CINTAS CORP

Previous wording

Cintas classifies its business into two reportable operating segments and places the remainder of its operating segments in an All Other category. Cintas’ two reportable operating segments are Uniform Rental and Facility Services and First Aid and Safety Services. The Uniform Rental and Facility Services reportable operating segment consists of the rental and servicing of uniforms and other garments including flame resistant clothing, mats, mops and shop towels and other ancillary items. In addition to these rental items, restroom cleaning services and supplies and the sale of items from our catalogs to our customers on route are included within this reportable operating segment. The First Aid and Safety Services reportable operating segment consists of first aid and safety products and services. The remainder of Cintas’ business, which consists of the Fire Protection Services operating segment and the Uniform Direct Sale operating segment, is included in All Other. These operating segments consist of fire protection products and services and the direct sale of uniforms and related items. Cintas evaluates operating segment performance based on revenue and income before income taxes. Revenue and income before income taxes for the three and six months ended November 30, 2023 and 2022, for the two reportable operating segments and All Other are presented in Note 10 entitled Segment Information of “Notes to Consolidated Condensed Financial Statements.”

Current wording

Cintas classifies its business into two reportable operating segments and places the remainder of its operating segments in an All Other category. Cintas’ two reportable operating segments are Uniform Rental and Facility Services and First Aid and Safety Services. The Uniform Rental and Facility Services reportable operating segment consists of the rental and servicing of uniforms and other garments including flame resistant clothing, mats, mops and shop towels and other ancillary items. In addition to these rental items, restroom cleaning services and supplies and the sale of items from our catalogs to our customers on route are included within this reportable operating segment. The First Aid and Safety Services reportable operating segment consists of first aid and safety products and services. The remainder of Cintas’ business, which consists of the Fire Protection Services operating segment and the Uniform Direct Sale operating segment, is included in All Other. These operating segments consist of fire protection products and services and the direct sale of uniforms and related items. Cintas evaluates operating segment performance based on revenue and income before income taxes. Revenue and income before income taxes for the three and nine months ended February 29, 2024 and February 28, 2023, for the two reportable operating segments and All Other are presented in Note 11 entitled Segment Information of “Notes to Consolidated Condensed Financial Statements.”

Previous wording

Total revenue increased 9.3% to $2,377.2 million for the three months ended November 30, 2023, compared to $2,174.9 million for the three months ended November 30, 2022. The organic revenue growth rate, which adjusts for the impact of acquisitions and foreign currency exchange rate fluctuations, was 9.0%. Revenue growth was positively impacted by 0.4% due to acquisitions and negatively impacted by 0.1% due to foreign currency exchange rate fluctuations.

Current wording

Total revenue increased 9.9% to $2,406.2 million for the three months ended February 29, 2024, compared to $2,190.0 million for the three months ended February 28, 2023. The organic revenue growth rate, which adjusts for the impact of acquisitions, workday differences and foreign currency exchange rate fluctuations, was 7.7%. Revenue growth was positively impacted by 0.5% due to acquisitions and by 1.7% due to one more workday in the three months ended February 29, 2024 compared to the three months ended February 28, 2023.

Previous wording

Uniform Rental and Facility Services reportable operating segment revenue was $1,850.5 million for the three months ended November 30, 2023, compared to $1,710.0 million for the same period in the prior fiscal year, which was an increase of 8.2%. The organic revenue growth rate for this reportable operating segment was 7.9%. Revenue growth in the Uniform Rental and Facility Services reportable operating segment was positively impacted by 0.4% due to acquisitions and negatively impacted by 0.1% due to foreign currency exchange rate fluctuations. Revenue growth was a result of new business, the penetration of additional products and services into existing customers and price increases, partially offset by lost business. New business growth resulted from an increase in the number and productivity of sales representatives.

Current wording

Uniform Rental and Facility Services reportable operating segment revenue was $1,876.6 million for the three months ended February 29, 2024, compared to $1,716.2 million for the three months ended February 28, 2023, which was an increase of 9.4%. The organic revenue growth rate for this reportable operating segment was 7.1%. Revenue growth in the Uniform Rental and Facility Services reportable operating segment was positively impacted by 0.5% due to acquisitions, by 1.7% due to one more workday in the three months ended February 29, 2024 compared to the three months ended February 28, 2023, and by 0.1% due to foreign currency exchange rate fluctuations. Revenue growth was a result of new business, the penetration of additional products and services into existing customers and price increases, partially offset by lost business. New business growth resulted from an increase in the number and productivity of sales representatives.

Previous wording

Other revenue, consisting of revenue from the First Aid and Safety Services reportable operating segment and All Other, increased 13.3% for the three months ended November 30, 2023, compared to the same period in the prior fiscal year, from $464.9 million to $526.6 million. The organic revenue growth rate for other revenue was 12.9%. Revenue growth was positively impacted by 0.4% due to acquisitions.

Current wording

Other revenue, consisting of revenue from the First Aid and Safety Services reportable operating segment and All Other, increased 11.8% for the three months ended February 29, 2024, compared to the three months ended February 28, 2023, from $473.8 million to $529.5 million. The organic revenue growth rate for other revenue was 9.5%. Revenue growth was positively impacted by 0.5% due to acquisitions and by 1.8% due to one more workday in the three months ended February 29, 2024 compared to the three months ended February 28, 2023.

Previous wording

Cost of uniform rental and facility services consists primarily of production expenses, delivery expenses and the amortization of in service inventory, including uniforms, mats, shop towels and other ancillary items. Cost of uniform rental and facility services increased $67.5 million, or 7.4%, for the three months ended November 30, 2023, compared to the three months ended November 30, 2022. This change from the same period in the prior fiscal year was primarily due to higher Uniform Rental and Facility Services reportable operating segment sales volume, as well as investments in delivery infrastructure to support increased revenue growth achieved during the three months ended November 30, 2023.

Current wording

Cost of uniform rental and facility services consists primarily of production expenses, delivery expenses and the amortization of in service inventory, including uniforms, mats, shop towels and other ancillary items. Cost of uniform rental and facility services increased $52.2 million, or 5.8%, for the three months ended February 29, 2024, compared to the three months ended February 28, 2023. Cost of uniform rental and facility services improved as a percent of revenue, decreasing from 52.9% for the three months ended February 28, 2023, to 51.2% for the three months ended February 29, 2024. This improvement as a percent of revenue was primarily due to efficiency gains in energy usage, material cost amortization and improved leverage of fixed costs.

Previous wording

Cost of other consists primarily of cost of goods sold (predominantly first aid and safety products, personal protective equipment, uniforms, and fire protection products), delivery expenses and distribution expenses in the First Aid and Safety Services reportable operating segment and All Other. Cost of other increased $15.7 million, or 6.4%, for the three months ended November 30, 2023, compared to the three months ended November 30, 2022, primarily due to increased sales volume in each of the underlying operating segments. Cost of other improved as a percent of revenue, decreasing from 52.8% for three months ended November 30, 2022, to 49.6% for the three months ended November 30, 2023. The improvement in cost of sales as a percent of revenue was primarily due to favorable changes in the sales mix, sourcing and productivity initiatives in the First Aid and Safety Services reportable operating segment as well as improved leverage of fixed costs for both the First Aid and Safety Services reportable operating segment and All Other.

Current wording

Cost of other consists primarily of cost of goods sold (predominantly first aid and safety products, personal protective equipment, uniforms, and fire protection products), delivery expenses and distribution expenses in the First Aid and Safety Services reportable operating segment and All Other. Cost of other increased $10.2 million, or 4.1%, for the three months ended February 29, 2024, compared to the three months ended February 28, 2023, primarily due to increased sales volume in each of the underlying operating segments. Cost of other improved as a percent of revenue, decreasing from 52.3% for three months ended February 28, 2023, to 48.7% for the three months ended February 29, 2024. The improvement in cost of sales as a percent of revenue was primarily due to favorable changes in the sales mix and sourcing and productivity initiatives in the First Aid and Safety Services reportable operating segment as well as improved leverage of fixed costs for both the First Aid and Safety Services reportable operating segment and All Other.

Previous wording

Selling and administrative expenses increased $64.4 million, or 11.1%, in the three months ended November 30, 2023, compared to the same period of the prior fiscal year. Selling and administrative expenses as a percent of revenue were 27.0% for the three months ended November 30, 2023, compared to 26.6% for the same period in the prior fiscal year. The change as a percent of revenue is primarily due to investing in additional selling resources, investing in our management trainee program and expanding our talent acquisition efforts for future growth.

Current wording

Selling and administrative expenses increased $79.8 million, or 13.6%, in the three months ended February 29, 2024, compared to the three months ended February 28, 2023. Selling and administrative expenses as a percent of revenue were 27.7% for the three months ended February 29, 2024, compared to 26.8% for the three months ended February 28, 2023. The change as a percent of revenue is primarily due to investing in additional selling resources, investing in our management trainee program, expanding our talent acquisition efforts for future growth, as well as costs associated with the tentative legal settlement discussed in Note 12 to the consolidated condensed financial statements. The costs associated with the tentative legal settlement discussed in Note 12 to the consolidated condensed financial statements were not material to the consolidated statements of income.

Previous wording

Operating income was $499.7 million, or 21.0% of revenue, for the three months ended November 30, 2023, compared to $444.9 million, or 20.5% of revenue, for the three months ended November 30, 2022. The improvement in operating income as a percent of revenue was due to operating leverage from revenue growth, efficiency gains in energy usage and productivity initiatives.

Current wording

Operating income was $520.8 million, or 21.6% of revenue, for the three months ended February 29, 2024, compared to $446.8 million, or 20.4% of revenue, for the three months ended February 28, 2023. The improvement in operating income as a percent of revenue was primarily due to operating leverage from revenue growth, efficiency gains in energy usage and productivity initiatives, partially offset by the increase in selling and administrative expense noted above.

Previous wording

Net interest expense (interest expense less interest income) was $25.8 million for the three months ended November 30, 2023, compared to $28.6 million for the three months ended November 30, 2022. The decrease was primarily due to a decrease in the average amount of outstanding debt during the three months ended November 30, 2023 compared to the three months ended November 30, 2022.

Current wording

Net interest expense (interest expense less interest income) was $24.6 million for the three months ended February 29, 2024, compared to $28.4 million for the three months ended February 28, 2023. The decrease was primarily due to a reduction in the average amount of outstanding debt during the three months ended February 29, 2024 compared to the three months ended February 28, 2023.

Previous wording

Cintas’ effective tax rate was 20.9% and 22.1% for the three months ended November 30, 2023 and 2022, respectively. The effective tax rate in both periods was impacted by certain discrete items, primarily the tax accounting impact for stock-based compensation.

Current wording

Cintas’ effective tax rate was 19.9% and 22.1% for the three months ended February 29, 2024 and February 28, 2023, respectively. The effective tax rate in both periods was impacted by certain discrete items, primarily the tax accounting impact for stock-based compensation.

Previous wording

Net income was $374.6 million for the three months ended November 30, 2023, an increase of 15.5%, compared to the three months ended November 30, 2022. Diluted earnings per share were $3.61 for the three months ended November 30, 2023, which was an increase of 15.7% compared to the same period in the prior fiscal year. Diluted earnings per share increased due to the increase in net income.

Current wording

Net income was $397.6 million for the three months ended February 29, 2024, an increase of 22.0%, compared to the three months ended February 28, 2023. Diluted earnings per share were $3.84 for the three months ended February 29, 2024, which was an increase of 22.3% compared to the three months ended February 28, 2023. Diluted earnings per share increased primarily due to the increase in net income.

Previous wording

Uniform Rental and Facility Services reportable operating segment revenue was $1,850.5 million for the three months ended November 30, 2023 compared to $1,710.0 million for the same period of the prior fiscal year. The organic revenue growth rate for the reportable operating segment was 7.9%. The cost of uniform rental and facility services increased $67.5 million, or 7.4%. The reportable operating segment’s gross margin was $876.3 million. Gross margin as a percent of revenue was 47.4% for the three months ended November 30, 2023 compared to 47.0% for the three months ended November 30, 2022. The improvement in gross margin was primarily the result ofa reduction in energy expense as a percent of revenue.

Current wording

Uniform Rental and Facility Services reportable operating segment revenue was $1,876.6 million for the three months ended February 29, 2024 compared to $1,716.2 million for the three months ended February 28, 2023. The organic revenue growth rate for the reportable operating segment was 7.1%. The cost of uniform rental and facility services increased $52.2 million, or 5.8%. The reportable operating segment’s gross margin was $916.4 million. Gross margin as a percent of revenue was 48.8% for the three months ended February 29, 2024 compared to 47.1% for the three months ended February 28, 2023. The improvement in gross margin was primarily the result of efficiency gains in energy usage, material cost amortization, and improved leverage of fixed costs.

Previous wording

Selling and administrative expenses for the Uniform Rental and Facility Services reportable operating segment increased $42.5 million in the three months ended November 30, 2023 compared to the same period of the prior fiscal year. Selling and administrative expenses as a percent of revenue for the three months ended November 30, 2023 were 25.8% compared to the 25.4% in the same period of the prior fiscal year. The change as a percent of revenue was primarily due to investing in additional selling resources, investing in our management trainee program and expanding our talent acquisition efforts for future growth.

Current wording

Selling and administrative expenses for the Uniform Rental and Facility Services reportable operating segment increased $47.8 million in the three months ended February 29, 2024 compared to the three months ended February 28, 2023. Selling and administrative expenses as a percent of revenue for the three months ended February 29, 2024 were 26.4% compared to the 26.1% in the three months ended February 28, 2023. The change as a percent of revenue was primarily due to investing in additional selling resources, investing in our management trainee program and expanding our talent acquisition efforts for future growth.

Previous wording

Income before income taxes increased $30.5 million, or 8.3%, for the Uniform Rental and Facility Services reportable operating segment for the three months ended November 30, 2023, compared to the same period in the prior fiscal year, but remained the same as a percent of revenue at 21.6%. This was a result of the improvement in gross margin being offset by the investments in selling and administrative expenses noted above.

Current wording

Income before income taxes increased $60.4 million, or 16.8%, for the Uniform Rental and Facility Services reportable operating segment for the three months ended February 29, 2024, compared to the three months ended February 28, 2023. Income before income taxes was 22.4% of the reportable operating segment's revenue compared to the three months ended February 28, 2023 of 21.0% of revenue. The improvement in income before income taxes was a result of the expansion in gross margin which was partially offset by the investments in selling and administrative expenses noted above.

Previous wording

Cost of first aid and safety services for the three months ended November 30, 2023, increased $4.3 million, or 3.7%, compared to the three months ended November 30, 2022. The gross margin as a percent of revenue was 54.5% for the three months ended November 30, 2023, compared to the gross margin as a percent of revenue of 50.5% in the same period of the prior fiscal year. The improvement in gross margin was primarily driven by favorable changes in the sales mix and sourcing and productivity initiatives, as well as improved leverage of fixed costs and a reduction in energy expense as a percent of revenue.

Current wording

Cost of first aid and safety services for the three months ended February 29, 2024, increased $2.7 million, or 2.4%, compared to the three months ended February 28, 2023. The gross margin as a percent of revenue was 56.3% for the three months ended February 29, 2024, compared to the gross margin as a percent of revenue of 51.6% in the three months ended February 28, 2023. The improvement in gross margin was primarily driven by favorable changes in the sales mix, sourcing and productivity initiatives, as well as improved leverage of fixed costs and a reduction in energy expense as a percent of revenue.

Previous wording

Selling and administrative expenses increased $13.1 million in the three months ended November 30, 2023, compared to the same period of the prior fiscal year. Selling and administrative expenses as a percent of revenue for the three months ended November 30, 2023 were 32.6%, compared to 31.2% in the second quarter of the prior fiscal year. The change as a percent of revenue was largely due to investing in additional selling resources for future growth.

Current wording

Selling and administrative expenses increased $17.9 million in the three months ended February 29, 2024, compared to the three months ended February 28, 2023. Selling and administrative expenses as a percent of revenue for the three months ended February 29, 2024 were 34.3%, compared to 31.1% in the third quarter of the prior fiscal year. The change as a percent of revenue was primarily due to investing in additional selling resources for future growth as well as an increase in inventory obsolescence reserves.

Previous wording

Income before income taxes for the First Aid and Safety Services reportable operating segment increased $13.0 million to $58.5 million for the three months ended November 30, 2023, compared to the same period in the prior fiscal year. Income before income taxes was 22.0% of the reportable operating segment’s revenue compared to the same period of the prior fiscal year of 19.3%. The increase in income before income taxes was due to the previously discussed improvements in gross margin, partially offset by the increase in selling and administrative expenses.

Current wording

Income before income taxes for the First Aid and Safety Services reportable operating segment increased $10.4 million to $57.7 million for the three months ended February 29, 2024, compared to the three months ended February 28, 2023. Income before income taxes was 22.0% of the reportable operating segment’s revenue compared to the three months ended February 28, 2023 of 20.4%. The increase in income before income taxes was primarily due to the previously discussed improvements in gross margin, partially offset by the increase in selling and administrative expenses.

Previous wording

Total revenue increased 8.7% to $4,719.5 million for the six months ended November 30, 2023, compared to $4,341.3 million for the six months ended November 30, 2022. Total organic revenue growth was 8.5%. Organic growth adjusts for the impact of acquisitions and foreign currency exchange rate fluctuations. Revenue growth was positively impacted by 0.3% due to acquisitions and negatively impacted by 0.1% due to foreign currency exchange rate fluctuations.

Current wording

Total revenue increased 9.1% to $7,125.7 million for the nine months ended February 29, 2024, compared to $6,531.3 million for the nine months ended February 28, 2023. Total organic revenue growth was 8.2%. Organic growth adjusts for the impact of acquisitions, workday differences and foreign currency exchange rate fluctuations. Revenue growth was positively impacted by 0.3% due to acquisitions and by 0.6% due to one more workday in the nine months ended February 29, 2024 compared to the nine months ended February 28, 2023.

Previous wording

Uniform Rental and Facility Services reportable operating segment revenue was $3,677.4 million for the six months ended November 30, 2023, compared to $3,407.8 million in the same period of the prior fiscal year, which was an increase of 7.9%. Organic revenue growth for this reportable operating segment was 7.8%. Uniform Rental and Facility Services reportable operating segment revenue was positively impacted by 0.3% due to acquisitions and negatively impacted by 0.2% due to foreign currency exchange rate fluctuations. Revenue growth was a result of new business, the penetration of additional products and services into existing customers and price increases, partially offset by lost business. New business growth resulted from an increase in the number and productivity of sales representatives.

Current wording

Uniform Rental and Facility Services reportable operating segment revenue was $5,554.0 million for the nine months ended February 29, 2024, compared to $5,123.9 million in the nine months ended February 28, 2023, which was an increase of 8.4%. Organic revenue growth for this reportable operating segment was 7.6%. Uniform Rental and Facility Services reportable operating segment revenue was positively impacted by 0.3% due to acquisitions, positively impacted by 0.6% due to one more workday in the nine months ended February 29, 2024 compared to the nine months ended February 28, 2023, and negatively impacted by 0.1% due to foreign currency exchange rate fluctuations. Revenue growth was a result of new business, the penetration of additional products and services into existing customers and price increases, partially offset by lost business. New business growth resulted from an increase in the number and productivity of sales representatives.

Previous wording

Other revenue, consisting of revenue from the First Aid and Safety Services reportable operating segment and All Other, was $1,042.1 million for the six months ended November 30, 2023, compared to $933.6 million for the same period of the prior fiscal year, which was an increase of 11.6%. Other revenue organic growth was 11.3%. Revenue growth was positively impacted by 0.4% due to acquisitions and negatively impacted by 0.1% due to foreign currency exchange rate fluctuations.

Current wording

Other revenue, consisting of revenue from the First Aid and Safety Services reportable operating segment and All Other, was $1,571.7 million for the nine months ended February 29, 2024, compared to $1,407.4 million for the nine months ended February 28, 2023, which was an increase of 11.7%. Other revenue organic growth was 10.7%. Revenue growth was positively impacted by 0.4% due to acquisitions and by 0.6% due to one more workday in the nine months ended February 29, 2024 compared to the nine months ended February 28, 2023.

Previous wording

Cost of uniform rental and facility services consists primarily of production expenses, delivery expenses and the amortization of in service inventory, including uniforms, mats, shop towels and other ancillary items. Cost of uniform rental and facility services increased $124.3 million, or 6.9%, for the six months ended November 30, 2023, compared to the six months ended November 30, 2022. The increase over the same period of the prior fiscal year was due to higher Uniform Rental and Facility Services reportable operating segment sales volume.

Current wording

Cost of uniform rental and facility services consists primarily of production expenses, delivery expenses and the amortization of in service inventory, including uniforms, mats, shop towels and other ancillary items. Cost of uniform rental and facility services increased $176.5 million, or 6.5%, for the nine months ended February 29, 2024, compared to the nine months ended February 28, 2023, primarily due to increased sales volume in each of the underlying operating segments. Cost of uniform rental and facility services improved as a percent of revenue, decreasing from 52.8% for the nine months ended February 28, 2023, to 51.9% for the nine months ended February 29, 2024. This improvement as a percent of revenue was primarily due to efficiency gains in energy usage and improved leverage of fixed costs.

Previous wording

Cost of other consists primarily of cost of goods sold (predominantly first aid and safety products, personal protective equipment, uniforms, and fire protection products), delivery expenses and distribution expenses in the First Aid and Safety Services reportable operating segment and All Other. Cost of other increased $21.3 million, or 4.3%, for the six months ended November 30, 2023, compared to the six months ended November 30, 2022. Cost of other improved as a percent of revenue, decreasing from 52.8% for six months ended November 30, 2022, to 49.4% for the six months ended November 30, 2023. The improvement in cost of sales as a percent of revenue was primarily due to favorable changes in the sales mix in the First Aid and Safety Services reportable operating segment as well as improved leverage of fixed costs for both the First Aid and Safety Services reportable operating segment and All Other.

Current wording

Cost of other consists primarily of cost of goods sold (predominantly first aid and safety products, personal protective equipment, uniforms, and fire protection products), delivery expenses and distribution expenses in the First Aid and Safety Services reportable operating segment and All Other. Cost of other increased $31.5 million, or 4.2%, for the nine months ended February 29, 2024, compared to the nine months ended February 28, 2023. Cost of other improved as a percent of revenue, decreasing from 52.7% for nine months ended February 28, 2023, to 49.2% for the nine months ended February 29, 2024. The improvement in cost of sales as a percent of revenue was primarily due to favorable changes in the sales mix and sourcing and productivity initiatives in the First Aid and Safety Services reportable operating segment as well as improved leverage of fixed costs for both the First Aid and Safety Services reportable operating segment and All Other.

Previous wording

Selling and administrative expenses increased $117.4 million, or 10.1%, for the six months ended November 30, 2023, compared to the same period in the prior fiscal year. Selling and administrative expenses as a percent of revenue were 27.2% for the six months ended November 30, 2023, compared to 26.8% for the same period of the prior fiscal year. The change as a percent of revenue is primarily due to investing in additional selling resources, investing in our management trainee program and expanding our talent acquisition efforts for future growth.

Current wording

Selling and administrative expenses increased $197.2 million, or 11.3%, for the nine months ended February 29, 2024, compared to the nine months ended February 28, 2023. Selling and administrative expenses as a percent of revenue were 27.4% for the nine months ended February 29, 2024, compared to 26.8% for the nine months ended February 28, 2023. The change as a percent of revenue is primarily due to investing in additional selling resources, investing in our management trainee program, expanding our talent acquisition efforts for future growth, as well as the previously noted costs associated with the tentative legal settlement discussed in Note 12.

Previous wording

Operating income was $1,000.2 million, or 21.2% of revenue, for the six months ended November 30, 2023, compared to $885.1 million, or 20.4% of revenue, for the six months ended November 30, 2022. The change in operating income as a percent of revenue was due to the previously mentioned improvements in gross margin.

Current wording

Operating income was $1,521.0 million, or 21.3% of revenue, for the nine months ended February 29, 2024, compared to $1,331.9 million, or 20.4% of revenue, for the nine months ended February 28, 2023. The change in operating income as a percent of revenue was due to the previously mentioned improvements in gross margin, partially offset by the increase in selling and administrative expenses noted above.

Previous wording

Net interest expense (interest expense less interest income) was $49.9 million for the six months ended November 30, 2023, compared to $56.1 million for the six months ended November 30, 2022. The change was primarily due to a decrease in the average amount of outstanding debt during the six months ended November 30, 2023.

Current wording

Net interest expense (interest expense less interest income) was $74.5 million for the nine months ended February 29, 2024, compared to $84.6 million for the nine months ended February 28, 2023. The change was primarily due to a decrease in the average amount of outstanding debt during the nine months ended February 29, 2024.

Previous wording

Cintas’ effective tax rate was 20.1% and 18.4% for the six months ended November 30, 2023 and 2022, respectively. The effective tax rate in both periods was impacted by certain discrete items, primarily the tax accounting for stock-based compensation.

Current wording

Cintas’ effective tax rate was 20.0% and 19.7% for the nine months ended February 29, 2024 and February 28, 2023, respectively. The effective tax rate in both periods was impacted by certain discrete items, primarily the tax accounting for stock-based compensation.

Previous wording

Net income for the six months ended November 30, 2023, increased $83.7 million, or 12.4%, compared to the six months ended November 30, 2022. Diluted earnings per share was $7.32 for the six months ended November 30, 2023, which was an increase of 12.4% compared to the same period in the prior fiscal year. Diluted earnings per share increased due to the increase in net income.

Current wording

Net income for the nine months ended February 29, 2024, increased $155.5 million, or 15.5%, compared to the nine months ended February 28, 2023. Diluted earnings per share was $11.15 for the nine months ended February 29, 2024, which was an increase of 15.5% compared to the nine months ended February 28, 2023. Diluted earnings per share increased due to the increase in net income.

Previous wording

Uniform Rental and Facility Services reportable operating segment revenue increased 7.9% to $3,677.4 million for the six months ended November 30, 2023, compared to $3,407.8 million for the same period of the prior fiscal year. Organic revenue growth for this reportable operating segment was 7.8%. The cost of uniform rental and facility services increased $124.3 million, or 6.9%, for the six months ended November 30, 2023 over the same period in the prior fiscal year. The reportable operating segment’s gross margin was $1,755.6 million, or 47.7% of revenue, for the six months ended November 30, 2023, compared to the gross margin of 47.3% for the six months ended November 30, 2022. The improvement in gross margin was primarily the result of a reduction in energy expense as a percent of revenue.

Current wording

Cost of uniform rental and facility services increased $176.5 million, or 6.5%, for the nine months ended February 29, 2024 over the nine months ended February 28, 2023. The reportable operating segment’s gross margin was $2,672.0 million, or 48.1% of revenue, for the nine months ended February 29, 2024, compared to the gross margin of 47.2% for the nine months ended February 28, 2023. The improvement in gross margin was primarily the result of efficiency gains in energy usage and improved leverage of fixed costs.

Previous wording

Selling and administrative expenses for the Uniform Rental and Facility Services reportable operating segment increased $73.0 million, increasing as a percent of revenue for the six months ended November 30, 2023 to 25.8%, compared to 25.7% for the same period of the prior fiscal year. As a percent of revenue, expenses were largely consistent as compared to the same period of the prior year.

Current wording

Selling and administrative expenses for the Uniform Rental and Facility Services reportable operating segment increased $120.9 million, increasing as a percent of revenue for the nine months ended February 29, 2024 to 26.0%, compared to 25.9% for the nine months ended February 28, 2023. As a percent of revenue, expenses were largely consistent as compared to the nine months ended February 28, 2023.

Previous wording

Income before income taxes increased $72.3 million, or 9.8%, for the Uniform Rental and Facility Services reportable operating segment for the six months ended November 30, 2023, compared to the same period in the prior fiscal year. Income before income taxes was 21.9% of the reportable operating segment’s revenue, compared to 21.5% for the six months ended November 30, 2022. The change as a percent of revenue was primarily a result of the improvement in gross margin.

Current wording

Income before income taxes increased $132.7 million, or 12.1%, for the Uniform Rental and Facility Services reportable operating segment for the nine months ended February 29, 2024, compared to the nine months ended February 28, 2023. Income before income taxes was 22.1% of the reportable operating segment’s revenue, compared to 21.3% for the nine months ended February 28, 2023. The change as a percent of revenue was primarily a result of the improvement in gross margin.

Previous wording

First Aid and Safety Services reportable operating segment revenue increased from $470.1 million to $527.1 million, or 12.1%, for the six months ended November 30, 2023, over the same period in the prior fiscal year. Organic revenue growth for this reportable operating segment was 11.9%. First Aid and Safety Services reportable operating segment revenue was positively impacted by 0.3% due to acquisitions and negatively impacted by 0.1% due to foreign currency exchange rate fluctuations. This increase in revenue was driven by many factors including new business sold by sales representatives, penetration of additional products and services into existing customers, price increases, and strong customer retention.

Current wording

First Aid and Safety Services reportable operating segment revenue increased from $701.7 million to $789.7 million, or 12.5%, for the nine months ended February 29, 2024, over the nine months ended February 28, 2023. Organic revenue growth for this reportable operating segment was 11.8%. First Aid and Safety Services reportable operating segment revenue was positively impacted by 0.2% due to acquisitions, positively impacted by 0.6% due to one more workday in the nine months ended February 29, 2024 compared to the nine months ended February 28, 2023, and negatively impacted by 0.1% due to foreign currency exchange rate fluctuations. This increase in revenue was driven by many factors including new business sold by sales representatives, penetration of additional products and services into existing customers, price increases and strong customer retention.

Previous wording

Cost of first aid and safety services increased $1.2 million, or 0.5%, for the six months ended November 30, 2023, from the six months ended November 30, 2022, due to higher sales volume. The gross margin as a percent of revenue was 55.2% for the six months ended November 30, 2023, which was an increase of 520 basis points compared to the gross margin as a percent of revenue of 50.0% in the same period of the prior fiscal year. The improvement in gross margin was primarily driven by favorable changes in the sales mix, sourcing and productivity initiatives, as well as improved leverage of fixed costs and a reduction in energy expense as a percent of revenue.

Current wording

Cost of first aid and safety services increased $3.8 million, or 1.1%, for the nine months ended February 29, 2024, from the nine months ended February 28, 2023, due to higher sales volume. The gross margin as a percent of revenue was 55.6% for the nine months ended February 29, 2024, which was an increase of 510 basis points compared to the gross margin as a percent of revenue of 50.5% in the nine months ended February 28, 2023. The improvement in gross margin was primarily driven by favorable changes in the sales mix, sourcing and productivity initiatives, as well as improved leverage of fixed costs and a reduction in energy expense as a percent of revenue.

Previous wording

Selling and administrative expenses increased $24.0 million, and increased as a percent of revenue to 32.8%, for the six months ended November 30, 2023, compared to 31.7% for the six months ended November 30, 2022. The increase in expenses as a percent of revenue was primarily due to increases in labor and other employee-partner related expenses, including investing in additional selling resources for future growth.

Current wording

Selling and administrative expenses increased $41.9 million, and increased as a percent of revenue to 33.3%, for the nine months ended February 29, 2024, compared to 31.5% for the nine months ended February 28, 2023. The change as a percent of revenue was largely due to investing in additional selling resources for future growth as well as an increase in inventory obsolescence reserves.

Previous wording

Income before income taxes for the First Aid and Safety Services reportable operating segment was $118.1 million for the six months ended November 30, 2023, compared to $86.3 million for the same period in the prior fiscal year. Income before income taxes, at 22.4% of the reportable operating segment’s revenue, increased 400 basis points compared to the same period of the prior fiscal year due to the improvements in gross margin, partially offset by increases selling and administrative expenses.

Current wording

Income before income taxes for the First Aid and Safety Services reportable operating segment was $175.8 million for the nine months ended February 29, 2024, compared to $133.6 million for the nine months ended February 28, 2023. Income before income taxes, at 22.3% of the reportable operating segment’s revenue, increased 330 basis points compared to the nine months ended February 28, 2023 due to the improvements in gross margin, partially offset by increases selling and administrative expenses.

Previous wording

The following is a summary of our cash flows and cash and cash equivalents as of and for the six months ended November 30:

Current wording

The following is a summary of our cash flows and cash and cash equivalents as of and for the nine months ended:

Previous wording

Cash and cash equivalents as of November 30, 2023 and 2022, include $40.7 million and $29.8 million, respectively, that is located outside of the U.S.

Current wording

Cash and cash equivalents as of February 29, 2024 and February 28, 2023, include $52.4 million and $40.4 million, respectively, that is located outside of the U.S.

Previous wording

Net cash provided by operating activities was $729.6 million for the six months ended November 30, 2023, compared to $619.1 million for the six months ended November 30, 2022. The change from the prior fiscal year was primarily due to an increase in net income and favorable changes in working capital, specifically accounts receivable, inventories, net and uniforms and other rental items in service. These improvements were partially offset by unfavorable changes in working capital, specifically, accrued compensation and related liabilities and accounts payable.

Current wording

Net cash provided by operating activities was $1,386.7 million for the nine months ended February 29, 2024, compared to $1,044.2 million for the nine months ended February 28, 2023. The change from the prior fiscal year was primarily due to an increase in net income and favorable changes in working capital, specifically accounts receivable, inventories, net and uniforms and other rental items in service. These improvements were partially offset by unfavorable changes in working capital, specifically, accrued compensation and related liabilities and accounts payable.

Previous wording

Net cash used in investing activities includes capital expenditures, purchases of investments and cash paid for acquisitions of businesses. Capital expenditures were $200.5 million and $146.4 million for the six months ended November 30, 2023 and 2022, respectively. Capital expenditures in the six months ended November 30, 2023, included $127.6 million for the Uniform Rental and Facility Services reportable operating segment and $46.8 million for the First Aid and Safety Services reportable operating segment. The increase in capital expenditures during the six months ended November 30, 2023, over the same period in the prior fiscal year, was due to investments in the operating segments to support continued revenue growth, an increase in equipment purchases, primarily trucks, due to vendors clearing backlogged orders and spending associated with the SAP implementation in the Fire Protection Services operating segment. Cash paid for acquisitions of businesses was $74.0 million and $15.5 million for the six months ended November 30, 2023 and 2022, respectively. The acquisitions during both the six months ended November 30, 2023 and 2022, occurred in our Uniform Rental and Facility Services reportable operating segment, our First Aid and Safety Services reportable operating segment and our Fire Protection operating segment, which is included in All Other. Net cash used in investing activities also includes $7.5 million and $5.2 million of purchases of investments during the six months ended November 30, 2023 and 2022, respectively.

Current wording

Net cash used in investing activities includes capital expenditures, purchases of investments and cash paid for acquisitions of businesses. Capital expenditures were $307.6 million and $224.1 million for the nine months ended February 29, 2024 and February 28, 2023, respectively. Capital expenditures in the nine months ended February 29, 2024, included $197.2 million for the Uniform Rental and Facility Services reportable operating segment and $73.2 million for the First Aid and Safety Services reportable operating segment. The increase in capital expenditures during the nine months ended February 29, 2024, over the nine months ended February 28, 2023, was due to investments in the operating segments to support continued revenue growth, an increase in equipment purchases, primarily trucks, due to vendors clearing backlogged orders and spending associated with the SAP implementation in the Fire Protection Services operating segment, which is included in All Other. Cash paid for acquisitions of businesses was $185.0 million and $33.0 million for the nine months ended February 29, 2024 and

Previous wording

Net cash used in financing activities was $485.8 million and $446.4 million for the six months ended November 30, 2023 and 2022, respectively. The increase in cash used in financing activities was due to the increase in share buyback activity and an increase in dividends paid. This increase was partially offset by an increase in proceeds from the net issuance of commercial paper in the six months ended November 30, 2023.

Current wording

Net cash used in financing activities was $879.5 million and $774.6 million for the nine months ended February 29, 2024 and February 28, 2023, respectively. The increase in cash used in financing activities was due to the increase in share buyback activity and an increase in dividends paid. This increase was partially offset by a decrease in payments of debt and commercial paper in the nine months ended February 29, 2024.

Previous wording

On July 27, 2021, Cintas announced that the Board of Directors authorized a $1.5 billion share buyback program, which does not have an expiration date. On July 26, 2022, Cintas announced that the Board of Directors authorized a new $1.0 billion share buyback program, which does not have an expiration date.

Current wording

On July 27, 2021, Cintas announced that the Board of Directors authorized a $1.5 billion share buyback program, which does not have an expiration date. On July 26, 2022, Cintas announced that the Board of Directors authorized a new $1.0 billion share buyback program, which does not have an expiration date. The following table summarizes the buyback activity by program for the nine months ended: