Cintas Corporation Reports Third Quarter Fiscal 2007 Revenue and Earnings



    Revenue Increases 8%; Earnings Per Diluted Share Increases 7%

    CINCINNATI, March 20 /CNW/ - Cintas Corporation (Nasdaq:  CTAS) today
reported revenue for the third quarter of fiscal 2007 of $905.4 million, an
8.2% increase from the previous year's third quarter revenue of $836.4
million. Earnings per diluted share of $0.48 increased 6.7% from $0.45 per
diluted share last year, and net income of $76.7 million increased from last
year's net income of $76.6 million. Current year net income is being impacted
by increased interest expense related to the Company's share buyback program.

    Scott D. Farmer, President and Chief Executive Officer, stated, "We
posted solid growth in revenue and profits for our third quarter, delivering
8.2% revenue growth and 6.7% growth in earnings per diluted share. While all
of our businesses are growing, growth in the third quarter was impacted by
three things. First, the very mild winter weather into early February impacted
the seasonal jacket and mat rental volume that normally occurs in this
quarter.

    "In addition, we continue to experience economic pressure in our uniform
business due to the continued off-shoring of manufacturing jobs and the ripple
effect this causes to other businesses serving these operations.

    "Finally, our new sales force re-organization was completed at the end of
the calendar year. We are encouraged about the early results and the new
organization's impact on cross-selling and overall improved revenue growth. In
the short term, this change has caused disruption due to the promotion of many
high-performing sales reps into management jobs, the time to train them in
their new roles and the time necessary to develop their newly hired
replacements. The full benefit of this new organization will be felt as these
new sales representatives come up to speed, which is generally a 6-month to
1-year process."

    Mr. Farmer added, "Despite these top line pressures, we achieved solid
growth and delivered earnings before interest and income taxes of 14.7% of
revenue. We continue to increase our product line and service offerings in all
of our businesses. Revenue growth in our First Aid and Safety, Fire Protection
and Document Management businesses continues to be strong as we expand our
geographic presence."

    Share Buyback Program

    During the third quarter, Cintas purchased approximately 1.4 million
shares of Cintas common stock under an authorized share buyback program at a
cost of $57 million. Since the inception of this program, the Company has
bought back approximately 14.2 million of the outstanding shares, or
approximately 8% of the total shares outstanding at the beginning of the
program, at a cost of approximately $580 million. The Company continues to
operate under this program and has $420 million remaining under its current
authorization.

    Strong Balance Sheet

    The Company's balance sheet continues to be strong. Despite increased
debt levels related to acquisitions and the share buyback program, debt to
total capitalization as of February 28, 2007, was only 30.1%. Cash and
marketable securities were $157.5 million at the end of the third quarter. As
marketable securities mature, it is the Company's intention to use the funds
to reduce its outstanding debt under its commercial paper program, contingent
upon other cash needs. Total shareholders' equity was $2.1 billion.

    Outlook

    Mr. Farmer stated, "Based on our third quarter results and the continuing
economic pressure on our customer base, we are lowering our current year
revenue and earnings guidance. We now estimate that revenue for fiscal 2007
will be $3.675 to $3.725 billion and earnings per diluted share will be $2.03
to $2.08. We expect this year will be another record year at Cintas, which
would result in our 38th consecutive year of growth in sales and earnings.

    "We continue to be recognized by our customers and the business community
in general for the services we provide our customers. In fact, we were
recently named the "Most Admired Company" in the diversified outsourcing
industry by FORTUNE magazine. We have consistently ranked among the top five
"Most Admired" organizations in our industry sector since 2001 and this marks
the fourth time we have topped this prestigious list. We have also been ranked
among the "Best Employers in Canada" by Report on Business magazine in 2007
and were named "Reader's Choice" as the best uniform supplier to the food
processing industry by Food Processing magazine. This marks the fifth
consecutive year that Cintas received "Golden Supplier" distinction from food
industry professionals."

    Mr. Farmer added, "The accolades that we receive are a direct result of
our employee-partners servicing our customers every day. We are excited about
the future as we continue to expand our role as the professional services
company of choice."

    About Cintas

    Headquartered in Cincinnati, Cintas Corporation provides highly
specialized services to businesses of all types throughout North America.
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 700,000 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 37 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,"
"projects," "plans," "expects," "intends," "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.
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, 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, 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 to reflect events or circumstances arising after
the date on which they are made.

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

    ----------------------------------------------------------------------
                                             Three Months Ended
    ----------------------------------------------------------------------
                                                  Feb. 28, 2006
                                    Feb. 28, 2007  (Restated)(a) % Chng.
    --------------------------------------------- -------------- ---------
    Revenue:
    --------------------------------------------- -------------- ---------
      Rentals                           $665,647       $631,322     5.4
    --------------------------------------------- -------------- ---------
      Other services                     239,751        205,099    16.9
    --------------------------------------------- -------------- ---------
      Total revenue                     $905,398       $836,421     8.2
    --------------------------------------------- -------------- ---------

    --------------------------------------------- -------------- ---------
    Costs and expenses (income):
    --------------------------------------------- -------------- ---------
      Cost of rentals                   $371,185       $350,655     5.9
    --------------------------------------------- -------------- ---------
      Cost of other services             148,386        132,796    11.7
    --------------------------------------------- -------------- ---------
      Selling and administrative
       expenses                          253,128        224,420    12.8
    --------------------------------------------- -------------- ---------
      Interest income                     (1,339)        (1,925)  -30.4
    --------------------------------------------- -------------- ---------
      Interest expense                    11,584          7,239    60.0
    --------------------------------------------- -------------- ---------
      Total costs and expenses          $782,944       $713,185     9.8
    --------------------------------------------- -------------- ---------

    --------------------------------------------- -------------- ---------
    Income before income taxes          $122,454       $123,236    -0.6
    --------------------------------------------- -------------- ---------
    Income taxes                          45,727         46,642    -2.0
    --------------------------------------------- -------------- ---------
    Net income                           $76,727        $76,594     0.2
    --------------------------------------------- -------------- ---------

    --------------------------------------------- -------------- ---------
    Per share data:
    --------------------------------------------- -------------- ---------
    Basic earnings per share               $0.48          $0.46     4.3
    --------------------------------------------- -------------- ---------
    Diluted earnings per share             $0.48          $0.45     6.7
    --------------------------------------------- -------------- ---------

    --------------------------------------------- -------------- ---------
    Weighted average number of
     shares outstanding                  159,311        168,038
    --------------------------------------------- -------------- ---------
    Diluted average number of shares
     outstanding                         159,699        168,599
    --------------------------------------------- -------------- ---------


    CINTAS CORPORATION SUPPLEMENTAL DATA
    ----------------------------------------------------------------------
                                             Three Months Ended
    ----------------------------------------------------------------------
                                                  Feb. 28, 2006
                                    Feb. 28, 2007  (Restated)(a) % Chng.
    --------------------------------------------- -------------- ---------
    Rentals gross margin                    44.2%          44.5%
    --------------------------------------------- -------------- ---------
    Other services gross margin             38.1%          35.3%
    --------------------------------------------- -------------- ---------
    Total gross margin                      42.6%          42.2%
    --------------------------------------------- -------------- ---------
    Net margin                               8.5%           9.2%
    --------------------------------------------- -------------- ---------

    --------------------------------------------- -------------- ---------
    Depreciation and amortization        $44,298        $40,484     9.4
    --------------------------------------------- -------------- ---------
    Capital expenditures                 $47,315        $31,899    48.3
    --------------------------------------------- -------------- ---------

    --------------------------------------------- -------------- ---------
    Debt to total capitalization            30.1%          22.6%
    --------------------------------------------- -------------- ---------


    RECONCILIATION TO GAAP MEASURES
    ----------------------------------------------------------------------
                                             Three Months Ended
    ----------------------------------------------------------------------
                                                  Feb. 28, 2006
                                    Feb. 28, 2007  (Restated)(a) % Chng.
    --------------------------------------------- -------------- ---------
    Income before income taxes          $122,454       $123,236    -0.6
    --------------------------------------------- -------------- ---------
    Interest income                       (1,339)        (1,925)  -30.4
    --------------------------------------------- -------------- ---------
    Interest expense                      11,584          7,239    60.0
    --------------------------------------------- -------------- ---------
    Earnings before interest and
     taxes                              $132,699       $128,550     3.2
    --------------------------------------------- -------------- ---------

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

    ----------------------------------------------------------------------
                                               Nine Months Ended
    ----------------------------------------------------------------------
                                                    Feb. 28, 2006
                                      Feb. 28, 2007  (Restated)(a) % Chng.
    ----------------------------------------------- -------------- -------
    Revenue:
    ----------------------------------------------- -------------- -------
      Rentals                           $2,037,796     $1,890,920     7.8
    ----------------------------------------------- -------------- -------
      Other services                       705,029        604,761    16.6
    ----------------------------------------------- -------------- -------
      Total revenue                     $2,742,825     $2,495,681     9.9
    ----------------------------------------------- -------------- -------

    ----------------------------------------------- -------------- -------
    Costs and expenses (income):
    ----------------------------------------------- -------------- -------
      Cost of rentals                   $1,129,500     $1,039,738     8.6
    ----------------------------------------------- -------------- -------
      Cost of other services               445,944        397,024    12.3
    ----------------------------------------------- -------------- -------
      Selling and administrative
       expenses                            745,884        670,014    11.3
    ----------------------------------------------- -------------- -------
      Interest income                       (4,488)        (4,959)   -9.5
    ----------------------------------------------- -------------- -------
      Interest expense                      36,499         22,059    65.5
    ----------------------------------------------- -------------- -------
      Total costs and expenses          $2,353,339     $2,123,876    10.8
    ----------------------------------------------- -------------- -------

    ----------------------------------------------- -------------- -------
    Income before income taxes            $389,486       $371,805     4.8
    ----------------------------------------------- -------------- -------
    Income taxes                           145,270        139,950     3.8
    ----------------------------------------------- -------------- -------
    Net income                            $244,216       $231,855     5.3
    ----------------------------------------------- -------------- -------

    ----------------------------------------------- -------------- -------
    Per share data:
    ----------------------------------------------- -------------- -------
    Basic earnings per share                 $1.52          $1.38    10.1
    ----------------------------------------------- -------------- -------
    Diluted earnings per share               $1.52          $1.37    10.9
    ----------------------------------------------- -------------- -------

    ----------------------------------------------- -------------- -------
    Weighted average number of shares
     outstanding                           160,144        168,321
    ----------------------------------------------- -------------- -------
    Diluted average number of shares
     outstanding                           160,550        168,915
    ----------------------------------------------- -------------- -------


    CINTAS CORPORATION SUPPLEMENTAL DATA
    ----------------------------------------------------------------------
                                               Nine Months Ended
    ----------------------------------------------------------------------
                                                    Feb. 28, 2006
                                      Feb. 28, 2007  (Restated)(a) % Chng.
    ----------------------------------------------- -------------- -------
    Rentals gross margin                      44.7%          45.3%
    ----------------------------------------------- -------------- -------
    Other services gross margin               36.7%          34.4%
    ----------------------------------------------- -------------- -------
    Total gross margin                        42.6%          42.4%
    ----------------------------------------------- -------------- -------
    Net margin                                 8.9%           9.3%
    ----------------------------------------------- -------------- -------

    ----------------------------------------------- -------------- -------
    Depreciation and amortization         $130,051       $118,144    10.1
    ----------------------------------------------- -------------- -------
    Capital expenditures                  $128,636       $102,080    26.0
    ----------------------------------------------- -------------- -------

    ----------------------------------------------- -------------- -------
    Debt to total capitalization              30.1%          22.6%
    ----------------------------------------------- -------------- -------


    RECONCILIATION TO GAAP MEASURES
    ----------------------------------------------------------------------
                                               Nine Months Ended
    ----------------------------------------------------------------------
                                                    Feb. 28, 2006
                                      Feb. 28, 2007  (Restated)(a) % Chng.
    ----------------------------------------------- -------------- -------
    Income before income taxes            $389,486       $371,805     4.8
    ----------------------------------------------- -------------- -------
    Interest income                         (4,488)        (4,959)   -9.5
    ----------------------------------------------- -------------- -------
    Interest expense                        36,499         22,059    65.5
    ----------------------------------------------- -------------- -------
    Earnings before interest and
     taxes                                $421,497       $388,905     8.4
    ----------------------------------------------- -------------- -------
    

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

    ----------------------------------------------------------------------
                                              Feb. 28, 2007  May 31, 2006
                                               (Unaudited)   (Restated)(a)
    ------------------------------------------------------- --------------
    ASSETS
    ------------------------------------------------------- --------------
    Current assets:
    ------------------------------------------------------- --------------
      Cash and cash equivalents                    $31,558        $38,914
    ------------------------------------------------------- --------------
      Marketable securities                        125,935        202,539
    ------------------------------------------------------- --------------
      Accounts receivable, net                     393,155        389,905
    ------------------------------------------------------- --------------
      Inventories, net                             227,083        198,000
    ------------------------------------------------------- --------------
      Uniforms and other rental items in
       service                                     339,082        337,487
    ------------------------------------------------------- --------------
      Prepaid expenses                              14,926         11,163
    ------------------------------------------------------- --------------
    Total current assets                         1,131,739      1,178,008
    ------------------------------------------------------- --------------

    ------------------------------------------------------- --------------
    Property and equipment, at cost, net           900,772        863,783
    ------------------------------------------------------- --------------

    ------------------------------------------------------- --------------
    Goodwill                                     1,226,176      1,136,175
    ------------------------------------------------------- --------------
    Service contracts, net                         172,842        179,965
    ------------------------------------------------------- --------------
    Other assets, net                               75,960         67,306
    ------------------------------------------------------- --------------

    ------------------------------------------------------- --------------
                                                $3,507,489     $3,425,237
    ------------------------------------------------------- --------------

    ------------------------------------------------------- --------------
    LIABILITIES AND SHAREHOLDERS' EQUITY
    ------------------------------------------------------- --------------
    Current liabilities:
    ------------------------------------------------------- --------------
      Accounts payable                             $69,540        $71,635
    ------------------------------------------------------- --------------
      Accrued compensation & related
       liabilities                                  57,014         50,134
    ------------------------------------------------------- --------------
      Accrued liabilities                          234,840        188,927
    ------------------------------------------------------- --------------
      Income taxes:
    ------------------------------------------------------- --------------
        Current                                     51,057         43,694
    ------------------------------------------------------- --------------
        Deferred                                    39,506         51,669
    ------------------------------------------------------- --------------
      Long-term debt due within one year           229,139          4,288
    ------------------------------------------------------- --------------
    Total current liabilities                      681,096        410,347
    ------------------------------------------------------- --------------

    ------------------------------------------------------- --------------
    Long-term debt due after one year              654,376        794,454
    ------------------------------------------------------- --------------

    ------------------------------------------------------- --------------
    Deferred income taxes                          115,858        130,244
    ------------------------------------------------------- --------------

    ------------------------------------------------------- --------------
    Shareholders' equity:
    ------------------------------------------------------- --------------
      Preferred stock, no par value: 100,000
       shares authorized, none outstanding               -              -
    ------------------------------------------------------- --------------
      Common stock, no par value: 425,000,000
       shares authorized
      FY 2007: 172,838,020 shares issued and
       158,640,697 shares outstanding
      FY 2006: 172,571,083 shares issued and
       163,181,738 shares outstanding              130,389        120,860
    ------------------------------------------------------- --------------
      Paid in capital                               44,939         47,644
    ------------------------------------------------------- --------------
      Retained earnings                          2,443,139      2,260,917
    ------------------------------------------------------- --------------
      Treasury stock
      FY 2007: 14,197,323 shares; FY 2006:
       9,389,345 shares                           (580,562)      (381,613)
    ------------------------------------------------------- --------------
      Other accumulated comprehensive income        18,254         42,384
    ------------------------------------------------------- --------------
    Total shareholders' equity                   2,056,159      2,090,192
    ------------------------------------------------------- --------------

    ------------------------------------------------------- --------------
                                                $3,507,489     $3,425,237
    ------------------------------------------------------- --------------
    

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

    ----------------------------------------------------------------------
                                                   Nine Months Ended
    ----------------------------------------------------------------------
                                                            Feb. 28, 2006
                                             Feb. 28, 2007   (Restated)(a)
    ------------------------------------------------------- --------------
    Cash flows from operating activities:
    ------------------------------------------------------- --------------

    ------------------------------------------------------- --------------
    Net income                                    $244,216       $231,855
    ------------------------------------------------------- --------------

    ------------------------------------------------------- --------------
    Adjustments to reconcile net income to
     net cash provided by operating
     activities:
    ------------------------------------------------------- --------------
      Depreciation                                 100,036         94,014
    ------------------------------------------------------- --------------
      Amortization of deferred charges              30,015         24,130
    ------------------------------------------------------- --------------
      Stock-based compensation                       2,746          4,507
    ------------------------------------------------------- --------------
      Deferred income taxes                        (19,062)         7,399
    ------------------------------------------------------- --------------
      Change in current assets and
       liabilities, net of acquisitions of
       businesses:
    ------------------------------------------------------- --------------
         Accounts receivable                           911        (14,187)
    ------------------------------------------------------- --------------
         Inventories                               (28,176)        11,984
    ------------------------------------------------------- --------------
         Uniforms and other rental items in
          service                                   (1,595)       (11,240)
    ------------------------------------------------------- --------------
         Prepaid expenses                           (3,676)          (790)
    ------------------------------------------------------- --------------
         Accounts payable                           (2,070)        (9,210)
    ------------------------------------------------------- --------------
         Accrued compensation and related
          liabilities                                6,880            511
    ------------------------------------------------------- --------------
         Accrued liabilities                       (15,511)       (32,293)
    ------------------------------------------------------- --------------
         Tax benefit on exercise of stock
          options                                      (37)          (706)
    ------------------------------------------------------- --------------
         Income taxes payable                        7,400          4,947
    ------------------------------------------------------- --------------
      Net cash provided by operating
       activities                                  322,077        310,921
    ------------------------------------------------------- --------------

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

    ------------------------------------------------------- --------------
    Capital expenditures                          (128,636)      (102,080)
    ------------------------------------------------------- --------------
    Proceeds from sale or redemption of
     marketable securities                         102,871         74,820
    ------------------------------------------------------- --------------
    Purchase of marketable securities              (24,901)       (11,346)
    ------------------------------------------------------- --------------
    Acquisitions of businesses, net of cash
     acquired                                     (135,011)      (327,983)
    ------------------------------------------------------- --------------
    Other                                          (16,303)       (13,830)
    ------------------------------------------------------- --------------
      Net cash used in investing activities       (201,980)      (380,419)
    ------------------------------------------------------- --------------

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

    ------------------------------------------------------- --------------
    Proceeds from issuance of debt                 252,460        173,000
    ------------------------------------------------------- --------------
    Repayment of debt                             (167,687)        (7,068)
    ------------------------------------------------------- --------------
    Stock options exercised                          9,529         11,404
    ------------------------------------------------------- --------------
    Tax benefit on exercise of stock options            37            706
    ------------------------------------------------------- --------------
    Repurchase of common stock                    (198,949)      (114,170)
    ------------------------------------------------------- --------------
    Other                                          (22,843)        10,473
    ------------------------------------------------------- --------------
      Net cash (used in) provided by
       financing activities                       (127,453)        74,345
    ------------------------------------------------------- --------------

    ------------------------------------------------------- --------------
    Net (decrease) increase in cash and cash
     equivalents                                    (7,356)         4,847
    ------------------------------------------------------- --------------
    Cash and cash equivalents at beginning of
     period                                         38,914         43,196
    ------------------------------------------------------- --------------
    Cash and cash equivalents at end of
     period                                        $31,558        $48,043
    ------------------------------------------------------- --------------
    




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

More on this organization


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890