Good day, everyone, and welcome to the Cintas Corporation announces fiscal 2024 first quarter earnings release conference call. Today's call is being recorded. At this time, I would like to turn the call over to Mr. Jared Mattingley, Vice President, Treasurer, and Investor Relations. Please go ahead, sir. Thank you for 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 2024 first quarter results. After our commentary, we will open the call to questions from the analysts. 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. 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. Thank you, Jared. We are pleased with our start to fiscal year 2024. First quarter total revenue grew 8.1% to $2.34 billion. Each of our businesses continued to execute at a high level. The benefits of our strong volume growth and revenue flowed through to our bottom line. Operating income margin increased 110 basis points to an all-time high of 21.4%, and diluted EPS grew 9.1% to $3.70. I thank our employees, whom we call partners, for their continued focus on our customers, our shareholders, and each other. Uniform rental and facility services operating segment revenue for the first quarter of fiscal 2024 was $1.83 billion, compared to $1.7 billion last year. The organic revenue growth rate was 7.6%. While price increases move near historical levels, revenue growth continues to be driven mostly from increased volume. Our sales force continues to add new customers and penetrate and cross-sell our existing customer base. Businesses prioritize all we provide, including image, safety, cleanliness, and compliance. Our first aid and safety services operating segment revenue for the first quarter was $260.7 million, compared to $234.2 million last year. The organic revenue growth rate was 11%. Our value proposition continues to resonate in our first aid and safety services operating segment. 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 wellbeing in the workplace. Our fire protection services and uniform direct sale businesses are reported in the All Other segment. All Other revenue was $254.8 million, compared to $234.5 million last year. The fire business revenue was $174.3 million, and the organic revenue growth rate was 14.2%. The uniform direct sale business revenue was $80.5 million, which was down 2.7% organically compared to last year. Now, before turning the call over to Mike to provide details of our first quarter results, I'll provide our updated financial expectations for our fiscal year. We are increasing our financial guidance. We are raising our annual revenue expectations from a range of $9.35 billion-$9.5 billion, to a range of $9.4 billion-$9.52 billion, a total growth rate of 6.6%-8%. Also, we are raising our annual diluted EPS expectations from a range of $13.85- $14.35, to a range of $14-$14.45, a growth rate of 7.8%-11.2%. Mike? Thanks, Todd, and good morning. Our fiscal 2024 first quarter revenue was $2.34 billion, compared to $2.17 billion last year. The organic revenue growth rate, adjusted for acquisitions and foreign currency exchange rate fluctuations, was 8.1%. Gross margin for the first quarter of fiscal 2024 was $1.14 billion, compared to $1.03 billion last year, an increase of 11%. Gross margin, as a percent of revenue, was an all-time high, excuse me, of 48.7% for the first quarter of fiscal 2024, compared to 47.5% last year, an increase of 120 basis points. Strong volume growth, and continued operational efficiencies helped generate this record gross margin. Energy expenses, comprised of gasoline, natural gas, and electricity, were a tailwind, decreasing 50 basis points from last year. Please keep in mind that some of the energy benefit is the result of efficiencies we've created with our proprietary Smart Truck technology. Certainly, we've also seen a benefit from a drop in prices at the pump compared to a year ago. Gross margin percentage by business was 48.1% for uniform rental and facility services, 55.9% for first aid and safety services, 49% for fire protection services, and 38.7% for uniform direct sale. ... operating income of $500.6 million compared to $440.1 million last year. Operating income as a percentage of revenue was 21.4% in the first quarter of fiscal 2024, compared to 20.3% in last year's first quarter, an increase of 110 basis points. Our effective tax rate for the first quarter was 19.2%, compared to 14.8% last year. The tax rates in both quarters were impacted by certain discrete items, primarily the tax accounting impact for stock-based compensation. Net income for the first quarter was $385.1 million, compared to $351.7 million last year. This year's first quarter diluted EPS of $3.70, compared to $3.39 last year, an increase of 9.1%. Cash flow remained strong. Net cash provided by operating activities in the first quarter grew 13% over the prior year. On September 15, we paid shareholders $138.3 million in quarterly dividends, an increase of 17.8% from the amount paid the previous September. Todd provided our annual financial guidance. Related to the guidance, please note the following: fiscal 2024 interest expense is expected to be $98 million compared to $109.5 million in fiscal 2023, predominantly as a result of lower variable rate debt. Our fiscal 2024 effective tax rate is expected to be 21.3%. This compares to a rate of 20.4% in fiscal 2023. The higher effective tax rate negatively impacts fiscal 2024 EPS guidance by about $0.16 and diluted EPS growth by about 120 basis points. Our financial guidance does not include the impact of any future share buybacks. Guidance includes the impact of having one more workday in fiscal 2024 compared to fiscal 2023. This extra workday comes in our fiscal third quarter. Jared? 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. If you would like to ask a question, please press star one on your phone now, and you will be placed in the queue in the order received. Please be prepared to ask your question when prompted. Once again, if you would like to ask a question, please press star one on your phone now. And our first question comes from Faiza Alwy from Deutsche Bank. Please go ahead. Yes. Hi, thank you, and good morning. Wanted to see if you could provide a bit more color on the new business environment and, you know, if you've noticed any, you know, any change in terms of, the macro environment. Certainly, you guys are, you know, talking to your customers every day. So just a bit more perspective around what you're seeing out there in the marketplace. Great. Good morning, Faiza. Yeah, our new business pipeline is quite good. We love the state of our sales organization. You know, their focus that they have, the scope. So new business is quite good. And that's a big driver of our growth that you're seeing, and we see that continuing. As far as macro environment, you know, it is... We haven't seen any real change in our customers' behavior, I would say, since we reported last. It's pretty consistent what we've seen over the past few quarters, and we are watching it very, very closely and monitoring it as we move forward. Great. Thank you. Thank you. Our next question comes from Manav Patnaik from Barclays. Please go ahead, Manav. Thank you. Good morning. I just wanted to see if you could give us a little more color, I think, you know, in terms of the pricing strategy and then also the strong volume growth. So I think you said pricing is back to historical levels, so, you know, I'm guessing that's down, you know, in that low single-digit camp, versus, you know, almost every other company talking about still, I guess, pricing higher than above average. So just maybe the first question is just, you know, how do we think about, you know, your pricing strategy here? Yes, good morning, Manav. Yeah, it is certainly closer to historical levels, and, you know, we like that. That's, we think, appropriate, based upon, our cost inputs. But we are, we're very proud of the fact that we're growing our, our business attractively, and we think we can continue this, based upon new business being, robust and, and our, and our customer retention levels being, very good as well. And we're seeing that in our, in our customer satisfaction scores as well. And, and then the, the status of our, of our customers is, you know, the, they're, they're, they're continuing on in the operating environment, as they have in the past. So, so we like where we're positioned. We like the momentum in our business, and we like how we're growing it as well, and we think it bodes well for the future. Manav, I might just add to that. You know, you ask about our pricing strategy, and as we've talked in the past, Our goal is operating margin improvement, right? And pricing can be a lever within that, but we have other levers. It's not the only way for us to improve margins. And so as we think about the operating margin strategy of increasing, we've got a lot of good things going on, and this is a great quarter that shows where pricing is sort of returning back to that historical level. We still increase margins quite nicely, even to record levels. And you know, again, it's just the pricing is a part of that strategy. Yeah, that makes sense. That's quite impressive. And then maybe just on the strong volume growth, could you just help provide some color on, you know, how much of that is, you know, new business, cross-selling, maybe share gains? Any color around that? Yeah, good question, Manav. I mean, it's, it's everything. As I mentioned, our new is quite good, and our retention levels, we're very happy with. And we're cross-selling, and we've, we're continuing to make good progress there. We're never satisfied, but our value proposition is resonating with our customers, and we're trying to make it easier to do business with us through various technologies. And I think it's showing up in our results, and we're again bullish. Got it. Thanks a lot. Thank you. Our next question comes from Josh Chan from UBS. Please go ahead, Josh. Hi, good morning, Todd, Mike, and Jared. Thanks for taking my questions. I guess could I ask about inflation and what you're seeing across your different cost buckets, labor, energy, material, and how you expect that to kinda transpire over the coming quarters as well? Yeah. Good morning, Josh. Yeah, I'll start if Mike wants to chime in as well. Yeah. Well, so what we're seeing from an input cost standpoint, labor is still higher than historical. But to Mike's point earlier, we're finding ways to improve operating margin in that environment still. And part of it's because productivity is quite attractive. And we're trying to position our employee partners so that they can be more successful in the marketplace, which is good for them, and it's good for ourselves and obviously with that, retention levels of our employee partners being much back are back close - very close to historical levels, it... That's good for our customers as well. Other input costs, you saw where energy was down, year over prior. That is really a Q1 subject, because if you recall, last year, the price at the pump was very high. And, so we got a little bit of a tailwind there, but we think that will be pretty muted through the balance of the fiscal year. And then last, material costs. Our global supply chain team is doing one heck of a job in trying to make sure that we're well positioned to have very competitive prices and access to all that product. And we've spoken in the past about how a very small percentage of our products are single source, so that positions us well as far as having access to product, but also giving them at very competitive rates. Thanks for the color, Todd. I guess for my follow-up, could you talk about what your CapEx expectations are this year and kind of the types of projects that you're investing in? Thank you. Sure. We did see a little bit of an increase in CapEx in Q1. We are, as we've talked, we are in the midst of implementing SAP for our fire protection business, and that adds a little bit of CapEx. You know, in the first quarter, we also saw, over the last couple years, supply chains, our vendors, have had some disruption in their ability to deliver trucks, being the best example. And in the first quarter, we saw a little bit of a catch-up in terms of us receiving more of those trucks, and so we saw a bit of an increase there too in the first quarter. I expect for the year that we're gonna likely be right around 4%. Longer term, we still believe 3.5%-4%, but because of SAP and sort of that catch-up, might be a little closer to 4% this year. Great. Thank you, Mike, and thanks both for your time. Thank you. My pleasure. Our next question comes from Heather Balsky from Bank of America. Please go ahead, Heather. Hi, thank you for taking my questions. I was hoping first you could talk about your exposure to the auto sector and any exposure you may have to, I guess, some of the current disruption. And then two, if you could talk about sort of the end markets. Are there any areas where just in this macro, you're seeing softness and areas where you're seeing strength, would be great. Thanks. Good morning, Heather. Yes, we're certainly watching what's going on with the autoworkers strike. But it is not affecting us in any material way whatsoever. You know, we have a very broad-based customer base, and as a result of that, it's not affecting us to any material degree whatsoever. And keeping in mind that we have no one customer that's greater than 1% of our revenue, and no even sector that's greater than 10% for three-digit NAICS codes. So, that helps us and insulates us a bit from all that. As far as, you know, the macro environment, it really varies based upon, you know, the sector, geography, you know, whether they're goods producing or services providing. But the labor market is a little easier but still not easy. And you see that through what we're reading with the job openings, still 9.5 million job openings. And that affects our customer base, from the standpoint of them trying to attract and retain people. We'd love to see those jobs filled because we think that'd be really good for our customers and for the economy in general. Appreciate the color. Thank you. Thank you. Our next question comes from Justin Hauke from RW Baird. Please go ahead, Justin. Yeah. Hi, good morning. I wanted to ask about the first aid margins, 'cause they've kind of sustainably been, you know, higher than they have been historically, and really, you know, more comparable to the uniform rental and the facility services segment. And I guess, you know, the question is, I mean, you know, for years, that was kind of a scale business where you were building it out, and it had lower margins. Are you at the point now where, like, you know, that business has reached a point where it has very comparable margins sustainably to the uniform rental business? Yeah. Good morning, Justin. Yeah, we really like the first aid business. I mean, it's that, it resonates with our customer base. They, strong, very strong value proposition, is helping our revenue growth. The mix has returned closer to historical, with first aid and safety. Justin, just like our other businesses, we're using various technologies to extract inefficiencies out of our business, and they're certainly no exception to that. I mentioned that our global supply chain team is doing a great job in sourcing product, and we're benefiting from sourcing there. But yeah, we see, you know, certainly there is, you know, running a business is not linear, but that being said, we certainly think that, you know, gross margins in excess of 50 are sustainable in that business. Great. And then I guess the last one is kind of more procedural, I guess. But, you did, it looked like in the cash flow, about $56 million spending on acquisitions in the quarter, which is a little bit higher than what you guys typically do. Do you have any comments on kind of where that was, where we should see the revenue flow from it? Well, I'll start and Mike can chime in. Justin, as you know, we love leveraging our balance sheet for M&A. And we think it's a great use of cash, and we're very happy with the fact that we were able to deploy some of the cash to leverage that opportunity. And we are acquisitive in all three of our operating segments that are route-based, and we made acquisitions in all three, so in Q1. So, we're pleased with that, and we think that'll, it's a great opportunity for us to bring those customers into the fold, those partners, those employee partners into the fold, and provide more value and cross-sell those to those those customers that are now part of Cintas. Okay. Thank you very much. Thank you. Our next question comes from George Tong, from Goldman Sachs. Please go ahead, George. Hi. Thanks. Good morning. In the past, you've talked about strong demand from the healthcare, education, and government verticals in driving uniform rentals growth. Can you discuss the latest trends you're seeing in these end markets and what's fueling the growth? Good morning, George. Yeah, those are, you know, those are three great verticals for us. I mean, they're three great segments of the North American economy. And, so yeah, we're still seeing outsized growth in those markets. And, as we've chatted about in the past, it's more than just a sales effort. We've organized around them, we've got products for them, we've got technologies for them, and that is resonating with that customer base. So, we think we've chosen them quite well, and there's plenty of runway in all of them. So, we're again quite bullish on the future of those segments. Got it. And then with respect to margins, your gross margins expanded 60 basis points year-over-year in your uniform segment. Most of that appears to be driven by lower energy costs. Can you discuss puts and takes around uniform gross margins in the quarter and opportunities for additional margin expansion over the remainder of this year that comes above and beyond tailwinds you're seeing from lower energy costs? ... Yes, George, we're, you know, the nature of the math around our business is the rental business is obviously a large percentage of it, and we're guiding towards margin expansion for the year. And we do not see energy being a tailwind for the balance of the year. So we expect margin expansion based upon certainly leverage on revenue growth. That's gonna be helpful. But we're extracting those inefficiencies out of our business. And as Mike mentioned earlier, we're proud of the fact that, you know, pricing is returning back to historical levels, but we're still able to grow operating margin, gross margin and operating margin at very attractive levels and to levels that are all-time highs. So, that's part of our plan. And, you know, our team is executing at a very high level, and we expect that that will continue. George, I might just reiterate what I had mentioned in the prepared remarks, keeping in mind that the energy benefit that we are getting is partly because we are working really hard at things like our Smart Truck initiative. So in other words, as we continue to grow really nicely with volumes, we don't need to add as many routes and trucks as we have in the past, and that creates then better fuel efficiency, if you will, throughout our network. And so that's a proactive initiative to get energy down, and one of those proactive ways is through that Smart Truck technology. And Mike, I might add that, you know, when we extract those inefficiencies out, that's better for our customers because we're able to spend more time in front of them instead of on the road. It's certainly better for our partners, our employee partners, because it makes them that much more productive, and that's good for them and our organization. It's really good for the environment. So, we think, you know, let's say, there's a lot of boxes checked there, and we've worked hard on that technology over the years, and it's showing up, and it's benefiting not just the P&L in a more simplistic fashion, but in many ways. Very helpful. Thank you. Thank you. Our next question comes from Tim Mulrooney from William Blair. Please go ahead, Tim. Hey, this is Sam Kusswurm from Tim Mulrooney. Thanks for taking our questions here. I guess I want to start with another healthcare question here. But as it relates to your healthcare clients, you've, you've talked a lot about the opportunity here, especially as more no programmers convert. But I guess I'd like to know for those healthcare operators who, who already use a service partner, what do you think your penetration rate is, and, and how might that compare to some of your other customer verticals? Sam, that's a good question. I don't have that in front of me, but we know this, we're in the early innings with healthcare. We're coming up with more products and services that they find attractive, and that's part of our culture. You know, we will enter into a business, but then we get out from behind our desks, and we go spend time with our customers. When we find that, we find the answers to what they are most interested in by speaking to them and our customers and our employee partners. We're hearing from them in various areas where we can help them, and we're taking action there. So, again, a very long runway in that vertical, and that's again part of our culture, and will be part of how we go to market moving forward. Gotcha. Appreciate it. Maybe just another quick one on the margins. I see SG&A as a percentage of sales ticked up again in the quarter compared to last year. I guess I'm wondering if there was any variable costs, like your insurance expenses, or if it was mainly some of the selling and branding investments you've talked about previously. Maybe you could just help break that out for us a little more. Nothing, nothing unusual in the quarter. We did see the. You know, we talked in the fourth quarter about some claims getting higher, but, but not structural. We saw those come back down to something more normal. But, as it relates to the quarter, just some puts and takes, nothing of any significance. Our, our goal is to continue to leverage, particularly, particularly the G&A piece of that, and we're gonna continue to work at that. Awesome. Appreciate it. Thank you. Thank you. Our next question comes from Andrew Steinerman from JPMorgan Securities. Please go ahead, Andrew. Hi. I wanted to talk to you about incremental margins, which were super strong in the quarter and, and last quarter on a year-over-year basis. I surely know Cintas historically has targeted 20%-30% as a range for incremental margins, but kind of given where we are right now, it definitely feels like that kind of low end of the range, the 20, might not be as appropriate. And so my question is, you know, has your medium-term range for incremental margins been creeping up? Good morning, Andrew. Yeah, 20%-30% is our target. We, Q1 was a very attractive incremental margins, and there's, you know, there's always puts and takes in every quarter. As I mentioned, you know, running a business is not linear, but we will expect that we will be in that 20%-30% range.... I certainly like higher in the range than lower. And we are, and I think our guide speaks to where attractive margin improvement for the year as well. Okay. Thank you. Thank you. Our next question comes from Seth Weber from Wells Fargo. Please go ahead, Seth. Hey, guys, good morning. Wanted to ask just about the small tick down in uniform direct sales, organic growth here in the quarter. It's the first, I think, decline that we've seen there in a while, and I know the comp was hard. Is there anything else that you'd call out there for that business? Thanks. Yeah. Good morning, Seth. You know, certainly, well, we have seen outstanding performance from that business over the past, really, two years. And but it is, as we've spoken about in the past, the uniform direct sale business tends to be a little bit lumpier based upon rollouts of large programs, whether it's hospitality or a Fortune 1,000 type customer. So, nothing more than that. We still are bullish on the future of that business and for the year and moving forward. Do, do you think, Todd, do you think that business could be up for the year, or do you think that's kind of flattish or down? Well, I would suspect. Well, we expect all of our businesses to grow, so I would suspect that we would see that up. But just the comps are, you know, Seth, with, you know, the level of what we dealt with with hospitality and in that vertical in Fortune 1,000, the level of where employees came back so strongly. I wouldn't suspect that you'll see, you know, anywhere near the level of growth that we've seen in the last couple of years, but we expect it to grow. Seth, I might point out that, you know, the last two years have, they have been a significant recapture of what we sort of lost in that pandemic period of time. In our fiscal 2022, that business grew organically over 50%. In fiscal 2023, it was almost 30%. So there was a lot of recapture going on. But keep in mind that our longer-term goal for that business, Todd expects it to grow, but it's probably more of a low single digit to mid single digit grower in our portfolio. Right. Okay, understood. Thank you. And then maybe just on the first aid safety business, given the margin strength that you're seeing there, can you talk about, are you seeing any incremental competition in that space? Are you seeing any, you know, bigger players trying to get into that space, or just smaller regional players getting more active? Thank you. Yeah, a good question, Seth. Certainly, it's a very competitive marketplace. And, you know, first aid products, safety products, there is hundreds of competitors out there. There's many, many ways to procure those products, whether it be van delivered or e-commerce, you name it, we see it there. But as a result of that, it's a very competitive market, and, you know, we've talked about the health and safety of employees being the number one item that businesses are focused on. And when that occurs, there certainly it attracts plenty of people into the marketplace because the value proposition of taking great care of employees is resonating with folks. So yeah, it's a very competitive environment, and I'm sure it'll continue to be. Okay, guys. Thank you very much. Thank you. Our next question comes from Stephanie Moore from Jefferies. Please go ahead, Stephanie. Hi, good morning. Thank you. Actually, maybe continuing on, on that last question there. Could you talk a little bit about what you're seeing in terms of the competitive landscape and your more, core uniform ancillary products, segment? You know, as you continue to win new business, where are you seeing the majority of that new business coming from? Is it, you know, non-programmers, some of the regional players, larger players? Any color there to be helpful. Thank you. Yes, good morning, Stephanie. So, you know, I've been in the uniform rental and facility services business my entire career, 34 years. It's been highly competitive my entire career, and I'm sure it'll continue to be that way. But we haven't seen a change in the landscape. It's always really competitive. So, that being said, our sales organization is highly skilled, and what we know is there is a massive opportunity with the no-program market. And for years, our organization's been focused on expanding the pie, and they are continuing to do exactly that. And when we talk about expanding the pie, they are, you know, those employees at a no programmer, I mean, they're wearing garments, right? But they are—they may be buying it themselves, they may be buying it through a catalog. They... It might be a centralized program for the company, but they're, they're, they're purchasing them, and then we provide more value to them with the, the, the products and services that we offer, whether they're unique products like Carhartt or Chef Works or Landau, it brand-great branded programs. But the, the no-program market is really attractive for us, and we find that, our, that market sees really good value in what we're offering. So we're focused on expanding that pie, and, that will continue. Got it. And just a follow-up, if I may. You noted that retention levels, you know, continue to be really high. I'm just curious, in this current environment, what do you think is resonating the most with your customers, as your sales force kind of goes in? Is it kind of a willingness to work with them on price? Is it the product offering, your scale? Love to just get your thoughts on what do you think is resonating the most to drive such a nice retention level. Thanks. Yeah, great question, Stephanie. That's a very complicated answer 'cause there's so many inputs to it. But it starts with being highly focused on taking incredibly good care of our customers, and attracting and retaining the very best people. But then giving them product services, tools, so that they can not only have the intent to take great care of our customers, but do just exactly that. So, and you know, that gets into great products that I mentioned earlier. The service focus that we're-- or the tools that we're making it, the, to make it easier to do business with us. But it gets down to our people and positioning them to take really, really good care of our customers and them executing on that. They're executing at a really high level. You know, we talk often about, you know, when things are challenging, when it's hard to attract people, when it's hard to procure products, when it's hard to operate in the marketplace. It gives us a chance to shine. Our culture is shining through, and our people are doing one heck of a job in taking care of our customers. Great. Thank you so much. Thank you. Our next question comes from Scott Schneeberger from Oppenheimer. Please go ahead, Scott. Thanks. Good morning. Guys, you've, you've certainly... It, it sounds like you really wanna speak to, to Smart Truck because that's been going very well. I was hoping you could add also on automation to facilities. And where I'm going here, just, kind of an update, and where I'm going here is, it sounds like you've been getting nice efficiencies, and you still see more room to run. Is there any quantification you can put on that? I know you're looking for margins up this year, overall business, but, maybe just help us, get an idea of what's at play there and how much you can do. Thanks. You know, Scott, I'll start. Mike, if you would like to chime in there. Yeah, we are, we're deploying technology, and you can call it automation, you can call it technology, you can call it digital. We're deploying that across all of our businesses and across all areas of our business as well. And we've been focused on that for years, but there certainly is, you know, we're seeing some real benefits there with our investment with SAP, where with our investments, our partnerships with Google and with Verizon. And it's we see that there's plenty of opportunities still to come there to improve in the efficiencies of our business and to automate certain functions. You know, we call it make it easier for our customers to do business and make it easier for our employee partners to take great care of our customers. The more we can invest there, we think it's an incredibly good use of our balance sheet because it positions us well for not just the short term, but the long term as well. There are so many details that go into all of the things that Todd just talked about, that it's really hard to put a number on it. Our goal is, as you've heard us say, is continue to improve margins. We have a number of different levers to do so. Our goal is incrementals in that 20-30% range, recognizing we're at the bottom of that range today. But it's hard to put a specific number on what's left, because we're always working on what more can we do? And there are so many details and so many different projects we're working on. So our guide certainly does imply for continued margin improvement over last year, and that's the way we think about it. Great. Thanks, guys. Appreciate that. You just referenced SAP, and you mentioned CapEx may be high end of the range this year, working on some implementation in the fire segment. Could you just speak to, you know, is it, will that have a tail to next year? How much more, I mean, are we gonna see SAP projects for years to come? Just a sense of what you have on the spend side going forward. Thanks. From a fire perspective, you know, the implementation—we are in the midst of the early innings of the implementation, and so we'll see some pressure in the fire margins a little bit this year... and a little bit next year. Though the synergies and the benefits don't come overnight, it's not a flip of the switch. And so we—just like we did with the rental business and the first aid business before that, we need to get onto the platform. It takes a little bit of time to get really good at using the platform, and then we really start to see the benefits accelerate, just like we have in first aid and rental. Now, you know, that's a fire is a smaller part of our business, but we certainly expect that those benefits will come. As it relates to SAP, you know, SAP is not, it's a journey, right? And we are, even though we are on SAP and will be for most of our business after the fire protection business gets on, there are constant things to learn from SAP. There are new initiatives in working with SAP and Google and Verizon that create new and different things. And so we look at this. I think Todd's talked about it as one of his largest initiatives in terms of technology, and it's a journey. It's not a flip of a switch, we turn on new systems here and there. So we're in the midst of that. We'll continue to invest in all of that, and our expectation is it's gonna continue to bring benefits into the future. Yeah, Scott, to expand on what Mike said, it is a journey. But when you're on that journey, there is benefits, a long, long tail of benefits as well. And so we will continue to invest appropriately. We have relationships at a very high level, in each of those organizations, and it's gonna bear fruit for us. And that's part of our plan. It's not easy. It's very challenging to go through these processes, but our team has shown the wherewithal to not only digest the change, but then leverage the opportunities that are in front of them. Great. Thanks, guys. Yes, sir. Our next question comes from Shlomo Rosenbaum. Please go ahead, Shlomo. Hi, thank you for taking my questions. Hey, Todd, maybe you can just peel the onion back a little bit more on that margin on the first aid side. I know you pointed to some sourcing and, and stuff like that, but it seems like the business has gone from mid-teens to low twenties in the course of the year. And I was wondering if there's, is there something to do with route optimization? Is it mix related, pricing, anything else that operationally made such a significant difference? And, you know, after that, I have just a question on the labor environment for you guys yourselves. Are you, is it easier for you guys to source people for what you need? Good question, Shlomo. Yeah, again, we love the first aid business, but there's so many inputs to margin expansion, and we're leveraging them all. It starts with really good revenue growth, and we're seeing that, and that's in a big way because the value proposition is resonating. The products, the services that we offer, you know, in the marketplace, trying to attract and retain people is still challenging. And customers are trying to take really good care of their people, and we're benefiting from that, and we're helping them accomplish exactly that. We're helping them run that business—their business better. So that's helpful. The mix, as you know, has you know back during the pandemic, it was certainly so much more focused on safety products, a lot of gloves and a lot of sanitizer and those types of items. And that has abated a bit, and the mix is back focused on you know first aid and those types of products, more recurring revenue type. And yeah, we are absolutely leveraging technology to make it easier to do business, but also to position our partners, our employee partners, to provide more value to our customers. And Smart Truck is a component of that. You know, we did have a little bit of energy tailwind, 40 basis points, but as Mike cited earlier, not all that's because of the price at the pump. That is also because we are extracting the inefficiencies out. And we always talk around here about how we don't make money when the wheels are moving. We make money when the wheels stop. That's better for our customers, that's better for our employee partners, and all that is contributing. And then lastly, as I mentioned, our supply chain team has done a great job. They are leveraging the opportunities there. The larger we get in that business, the more leverage they have, and they're executing at a high level. And so many inputs that are contributing to it. And but what's really encouraging is we see those having an opportunity to continue in the future. Certainly no event, it's more of a process. And then just the labor environment on your own, like for the people that you're sourcing? Yeah, pardon me. So, from a labor standpoint, it, yeah, as I mentioned earlier, it is easier, but not easy. And we are looking for great people. You know, we wanna hire not only people that are employed somewhere else, but happily employed, which is very challenging. And but we think we have a great employee value proposition as well, and so we're highly focused on that. So, but yes, easier than it was a year ago. But I'd say Shlomo, throughout my career, it's always been challenging. It's a little bit more challenging than it has been historically, but not what it once was, you know, a year ago or so. Thank you. Thank you. Our next question comes from Kartik Mehta from North Coast Research. Please go ahead, Kartik. Hey, good morning. I know there's a lot of questions and maybe thoughts on what happens to new sales, and I'm wondering, you know, if you go back to kinda 2008, 2009, and hopefully never have that recession again, but if you look at new sales back then, how did, how did Cintas perform, for new sales? And any lessons from that you would take, as we move forward? Yes, Kartik. Well, you know, first of all, we're a really different company today than we were in 2008, 2009, where we have a much more diversified customer base. You know, we're now, today, 70% of our customers are services providing, 30% are goods producing. We have significant verticals that we didn't have as well, healthcare, education, government. So, we think we're really well positioned for whenever the next recession is. And I remember 2008, 2009, 'cause I was running the sales organization back then, and you know, our value proposition still resonated with people. And we still sold new business, and we did so at attractive rates. As I mentioned, it's not always, are we asking for new monies? Sometimes it's just a redirection of those from somewhere else to us, not only in a maybe a direct competitor standpoint, but also, you know, they're purchasing, you know, clothing. They're purchasing items to take care of their facilities. So, we think we're well positioned. I might also mention, you didn't ask specifically about it, but, you know, we love having a pristine balance sheet. And we think, whenever the next recession is, that might open up opportunities for us. Just the fact that we've, you know, our organization is focused on, you know, fighting through whatever the economic environment is, taking great care of our customers, take great care of our employee partners. We've grown sales in 52 of the last 54 years. We suspect that whatever the economic environment is, we believe we're gonna be successful at it. Kartik, I might add, Todd might be a little modest. He was running that organization. It was a difficult environment, and he and the sales team exceeded their internal goals and really continued to show that value even in tough times, as Todd mentioned. And as he also talked about, our customer base is quite a bit broader than it was back then, and our sales team is a little bit different. But the really good news is, even back then, in the deepest, longest, broadest recession we'd seen in 100 years, we still sold a lot of new business. And it's a nice reflection of the value proposition that we have. Yeah, thanks. Hey, and just as a follow-up, if you look at that first aid and safety business, you're doing really well in it. Is there a way you would look at to say a certain percentage is recurring? Do you consider a certain percentage recurring? I know you don't have long-term contracts in that business, but just from a demand standpoint and what you've seen from a historical standpoint. Yes, Kartik, it's a good question. I don't have that in front of me, but I know it has returned much closer to historical or even higher, as far as what we see from a repeat recurring type of revenue. You know, we want to provide value to the customers, you know, whatever product, services they want. It's just the nature of it, what we provide, whether it be first aid supplies, you know, access to AEDs, access to eye wash stations, access to clean water through our WaterBreak offering. Those are all items that are really important to our customers, more so today than they were pre-pandemic. We think that trend will continue. Thank you very much. I really appreciate it. Yes, thank you. Our next question comes from Toni Kaplan from Morgan Stanley. Please go ahead, Toni. Thank you so much. So one of your competitors has been talking about using a strategy where they're incentivizing their drivers to cross-sell products. Can you talk about why you don't use that strategy? You know, what the disadvantages are that you have found when doing that? Yeah, great question, Toni. I'm glad you asked because, you know, my first job 34 years ago was on the trucks, and we have been cross-selling our products via our, we call them our service sales representatives. We've been cross-selling them since I started, and I'm sure it was in place well before I started as well. So we see the fact that we have 12,000 or so trucks that roll out of our parking lots every single day that are focused on taking great care of our customers. When they roll out of those parking lots, they're spending time in those businesses, and they have eyes, they have ears, they have minds, and they see what's going on in those businesses, and they see opportunities. It always has been and always will be a key component of our growth trajectory. Because we see that infrastructure as a real advantage, and we leverage it and make sure that those service providers either provide more products and services, or they provide a lead to provide more products and services, based upon the nature of the product that the customer might be interested in. And Toni, you know, we've talked a lot about this over the last more than 10 years. We've got customers of all different sizes, verticals, et cetera. And so while we do certainly expect those service sales reps to continue to penetrate and sell, we recognize that some businesses are just more complex than others, are larger than others. And so sometimes there is a strategy to enhance that opportunity. And it might be through, for example, in healthcare, we have dedicated people that really do reach out to the decision-maker. So it's not just the service sales rep, but it's also other people that have relationship responsibilities that are looking for those new and different penetration opportunities. It's not as simple, just to simply say, "We're going to go in and have a service sales rep or an SSR go into each customer and sell." It's all customers are so different, and so we need a strategy that can attack all types of customers, and we do. Toni, we know that our customer satisfaction scores are really good, and in large part because they really like our people. They like our service providers, our frontline service providers, and we leverage that. And whether it be, as Mike mentioned, a more, a smaller type customer, we can cross-sell via the service provider. A larger one that's a little bit more complicated, there might be a need for some some air cover, for some help there. But nevertheless, that's always been a an important component of our strategy and and always will be. That is super helpful. Wanted to also ask, I think the last few calls, you've been talking more about technology and investments and, and things of this sort. Are there any, I guess, technology capabilities that you think you still need, that you either are getting through hiring technology people or maybe even doing, you know, M&A, like... And maybe you've done it, maybe you still have yet to do. But are there any technology capabilities that you need that, you know, basically would be helped through M&A or hiring internally new technology people? Yeah, Toni, great question. So we are always on the lookout for those opportunities. We think we have a really strong technology platform that we can build off of. But we know that the answer for what our customers are interested in is with spending time with our customers, and our employee partners are the ones who discern those opportunities. So we're always asking them, you know, how do we make it easier to do business? What is there any void? And frankly, that's where most of our investments have come from, is that information. We're trying to make it easier to do business with us. So we are. We're always in search of, and, and, of trying to be a world-class service provider, but having an incredibly strong technology platform that makes it easier for our customers to do business with us, and makes it easier for our employee partners, our service providers, to create a world-class experience for those, those customers. So, so yes, we're in search of, whether it's, we, we buy it, or we, we bolt it on to our current platform, or we create it ourselves. All of, all of those are of interest to us and, and will be moving forward. Thank you. Thank you. At this time, there are no further questions. I'd like to turn the call back over to Jared Mattingley for closing remarks. Thank you for joining us this morning. We will issue our second quarter of fiscal 2024 financial results in December. We look forward to speaking with you again at that time. Thank you. This concludes today's conference call. Thank you for your participation. You may now disconnect.