Cintas Announces Quarterly Increases
Distributors Says It Continues To Be Challenged By Difficult Economy
Counselor Top 40 distributor Cintas (asi/162167) has announced that it grew its sales in its fiscal first quarter of 2013 by 3.4%. In the quarter, which ended August 31, Cintas realized revenue of $1.05 billion, compared to the $1.02 billion in revenue in the comparable quarter last year. In its public filing, though, Cintas said it continues to be challenged by the difficult economy and lower paper prices.
"In my July earnings release comments, I spoke of a U.S. economy without momentum. During our first quarter, we saw nothing that would change that assessment," said Scott Farmer, CEO of Cintas, in a statement. "However, despite this continued absence of momentum and another quarter of difficult year-over-year recycled paper price comparisons, we are pleased to report solid revenue growth and a double-digit increase in earnings per share."
Cintas' profit in its fiscal first quarter of 2013 reached $139.3 million, which was an 8.3% increase over last year's first quarter. Net income increased 11.8% to $76.7 million as compared to $68.6 million in last year's first quarter. "We continue to be pleased with our operating margin performance, particularly in our [uniform] rental operating segment," Farmer said. "The rental segment's operating margin improved to 15.5% of revenue, compared to last year's first quarter operating margin of 13.8%. Our total operating margin improved to 13.2% from last year's first quarter operating margin of 12.6% despite the recycled paper price impact. We will continue our focus on selling profitable business, managing our cost structure and improving efficiencies through process improvement."
Cintas ranks as the eighth-largest distributor in the industry, after Counselor estimated that the company tallied $162 million in North American ad specialty sales in 2011. The company announced in May that it signed a partnership deal with distributor firm Touchstone (asi/345631) in which Touchstone will manage Cintas' enterprise promotional marketing clients.