Cintas Corporation

Good day, everyone, and welcome to the Sintes Corporation announces Fisco 2025 third quarter results conference call. Today's call is being recorded. At this time, I would like to turn the call over to Mr. Jared Mattingly, Vice President, Treasurer, and Investor Relations. Please go ahead, sir.

Thank you, Ross. Thank you for joining us. With me are Todd Schneider, President and Chief Executive Officer, and Mike Hanson, Executive Vice President and Chief Financial Officer. We will discuss our fiscal 2025 third 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.

Thank you, Jared. We are pleased with our strong third quarter results. Third quarter total revenue grew 8.4% to $2.61 billion. Our organic growth rate, which adjusts for the impacts of acquisitions and foreign currency exchange rate fluctuations, was 7.9%. Our results reflect great execution by our employee partners across each of our business segments. Uniform rental and facility services continues to perform well with organic growth of 7%, and our first aid and safety services and fire protection services businesses grew double digits, underscoring the comprehensive value proposition we offer to customers of all types and sizes. Gross margin for the third quarter grew 11.1% over the prior year to 50.6%, an all-time high. Operating income increased 17.1% to 23.4%, which was also an all-time high. Our third quarter profitability includes a $15 million gain on the sale of property. Excluding that benefit, operating income as a percent of revenue was 22.8%, the second highest in CENTOS history. Diluted EPS grew a robust 17.7% to $1.13. Our strong earnings growth and profitability reflect our continued operational excellence via sourcing and supply chain initiatives, route and energy optimization, and technology-enabled efficiency in our facilities. For example, we continue to leverage our SAP system to standardize our processes across our operations. These initiatives are improving the way our employee partners work in getting the right products to our customers faster, improving both the customer experience and our margin profile. Cash flow this year continues to be very strong. Our free cash flow for the first nine months of the year increased 14.5% over the prior year. Our strong cash flow generation enabled us to deploy capital across each of our capital allocation priorities, starting with investing back in the business, including products and technologies to support our employee partners as they look to sustain attractive growth levels and create value over the long term. Additionally, we made strategic acquisitions across each of our three route-based segments in the quarter. Returning capital to Cintas shareholders also remains a key priority. Cintas paid a quarterly cash dividend of 39 cents per share on March 14th, and we continue our opportunistic approach to share buybacks. Before turning the call over to Mike to provide details of our third quarter results, I'll provide our updated financial expectations for the remainder of our fiscal year, which reflect our continued momentum and confidence in our outlook. We are updating our annual revenue expectations from a range of $10.255 billion to $10.32 billion to a range of $10.28 billion to $10.305 billion. As we enter our last quarter of fiscal 2025, we have narrowed our revenue guidance to increase total revenue growth and organic revenue growth at the midpoints of the guide. The $15 million reduction at the top end of the range reflects the negative impact of the foreign currency exchange rate experienced in the third quarter and the expected impact for the fourth quarter. Please keep in mind that the impact of foreign currency exchange rate fluctuations does not impact organic growth. Our organic revenue growth guidance is now to be in the range of 7.4% to 7.7%. We are also raising our annual diluted EPS expectations from a range of $4.28 to $4.34 to a range of $4.36 to $4.40. implying a growth rate of 15% to 16.1%. I want to thank all of Cintas' employee partners for their outstanding work and dedication to our customers. With our culture of continuous improvement, superior products and services, and the strong value proposition we offer to our customers, we remain poised to deliver sustained growth and value creation for the rest of fiscal year 2025 and beyond. With that, I'll turn the call over to Mike to discuss details of our third quarter results.