CINCINNATI, September 23, 2020 -- Cintas Corporation (Nasdaq: CTAS) today reported results for its fiscal 2021 first quarter ended August 31, 2020. Revenue for the first quarter of fiscal 2021 was $1.75 billion, a decrease of 3.6% from last year’s first quarter. Earnings per diluted share (EPS) were $2.78 in the first quarter of fiscal 2021, an increase of 19.8% from last year's first quarter diluted EPS.
Organic revenue for the first quarter of fiscal 2021, which is adjusted for the impacts of acquisitions, foreign currency exchange rate fluctuations and differences in the number of workdays, declined 5.0% from last year's first quarter. Organic revenue for the Uniform Rental and Facility Services operating segment declined 5.4%. Organic revenue for the First Aid and Safety Services operating segment increased 17.1%.
Gross margin for the first quarter of fiscal 2021 of $826.2 million decreased 2.7% from last year’s first quarter. Gross margin as a percentage of revenue increased 40 basis points to 47.3% for the first quarter of fiscal 2021 compared to 46.9% in the first quarter of fiscal 2020.
Operating income for the first quarter of fiscal 2021 of $349.7 million increased 14.2% from last year’s first quarter operating income of $306.1 million. Operating income as a percentage of revenue was 20.0% in the first quarter of fiscal 2021 compared to 16.9% in the first quarter of fiscal 2020.
Net income was $300.0 million for the first quarter of fiscal 2021, an increase of 19.6% from last year's first quarter net income of $250.8 million. First quarter of fiscal 2021 diluted EPS were $2.78, an increase of 19.8% from last year's first quarter diluted EPS of $2.32.
Net cash provided by operating activities for the first quarter of fiscal 2021 of $312.3 million increased 12.8% from last year's first quarter net cash provided by operating activities of $276.9 million. Free cash flow, which is defined as net cash provided by operating activities less capital expenditures, for the first quarter of fiscal 2021 was $281.4 million, an increase of 32.6% from last year's first quarter.
Scott D. Farmer, Cintas' Chairman and Chief Executive Officer, stated, "The COVID-19 coronavirus (COVID-19) pandemic remains a significant disruption to the economy and our business. Our objectives include keeping our employees, whom we call partners, healthy and safe and serving our customers in any way possible. I am pleased with our performance on both priorities, and I thank our employee-partners for their unwavering passion, strong work ethic, and commitment."
Mr. Farmer concluded, “Visibility to future financial performance remains impaired due to the COVID-19 pandemic. Therefore, we are not providing fiscal year financial guidance at this time. However, we will provide our second quarter financial estimates. We expect our second quarter revenue to be in the range of $1.725 billion to $1.750 billion and diluted EPS to be in the range of $2.00 to $2.20. Despite the short-term uncertainty, I'm confident in our ability to continue to manage the volatility while maintaining focus on our compelling long-term objectives. Our value proposition of getting businesses Ready for the Workday® by providing essential, unparalleled image, safety, cleanliness and compliance resonates loudly in a society focused on health, readiness and outsourcing of non-core activities.”
About Cintas
Cintas Corporation helps more than one million businesses of all types and sizes get READY™ to open their doors with confidence every day by providing a wide range of products and services that enhance our customers’ image and help keep their facilities and employees clean, safe and looking their best. With products and services including uniforms, floor care, restroom supplies, first aid and safety products, fire extinguishers and testing, and safety and compliance training, Cintas helps customers get Ready for the Workday®. Headquartered in Cincinnati, Cintas is a publicly held Fortune 500 company traded over the Nasdaq Global Select Market under the symbol CTAS and is a component of both the Standard & Poor’s 500 Index and the Nasdaq-100 Index.
Cintas will host a live webcast to review the fiscal 2021 first quarter results today at 10:00 a.m., Eastern Time. The webcast will be available to the public on Cintas' website at
www.cintas.com. A replay of the webcast will be available approximately two hours after the completion of the live call and will remain available for two weeks.
CAUTION CONCERNING FORWARD-LOOKING STATEMENTS
The Private Securities Litigation Reform Act of 1995 provides a safe harbor from civil litigation for forward-looking statements. Forward-looking statements may be identified by words such as “estimates,” “anticipates,” “predicts,” “projects,” “plans,” “expects,” “intends,” “target,” “forecast,” “believes,” “seeks,” “could,” “should,” “may” and “will” or the negative versions thereof and similar words, terms and expressions and by the context in which they are used. Such statements are based upon current expectations of Cintas and speak only as of the date made. You should not place undue reliance on any forward-looking statement. We cannot guarantee that any forward-looking statement will be realized. These statements are subject to various risks, uncertainties, potentially inaccurate assumptions and other factors that could cause actual results to differ from those set forth in or implied by this Press Release. Factors that might cause such a difference include, but are not limited to, the possibility of greater than anticipated operating costs including energy and fuel costs; lower sales volumes; loss of customers due to outsourcing trends; the performance and costs of integration of acquisitions; fluctuations in costs of materials and labor including increased medical costs; costs and possible effects of union organizing activities; failure to comply with government regulations concerning employment discrimination, employee pay and benefits and employee health and safety; the effect on operations of exchange rate fluctuations, tariffs and other political, economic and regulatory risks; uncertainties regarding any existing or newly-discovered expenses and liabilities related to environmental compliance and remediation; the cost, results and ongoing assessment of internal controls for financial reporting required by the Sarbanes-Oxley Act of 2002; the effect of new accounting pronouncements; disruptions caused by the inaccessibility of computer systems data, including cybersecurity risks; the initiation or outcome of litigation, investigations or other proceedings; higher assumed sourcing or distribution costs of products; the disruption of operations from catastrophic or extraordinary events including viral pandemics such as the COVID-19 coronavirus; the amount and timing of repurchases of our common stock, if any; changes in federal and state tax and labor laws; and the reactions of competitors in terms of price and service. Cintas undertakes no obligation to publicly release any revisions to any forward-looking statements or to otherwise update any forward-looking statements whether as a result of new information or to reflect events, circumstances or any other unanticipated developments arising after the date on which such statements are made. A further list and description of risks, uncertainties and other matters can be found in our Annual Report on Form 10-K for the year ended May 31, 2020 and in our reports on Forms 10-Q and 8-K. The risks and uncertainties described herein are not the only ones we may face. Additional risks and uncertainties presently not known to us, or that we currently believe to be immaterial, may also harm our business.
For additional information, contact:
J. Michael Hansen, Executive Vice President and Chief Financial Officer - 513-972-2079
Paul F. Adler, Vice President - Treasurer & Investor Relations - 513-972-4195