CINCINNATI, March 19, 2013 - Cintas Corporation (Nasdaq:CTAS) today reported results for its third quarter ended February 28, 2013. Revenue for the third quarter was $1.08 billion, representing a 6.3% increase compared to last year's third quarter. Adjusting for one less workday in this year's third quarter compared to last year's quarter, revenue grew 7.9% over last year's third quarter. Organic growth, which adjusts for the impact of acquisitions and the impact of one less workday compared to last year's third quarter, was 6.9%. Organic growth rates in each of the Company's four operating segments increased from second quarter levels.
Scott D. Farmer, Chief Executive Officer, stated, "We are pleased to report record quarterly revenue led by very strong Uniform Direct Sales performance. We are also encouraged to see organic growth rates improve in each of our operating segments, reflecting the great execution by our dedicated team of employees, who we call partners."
The Company's operating income of $133.0 million and net income of $74.7 million decreased compared to last year's third quarter by 3.3% and 1.7%, respectively. These decreases were due in part to the effect of one less workday compared to last year's third quarter. In addition, continuing solid new business sales have resulted in higher material cost amortization and the need for additional route capacity in our route based businesses.
Earnings per diluted share (EPS) for the third quarter were $0.60, a 3.4% increase over the $0.58 EPS in last year's third quarter. EPS increased despite the decrease in net income as a result of the positive impact of the Company's share buyback program in fiscal 2012 and 2013.
The Company's balance sheet and cash flow remain very strong. Cash and marketable securities totaled $245.7 million at February 28, 2013. Cash flow from operations in the first three quarters of fiscal 2013 improved to $368.3 million, a 19.7% increase over the same period of last fiscal year. As of February 28, 2013, the Company's current ratio was 3.0 to one, and its debt to EBITDA was 1.9 to one.
The effective tax rate for the third quarter of fiscal 2013 and fiscal 2012 was 36.1% and 37.0%, respectively. The effective tax rate can fluctuate from quarter to quarter based on specific discrete items. We expect the effective tax rate for the entire 2013 fiscal year to be approximately 37.0%, which would be slightly higher than last year's effective tax rate of 36.8%.
Mr. Farmer concluded, "Based on our third quarter results, we are updating our fiscal 2013 guidance with revenue in the range of $4.3 billion to $4.325 billion and EPS to be in the range of $2.50 to $2.54. This guidance assumes no deterioration in the U.S. economy and does not consider any additional share buybacks."
Headquartered in Cincinnati, Cintas Corporation provides highly specialized services to businesses of all types primarily throughout North America. Cintas designs, manufactures and implements corporate identity uniform programs, and provides entrance mats, restroom supplies, promotional products, first aid, safety, fire protection products and services and document management services for over one million businesses. Cintas is a publicly held company traded over the Nasdaq Global Select Market under the symbol CTAS and is a component of the Standard & Poor's 500 Index.
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, 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, disruptions caused by the inaccessibility of computer systems data, 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, the amount and timing of repurchases of our common stock, if any, changes in federal and state tax and labor laws, the reactions of competitors in terms of price and service and the finalization of our financial statements for the quarter ended February 28, 2013. 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, 2012 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:
William C. Gale
Sr. Vice President-Finance and Chief Financial Officer
J. Michael Hansen
Vice President and Treasurer