Cintas Corporation Announces Fiscal 2008 Results; Total Revenue of $3.9 billion, increase of 6%; Earnings per Diluted Share increases 3%
CINCINNATI, July 15, 2008 — Cintas Corporation (Nasdaq:CTAS) today reported revenue for its fiscal year ended May 31, 2008, of $3.9 billion, a 6 percent increase over the previous fiscal year. Net income for the year was $335 million and earnings per diluted share were $2.15.
For the fourth quarter ended May 31, 2008, revenue was slightly in excess of $1.0 billion, a 5 percent increase over prior year fourth quarter revenue. This marks the first time that Cintas revenue has exceeded one billion dollars for a fiscal quarter. Fourth quarter net income was $90 million and earnings per diluted share were $0.58.
Scott D. Farmer, President and Chief Executive Officer, stated, "I am pleased to announce that we have recently completed our 39th consecutive year of growth in both revenue and earnings. Despite difficult and challenging economic conditions, including significant increases in energy costs, we were able to achieve these positive results. These results could not have been achieved without the continued support of our customers and the hard work and dedication of our 34,000 employee-partners."
Mr. Farmer continued, "Our products and services, which include uniforms, facility services, first aid and fire protection services and document management services, continue to be effective, efficient solutions for businesses of all sizes and types. All of our operating divisions continued to grow in fiscal 2008, demonstrating the value our services provide to our customers."
Cintas also continues to be recognized throughout North America for its social and environmental commitment. Recognition during the fiscal year included being listed in the Top 50 military friendly businesses by G.I. Jobs magazine, receiving the "Governor’s Pollution Prevention Award" by the Illinois Department of Natural Resources and receiving the New Jersey Governor’s Occupational Safety and Health Award. Cintas was also named among the best employers in Canada for the fourth consecutive year by Canada’s Globe and Mail news, and was listed among FORTUNE magazine’s list of "America’s Most Admired Companies" for the eighth consecutive year.
Cintas continues to be financially sound. Despite significantly higher energy costs in fiscal 2008, the Company maintained gross margins of 43% of revenue and generated operating income of 15% of revenue. The Company also generated free cash flow of $354 million, representing 9% of revenue. Approximately $112 million of this free cash flow was used to make acquisitions, as the Company continued to expand its national footprint and scope. In addition to acquisitions, $191 million was used to purchase shares under the Company’s share buyback program. Since the program’s inception the Company has bought back a total of $772 million of its stock, reducing outstanding shares by over 11%. The Company has $228 million in remaining authorization under the program and continues to balance purchases under the program with acquisition opportunities and overall balance sheet management.
During its fourth quarter the Company also paid an annual dividend of $0.46 per share, an 18% increase over the $0.39 per share paid in fiscal 2007. This marks the 25th consecutive year Cintas has increased its dividend, which is every year since the Company went public in 1983.
The Company’s balance sheet remains strong. Despite the acquisition and buyback activity, the Company’s debt to total capitalization remains under 30% and the Company’s current ratio is a healthy 3.5 to 1.
Mr. Farmer stated, "We are excited with the opportunities that lie ahead for Cintas. Today, there is hardly a business or industry that you can think of that does not need one or more of our products and services."
Mr. Farmer continued, "While we remain bullish on all of our products and services, we expect the difficult economic environment to continue, which will impact our fiscal 2009 performance. Given this economic landscape, we expect revenue for fiscal 2009 to be in the range of $4.1 billion to $4.2 billion, with full year earnings per diluted share in the range of $2.22 to $2.30."
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, safety, fire protection products and 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.
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. 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 results 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.
For additional information, contact:
William C. Gale
Senior Vice President-Finance and Chief Financial Officer
Michael L. Thompson
Vice President and Treasurer