Cintas (CTAS) Q4 2011 Earnings Call July 19, 2011 5:00 PM ET

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. Bill Gale, Senior Vice President of Finance and Chief Financial Officer. Please go ahead, sir.

William Gale

Thank you for joining us this evening to report our fourth quarter results for fiscal 2011. With me is Mike Hansen, Cintas' Vice President and Treasurer. After some commentary on the results, we will be happy to answer questions.

We are pleased to report that our revenue for the fourth quarter grew 11.3% from last year's fourth quarter to a record revenue of $1,012,000,000. Net income increased by 27.6% to $70.8 million, and the earnings per share were $0.49, a 36% increase over last year. As noted in the release, total year revenue of over $3.8 billion was 7.4% higher than last year, and total earnings per share of $1.68 was 20% higher. Stabilization of revenue at existing customers, excellent new business results and cost control measures, as well as improved productivity within our organization, were all factors in these very good results. We want to express our sincere appreciation to all of our employees, who we call our partners, for their contribution to this successful year.

On May 18, we issued $500 million of public debt spread in 2 tranches, $250 million with a 5-year maturity and the other at 10 years. We found the rates to be very attractive, and demand was strong for our bonds. Given the price of our stock and the positive outlook for our company's performance, our Board of Directors authorized management to use these funds to pay off short-term debt and to purchase Cintas stock under parameters established by the board. The $500 million expenditure resulted in total purchases of 15.8 million shares, of which 7.7 million shares were purchased as of May 31, and the remaining 8.1 million shares were purchased between June 1 and July 6. Coupled with the share purchases made earlier in fiscal 2011, Cintas purchased 23.4 million shares since last July. The impact of the share purchases in fiscal 2011 added about $0.05 to our earnings per share from what we would have reported with no share purchases.

Our guidance for fiscal 2012 revenue is to be in the range of $4 billion to $4.1 billion and earnings per diluted share to be in the range of $1.97 to $2.05. This guidance incorporates the impact of the recently completed $500 million share buyback program, which equates to about $0.12 a share, when also factoring in the additional interest expense from the debt offering in May.

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