Cintas Corporation Reports Second Quarter Fiscal 2008 Revenue and Earnings



    CINCINNATI, December 20 /CNW/ - Cintas Corporation (Nasdaq:  CTAS) today
reported revenue for the second quarter of fiscal 2008 of $983.9 million, a
6.6% increase from the previous year's second quarter revenue of $923.3
million. Net income was $82.9 million and earnings per diluted share were
$0.53.

    Scott D. Farmer, President and Chief Executive Officer, stated, "We are
pleased to announce our second quarter results, which are in line with our
expectations. Our new sales organization continues to gain momentum. The new
business results being achieved under this new organization are meeting our
expectations, most notably in our emerging business units."

    Net income increased 0.4% and earnings per diluted share increased 3.9%
as compared to the second quarter of fiscal 2007. These results were impacted
by an increase in the Company's effective tax rate, which increased to 38.3%
as compared to 37.3% in last year's second quarter. This increase was due to
the second quarter impact of FASB Interpretation No. 48 (FIN 48), Accounting
for Uncertainty in Income Taxes - an interpretation of FASB Statement No. 109.
The Company expects its full year fiscal 2008 effective tax rate to be the
same as last year's effective rate of 37.3%. Results for the quarter were also
impacted by the increased investment the Company has made to its sales
organization over the past year.

    Share Buyback

    Mr. Farmer also announced, "We have resumed purchases under our
authorized share buyback program. During our second quarter, we purchased 5.2
million shares at a cost of approximately $191 million. Since the program's
inception, we have bought back 19.4 million shares, which equates to over 11%
of our outstanding stock that existed at the program's inception. We have $228
million in remaining authorization available under the program."

    Strong Balance Sheet and Cash Flow

    The Company's balance sheet and cash flow from operations continue to be
strong. As of November 30, 2007, the Company's current assets exceeded current
liabilities by over a three to one ratio and debt to total capitalization was
30.6%.

    On December 7, 2007, subsequent to the end of the second quarter, the
Company issued $250 million of 6.125% Senior Debt. The proceeds generated from
this debt issuance were used to reduce the Company's outstanding balance under
its commercial paper program.

    Outlook

    Mr. Farmer stated, "Our results through the second quarter continue to be
in line with our expectations. Based on these results and our current outlook
for the remainder of our fiscal year, 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            Six Months Ended
    ----------------------------------------------------------------------
                 Nov. 30,  Nov. 30,    %     Nov. 30,    Nov. 30,     %
                    2007      2006    Chng.     2007        2006     Chng.
    ----------------------------------------------------------------------
    Revenue:
    ----------------------------------------------------------------------
      Rental
       uniforms
       and
       ancillary
       products  $708,845  $684,491     3.6 $1,419,199  $1,372,149     3.4
    ----------------------------------------------------------------------
      Other
       services   275,020   238,775    15.2    533,794     465,278    14.7
    ----------------------------------------------------------------------
      Total
       revenue   $983,865  $923,266     6.6 $1,952,993  $1,837,427     6.3
    ----------------------------------------------------------------------

    ----------------------------------------------------------------------
    Costs and
     expenses
     (income):
    ----------------------------------------------------------------------
      Cost of
       rental
       uniforms
       and
       ancillary
       products  $392,211  $380,015     3.2   $783,701    $758,315     3.3
    ----------------------------------------------------------------------
      Cost of
       other
       services   171,086   152,178    12.4    331,352     297,558    11.4
    ----------------------------------------------------------------------
      Selling and
       admini-
       strative
        expenses  275,125   248,628    10.7    551,835     492,756    12.0
    ----------------------------------------------------------------------
      Interest
       income      (1,796)   (1,623)   10.7     (3,258)     (3,149)    3.5
    ----------------------------------------------------------------------
      Interest
       expense     12,993    12,483     4.1     25,830      24,915     3.7
    ----------------------------------------------------------------------
      Total costs
       and
       expenses  $849,619  $791,681     7.3 $1,689,460  $1,570,395     7.6
    ----------------------------------------------------------------------

    ----------------------------------------------------------------------
    Income before
     income taxes$134,246  $131,585     2.0   $263,533    $267,032    -1.3
    ----------------------------------------------------------------------
    Income taxes   51,393    49,058     4.8     99,617      99,543     0.1
    ----------------------------------------------------------------------
    Net income    $82,853   $82,527     0.4   $163,916    $167,489    -2.1
    ----------------------------------------------------------------------

    ----------------------------------------------------------------------
    Per share
     data:
    ----------------------------------------------------------------------
    Basic
     earnings per
     share          $0.53     $0.51     3.9      $1.04       $1.04     0.0
    ----------------------------------------------------------------------
    Diluted
     earnings per
     share          $0.53     $0.51     3.9      $1.04       $1.04     0.0
    ----------------------------------------------------------------------

    ----------------------------------------------------------------------
    Basic shares
     outstanding  156,563   160,312            157,673     160,542
    ----------------------------------------------------------------------
    Diluted
     shares
     outstanding  156,813   160,721            157,949     160,932
    ----------------------------------------------------------------------
    

    
    CINTAS CORPORATION SUPPLEMENTAL DATA
    ----------------------------------------------------------------------
                            Three Months Ended        Six Months Ended
    ----------------------------------------------------------------------
                         Nov. 30, Nov. 30,   %    Nov. 30, Nov. 30,   %
                           2007     2006    Chng.   2007     2006    Chng.
    ----------------------------------------------------------------------
    Rental uniforms and
     ancillary products
     gross margin           44.7%    44.5%           44.8%    44.7%
    ----------------------------------------------------------------------
    Other services gross
     margin                 37.8%    36.3%           37.9%    36.0%
    ----------------------------------------------------------------------
    Total gross margin      42.7%    42.4%           42.9%    42.5%
    ----------------------------------------------------------------------
    Net margin               8.4%     8.9%            8.4%     9.1%
    ----------------------------------------------------------------------

    ----------------------------------------------------------------------
    Depreciation and
     amortization         $47,390  $42,985   10.2  $93,612  $85,753    9.2
    ----------------------------------------------------------------------
    Capital expenditures  $47,863  $44,825    6.8  $93,207  $81,321   14.6
    ----------------------------------------------------------------------

    ----------------------------------------------------------------------
    Debt to total
     capitalization         30.6%    27.4%           30.6%    27.4%
    ----------------------------------------------------------------------
    

    
    RECONCILIATION TO GAAP MEASURES
    ----------------------------------------------------------------------
                         Three Months Ended          Six Months Ended
    ----------------------------------------------------------------------
                     Nov. 30,  Nov. 30,    %    Nov. 30,  Nov. 30,    %
                        2007      2006    Chng.    2007      2006    Chng.
    ----------------------------------------------------------------------
    Income before
     income taxes    $134,246  $131,585     2.0 $263,533  $267,032    -1.3
    ----------------------------------------------------------------------
    Interest income    (1,796)   (1,623)   10.7   (3,258)   (3,149)    3.5
    ----------------------------------------------------------------------
    Interest expense   12,993    12,483     4.1   25,830    24,915     3.7
    ----------------------------------------------------------------------
    Earnings before
     interest and
     taxes           $145,443  $142,445     2.1 $286,105  $288,798    -0.9
    ----------------------------------------------------------------------
    

    
                                          Rental
                                          Uniforms            First Aid,
                                            and      Uniform   Safety and
                                          Ancillary   Direct     Fire
    SUPPLEMENTAL SEGMENT DATA             Products    Sales    Protection
    ----------------------------------------------------------------------
    For the three months ended November
     30, 2007
    ----------------------------------------------------------------------
                                Revenue    $708,845 $134,455      $99,153
    ----------------------------------------------------------------------
                           Gross margin    $316,634  $43,315      $38,415
    ----------------------------------------------------------------------
            Selling and administrative
                               expenses    $198,635  $27,565      $31,069
    ----------------------------------------------------------------------
      Income (loss) before income taxes    $117,999  $15,750       $7,346
    ----------------------------------------------------------------------

    ----------------------------------------------------------------------
    For the three months ended November
     30, 2006
    ----------------------------------------------------------------------
                                Revenue    $684,491 $127,968      $87,468
    ----------------------------------------------------------------------
                           Gross margin    $304,476  $40,258      $34,912
    ----------------------------------------------------------------------
            Selling and administrative
                               expenses    $186,679  $24,732      $26,150
    ----------------------------------------------------------------------
      Income (loss) before income taxes    $117,797  $15,526       $8,762
    ----------------------------------------------------------------------

    ----------------------------------------------------------------------
    As of and for the six months ended
     November 30, 2007
    ----------------------------------------------------------------------
                                Revenue  $1,419,199 $253,260     $201,409
    ----------------------------------------------------------------------
                           Gross margin    $635,498  $79,785      $80,235
    ----------------------------------------------------------------------
    Selling and administrative expenses    $402,706  $52,908      $62,268
    ----------------------------------------------------------------------
      Income (loss) before income taxes    $232,792  $26,877      $17,967
    ----------------------------------------------------------------------
                                 Assets  $2,622,562 $191,910     $340,453
    ----------------------------------------------------------------------

    ----------------------------------------------------------------------
    As of and for the six months ended
     November 30, 2006
    ----------------------------------------------------------------------
                                Revenue  $1,372,149 $244,965     $175,804
    ----------------------------------------------------------------------
                           Gross margin    $613,834  $75,951      $69,242
    ----------------------------------------------------------------------
    Selling and administrative expenses    $371,957  $48,522      $51,301
    ----------------------------------------------------------------------
      Income (loss) before income taxes    $241,877  $27,429      $17,941
    ----------------------------------------------------------------------
                                 Assets  $2,531,085 $173,427     $298,465
    ----------------------------------------------------------------------

                                           Document
    SUPPLEMENTAL SEGMENT DATA              Management Corporate    Total
    ----------------------------------------------------------------------
    For the three months ended November
     30, 2007
    ----------------------------------------------------------------------
                                  Revenue     $41,412       $0    $983,865
    ----------------------------------------------------------------------
                             Gross margin     $22,204       $0    $420,568
    ----------------------------------------------------------------------
      Selling and administrative expenses     $17,856       $0    $275,125
    ----------------------------------------------------------------------
        Income (loss) before income taxes      $4,348 ($11,197)   $134,246
    ----------------------------------------------------------------------

    ----------------------------------------------------------------------
    For the three months ended November
     30, 2006
    ----------------------------------------------------------------------
                                  Revenue     $23,339       $0    $923,266
    ----------------------------------------------------------------------
                             Gross margin     $11,427       $0    $391,073
    ----------------------------------------------------------------------
      Selling and administrative expenses     $11,067       $0    $248,628
    ----------------------------------------------------------------------
        Income (loss) before income taxes        $360 ($10,860)   $131,585
    ----------------------------------------------------------------------

    ----------------------------------------------------------------------
    As of and for the six months ended
     November 30, 2007
    ----------------------------------------------------------------------
                                  Revenue     $79,125       $0  $1,952,993
    ----------------------------------------------------------------------
                             Gross margin     $42,422       $0    $837,940
    ----------------------------------------------------------------------
      Selling and administrative expenses     $33,953       $0    $551,835
    ----------------------------------------------------------------------
        Income (loss) before income taxes      $8,469 ($22,572)   $263,533
    ----------------------------------------------------------------------
                                   Assets    $390,390 $154,267  $3,699,582
    ----------------------------------------------------------------------

    ----------------------------------------------------------------------
    As of and for the six months ended
     November 30, 2006
    ----------------------------------------------------------------------
                                  Revenue     $44,509       $0  $1,837,427
    ----------------------------------------------------------------------
                             Gross margin     $22,527       $0    $781,554
    ----------------------------------------------------------------------
      Selling and administrative expenses     $20,976       $0    $492,756
    ----------------------------------------------------------------------
        Income (loss) before income taxes      $1,551 ($21,766)   $267,032
    ----------------------------------------------------------------------
                                   Assets    $259,866 $172,221  $3,435,064
    ----------------------------------------------------------------------
    

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

    ----------------------------------------------------------------------
                                                Nov. 30, 2007
                                                 (Unaudited)  May 31, 2007
    ----------------------------------------------------------------------
    ASSETS
    ----------------------------------------------------------------------
    Current assets:
    ----------------------------------------------------------------------
      Cash and cash equivalents                      $56,640      $35,360
    ----------------------------------------------------------------------
      Marketable securities                           97,627      120,053
    ----------------------------------------------------------------------
      Accounts receivable, net                       420,667      408,870
    ----------------------------------------------------------------------
      Inventories, net                               238,944      231,741
    ----------------------------------------------------------------------
      Uniforms and other rental items in service     363,802      344,931
    ----------------------------------------------------------------------
      Deferred tax asset                              33,672            -
    ----------------------------------------------------------------------
      Prepaid expenses                                16,311       15,781
    ----------------------------------------------------------------------
    Total current assets                           1,227,663    1,156,736
    ----------------------------------------------------------------------

    ----------------------------------------------------------------------
    Property and equipment, at cost, net             949,396      920,243
    ----------------------------------------------------------------------

    ----------------------------------------------------------------------
    Goodwill                                       1,277,929    1,245,877
    ----------------------------------------------------------------------
    Service contracts, net                           160,769      171,361
    ----------------------------------------------------------------------
    Other assets, net                                 83,825       76,263
    ----------------------------------------------------------------------

    ----------------------------------------------------------------------
                                                  $3,699,582   $3,570,480
    ----------------------------------------------------------------------

    ----------------------------------------------------------------------
    LIABILITIES AND SHAREHOLDERS' EQUITY
    ----------------------------------------------------------------------
    Current liabilities:
    ----------------------------------------------------------------------
      Accounts payable                               $73,837      $64,622
    ----------------------------------------------------------------------
      Accrued compensation & related liabilities      40,750       62,826
    ----------------------------------------------------------------------
      Accrued liabilities                            174,803      200,686
    ----------------------------------------------------------------------
      Income taxes:
    ----------------------------------------------------------------------
        Current                                       72,474       18,584
    ----------------------------------------------------------------------
        Deferred                                           -       52,179
    ----------------------------------------------------------------------
      Long-term debt due within one year               1,324        4,141
    ----------------------------------------------------------------------
    Total current liabilities                        363,188      403,038
    ----------------------------------------------------------------------

    ----------------------------------------------------------------------
    Long-term liabilities:
    ----------------------------------------------------------------------
      Long-term debt due after one year              947,473      877,074
    ----------------------------------------------------------------------
      Deferred income taxes                          120,961      122,630
    ----------------------------------------------------------------------
      Accrued liabilities                            120,332            0
    ----------------------------------------------------------------------
    Total long-term liabilities                    1,188,766      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: 173,069,626 shares issued and
       153,677,303 shares outstanding
      FY 2007: 172,874,195 shares issued and
       158,676,872 shares outstanding                128,563      120,811
    ----------------------------------------------------------------------
      Paid-in capital                                 57,973       56,909
    ----------------------------------------------------------------------
      Retained earnings                            2,683,644    2,533,459
    ----------------------------------------------------------------------
      Treasury stock
      FY 2008: 19,392,323 shares; FY 2007:
       14,197,323 shares                            (772,041)    (580,562)
    ----------------------------------------------------------------------
      Other accumulated comprehensive income          49,489       37,121
    ----------------------------------------------------------------------
    Total shareholders' equity                     2,147,628    2,167,738
    ----------------------------------------------------------------------

    ----------------------------------------------------------------------
                                                  $3,699,582   $3,570,480
    ----------------------------------------------------------------------
    

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

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

    ----------------------------------------------------------------------
                                                    Six Months Ended
    ----------------------------------------------------------------------
                                               Nov. 30, 2007 Nov. 30, 2006
    ----------------------------------------------------------------------
    Cash flows from operating activities:
    ----------------------------------------------------------------------

    ----------------------------------------------------------------------
    Net income                                     $163,916      $167,489
    ----------------------------------------------------------------------

    ----------------------------------------------------------------------
    Adjustments to reconcile net income to net
     cash provided by operating activities:
    ----------------------------------------------------------------------
      Depreciation                                   72,271        66,074
    ----------------------------------------------------------------------
      Amortization of deferred charges               21,341        19,679
    ----------------------------------------------------------------------
      Stock-based compensation                        4,809         1,250
    ----------------------------------------------------------------------
      Deferred income taxes                           3,626           999
    ----------------------------------------------------------------------
      Change in current assets and liabilities,
       net of acquisitions of businesses:
    ----------------------------------------------------------------------
         Accounts receivable                         (8,216)      (14,179)
    ----------------------------------------------------------------------
         Inventories                                 (6,719)      (19,254)
    ----------------------------------------------------------------------
         Uniforms and other rental items in
          service                                   (17,422)       (9,534)
    ----------------------------------------------------------------------
         Prepaid expenses                              (453)       (2,424)
    ----------------------------------------------------------------------
         Accounts payable                             8,771         7,506
    ----------------------------------------------------------------------
         Accrued compensation and related
          liabilities                               (22,250)          515
    ----------------------------------------------------------------------
         Accrued liabilities and other              (17,425)      (28,979)
    ----------------------------------------------------------------------
         Income taxes payable                        68,413        38,192
    ----------------------------------------------------------------------
      Net cash provided by operating activities     270,662       227,334
    ----------------------------------------------------------------------

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

    ----------------------------------------------------------------------
    Capital expenditures                            (93,207)      (81,321)
    ----------------------------------------------------------------------
    Proceeds from sale or redemption of
     marketable securities                           41,930        80,485
    ----------------------------------------------------------------------
    Purchase of marketable securities and
     investments                                    (22,861)      (10,218)
    ----------------------------------------------------------------------
    Acquisitions of businesses, net of cash
     acquired                                       (56,031)      (53,782)
    ----------------------------------------------------------------------
    Other                                               732        (2,740)
    ----------------------------------------------------------------------
      Net cash used in investing activities        (129,437)      (67,576)
    ----------------------------------------------------------------------

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

    ----------------------------------------------------------------------
    Proceeds from issuance of debt                  296,000       252,460
    ----------------------------------------------------------------------
    Repayment of debt                              (228,418)     (259,929)
    ----------------------------------------------------------------------
    Stock options exercised                           7,752         5,781
    ----------------------------------------------------------------------
    Repurchase of common stock                     (191,479)     (141,960)
    ----------------------------------------------------------------------
    Other                                            (3,800)      (16,085)
    ----------------------------------------------------------------------
      Net cash used in financing activities        (119,945)     (159,733)
    ----------------------------------------------------------------------

    ----------------------------------------------------------------------
    Net increase in cash and cash equivalents        21,280            25
    ----------------------------------------------------------------------
    Cash and cash equivalents at beginning of
     period                                          35,360        38,914
    ----------------------------------------------------------------------
    Cash and cash equivalents at end of period      $56,640       $38,939
    ----------------------------------------------------------------------
    




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

Organization Profile

CINTAS CORPORATION

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