Cintas Corporation

Good day, everyone, and welcome to the Sintas Corporation announces fiscal 2024 second quarter earnings release conference call. Today's call is being recorded. At this time, I would like to turn the meeting over to Mr. Jared Mattingly, Vice President, Treasurer, and Investor Relations. Please go ahead, sir.

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 2024 second 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 discussions on these points contained in our most recent filings with the Securities and Exchange Commission. I'll now turn the call over to Todd.

Thank you, Jared. We are pleased with our second quarter results and are excited about the future. Second quarter total revenue grew 9.3% to $2.38 billion. Each of our businesses continue to execute at a high level. Our momentum in the business is good and volume remains robust. We can grow in a number of different ways. Contribution to our growth from new business remains strong and comes from companies that either outsource their program today or they are managing it themselves. We continue to have great success cross-selling to existing customers. Retention levels are strong and remain at very attractive levels. Our value proposition of image, safety, cleanliness, and compliance continues to resonate across businesses of all sizes and in all verticals. We continue to be pleased with results from our focus on prospects within the verticals of healthcare, hospitality, education, and state and local government. We recently announced the opening of two clean room facilities one in North Carolina and the other in Wisconsin. These facilities will provide additional capacity in these regions in order to expand our efforts in this area of attractive growth from pharmaceutical and biotechnology companies. The benefits of our strong volume growth and revenue flow through to our bottom line. Gross margin for the second quarter grew 11.6%, and operating income grew 12.3%. Diluted EPS grew 15.7% to $3.61. Cash flow remained strong. Net cash provided by operating activities in the second quarter grew 17.8% over the prior year. Our strong cash flow gives us flexibility to choose how we deploy our capital. In the second quarter, we continued to invest in our businesses. We also acquired several smaller businesses. On December 15th, we paid shareholders $137.5 million in quarterly dividends, an increase of 17.1% from the amount paid the previous December. During the second quarter, we also purchased $320.3 million of Cintas Common Stock under our buyback program. I would like to thank our employees whom we call partners for their continued focus on our customers, our shareholders, and each other. Now, before turning the call over to Mike to provide details of our second quarter results, I'll provide our updated financial expectations for our fiscal year. We are increasing our financial guidance. We are raising our annual revenue expectations from a range of $9.4 billion to $9.52 billion to a range of $9.48 billion to $9.56 billion, a total growth rate of 7.5 to 8.4%. Also, we are raising our annual diluted EPS expectations from a range of $14 to $14.45 to a range of $14.35 to $14.65, a growth rate of 10.5 to 12.8%. Mike? Thanks, Todd, and good morning. Our fiscal 2024 second quarter revenue was $2.38 billion compared to $2.1 billion last year.