulevard
P.O. Box 625737
Cincinnati,	Ohio	45262-5737
(Address of Principal Executive Offices)		(Zip Code)

Registrant's Telephone Number, Including Area Code: (513) 459-1200

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading symbol(s)

Name of each exchange on which registered

Common stock, no par value

CTAS

The NASDAQ Stock Market LLC

(NASDAQ Global Select Market)

Indicate by checkmark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by checkmark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes ☑ No ☐

Indicate by checkmark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer ☑ Accelerated Filer ☐ Non-Accelerated Filer ☐

Smaller Reporting Company ☐ Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by checkmark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.


Class						Outstanding September 30, 2024
Common Stock, no par value						403,298,633

CINTAS CORPORATION

TABLE OF CONTENTS


		Page
Part I. Financial Information

Item 1.	Financial Statements

	Consolidated Condensed Statements of Income – Three Months Ended August 31, 202 4 and 2023	3

	Consolidated Condensed Statements of Comprehensive Income – Three Months Ended August 31, 2024 and 2023	4

	Consolidated Condensed Balance Sheets – August 31, 2024 and May 31, 2024	5

	Consolidated Condensed Statements of Shareholders' Equity - Three Months Ended August 31 , 2024 and 2023	6

	Consolidated Condensed Statements of Cash Flows – T hree Months Ended August 31,2024 and 2023	7

	Notes to Consolidated Condensed Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	26

Item 4.	Controls and Procedures	26

Part II. Other Information

Item 1.	Legal Proceedings	27



Item 2.	Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities	27

Item 5.	Other Information	27

Item 6.	Exhibits	28

Signatures		29

Table of Contents

Part I. Financial Information

ITEM 1.

FINANCIAL STATEMENTS

CINTAS CORPORATION

CONSOLIDATED CONDENSED STATEMENTS OF INCOME

(Unaudited)


	Three Months Ended
(In thousands except per share data)	August 31, 2024		August 31, 2023
Revenue:
Uniform rental and facility services	$	1,933,839	$	1,826,825
Other	567,748		515,505
Total revenue	2,501,587		2,342,330

Costs and expenses:
Cost of uniform rental and facility services	981,163		947,583
Cost of other	268,293		253,176
Selling and administrative expenses	691,100		641,015

Operating income	561,031		500,556

Interest income	(1,250)		(422)
Interest expense	25,619		24,544

Income before income taxes	536,662		476,434
Income taxes	84,629		91,349


Net income	$	452,033	$	385,085




Basic earnings per share	$	1.12	$	0.94




Diluted earnings per share	$	1.10	$	0.93

Dividends declared per share	$	0.39	$	0.3375

See accompanying notes.

Table of Contents

CINTAS CORPORATION

CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)


	Three Months Ended
(In thousands)	August 31, 2024		August 31, 2023

Net income	$	452,033	$	385,085

Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	3,656		2,634
Change in fair value of interest rate lock agreements, net of tax (benefit) expense of $(3,408) and $2,806, respectively	(9,956)		8,199
Amortization of interest rate lock agreements, net of tax benefit of $(513) and $(487), respectively	(1,523)		(1,442)

Other comprehensive (loss) income, net of tax (benefit) expense of $(3,921) and $2,319, respectively	(7,823)		9,391
Comprehensive income	$	444,210	$	394,476

See accompanying notes.

Table of Contents

CINTAS CORPORATION

CONSOLIDATED CONDENSED BALANCE SHEETS


(In thousands)	August 31, 2024		May 31, 2024
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	101,373	$	342,015

Accounts receivable, net	1,293,791		1,244,182
Inventories, net	399,078		410,201
Uniforms and other rental items in service	1,061,065		1,040,144

Prepaid expenses and other current assets	188,085		148,665
Total current assets	3,043,392		3,185,207

Property and equipment, net	1,554,640		1,534,168

Investments	325,651		302,212
Goodwill	3,223,528		3,212,424
Service contracts, net	311,199		321,902
Operating lease right-of-use assets, net	190,965		187,953
Other assets, net	419,332		424,951
	$	9,068,707	$	9,168,817

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	395,931	$	339,166
Accrued compensation and related liabilities	125,004		214,130
Accrued liabilities	717,093		761,283
Income taxes, current	84,622		18,618
Operating lease liabilities, current	46,537		45,727
Debt due within one year	615,702		449,595
Total current liabilities	1,984,889		1,828,519

Long-term liabilities:
Debt due after one year	2,026,448		2,025,934
Deferred income taxes	474,461		475,512
Operating lease liabilities	149,345		146,824
Accrued liabilities	412,141		375,656
Total long-term liabilities	3,062,395		3,023,926

Shareholders’ equity:
Preferred stock, no par value:	—		—
100 shares authorized, none outstanding
Common stock, no par value, and paid-in capital:	2,415,723		2,305,301
1,700,000 shares authorized
FY 2025: 775,231 shares issued and 403,258 shares outstanding
FY 2024: 773,097 shares issued and 405,008 shares outstanding

Retained earnings	10,912,033		10,617,955
Treasury stock:	(9,389,711)		(8,698,085)
FY 2025: 371,972 shares
FY 2024: 368,089 shares
Accumulated other comprehensive income	83,378		91,201
Total shareholders’ equity	4,021,423		4,316,372
	$	9,068,707	$	9,168,817

See accompanying notes.

Table of Contents

CINTAS CORPORATION

CONSOLIDATED CONDENSED STATEMENTS OF SHAREHOLDERS' EQUITY

(Unaudited)


	Common Stock and Paid-In Capital			Retained Earnings		Accumulated Other Comprehensive Income			Treasury Stock				Total Shareholders' Equity
(In thousands)	Shares	Amount						Shares		Amount

Balance at June 1, 2024	773,097	$	2,305,301	$	10,617,955	$	91,201		(368,089)		$	(8,698,085)	$	4,316,372
Net income	—	—		452,033		—			—		—		452,033
Comprehensive loss, net of tax	—	—		—		(7,823)			—		—		(7,823)
Dividends	—	—		(157,955)		—			—		—		(157,955)
Stock-based compensation	—	33,367		—		—			—		—		33,367
Vesting of stock-based compensation awards	792	—		—		—			—		—		—
Stock options exercised	1,342	77,055		—		—			(407)		(76,824)		231
Repurchase of common stock	—	—		—		—			(3,476)		(614,802)		(614,802)


Balance at August 31, 2024	775,231	$	2,415,723	$	10,912,033	$	83,378		(371,972)		$	(9,389,711)	$	4,021,423


	Common Stock and Paid-In Capital			Retained Earnings		Accumulated Other Comprehensive Income			Treasury Stock				Total Shareholders' Equity
(In thousands)	Shares	Amount						Shares		Amount

Balance at June 1, 2023	768,796	$	2,031,542	$	9,597,315	$	77,778		(361,867)		$	(7,842,649)	$	3,863,986
Net income	—	—		385,085		—			—		—		385,085
Comprehensive income, net of tax	—	—		—		9,391			—		—		9,391
Dividends	—	—		(138,272)		—			—		—		(138,272)
Stock-based compensation	—	30,242		—		—			—		—		30,242
Vesting of stock-based compensation awards	625	—		—		—			—		—		—
Stock options exercised	1,210	59,691		—		—			(472)		(59,212)		479
Repurchase of common stock	—	—		—		—			(582)		(73,276)		(73,276)
Balance at August 31, 2023	770,631	$	2,121,475	$	9,844,128	$	87,169		(362,921)		$	(7,975,137)	$	4,077,635

See accompanying notes.

Table of Contents

CINTAS CORPORATION

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)


	Three Months Ended
(In thousands)	August 31, 2024		August 31, 2023
Cash flows from operating activities:
Net income	$	452,033	$	385,085
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	73,838		67,613
Amortization of intangible assets and capitalized contract costs	41,366		39,199
Stock-based compensation	33,367		30,242
Deferred income taxes	1,887		(1,367)
Change in current assets and liabilities, net of acquisitions of businesses:
Accounts receivable, net	(49,129)		(43,892)
Inventories, net	11,318		8,541
Uniforms and other rental items in service	(20,144)		(7,414)
Prepaid expenses and other current assets and capitalized contract costs	(68,719)		(66,791)
Accounts payable	56,698		12,443
Accrued compensation and related liabilities

SEC Form 10-Q filed by Cintas Corporation