CTAS - Earnings call transcript Q1 2019

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Operator

Good day, everyone, and welcome to the Cintas Quarterly Earnings Results Conference Call. Today's call is being recorded. At this time, I would like to turn the call over to Mr. Mike Hansen, Executive Vice President and Chief Financial Officer. Please go ahead, sir.

Michael Hansen

evening. Good joining for us. you Thank me Adler, Treasurer. Vice and Paul With Cintas President is

We uncertainties, for statements. the questions. refer quarter subject our first civil which events that XXXX will our discuss reflect harbor safe future results financial call Litigation These to and most to risks SEC. Act with are be from materially these may contains to and provides the recent cause statements a views those Securities as to the for commentary, our on differ happy fiscal could conference answer forward-looking performance. contained results company's you Private actual any we forward-looking statements in current The litigation discussion Reform of This filings points from we'll After discuss. XXXX. to I forward-looking

adjusts revenue rate XX, the segment rate First and Note Facility previously G&K was Services of growth last first August the Services Uniform The quarter. Services Our and we organic the The X.X% growth expected fluctuations Aid organic as acquisitions was exchange was Rental rate X.X%. rate X.X%. was due organic the $X,XXX,XXX,XXX, which have the of quarter, ended revenue that over first communicated, Services increase of and foreign segment Facility Uniform year's the for was revenue acquisition. revenue lower Rental for lapping organic and currency and for and impacts of which an Safety the to growth X.X%, rate the growth for segment the was

XXXX income million this offsetting last income reduced. our in Accounting Update customers. negatively million stock-based first to call, from impacted agent when related Standard $XX earnings of rate compensation in the the guidance. from growth $XXX million initial quarter provided was expense fiscal lower first tenure XXXX-XX, was Operating by a was XXXX benefit organic $XXX requirements during our resulting this compared remainder contracts expect retirement to first fiscal quarter. the of on fiscal operating change XXXX. commission the Slightly Reported the increase million policy, quarter retirement for for in year's from We which in of Cintas items expense, July with a both revenue the were $X.X adoption we discussed We to the

million expenses operating to $X integration in of fiscal the the of $X quarter by XXXX, in Lastly, and fiscal was reduced the related first G&K income first million about quarter about XXXX acquisition.

year’s fiscal fiscal continuing last expenses of of XXXX and from $XXX to operating income primarily and debt Act. $XXX and XXXX integration negatively EPS of XXXX, a by grew from positively fiscal of $X.XX. Net Jobs fiscal effective reduction first XX% EPS increase quarter first EPS million. quarter, increased fiscal last income operations Excluding quarter income rate year’s about lower the from Net these XX.X% margin XXXX from quarter first from the for from last quarter operations were for an the compared quarter of of of impacted tax EPS first respectively were impacted continuing of compared XXXX from in the in fiscal due last operations year continuing $X million, $X.XX, the to compared enactment Cuts in by operations XX%, an operations fiscal first for lower operations first were quarter first $X.XX of from G&K million. the continuing of continuing income acquisition. XX.X% net and income to expense related continuing first items, the was of this operating resulting quarter, to from the of quarter $XXX Net from our and million XX.X% year. in about XXXX $X.XX year’s to first the Tax Interest

fiscal of of remainder result are quarter for year, forecast annual first a and the results As our increasing we our the guidance.

stock to fiscal a to in of to for move billion billion. billion of guidance continuing for it expenses. down rate initial of range including $X.XXX effective of that is $X.X or to We are following tax we events to of of a Note mind does guidance our the from a EPS raising revenue XXX.X EPS assumes And The any in year range range to this G&K XX.X%, range full EPS benefits. of $X.XX operations, assumes which on amount $X.XX not for diluted from assume rate integration shares, $X.XX a the Keep the up that fiscal billion from an $X guidance; $X.XX. July tax rate $X.XX it discrete the same provided from XXXX count computing can compensation our guidance. based million quarter-to-quarter, share regarding

$XX million for However these fiscal $XX full of we to range do expect the to in incur million year. the

Board and Scott was in with our are release, the of to the Chairman CEO, fiscal our As Farmer start year. earnings pleased we quoted the

call making to the at the of G&K integration turn employees progress level, a acquisition and significant planning system. I'll Paul. partners now continue the our call high to resource implementation on and execute we enterprise the very Our over while of also

Paul Adler

Mike. you, Thank

that same first note as the prior number our quarter. quarter year fiscal the please of contain first First, workdays

workdays the be fiscal no comparable quarter XXXX. there’ll year, of fiscal the of differences number quarter of contains the XXXX workday remainder each as fiscal as the same of Additionally,

consists Other. Rental and Services in have reportable and All operating is Direct Facility segments, Services, Uniform Other Aid Safety We of Uniform Sale First business. Protection our remainder and Fire Services. included The two business of and all our

an Safety the on facility The compared X.X% Services sale Other uniforms, year's income as and Uniform operating and on to are provision and and of and Other routes. services. segment customers restroom billion, revenue and presented Services and our and our other increase the All Facility from products mats Services Rental statement. rental first and of Aid Uniform includes to last of segment combined servicing the First Services Facility Rental The items supplies and the quarter. also was towels $X.XX of includes catalogs

and acquisitions organic the of was foreign impact the exchange rate X.X%. currency changes, growth rate Excluding

previously growth of the Mike organic stated, lapping As impacted negatively acquired by the business. rate the G&K was

However, the reached the bottom. organic has rate we growth believe that

organic We increase rate growth fiscal remainder expect during the the to of the XXXX.

a segment to about Our XX.X% starting was XX.X% first Uniform Facility quarter. cost compared Rental Energy few last and We pressures for gross areas. to was headwind Services year's first points. XX expense a margin the were basis quarter of see in in

from largely in are seen all we’ve certain Keep We and are our are pressures mind, cost these that China. in in our inflation sourced some updated areas considered on of experiencing hangers, wage which guidance.

integration the points. previously the said to and and weigh with we as disclosed, that were with expansion addition XX on we sequential an in the basis margins experience customary ERP being though, these pleased that are short-term. implementation a all system on In gross activities an continue With acquisition basis margin inefficiencies of

gross gross difficult X.X%, from was against organic First the of million, of than quarter customers first Services benefited revenue strong help segment products, organic sale The expanding margins year's training. growth year Cintas an the and was and quarter, first compared revenue was of points. continue the XX.X% first $XXX keep includes programs the comparison value quarter almost productive. for On Our increase and the first higher was of margin first in their year's of of and to revenue quarter sectors businesses segment solid existing last was basis, to the aid economy of and very in their noteworthy Organic growth safety and penetration the Safety aid, by first XX.X% that was safety in on Aid the employees a an account XX This healthy, prior first having to plus which growth confirmation for growth which the business. servicing national quarter. operating rate all segment's new of are X.X% and This accomplishment XX%. training basis last place segment's safe products be manage combination

category. in Sale the Protection All are Other Services Our Direct and Fire Uniform reported businesses

as revenue other year's last us Our to quarter basis for increase basis year Fire workers other in fire of business was business. dollar such when first by for often strong fiscal our is services customers however significant a Selling compared were of A growth All Sale units. Sale we Direct to Other increase expansion compared year a first are to quarter. provide The by products in Direct XX.X% Uniform an rate driven its medical the gross Uniform lower year's X.X% opportunities account. first multi-million of and low from in a are percentage XX.X% install $XXX XXX grow expenses pace. generally at revenue was and organic and points. XX.X% each gross Sale and to volatility, in to key compared million, last expenses. compensation than XX.X% business Fire first business offset growth rate labor, was for quarter. stock-based quarter was Direct The margins. cross-sell X.X% as margin of single-digits was of subject Other and X.X% to organic point this are realized first growth year’s quarter, Both and last more business expense increase compensation, continues administrative and XX the a the Uniform All and an

revenue increased covering fixed from leverage costs. getting are We

effective U.S. rate legislation. operations the from tax first tax Our new on for quarter benefited of continuing the XX.X%

it stock-based compensation. was In positively by impacted addition,

the on as period. and stock tax the tax Our EPS to XX.X%. discrete guidance of including Note items, that relating quarter-to-quarter amount rate tax benefits reserve for from each fiscal as in compensation effective fluctuate rate will an build based soon releases XXXX of effective

was balance $XX $XXX fiscal fiscal we to August Cash Our as were flow quarter the XXXX remained of cash first and XXXX. operating and expect cash Capital strong expenditures XXst in exceed flow equivalents million. million.

and by Rental Facility follows: $XX All $X million CapEx First Other. operating in was Our and Aid million as $X Uniform Safety and in million Services, in segment

range be We expect million. of CapEx the million $XXX to $XXX to XXXX fiscal in

was and August XXst, to fixed times our debt. XXst, X.X debt As leverage debt of August rate prepared total That entirely remarks. of $X,XXX,XXX,XXX concludes EBITDA. consist At was our interest

questions. happy to your answer are We

Operator

Thank you. [Operator comes Morgan Instructions] Kaplan question from first Stanley. with Toni Our

Toni Kaplan

good or say. I should afternoon, morning Good

Paul Adler

Toni. Hi,

Toni Kaplan

on were bit us was little we quarter? cash color than some capital. this just lighter working you capital of Could drivers by give some impacting the expecting a that what working driven Free flow were

Paul Adler

this Toni, Paul. is Yes,

have exceed and in this operating prior I looking of year, believe year. forecast just our we flow in we for think perspective, flow issues our that at will a timing as strong be but remainder and mentioned even prepared remarks we the cash from cash the did quarter, some our

new inventory we’ve But So cetera. tell thing and balance accounts you et there goods an that Services note distribution inventory, to the just is growth. to due we the to Facility distribution in had the have very recently are facility It’s that payable, center. things can services a from some I one that up new center increase support we sheet a about started need timing strong

a that DC And build inventory with center, that’ll so we’ve had continues start-up and burn expected, to a of once typical off it’ll new that a And come as of inventory. down. distribution run

cash So the terms timing of has structural organization be we some flow, just and nothing the effects, in again, year. the end about it will strong at of that us believe concerned

Toni Kaplan

of, great. the from the whole you in continue But if that give you. mentioned hangers sense Thank these and is any get better. you’re you know or wage much them be from pressures us worse can a helpful expecting give And in too? of through the China. if if Okay, guidance. mentioned and guidance would I you’re could how And that costs the color to you year, in And you inflation expecting to the energy

Paul Adler

somewhere through XX continue put that year. the all If you of the expect probably basis it's together in points quarter. we Toni, the And rest of XX to generally those in the to

Toni Kaplan

Thank you.

Operator

And Scott Schneeberger next is our Oppenheimer. question with

Unidentified Analyst

to narrative for Hi, full could guys Could for synergy a think year? the the it's you Daniel scenario target the on where us the synergy progress you about Scott. speak for exceed help and

Paul Adler

pleased very with The integration efforts it. we're continues and

well, really the we're are to continuing getting We process. route optimization -- into

of working -- year. back still the most the that take redundant new plants. environment. and we're on operating accepted the that'll kind a still to closed of getting that all through But some plants inefficiencies normal volume all So working them We've getting inefficiency of of about

additional to of from the and above I we we’re million we $XXX are come way that talked where that continue pleased than we for target biggest anything $XXX $XX of that’s something synergy see in top sourcing the million that get million so with we we of getting And million opportunity, can million, confident think What think an the and about and last very year would we’re the $XX very those. got will synergies opportunity in in us I July, fiscal on the total to more outperformance. $XX of

can that, answering words, can volume your and with think question, translate and from and savings as chain it we ready we from. other am supply in to modeled. larger do But we So the that’s that sourcing we continues, were but if generally our the it. G&K than integration we incorporate I have where in likely pleased take expected that just into that would say I outperform to into we’re very not come

Unidentified Analyst

decent go a basis, forward provide quarter on Got buybacks, us on I it, an discuss you update capital so about you a you that if think in mean, go you thank allocation could please? you. had a forward on basis. can how On capital just allocation,

Michael Hansen

would allocation to that, I pre-G&K continue system CapEx we’re important to acquisition capital grow, us the we and both order in need adding say invest that in in route we adding similar to to going and investments. organically plant to business for grow means is that capacity be is will other that and Yes, the way capacity, to in philosophy the want

are us. to acquisitions in tuck-in and that important current that’s We businesses. So acquisitions love our

continue in business for business, our business. kinds our Safety And to and we’ll so in of Aid First our look Fire in Rental and opportunities those

taking I for part deal. most of to aggressive would XXXX And XXXX fiscal G&K and the return off, so being because that -- after will we we’re the expect

our we to And with have are raised first that’s program. and to public. us. we opportunity would and program, went to opportunistic continue into cash buyback of would the the I did I that have do every since have dividend on quarter that then feel be for additional year that cash, there evaluate we’ll important execute we opportunities We little will the an that and if that use expect a we to that if that say bit we We in like very future. we’ll

Unidentified Analyst

Great, thank you much. very

Operator

question John question Macquarie our comes with take North from next Research. Hamzah with from Healy next Mazari We’ll Coast Our Capital.

Hamzah Mazari

ERP is some then afternoon, just, you the operating think Cintas? how G&K distraction post thank in do have disruption, costs pressures, that question Good when you. My you But, integration relative natural how or underlying about business G&K. to about do sort in maybe obviously think leverage highlighted around of first the you just of sort know legacy I of G&K. some of operating And you some thing. natural leverage post the sort that’s business

Michael Hansen

to the G&K. to going including business the -- to I’m company Well now whole whole speak

but to in in to and especially forward. continue we synergies, to past revenue Now XX% continue we’ve have route the we believe and we to get margins that on existing we’re future, generally large operating got sell to incremental continue and our going very capacity and as to leveraged been into that customers very going goal range to the as do to expect XX% that the will grow, more and continue has stop. work that the per continue we in investment to structure well We

and the there changed. it going a leveraging create our in fiscal that in fiscal going forward, we in forward integration has our more efforts on. incremental that bumpy So, in but SAP but on a bit margin And a incremental let's and and margin, that do going not of terms that year really belief have the will of current going little a XXXX ride opportunity this called philosophy XXXX, way in have isn’t we the we as just change view efforts

Hamzah Mazari

view any on China hearing an basis? know customer direct mentioned in lot plays great. you're think just And hangers, on you you there is Okay, indirect know I not the a I portfolio your Tariffs? updated of from of or out how base exposure. your this terms anything but

Michael Hansen

Hamzah tell. I early think to too it's

creep direct amount, something out we in. it's is starting a haven't not than called but significant other We hangers -- in seen much it that’s to yet, a impact

haven't indirect yet. direct much we that, from Aside or seen impact

I think more just need we see play out. to

Hamzah Mazari

just it follow-up, I'll over. And turn Okay. a

system mention ERP, benefits place of you of the term? did in how that On sort once about think longer it's to

Michael Hansen

a bit the people get efficient, how more to talked more more can sales more costs. prospecting, of eliminated system power that There from at of existing and but the in that about productive we our certainly system. from the will targeted little sell power be that us the customers. that we'll implementation some the We can even information be we information the way both that make But really costs that particularly look

we the power is revenue so and selling process, that the move the as of into think kind future. efficiency in we productivity of And the opportunity the

Hamzah Mazari

you. thank Great,

Operator

Healy now question have And Northcoast we from Research. with a John

John Healy

it the And look of Wanted up when guidance bit of to know growth would organic approaching at little we of and just the there. I I the the that that bottom year, here? kind from But X% steps about X.X%. for this end the you you. quickly the think kind Thank mark of how the have guys expectation ask said probably towards curious you the just year. know assumes number to a the cadence

Michael Hansen

John quarter I think we're pleased first the that with Yes, very quarter.

the maybe -- As you bit. our the internal plan did can little a what beat guidance, tell revenue we with from by we

real Cintas sales the nice rep execution, acquired some our of into in products saw And in some performance selling Facility we Services a G&K saw our have also nice customers. productivity. We nice we uptick quarter first

we the -- second and by we we raise range by we guidance is that mentioned the certainly as and some mentioned in we of as still you're in expect very said, quarter. opportunities to our from a expect in quarter the to that an uptick penetration the productivity, the little increase, year saw X.X% in And what seeing customers. we as we X% in rev first being I our guidance benefit what July, that. to good G&K encouraged call, the our I well With expected that that comfortable second reflection feel our half be liked continue seeing July in So be in feel and about

fairly expect would second to of I the year be So performance. the half good

John Healy

there so hit the out was of kind Great. just if kind SG&A, And SG&A I of good very there, one And one-time comp of or then management. the on question the back million $XX items onetime stock kind just of if with I a curious there line little were the of any kind bit that or on maybe cause guys to was what in maybe really allowed you that the that? SG&A outperform going helped kind

Michael Hansen

really in nice leverage the taking mentioned we Well, certainly Paul opportunities effect. and are there are some synergy as

And a lower seen and so -- labor some kind along bit seen with workers comes of number. that little we've a lower comp we've of then number lower a medical

we And time there it's pretty good any so control. really more G&A. say performance say aren't about of anything piece one It's good feel call significant than that I would And just the I outs. structural would and cost

John Healy

Great. thoughts timing one the kind implementation ERP And or me. final on any for there? question spots bright Any of updates on just any

Paul Adler

a scheduled. quarter, now it SAP continues have back this continues well. to little XX% more in converted John, point at XX% to in go our of system. or been SAP to That's don't operations the And the maybe up had bit know implementation I Last go July, we time. about to very as

into going very still it's XXXX. it'll extend So, well, fiscal

of XXX,XXX had give on converted and by this to color implementation SAP, and we've X,XXX you impacted the the routes some customers. scope it, Just

on. is very to big significant a it's update So going you well. Nothing but everything undertaking,

John Healy

Great, congrats a guys. great on quarter,

Michael Hansen

you. Thank

Operator

Barclays question is with Patnaik Our from Capital. next Manav

Greg Bardi

actually calling is this Hi, in. Greg

little new given from the what a to hit labor of bit of if a sales perspective, terms terms net more rate. hires? the And benefit tight both in low talent doing Just to unemployment you're from wanted seeing you're market on in maybe any then customer attract

Michael Hansen

the So from is most we see the pressure in plants. a labor that standpoint, our

go and very number doing thing want the the and benefits at competitive was question we’re a working provide that mentioned standpoint to nice in make the fairs partner working that great we standpoint new partner and in on of we our sure retention And believe challenging sales we types we’ve new uptick been we wages, it that sales our the environment are from so things. we I the seen a one I is headed. ago, are additional do and as find your begins important aggressively is looking labor need of more certainly really little labor bit has When and schools we’re hires few where retention. minutes retention and the really grow very most with for finding thing recruiting a however, productivity productivity from to recruiting and good. additional the trade We, in a But From That’s business, of rep our other people. we like and the us. we

raise We we’re levels are headed pre-G&K I we like yet. to some that revenue performance our not the and good like confidence really mentioned. gives where to guidance, back has But us and been

Greg Bardi

on then XXXX-XX. the And Okay. rule

I quarter, still last $XX expectation? to for million Is talked the that about $XX the you think benefit million year. full a

Michael Hansen

in we’ll of be update the that you on $X.X would the was end higher bit range go probably It it’s through going million first to and year. as a quarter and little say the I we about

Greg Bardi

thank Okay, you.

Operator

Tong question And Jaffray. from comes Piper George our next with

George Tong

With Goldman Sachs.

penetration guess, change I penetration increase can And and your cost ability around achieve the extent synergies? which first secondly, does impact your growth deal? to with structural timelines the those So your opportunities as question about cross-selling you the talk G&K will how SAP cross-selling, to then organic

Michael Hansen

customers. our with something of any on not In some our business organic Well, into words, it’s fairly just time I the to would growth, and that we is say subtle. takes be rush penetration own other going like impact with

confidence this to does expect I to that our certainly into a continue a It something would does So it's the that conversion. mentioned the subtle future. of bit that as on gives us have improvement certainly certainly conversion a will be I little an a impact but year. it's system raise going bit few guidance minutes And is that ago

G&K legacy Cintas operating are all systems. on Now locations

that so process, get And start and that first earnest in more quarter. in allows certainly really us we in started have the which into this to

forward, some conversion good like just but be with I going market-by-market, to news think is converting the one system is is disruption time. move we're the will company the is as conversion. of business. all at we a It our it not entire market-by-market There

so And ability to It don't not be the significant to have going have from is timing going a little have that going route penetrate. But a is little on that's of to system disruption that's optimization, little I think quarter-to-quarter. bit of different -- but going to our that bit impact much topic. impact to conversion bit a on a more is

George Tong

acquisition, Got the your of cost the going of synergies G&K or to expectation from the be you your is growth. margins, synergies, can to it, portion on synergies And around discuss cost to reinvesting the are reinvesting into topic outlined you business then through back whether very the you've drive XXX% helpful. thoughts a flow of the

Michael Hansen

invest we're Well, we to in our to as order possible. locations way make invest efficient as going to need the

is make we we of cost synergies certainly in staffed that cetera. et will XXX require our investments there our intention amount significant quarter-to-quarter that Now sure be to not XXX to are will a that reinvested. that equipment are from maintaining But be to that properly,

that part there happen. margin our part expected operating to will that and to an reinvest, number it's are investment is So our of going forward. CapEx we of don't going -- But we have going certainly I be don't

George Tong

Thank helpful. Very you.

Operator

R.W. next Our Andrew comes question Wittmann Baird. with from

Andrew Wittmann

us everyone. the raise there. it much that's Great, thanks. there got digging you in was changed? little out lot about you mean, in that talked guidance you think headwinds of year your passing talk the called the the bit just to what of of would to year, revenue if view is inputs very just you is gave question there I and the balance the You your you've some helpful or one balance I for about XQ But that a clear. forecast better put a could given be specifically the just the here Mike, was the than on guidance pass the of into you through tax expected margins How Maybe for that the be clearly XQ? get has out. helpful that through of

Michael Hansen

was lower year than the our our same little quarter tax fiscal Yes, guidance we bit But mentioned we tax we as in gave you XX.X% guidance first that of rate full is rate July. a expected. comments, the just in of

strong. we through the with certainly increase QX, pretty nice in perspective, last as tax as rate And three we So that. gave through really performance tonight. by we growth move the was really that same in good coming some do the wasn't feel the have year-over-year didn't from -- a quarters. tax It's see affected real The first QX feel certainly we July the opportunities to guidance operating about margins quarter. you We good

would can help? business can we That margin it gain really growth we attribute expect? real continue synergies I more about get of the the any nice not we that and continue So taxes, to leverage it's to to and

Andrew Wittmann

like and here like got -- going then that you maybe looks there, it guidance margins. to flow it It upside help. operating sounds it's revenue sounds it does through like Yes, that’s to yes the the

of the it? it kind core operating revenue way the count that to share sounds substantially, summarize didn’t change substantially, through is and another it change like the to didn’t like EPS. there So Is flow is up looks that numbers, -- here lift a tax

Michael Hansen

we be QX three that year, and that XX% quarters, the margins think was expect we’re Yes, right this QX the high for about for the going if the last you average range. operating remaining through XX% about to beat guidance XX% with into

operating So we some move year. through improvement as margin nice the expect we

Andrew Wittmann

that’s helpful. Okay, super

it capitalized compensation on that million, being models of as those stock for in thing amortized. here, doing amortization then of million maybe rate year rate things and of that same kind on here, $XX.X associated the was items? a and just the around the with new the quarter running million, run intangible a with primarily couple rate So now sub just talking is accounting with good good the $XX.X other pretty now per peoples $XX the you’re commissions for presumably balance a run Is this sales two range

Michael Hansen

Yes, great yes. question standpoint, an From Andy. amortization

expense run change, accounting now. the amortization With the does that through commission

So, in run expenses as there offset working down going big rest year mind good increase and rate, the in see you pretty to offset -- a capital that’s will prepaid of you’ll keep continue be a and the line, the that through well. that’s

this So, much net-net the change operating in accounting. cash flows aren’t by really impacted

rev compensation, rec change. million impact is that loaded quarter that that see a earlier. mentioned $XX $XX From in with that we that’s million So first the stock-based the you

is run where generally restricted out first we And kind so Cintas the we our retirement occur going the when to is rate, have and most That take do rate provide shares a $XX the the that’s expense tenure. when partners related in run of we change a for to million year. would agent of probably that, we -- options of good of expense attained And rest get certain the quarter, stock accelerate -- to who grants. chunk better not that you $XX a good of fairly to a million

Andrew Wittmann

running full Yes, almost you’re the XXXX, the got that at. you’re then exclude historical to it, level back you because if

this minimis So for right? it does heavy the de it’s the year, seem in like balance of really pretty pretty then quarter

Michael Hansen

correct. that’s Yes,

Andrew Wittmann

them? of talk that shares the maybe just then were of amount was repurchased price quarter can and the average the in thing total first number clarify, for paid that about And to one Okay. other you

Michael Hansen

$XX totaled the about price we program, an about over million. at shares Under buyback average and of XXX,XXX that $XXX.XX repurchased just

right authorization. on have $XXX We left million about our

Andrew Wittmann

very much. you Thank

Operator

Dolev Securities International. Dan next from question Nomura our comes with And

Dan Dolev

guys, Hey hear you can me?

Michael Hansen

Dan. Yes. Hi,

Dan Dolev

you you mid-single-digit, like down already it but of think part anymore, we give I missed breakdown us was. mentioned And what the am in a it, GK sense if job the quick strong, I was organic business than not I’ve quarter. guys. in questions, X.X, I were was revenue the know X.X you ted were rental what Hey were last the two you the and weaker got we Nice I could on two about it maybe quarters. sorry know a you’re versus giving modeling.

trying weakness in versus So our model, I what -- out was the your was results? to figure where am the

Michael Hansen

we provide now build comingled not the just Yes, it’s Cintas try number, many that because July, in business back G&K that with assumptions too too did it’s is into it number. to Dan, hard, we as a mentioned to really so

those. am right I well is going -- expected, to internally that let's call to And entire because closed simply gets around better the that really of we've is feel standalone what Cintas the as difficult of the a Cintas comingled little we so it locations, various report that just But accounts for we selling X.X This expected. G&K we've locations it's on the are locations. And be So and and this bit of that. standalone providing all business. not locations, good it sales performance than both reps about real we merged as into where maybe block

Dan Dolev

also you I in there were then know understand energy that’s points my prior the talking is XX also energy And years headwind. out whenever follow-up fair. is on I No, a basis a about the Can called you headwind you. to maybe a Thank a there was you by rental? organic there's tailwind also cost -- accompanied if specify if to that is revenue tailwind to and revenue.

Michael Hansen

point. Yes, -- those it a say time. I where rest are the is -- healthy happen But few necessarily same not sector, at back it's was outperforming healthy a this don't from seeing energy we the this I fairly exact the that of business years ago. sector. a it It's things wouldn't to is at it

Dan Dolev

you Nice thank it, results. much. Got very

Michael Hansen

Thank you.

Operator

Instructions]. [Operator

Michael Hansen

no are tonight. questions, other there If joining you us for thank

December. XXXX speaking our forward with We issue you for that Thanks fiscal will we and at look again in earnings joining to us, second time. quarter

Operator

today’s This ladies concludes you, gentlemen. teleconference. and Thank

now disconnect. may You

Cintas (CTAS) 25 Sep 182019 Q1 Earnings call transcript