Cintas (CTAS) 21 Dec 232024 Q2 Earnings call transcript

Good day, everyone, and welcome to the Cintas Corporation Announces Fiscal 2024 Second Quarter Earnings Release Conference Call. Today's call is being recorded. At this time, I would like to turn the meeting over to Mr. Jared Mattingley, Vice President, Treasurer and Investor Relations. Please go ahead, sir.

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

After open discuss second from will fiscal our results. commentary, We us. we call the our will to questions quarter XXXX

Securities risks statements XXXX a statements The to company's views I that are from reflect could on actual to to and our Litigation which subject safe conference and those Commission. This future Securities Act cause the in forward-looking financial discussion Exchange as results uncertainties, from forward-looking for most materially we the litigation the statements. Reform with recent these contained performance. to events refer call differ harbor points may of Private provides filings civil contains These discuss. due and forward-looking current

now Todd. the call I'll over to turn

Thank you, Jared.

second our and with pleased excited future. are quarter about the results We are

to continue a Each revenue total billion. of $X.XX quarter level. businesses our high grew Second at execute X.X% to

Our it from momentum growth can either program different they our good, to companies remains in come strong ways. Contribution from managing number today volume is in and their a grow are that the business of themselves. remains business new outsource robust. We or and

cross-selling We attractive and remain Retention levels. to continue at great to levels have success very customers. existing are strong

all businesses value in Our continues compliance all proposition of image, sizes and of and resonate across safety, to cleanliness verticals.

our within be focus We verticals prospects government. the state health from on education continue to and care, local and pleased results with of the hospitality,

these attractive biotechnology from in provide area X the the efforts to clean facilities, North in Carolina additional regions Wisconsin. companies. growth of of expand order facilities other this X our These announced and recently in in will pharmaceutical opening capacity in We and room

prior cash flow income provided to second grew Net line. in activities Cash XX.X% XX.X% to operating our The the and $X.XX. year. benefit margin flowed XX.X% second the grew our quarter growth Gross and remains XX.X%. bottom quarter the Diluted grew for strong grew through by revenue strong. operating over volume of EPS

cash our capital. In flexibility our flow choose invest Our we how in gives to businesses. strong us the quarter, to continued second we deploy

several acquired $XXX.X businesses. amount an December. XX, XX.X% dividends, in of increase paid shareholders we million the quarterly paid from to also We December smaller previous On

second the $XXX.X During other. whom million Cintas to thank I also employees, like our quarter, stock buyback our of we and we their under for purchased call customers, each would common shareholders focus our partners, on our continued program.

of I'll I call before details provide Now quarter second Mike expectations our for provide the our results, turn updated to our financial year. over to fiscal

increasing our are financial We guidance.

$X.XX revenue of range We billion, annual a our are $XX billion And growth to are to Also, [ range $X.XX XX.X% of raising X.X total to from to of range expectations . to $X.X rate we raising to our X.X a $XX.XX. range a $XX.XX billion annual to ] to billion a rate from of $X.XX a EPS Mike? diluted expectations XX.X%. growth of of a $XX.XX

morning. good and Todd, Thanks,

The year. aid was sale. and Rental Uniform Our services X.X% compared exchange for Facility and currency for to was rate X.X% acquisitions fiscal XX.X% by and X%. $X.XX growth was Direct for Services. foreign quarter services, protection for for last fluctuations, billion revenue organic XXXX billion revenue Organic second growth fire XX.X% first business $X.X adjusted rate safety Uniform

XXX efficiencies XX% Gross continued basis growth second gross volume of for XX.X%. last billion to $X.XX strong of Strong billion margin increase fiscal increase helped the 'XX year, compared a year, points. percent of $X.XX this margin. 'XX revenue compared the was to was quarter second operational and margin an as of an fiscal for XX% Gross quarter generate last of

Safety and and Facility Services percentage Facility XX.X% XX.X% and for First was Services, XX.X% Rental Services for Uniform basis year. Gross Uniform segment Protection business Rental XX margin sale. Uniform for Direct the XX.X% Fire Gross by for increased margin Aid points Services. and last for from

We of business expand to extracting order out continue the our revenue margins. strong efficiencies in growth to and leverage

are Our improvements no year-over-year accident.

and in have maximize teams our helped us Our of Six equipment, and us engineering the Sigma to plant efficiencies labor create energy. utilization the allow to

Our smart existing provide efficiencies to allows truck to us route technology improve our density and our routes.

that energy comprised points efficiencies just some is While and gas the Please benefit from of result in basis gasoline, of of tailwind natural mentioned. XX energy keep last a the electricity year. were of expenses mind

route added an As since only revenue rental to last X.X%, our structure we but X% example, our year. at grew organically

points the segment Safety First margin year. for Aid from Services and basis Gross last increased XXX

revenue strong this proposition segment. is employees Health top resonate continues value growth in our of of safety value mind. to and and Our remains --

Our recurring eyewash mix to healthy, be including revenue and Rentals, break. products growing revenue AED water continues of high-margin stations like

distribution technology Truck Smart and first dedicated costs. product to to our We use improve center continue us our allows like to aid optimize And lower efficiencies. routes

these of our contribute to margins. All improved

in $XX.X administrative and grew us revenue year. which Selling growth million to XX.X% over business. allows or the invest leverage, last creates Strong expenses

$XXX.X to our XX program income future to $XXX.X our year's the 'XX income efforts. selling increase a second and in develop acquisition invest last adding compared in training leaders last continue Operating of people, was an expanding points. our million to revenue of XX.X% Operating management quarter in year. We in XX% resources, second basis compared of million quarter, fiscal talent thing as of to percent

accounting compensation. primarily to rate tax rates compared stock-based by the for Our second both impacted $XXX.X XX.X% increase second XX.X% million compared last $X.XX in year. year's the quarter last tax discrete quarters were tax The EPS diluted to to million quarter quarter was impact for effective Net certain of compared items, year. $XXX.X of This second year. An $X.XX was income last XX.X%. for the

as financial predominantly a annual 'XX, million interest less provided the result to compared is million note of in guidance rate. 'XX guidance, related Tom expected following: be fiscal to $XXX.X the variable please expense our fiscal $XXX to

This of about about XX.X% rate diluted EPS growth a Our fiscal 'XX. compares EPS in basis be 'XX The points. to XXX 'XX expected and fiscal impacts negatively rate effective effective by $X.XX tax to tax rate higher guidance XX.X%. is fiscal by

does guidance financial of And workday I'm compared of the impact to turn workday -- fiscal in quarter. I'll one having Jared. compared not to comes fiscal future to impact more Our fiscal 'XX buybacks. guidance 'XX. our extra sorry, 'XX includes the in any it back third share fiscal This fiscal include

prepared Thanks, Mike. remarks. That concludes our

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

our question And comes Ashish first Instructions]. Sabadra RBC. from [Operator from

color? can wondering verticals growth those the revenues X company as how you compared Just of particular. if strength the combined from quantify and big how there profile highlighted, you on does average? areas in verticals are the the I that was to Any the

is But success. you that morning, far verticals Good performing I question. Yes, don't tell exact for Todd. we are number -- this the well. can I as don't have number. really a Ashish, that Thanks you as for quite specific our good having We're

selling, around around focus got paying wins really I've not Our is you us. share the just off organizing those verticals. a just regarding with for but of I can couple

benefiting wanted to and home consistent having with they identify what being hospital their also us that new leadership their to a program nonacute a scrub a the in they scrub were understanding interested health the people, care, as network space, image experience had program big nursing and In put They we're with able image is well. rental identify The that to be have but able identification. who that. in really consistent their from got good buying was new Virginia. in in South Same We supposed to customer area, own We've to success and in thing. this a similar acute did people. Carolina a in were be told

control -- our manage led acute program that side, around cleanliness and And which offered program were out having pull in hospital struggling great patients the instead inventory, products, concerns. on to allowed they of focus on a a trying to technology with to with had new to control microfiber. the their product the We which more them quality, some a because again, to rolled microfiber we Florida inventory

great I'm sorry -- AEDs the first employees their you program being just for recently a us, and In aid a system wouldn't the that in a have to California, it I think -- is it we public a prospect needed library but -- for to the examples as because sector, the is. and group. of was They realize of government rental I've prepared public couple rolled their which is out be a library public in with in we helpful case bring got AED system thought might would and other locations. value our being

put chemistry a rental bit be in all a little in variety wins. a ] students Works University share those big Nice Virginia. would We put then at of university maintenance ] with a with Arizona which their people then The Labco there uniforms, Works, was facility Chef folks. And department people university and Put program, [ had there. a I'll just of a educators all it California. at in lastly, [ They their at in on Size all department wins education, a in a Carhartt were They item Carhartt big win they us. program and the in last love for is Carhartt. the from their programs a And dining branded where Chef culinary you

because I thought know I belabor folks just to the are I to a Ashish, of want don't wins verticals on yourself, plenty I but but would So interest few call. it, other of also share

as we growing many other are win. I Yes. thing The only might to than about, the ways talked have those just average. so And verticals clearly, faster Todd add,

seeing So are in we of momentum still those. really each good

does Truck follow-up. that and just and more and those. [ those best if front? ] was I It update there's on Any verticals. ask lot Google horizon on color Smart program can particularly for -- a the if if you thanks SAP. could And great any share ownership, quick on a technology, sharing the That's your wondering updates clarity I provide

Certainly.

when I We things make money we are total. when we we the make added our think over in of around route for to wheels grew it, wheels so And X%, we're and X% how -- Mike total structure our described don't revenues -- we only money in the -- here, have one but company, way stop. the moving. the

our is customers, means partners for the time So customer, for less better and which for that our better better spending time Cintas. more we're driving, with

that. with pleased we're So

Our us. regarding our we the number technology business. successful a the Google very out That go inefficiencies for migration we this Google quarter farm a There's our efficiencies, focused of server of from press We Cloud. a to has -- out room moving release still there. on benefits have bringing We're note, to extracting those in a and from to get sent plenty the that been Cloud.

one first more us. so secure, very The is it's to important

will that gives AI for -- more will we the us third to believe access cost And we is effective time, be it over is item Second us. Google's platform.

be in So able certainly that We the that, be we us innings. term more with it right the Cintas, types in them our making to positioning migrated. direction business tools. very, to -- type attractive, help it and early do just making longer that people very successful making easier of of in to those point But we think that sure are to leverage will

comes Manav next Capital. question from from And Barclays Patnaik our

that's out versus just first-time front, to new any competitive before, Maybe this outsourcing? business just seeing on called you wins that market changes first-time you're whether just and about. percentage you've follow trends, Todd, the any outsources all on or question -- guess but the is environment I share up the more talked from more contracts the is

Good Great question. Manav. morning,

said, in win many ways. we As Mike

there's been tell the service to -- continue a there of And inception have businesses, XX businesses million little you that. X just we my U.S. and can you, I -- and million no I'll remind in we the since We programmers Canada. but are selling over career.

telling We the they in-house, of a processing giving, go it they their certainly pie. it But the were we in-house from we they growing it's or were the is doing competitors examples So there. And there's like product. plenty employees both. in was either buy -- mix. I microfibers like were And then to some opportunity meaning part, win large

of programmers. -- are we different -- products up just were them identification, Meaning them, their are there's consistent they to it providing just our for much these nevertheless, look all work no buying people some and some better and them compliance of so telling to and telling to program customers. they them, variations So we're But good. show and drivers cleanliness, bring big to wear

down? indication just that And that front, market any should Or the on while capital allocation just of of think the quarters one mean is there? Got it. for bigger I now. buyback how I then about M&A mean, the slowing number, a balance the we

what some acquisitions an working a to Still, can. us seeing in heard pipeline Manav, perspective, M&A. quarter. this made it buyback we saw best we're we're this that's speak We've you execution. in we From as the -- you've And change no what year. being opportunistic nice

think back and were a negatively, reacted they a our thought saw and it. we The opportunity, nice we that we results, took and As stock about first pretty quarter as of we little advantage good. bit

part -- don't good our a maybe, let's choose the always it for that last during quarter Dividends a talked is from program. call and able example of we've beauty, And we've to on an Manav, buyback opportunistic capital about, invested our that's that is we business, speak the the was buyback the from up which up, it, right, we to last execute allocation, important quarter the year, is of the to are as M&A up XX% have we've as program. So investment, or year. in CapEx us. about in year, of been as execution

all, And think, so hear cash of you again, sheet nicely levers flow And us this our talk done allocation, don't we the them of choose. I have balance our the and the really of beauty to X is sort about capital we've year. when

our on and we fiduciaries all to powder Mike, and in the is Mike sizes, all shareholders' of dry we're I shapes we're the of allows really mentioned interested of levers. that think good have that. add still which great net-net we would just take being us M&A that And investments.

And our Chan comes from from next UBS. question Joshua

going parts Clean Clean So Todd, mean the the kind of this business? How can was of attractive you the in it of us if you frame for it mentioned I just you what Cintas Rooms. opening as Rooms? opportunity And does wondering is what of for see attractive? kind forward the

there's an cleaning the that like Room Yes, and seems companies. business more Thanks and more that there's for Josh. that is, -- the pharmaceutical of sector biotechnology need Clean us. And of question, mentioned for it's level attractive level I year cleanliness. every it

So think bodes business that -- future. well in we for is the that that

to the momentum been we're want that well. to seen future And And onshoring we area. in make there -- current as have and that capacity that prepared has you've serve on appropriate sure the customers some our we for

and like the the business. in we trends business, we So like that

with targeted if I you future, Great. And then to margin the you lessen. favorability Could the were guess, to tailwind? margins as if much can to margin the up follow and opportunities question. talk in I going forward the drive energy incremental without the energy that still have expansion

Yes. question. Yes. Great

So be then one be go prices focused is route that's to extracting And go energy down. structure. in inefficiencies our on But up facilities. to that consistent and going recognize we out our thing production we're going they

us still our layering a technology. of impactful what's mentioned, us. team then also allows to as into in Sigma many a us in opportunity technology So Smart impactful there's our been professionals talked company. technology engineering there that And that ample we've before go. with But our visibility in level professionals, really is, never will be the Truck Mike to This We operations centralized the of the Six allows about have important we history us. That's certainly that to to had at and think ways.

to our us equipment, maximize allows our ultimately So it spend. -- energy and our labor,

markets inefficiencies. on focused love recognize extracting but we're those moving extracting out will energy out manage going we costs -- we to So it down, -- be but and goes on those focused we're go move, that forward. so when inefficiencies can We those

next of America. Heather Bank our Balsky from comes from question And

about Sorry that.

nonprogrammers, still the and COVID pre-COVID Are to from and you out do the starting programmers further demand question the First outsource? regards you looking shift as in nonprogrammers think back to to normalize further to seeing more we're trend? it's in period. of Or with terms

various in. We're no -- Well, Heather, from customer. start, a to I'll to going reasons a chime a it's prospect a customer a programmer great Mike, would why turn free there's feel question. into and

it very hey, struggling good to we're we we're struggling we're outsource is, find -- and we're like don't have because not to manage it at to them of not to staff this. or One we're we'd -- people --

But the continues. like we the don't of image don't It identification. We still that We be there other that -- lack lack we're trying. So are reasons. the lack might like compliance. don't of

You can we know cleaned. them, and that hygienically provide they're

So there's many different motives.

it whatever instead help. One And we their allows and customers, be, manage of to might is, it need that, see most it customers taking we focus guests, to patients, various programs. our staff to of of through these on frankly, can't important them, we their what's their and care still having hey,

Heather, more we no programmers new than XX% from the get business is note still comes our -- of programmers.

to we reference of hand in equipment back in the have Your ongoing did the pandemic, to would and levels. days sanitizer, those early certainly see like we protective increase call -- be pandemic the normal what an might normalized things personal and

we be change normal. had So the that that back to and might only

we're kind think And then talked When opportunities margin about efficiencies on about source just coming are those kind much of the organic when of earlier for about And or think the and further G&K you you're you much curious out from? front, you -- synergy effort, of SAP? Sigma benefiting savings, how are opportunities how from that is still there your productivity. Six just

our don't to to Heather, all efficiencies. appropriately it's discern a be engineering Six really team, good Sigma orchestrated They and technologies. the team have difference the our get question. between We our work,

So and that's exactly what we're doing.

what and great the results. to be that's everybody produces has So involved,

correct. we're I X.X we math we've -- since years about think, if G&K, we're, for is As my now acquired --

on left anything the bone there's that say wouldn't I So there.

from Andy R.W. next from And Baird. question Wittmann your comes

Mike. outlook bit just to wanted the here, on a little I guess I ask

the [ here. X% X% organic the is at midpoint ] an The second against impact in total half range revenue guidance quarter

So But of I about just of that's elaborate little you a that guys considering? your in implicit was guess a kind approach be something well. bit your talk we degree you're you give chance a guidance I as if just normal in what there's macro, being I to should the deceleration. or that. maybe thought on previous more seeing prudent if

with, I'd about when the prudent still where little it's good. a our bit about already is talked And we growth is momentum we've normal think approach. lead good, are, Andy, you

range. The over range business X% X of imply little we like We little that as the you going. certainly for as what midpoint, the X% the may of may look, the us, at is uncertainty certainly The economy is bit is But cadence back -- movements half a so there's a good bit look And the where a know. for the into little what does point. calendar Fed the as to high at we year, bring. over bring, new like 'XX,

look think And is so prudent out. to we it we as be wise

my today. only merry That's question a Great. guys. for Have Christmas,

And Goldman George our from from Sachs. Tong next question comes

were Earlier, [ more any might be on was sales you changes mentioned you seeing And color business that you momentum customer trends in good. white overall that cycle? provide customer sentiment? the and robust quarter. ] Volumes Can in the

Good forward-looking, what's customer seeing reacting going trying base a But change calendar change not We how not seen of marketplace. they're morning, on year. how any sales our in will -- to haven't there's the in our and Mike we're the said, prognosticate customers we react we're turning exactly to and in George. cycles to always as the

And been react out more business what of the preferred to it's businesses holidays. coming has consistent. and Mike of of So year, the how calendar the see it's turn we'll kind

helpful. And you're That's quarter. in mentioned seeing amount areas cross-selling elaborate the of you that from? cross-sell you're or more you trends cross-selling bundling upsell, Can good also on in seeing was most Got it. which

growth. They of our an we're be is -- component like And is position our like a it really us. the our relationships. our business. fortunately, important nature they areas all good George, success of having to cross-sell our where of it's of blessed customers, We're in across

basis, We have on mostly really frequent businesses on a basis. people in a their weekly

minds it and means have their a them quickly customer doesn't we but can have with, -- business, matter and to ears interested will can they're in what in, eyes, so we and So pivot lead help. us in ways. and might And many they then help -- whatever we we we that

of There's the rental Fire just there are because for customers share the numbers the Aid thoughts. working just share But but that all plenty sure leads, -- into business that size to First make customer taken quite cross-sell We care well nature of and well opportunity we because the is of division so the across And our of that is of. of we it's there. So such organization. many nevertheless, there. our

next from our Mulrooney William Blair. from And Tim question comes

was of to to that wanted little a Yes. think now means I just Do retention? I helpful. quarter the comprised hoping was I would back volume. growth? you I it a X stronger most points because ask maybe X Pricing organic Did And have was you normalized dig than could account mean range. little or question. of that just new you details approximately more that X% into of be in bit uptick your expecting. cross-sell an any with see were a us growth strong

So business our is new robust.

retention historical, It pricing but to is it's it's levels cross-sell than year. are historical. last good. much higher mentioned, very And closer I the lower than certainly is good and is still, very our getting As

that, so think performing but well, -- are and to inputs So expect you various it we is -- growth our when when continue. all about that

we where ways quarter quarter. first and momentum still first some over from the to in the the improvement the we we in talked, But business XX% of XX.X% First XX% quarter. organically in from in rental to saw we XX.X% nice the in the saw little And in a Aid good. some a went lot nice second acceleration really Fire, also quarter second Safety win quarter the we in as is in in And really

those some X second and see really had So we performance quarter. in momentum the businesses some nice just in particularly our good all really of

both across notice businesses. those reacceleration that That's Yes. I helpful. did

question comes JP Securities. Andrew next from from Steinerman Morgan our And

was mention down if business Uniform stops just up, recently? the Rental your you directionally flat ad or and Could

been metrics our Andrew, have consistent. ad stop -- are pretty

much in change of a seen base. haven't We our customer

would And XX We consistent pretty months. describe so it the see been ad as last but metrics. stop it's it. And that's that's our I say trends for positive has still to -- how -- in X I'd

much. very you Thank

Bibb comes Our Securities. next Truist from from Jasper question

the mentioned from I energy, inputs, hoping color get year-on-year You materials. tailwind labor to but cost just guess, I other on specifically and additional was some

I'll Yes. start, Jasper.

-- seeing as that like you're it. come the with Cotton we're total, inflation as labor seeing that's down. the and has fast in come but And we're still down easier, seeing seeing we're seeing Our -- -- we just not we easy, it it's is It's down market are never us. is coming but freight important easier. stabilized, like, it's to and

think right would market the lessen to pressure labor think eases way on be about probably that So and it the growth that will as I as wage well.

level unlocked operating sustainable in I then half. really were strong about margins forward? the anything low you follow there's changed Operating is think year-to-date? we wanted these leg on say that's up first there to of Should going another XX% there Aid. would First expansion And margin that's like And

few we more safety with, we Jasper, them to resonating our performance really is that I Sure. a in sell the margin some first value well. is perspective, nothing the of of spoke that still of seen from and have And health important business. than nice where a all, employees

all recurring good great eyewash break. great products the the business. Many good service them, also a install. streams nice program the for been recurring are And our we water talked of it bit revenue comments are to And really businesses these of been been a existing and after stations add-on of in to about for opening AED that. really And has the customers. growth these margins. sort The We But on times, our rentals, we nice really in has us. stickiness again, us. and growth goes leads then have have margins and X that that our so And little

things us again, we more. out better a point business. to those that, us drives years that other center centralize down to opened The And and material sourcing. some our that lead It is a the aid First thing first source allows ago. cost. allows couple distribution I'll And Safety Aid kind safety a of of cost our And in of and product to

didn't is combination benefit of the really I that The mention was also in Smart sales good really Truck the So having technology a good there. mix, growth business, sourcing. one good

things of contributing. are those All

this so to really And going. sort case of partners aid not This bit lot our safety and a X and this work of is is by a items. of execution months hard of of little unusual first a margin get

And our next from Deutsche question comes Faiza from Alwy Bank Securities.

wanted I and Aid to the follow up business on First business. both So the Fire

the little first the But driving on curious touched You what's on bit. aid acceleration. a

to sustain ahead. know you do If level expand on growth SAP first outlook, looking on this your about you expect I you about that implementation fiscal And then was this could that, both of year. talked in in And and an fire. Fire, as we happening think

margins How that that maybe line? top business? going happened? about the So helping should Has is that we forward think in

business Thanks in have have we're business. only you legally to the like where the We really question. the it. It's fire for

it, very negative. So we a but is are I'll program double programmer, No well there to Everyone call market. is cross able market. into sell that

referenced and it's We growth our a meaning from truck the -- attractive, Mark business certainly positioning think that isn't we successful, that sure technology our linear. all are in running getting growth, we we're us. using be that and use partners various there's to we're technologies and to is Mike businesses, leverage helps make But more our of

business. So there will be the ebbs and flows, for but long-term we like outlook fire the

implemented mentioned, going we haven't -- even are we said, an as SAP We being through you certainly That this implementation. at point.

about benefits that any seen help haven't over just our can years. business we the yet, coming how we're optimistic So but

aid fire too. Maybe the of to X first a I'll add little things and bit

in as businesses place. is into businesses that talked we've expectation, Again, opportunity market double-digit large. is opportunity will the really about, near is market of our that those large. those a And the As type really continue the future

on not comment SAP. last We've started One the it.

which is into bit that, likely turn going of start And fire overnight. of time. you you SAP little to year, segment about pressure be fiscal an conversion, can the little we we next It when get takes see more go into in so as you a a because when bit as benefits get -- don't imagine, may you to

we'll and costs certainly benefits in then future nice business. additional setting the into for some So up 'XX have really that

could I if up then And Great. follow on macro environment. the just

You some is prudent made to there a uncertainty. some previous being you're around just response in comments question and

you're well other doing in Just business. of give given how about businesses, you you the we macro can if -- think terms you how in impact framework these you're sort a seeing of your macro the on -- of I'm on of sort if should can momentum if curious us environment have and

start Well, grow multiples our -- GDP employment And of in with we you has and growth. hit certainly it. history Pfizer I'll been

no people, for sell programs say, adding let's to able are We managing into we pressure can not, even them. programmers by them take off when of they're

our of So our to potentially got got reduce really new see if people economy, good. in if start adjust we've business effort we see we've is their customers the adjust. we always number turns certainly, to But to

the as guidance us it future. look we about is so of our into business. of and for that to the prudent think into sort And

from Seth comes question next Fargo. from Weber Wells our And

Clean Room new be openings? we Happy there what Is way should understanding wanted to facilities? forward. are any better to thinking going back how And just Cintas way and opportunity to the I'm to the for for those a minute. there's to facility might I any combined get just traditional a frame holidays. relative that facility? of go be about this facilities to CapEx If Or a trying higher investment discussion

thank you question. Yes. the Seth, for

uniform of that's you know, the a As market. segment

earlier, requirements. does higher or mentioned over seem quality cleaning so more it last As decade the I companies have

So there. tailwind there's we think a

required usually And CapEx it like we the a of as cover think to far may facility you facility. of customer about we a the is it's I you reason many larger area uniform it them, the would base. The to only As have -- difference, geographic serves they is and have only traditional with being than so think, for a can a that want facility. to very that, think similar as

a do out facilities. -- they So those geographic result each of a of do for as we -- cover area larger of that, cover

way That's the many saw the of might much think -- next the mean, facilities -- release going bigger be Xs? over but is of order Wisconsin And could opening magnitude, how us to couple this facility, you press is years, much, be I Okay. any about and of helpful. for there I these for this relative Xs forward? Or

Yes. or out see every -- of coming I to year Xs going based size not quarter Xs the Seth, on market. the you're every and wouldn't

to pace. But it based be the and demand. prepared it, anywhere So If there's will that be that -- are certainly upon the we'll from it be more in interested near meet customers paced marketplace. demand those won't then that more

Got it.

It just the then detail side? And helpful. ]. on That's manufacturing again business [ there was from direct whether to nice positive any the across be see sales kind side And a Okay. more the maybe is quarter. Is the any the the just customer just follow-up it sales in that's coming on there? of quick Or in more color direct the service board? base, your of

collective the The Good certainly we've in sale direct the as business, design portion it, question, lumpier. Seth. it's past, spoken of

is where it's as as spike growth coming rollouts for where it -- so national a but it, what big as spikes you from, and far when love -- the they then new programs, we wouldn't growth and and think good, engine we allotment -- hospitality, spikes accounts get really as I get that us. the tend then isn't to would comes after about lodging, then so and And have more or the

the Yes, would in low typically say mid-single-digit growth. to we

expectation. is right that with this So sort quarter line in of

Stephanie next question Jefferies. from from comes And Moore our

bit wanted a to opportunity cross-sell touch I the on maybe over time. you. Thank

continue to I out think on you you've very see have. you called your and just investments execute provided, that the front technology enhanced well on visibility the you that

of for about, given continue So this of existing and kind penetrate further maybe you mean some can meeting investments, those each what add opportunity these customer. to to additional talk cross-selling, might products the

time. of offer the that you how balancing kind incremental So can you over are products

upsell, morning, that don't all the cross-sell. or call There's use First be division. There's it, we Well, also products you. think about of a Stephanie. our division is we our division can Good Rental even the customers really -- division have Aid have which you to would products, it within cross-sell what

us, significant all runway we see and frankly, are areas. all growth for So massive, components in those those of

partners on and It's that. So in get on new employee component of invest our a and And in part and products new test corporate the we And spot we will right also help we're and is ideas our launch those always and action services they're from right culture to been to we're continually, our growth them those position to then working that to we're sure And trying always working make have that. the be. we're the as always of them, we customer. customers. always then then

And our Oppenheimer. from comes Scott question Schneeberger next from

to year resources, Happy low Good SG&A as investment double morning, efforts. cited did And I'm running management you training My holidays. first also something everyone. program delve talent some well. in digits growth one, selling going you last into and the acquisition tech

said Just and it selling? curious but on anything you've pushing also labor guys have aspect is elaborate wondering a kind call, already extra you waiver tough. the in about doing better, are still little guys there. you the Maybe you if what just aspect. but getting on -- this And of the curious there's you what if Could [ tech the covered and that's call, meant, then ]

that important items they're We're you the really mentioned, Good -- morning, to us. Scott. all

for the a we pipeline are resources think programs is best know how mentioned would sticky size customers, bright want critical We X very future. it of what there's are leaders And have, trainee management XX to way. then -- of businesses. and -- million this we not invest I team customers The I the [ we the million need looks -- about they many are to the that We We talent. those we selling think the But future. our ] the we it see is bright And be I call leaders. future to talent and think we going the attracting we're the really with think is out. one our future about need the acquisition would market is.

And the kind all easier business make us. we direction, them to it easier you to customer to technology So do will all technology easier in with great. in for to -- it of wrap them we technology make Point then to spend business make their also successful. leverage with And to want our right that's in to buy, want toolbox because to the right partners but in totality. the the give time with do it right spots, tools their more

across I saying some Great. but then the not quarter, in Appreciate the that. there good all that last it up hit is clearly about but too talk segments, the amount activity a And there you was a of quarter. was been we what businesses, it have what -- in strategies was Could and much acquisition but remember didn't across lot you're acquiring there? quarter. it you first and

and made can that this a lot number marketplace, utilization in we that a a route strategy, opportunities, as we density. do Not we immediate capacity tuck-in those Sure. Scott, imagine, is improvement, the rental year. of you and we've when change in add of And love

business. things those really the And in help us so rental

first the tuck-in we've the we can. those is So acquisitions, best are strengthen which dynamic that them, acquire certainly local we've opportunities we'll aid these. those. look some as We really These our to for similar X just business and made fire all Again, have opportunities we of and some in continue made in acquisitions. in of markets made nice

capacity One us might more density, we to Mike's add the us with allowed is, I thing helps with to spend get It point, helps time us with utilization, synergies. customers.

normally, an able we rental, of the customer valuable. what aid business in businesses, broader or than make upon depending had they that offering So first we're that's But past. an But the acquisition to all in that's provide in fire, the to each when we base acquire.

acquisition, broader waiver the we consistent, in do depending there, companies out we can cross-sell. the certainly rental then the separate So first And offering fire as from most well. very upon than aid, that's

So adds value. it's -- it nice just

And our from next Rosenbaum comes from question Stifel. Shlomo

sorry. muted, was a basically line is This my Mike. question Sorry, for

X of what factors end Are are Receivables days quarter. going last through are bit little saw technical Because that up I of there the Or days XX was there of was business in changing the we days were a in lot quarter. came COVID. wondering sequentially. the seeing any the patterns in time paying? during clients Just if the that? any other at you items was some in a

ability bit terms seems our it them mail, many the the of It end the holiday, too in our does a and do. -- we to when Shlomo, -- like a little disruption quarters collect create of on application. of

see a contribute thanks We standpoint deterioration little the bit just not we've have AR, of say, to in slowing a of maybe seen seen of we that. the additional I'll any, touch usually write-offs. from the but But holiday slowing can did and

on, at to XX% Okay. even quarter. is going the less just in that some should And Then one of other on nicely. margin continue in what's just the the that very Can ground day nicely us tell unit the OPM, or sequentially us -- level? expect kind mechanics something of the sequentially, the though It's margin, there's was give that the very over there. operating increasing we the up you

our certainly, some of -- powerful important. all revenue we the that's revenue really in we growth, is Well, see when nice growth And businesses.

Direct margins, for The that went other in negative And to I terms Uniform thing is that say would revenue a Sale important X.X% growth business is from the of too. X.X%. operating

some So in other direct we would the in Nothing revenue. improvement see did is acceleration the some there sale. noteworthy say again, than, nice I that nice

comes Citigroup. Leo next question from Carrington our And from

around your you out points follow-up the one-off current Were a underlying to Do in these you in out around on you see to the in the growth. when of increases is? investment additional in -- called the or spend of this through QX them margins calling one-off technology. costs any acquisition, ask more then factor And in organic QX quarter? on that or sustainable could drop training, where terms as the highlight nature you and I If that

and they term, invest the Leo, long business. understand Well, looking to sure at important important, want call we're are show to called also term, out we out make to In the opportunities. them our utilization opportunities, start investors improvements, they cross-sell we in them going that up, with are business. more we let's but up it's I'll that, more those set we set to and opportunities, the to -- penetration focused wanted say, on in productivity the really long we that continue because continue And these to we're investments cases, look, and think capacity

future advantage the is and times, of really investing couple business. that. for And make we were the about The that a is of take said us, that to bright bright. future Todd the want bright call-outs sure by As we more future in

to we XX% for to XX% incremental revenue even had by is to, we and recognize margin of our communicate that future range things going think, the we're It's we're in to that. we that we higher quarter, I think we're us Look, -- SAP range. margins the of expectation that. up those XX%. going about in be and And can other XX% we're we're they XX%, we to need continue the be those and at the in that We In forward. the And opportunities. say that's to way, level when do to like talk investments, technology business. investing when and But setting get give able sitting important when

Morgan from from And Kaplan our next Stanley. Toni question comes

offer You just with the Works. Chef relationships there or are these long the branded and and areas well? for? remind exclusive Could particularly could had equipment benefit as any Carhartt relationships could are mentioned And you if success from the earlier, with us other products that that products you've that branded how you are then

the Good morning, for Toni. Thank question. you

and relationship programs. Carhartt for companies for are rental on those those the So long-standing exclusive the we licensees And a with we've Works. had folks, Chef

the And end but that work our and want -- design so very we well wear products goes users processing want, that systems. them to to with also through

to us. important very all that's So

products. into that are Works Carhartt them, and don't tell that companies, as X to We our with as with get are of great where wearing customers from. come end working constantly get great arrangements looking examples As -- we about But -- that contractual we love And them. in excited brands, products great I And are Chef relationships as those are relationships, can are opportunities And spend and you time that this. long-standing really lot great are that. our for but great and far users we're of important -- talk us. see a about our there X other to opportunities to partners that with far those

Maybe Yes. expansion? great. would us just could you thoughts That international be Terrific. give if your latest on potential

those in types the really of in that be at businesses. to have servicing running we're do Canada. say order similar the those are really, that say, to great We But and successful opportunities. U.S. it future. to about I'd people stay looking in businesses We're million million there's, products. and with contact look There's certainly again, X at businesses. always We X in news know is the we don't

million we the the Canada. get and there X exciting time by what's U.S. is Here's be to million businesses XX in will than more really customers,

kind So of the running running exciting the really a be you're race, to to race extended. a but X-mile get going that's is you're business a if once it's if because we bummer mark,

more products to going have and So over services coming years. we're that's separate the -- from

for required So is to then certainly -- watch all said in not for not that itself, continue opportunity look in presents successful evaluate future. seize to We we that being it. the opportunity. it. but us the we right And will be We it's if order it,

turn call out are the at back to further call. Mattingley I'd the this there questions. to And over time, like to Jared no close

this Thank you joining us for morning.

fiscal at of We speaking March. 'XX with quarter in again you to third look forward time. our financial that results issue will We

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

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