信達思 (CTAS) 2023 Q3 法說會逐字稿

Good day, everyone, and welcome to the Cintas Corporation announces Fiscal 2023 Third Quarter Earnings Release Conference Call. Today's call is being recorded. At this time, I would like to turn the call over to Mr. Paul Adler, Vice President, Treasurer and Investor Relations. Please go ahead, sir.

大家好，歡迎來到 Cintas 公司宣布 2023 財年第三季度收益發布電話會議。今天的通話正在錄音中。在這個時候，我想把電話轉給財務主管和投資者關係副總裁保羅·阿德勒先生。請繼續，先生。

Thank you, Ross. And thank you joining us. With me is Todd Schneider, President and Chief Executive Officer and Mike Hansen, Executive Vice President and Chief Financial Officer. We will discuss our fiscal 2023 third quarter results.

謝謝你，羅斯。感謝您加入我們。和我一起的還有總裁兼首席執行官托德施耐德和執行副總裁兼首席財務官邁克漢森。我們將討論 2023 財年第三季度的業績。

After our commentary, we will open the call to questions from analysts.

在我們的評論之後，我們將打開分析師提問的電話。

The Private Securities Litigation Reform Act of 1995 provides a safe harbor from civil litigation for forward-looking statements. This conference call contains forward-looking statements that reflect the company's current views as to future events and financial performance. These forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ materially from those we may discuss.

1995 年的《私人證券訴訟改革法案》為前瞻性陳述提供了避免民事訴訟的安全港。本次電話會議包含前瞻性陳述，反映了公司當前對未來事件和財務業績的看法。這些前瞻性陳述受風險和不確定因素的影響，可能導致實際結果與我們可能討論的結果大不相同。

I refer you to the discussion on these points contained in our most recent filings with the Securities and Exchange Commission. I'll now turn the call over to Todd.

我建議您參考我們最近提交給美國證券交易委員會的文件中對這些要點的討論。我現在將電話轉給托德。

Thank you, Paul. Third quarter total revenue grew 11.7% to $2.19 billion. Each of our businesses continue to execute at a high level. The benefit of our strong revenue growth flowed through to our bottom line. Excluding a gain in the related tax benefit in last year's third quarter, operating income margin increased 110 basis points to 20.4% and diluted EPS grew 16.7% to $3.14. I thank our employees, whom we call partners, for their continued focus on our customers, our shareholders and each other.

謝謝你，保羅。第三季度總收入增長 11.7% 至 21.9 億美元。我們的每項業務都繼續保持高水平。我們強勁的收入增長帶來的好處流向了我們的底線。剔除去年第三季度的相關稅收優惠收益，營業收入利潤率增長 110 個基點至 20.4%，稀釋後每股收益增長 16.7% 至 3.14 美元。我感謝我們的員工，我們稱之為合作夥伴，感謝他們持續關注我們的客戶、股東和彼此。

The Uniform Rental and Facility Services operating segment revenue for the third quarter of fiscal '23 was $1.72 billion compared to $1.55 billion last year. The organic revenue growth rate was 10.8%. While price increases contributed at a higher level than historically, revenue growth was driven mostly from increased volume. Our sales force continues to add new customers and penetrate and cross-sell our existing customer base. Business has prioritized all we provide, including image, safety, cleanliness and compliance.

23 財年第三季度統一租賃和設施服務運營部門的收入為 17.2 億美元，而去年為 15.5 億美元。有機收入增長率為 10.8%。雖然價格上漲的貢獻高於歷史水平，但收入增長主要來自銷量的增長。我們的銷售人員繼續增加新客戶，並滲透和交叉銷售我們現有的客戶群。企業優先考慮我們提供的一切，包括形象、安全、清潔和合規性。

Our First Aid and Safety Services operating segment revenue for the third quarter was $231.6 million compared to $213 million last year. The organic revenue growth rate was 7.8%. The segment was up against a difficult revenue comparison because last year's third quarter revenue included about $15 million in sales of COVID-19 test kits that did not repeat this year. Excluding the prior year test kit sales, the organic revenue growth rate was 16%.

我們的急救和安全服務運營部門第三季度收入為 2.316 億美元，而去年同期為 2.13 億美元。有機收入增長率為 7.8%。該部門面臨艱難的收入比較，因為去年第三季度的收入包括約 1500 萬美元的 COVID-19 測試套件銷售額，今年沒有重複。不包括上一年的測試套件銷售，有機收入增長率為 16%。

We continue to have good momentum in our first aid cabinet business, which continues to grow greater than 20%. Health and safety of employees remains top of mind. We provide businesses with access to quick and effective products and services that promote health and well-being in the workplace. Our Fire Protection Services and Uniform Direct Sale businesses are reported in the All Other segment.

我們的急救櫃業務繼續保持良好勢頭，繼續增長超過 20%。員工的健康和安全仍然是重中之重。我們為企業提供快速有效的產品和服務，以促進工作場所的健康和福祉。我們的消防服務和統一直銷業務在所有其他部分報告。

All Other revenue was $242.2 million compared to $194.3 million last year. The fire business revenue was $155.8 million. The organic revenue growth rate was 20.7%. The Uniform Direct Sale business revenue was $86.5 million, and the organic growth rate was 32%. Now before turning the call over to Mike to provide details of our third quarter results, I'll provide our updated financial expectations for our fiscal year.

所有其他收入為 2.422 億美元，而去年為 1.943 億美元。消防業務收入為 1.558 億美元。有機收入增長率為 20.7%。統一直銷業務收入為 8650 萬美元，有機增長率為 32%。現在，在將電話轉給邁克提供我們第三季度業績的詳細信息之前，我將提供我們對本財年的最新財務預期。

We are increasing our financial guidance. We are raising our annual revenue expectations from a range of $8.67 billion to $8.75 billion to a range of $8.74 billion to $8.80 billion, a total growth rate of 11.3% to 12%. Also, we are raising our annual diluted EPS expectations from a range of $12.50 to $12.80 to a range of $12.70 to $12.90, a growth rate of 12.6% to 14.4%. Mike?

我們正在增加財務指導。我們將年收入預期從 86.7 億美元至 87.5 億美元提高到 87.4 億美元至 88 億美元，總增長率為 11.3% 至 12%。此外，我們將年度稀釋後每股收益預期從 12.50 美元至 12.80 美元上調至 12.70 美元至 12.90 美元，增長率為 12.6% 至 14.4%。麥克風？

Thanks, Todd, and good morning. Our fiscal 2023 third quarter revenue was $2.19 billion compared to $1.96 billion last year. The organic revenue growth rate, adjusted for acquisitions and foreign currency exchange rate fluctuations, was 11.8%. Gross margin for the third quarter of fiscal '23 was $1 billion compared to $898.2 million last year, an increase of 15.1%.

謝謝，托德，早上好。我們 2023 財年第三季度的收入為 21.9 億美元，而去年為 19.6 億美元。經收購和匯率波動調整後的有機收入增長率為 11.8%。 23 財年第三季度的毛利率為 10 億美元，而去年同期為 8.982 億美元，增長 15.1%。

Gross margin as a percent of revenue was 47.2% for the third quarter of fiscal '23 compared to 45.8% last year, an increase of 140 basis points. Energy expenses comprised of gasoline, natural gas and electricity were a tailwind, decreasing 15 basis points from last year. Strong volume growth from new customers and the penetration of existing customers with more products and services helped generate great operating leverage.

23 財年第三季度的毛利率佔收入的百分比為 47.2%，而去年為 45.8%，增加了 140 個基點。由汽油、天然氣和電力組成的能源支出是有利因素，比去年減少了 15 個基點。來自新客戶的強勁銷量增長以及現有客戶對更多產品和服務的滲透幫助產生了巨大的經營槓桿。

Gross margin percentage by business was 47.1% for Uniform Rental and Facility Services; 51.6% for First Aid and Safety Services; 48.5% for Fire Protection Services; and 35.8% for Uniform Direct sale. Operating income of $446.8 million compared to $407.6 million last year. Operating income as a percentage of revenue was 20.4% in the third quarter of fiscal '23 compared to 20.8% in last year's third quarter.

統一租賃和設施服務的業務毛利率為 47.1%； 51.6% 用於急救和安全服務； 48.5% 用於消防服務；統一直銷為 35.8%。營業收入為 4.468 億美元，而去年為 4.076 億美元。 23 財年第三季度營業收入佔收入的百分比為 20.4%，而去年第三季度為 20.8%。

Fiscal '22 third quarter operating income included a $30.2 million gain on an equity method investment transaction. The gain was recorded in selling and administrative expenses. Excluding this gain, fiscal '23 third quarter operating income as a percentage of revenue was 20.4% compared to 19.3% in last year's third quarter, an increase of 110 basis points.

22 財年第三季度營業收入包括 3020 萬美元的權益法投資交易收益。收益記錄在銷售和管理費用中。排除這一收益，23 財年第三季度營業收入佔收入的百分比為 20.4%，而去年第三季度為 19.3%，增加了 110 個基點。

Our effective tax rate for the third quarter was 22.1% compared to 18.2% last year. The fiscal '22 third quarter equity method investment transaction included a significant tax benefit. Excluding the transaction, the effective tax rate for the third quarter of fiscal '22 was 19.6%. Net income for the third quarter was $325.8 million compared to $315.4 million last year. This year's third quarter diluted EPS of $3.14 compared to $2.97 last year.

我們第三季度的有效稅率為 22.1%，而去年為 18.2%。 22 財年第三季度權益法投資交易包括一項重要的稅收優惠。不包括交易，22 財年第三季度的有效稅率為 19.6%。第三季度淨收入為 3.258 億美元，而去年同期為 3.154 億美元。今年第三季度攤薄後每股收益為 3.14 美元，而去年為 2.97 美元。

However, fiscal '22 third quarter diluted EPS contained $0.28 from the gain on the equity method investment transaction, which included a related $0.07 tax rate benefit. Excluding this gain and the related benefit -- related tax benefit, fiscal '23 third quarter diluted EPS of $3.14 compared to $2.69 in last year's third quarter, an increase of 16.7%.

然而，'22 財年第三季度攤薄每股收益包含 0.28 美元的權益法投資交易收益，其中包括 0.07 美元的相關稅率收益。排除這一收益和相關收益——相關稅收收益，23 財年第三季度攤薄後每股收益為 3.14 美元，與去年第三季度的 2.69 美元相比增長 16.7%。

Cash flow remained strong. On December 15, 2022, we paid shareholders $117.4 million in quarterly dividends, an increase of 18.6% from the amount paid to previous December. Todd provided our annual financial guidance, related to the guidance, please note the following: Fiscal '22 included a gain on sale of operating assets in the first quarter and a gain on an equity method investment in the third quarter.

現金流保持強勁。 2022 年 12 月 15 日，我們向股東支付了 1.174 億美元的季度股息，比去年 12 月支付的金額增加了 18.6%。托德提供了我們的年度財務指導，與指導相關，請注意以下內容：'22 財年包括第一季度出售經營資產的收益和第三季度權益法投資的收益。

Excluding these items, fiscal '22 operating income was $1.55 billion, a margin of 19.7% and diluted EPS was $11.28. Please see the table in our earnings press release for more information. Fiscal '23 operating income is expected to be in the range of $1.77 billion to $1.80 billion compared to $1.55 billion in fiscal '22 after excluding the gains.

不包括這些項目，22 財年營業收入為 15.5 億美元，利潤率為 19.7%，攤薄後每股收益為 11.28 美元。有關更多信息，請參閱我們的收益新聞稿中的表格。剔除收益後，23 財年營業收入預計在 17.7 億美元至 18 億美元之間，而 22 財年營業收入為 15.5 億美元。

Fiscal '23 interest expense is expected to be $112 million compared to $88.8 million in fiscal '22 due in part to higher interest rates. Our fiscal '23 effective tax rate is expected to be 20.7%. This compares to a rate of 17.9% in fiscal '22 after excluding the gains and their related tax impacts. Our financial guidance does not include the impact of any future share buybacks. And we remain in a dynamic environment that can continue to change. Our guidance contemplates a stable economy and excludes significant economic disruptions or downturns. I'll turn it back over to Paul.

23 財年的利息支出預計為 1.12 億美元，而 22 財年的利息支出為 8880 萬美元，部分原因是利率較高。我們的 23 財年有效稅率預計為 20.7%。相比之下，在排除收益及其相關稅收影響後，22 財年的增長率為 17.9%。我們的財務指南不包括任何未來股票回購的影響。我們仍然處於一個可以繼續變化的動態環境中。我們的指導考慮了穩定的經濟，不包括重大的經濟動盪或衰退。我會把它轉回給保羅。

And that concludes our prepared remarks. Now we are happy to answer questions from the analysts. Please ask just one question and a single follow-up if needed. Thank you.

我們準備好的發言到此結束。現在我們很樂意回答分析師的問題。如果需要，請只問一個問題和一次跟進。謝謝。

(Operator Instructions) And our first question comes from Manav Patnaik from Barclays.

（操作員說明）我們的第一個問題來自巴克萊銀行的 Manav Patnaik。

I was just hoping you could talk about -- clearly, you had strong results in the quarter, so I assume all the trends that you're hearing from your customers were solid. But have you seen any changes more recently with all the events that have occurred out there in the banking world? And if that's impacting kind of the small business confidence where you guys have more kind of exposure to?

我只是希望你能談談 - 顯然，你在本季度取得了強勁的業績，所以我假設你從客戶那裡聽到的所有趨勢都是可靠的。但是，最近銀行界發生的所有事件，您是否看到了任何變化？如果這會影響你們更多接觸的小企業信心？

Manav, thanks for the question. It is -- we're watching it very closely. Certainly, there's rumblings, when you read the newspapers every day and what's going on in the marketplace, but our customers seem still quite solid. And it's always a very competitive marketplace, and we're competing quite well there. They like our products and services, and we help them run their business better. So -- and help -- free them up to take care of items to where they can focus on their business. So we like our value proposition and -- but we certainly prefer an environment where our customers are in a great strong economy. But we're not seeing it just yet. And -- but we're certainly watching it very closely and monitoring it and making sure that we're focused on providing great value for our customers.

馬納夫，謝謝你的提問。它是——我們正在密切關注它。當然，當您每天閱讀報紙以及市場上正在發生的事情時，就會有傳聞，但我們的客戶似乎仍然很穩固。它始終是一個競爭非常激烈的市場，我們在那裡的競爭非常激烈。他們喜歡我們的產品和服務，我們幫助他們更好地經營業務。所以——並幫助——讓他們騰出時間來處理物品，以便他們可以專注於自己的業務。所以我們喜歡我們的價值主張——但我們當然更喜歡我們的客戶處於強大經濟中的環境。但我們還沒有看到它。而且 - 但我們當然會非常密切地關注它並監控它並確保我們專注於為我們的客戶提供巨大的價值。

Got it. And then just as a follow-up, the growth has obviously been pretty strong, better than I think what we were expecting to, but you said most of that growth was mostly volume. And so I was just wondering on the volume piece, is it that you're taking maybe more share than normal? Or is it just that these businesses are starting to get back to more normal capacity, and so there's more of that volume recovery that's aiding that?

知道了。然後作為後續行動，增長顯然非常強勁，比我想像的要好，但你說大部分增長主要是數量。所以我只是想知道關於體積的部分，是不是你獲得的份額可能比平時多？或者只是這些企業開始恢復到更正常的容量，所以有更多的容量恢復來幫助它？

Yes, it's a good question. There's a whole lot of inputs to our success in growing our revenue at the levels that we're growing at, and it is exceeding our expectations. Certainly, new business is quite good. We really like that. Our retention levels are very attractive. Cross-sell that we've spoken about in the past is continuing to improve. And as we mentioned, pricing is above historical, but the volumes are really coming from the three areas that I mentioned. Keep in mind, the majority of the new accounts that we sell are new to our segment, meaning we call them new programmers so we're growing the pie, not taking -- just taking share. We certainly love to do both, but growing the pie has been something that we are quite good at and have done consistently over the years, and we still -- we think the future is quite bright there.

是的，這是個好問題。我們成功地以我們正在增長的水平增加收入有很多投入，這超出了我們的預期。當然，新業務是相當不錯的。我們真的很喜歡。我們的保留水平非常有吸引力。我們過去談到的交叉銷售正在不斷改進。正如我們所提到的，定價高於歷史，但數量確實來自我提到的三個領域。請記住，我們銷售的大多數新客戶都是我們細分市場的新客戶，這意味著我們稱他們為新程序員，所以我們在做大蛋糕，而不是拿——只是分享。我們當然喜歡兩者兼顧，但做大蛋糕一直是我們非常擅長並且多年來一直在做的事情，而且我們仍然 - 我們認為那裡的未來非常光明。

And our next question comes from Andrew Steinerman from JPMorgan Securities.

我們的下一個問題來自摩根大通證券的 Andrew Steinerman。

With just one quarter left in the fiscal year. I just wanted to ask what the organic revenue growth year-over-year for the fourth quarter '23 is implied in the upgraded fiscal '23 guide?

財政年度只剩下四分之一了。我只想問一下，升級後的 23 財年指南暗示了 23 年第四季度的有機收入同比增長是多少？

Andrew, the fourth quarter guide would contemplate 6.5% to 9.5% revenue growth. But keep in mind, we've talked a lot about the direct sale business, which grew 32% in the third quarter, and it is coming up against tougher comps. And so we just don't see that kind of growth continuing and settling back into what we would say is a typical growth rate from direct sale in that low single digits. So that's the primary change that we see in the fourth quarter.

安德魯，第四季度指南將考慮 6.5% 至 9.5% 的收入增長。但請記住，我們已經談了很多關於直銷業務的話題，該業務在第三季度增長了 32%，並且面臨更艱難的競爭。因此，我們只是沒有看到這種增長持續下去，並回到我們所說的那種低個位數的直銷的典型增長率。所以這是我們在第四季度看到的主要變化。

Right. And so for the rental business, you're expecting a similar growth rate in the fourth quarter than you had in the third?

正確的。那麼對於租賃業務，您預計第四季度的增長率與第三季度相似嗎？

Well, I'll say this, Todd, just talked about the -- we haven't seen much change in customer behavior and the demand has still been really good and momentum in the rental business is good. And while I'm not ready to say we're guiding to a specific number, we don't see much change to it coming into the fourth quarter. Momentum still is strong.

好吧，托德，我要說的是——我們沒有看到客戶行為發生太大變化，需求仍然非常好，租賃業務的勢頭很好。雖然我還沒準備好說我們正在指導具體數字，但我們認為第四季度不會有太大變化。勢頭依然強勁。

And our next question comes from Faiza Alwy from Deutsche Bank.

我們的下一個問題來自德意志銀行的 Faiza Alwy。

I was hoping to talk a little bit about -- you've historically -- seeing your results have accelerated beyond what the [macros] would suggest, and you've talked about new verticals and the benefits of SAP implementation. So curious, how much more run rate do you see in both of those areas as we look ahead to next fiscal year and potentially [long term].

我希望談談——你在歷史上已經——看到你的結果加速超出了 [宏] 所建議的範圍，並且你已經談到了新的垂直領域和 SAP 實施的好處。很好奇，當我們展望下一個財政年度並可能 [長期] 時，您在這兩個領域看到了多少運行率。

Faiza, I'll start, and then Mike can certainly chime in. As far as our results are quite good. We usually do grow in multiples of GDP. And -- but we like where we are and where we're heading. Regarding SAP, we're very much in the early innings of the SAP. That is the umbrella of our technology investment or the digitization of our business. And we went through all the implementation, which we're still -- there's always work to be done there. But nevertheless, we're seeing benefits from our technology investments. Our customers are seeing benefits from our technology investments. And we certainly love when we derive efficiencies from technology, but we get even more excited when our customers see benefits, giving us a competitive advantage in the marketplace.

Faiza，我先開始，然後 Mike 肯定可以插話。就我們的結果而言，這是相當不錯的。我們通常確實以 GDP 的倍數增長。而且 - 但我們喜歡我們所處的位置和我們前進的方向。關於 SAP，我們還處於 SAP 的早期階段。這是我們技術投資或業務數字化的保護傘。我們經歷了所有的實施，我們仍然 - 那裡總是有工作要做。儘管如此，我們還是看到了技術投資帶來的好處。我們的客戶正在從我們的技術投資中受益。當我們從技術中獲得效率時，我們當然會很高興，但當我們的客戶看到好處時，我們會更加興奮，從而使我們在市場上具有競爭優勢。

So we've talked in the past about the certain advantages that we get with technology investments. My Cintas portal is one of the more obvious ones that the customers see an advantage. They get to be able to manage their account. They make request, the majority of our requests are done outside of normal business hours. So our customers don't always just want to be able to deal with our service provider in person or call our office during normal business hours. So they like to be able to do the flexibility to do business on their time and to get things off their list and move it on to ours. And that portal allows that flexibility for them. And it's showing up in customer satisfaction and customer loyalty. So yes, very much on the early innings of our technology deployment, I can certainly speak more to that, if you like.

因此，我們過去曾討論過我們通過技術投資獲得的某些優勢。我的 Cintas 門戶是客戶認為優勢更明顯的門戶之一。他們可以管理自己的帳戶。他們提出要求，我們的大部分要求都是在正常工作時間以外完成的。因此，我們的客戶並不總是希望能夠親自與我們的服務提供商打交道或在正常工作時間致電我們的辦公室。因此，他們希望能夠靈活地按自己的時間開展業務，並將事情從他們的清單上移到我們的清單上。該門戶網站為他們提供了這種靈活性。它體現在客戶滿意度和客戶忠誠度上。所以是的，在我們技術部署的早期階段，如果你願意的話，我當然可以說得更多。

Before you get into that, Todd, I just might remind -- provide a reminder that, look, we love the market opportunity also for our business. And it's -- we look at it as a very, very big opportunity. So in other words, when we talk about we have a little bit over 1 million customers, there are 16 million customers or 16 million businesses in the U.S. and Canada, we're just continuing to try to highlight that there is a great market opportunity, and Todd brought up the point that when the majority of our new business is expanding the served market or tapping into that large market potential, it means that we can grow in those multiples of GDP and employment growth for a long period of time. I think it's important to keep that in mind as you think about the growth potential over the longer term, the market opportunity is great.

在你進入之前，托德，我可能會提醒 - 提醒一下，看，我們也喜歡我們業務的市場機會。而且它 - 我們將其視為一個非常非常大的機會。所以換句話說，當我們談論我們有超過 100 萬客戶時，在美國和加拿大有 1600 萬客戶或 1600 萬企業，我們只是繼續努力強調存在巨大的市場機會，托德提出了這樣一個觀點，即當我們的大部分新業務正在擴大服務市場或挖掘巨大的市場潛力時，這意味著我們可以在很長一段時間內實現 GDP 和就業增長的倍數增長。我認為在考慮長期增長潛力時牢記這一點很重要，市場機會很大。

Great. That's really helpful. Maybe on the -- I mean, I would love to hear more about the technology. So I'll leave it up to you in terms of how much more you'd like to share. But maybe specifically on the healthcare vertical, could you talk about what the growth trends have been like there? What they were like this particular quarter and sort of how they've been trending?

偉大的。這真的很有幫助。也許在——我的意思是，我很想听到更多關於這項技術的信息。所以我會把你想分享多少留給你。但也許特別是在醫療保健垂直領域，你能談談那裡的增長趨勢嗎？他們在這個特定的季度是什麼樣的，他們的趨勢如何？

Certainly, the healthcare business is a great vertical for us. We have spent years organizing appropriately around that with our service providers, our sales partners, and we've organized around products and services that they find attractive. And so a good example of that is -- let me back up. So our growth rates are very attractive there. They're in excess of where we're running in totality and they're primarily due to what I just described, but also some specific products that we have launched. And we've spoken a little bit about the scrub business. When the scrub business historically was not a real attractive business for us. But -- and the reason being it was low-quality products, heavy low margin and just they were kind of not treated as a disposable, but pretty close to a disposable product. And we changed the game on that when we launched our garment dispensing service there, which controls the inventory levels for our customers.

當然，醫療保健業務對我們來說是一個很好的垂直領域。我們花了數年時間與我們的服務提供商、我們的銷售合作夥伴圍繞這一點進行適當的組織，並且我們圍繞他們認為有吸引力的產品和服務進行組織。因此，一個很好的例子是——讓我支持一下。所以我們的增長率在那裡非常有吸引力。它們超出了我們總體運行的範圍，這主要是由於我剛才描述的，還有我們推出的一些特定產品。我們已經談了一些關於擦洗業務的事情。從歷史上看，擦洗業務對我們來說並不是真正有吸引力的業務。但是——原因是它是低質量的產品，利潤率很低，只是它們沒有被視為一次性產品，而是非常接近一次性產品。當我們在那裡推出我們的服裝配送服務時，我們改變了遊戲規則，該服務控制了我們客戶的庫存水平。

And here's the big thing is it what it -- because the technology controls it and only allows what the administrator of the hospital says each person can get then what allows us to do is to provide a higher quality product and -- but not be dealing with such low cost, low margin products. The customers is happier, we control the cost so much better because the inventory is controlled. So that's a great example of one of the innovations that we brought to the healthcare industry. That certainly is a technology that people value, and it's helping us grow that business really attractively. And we're still very much in the early innings of that. So hopefully, that gives you a little more color.

重要的是它是什麼——因為技術控制它，只允許醫院管理員說每個人都能得到什麼，然後讓我們做的是提供更高質量的產品——但不是交易擁有如此低成本、低利潤的產品。客戶更快樂，我們更好地控製成本，因為庫存得到控制。因此，這是我們為醫療保健行業帶來的一項創新的一個很好的例子。這當然是人們重視的一項技術，它正在幫助我們真正有吸引力地發展該業務。而且我們仍處於早期階段。所以希望這能給你多一點色彩。

And our next question comes from George Tong from Goldman Sachs.

我們的下一個問題來自高盛的 George Tong。

I wanted to dive a little bit more into the selling environment. Can you discuss what you're seeing with client sales cycles, budgets and client headcount and what the implications are for the business?

我想更深入地了解銷售環境。您能否討論您對客戶銷售週期、預算和客戶人數的看法以及對業務的影響？

Yes. Thanks for the question, George. I would say that the selling environment is very similar. It has not really changed much. Sales cycles, they're not elongating the -- what's going on with our customers. They're still fighting for -- to bring people on to make sure that they're providing the right levels of service. And in these types of environments, we help provide value to them. We provide a benefit to them running their business. And in many cases, we're able to help customers save money from what they were doing. So I spoke earlier about when you walk into a customer and they're not a programmer.

是的。謝謝你的問題，喬治。我會說銷售環境非常相似。它並沒有真正改變太多。銷售週期，他們並沒有延長——我們的客戶正在發生什麼。他們仍在努力——讓人們加入進來，以確保他們提供正確的服務水平。在這些類型的環境中，我們幫助為他們提供價值。我們為他們經營業務提供好處。在許多情況下，我們能夠幫助客戶從他們所做的事情中省錢。所以我之前談到當你走進一位客戶時，他們不是程序員。

Well, they still have products that -- probably that they have procured on their own kind of a do-it-yourself and they're struggling to keep up with that and in many cases, because of our scale and our ability to source products and the fact that we are already there, servicing them in many cases, we can provide great value for them and actually help lower their costs. So -- and we've seen that throughout the years, and that's a real benefit as we go through trying to provide value for our customers. So -- but -- generally speaking, George, I would say the selling environment is pretty similar -- not a whole lot of change over the past 6 months or so.

好吧，他們仍然有一些產品——可能是他們自己採購的，他們正在努力跟上這一點，在很多情況下，因為我們的規模和我們採購產品的能力事實上，我們已經在那裡，在許多情況下為他們提供服務，我們可以為他們提供巨大的價值，並實際上幫助降低他們的成本。所以——多年來我們已經看到了這一點，在我們努力為客戶提供價值的過程中，這是一個真正的好處。所以——但是——總的來說，喬治，我想說銷售環境非常相似——在過去 6 個月左右的時間裡沒有太大變化。

Got it. That's helpful. And as a follow-up, you increased your full year guidance pretty much across the board. How much of that increase was driven by fiscal 3Q outperformance versus your internal expectations compared to a stronger fiscal 4Q outlook?

知道了。這很有幫助。作為後續行動，您幾乎全面增加了全年指導。與更強勁的第四財季前景相比，與您的內部預期相比，第三財季的出色表現推動了這一增長的多少？

George, I don't know if I can specifically separate the guidance raise. But clearly, we had a nice third quarter and the performance was strong from the organic growth to the gross margins to the operating margin. So a pretty solid quarter all the way through. And our guide for Q4 would suggest we expect more of the same. So the guide would suggest we expect another nice quarter. Harder to separate though for us exactly what the difference is because our internal expectations are a little bit different than our external, I'll say, consensus and guide. So...

喬治，我不知道我是否可以具體分開指導加薪。但很明顯，我們第三季度表現不錯，從有機增長到毛利率再到營業利潤率，表現都很強勁。因此，整個季度都非常穩固。我們的第四季度指南建議我們期待更多相同的情況。所以指南會建議我們期待另一個不錯的季度。雖然對我們來說很難區分到底有什麼區別，因為我們的內部期望與我們的外部期望略有不同，我會說，共識和指導。所以...

And our next question comes from Stephanie Moore from Jefferies.

我們的下一個問題來自 Jefferies 的 Stephanie Moore。

This is Hans Hoffman on for Stephanie. Just wanted to ask on margins, specifically the First Aid and Safety gross margin, obviously, really strong and almost 52%. Is that just a function of kind of lower margin PPE sales rolling off and higher-margin cabinets business kind of becoming a larger part of the mix? Or is there anything else kind of to call out on the performance there? And how should we be thinking about margins in that business on a go-forward basis?

這是斯蒂芬妮的漢斯霍夫曼。只是想問一下利潤率，特別是急救和安全的毛利率，顯然非常強勁，幾乎達到 52%。這是否只是利潤率較低的 PPE 銷售下降和利潤率較高的櫥櫃業務在組合中佔據更大份額的結果？或者還有什麼其他的東西可以呼喚那裡的表現嗎？我們應該如何考慮未來業務的利潤率？

Yes. Hans, it's good question. The -- certainly, we're very happy with the trends that we're seeing in the gross margin in the first aid business, but we're very happy in general with the first aid business. It is -- execution is at a very high level. Certainly, the mix of business is we're benefiting from since PPE sales and safety sales tend to be lower margin, but there is strong demand for what we are providing. Health and wellness is resonating in the marketplace. The mantra that we have in that business is what's more important to a business than the health and safety of their people. So -- and that is resonating. And so we're getting good leverage from the growth and the mix, but strong execution, and we really like how we're operating in that business.

是的。漢斯，這是個好問題。 - 當然，我們對我們在急救業務的毛利率中看到的趨勢非常滿意，但我們對急救業務總體上非常滿意。它是 - 執行處於非常高的水平。當然，業務組合使我們受益，因為 PPE 銷售和安全銷售的利潤率往往較低，但對我們提供的產品的需求強勁。健康與保健在市場上引起共鳴。我們在該業務中的口頭禪是對企業而言比員工的健康和安全更重要。所以 - 這引起了共鳴。因此，我們從增長和組合中獲得了良好的槓桿作用，但執行力很強，我們真的很喜歡我們在該業務中的運營方式。

Got it. And then just for my follow-up, I wanted to ask on the All Other segment. Clearly, really strong growth there in the quarter. And I know last quarter, you guys kind of talked about tougher comps, specifically in the Uniform Direct business in the second half of this year. I was just kind of curious what kind of drove the strong performance this quarter, I think a lot of us kind of expected that to kind of show up in Q3?

知道了。然後只是為了我的後續行動，我想問一下所有其他部分。顯然，本季度增長非常強勁。我知道上個季度，你們談到了更強硬的競爭，特別是在今年下半年的 Uniform Direct 業務中。我只是很好奇是什麼推動了本季度的強勁表現，我想我們很多人都希望在第三季度出現這種情況？

Yes. It's -- certainly, the comps are in Q4 are quite challenging. And as Mike mentioned, we do expect that to moderate. The Uniform Direct Sale business is a little lumpier. And sometimes, things come through based upon customer demand a little faster or what have you. But certainly, the comps in Q4 are tougher, and that's part of our guide.

是的。這是 - 當然，第四季度的比賽非常具有挑戰性。正如 Mike 所提到的，我們確實希望這種情況能夠緩和。統一直銷業務有點笨拙。有時，根據客戶的需求，事情會更快一些或者你有什麼。但可以肯定的是，第四季度的比賽更加艱難，這是我們指南的一部分。

Our next question comes from Andrew Wittmann from R.W.Baird.

我們的下一個問題來自 R.W.Baird 的 Andrew Wittmann。

Yes. Great. I guess I was hoping, Mike, you could talk a little bit about some of the relevant inflationary factors that are driving so much the stress in the overall economy. But specific to your business, I was wondering if you talk about the basically the COGS or merchandise costs, whether it's for uniforms, mats or the ancillary services that you provide as well as address how labor is progressing in your business. Have those things generally been -- have you been able to get leverage on those items despite the challenges? In other words, are those down as a percentage of revenue in the quarter? Can you just talk about the trend lines that you're seeing in those, if there's any moderation or acceleration in them?

是的。偉大的。邁克，我想我希望你能談談一些相關的通脹因素，這些因素正在給整體經濟帶來如此大的壓力。但具體到您的業務，我想知道您是否基本上談論 COGS 或商品成本，無論是製服、墊子還是您提供的輔助服務，以及您的業務中勞動力的進展情況。這些事情通常是——儘管面臨挑戰，你是否能夠利用這些項目？換句話說，這些佔本季度收入的百分比是否下降了？你能談談你在其中看到的趨勢線嗎，如果它們有任何緩和或加速？

Sure. So I'll start with material cost, Andrew. Let me start with we source or direct the sourcing of more than 90% of our volume and more than 90% of our items have more than one source. And that's really important to keep in mind so that when our vendors may have inflationary pressures on them, the thing to remember is we have choices. And so sometimes that means we do have to take increases, but many times, it means we have -- we can flex and we can negotiate and we can -- again, we have choices. And so we don't always have to accept every vendor price increase that comes our way when we direct to sourcing ourselves and when we have multiple sources, that's really important.

當然。所以我將從材料成本開始，安德魯。讓我從我們採購或直接採購我們 90% 以上的數量開始，我們超過 90% 的項目有一個以上的來源。記住這一點非常重要，這樣當我們的供應商可能對他們施加通脹壓力時，要記住的是我們有選擇。因此，有時這意味著我們確實必須增加，但很多時候，這意味著我們有——我們可以靈活調整，我們可以談判，我們可以——再次，我們有選擇。因此，當我們直接自己採購併且有多個來源時，我們不必總是接受每一個供應商的價格上漲，這非常重要。

The other thing is, obviously, the amortization of this bucket of expenses allows us to see ahead so anticipate what's coming. So as you can imagine, when a vendor does come to us and has a price increase, that -- it takes a while to, first of all, build the inventory and then it goes to our distribution centers. And then for after a turn, it comes into our rental locations, and that's where the amortization starts. And in month 1, we have [1/18th] of that inflation for garments, for example, [1/48th] of that for entrance mats. And so you can kind of get a feel for it. It takes a long time for those inflationary pressures to come to us.

另一件事是，顯然，這一桶費用的攤銷使我們能夠預見未來，從而預測即將發生的事情。因此，正如您可以想像的那樣，當供應商確實來找我們並提價時，首先需要一段時間來建立庫存，然後將其運送到我們的配送中心。然後在轉彎後，它進入我們的租賃地點，這就是攤銷開始的地方。在第 1 個月，我們有 [1/18] 的服裝通貨膨脹，例如，[1/48] 的入口墊。所以你可以有點感覺。這些通脹壓力需要很長時間才能降臨到我們身上。

That means we can do lots of planning. We can think about initiatives that we have going on, and we can accelerate some of those. We can think about process improvement and we can implement those, but we can also give in at least one annual price increase and maybe multiple price increases before that full inflation hits us. So we can really get ahead of that kind of cost. So we have choices, and we can really see ahead of that. And that gives us a really nice opportunity to plan the business without a lot of disruption.

這意味著我們可以做很多計劃。我們可以考慮我們正在進行的舉措，我們可以加快其中的一些舉措。我們可以考慮流程改進，我們可以實施這些，但我們也可以在全面通貨膨脹打擊我們之前至少每年提價一次，甚至可能多次提價。所以我們真的可以領先於這種成本。所以我們有選擇，我們真的可以預見未來。這給了我們一個非常好的機會來規劃業務而不會造成太多干擾。

The other thing I'll say, Andrew, is we've got a lot of infrastructure. We've got a lot of facilities and trucks and things, the rents. And those aren't quite as disrupted by inflation or at least immediately. And so again, we can get with our great growth, we can get some really nice leverage on that part of our cost structure. And then when you think about labor that you touched on, Andrew, we certainly want to make sure that we are maintaining the absolute best partner engagement that we can, and that means we like to be at market or slightly above market rates that's important for us in terms of the labor rates. But we've talked about -- we've had a couple of things happen over the course of the last 5 or 6 years. One is, we had a lot of G&K synergies being realized over the course of the last 6 years, and that allowed us to be a little bit more aggressive on raising rates.

我要說的另一件事是，安德魯，我們有很多基礎設施。我們有很多設施、卡車和其他東西，還有租金。而且這些並沒有受到通貨膨脹的干擾，或者至少不會立即受到通貨膨脹的干擾。因此，我們可以再次獲得巨大的增長，我們可以在成本結構的這一部分上獲得一些非常好的槓桿作用。然後，當你想到你提到的勞動力時，安德魯，我們當然希望確保我們能夠保持絕對最佳的合作夥伴參與，這意味著我們希望達到市場價格或略高於市場價格，這對我們在勞動率方面。但我們已經談到——在過去 5 或 6 年的過程中，我們發生了一些事情。一是，在過去 6 年中，我們實現了很多 G&K 協同效應，這讓我們能夠更積極地提高利率。

So we were never caught flat footed in terms of when the labor challenges hit. That was -- that's been important to us, and it's been -- it's allowed us to kind of keep disruption down. But the other thing is, we've talked a lot about initiatives like Smart Truck. We talked a lot about the technology impacts in our facilities that allow us to be more efficient. So that means as we are growing, we don't need to add as many resources within the plants or on the routes, and that allows us to leverage that labor environment even in this period of time where we've got raising labor rates.

因此，我們從未在勞動力挑戰何時到來時措手不及。那是——這對我們很重要，而且一直是——它讓我們能夠減少干擾。但另一件事是，我們已經談了很多關於 Smart Truck 之類的計劃。我們談了很多關於技術對我們設施的影響，這些影響使我們更有效率。因此，這意味著隨著我們的成長，我們不需要在工廠內或路線上添加那麼多資源，這使我們能夠利用這種勞動力環境，即使在我們提高勞動力率的這段時間裡也是如此。

Mike, if I can add. Andrew, certainly, in this type of inflationary environment, it's challenging to grow gross margin. We've been quite successful in doing so. Getting good leverage on that revenue has been key for us. But managing our variable costs, it's -- that is just simply part of our culture, managing it very, very closely. So that's been big. But to Mike's point, in leveraging some of our digital transformation, Smart Truck has been very important to us. And then also the -- managing our inventory at our used (inaudible) has been really important. And we have good systems in place there that allows us to get better reuse, which is better for the customer because the speed at which we can provide products goes up because it's right there available locally, don't have to get it from a distribution center and ship it into us. And it also, obviously, helps the amortization schedule when you can get better reuse of that current product that you're already paying for. So -- the leverage that we're getting as a result of the systems and processes we put in place with technology have -- are paying off.

邁克，如果我可以補充的話。安德魯，當然，在這種通貨膨脹的環境中，增加毛利率是一項挑戰。我們在這方面做得非常成功。充分利用該收入對我們來說至關重要。但是管理我們的可變成本，這只是我們文化的一部分，非常、非常密切地管理它。所以這很大。但邁克認為，在利用我們的一些數字化轉型方面，Smart Truck 對我們非常重要。然後 - 在我們使用過的（聽不清）中管理我們的庫存非常重要。我們在那裡擁有良好的系統，使我們能夠更好地重用，這對客戶來說更好，因為我們可以提供產品的速度提高了，因為它就在本地可用，不必從分發中獲取中心並將其運送到我們這裡。顯然，當您可以更好地重用您已經支付的當前產品時，它也有助於攤銷計劃。因此 - 我們通過技術實施的系統和流程所獲得的影響力 - 正在得到回報。

Great. That's helpful. I guess just for my follow-up, I wanted to ask about, I guess, the balance sheet, Mike. I mean by -- in the next quarter or two, you'll be at about 1x leverage, which is on the lower end of where you've historically run the company. And with the company doing effectively $2.2 billion of EBITDA and growing, there's -- and cash flow being very strong, you're going to have not only the ability to leverage the balance sheet plus the cash coming in, that's a lot of capital to deploy. How do you deploy that capital in a world where we haven't seen that amount of capital being -- having been deployed really since you guys did G&K, like you said 6 years ago, how do you keep the balance sheet geared appropriately? And what are the opportunities that are out there for you?

偉大的。這很有幫助。我想只是為了我的後續行動，我想問一下資產負債表，邁克。我的意思是——在接下來的一兩個季度，你的槓桿率將達到 1 倍左右，這處於你過去經營公司的低端。隨著公司有效地實現 22 億美元的 EBITDA 並不斷增長，現金流非常強勁，您將不僅有能力利用資產負債表和現金流入，還有大量資本部署。你如何在一個我們還沒有看到那麼多資本的世界中部署這些資本——自從你們做 G&K 以來就已經真正部署了，就像你 6 年前說的那樣，你如何保持資產負債表的適當調整？你有什麼機會？

Well, the first thing that I'll say is the most important thing for us is to make sure that we're investing in the right way for a long-term success of the business. And -- So we want to make sure that we are growing capacity as needed with our growth that we're training our partners, that we're doing the things that we need to do to continue to grow long term. We are still -- we still want to be very acquisitive. It's hard to pinpoint when those may or may not happen, but we want to continue to be acquisitive. .

好吧，我要說的第一件事對我們來說最重要的是確保我們以正確的方式進行投資以實現業務的長期成功。並且 - 因此我們希望確保我們正在根據我們正在培訓我們的合作夥伴的增長所需的能力進行增長，我們正在做我們需要做的事情以繼續長期增長。我們仍然 - 我們仍然想要非常收購。很難確定這些可能會發生或不會發生的時間，但我們希望繼續收購。 .

We talked about the dividend a little bit in that we've raised it almost 20% this past year. And certainly, while we didn't do any buybacks in the last quarter, that remains an opportunity for us as we look forward. Andy, we want to make sure that we are prudent in the way that we invest our cash. And so sometimes that means we may take a little bit longer to deploy cash. But we want to make sure more than anything. Job #1 is, long-term growth of the business, both on the topline and on the bottom line and are we doing the right things in order to make that happen and then prudently look for ways to enhance that.

我們稍微談到了股息，因為我們在過去一年將其提高了近 20%。當然，雖然我們在上個季度沒有進行任何回購，但這對我們來說仍然是一個機會。安迪，我們要確保我們在投資現金的方式上是謹慎的。所以有時這意味著我們可能需要更長的時間來部署現金。但我們最想確保的是。工作 #1 是業務的長期增長，無論是在收入上還是在利潤上，我們是否在做正確的事情以實現這一目標，然後審慎地尋找增強它的方法。

And our next question comes from Tim Mulrooney from William Blair.

我們的下一個問題來自 William Blair 的 Tim Mulrooney。

This is Sam Kusswurm on for Tim. I guess to start on the margin side, lower energy costs were 15 basis point benefit during the quarter. I'd imagine this dynamic is going to continue for the next few quarters. I was wondering if you could help frame for us the pacing and size of any benefit you're expecting, if you have any color to provide there?

這是 Tim 的 Sam Kusswurm。我想從利潤率方面開始，本季度較低的能源成本有 15 個基點的收益。我想這種動態將在接下來的幾個季度持續下去。我想知道您是否可以幫助我們確定您期望的任何收益的節奏和規模，如果您有任何顏色可以提供？

Well, certainly, Sam, we watch the energy prices very closely. Fuel, as in diesel and gasoline, hasn't changed that much year over prior. Natural gas, we're watching, and we expect that, that will be a benefit in the near future and the electricity it doesn't change a whole lot. So I wouldn't say that you can count on significant tailwind there. We are certainly not when you think about energy as a percent of sales, I think we came in at 2.15% energy as a percent of sales. So we like when they're coming down, and we manage it as they're going up, but I wouldn't expect a real change there.

嗯，當然，山姆，我們非常密切地關注能源價格。與柴油和汽油一樣，燃料與前一年相比變化不大。天然氣，我們正在觀察，我們預計，這將在不久的將來帶來好處，而電力不會發生太大變化。所以我不會說你可以指望那裡有很大的順風。當您將能源佔銷售額的百分比考慮時，我們當然不是，我認為我們的能源佔銷售額的百分比為 2.15%。所以我們喜歡它們下降的時候，我們在它們上升的時候進行管理，但我不希望那裡有真正的改變。

Yes. Just to frame it a little bit, Sam. Last year in the fourth quarter, our total energy was 2.5% of revenue. In the first quarter, it was 2.4%. This time, it was 2.15%. So we may see a little bit of a benefit in Q4 and Q1. But boy, we've worked so hard to get this to be such a small part of our cost structure that I'm not sure the benefit is going to be that significant one way or the other.

是的。只是稍微構圖一下，山姆。去年第四季度，我們的總能源佔收入的 2.5%。第一季度為2.4%。這次是 2.15%。因此，我們可能會在第四季度和第一季度看到一些好處。但是，天啊，我們已經非常努力地讓它成為我們成本結構的一小部分，以至於我不確定收益是否會以某種方式那麼重要。

Got you. I appreciate the color there. I guess for a follow-up, you've spoken before about Smart Truck and I think you just mentioned the question previously for the routing software. Now it's been over a year since kind of first rolling it out. I guess I'd be curious if you could help quantify a benefit to your margins? And if you still think there is a sizable benefit remaining there from (inaudible) or adoption?

明白了我欣賞那裡的顏色。我想對於後續行動，您之前已經談到過 Smart Truck，我認為您之前剛剛提到了路由軟件的問題。現在距離首次推出已經一年多了。我想我很好奇您是否可以幫助量化您的利潤收益？如果您仍然認為（聽不清）或採用還有相當大的好處？

Yes. Good question, Sam. Yes, we absolutely see opportunities still to come with Smart Truck. It's -- one of the things that we are very careful about is it's -- when you route a new customer, that's one thing. But when you are rerouting your existing customer base, we're very judicious about that because changing the face of the service provider can sometimes bring issues, meaning they love their service provider and now you change it. So you got to be really careful with that. So you're going to see -- I would expect benefits in that area for years to come. And that shows up in energy, in emissions. But it shows up also in productivity because our partners have more time to spend with the customers and they can provide more value to the customers. And is one of the things we talk often about here is, we don't generate any revenue when the wheels are moving. It's only when the wheel stop. So we're very focused on that, but you're going to see it, I think, for years to come.

是的。好問題，山姆。是的，我們絕對看到智能卡車仍有機會。這是——我們非常小心的一件事是——當你安排新客戶時，那是一回事。但是，當您重新安排現有客戶群時，我們對此非常明智，因為改變服務提供商的面貌有時會帶來問題，這意味著他們喜歡他們的服務提供商，而現在您改變了它。所以你必須非常小心。所以你會看到 - 我希望在未來幾年在該領域受益。這體現在能源和排放中。但它也體現在生產力上，因為我們的合作夥伴有更多時間與客戶共度時光，他們可以為客戶提供更多價值。我們在這裡經常談論的事情之一是，當車輪移動時，我們不會產生任何收入。只有當輪子停止時。所以我們非常關注這一點，但我認為，在未來的幾年裡你會看到它。

And our next question comes from Seth Weber from Wells Fargo.

我們的下一個問題來自富國銀行的 Seth Weber。

Mike, I just wanted to ask about free cash flow. It was a little bit below what we were looking for in the quarter. Is that -- do you feel like just a transitory function of revenue growth ramping a little bit better, and you're just kind of getting a little bit behind on working capital? Or can you just talk us through how you're thinking about working capital going forward?

邁克，我只是想問問自由現金流。這略低於我們在本季度的預期。那是——你是否覺得收入增長的暫時性功能有所好轉，而你只是有點落後於營運資金？或者你能告訴我們你是如何考慮未來的營運資金的嗎？

Well, I'll say free cash flow. I think your point is a good one from the perspective of -- it's a little bit transitory, but in the way of, look, we're coming off of a fiscal '21 year where there wasn't a lot of growth and then really getting some nice acceleration into fiscal '22 and '23. And so there is a little bit of -- as we have used capacity through the pandemic, we've gotten back into a time period where we need some capacity here and there. And we've been really good at managing the capacity in many different ways, whether it is, for example, better efficiency in our existing wash alleys to adding a washer to adding a dryer to maybe then adding a new facility. But we've gotten to the point where it's time to add capacity again, and that's healthy. But I would call that there is a little bit of a mismatch there that we're catching up a bit from that.

好吧，我會說自由現金流。我認為你的觀點是一個很好的觀點——它有點暫時，但從某種意義上說，我們正在結束一個沒有太多增長的 21 財年，然後真正在 22 和 23 財年取得了一些不錯的加速。因此，有一點——當我們在大流行期間使用了容量時，我們又回到了一個我們需要一些容量的時間段。我們一直非常擅長以許多不同的方式管理容量，例如，無論是在我們現有的洗滌巷中提高效率，還是添加洗衣機，添加烘乾機，再添加新設施。但我們已經到了再次增加容量的地步，這是健康的。但我認為那裡有一點不匹配，我們正在從中趕上一點。

Having said that, look, we still expect free cash flow to be very, very strong. And whenever we're growing nicely, we're going to use some working capital. That's just the nature of our business. And that's a good thing. But you're right, there's a little bit of a catch-up in our capital expenditures, and we'll start to -- I'll say, those will get more in sync as we go into the next year and following years, assuming there's no other economic disruption.

話雖如此，看，我們仍然預計自由現金流會非常非常強勁。每當我們增長良好時，我們都會使用一些營運資金。這就是我們業務的本質。這是一件好事。但你是對的，我們的資本支出有點追趕，我們將開始 - 我會說，隨著我們進入明年和接下來的幾年，這些將變得更加同步，假設沒有其他經濟中斷。

Okay. That's helpful. And so do you think CapEx could go back to that 4% of revenue range where you kind of work towards the end of the last decade? Or -- and then it went to like 2% a couple of years ago? I'm just trying to understand where...

好的。這很有幫助。那麼你認為資本支出可以回到你在過去十年末工作的收入範圍的 4% 嗎？或者 - 然後它在幾年前達到了 2%？我只是想了解在哪裡...

Yes, it's going to be close. We certainly don't expect it to be down at that 2% level. It's going to be closer to that 4% level as we think about moving forward.

是的，它會很接近。我們當然不希望它下降到 2% 的水平。隨著我們考慮向前推進，它將更接近 4% 的水平。

And our next question comes from Heather Balsky from Bank of America.

我們的下一個問題來自美國銀行的 Heather Balsky。

You talked a fair amount during the call about your success with new customers and that a lot of them are what you call non-programmers. And I think a key theme that's been discussed on multiple calls is the shift to outsourcing and an acceleration kind of in that trend. I'm just curious, as you kind of look to what happened in the third quarter and as you're looking out, kind of your thoughts on how that trend continues? Do you see it normalizing? Or do you think there's further momentum into the next few years?

你在電話中談了很多關於你與新客戶的成功，其中很多是你所說的非程序員。我認為在多次電話會議上討論的一個關鍵主題是向外包的轉變以及這種趨勢的加速。我只是很好奇，當你關注第三季度發生的事情時，當你展望未來時，你對這種趨勢如何繼續下去有什麼看法？你看到它正常化了嗎？或者您認為未來幾年會有進一步的發展勢頭嗎？

Yes, I'd say that trend continues. There's still people -- our customers still are -- there's still 10 million job openings, folks trying to attract talent and trying to run their business and provide the levels of service that their customers expect. And when we have the ability to outsource items for them at very competitive rates, and again, many cases, because we're already there, then that makes it quite attractive. And it's one of these like, oh my gosh, you can take this off my plate? Then please, take it off my plate. And we leverage that and we'll continue to leverage that. So economic cycle aside, customers still need to take care of their customers and we can help them do exactly that. So we'll be focused on providing that value and managing our cost structure so that we can do it at very competitive rates.

是的，我會說這種趨勢還在繼續。仍然有人 - 我們的客戶仍然 - 仍然有 1000 萬個職位空缺，人們試圖吸引人才並試圖經營他們的業務並提供客戶期望的服務水平。當我們有能力以極具競爭力的價格為他們外包項目時，而且在很多情況下，因為我們已經在那裡，那麼這就非常有吸引力了。其中之一就像，天哪，你能把這個從我的盤子裡拿走嗎？那麼請把它從我的盤子裡拿走。我們利用它，我們將繼續利用它。因此，撇開經濟周期不談，客戶仍然需要照顧好他們的客戶，而我們可以幫助他們做到這一點。因此，我們專注於提供該價值並管理我們的成本結構，以便我們能夠以極具競爭力的價格做到這一點。

Great. And I guess as my follow-up, you discussed earlier that you are looking for M&A opportunities, although you don't know kind of when those might occur. I'm curious, can you talk about your priorities with regards to M&A? Are there white space areas you want to fill in? Is it geographic opportunities? Just what are your priorities?

偉大的。我想作為我的後續行動，你之前討論過你正在尋找併購機會，儘管你不知道這些機會何時會發生。我很好奇，你能談談你在併購方面的優先事項嗎？是否有您要填充的空白區域？是地理機會嗎？你的優先事項是什麼？

Yes. Good question, Heather. So we're interested in M&A, certainly in our rental business, in our first aid business and our fire business. And we make acquisitions every year, every quarter, it seems in each of those businesses, but they're usually reasonably small. Some of them are geographic expansion. Some of them are tuck-in. So it's a real mixture. And M&A tends to ebb and flow a bit. It's tough to predict timing, but we're interested in M&A in all those businesses. They have to be the right businesses, meaning well-run businesses, but large, medium, small, we are interested in all in each of those businesses.

是的。問得好，希瑟。因此，我們對併購感興趣，當然對我們的租賃業務、急救業務和消防業務感興趣。我們每年、每個季度都進行收購，似乎在每個業務中，但它們通常相當小。其中一些是地理擴張。其中一些是塞進去的。所以這是一個真正的混合物。併購往往會潮起潮落。很難預測時間，但我們對所有這些業務的併購感興趣。他們必須是正確的企業，即經營良好的企業，但無論大中小，我們都對這些企業中的每一個都感興趣。

And our next question comes from Toni Kaplan from Morgan Stanley.

我們的下一個問題來自摩根士丹利的 Toni Kaplan。

Wanted to ask about your staffing right now. Are you being more cautious now because of the environment or not? Because I know you mentioned you haven't really seen a slowdown yet in your customer base. So maybe nothing has really changed. So I just wanted to think about how you're thinking of staffing going forward?

現在想問問你們的人員配置。您現在是否因為環境而變得更加謹慎？因為我知道你提到你還沒有真正看到你的客戶群放緩。所以也許什麼都沒有真正改變。所以我只是想想想你是如何考慮未來的人員配置的？

Yes, Toni, (inaudible) today. The labor market, in general, is easier than it was 6 months ago. It's certainly not easy still. And so we're focused on staffing at the level to make sure that we provide really good customer service. And so that's where we are. We will adjust accordingly if the economic cycle changes. And we're watching it really closely, as you can imagine, to make sure that we're providing the right service, the right value to our customers. But we're certainly -- have a watchful eye out to understand if demand starts to change based upon what's going on in the broader economy.

是的，托尼，（聽不清）今天。總的來說，勞動力市場比 6 個月前更容易。這當然不容易。因此，我們專注於該級別的人員配備，以確保我們提供真正優質的客戶服務。這就是我們的處境。如果經濟周期發生變化，我們會相應調整。正如您可以想像的那樣，我們正在密切關注它，以確保我們為客戶提供正確的服務和正確的價值。但我們當然 - 密切關注需求是否開始根據更廣泛的經濟狀況發生變化。

Terrific. And I wanted to ask about pricing. You mentioned a couple of times on the call that price contributed more this quarter versus in the past. And so is that -- I just wanted to understand, is this a function of you had been raising prices a lot and now you're sort of at -- and you're still raising? Or like is the rate of change on pricing still higher versus before? Or it's just the prior price increases still coming in?

了不起。我想問一下定價。你在電話會議上多次提到，與過去相比，本季度的價格貢獻更大。那就是 - 我只是想了解，這是你一直在提高價格的功能，現在你有點 - 而且你還在提高？或者定價的變化率是否比以前更高？或者只是之前的價格上漲仍在繼續？

Yes, Toni. So our pricing, it varies based upon -- pricing is a local subject. So we handle it differently in different businesses and different geographies. So that being said, yes, our pricing is above what it has been historically. That being said, the volume growth is the majority of our growth. And the reason being is the inflationary environment is such that we have to pass on a larger price increase than we do historically. Fortunately, the customers are -- they understand that. They understand the environment, and we've been very successful in providing the right levels of service so that they are open to those adjustments. We're not here to give guidance beyond Q4. But certainly, if the work of the Fed is such that it brings inflation down, then we'll manage our business accordingly to match that.

是的，托尼。因此，我們的定價根據不同而有所不同——定價是當地的主題。因此，我們在不同的業務和不同的地區以不同的方式處理它。所以話雖這麼說，是的，我們的定價高於歷史水平。話雖如此，銷量增長是我們增長的主要部分。原因是通貨膨脹環境使得我們必須承受比歷史上更大的價格上漲。幸運的是，客戶是——他們明白這一點。他們了解環境，我們在提供適當水平的服務方面非常成功，因此他們對這些調整持開放態度。我們不會在這裡提供第四季度之後的指導。但可以肯定的是，如果美聯儲的工作能夠降低通脹，那麼我們將相應地管理我們的業務以與之相匹配。

Toni, I might just add that the pricing that Todd talked about earlier is relative to historical levels, not -- we were not pointing out that there is a sequential increase in that level of pricing. So if that's where your question might have been coming from, it's really that relative to the historical levels of pricing. We're certainly above that, but not a real change in practice sequentially.

托尼，我可能只是補充說，托德之前談到的定價是相對於歷史水平的，而不是——我們並沒有指出該定價水平有連續增長。因此，如果這就是您的問題可能來自的地方，那麼它確實是相對於歷史定價水平而言的。我們當然高於這個水平，但實際上並沒有按順序進行真正的改變。

And our next question comes from Shlomo Rosenbaum from Stifel.

我們的下一個問題來自 Stifel 的 Shlomo Rosenbaum。

I want to ask back on kind of the questions Manav was asking about initially. Just in terms of the client base that you have, it's interesting like the ADP National Employment Report is talking about small businesses have been shedding jobs basically since August. Are you not seeing that at all in your client base? Or is it that you just skew more towards midsized and larger clients? I just want to get a little bit further into how to read some of the kind of economic reports versus the very strong results that we're seeing at Cintas.

我想反問 Manav 最初提出的問題。就您擁有的客戶群而言，有趣的是，ADP 全國就業報告正在談論小型企業自 8 月以來基本上一直在裁員。您是否在您的客戶群中根本看不到這一點？還是您只是更傾向於中型和大型客戶？我只想進一步了解如何閱讀一些經濟報告與我們在 Cintas 看到的非常強勁的結果。

We have a really diverse customer base. And so no, we are not more geared towards the medium-sized -- small, medium, large customers, geographic, different verticals. We have a really diverse customer base. And when you think about our business now, it is more geared towards the service economy than it is just goods producing. And so you name it, we've got it. We've got some small customers that are struggling. We've got some that are thriving. And that is really more dependent upon their business, there maybe -- their particular environment. And the same goes for the medium and the larger customers. It's a real mix. And we work with them.

我們擁有真正多樣化的客戶群。所以不，我們不是更適合中型 - 小型，中型，大型客戶，地理，不同的垂直行業。我們擁有真正多樣化的客戶群。現在，當您考慮我們的業務時，它更傾向於服務經濟，而不僅僅是商品生產。所以你說出來，我們已經知道了。我們有一些正在苦苦掙扎的小客戶。我們有一些正在蓬勃發展。這實際上更取決於他們的業務，也許是他們的特定環境。中型和大型客戶也是如此。這是一個真正的組合。我們與他們合作。

So we have a customer who is particularly struggling then we pivot and try to adjust accordingly. If their demand is such that it's coming down, then we pivot and handle it accordingly. But again, we also have other products and services that they might be procuring elsewhere we might be able to help them and provide cost savings to them. So it varies based upon the customer, but we're focused on providing that value, and we'll continue to focus on that.

所以我們有一個特別掙扎的客戶，然後我們轉向並嘗試相應地調整。如果他們的需求正在下降，那麼我們會相應地調整和處理它。但同樣，我們也有他們可能在其他地方採購的其他產品和服務，我們可能會幫助他們並為他們節省成本。所以它因客戶而異，但我們專注於提供這種價值，我們將繼續專注於此。

Okay. Great. And then just following up on Toni's question on the pricing, is there any change at all in customer behavior in terms of the continued pricing? Is there any more pushback or it's kind of the same that you've had over the last, say, 2 to 3 quarters?

好的。偉大的。然後就 Toni 關於定價的問題進行跟進，就持續定價而言，客戶行為是否有任何變化？是否還有更多的阻力，或者它與你在過去的 2 到 3 個季度中遇到的情況相同？

Yes. Well, there's always pushback from customers. Always has been, always will be. The current environment with inflation levels make it an opportunity for us to do so better than historical -- larger than historical. But I wouldn't tell you that the environment has changed dramatically. But certainly, inflation is starting to -- it appears to come down. And so we're managing our business accordingly and we'll manage our customers accordingly as well.

是的。嗯，總是有客戶的反對。一直是，永遠是。當前通貨膨脹水平的環境使我們有機會做得比歷史更好 - 比歷史更大。但我不會告訴你環境發生了巨大變化。但可以肯定的是，通貨膨脹開始——它似乎正在下降。因此，我們正在相應地管理我們的業務，我們也會相應地管理我們的客戶。

Your next question comes from Scott Schneeberger from Oppenheimer.

您的下一個問題來自 Oppenheimer 的 Scott Schneeberger。

I guess, on the focus on margin question, could you provide a little bit of attribution, 110 basis points, just operating income improvement year-over-year is really impressive. Could you kind of provide what was that via the topline as opposed to where were you getting efficiencies on the cost line? And maybe elaboration to the extent you're able of what was Smart Truck, what was automation in the facilities? What was SAP? Really, that's where the question is focused on the cost lines, where are you getting the most benefit presently?

我想，在關注利潤率問題上，你能否提供一點歸因，110 個基點，營業收入同比增長確實令人印象深刻。你能通過頂線提供什麼，而不是你在成本線上獲得效率的地方嗎？也許你可以詳細說明什麼是智能卡車，什麼是設施中的自動化？什麼是 SAP？真的，這就是問題集中在成本線的地方，你目前從哪裡獲得最大利益？

Well, Scott, look, it starts with great growth. And when we are growing our topline at healthy levels, we're going to get some nice leverage. I talked a little bit about in a previous response. I talked a little bit about that the cost structure of having some costs that are a little bit in that infrastructure type of a bucket that when we grow real nicely, we get some great leverage. And that happened in all of our businesses. The growth that we saw in the third quarter was broad-based in all four of our businesses, and that leads to some really nice leveraging in each of those businesses. .

好吧，斯科特，你看，它從巨大的增長開始。當我們的收入以健康水平增長時，我們將獲得一些不錯的影響力。我在之前的回復中談到了一點。我談到了一些成本結構，即在基礎設施類型的基礎設施中有一些成本，當我們真正很好地增長時，我們會獲得一些很大的影響力。這發生在我們所有的業務中。我們在第三季度看到的增長在我們所有四項業務中都有廣泛的基礎，這導致每項業務都產生了一些非常好的槓桿作用。 .

I talked a little bit about that amortizing aspect of material costs, particularly within the rental business, and again, that allows us to see things coming, and it allows us to plan accordingly. And so again, the growth helps in that area, but it also allows us to think about things like process improvements, Smart Truck that you mentioned. And in all of our businesses, we've got those kinds of initiatives. And all of them are -- we're hard at work in all of them. And so we're seeing benefits from process improvement. Some are just simply better improvements, better training and some are technology related, like the Smart Truck. We've got all of them in each of the businesses, and that is adding to it.

我談到了材料成本的攤銷方面，尤其是在租賃業務中，這讓我們能夠看到未來的發展，並讓我們做出相應的計劃。因此，增長再次有助於該領域，但它也讓我們能夠考慮流程改進、您提到的 Smart Truck 等事情。在我們所有的業務中，我們都有這樣的舉措。所有這些都是——我們都在努力工作。因此，我們看到了流程改進帶來的好處。有些只是更好的改進，更好的培訓，有些是技術相關的，比如智能卡車。我們在每個業務中都有所有這些，並且正在增加。

Now certainly, the first aid margin moving from 12.4% last year to 20.4% this year, there is the mix benefit that we're certainly getting in that space. But we also have lots of other good things going on in there. We are sourcing better in First Aid and Safety. And we do have some really nice process improvement opportunities going on there, and we've initiated Smart Truck in the First Aid and Safety business and in the fire business. So certainly, first aid has been a big part of that margin improvement, but we've seen it all. So it's hard -- I don't have specific numbers to give you, Scott, but it starts with great growth and leverage and then we get into better sourcing, process improvement, technology gains and certainly then healthy mix. All of those things have contributed.

現在可以肯定的是，急救利潤率從去年的 12.4% 上升到今年的 20.4%，我們肯定會在這個領域獲得混合收益。但我們也有很多其他的好事情在那裡發生。我們在急救和安全方面採購得更好。我們確實有一些非常好的流程改進機會，我們已經在急救和安全業務以及消防業務中啟動了智能卡車。所以當然，急救是利潤率提高的重要組成部分，但我們已經看到了這一切。所以這很難——我沒有具體的數字可以給你，斯科特，但它從巨大的增長和槓桿開始，然後我們進入更好的採購、流程改進、技術收益，當然還有健康的組合。所有這些都做出了貢獻。

Scott, I'd just like to add, certainly what Mike was talking about, it starts with great growth. That is so critical to us. But part of our culture here is we're focused on extracting inefficiencies out of our business. And we've -- and I spoke earlier that there's a lot of inputs to revenue growth, and there's a lot of inputs to margin improvement. And Mike went through a list, which was pretty darn comprehensive. But generally speaking, the -- I'll just say that we're focused on -- and we're not going to just grow through pricing, and we're going to find a way in these types of environments to extract the inefficiencies so that we can grow margins, which in these type of inflationary environments are certainly is very challenging, but the team is doing a heck of a job, and we're quite proud of it.

斯科特，我只想補充一點，當然是邁克所說的，它始於巨大的增長。這對我們來說非常重要。但我們這裡的文化的一部分是我們專注於從我們的業務中提取低效率。我們已經——我之前說過，收入增長有很多投入，利潤率提高也有很多投入。邁克瀏覽了一份清單，非常全面。但總的來說，——我只想說我們專注於——我們不會僅僅通過定價來增長，我們將在這些類型的環境中找到一種方法來消除低效率這樣我們就可以增加利潤，這在這種類型的通貨膨脹環境中肯定是非常具有挑戰性的，但團隊正在做一份工作，我們為此感到非常自豪。

Sounds good. I appreciate the overview. So I think a lot of good momentum. You all touched upon My Cintas portal earlier. It sounded like maybe a little bit more you're willing to share. Just curious what percent penetration do you have there? Where do you anticipate that to go? And you mentioned that gets used at all hours of the day, but I'm just wondering what inning are we in? And any quantification of benefit of if customers are using that, how much more is that efficient in financially, if there's anything you can share on that?

聽起來不錯。我很欣賞這個概述。所以我覺得勢頭很好。你們之前都接觸過 My Cintas 門戶。聽起來您可能願意分享更多。只是好奇你那裡的滲透率是多少？你預計它會去哪裡？你提到它在一天中的所有時間都被使用，但我只是想知道我們在哪一局？如果客戶正在使用它，那麼對收益的任何量化，在財務上的效率會提高多少，如果有什麼可以分享的話？

Yes. Certainly, Scott. It is -- you're talking about changing behavior within customers. So it tends to be a higher percentage of new customers that are coming on board that are participating at a high level. And the reason being is, it's new behavior, period. So then changing the customer -- the current customer behavior takes longer. And because they're used to a certain way of how we're doing business and some are leaning into it faster than others. But we're -- we see a very long runway here of benefits that we're going to get. And where does it show up? It shows up in so many places, but certainly trying to be easier to do business with is a focus here, and it makes it easier to do business with us. So I think you'll see that benefit for years to come.

是的。當然，斯科特。它是——你在談論改變客戶的行為。因此，往往有更高比例的新客戶加入，他們的參與程度很高。原因是，這是新的行為，時期。那麼改變客戶——當前的客戶行為需要更長的時間。而且因為他們已經習慣了我們開展業務的某種方式，而且有些人比其他人更快地適應了這種方式。但是我們 - 我們在這裡看到了一條很長的跑道，我們將獲得好處。它出現在哪裡？它出現在很多地方，但當然努力更容易做生意是這裡的重點，它讓我們更容易做生意。所以我認為你會在未來幾年看到這種好處。

It's a little bit of an evolution with My Cintas in that a customer starts to use it and they like the benefits. And so there's -- they then start to grow in the way that they use it and expand. And as we continue to see that, that growth, too, we can add more options and other functionality to that, that over time grows and grows. And so this is not a -- we have flipped the switch on My Cintas and now let's see how many people we get -- how many customers we get adopting. This is really -- we've opened it. And this is going to grow just the product itself is going to continue to grow and add opportunity for us. So more and more customers will be added, but also more and more functionality will come with it into the future. And so to Todd's point, this is a journey, and it's an evolution, and we are in the very early stages of it.

這是 My Cintas 的一點點演變，因為客戶開始使用它並且他們喜歡它的好處。因此，他們開始以使用和擴展的方式成長。隨著我們繼續看到這種增長，我們也可以為其添加更多選項和其他功能，隨著時間的推移會不斷增長。所以這不是——我們已經打開了 My Cintas 的開關，現在讓我們看看我們有多少人——我們有多少客戶被採用。這真的是——我們已經打開了它。這將會增長，只是產品本身將繼續增長並為我們增加機會。因此，將添加越來越多的客戶，但未來也會有越來越多的功能。因此，對於托德而言，這是一段旅程，是一次進化，而我們正處於它的早期階段。

And at this time, there are no further questions. I'd like to turn the call back over to Paul Adler for closing remarks.

而此時，沒有進一步的問題。我想將電話轉回給 Paul Adler 以作結束語。

Okay, Ross. Thank you all for joining us this morning. We will issue our fourth quarter fiscal '23 financial results in July, and we look forward to speaking with you again at that time. Good day.

好的，羅斯。感謝大家今天早上加入我們。我們將在 7 月份發布 23 財年第四季度的財務業績，我們期待屆時再次與您交談。再會。

This concludes today's conference call. Thank you for your participation. You may now disconnect.

今天的電話會議到此結束。感謝您的參與。您現在可以斷開連接。