In the business world, there are few traits I admire more than consistency. Sure, margin expansion is great, paying down debt is laudable, and who doesn't admire free cash flow? But if a company can reliably and consistently manage to grow, regardless of economic trends or business cycles, other smaller pieces of the operation usually tend to fall into place.
Obviously, Anheuser-Busch's (NYSE: BUD) 23 consecutive quarters of double-digit earnings increases are worthy of mention, and Automatic Data Processing (NYSE: ADP) once put together 41 straight years of double-digit earnings growth, but that streak has since ended. Cintas (NYSE: CTAS), though, the nation's largest uniform supplier, has posted rising revenues and earnings for 35 years in a row.
Even the best streaks eventually hit a wall at some point; Joe DiMaggio couldn't manage to put a hit on the board in game No. 57. Here's some interesting trivia -- eight years earlier, as an 18-year-old rookie playing for the San Francisco Seals of the Pacific Coast League, he actually hit safely in 61 straight games. (Speaking of trivia, Ken Jennings' run as Jeopardy champion reportedly ended after he reeled off an unprecedented string of 75 wins.) Cintas' streak, though, appears live and well, at least judging by yesterday's first-quarter numbers.
Earnings jumped 14% to $0.42, or $72.7 million, from $0.37 the year before, on revenues that climbed 10% to $746 million. Uniform rental revenues, which account for roughly three-fourths of the top line, rose 8% to $581.7 million. Other services, which include document management and the sale of uniforms, hygiene products, entrance mats, first-aid products, and clean room supplies, jumped 18% to $164.3 million.
Once again, Cintas also strengthened its balance sheet, reducing debt as a percentage of capitalization by almost five points to 19.8 and nearly tripling cash and securities to $264 million from $92 million.
More than 5 million workers wear Cintas uniforms, and as the leader in a fragmented market that includes Aramark (NYSE: RMK) and G&K Services (Nasdaq: GKSRA), Cintas enjoys scale advantages and pricing power that result in operating margins well above the industry average. The company has expanded, though, from its core roots. Non-uniform clients now represent more than half of Cintas' customer base of 550,000 firms, leading to the recent adoption of a new corporate slogan -- "Cintas -- the service professionals."
With a capable sales force in place, a sluggish labor market finally getting back into gear, and the bulk of the global $30 billion market virtually untapped, Cintas appears well-positioned to extend its winning ways.
Fool contributor Nathan Slaughter would much prefer wearing a uniform to work than a suit and tie, but he owns none of the companies mentioned.
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