Cintas (CTAS) 23 Mar 222022 Q3 Earnings call transcript

Good day, everyone. And welcome to the Cintas Third Quarter and Full Year 2022 Earnings Release Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Paul Adler, Vice President and Treasurer, Investor Relations. sir. ahead, go Please

And Schneider, for Officer; President Vice Financial Hansen, Sergei. me and us. is Executive Officer. Chief and Todd and President thank you, joining you With Mike Thank Chief Executive

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

Paul. you Thank

quarter by to increase benefits a The XX.X%. top strong our third financial led strong of line. growth bottom of flowed results our line through revenue Our are

expenses, year’s XX XX.X% gain the in Excluding $X.XX. and margin to grew XX.X% quarter EPS basis and income this recorded selling of administrative points onetime from to operating increased third XX.X% from $X.XX

year hit and Inflation excellent they were gas in with and services, a pleased for service and broad efficiencies, existing workday. from challenge products and increasingly time especially because it. to obtaining And navigate our compelling them see Businesses high. starting and which a station been businesses while EPS all prioritize compliance. including increases with more financial period incremental penetrating labor corner ready rising proposition. cleanliness, further of not value help providing results high in operational the get by this financial results new XX base. are able any business, price safety, increased and our to customers the indicative challenging Our to and delivered operating we provide productively driving to scarcity We've U.S. inflation customer Cintas turn achieved image, our is than costs with margins look and need one I'm

via our suppliers, As we plants. grow better we volume operating new more achieve business on leverage routes, leverage, negotiating and denser with

As existing margins. partners incremental we our call we I realize other. even thank focus our customers shareholders, continued employees whom their penetrate stronger each operating on customers, we our for and

facility our Organic uniform year. operating was XXXX business segment and to $X.XX to the X.X%. quarter growth third revenue revenue the billion units, services rental was last for now billion fiscal Turning $X.XX compared of

education, state rates. news and and strategies revenue Our vertical of continue leading local growth post to healthcare, government

verticals. decreased. struggling in job concerned the openings opportunities remain COVID for as properly However, all fill infections even their about ability positions. There are sectors to all in with us to U.S. Businesses sanitized are there are open in Businesses XX million alone.

to Additionally, and of reduce impacts shedding the businesses costs inflation. are competencies minimize non-core

to outsourcing are and Cintas. these reasons increasingly For others, businesses

revenue because improvement profit higher more reflects We quarter. the This growing $XXX.X Aid a is operating X.X% to improvement Services quarter the this third consistent First Aid million last XX% Our nice $XXX.X revenue welcome momentum a which and stream from third it year. of was which in has revenue was million is and Safety our cabinet shift business quarter's the growth for First grew Organic segment last mixed margins. X.X%. compared

the were protective year-over-year organic high equipment improved as or The very last revenue of growth outsized Third comparison. First prevalent. Services of mix. has COVID and and are a business Aid in however, quarter revenue third amount difficult quarter percentage an comprised COVID-XX expected, Safety year's declined PPE pandemic, infections sales At of XX.X%. revenue of that still time despite response the PPE PPE grew And to personal

about remains revenue pre-COVID. a than a year’s percentage which in this sold larger of we kits PPE fact, was $XX mix new In million it product is the quarter. test third COVID in

Fire one Protection businesses revenue Other and in Our growth Sale year. $XXX.X Other and Services compared as was are rate organic Uniform have expected. $XXX.X Uniform was back rate I'd growth on was strengths reported XX.X% business like cash bounced comment organic All million flow. revenue namely last segment. Both Direct All Direct another the million fire businesses to business of XX.X%. The our to Sale

In we year's paid increased XX.X% under was On purchased last quarter Cintas million and And of XX, XXXX shareholders the our during million $XXX million stock used flow quarter from for $XXX.X dividends. this acquisitions. through Cintas in program. $XX cash common operating third quarter XXth, March year. Third March buyback quarterly

improve allocate to continue in We return. shareholder capital ways many to

sheet strong cash Our to so and balance consistently. us flow do enable

front. Finally, news great I want share technology to on our some

transformation developers new outcomes to dynamic provider Strategic in and to the business. enables This program is into efficient exclusive a I'll Program gain the call SAP technologies its realize This and of with employees. turn to for membership in ERP will X% have speed us membership Mike. directly Cintas. engage management Only customers pace valuable to and top in the suppliers, of and process their Inclusion SAP more SAP's over extended Customer Our to program. our program it. access customers, an now our data of

Todd. Thanks,

was XXXX, basis XX.X% to a of increasing quarter Gross year. increase for $X.XX and last compared Operating income percentage compared were -- third of Aid Gross of year. an last quarter included quarter adjusted revenue XX.X% last last First a natural third XX.X% $X.XX margin of Facility billion Uniform headwind, for the points rate Services, XXXX $XXX.X Fire for revenue the year. was from Our compared and XXXX $XXX.X XX compared acquisitions, million compared Services XXXX Operating the foreign of Gross rate growth was million, revenue Rental fiscal to was Sale. an on divestitures, for fiscal The of third The of income gain exchange Direct Protection and and XX.X% Facility billion quarter organic for of gasoline, an percent selling points. was and entity million comprised XX.X% XX.X% currency fiscal last and to expenses XX%. XX.X% Safety year, income year. Fiscal expenses. as Energy electricity basis gas, the margin Uniform $XXX.X was recorded business fluctuations operating for XX year. million acquisition $XX.X administrative Services, Uniform a to third in and $XXX.X margin for equity to XX.X% reported last was Services, million method margin gain investment. Rental segment's by

of basis Excluding third was year's points quarter operating last this income, a from XX gain, quarter. third fiscal as revenue, an XXXX increase XX.X%, of percentage

based effective from rate rate period Our period included tax method benefit. to year's The including of can quarter quarter tax discrete a for This the the was tax significant third compared third move expense. transaction stock amount investment year. events, last XX.X% XX.X% on equity to compensation

gain the Fiscal rate XXXX was the which $X.XX third a investment compared transaction, from related fiscal $X.XX method Excluding quarter transaction, year. income contained the third EPS the last the the equity benefit. was last $XXX.X of to for was rate year. quarter for included $X.XX on third diluted Diluted $X.XX $XXX.X million, million EPS to compared XXXX effective Net tax XX.X%. tax quarter

third fiscal compared tax year's our was in a EPS and to Excluding and We're financial increasing XX.X% this related third gain impact, $X.XX diluted the last XXXX quarter quarter, increase. guidance. $X.XX

$X.XX. $X.XX billion fourth be the the to our billion and $X.XX range of in revenue $X.XX quarter to to be in of to expect diluted EPS We range

approximately fiscal fourth anticipated effective year's to rate expected diluted XXXX quarter EPS The to guidance fourth negatively be XX.X% basis XXX growth points. of a approximately higher quarter. effective expected approximately to for impact last fiscal is rate diluted by and EPS rate Our quarter $X.XX compared is tax tax XX.X% XXXX fourth by

includes March include share but XXnd, impact through Our buybacks. financial guidance future does of buybacks any share not the

liquidity. to I our an and on Finally, provide wanted debt update

senior We million April maturing senior maturing June of and Xst, Xst, notes have $XXX XXXX, million $XXX XXXX. of notes

received $X issuance and We new it the credit via with today it new these senior billion a to of debt. XXXX. expect refinance on facility, increasing we Also, to to funds closed extending amounts

strong Paul, now. liquidity. a ample sheet have and over We to it I'll turn balance

prepared That our concludes remarks.

question we Now, from analysts. ask one the just follow-up Please questions single a if to and answer happy are you. Thank needed.

Thank you. [Operator Instructions].

from Andrew question Morgan. go Steinerman comes J.P. from first Please Our ahead.

rebound this Andrew Thanks vertical hospitality or is also, Alex in on those is -- Steinerman what two touch from at potential quarter adoption still with Hi, Omicron to in maybe, guys. your driving and in last being in on healthcare, fronts? was comments maybe, that a seeing on then any briefly rebound and progress respect dragged for Hess that today. are wanted you a level, maybe to I the guys

Sure, Thanks Alex. question. the for

well. vertical working is strategy Our quite

certainly is the back. it mentioned You bouncing hospitality sector,

and If read you airlines news, in the you the the -- what hospitality in are sector. bookings up

that's so back. tied hospitality area, yes, the is sales results in results to I certainly, our So bouncing business, to to think the outstanding. -- part percentage large which the in direct tied a are And

early products we're verticals, having very a base. services in good healthcare, are those. we're technologies to -- innings there. see specifically, new customer very each And products integrating So -- and we're we we're to the but in new that continuing and we that our in of create much And evolve compelling other the success but have that in and

our on in that area, So with the as reflective. and very result, bullish focus area, that strategy think in are results a we're our I

Thank you.

go Jefferies. from ahead. Please Mazari Hamzah

good morning. Hey,

you referenced customers that one to more at as of number many it so you, do has that, changed due of initiative? of that from penetrating all have You just SAP? are can relates a buying was pre-pandemic specifically we sense that incrementals, to What having a sense more part had than how get same strong service today customers as

being you to There again, Yes. What early now, a our system the cross-selling. on innings cross-sell. I'll long into of is a runway that helping -- add tell ability in virtually product, our area. Hamzah, really we're transparency is certainly certainly it have one in we is,

a get level to on existing working reasonable to into we're customers products with penetrating there where and of bring marketplace our we penetration, always feel our Just long new to we're runway which separate a is to going it, from products even the about excited what future, is in services. long, the

we feel good So that. about

on -- innings that very that much So it's subject. improving, certainly early the in of but

turn you've M&A, valuations Thank there Got rationale I'll route-based, have historically, I the through it. well, that follow-up know around come just be you. question, the mean there? to And any my it doesn't has as is all, in as that necessarily over, about updated to at us it it thoughts walk talked just or pipeline just, M&A

attractive. looks Sure, Hamzah. acquiring reasons the pipeline quarter businesses. made of our companies It was good transact. highly for different third We -- the takes in in M&A to different we've as we acquisitive. We're -- noted, investment The

always interested very much You making are shapes all predict We're and and acquisitive of we buyer that in timing, deals. and can't but very a very, willing sizes.

and able So we're area. to continue ready, forward to willing, in move that

Todd is certainly an which Yes. number heard Hamzah, as third a we been. where step mention, quarter -- of we've overall acquisition you million, from included $XXX our up

of number. the But the Now, was method included the where is million a step-up which that the $XX million been. remaining purchase about rest we've of of equity of investment, that the $XX M&A is in still from shares within

many has there the getting. see that of this and year, we're so some entire far year, we this fiscal messaging been on can as and pipeline the those. you movement like So we've like We acted good

you. helpful. it, Got Thank very

Goldman Tong, go ahead. Please George Sachs.

Hi, how pricing wage this? energy morning. inflation is input discuss by and you And including thanks, are costs? rising costs, good higher effectively impacted trends the offsetting how business being Can

question. costs we Thanks that something George. would be about. morning for to be Good talking would Certainly, input expected inflation and the want that

like But about costs. -- mitigate it's So -- steps so inflation -- It's to we that examples that I'd a have we're there. to we yes, is few regarding items certainly I challenging. taking have are talk much very input

exposure. we're steps As very taking it's to we prepared in sure costs type I other that active in or whether are make mitigating my are fuel being mentioned But of that remarks, real. areas, input

of so it only is pricing, no it -- is by excuse pricing mentioned a to combat our means -- is me, or strategy, to combat certainly component You but inflation. pricing strategy the

and on. they technology. steps So were these initiatives working other we're that we been involve And all all have almost taking

decided individually, them certainly not inflation And them. However, collectively due forward up. go to the we faster massive and pull but with they movers, they are subject, add to

those of few provide a through go help little I'll might So I color. think that a

do the as company, I our long said about our and there, I've that with will as routing and to out in thankful we on We're we have have to have that. finally we a in the mentioned fit with ourselves. very we're going we're routing And off, couple organization, routing that -- going unique tried think, I'm it rolled we've in, been it going and out First invested build it last because it. I be that technology is years, invested SAP, to call, And well. past it. that really the so over and across we business It's we seems fits proprietary did like structure, software every executing technology. We've of

Now, revenue When our business, it can very generate revenue. when that place important, stops recognize we we -- customers' we generate right, at we stops. the that's truck of only when

any Certainly, And we're be again, would customer that go to takes the blessed pressure So that we've -- And inflation didn't I'm to subject. are if of much we're with but disruption, the investment. very we then we investment. time. more that pleased with organization it conscious put And There's got trying more efficient. on subject. we have the it, made faster with it really

flexibility very implement what's technology of as invested on flexibility have again, processes faster, have the standpoint, this gets to But this uniform upon a facility footprint of That our with three pieces facilities. through. how into that we of going that. provides didn't automation go is, one We costs, because the pivoted We've factors of going the a us from some automation. processing different labor of we in meaning number in can in now So And also, certainly. really we've pleased past. based to those for have into and subject we on well deploy number the we

an sped-up that a through in we've got processing We So fashion. -- I'll our we're a a able standpoint. then how effectiveness real-time to and rental others And to of SAP look of I've centralized on that have talk efficiency and dashboard invested facilities basis a operating us automate couple at in our understand they're now facilities all from allows basis, about. daily a technology and

past, it This share real give of now, with we -- inventory inventory each is now, we and of the you go impact this we because And allows is where others, And doing. in I'll to dashboard the all our rooms, which of same locations in technology understand these expect. real-time and operating to better. and got I've improve as our of one there's they're that a result, we we other getting all know the So being ability garments more in how us our we're if having to manner on have facilities our a are had house is at real-time we have SAP the that used inventory to due we're system to allows nice locations. of That few accountability, physically us we're see used but across But efficiencies within SAP. business. stock to tracking seeing our our our a

use gain the in base. is inventory locations was allows to what to to customer do So individual of solely dedicated better the it that past, the us

we Now, base. we larger it it product can nonstock where look allows customers. and is out much our spread to it customer and to -- us get a faster across with, at also sizes, And the

to that that past. of I able the we to as could this examples in I'm that but steps organization hopefully, have that proactive but items as Because, challenging, be we through you again, highly mitigate -- a real, gives it's go manage inflation. the the it's confident few will I So on, taking mentioned, are

is customer and a disruptions then update on provide Thank follow-up, just very helpful. demand flow-through on That's brief base by affected And could chain you your impact Cintas' supply as being for how the a you. services?

earlier, we're But costs. facing customers us. staffing But and ways Yes. dynamic has being George, labor that. the I doing, by passionately that's beneficiaries for mentioned are, bit. as business Certainly, of to -- impacted about our slowing They're chain care our and looking how and customers it because supply aren't impact on customers that our obviously them we challenges a was their a are are outsource

We bit date, abating are that's the supply the tailwind our there. even faster, being issues we customers to able of have we're a chain about to certainly seeing a and outsourcing headwind, of and go the excited but but benefits

you. Very helpful, thank

Ashish Please Sabadra, RBC. go ahead.

the pricing how Thanks for for pricing taking in what how higher potentially, on and can on you question further technology to trend about maybe, and particularly response you just my on more by thanks pricing -- are and on detailed has the if I providing thinking quote the inflationary talk historically, the also more we been your color helping technology about normalized local like environment front. that wondering your could pricing to and the just you price? dynamic was is the pricing, Thanks. customer here,

start, a Thanks, customer subject, It's long-term I'll to industry ability the contribute use Ashish does decisions. look Mike more pricing data it's -- to platform we one give large -- We us if at to a But subject. the strategically well. to analyze. technology, question. technology amounts industry. base ability but wants being customer-by-customer for really gives make the to us again, certainly, -- it by on as is And does us making good local we're sure -- -- our give of the

place, that. we're and we'll good years, So had approach more and that that strategic. they're taken more that about sure decisions continue targeted we've of are making make the but couple that over we and sweeping decisions, approach in just that We've feel past not

of are be customers otherwise. simply than -- the easier inflation all add, with a certainly, the it's I'll the today might bit little conversation Maybe, in an news, it of

that of results generally our than little been And customers and in higher pricing the a a that, in bit so past. receptive impact have to

And talked in we're lot so and little X% today. a about a bit X% that past, we've to the above

us is certainly fight that for inflation. so way And to one

you. that point Great, we're base, that's clearly. of of adding our our customer growth growth just pricing, our is is from is value coming we're to to the the the due and selling, it and new growth But from, where coming Mike. majority penetrating not more customers that ads Thank volume out, clearly, and business to majority

just to I going back to to the thought the with technology. want conclude Ashish

of business. understand this I for think people in the it's magnitude hard transactions sometimes, the to

One of operations, mean, one have operation, they our X,XXX can General I Managers customers. of our just

types the upon that ability or supplement to so jeopardy be it that over of a huge in there such to understand to, just trends see General have comparing that analyze advantages particular the to spoke the in the is are are those intelligence the and technology, as are reducing I, to of needs back, that's be services that time, manager to competitive to business a is that luminous eyes certainly technology additional provides, And it X,XXX the customers because the the Todd able ensure customers and of to and technology need account. is that to a kind get to where the advantage. pricing seize GM's front if that customer, ability data and

side, I if energy ask, you helpful How are Thank about big efficiency That's of thinking improving also, can the the color. a quantified more truck you longer-term. also the you. front? but on And overall how percentage I'm is expenses laundry but the business, of both my not maybe, on energy very facilities as have question is sure if just

Ashish. Sure,

has guidance for fourth more and In quarter got as in terms gas certainly, February, the our escalated we of we're price into total the to our side sales. energy was business X.X% X.X% quarter. third in of X.X% thinking The

our bit is see So certainly, of bit little little a increase. a expectation to of we'll an we're see going

at to impact that at to calendar you XXXX, a time done was time our if little the prices energy bit we calendar of if kind X% energy Just a revenue. company, at And be saw of third was you to were more of an the this we efficient, our back total go smaller in maybe, XXXX. certainly the of what think of back give level already have pump you last we quarter about but

in So to a our to at price energy the the X.X%. and almost same X% we've third by reduce pump, from been able

and things. So some good some talked about those we've we've made really of progress

it that Some certainly Todd it as of little truck us is a the the but bit growth, has to penetration also routing is longer. park and about, scale talked efficiency, allows of the some

started. years. we've penetration, some we So certainly also, the progress do over at think certainly, really to we it are about but little of net has made of nice towards routing is And about road going zero work expectation we've the many many, last continue how to more number talked forward, bit our our efficiency, as going getting several electric goal on a we And that XXXX. vehicles we'll put to of in and those move

and the a a there's early early, that's in we that So in future. type we're but this come alternative to certainly space think big more lot part of our vehicles, fuel of of exploring part

dashboard I energy that of are directly functioning, the about centralized locations production That Ashish, level to in mentioned us facilities. what addition, at our to speaks how understand usage our allows in efficiency. earlier

some the years, LED the I past helps our we've we the in invested which So the we have over but of helps also, with and lighting, consumption journey, couple ESG all specifically. to helps cost. pound, the of And energy energy, but certainly, of of locations didn't in reduce it then, efficient lower mention, our the are, per converting more consumption

also a it's subject. mitigation So cost

So energy other that -- area production reduce facility. items at our we're and to in looking in consumption

color very the congrats solid helpful That's and results. on

go ahead. Baird. Wittmann, R.W. Andy Please

thanks. Hey

into backing path, about Let's midpoint which on quarter going and the when this just is revenue EPS your guess. using at guidance, year-over-year. flat I your guidance, Mike, fourth margin kind keep just I'm of

But third and other energy was the improvements, of that basis if XX other just I and margin about that, to And maybe, takes the you what's XX XX? implied a quarter like wondering I prices probably on some talk energy, basis sequential right, think margin you basis, comment puts you drive on I XX the you got can that in that's suppose. guidance? adjusted plus -- points. you mentioned can margin on that points the was

would at -- at XX.X% start the margin see The range with something top. the the I to we bottom like Yes. is guidance. let's implied that XX%

year's last was quarter So fourth XX.X%.

it's XX it, it's So energy somewhat to against, period headwind at of expansion a flattish And call midpoint, time. XX-point that from let's year even you're of this margin right, at a top ago. the range, in the

will So our to margin pretty drive a towards continue expansion even to in goal be difficult environment.

So getting back to, I why, more margin think, your maybe, question not of expansion.

First growth for doesn't of all, how routes. growth growing the in efficiency And when I Andy, environment, companies are kind I talk to. don't investing seen from when we in in are in but our know look, about also that But investing quarter we quite of intend in expanding we're you've the even total X.X% XX%. margins wash this would -- to our say, X.X% And like adding growing organically, many nicely. in us, route move first We're things we means not we that and we're mean capacity other to volumes, alleys necessarily places. are

our to so customer-facing going continue We're positions. continue going And to invest other invest to we're to in in routes.

to strong. because to very kind continue growth so and invest And the even of we're is this in going very, environment, good

point headwind good energy margin cost a environment, we we're guide a at towards this to kind pretty -- with little basis too. about. a of in Andy, looking gosh, of that feel XX to But bit So expansion, XX-point comes

positions you overall to people comment need specifically having category, about talk on Could the the wasn't trends do, imply what you and to on are enough trying today, otherwise. you are to them specifically? that can do you pricing labor filled I Yes, your market,

postings, as openings, And earlier, growing mentioned Andy, very our always I growing. attractively. have volume we're job we we're

we're more and there's that. So work really about pleased

yes, of and areas is We're RPMs, to -- speaking get area. in our to RPMs business. the we're that of But the management get plan our like levels and get levels to at. at partners running we So when we I our invest trying to think up competitive continue harder, in I part staffing culture, will where working as that work to we earlier, we're never they roles, advantage And conscious But are folks on. they to good that. large a work as a result, we're our in of It's of get that our that know, as quite we're they trying our like we're seeing leadership the strategic -- speaks successfully. in we're to higher -- and have add there, from is productivity And focused our later. it doing marketplace there. standpoint, higher challenging, team result say harder all labor enough, market you We that a from not a

Thanks.

William go Blair. Please ahead. Mulrooney, Tim

to Yeah, a I morning. second. back good wanted to go for pricing

the provisions contract are kind do years the in inflation pricing you. stipulated uniform pass-through there in needed your conversations or are thresholds? can talk pricing, typically If around are out Thank customers you when inflationary And just you hit you within several length, contracts these for to about of actual as mechanics how reach annual there adjust certain contracts? you

Tim, thanks for the question.

million or a customers more. have We

I'll but name to to we we do allow handle that speak that It customers doesn't do customer. So what our agreements raise us manner. all And generally, it. And a and is is the you they They year, our got we've to our price price that to in raise out it appropriate. -- day. same the once throughout we with like may spread the year conversation our is They be the found is But happen is so, mean answer that when that, approach that. commitment have it, once on the is as year. a

with customer, to that that, by those them. year look than our conversations they Mike partners just newspaper to continue of earlier, as the inflationary and And and front I like everything, But Our inflation a is every mentioned that they is we've that. are, we going And because plan sticking to normally been in and times, these once center at. have. by approach stick better are commitment

great. Thank Okay, you. that’s

Please Manav go Patnaik, ahead. Barclays.

the can in are labor that challenges, looking on labor managing and environment how of you like the Thank curious openings, well. you. follow today? customers sounds I just broadly, wanted your just But facing own terms that's what up you're turnover, etcetera share to pretty your it struggles,

a Manav, seeing the level, in trend That's people our customer certainly level we a we are and customer customer seeing is that base. a they through that see we're ad did, positive. work we a we productivity our certainly and for other end Meaning, within that base But has and like and than we're seems like we seeing. our now. been seeing than our right base has nevertheless, little stops more that it I to higher And mentioned, one Everybody churn, are it historically. up be having at at -- more bit past. the the but customer call higher little with bit churn just better, trends it the of it harder to customer -- businesses we at is it's as a

as Mike, And believe. then rental there's side on the it. Got I the and tough quarter, fire the maybe, well, comps just some for side fourth

could the thinking about, sequential contribution you just trends growth organic M&A help If the is we what maybe? maybe us with be should

growth organic about at think for division, were we we X.X%. When the Sure. rental

of first slightly step us X.X% so and guidance growth. XX% -- to The for growth, back. let XX% maybe me implies all, expectation Our Manav, over

those well type business, So rental ranges. we to going love the momentum continue the to perform of in single-digit that's we very, upper think very and

that quite comp. bit a little fourth the a in be easier an Safety And due in to momentum, expect is the but to to also, First going bit of Aid mid-teens. quarter rebound great and we

low going business to growth grew I get expect Uniform to Did I Direct Our going to that's to good And likely, mid-single fire business, area. a face question, I'm more is digits. heard XX.X% then, that sure something if Sale comp. organically tougher normalized if Manav. come second our this to quarter, in back continue one, the -- And of was not which we part very there a your

I what the it contribution given M&A. Yes, like. quality just you on around guess, look was that all would up picked

Got yes. Yes, it.

Facility this product was we of a years transaction. our component. within decided tuck I'll That component talked on, made talked now to about a innovation I venture going which investment primarily, business. Maybe, is own M&A global the sense into So supply wholly I a equity is touch we of covered Services joint think into -- M&A purposes ago and particularly, and we got about that. have That big But chain. I for that's the to entity, our that

non-revenue it's relatively So producing.

And in the so global tucks we won't on It much an supply impact that. chain. see of

Got thank it, you.

Bank Balsky, ahead. of go America. Heather Please

touch Thank morning. I some PPE my and on for good on wanted the stuff to you question. Hi, side. just clarify taking

and tests at you to this Just forward going above, you. guys quarter, COVID around you thinking are curious as business that have -- relative the gotten are you trend? inventory levels to an how of back sales point, of you or then And XXXX there during more still is kind you where that about are mentioned normalized well? a investment Thank you're

Yes.

our about And equipment customers still levels. that sales recognizing above -- We throughout been Our certainly value sanitizing. cleanliness still we seeing are little and the that personal talked it. pre-pandemic value a protective here they safety, are have bit in like we've

are pre-pandemic is those today the It's certainly pre-pandemic. what And revenue predict resonating proposition certainly, look is to more levels. future, into value did still And above hard than like so the it above are being going they're -- pre-pandemic. but those streams to

rising, Omicron quarter with not this opportunities, those. were with of It asking inventory requirement. we the staying we've were kit particular care take test a to So goal far, fulfill the power customers From do did able throughout done to our has an been we to so in our test of our that the come and perspective, kit pandemic, that. customers. movement for this And our us best like and in as really business

called to repeat is mover be close to that's expectation at future. not the We into about big Our something million worth, out that level. to expect we that wouldn't typically going $XX that's anything

declining, PPE And going quarter next margin do sort it's just levels Is a as is it's well? to it it see follow-up margins though a I because off next -- of you. Thank the even as it as still the just year tailwind going into recall, you side, your a business. elevated, lower and on that into

you're we really with our going our generally certainly First PPE First business. of and still momentum where second than comes business about that in right, forward some Safety The nice that that pre-pandemic. Aid and and this even But First our answer continue of is that is And gross to it the Aid And quarter better Heather. there nice saw Safety seen been, a though The hope is in way. those maybe, more Aid we've a uptick from Heather, has quarter going yes, the third I'll expectation And our talk lot margins. margins. momentum PP&E we side short is to

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for thank that Okay, you color.

Oppenheimer. Schneeberger, Please go ahead. Scott

on and I guys, much. And price. Good following very inflation Thanks have more one morning. up

the Thanks. price the stated curious, have yet the side who essence would a kicks better percent I already price, to will we doing maybe with but of increases coming on customer as on that that greater of who pricing see the more I'm price volume. you opposed going the affected you've much to what bit how had offsetting forward customer as as have may And base, the of is question and the a You the guess from and from time of you volume what by pressure cost forward? this in priced on percent base just your the majority -- say coming is growth juncture you a percentage feel contribution side going little just see a of growth from we you're at

the because year and consistent pricing approach weeks, you'll I very very, we're I become see for past, question, we're as we've pretty that, it's I percentage coming talked more it, of you'll the that demand their in customer, that and Scott. attractive that how year, lot relatively I think growth mentioned, But once of investing think level business from It's time future. or it. year. geography. of the the pleased. Thanks think outsized it's we're an as see is, approach as consistent. something base. again, it, We're that depends a we're wins seeing, very pricing the for coming some How smoothed a goes it of very upon we with on, the but our a months, we us. no, as getting, and happy industry, in the out the that that And And you're be hopefully, far will volume condition don't like as about that from for next how And seeing throughout what appropriately customer our

Great, response. that thanks. Appreciate

you you to you you're be elaborate you that? that pursued, little some I'm on to how Could follow-up, came that if and a that go something that deeper membership about Thanks. extended of curious, my of on, going and For where offers. could the benefits this just granted, X% just participating. us was be to they covered back what SAP to just was something how with you bit which expect in take But it it came

We're relationship they of years back goes have it is a and us. SAP, something with the very bestowed Great. proud number upon it Yes. of we that And now. Great.

Our relationship we because usefulness flourishing few get their which deploy years the it. of has that over the of the we out been to technology past degree and

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great. That I will it turn sounds Thanks, over.

Stifel. go Please ahead. Rosenbaum, Shlomo

in now with of apples-to-apples Hi, in are to good terms Todd, for volumes questions. an opening getting you basis like kind terms normal, your Hey taking where customers. morning. of my back Thank you of and up

today, just getting back you much and So recovery pre-COVID juice of is volume opening XXXX kind more play for of kind of, how let's -- that where more are your in basis up historical is things to versus levels? say, left

Shlomo, great question.

all Our Certainly, the of customers were. that survive are, that they're are all at they that through unfortunately, all are, But open. that through -- folks. same our consumption the there They're for once the the did I'll some and levels not at they're are most customers challenges pandemic say part, not open.

a economy work we are there's larger are lower. to degree. up think back and similar opens larger to more still people as a degree, some to But the opportunity higher, as there are Some

the their we provided, the fact talked think light. of that the the the that get that's positive. handled the flexibility also we different even increase accounts, they And didn't but that we we've we How a know their how hidden as we lack us invoices, we access in provided product in past. handled to throughout the the benefits pandemic, So that that in from see we also can there's -- think some about, during customers

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pool that, they will sets as folks think, But level once still even -- to different of So we spend that there's where level. within different level base they where get think opportunities I customer where a a result, a back were. more

So attractive we looks standpoint. quite think the from that future

you, we're it's that you Okay, The internally, then supply own to manage wanted is chain of sale, method talking And Mike. business that early your was brought what all about? it's a capability technology you just you stage equity you. business, but product to the thank clarify, it, not then in investment maybe, this that for is to the decided and

an rental It's a -- we've particularly product innovation products the it Services. where has division, for entity has been created Facility in done that

revenue, So it's producer have division. of products isn't direct a has streams over the that rental it created it while the years for -- created revenue

Thank alright. much. Okay, you very

Kaplan, Stanley. go Toni ahead. Morgan Please

inflationary escalators more one inflation do contracts into you on that follow-up in? and built and have ask to wanted do, I you. the percent if have you you Thank contracts whether built of what

appreciate the I question. Toni,

on? practical Absolutely. years do decisions help retain you life. that we speaking, we for making from those say, have us from generally certainly to it, a that of have customers not But deem it is we speaking, as price I price Certainly, what And explain we now. have we're talk -- will degraded. the more limited. raise attractive good and We is adjustment managed rates that ability they right we and our that. we not have we standpoint. a so that and retention broad go we're limits to since appropriate. once customer earlier, not limited -- really and contractual just the customer mentioned it about handled how and name the certain been do have while past fundamentally the no it, through such a I no, we've have limits, couple Generally and the year -- no, and practically, long-term customer have standpoint. customers But As adjustment are we in at I'll They It's base we for we're

about So that. we're excited

the approach, we people we in manage can large this reasonableness our think through understand the and take that subject have about good the we part, and think it's Toni, flexibility, I conversations I on pricing, that it.

about think -- to mentioned I different you of are question there And but them and wanted if it understand there's Great. couple outside and earlier of, a verticals healthcare I specific, there was a a verticals of were couple in certain makes mentioned new sense we to if just business hear that hospitality would any there's any higher seen pipeline. then Thanks. wanted earlier, color on that than lower just to the growth out? normal, have others or that call related, And

Sure.

other as is for reading periodicals, the -- up obviously, folks and journal hospitality are there. in So you're it's way bookings those

many expect back saying, bounced sector available deal. speaking, sector, which well in pandemic, the having towards and sector, have We cases. onetime hard say, They're stops a upon attractively in reusable stopped they're care, the out really in health many that's and cases, -- "hey, to as great the looking generally of movement grow has to is a and all past. nicely. of verticals. And that's quite then our going for want and through Education disposable.” in fact access, literally like Healthcare schools very continue has based And strategy doing growing we we great those consistent. environment we've some demand at to products the the been, starts obviously our And that So has don't we and starts, detailed not to been away as I'd like a folks started the them they kind been in big with And approach little the being there. getting for well. been stops was bit been But our product consistent. in government from, their and us areas education our attractively, in lastly, and but the

you. Thank

Thank you.

hand queue, the any I additional Alright, you, remarks. over closing Adler it to further for in Mr. or appears sir. are call no back Paul Thank the like to you. questions to would there Over

and all joining for thank this Sergei, Thanks, morning. us Alright. you

fiscal financial again XXXX you. quarter with look our will We We time. speaking you that July. issue in at to Thank forward fourth results

conference Thank your Thank participation. call. you. today's you This for concludes

may disconnect. You now