Cintas Corporation Reports First Quarter Fiscal 2008 Revenue and Earnings and Announces International Expansion



    New Sales Organization Gaining Momentum Company Acquires Business in
Europe

    CINCINNATI, September 27 /CNW/ - Cintas Corporation (Nasdaq:  CTAS) today
reported revenue for the first quarter of fiscal 2008 of $969.1 million, a
6.0% increase from the previous year's first quarter revenue of $914.2
million. Net income was $81.1 million and earnings per diluted share were
$0.51.

    Scott D. Farmer, President and Chief Executive Officer, stated, "Our
results for the first quarter are in line with our expectations. Our new sales
organization is now fully staffed and operational. We believe that the initial
disruption in new business sales caused by the rollout of this new
organization is behind us and we are beginning to see an improvement in new
business results. We expect the new sales organization to continue to gain
strength and momentum, resulting in improving revenue growth as we progress
through the rest of our fiscal year."

    While net income and earnings per diluted share decreased 4.6% and 3.8%,
respectively, as compared to the first quarter of last fiscal year, the
results were in line with Company projections. The Company indicated that the
investment in the new sales organization has impacted profitability, as
expected. Mr. Farmer stated, "The investment in the new organization has been
made in order to enhance future growth opportunities. As the amount of new
business sold improves under this new organization, we expect our selling
costs as a percent of revenue to begin to trend back to more traditional
levels."

    International Expansion

    In addition to their first quarter results, Cintas announced that it has
expanded internationally. Scott Farmer stated, "I am very pleased to announce
that we have acquired Certo Information Management, a privately-held document
shredding and storage business located in the Netherlands. We are very excited
about the opportunity to now expand our services outside of North America.
While the revenue added directly from this acquisition is not material to our
operations, our hope and intent is that experience gained from operating this
business will provide a platform for further international expansion."

    Strong Balance Sheet and Cash Flow

    The Company's balance sheet continues to be strong. As of August 31,
2007, the Company's current assets exceeded current liabilities by over a four
to one ratio and debt to total capitalization was 28.2%. The Company's cash
flow from operations continues to be healthy.

    As of June 1, 2007, the Company adopted FASB Interpretation No. 48 (FIN
48), Accounting for Uncertainty in Income Taxes - an interpretation of FASB
Statement No. 109. As a result of the implementation of FIN 48, the Company
recorded a $14 million decrease to opening retained earnings as of June 1,
2007, and a corresponding tax reserve was established.

    New Segment Reporting

    Cintas also announced that beginning this quarter it will increase the
number of operating segments reported in the Company's financial statements.
Scott Farmer stated, "Our Document Management business and our First Aid,
Safety and Fire business have grown to a sufficient size and scale that we
believe reporting these businesses as separate operating segments is
appropriate. These emerging businesses, which have historically been included
in our "Other Services" operating segment, will now be broken out separately."

    As a result of this change, the Company will now report results for five
operating segments: Rental Uniforms and Ancillary Products; Uniform Direct
Sales; First Aid, Safety and Fire Protection Services; Document Management
Services; and Corporate.

    Outlook

    Mr. Farmer stated, "Our first quarter results are in line with our
expectations for the quarter. Based on these results and the improvement we
are beginning to experience in our new business sales, we reiterate our full
fiscal year guidance of $3.9 billion to $4.1 billion in revenue and earnings
per diluted share of $2.15 to $2.25. Achieving this guidance would allow us to
reach our 39th consecutive year of growth in revenue and earnings."

    About Cintas

    Headquartered in Cincinnati, Cintas Corporation provides highly
specialized services to businesses of all types predominantly in the United
States and Canada. Cintas designs, manufactures and implements corporate
identity uniform programs, and provides entrance mats, restroom supplies,
promotional products, first aid and safety products, fire protection services
and document management services for approximately 800,000 businesses. Cintas
is a publicly held company traded over the Nasdaq Global Select Market under
the symbol CTAS, and is a Nasdaq-100 company and component of the Standard &
Poor's 500 Index. The Company has achieved 38 consecutive years of growth in
sales and earnings, to date.

    CAUTION CONCERNING FORWARD-LOOKING STATEMENTS

    The Private Securities Litigation Reform Act of 1995 provides a safe
harbor from civil litigation for forward-looking statements. Forward-looking
statements may be identified by words such as "estimates", "anticipates",
"predicts", "projects", "plans", "expects", "intends", "target", "forecast",
"believes", "seeks", "could", "should", "may" and "will" or the negative
versions thereof and similar expressions and by the context in which they are
used. Such statements are based upon current expectations of Cintas and speak
only as of the date made. We cannot guarantee that any forward-looking
statement will be realized. These statements are subject to various risks,
uncertainties and other factors that could cause actual results to differ from
those set forth in or implied by this news release. Factors that might cause
such a difference include, but are not limited to, the possibility of greater
than anticipated operating costs including energy costs, lower sales volumes,
loss of customers due to outsourcing trends, the performance and costs of
integration of acquisitions, fluctuations in costs of materials and labor
including increased medical costs, costs and possible effects of union
organizing activities, failure to comply with government regulations
concerning employment discrimination, employee pay and benefits and employee
health and safety, uncertainties regarding any existing or newly-discovered
expenses and liabilities related to environmental compliance and remediation,
the cost, results and ongoing assessment of internal controls for financial
reporting required by the Sarbanes-Oxley Act of 2002, the initiation or
outcome of litigation, higher assumed sourcing or distribution costs of
products, the disruption of operations from catastrophic events, changes in
federal and state tax laws and the reactions of competitors in terms of price
and service. Cintas undertakes no obligation to update any forward-looking
statements whether as a result of new information or to reflect events or
circumstances arising after the date on which they are made. You are advised,
however, to consult any further disclosures we make on related subjects in our
Form 10-Q, 8K and 10-K reports to the SEC.

    
                              Cintas Corporation
                 Consolidated Condensed Statements of Income
                                 (Unaudited)
                     (In thousands except per share data)

    ----------------------------------------------------------------------
                                               Three Months Ended
    ----------------------------------------------------------------------
                                       Aug. 31, 2007 Aug. 31, 2006 % Chng.
    ----------------------------------------------------------------------
    Revenue:
    ----------------------------------------------------------------------
      Rental uniforms and ancillary
       products                            $710,354      $687,658      3.3
    ----------------------------------------------------------------------
      Other services                        258,774       226,503     14.2
    ----------------------------------------------------------------------
      Total revenue                        $969,128      $914,161      6.0
    ----------------------------------------------------------------------

    ----------------------------------------------------------------------
    Costs and expenses (income):
    ----------------------------------------------------------------------
      Cost of rental uniforms and
       ancillary products                  $391,490      $378,300      3.5
    ----------------------------------------------------------------------
      Cost of other services                160,266       145,380     10.2
    ----------------------------------------------------------------------
      Selling and administrative
       expenses                             276,710       244,128     13.3
    ----------------------------------------------------------------------
      Interest income                        (1,462)       (1,526)    -4.2
    ----------------------------------------------------------------------
      Interest expense                       12,837        12,432      3.3
    ----------------------------------------------------------------------
      Total costs and expenses             $839,841      $778,714      7.8
    ----------------------------------------------------------------------

    ----------------------------------------------------------------------
    Income before income taxes             $129,287      $135,447     -4.5
    ----------------------------------------------------------------------
    Income taxes                             48,224        50,485     -4.5
    ----------------------------------------------------------------------
    Net income                              $81,063       $84,962     -4.6
    ----------------------------------------------------------------------

    ----------------------------------------------------------------------
    Per share data:
    ----------------------------------------------------------------------
    Basic earnings per share                  $0.51         $0.53     -3.8
    ----------------------------------------------------------------------
    Diluted earnings per share                $0.51         $0.53     -3.8
    ----------------------------------------------------------------------

    ----------------------------------------------------------------------
    Basic shares outstanding                158,771       160,770
    ----------------------------------------------------------------------
    Diluted shares outstanding              159,038       161,147
    ----------------------------------------------------------------------
    

    
    CINTAS CORPORATION SUPPLEMENTAL DATA
    ----------------------------------------------------------------------
                                               Three Months Ended
    ----------------------------------------------------------------------
                                       Aug. 31, 2007 Aug. 31, 2006 % Chng.
    ----------------------------------------------------------------------
    Rental uniforms and ancillary
     products gross margin                     44.9%         45.0%
    ----------------------------------------------------------------------
    Other services gross margin                38.1%         35.8%
    ----------------------------------------------------------------------
    Total gross margin                         43.1%         42.7%
    ----------------------------------------------------------------------
    Net margin                                  8.4%          9.3%
    ----------------------------------------------------------------------

    ----------------------------------------------------------------------
    Depreciation and amortization            $46,222       $42,768     8.1
    ----------------------------------------------------------------------
    Capital expenditures                     $45,344       $36,496    24.2
    ----------------------------------------------------------------------

    ----------------------------------------------------------------------
    Debt to total capitalization               28.2%         29.5%
    ----------------------------------------------------------------------
    

    
                                Rental
                                Uniforms           First Aid,
                                  and     Uniform   Safety and
                                Ancillary  Direct     Fire      Document
     SUPPLEMENTAL SEGMENT DATA  Products    Sales   Protection  Management
    ----------------------------------------------------------------------
    For the three months ended
     August 31, 2007
    ----------------------------------------------------------------------
                       Revenue   $710,354 $118,805    $102,256     $37,713
    ----------------------------------------------------------------------
                  Gross margin   $318,864  $36,470     $41,820     $20,218
    ----------------------------------------------------------------------
                  Selling and
       administrative expenses   $204,071  $25,343     $31,199     $16,097
    ----------------------------------------------------------------------
         Income (loss) before
                  income taxes   $114,793  $11,127     $10,621      $4,121
    ----------------------------------------------------------------------
                        Assets $2,592,401 $182,278    $332,757    $375,122
    ----------------------------------------------------------------------

    ----------------------------------------------------------------------
    For the three months ended
     August 31, 2006
    ----------------------------------------------------------------------
                       Revenue   $687,658 $116,997     $88,336     $21,170
    ----------------------------------------------------------------------
                  Gross margin   $309,358  $35,693     $34,330     $11,100
    ----------------------------------------------------------------------
                  Selling and
       administrative expenses   $185,278  $23,790     $25,151      $9,909
    ----------------------------------------------------------------------
         Income (loss) before
                  income taxes   $124,080  $11,903      $9,179      $1,191
    ----------------------------------------------------------------------
                        Assets $2,519,943 $163,572    $287,521    $238,291
    ----------------------------------------------------------------------

     SUPPLEMENTAL SEGMENT DATA                        Corporate   Total
    ----------------------------------------------------------------------
    For the three months ended August 31, 2007
    ----------------------------------------------------------------------
                                              Revenue       $0    $969,128
    ----------------------------------------------------------------------
                                         Gross margin       $0    $417,372
    ----------------------------------------------------------------------
                  Selling and administrative expenses       $0    $276,710
    ----------------------------------------------------------------------
                    Income (loss) before income taxes ($11,375)   $129,287
    ----------------------------------------------------------------------
                                               Assets $138,272  $3,620,830
    ----------------------------------------------------------------------

    ----------------------------------------------------------------------
    For the three months ended August 31, 2006
    ----------------------------------------------------------------------
                                              Revenue       $0    $914,161
    ----------------------------------------------------------------------
                                         Gross margin       $0    $390,481
    ----------------------------------------------------------------------
                  Selling and administrative expenses       $0    $244,128
    ----------------------------------------------------------------------
                    Income (loss) before income taxes ($10,906)   $135,447
    ----------------------------------------------------------------------
                                               Assets $174,894  $3,384,221
    ----------------------------------------------------------------------
    

    
    RECONCILIATION TO GAAP MEASURES
    ----------------------------------------------------------------------
                                               Three Months Ended
    ----------------------------------------------------------------------
                                       Aug. 31, 2007 Aug. 31, 2006 % Chng.
    ----------------------------------------------------------------------
    Income before income taxes             $129,287      $135,447     -4.5
    ----------------------------------------------------------------------
    Interest income                          (1,462)       (1,526)    -4.2
    ----------------------------------------------------------------------
    Interest expense                         12,837        12,432      3.3
    ----------------------------------------------------------------------
    Earnings before interest and taxes     $140,662      $146,353     -3.9
    ----------------------------------------------------------------------
    

    
                              Cintas Corporation
                    Consolidated Condensed Balance Sheets
                       (In thousands except share data)

    ----------------------------------------------------------------------
                                                Aug. 31, 2007
                                                 (Unaudited)  May 31, 2007
    ----------------------------------------------------------------------
    ASSETS
    ----------------------------------------------------------------------
    Current assets:
    ----------------------------------------------------------------------
      Cash and cash equivalents                      $40,841      $35,360
    ----------------------------------------------------------------------
      Marketable securities                           97,431      120,053
    ----------------------------------------------------------------------
      Accounts receivable, net                       409,441      408,870
    ----------------------------------------------------------------------
      Inventories, net                               236,102      231,741
    ----------------------------------------------------------------------
      Uniforms and other rental items in service     352,279      344,931
    ----------------------------------------------------------------------
      Deferred tax assets                             19,912            -
    ----------------------------------------------------------------------
      Prepaid expenses                                17,896       15,781
    ----------------------------------------------------------------------
    Total current assets                           1,173,902    1,156,736
    ----------------------------------------------------------------------

    ----------------------------------------------------------------------
    Property and equipment, at cost, net             933,233      920,243
    ----------------------------------------------------------------------

    ----------------------------------------------------------------------
    Goodwill                                       1,270,780    1,245,877
    ----------------------------------------------------------------------
    Service contracts, net                           166,223      171,361
    ----------------------------------------------------------------------
    Other assets, net                                 76,692       76,263
    ----------------------------------------------------------------------

    ----------------------------------------------------------------------
                                                  $3,620,830   $3,570,480
    ----------------------------------------------------------------------

    ----------------------------------------------------------------------
    LIABILITIES AND SHAREHOLDERS' EQUITY
    ----------------------------------------------------------------------
    Current liabilities:
    ----------------------------------------------------------------------
      Accounts payable                               $70,093      $64,622
    ----------------------------------------------------------------------
      Accrued compensation & related liabilities      34,517       62,826
    ----------------------------------------------------------------------
      Accrued liabilities                            124,174      200,686
    ----------------------------------------------------------------------
      Income taxes:
    ----------------------------------------------------------------------
        Current                                       27,966       18,584
    ----------------------------------------------------------------------
        Deferred                                           -       52,179
    ----------------------------------------------------------------------
      Long-term debt due within one year               4,161        4,141
    ----------------------------------------------------------------------
    Total current liabilities                        260,911      403,038
    ----------------------------------------------------------------------

    ----------------------------------------------------------------------
    Long-term liabilities:
    ----------------------------------------------------------------------
      Long-term debt due after one year              876,522      877,074
    ----------------------------------------------------------------------
      Deferred income taxes                          122,884      122,630
    ----------------------------------------------------------------------
      Accrued liabilities                            116,552            0
    ----------------------------------------------------------------------
    Total long-term liabilities                    1,115,958      999,704
    ----------------------------------------------------------------------

    ----------------------------------------------------------------------
    Shareholders' equity:
    ----------------------------------------------------------------------

      Preferred stock, no par value: 100,000
       shares authorized, none outstanding                  -            -
    ----------------------------------------------------------------------
      Common stock, no par value: 425,000,000
       shares authorized
      FY 2008: 173,057,674 issued and
       158,860,351 outstanding

      FY 2007: 172,874,195 issued and
       158,676,872 outstanding                       128,041      120,811
    ----------------------------------------------------------------------
      Paid-in capital                                 55,542       56,909
    ----------------------------------------------------------------------
      Retained earnings                            2,600,792    2,533,459
    ----------------------------------------------------------------------
      Treasury stock
      FY 2008: 14,197,323; FY 2007: 14,197,323      (580,562)    (580,562)
    ----------------------------------------------------------------------
      Other accumulated comprehensive income          40,148       37,121
    ----------------------------------------------------------------------
    Total shareholders' equity                     2,243,961    2,167,738
    ----------------------------------------------------------------------

    ----------------------------------------------------------------------
                                                  $3,620,830   $3,570,480
    ----------------------------------------------------------------------
    

    
                              Cintas Corporation
               Consolidated Condensed Statements of Cash Flows
                                 (Unaudited)
                                (In thousands)

    ----------------------------------------------------------------------

    ----------------------------------------------------------------------
                                                   Three Months Ended
    ----------------------------------------------------------------------
                                               Aug. 31, 2007 Aug. 31, 2006
    ----------------------------------------------------------------------
    Cash flows from operating activities:
    ----------------------------------------------------------------------

    ----------------------------------------------------------------------
    Net income                                      $81,063       $84,962
    ----------------------------------------------------------------------

    ----------------------------------------------------------------------
    Adjustments to reconcile net income to net
     cash provided by operating activities:
    ----------------------------------------------------------------------
      Depreciation                                   35,636        33,078
    ----------------------------------------------------------------------
      Amortization of deferred charges               10,586         9,690
    ----------------------------------------------------------------------
      Stock-based compensation                        2,132          (598)
    ----------------------------------------------------------------------
      Deferred income taxes                          17,418        10,772
    ----------------------------------------------------------------------
      Change in current assets and liabilities,
       net of acquisitions of businesses:
    ----------------------------------------------------------------------
         Accounts receivable                            644        (1,202)
    ----------------------------------------------------------------------
         Inventories                                 (4,293)      (12,381)
    ----------------------------------------------------------------------
         Uniforms and other rental items in
          service                                    (7,128)       (2,311)
    ----------------------------------------------------------------------
         Prepaid expenses                            (2,117)          634
    ----------------------------------------------------------------------
         Accounts payable                             5,435       (11,770)
    ----------------------------------------------------------------------
         Accrued compensation and related
          liabilities                               (28,386)       (2,777)
    ----------------------------------------------------------------------
         Accrued liabilities                        (77,865)      (58,777)
    ----------------------------------------------------------------------
         Income taxes payable                        24,001         6,524
    ----------------------------------------------------------------------
      Net cash provided by operating activities      57,126        55,844
    ----------------------------------------------------------------------

    ----------------------------------------------------------------------
    Cash flows from investing activities:
    ----------------------------------------------------------------------

    ----------------------------------------------------------------------
    Capital expenditures                            (45,344)      (36,496)
    ----------------------------------------------------------------------
    Proceeds from sale or redemption of
     marketable securities                           29,156        66,214
    ----------------------------------------------------------------------
    Purchase of marketable securities and
     investments                                     (6,237)       (3,527)
    ----------------------------------------------------------------------
    Acquisitions of businesses, net of cash
     acquired                                       (32,630)      (25,101)
    ----------------------------------------------------------------------
    Other                                               177        (1,954)
    ----------------------------------------------------------------------
      Net cash used in investing activities         (54,878)         (864)
    ----------------------------------------------------------------------

    ----------------------------------------------------------------------
    Cash flows from financing activities:
    ----------------------------------------------------------------------

    ----------------------------------------------------------------------
    Proceeds from issuance of debt                  224,750       252,460
    ----------------------------------------------------------------------
    Repayment of debt                              (225,282)     (194,283)
    ----------------------------------------------------------------------
    Stock options exercised                           7,230         3,403
    ----------------------------------------------------------------------
    Repurchase of common stock                            -      (114,418)
    ----------------------------------------------------------------------
    Other                                            (3,465)       (6,091)
    ----------------------------------------------------------------------
      Net cash provided by (used in) financing
       activities                                     3,233       (58,929)
    ----------------------------------------------------------------------

    ----------------------------------------------------------------------
    Net increase/(decrease) in cash and cash
     equivalents                                      5,481        (3,949)
    ----------------------------------------------------------------------
    Cash and cash equivalents at beginning of
     period                                          35,360        38,914
    ----------------------------------------------------------------------
    Cash and cash equivalents at end of period      $40,841       $34,965
    ----------------------------------------------------------------------
    




For further information:

For further information: Cintas Corporation William C. Gale,
513-573-4211 Senior Vice President-Finance and Chief Financial Officer or
Michael L. Thompson, 513-573-4133 Vice President and Treasurer

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CINTAS CORPORATION

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