Cintas Partners With ScanMD - Analyst Blog
February 22 2012 - 6:30AM
Zacks
In order to convert medical charts to electronic formats
Cintas Corporation (CTAS) has entered into a
partnership with ScanMD recently. Cintas will now be able to switch
to electronic medical records (EMR) instead of maintaining
elaborate paper charts and files.
The coalition will guarantee Cintas the security of medical
records by converting the paper charts into electronic formats,
backed-up on secure servers. The searchable data fields will
make the task of searching the patient’s records easier. The PDF
files will simplify the navigation process, thus saving time.
Alongside, the solution will also save the cost and space required
for maintaining the paper charts and files.
The alliance with ScanMD has helped Cintas in curtailing the
cost and labor of transforming the healthcare information and
records to EMR program. Moreover, Cintas is also able to stay ahead
of the future legislative regulations of utilizing EMR
programs.
ScanMD specializes in converting paper medical charts to
electronic formats. It integrates paper charts to EMR and
safeguards them, fulfilling the norms of Health Insurance
Portability and Accountability Act (HIPAA). The system also
diminishes the risk of HIPAA issues by reducing the number of lost
or inaccessible files.
In the recently reported quarterly results, Cintas’ earnings
increased 50% to 57 cents per share from 38 cents in the
year-ago-quarter. Total revenue increased 9% year over year to
$1.02 billion. The Zacks Consensus Estimate for the third quarter
of the year 2012 is 52 cents.
Cintas continues to deliver margin expansion through better
sales productivity and cost efficiencies, offsetting the rising
headwinds from higher energy and other input costs. During the
second quarter of fiscal 2012, gross margin increased 50 basis
points to 42.2% and in operating margin there was an impressive 200
basis point expansion to 13%; this happens to be the fourth
consecutive quarter of strong operating margin expansion after
several years of decline.
This performance was commendable considering the ongoing
headwinds from higher energy and garment material prices. There is
scope for further gross margin expansion as the company has
unutilized capacity in facilities that it can leverage.
Furthermore, due to a weak labor outlook, much of the growth over
the last few quarters has been driven by new business sales rather
than existing customers adding more employees, which is more
profitable. Any increase in hiring at existing customers will boost
margin expansion.
Currently, the shares of Cintas maintain a Zacks #2 (short-term
“Buy” recommendation) Rank. It competes with the likes of
G&K Services Inc. (GKSR) and privately held
Alsco Inc. and ARAMARK
Corporation.
Based in Cincinnati, Ohio, Cintas Corporation (CTAS) provides
specialized services to businesses of all types throughout North
America. The company designs, manufactures, implements corporate
identity uniform programs, and provides entrance mats, restroom
supplies, promotional products and first aid and safety products
for approximately 800,000 businesses. Cintas operates under two
operating segments, Rental Uniforms and Ancillary Products and
Other Services.
CINTAS CORP (CTAS): Free Stock Analysis Report
G&K SVCS A (GKSR): Free Stock Analysis Report
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