CINCINNATI--(BUSINESS WIRE)--Cintas Corporation (Nasdaq: CTAS) today provided an update on the COVID-19 pandemic's impact on its business.
Scott D. Farmer, Cintas Chairman and Chief Executive Officer stated, “At the time of our fiscal second quarter earnings conference call in late December, much uncertainty existed. COVID-19 cases were surging. Economic indicators reflected an economic recovery that slowed considerably. Many states and provinces reinstituted temporary economic restrictions in response to rising COVID-19 cases. Vaccines were just beginning to be distributed. All of these items contributed to a lack of clarity regarding their effects on our business in our fiscal third quarter. As a result, we did not provide financial guidance.”
Mr. Farmer continued, “After peaking in early January, COVID-19 cases have steadily decreased, and the impacts on our business in our fiscal third quarter, while still significant, are clearer. Therefore, we want to provide a financial update ahead of our third quarter earnings announcement. We expect our third quarter revenue to be in the range of $1.75 billion to $1.76 billion and diluted earnings per share to be in the range of $2.15 to $2.25. Please note that this year's third quarter contains one less workday than last year's third quarter, we expect our third quarter effective tax rate to be in the range of 13% to 15%, and the financial guidance excludes any impact from potentially significant winter storms.”
Mr. Farmer concluded, “Cintas continues to provide necessary products and services to our customers to ensure they are READY™ to open their doors with confidence every day. We are proudly providing our customers with clean garments, healthcare scrubs, microfiber towels and mops, disinfectant and sanitizer spray services, restroom supplies, hand sanitizer dispenser services, personal protective equipment including face masks and gloves, and numerous other products and services to help businesses keep their facilities, employees and customers clean and safe.”
Cintas’ consolidated balance sheet remains solid, and it currently has significant availability under its credit facility. Cintas is a strong cash flow business and has a track-record of efficient capital allocation. Quarter to date, Cintas has purchased $82.0 million of Cintas stock under its buyback program. On January 19, 2021, the Company’s Board of Directors approved a $0.75 per share quarterly dividend payable on March 15, 2021 to shareholders of record as of February 15, 2021.
Following this press release, Cintas intends to return to its normal quarterly financial reporting cadence. The Company will announce in March its full fiscal third quarter results for the period ended February 28, 2021 and conduct a conference call to address these results.
Cintas Corporation helps more than one million businesses of all types and sizes get READY™ to open their doors with confidence every day 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. With products and services including uniforms, floor care, restroom supplies, first aid and safety products, fire extinguishers and testing, and safety and compliance training, Cintas helps customers get Ready for the Workday®. Headquartered in Cincinnati, Cintas is a publicly held Fortune 500 company traded over the Nasdaq Global Select Market under the symbol CTAS and is a component of both the Standard & Poor’s 500 Index and the Nasdaq-100 Index.
CAUTION CONCERNING FORWARD-LOOKING STATEMENTS
The Private Securities Litigation Reform Act of 1995 provides a safe harbor from civil litigation for forward-looking statements. Forward-looking statements may be identified by words such as “estimates,” “anticipates,” “predicts,” “projects,” “plans,” “expects,” “intends,” “target,” “forecast,” “believes,” “seeks,” “could,” “should,” “may” and “will” or the negative versions thereof and similar words, terms and expressions and by the context in which they are used. Such statements are based upon current expectations of Cintas and speak only as of the date made. You should not place undue reliance on any forward-looking statement. We cannot guarantee that any forward-looking statement will be realized. These statements are subject to various risks, uncertainties, potentially inaccurate assumptions and other factors that could cause actual results to differ from those set forth in or implied by this Press Release. Factors that might cause such a difference include, but are not limited to, the finalization of our financial results as of and for the quarter ended February 28, 2021, which could differ from the estimates provided herein; the possibility of greater than anticipated operating costs including energy and fuel costs; lower sales volumes; loss of customers due to outsourcing trends; the performance and costs of integration of acquisitions; fluctuations in costs of materials and labor including increased medical costs; costs and possible effects of union organizing activities; failure to comply with government regulations concerning employment discrimination, employee pay and benefits and employee health and safety; the effect on operations of exchange rate fluctuations, tariffs and other political, economic and regulatory risks; uncertainties regarding any existing or newly-discovered expenses and liabilities related to environmental compliance and remediation; the cost, results and ongoing assessment of internal controls for financial reporting required by the Sarbanes-Oxley Act of 2002; the effect of new accounting pronouncements; disruptions caused by the inaccessibility of computer systems data, including cybersecurity risks; the initiation or outcome of litigation, investigations or other proceedings; higher assumed sourcing or distribution costs of products; the disruption of operations from catastrophic or extraordinary events including viral pandemics such as the COVID-19 coronavirus; the amount and timing of repurchases of our common stock, if any; changes in federal and state tax and labor laws; and the reactions of competitors in terms of price and service. Cintas undertakes no obligation to publicly release any revisions to any forward-looking statements or to otherwise update any forward-looking statements whether as a result of new information or to reflect events, circumstances or any other unanticipated developments arising after the date on which such statements are made. A further list and description of risks, uncertainties and other matters can be found in our Annual Report on Form 10-K for the year ended May 31, 2020 and in our reports on Forms 10-Q and 8-K. The risks and uncertainties described herein are not the only ones we may face. Additional risks and uncertainties presently not known to us, or that we currently believe to be immaterial, may also harm our business.