Cintas Corporation (CTAS): history, ownership, mission, how it works & makes money

A Brief History of Cintas Corporation

Company Overview

Cintas Corporation, founded in 1968, is a leading provider of corporate identity uniforms and related business services. The company operates through two main segments: Uniform Rental and Facility Services, and First Aid and Safety Services. Cintas is headquartered in Cincinnati, Ohio, and serves over 1 million businesses across North America.

Recent Financial Performance

As of August 31, 2024, Cintas reported total revenue of $2.50 billion, an increase of 6.8% from $2.34 billion in the same quarter of the previous year. The organic revenue growth rate was 8.0%.

Segment Performance

The Uniform Rental and Facility Services segment generated $1.93 billion in revenue for Q1 2024, up from $1.83 billion in Q1 2023, reflecting a 5.9% increase. The organic revenue growth rate for this segment was 7.0%.

In the First Aid and Safety Services segment, revenue rose to $567.7 million, a 10.1% increase from $515.5 million in the prior year, with an organic growth rate of 11.4%.

Expenses and Profitability

The total cost of uniform rental and facility services for Q1 2024 was $981.2 million, compared to $947.6 million in Q1 2023. Selling and administrative expenses rose to $691.1 million, up from $641.0 million.

Cash Flow and Investments

For the three months ended August 31, 2024, Cintas reported net cash provided by operating activities of $466.7 million, compared to $336.9 million for the same period in the previous year. Capital expenditures totaled $92.9 million.

Debt and Shareholder Equity

As of August 31, 2024, Cintas had a total debt of $2.64 billion, with a debt-to-equity ratio of 1.0. The company issued $166.0 million in commercial paper during the quarter, with a weighted average interest rate of 5.44%.

Share Buyback Programs

Cintas has been active in share repurchases, with a total of $614.8 million spent on buybacks in the quarter ending August 31, 2024. This includes shares acquired for employee payroll taxes and other buyback activities authorized by the Board.

Dividends

Cintas declared a dividend of $0.39 per share for the quarter ended August 31, 2024, totaling $157.3 million in dividends paid. This reflects an increase from the $0.3375 per share paid in the same quarter of 2023.

A Who Owns Cintas Corporation (CTAS)

Major Shareholders

As of 2024, the ownership structure of Cintas Corporation (CTAS) comprises a mix of institutional and retail investors. The largest shareholders include:

Institutional Ownership

Institutional investors hold a significant portion of Cintas Corporation's shares. The total institutional ownership is approximately 68.3% as of mid-2024. The following table illustrates the institutional ownership breakdown:

Recent Stock Performance

Cintas Corporation has demonstrated robust stock performance, with a market capitalization of approximately $78 billion as of August 31, 2024. The stock price has shown significant resilience, trading between $175 and $200 throughout the year.

Dividend Policy

Cintas Corporation maintains a strong dividend policy, with dividends declared quarterly. The latest dividend declared was $0.39 per share, reflecting the company’s commitment to returning value to shareholders.

Executive Ownership

Insider ownership among Cintas’ executives and board members is notable, with a collective ownership of approximately 6.5%. This includes shares held directly and indirectly. The following table provides details on executive ownership:

Cintas Corporation (CTAS) Mission Statement

Mission Statement Overview

Cintas Corporation's mission emphasizes providing high-quality products and services to help businesses maintain a professional appearance and environment. The company focuses on delivering essential business services, including uniform rental, facility services, first aid and safety products, and fire protection services.

Core Values

• Customer Focus: Cintas aims to build lasting relationships with customers by understanding and meeting their needs.
• Quality: The company is committed to providing high-quality products and services.
• Innovation: Emphasizing continuous improvement and innovation in service and product offerings.
• Employee Engagement: Cintas values its employees, promoting a culture of teamwork and respect.
• Community Responsibility: The company is dedicated to giving back to the community and conducting business responsibly.

Financial Performance

As of the first quarter of fiscal year 2025 (ended August 31, 2024), Cintas reported significant financial achievements:

Market Position and Growth Strategy

Cintas operates in a competitive market, focusing on the following strategies to enhance its market position:

• Expanding service offerings to include more comprehensive facility services.
• Increasing sales representative productivity to drive new customer acquisition and retention.
• Investing in technology and innovation to improve service delivery and operational efficiency.
• Focusing on strategic acquisitions to bolster growth and expand market reach.

Recent Developments

In July 2024, Cintas announced a new $1.0 billion share buyback program to enhance shareholder value, following a successful buyback of 3.1 million shares at an average price of $172.85 per share since the inception of the previous program in July 2022.

Community and Social Responsibility

Cintas is committed to corporate social responsibility, focusing on sustainability initiatives and community engagement. The company actively participates in local community programs and aims to reduce its environmental footprint through sustainable practices in its operations.

Conclusion

As Cintas continues to grow and adapt in a changing business environment, its mission statement remains a guiding principle for its operations and strategic direction, emphasizing quality, customer service, and employee engagement while driving financial performance.

How Cintas Corporation (CTAS) Works

Company Overview

Cintas Corporation (CTAS) provides specialized services to businesses of all sizes, primarily focused on uniform rental, facility services, first aid and safety services, and fire protection services. As of August 31, 2024, Cintas operates through various reportable segments, contributing to its diversified revenue streams.

Financial Performance

For the three months ended August 31, 2024, Cintas reported a significant increase in financial metrics compared to the same period in the previous year:

Segment Performance

Cintas operates primarily through two reportable segments: Uniform Rental and Facility Services, and First Aid and Safety Services. Each segment has demonstrated robust growth:

Cost Structure

Cintas has effectively managed its costs, leading to improved gross margins across its segments:

Debt and Financing

As of August 31, 2024, Cintas has a well-structured debt profile with a total outstanding debt of approximately $2.6 billion:

Dividends and Share Buybacks

Cintas has a history of returning value to shareholders through dividends and share repurchase programs:

Cash Flow Analysis

For the three months ended August 31, 2024, Cintas reported strong cash flow from operations:

Future Outlook

Looking forward, Cintas is focused on expanding its market presence, enhancing operational efficiencies, and continuing to deliver strong financial results. The company remains committed to maintaining its position as a leader in the uniform rental and facility services industry.

How Cintas Corporation (CTAS) Makes Money

Revenue Streams

Cintas Corporation generates revenue primarily through its three reportable operating segments: Uniform Rental and Facility Services, First Aid and Safety Services, and Fire Protection Services. As of August 31, 2024, the total revenue was $2,501.6 million, reflecting an increase of 6.8% compared to the same period in 2023.

Uniform Rental and Facility Services

This segment is the largest contributor to Cintas’ revenue, accounting for approximately 77.3% of total revenue. For the three months ended August 31, 2024, revenue from this segment was $1,933.8 million, up from $1,826.8 million in the previous year, marking a 5.9% increase. The organic growth rate for this segment was 7.0%, driven by new business, product penetration, and price increases.

The cost of uniform rental and facility services increased by $33.6 million, or 3.5%, for the same period. The gross margin for this segment improved to 49.3%, up from 48.1% in the prior year.

First Aid and Safety Services

This segment generated revenue of $292.6 million, an increase of 12.2% compared to $260.7 million in the prior year. The organic growth rate was 14.0%. The gross margin improved to 57.7%, compared to 55.9% in the same quarter of the previous year. The increase in revenue was attributed to new business, enhanced product offerings, and customer retention.

Cost Structure

The overall costs for Cintas were as follows for the three months ended August 31, 2024:

Selling and Administrative Expenses

Selling and administrative expenses increased to $691.1 million for the three months ended August 31, 2024, compared to $641.0 million in the previous year. This represents a 7.8% increase, primarily due to higher employee-partner related expenses.

Operating Income and Net Income

Operating income for the period was $561.0 million, representing 22.4% of total revenue, an increase from $500.6 million or 21.4% of revenue in the prior year. Net income was reported at $452.0 million, a 17.4% increase from $385.1 million in the previous year. Diluted earnings per share rose to $1.10 from $0.93.

Cash Flow and Capital Expenditures

Net cash provided by operating activities was $466.7 million for the three months ended August 31, 2024, compared to $336.9 million in the prior year. Capital expenditures for the same period were $92.9 million, indicating a strategic investment in growth.

Outstanding Debt

As of August 31, 2024, Cintas had the following outstanding debt:

Dividends and Share Buybacks

Cintas declared dividends totaling $157.3 million during the three months ended August 31, 2024. The company also repurchased shares at an average price of $176.88 per share, totaling approximately $614.8 million during the same period.