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Cintas Corporation (Nasdaq:CTAS) today reported results for its first quarter ended August 31, 2012. Revenue for the first quarter was $1.05 billion, representing a 3.4% increase compared to last year’s first quarter. Organic growth, which adjusts for the impact of acquisitions, compared to last year’s first quarter, was 3.2%. Recycled paper prices remained lower than last year, and this negatively impacted first quarter consolidated revenue by $8.3 million, or 0.8%, compared to last year’s first quarter.
The Company’s operating income of $139.3 million was an 8.3% increase as compared to 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. Earnings per diluted share (EPS) for the first quarter were $0.60, a 15.4% increase over the $0.52 earnings per diluted share in last year’s first quarter.
Scott D. Farmer, Chief Executive Officer, stated, “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. 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.”
Mr. Farmer added, “We continue to be pleased with our operating margin performance, particularly in our Rental operating segment. 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.”
During the first quarter of fiscal 2013, Cintas purchased 1.8 million shares of its common stock at an aggregate cost of $70.6 million. While it had no impact on the first quarter EPS, this buyback is expected to benefit fiscal year 2013 EPS by approximately $0.03. The Cintas Board of Directors authorized a $500.0 million share buyback program in October 2011. As of August 31, 2012, the Company had $299.8 million available under the current Board authorization.