Alex Hess

Alex Hess asked what specific data points Cintas uses to determine if its customer base is 'steady or improving slightly.' He also inquired about Cintas' positioning for a potential re-acceleration of non-farm payroll growth and commented on the inventory and uniform/rent uniforms and service injection.

Answer

Jim Rozakis, Executive Vice President and Chief Operating Officer, provided an example of expanding relationships with existing customers by cross-selling multiple services (uniform rental, facility, first aid, fire) to a manufacturing client. Todd Schneider, President and CEO, stated Cintas is not in the prediction business for employment but is prepared to grow in the current environment. Scott Garula, Executive Vice President and Chief Financial Officer, explained that the inventory injection reflects strong growth across all three route-based businesses.

Alex Hess asked for clarification on the company's assessment that the customer base was steady or slightly improving, seeking to understand the underlying data or anecdotal evidence supporting this observation.

Answer

Jim Rozakis, Executive Vice President and Chief Operating Officer, provided an example of expanding relationships with existing customers, where a manufacturing client, already using uniform rental, added facility, first aid, and fire protection services to a new building, illustrating how Cintas leverages its role as a 'trusted resource.' For a follow-up on inventory and uniform injection, Todd Schneider, President and CEO, stated Cintas is not in the prediction business for employment but plans to grow in the current environment. Scott Garula, Executive Vice President and Chief Financial Officer, explained that the increase in inventory (uniforms and service injection) directly reflects the strong growth in all three route-based businesses over the last four quarters, requiring capital investment.

Alex Hess asked what specific data points Cintas uses to determine that the customer base is 'steady or improving slightly,' and also inquired about the implications of re-accelerating non-farm payroll growth and the inventory levels for uniform and rental uniform injection this quarter.

Answer

EVP and COO Jim Rozakis provided an example of expanding relationships with existing customers by cross-selling multiple services (facility, first aid, fire protection) during a customer's expansion, highlighting Cintas's role as a trusted resource. President and CEO Todd Schneider stated Cintas doesn't predict employment trends but plans for growth in the current environment. EVP and CFO Scott Garula explained that the increase in uniform rental injection reflects the strong growth across all three route-based businesses over the past four quarters.