Cintas Corporation Announces Fiscal 2011 Second Quarter Results
CINCINNATI, December 21, 2010 — Cintas (Nasdaq:CTAS) today reported its results for the second quarter of its fiscal year 2011. Revenue for the quarter, which ended November 30, 2010, was $936.6 million, representing a 5.9% increase compared to last year's second quarter. When adjusting for the impact of acquisitions, the organic revenue growth was 4.2%.
Net income and earnings per diluted share for the second quarter were $55.9 million and $0.38, respectively. Last year's net income and earnings per diluted share were $57.2 million and $0.37, respectively. Last year's second quarter results included a legal settlement, net of insurance proceeds, which reduced net income and earnings per diluted share by $2.5 million and $0.02, respectively.
Scott D. Farmer, Chief Executive Officer, stated, “I am pleased to report solid results for our second quarter. Revenue in all four of our business segments grew over last year, and our organic growth rate improved from 2.8% in our first quarter to 4.2% in our second quarter. Our sales force's momentum continued to improve both in new business efforts and existing customer penetration. In addition, our customer retention improved during the quarter.”
Mr. Farmer added, “Net income and earnings per diluted share were in line with our internal expectations. We are pleased that our selling and administrative expenses as a percentage of revenue decreased sequentially despite one less workday from 31.8% in our first quarter to 30.8% in our second quarter.”
The Company's balance sheet continues to be very strong. Despite using $202 million of cash this fiscal year on our share buyback program, our cash and marketable securities were $285 million at November 30, 2010. Our total debt remained at $787 million and our total debt to total capitalization was 25%.
Mr. Farmer concluded, “Based on our second quarter results and our current outlook for the remainder of the year, we reiterate our fiscal 2011 revenue expectations to be in the range of $3.55 billion to $3.75 billion. We also continue to expect our fiscal 2011 earnings per diluted share to be in the range of $1.55 to $1.63.”
Headquartered in Cincinnati, Cintas Corporation provides highly specialized services to businesses of all types primarily 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 words, terms and 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. You should not place undue reliance on any forward-looking statement. We cannot guarantee that any forward-looking statement will be realized. These statements are subject to various risks, uncertainties, potentially inaccurate assumptions and other factors that could cause actual results to differ from those set forth in or implied by this Press 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, disruptions caused by the unavailability of computer systems, the initiation or outcome of litigation, investigations or other proceedings, higher assumed sourcing or distribution costs of products, the disruption of operations from catastrophic or extraordinary events, changes in federal and state tax and labor laws, the reactions of competitors in terms of price and service and the finalization of our financial statements for the three and six months ended November 30, 2010. Cintas undertakes no obligation to publicly release any revisions to any forward-looking statements or to otherwise update any forward-looking statements whether as a result of new information or to reflect events, circumstances or any other unanticipated developments arising after the date on which such statements are made. A further list and description of risks, uncertainties and other matters can be found in our Annual Report on Form 10-K for the year ended May 31, 2010 and in our reports on Forms 10-Q and 8-K. The risks and uncertainties described herein are not the only ones we may face. Additional risks and uncertainties presently not known to us or that we currently believe to be immaterial may also harm our business.
For additional information, contact:
William C. Gale
Sr. Vice President-Finance and Chief Financial Officer
J. Michael Hansen
Vice President and Treasurer