Cintas Corporation (CTAS) Q1 2023 Earnings Call Transcript

For the period ending August 31, 2022

September 28, 2022 10:00 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Good day, everyone, and welcome to Cintas First Quarter Fiscal Year 2023 Earnings Release Conference Call. Today's call is being recorded.

At this time, I would like to turn the call over to Mr. Paul Adler, Vice President and Treasurer, Investor Relations. Please go ahead, sir. Pardon me, interruption, Mr. Adler, we're unable to hear you.

Paul Adler - Vice President and Treasurer, IR

Thank you. Yes, we were still on mute. So, 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. We will discuss our fiscal 2023 first quarter results. After our commentary, we will open the call to questions from analysts.

The Private Securities 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 - President & CEO

Thank you, Paul. We are pleased with our start to our fiscal year 2023. First quarter total revenue grew 14.2%. Each of our businesses increased revenue at a double-digit rate. The benefits of our strong revenue growth flow through to our bottom line. Excluding a one-time gain recorded in last year's first quarter selling and administrative expenses, operating income margin increased 20 basis points and EPS grew 12.3%.

Our sales force continues to add new customers and penetrate and cross-sell our existing customer base. Businesses prioritize all we provide, including image, safety, cleanliness and compliance. In challenge with labor scarcity and rising costs, businesses continue to turn to Cintas to help them get ready for the workday. I thank our employees, whom we call partners, for their continued focus on our customers, our shareholders and each other.

Turning now to our business units. Uniform Rental and Facility Services operating segment revenue for the first quarter of fiscal ‘23 was $1.70 billion compared to $1.51 billion last year. Organic revenue growth was 12.3%. Revenue growth was driven mostly from increased volume. Additionally, price increases contributed at a higher level than historically. We believe such a mix of revenue drivers volume versus price is healthy and supportive of continued long-term growth.