3Q18 EPS Beats by 10 cents; Raising FY18 Estimate
- 3Q18 (Feb) adjusted EPS of $1.37 (vs an adjusted $1.12 last year) was up 22% YoY and 10 cents above our estimate, including 6 cents of tax benefits unrelated to the new U.S. tax law;
- Including a full year of results from acquired G&K, our FY18 estimate is now $5.82 (from $5.43 and Company implied guidance of $5.80-to-$5.85), up 21% from FY17 as the Company continues to benefit from increased penetration of non-uniform services, the new U.S. tax law, and synergy realization with G&K;
- For FY19, our EPS estimate remains $7.10, up 22% from our FY18 projection aided by a 24.5% tax rate for the year;
- G&K integration is on track to realize at least $50 million in FY18 synergies (17 cents per share) out of a total $130 million-to-$140 million by the fourth year of the deal.
Cintas is a provider of corporate identity uniforms through rental and sales programs, as well as a provider of related business services, including entrance mats, restroom cleaning services and supplies, carpet and tile cleaning services, first aid and safety services and fire protection products and services. The company's segments are Uniform Rental and Facility Services, which consists of the rental and servicing of uniforms and other garments, including flame resistant clothing, mats, mops and shop towels and other ancillary items; and The First Aid and Safety Services, which consists of first aid and safety products and services.
Great Lakes Review is located in Cleveland, Ohio, was founded in 1981 and became a division of Wellington Shields & Co. LLC in 2011. Great Lakes Review is a research boutique focused on the fundamentally-oriented investor seeking companies that dominate their respective specialty niche regardless of industry. The objective is to make money for the long-term by gradually accumulating a diversified portfolio from a universe of no more than 30 companies. Although short-term-oriented accounts will be alerted to trading opportunities, aggressive sell recommendations are triggered only by a deterioration in long-term fundamentals, not by short-term blips or investor fancy. Coverage of those names that lose their earnings momentum or earnings predictability may be dropped and replaced with more vital candidates.
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