Upcoming AWS Coverage on SYNNEX Post-Earnings Results

LONDON, UK / ACCESSWIRE / April 4, 2017 / Active Wall St. announces its post-earnings coverage on Cintas Corp. (NASDAQ: CTAS). The Company announced its third quarter fiscal 2017 financial results on March 22, 2017. The uniform rental Company surpassed top- and bottom-line expectations. Register with us now for your free membership at:

http://www.activewallst.com/register/

One of Cintas's competitors within the Business Services space, SYNNEX Corp. (NYSE: SNX), announced on March 13, 2017, that it will release its financial results for the fiscal Q1 ended February 28, 2017 after the market close on Monday, March 27, 2017. An earnings call will be held to discuss the financial results for the quarter at 5:00 p.m. ET hosted by SYNNEX's executive. AWS will be initiating a research report on SYNNEX in the coming days.

Today, AWS is promoting its earnings coverage on CTAS; touching on SNX. Get our free coverage by signing up to:

http://www.activewallst.com/register/

Earnings Reviewed

For the three months ended February 28, 2017, Cintas reported revenue of $1.281 billion, an increase of 5.3% on a y-o-y basis. The organic growth rate, which adjusts for the impacts of acquisitions, foreign currency exchange rate fluctuations and differences in the number of workdays, was 6.5%. The Company's revenue numbers surpassed market estimates of $1.279 billion.

For Q3 FY17, Cintas' gross margin improved to 44.2% compared to 43.1% in Q3 FY16. The Company recorded its 14th consecutive quarter of year-over-year gross margin improvement. The First Aid and Safety Services segment's third quarter gross margin improved to 44.8%, an increase of 260 basis points compared to Q3 FY16 primarily due to the realization of synergies from the acquisition of ZEE Medical in fiscal 2016.

Cintas' operating income for Q3 FY17 was $195 million, up 0.9% on a y-o-y basis. The Company's operating income margin was 15.2% in the reported quarter compared to 15.9% in the year earlier comparable quarter. The Company's reported quarter operating income included $9 million, or 0.7% of revenue, of transaction expenses related to the acquisition of G&K.

For Q3 FY17, Cintas' net income and earnings per diluted share (EPS) from continuing operations were $119 million and $1.08, respectively, compared to $117.3 million, or $1.05 per share, in the year-earlier same quarter. The reported quarter's EPS includes a positive impact from a change in the accounting for equity compensation as required under ASU 2016-09, which was adopted in Q1 FY17 as well as a negative impact from transaction expenses such as legal and professional expenses associated with the regulatory review related to the acquisition of G&K. The Company's adjusted earnings for the reported quarter were $1.11 per share, which surpassed analysts' consensus by $0.05 per share.

Segment Results

Cintas' Uniform Rental and Facility Services revenue was $993 million in Q3 FY17, up 6.1% compared on a y-o-y basis. Excluding the impact of foreign currency exchange rate changes, acquisitions, and workday differences, the segment's organic growth rate was 7.3%. Gross margin for the Uniform Rental and Facility Services segment improved to 45.0%, an increase of 100 basis points compared to the year ago corresponding period.

During Q3 FY17, Cintas' First Aid and Safety Services operating segment's revenue was $124 million, 4.4% higher compared to year ago comparable period. On an organic basis, the growth rate for this segment was 5.5%.

Cintas' fire protection services and direct sale businesses are reported in the All Other category. All Other revenue was $163 million, an increase of 1.9% on a y-o-y basis. The organic growth rate was 2.4%. All Other gross margin was 39.1% for the reported quarter compared to 38.9% for the prior year's same period.

Balance Sheet

Cintas' cash balances as of February 28, 2017, were $147 million and the Company had no marketable securities as of quarter end. Cash flow from operating activities in the reported quarter was $182 million and free cash flow was about $119 million. Cintas 'capital expenditures for Q3 FY17 were approximately $63 million. As of February 28, the Company's total debt was about $1.1 billion, consisting of $399 million in short-term debt and $745 million of long-term debt.

Completion of Acquisition

On March 21, 2017, Cintas announced the completion of the previously announced acquisition of G&K Services, Inc. for approximately $2.2 billion, including acquired net debt. G&K Services' shareholders previously voted to approve the transaction at G&K Services' annual meeting of shareholders held on November 15, 2016. The combined Company is expected to have annual revenues in excess of $6 billion and will serve over one million business customers. Cintas anticipates realizing annual synergies in the range of $130 million to $140 million. These synergies are expected to be realized in their entirety in the fourth full year after closing.

Stock Performance

At the close of trading session on Monday, April 03, 2017, Cintas' share price finished yesterday's trading session at $124.75, slipping 1.41%. A total volume of 689.14 thousand shares exchanged hands, which was higher than the 3 months average volume of 564.85 thousand shares. The stock has rallied 12.22% and 42.12% in the last six months and past twelve months, respectively. Furthermore, since the start of the year, shares of the Company have gained 7.95%. The stock is trading at a PE ratio of 26.90 and has a dividend yield of 0.84%.

Active Wall Street:

Active Wall Street (AWS) produces regular sponsored and non-sponsored reports, articles, stock market blogs, and popular investment newsletters covering equities listed on NYSE and NASDAQ and micro-cap stocks. AWS has two distinct and independent departments. One department produces non-sponsored analyst certified content generally in the form of press releases, articles and reports covering equities listed on NYSE and NASDAQ and the other produces sponsored content (in most cases not reviewed by a registered analyst), which typically consists of compensated investment newsletters, articles and reports covering listed stocks and micro-caps. Such sponsored content is outside the scope of procedures detailed below.

AWS has not been compensated; directly or indirectly; for producing or publishing this document.

PRESS RELEASE PROCEDURES:

The non-sponsored content contained herein has been prepared by a writer (the "Author") and is fact checked and reviewed by a third party research service company (the "Reviewer") represented by a credentialed financial analyst, for further information on analyst credentials, please email info@activewallst.com. Rohit Tuli, a CFA® charterholder (the "Sponsor"), provides necessary guidance in preparing the document templates. The Reviewer has reviewed and revised the content, as necessary, based on publicly available information which is believed to be reliable. Content is researched, written and reviewed on a reasonable-effort basis. The Reviewer has not performed any independent investigations or forensic audits to validate the information herein. The Reviewer has only independently reviewed the information provided by the Author according to the procedures outlined by AWS. AWS is not entitled to veto or interfere in the application of such procedures by the third-party research service company to the articles, documents or reports, as the case may be. Unless otherwise noted, any content outside of this document has no association with the Author or the Reviewer in any way.

NO WARRANTY

AWS, the Author, and the Reviewer are not responsible for any error which may be occasioned at the time of printing of this document or any error, mistake or shortcoming. No liability is accepted whatsoever for any direct, indirect or consequential loss arising from the use of this document. AWS, the Author, and the Reviewer expressly disclaim any fiduciary responsibility or liability for any consequences, financial or otherwise arising from any reliance placed on the information in this document. Additionally, AWS, the Author, and the Reviewer do not (1) guarantee the accuracy, timeliness, completeness or correct sequencing of the information, or (2) warrant any results from use of the information. The included information is subject to change without notice.

NOT AN OFFERING

This document is not intended as an offering, recommendation, or a solicitation of an offer to buy or sell the securities mentioned or discussed, and is to be used for informational purposes only. Please read all associated disclosures and disclaimers in full before investing. Neither AWS nor any party affiliated with us is a registered investment adviser or broker-dealer with any agency or in any jurisdiction whatsoever. To download our report(s), read our disclosures, or for more information, visit http://www.activewallst.com/disclaimer/.

CONTACT

For any questions, inquiries, or comments reach out to us directly. If you're a company we are covering and wish to no longer feature on our coverage list contact us via email and/or phone between 09:30 EDT to 16:00 EDT from Monday to Friday at:

Email: info@activewallst.com

Phone number: 1-858-257-3144

Office Address: 3rd floor, 207 Regent Street, London, W1B 3HH, United Kingdom

CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute.

SOURCE: Active Wall Street