Cintas Corporation

Good day, everyone, and welcome to the Cintas Quarterly Earnings Results Conference Call. Today's conference is being recorded. At this time, I would like to turn the call over to Mr. Paul Adler, Vice President, Treasurer, and Investor Relations. Sir, please go ahead.

Good morning, and thank you for joining us. With me today is Scott Farmer, Cintas Chairman of the Board and Chief Executive Officer, Todd Schneider, Executive Vice President and Chief Operating Officer, and and Mike Hansen, Executive Vice President and Chief Financial Officer. We will discuss our third quarter results for fiscal 2021. After our commentary, we will be happy to answer questions. 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 SEC. I'll now turn the call over to Scott Farmer. Thank you, Paul.

Good morning, everyone. The COVID-19 coronavirus pandemic continues, and it remains a significant disruption to the economy. Our fiscal third quarter, which included the months of December, January, and February, was particularly challenging. COVID-19 case counts surged from about 180,000 on December the 1st to a peak of a little over 300,000 on January the 8th. Not surprisingly, economic indicators reflected an economic recovery that slowed considerably. In December, the U.S. economy posted job losses again after seven straight months of job gains The operating environment was also challenged by severe winter weather. The snow and ice storm in February caused extensive energy blackouts in the U.S., especially in the state of Texas. Despite a very difficult operating environment in late December and into January, our sales rep productivity remained strong and our employee partners persevered, enabling us to offset the headwinds and get to flat on a sequential basis. On top of that, we were able to help our customers with large supplies of personal protective equipment before the end of the quarter. We provided more personal protective equipment than ever, enabling us to exceed our financial expectations. Also, on an organic basis, our quarterly revenue was flat year over year, a strong accomplishment considering the comparison to the prior year quarter that was not impacted by COVID-19. Looking ahead to our fourth quarter, we expect lower COVID-19 case counts to be the foundation for an improved operating environment. We do not anticipate that personal protective equipment sales will be as strong, so fourth quarter revenue in this product line will decline sequentially. However, we believe that our recurring service revenue will increase solidly on a sequential basis after being flat in the third quarter. Mike will provide more information regarding our fourth quarter guidance soon. Regardless of the operating environment, our employee partners work with urgency to get businesses ready for the workday. Companies want to open their doors every day with confidence that they're ready for their employees and their customers. We help businesses achieve that objective by providing a wide range of products and services that enhance our customers' image, and help keep their facilities and employees clean, safe, and looking their best. For over 90 years, CENTOS has accomplished getting businesses ready for the workday in numerous ways, including providing hygienically cleaned uniforms to auto manufacturers, for example, so that the workers can safely build their cars. Restroom supplies and services to professional services firms so bathrooms are ready for use by employees and clients. I genetically laundered towels to coffee chains so baristas can serve their coffee lovers. First aid products to restaurants to address the cuts and burns of the kitchen crew. And test, inspection, and repair services of fire extinguishers and alarm systems to facilities managers to protect employees and customers from danger. The COVID-19 pandemic ushered in for businesses a new era of readiness. Getting ready for the workday today also includes taking actions to prevent and reduce transmission of viruses and bacteria. Our solutions for getting businesses ready for the workday include providing hygienically clean scrubs to dentist offices because hygienists feel vulnerable taking them home to launder. Sanitizing spray surfaces and disinfectant wipes for food manufacturers, for instance, so that they can routinely sterilize surfaces. hand sanitizer dispensing units to universities so employees, professors, and students can keep their hands clean, masks and gloves to city, county, and state governments to protect employees when interacting with the public, and hygienically cleaned isolation gowns to hospitals to safeguard caregivers from the contaminants of the SIP. Our value proposition of helping businesses get ready for the workday has arguably never been more relevant Every business has a need that Cintas can help fulfill. And in this unpredictable environment, requiring new and increased demands, businesses appreciate the certainty of Cintas. The Cintas tagline of Ready for the Workday helps describe what we do. It also helps describe who we are. Our employees, whom we call partners, are always ready for the workday, whether it's in the best of times or in the most uncertain of times. Our partners are honored to be deemed essential. They are ready to listen, ready to offer solutions, ready to solve problems, and ready to be counted on to deliver. And they do. Now I'll turn the call back over to Mike for commentary on our financial results.