Cintas Corporation (CTAS) Q4 2023 Earnings Call Transcript

For the period ending May 31, 2023

July 13, 2023 10:00 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Good day, everyone, and welcome to the Cintas Corporation announces Fiscal 2023 Fourth Quarter and Full Year Results Conference Call. Today's call is being recorded. At this time, I'd like to turn the call over to Mr. Jared Mattingley, Vice President, Treasurer and Investor Relations. Please go ahead, sir.

Jared Mattingley

Thank you for joining us. With me is Todd Schneider, President and Chief Executive Officer; and Mike Hansen, Executive Vice President and Chief Financial Officer, who will discuss our fiscal '23 fourth quarter results. After our commentary, we will open the call to questions from analysts.

Private Securities and Litigation Reform Act of 1995 provides a Safe Harbor from civil litigation for forward-looking statements. This conference call contains forward-looking statements that reflect the company's current views as to future events and financial performance. These forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ materially from those we may discuss. I refer you to the discussion on these points contained in our most recent filings with the Securities and Exchange Commission.

I'll now turn the call over to Todd.

Todd Schneider

Thank you, Jared. Fourth quarter total revenue grew 10.1% to $2.28 billion. The organic growth rate, which adjusts for the impacts of acquisitions and foreign currency exchange rate fluctuations, was 10.3%. We are pleased with these fourth quarter results, where each of our businesses continue to grow and execute at a high level, especially coming off our highest growth quarter in fiscal '22.

Fourth quarter gross margin was $1.09 billion. Gross margin increased 210 basis points from 45.6% to 47.7%, an increase of 15.1% over the prior year. Operating income for the fourth quarter of fiscal '23 of $470.8 million increased 16.4% over the prior year. Operating margin increased 110 basis points to 20.6% from 19.5% in the prior year. Fourth quarter net income was $346.2 million, an increase of 17.6%.

Earnings per diluted share for the fourth quarter were $3.33, an increase of 18.5% over the prior year fourth quarter. These results conclude a fiscal year of significant accomplishments, including the following: Fiscal year '23 revenue was a record $8.82 billion, an increase of 12.2%. Organic growth was also 12.2% for the year. We saw double-digit organic growth for every quarter during fiscal '23.

We were once again named to the prestigious Fortune 500 for the sixth consecutive year. It is an honor to be recognized among the most successful and respected companies.