Cintas Corporation

Good day, everyone, and welcome to the Cintas Corporation announces Fisco 2026 fourth quarter and full year 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, and thank you for joining us. With me are Todd Schneider, President and Chief Executive Officer of Jim Rozakis, Executive Vice President and Chief Operating Officer and Scott Garula, Executive Vice President and Chief Financial Officer. We will discuss our fiscal 2026 fourth 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 in 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, and thank you all for joining us. On today's call, I will start with an overview of our fourth quarter and full year performance and thoughts on the year ahead. Jim will provide further detail on segment performance, and Scott will walk through additional financial details and assumptions for our fiscal 2027 outlook. We are very pleased with our fourth quarter results to close out fiscal 2026. We delivered robust top line growth and strong profitability, underscoring the strength of our value proposition across each of our businesses. In the fourth quarter, total revenue increased 8.9% to $2.91 billion. Our organic revenue growth rate, which adjusts for the impacts of acquisitions and foreign currency exchange rate fluctuations, was 8.4%. We continued to execute at a high level across each of our business segments. Turning to profitability, gross margin for the fourth quarter was 51%, the same as the third quarter, which was an all-time high and up approximately 130 basis points from the prior year. Operating income as a percent of revenue was 23.2% and grew to $673 million, an increase of 12.7% over the prior year. Adjusting for universe related transaction expenses, adjusted operating income as a percent of revenue was 23.6%, representing a year over year increase of roughly 120 basis points. Deluded earnings per share of $1.26 grew 15.6% over the prior year. Adjusted deluded earnings per share for the quarter were $1.29, an increase of 18.3% compared to $1.09 in last year's fourth quarter. These results conclude an outstanding fiscal year for Centos. For the full year of 2026, revenue was approximately $11.26 billion and 8.9% increase over fiscal 2025. Organic revenue growth was 8.3% for the year. This marks the 55th year of the last 57 years that we've grown both our top and bottom lines. Our strong top line performance highlights the durability of our business model in all macro environments. It shows how our culture continues to be our biggest differentiator It shows how we are capitalizing on the opportunity of a total addressable market that is massive, and it shows that we have a long runway for future growth of customers of all sizes across all industries. Gross margin for the year was 50.7%, up 70 basis points from the prior year. Over the last four years, we've expanded our gross margin by 450 basis points, demonstrating our culture of positive discontent, challenging ourselves to continuously improve the business while continuing to provide better products and services to our customers. Fiscal 2026 operating margin reached 23.1%. When you adjust for the universe related transaction expenses, adjusted operating margin was 23.3%, expanding by 50 basis points compared to fiscal 2025. This represents an all time high for our company, achieved while we continue to make strategic investments in the business. adjusted diluted earnings per share for the year were $4.94, up 12.3% versus $4.40 last year. In March, we gave full-year EPS guidance in the range of $4.86 to $4.90. That guidance excluded universe transaction expenses. Against this guidance, full-year EPS excluding transaction expenses was $4.94. This excellent performance reflects consistent execution by our team regardless of the macro environment. Our balanced approach to capital allocation remains a key pillar of our value creation strategy. In the fourth quarter and throughout fiscal 2026, we deployed capital across each of our priorities. First, we prioritize investments back into the business in many forms, including our products, technology, and people. Second, we love M&A, and we continue to pursue strategic acquisitions in our route-based businesses. Lastly, we look to return capital to shareholders via dividends and share buybacks. We will continue to prioritize these areas moving forward. Looking ahead to fiscal 2027, our outlook reflects confidence in our business model. As we will discuss in more detail, we expect fiscal 2027 revenue in the range of $12.1 billion to $12.25 billion, implying total growth of 7.4% We expect fiscal 2027 adjusted diluted EPS between $5.36 and $5.50, which represents 8.5% to 11.3% growth. Scott will provide more context on our assumptions for the guidance later in the call. Once again, we were named the prestigious Fortune 500 for the 10th consecutive year. It is an honor to be recognized among the most successful and respected companies. As I've said before, our culture is our greatest competitive advantage. Our employee partners pride themselves on delivering the highest quality products and services to help our customers manage their businesses better. Our drive for continuous improvement is a key component of our culture. We remain positioned to achieve long-term growth and value creation. Before I turn the call over to Jim, I'd like to provide a brief update on our acquisition of Unifirst. Based on the limited due diligence we've been able to complete, we remain confident for the substantial long-term value creation for our combined customers, partners, and shareholders. When we announced the transaction in March, we indicated the merger was subject to approval by Uniforce shareholders, regulatory clearances in both the US and Canada, and other customary closing conditions. The merger was approved by Uniforce shareholders in June. The regulatory process is ongoing. As expected, we did receive a second request from the FTC, similar to what we experienced with the G&K acquisition. We continue to work toward obtaining regulatory clearance and completing the other closing conditions. We remain optimistic that the deal will close during the second half of calendar 2026. In order to avoid creating speculation, we will not be providing any additional commentary on this process. We will update the market going forward as appropriate. With that, I'll turn the call over to Jim for additional insights on our operational performance.