Cintas (CTAS), a US largest producer of corporate uniform and a provider of diversified services for businesses, issued decent financials for its fiscal 2017 third quarter ended Feb 28. Revenues increased 5.3% y-o-y to $1.28 bn, with organic sales growth of 6.5%. The improvement was backed by addition of new customers, strong customer retention and higher penetration of existing customers through better and innovative products and services. Uniform Rental and Facility Services revenues for the quarter improved 6.1% to $993 mn. The segment accounted for 77.5% of the total revenues, with organic growth accelerating to 7.3%. Operating income increased 0.9% to $195 mn, and operating margin decreased to 15.2% from 15.9% in the year-ago quarter. To note, decline in margin was mostly due to a transaction expense of $9 bn related to the previously announced agreement to acquire G&K Services. Adjusted earnings per share rose 5.7% to $1.11 and surpassed analysts’ average projection of $1.06. Cintas has a solid financial position with adequate liquidity. The company ended FQ3 with cash and cash equivalents of $147 mn and total debt of $1.14 bn. In the first nine months of fiscal 2017, Cintas generated operating cash flow of $484 mn, up 62.8% y-o-y, and spent $219 mn on capital investments. The company’s annual dividend of $1.33 per share offers dividend yield of 1.1%.Cintas also announced that it recently completed the acquisition of its competitor G&K Services for approximately $2.2 bn, including acquired net debt, after receiving all the requisite regulatory approvals. The transaction should expand Cintas’ customer profile and augment revenues. Customer service is also likely to improve with increased route density. The company expects to realize annual synergies in the range of $130-140 mn in the fourth full year following the acquisition.I positively value Cintas’ focus on continually achieving revenue build up by increasing penetration levels at existing customers and broadening the customer base to include fresh business segments. The company also identifies additional product and service opportunities for its current and future customers to expand its portfolio. This approach should support steady top-line growth going forward.I expect Cintas’ shares to continue to rise, with medium-term target at $135. $CTAS, Cintas Corporation / D