My Company Store 
l rss t f yt

   

Cintas Corporation Reports Second Quarter Fiscal 2007 Revenue and Earnings


Revenue increases 10.5%
Earnings Per Diluted Share increases 10.9%

CINCINNATI - December 19, 2006 - Cintas Corporation (Nasdaq:CTAS) today reported revenue for the second quarter of fiscal 2007 of $923.3 million, a 10.5% increase from the previous year’s second quarter revenue of $835.8 million. Earnings per diluted share of $0.51 increased 10.9% from $0.46 per diluted share last year, and net income of $82.5 million increased 7.4% from $76.8 million last year.

Scott D. Farmer, President and Chief Executive Officer, stated, “I am proud to announce that we have achieved both revenue growth and earnings per share growth in excess of 10%.  Our results are a tribute to the effort that our more than 32,000 employee partners make every day in servicing our 700,000 business customers.  We continue to allocate capital and resources to grow the company at double digit rates while maintaining strong profit margins.  This marks our sixth consecutive quarter of achieving revenue growth in excess of 10%.
 
“During the second quarter, we purchased approximately 660,000 shares of Cintas common stock under our authorized share buyback program at a cost of $27.5 million.  Since the inception of this program, we have now bought back approximately 12.8 million of our outstanding shares at a cost of approximately $524 million.  These purchases, coupled with acquisitions made during the second half of fiscal 2006, have increased our debt levels and in turn our interest expense.  We are pleased to report a healthy 10.1% improvement in our earnings before interest and taxes over the second quarter of fiscal 2006.”

Mr. Farmer added, “We continue to implement our new sales structure and now have the new organization in place.  Orientation and training of affected partners continues to be on schedule.  Once our employee partners become fully oriented and acclimated to their roles, we expect the new organization to drive future improvements in internal growth.  The new sales structure is designed to better develop and execute additional cross-selling opportunities and improve sales productivity.”

Strong Balance Sheet
The Company’s balance sheet continues to be strong.  Despite increased debt levels related to acquisitions made in late fiscal 2006 and the Company’s share repurchase program, debt to total capitalization as of November 30, 2006 was only 27.4%. Cash and marketable securities were $172.2 million as of November 30, 2006.  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 commented, “Based on our sales results through the second quarter and more consistent energy costs as compared to fiscal 2006, we reiterate our fiscal 2007 guidance which calls for fiscal 2007 revenue of $3.77 to $3.85 billion and diluted earnings per share of $2.10 to $2.20.  We expect fiscal 2007 to be another record year at Cintas, which would result in our 38th consecutive year of growth in sales and earnings.”

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.

For additional information, contact:
William C. Gale
Senior Vice President-Finance and Chief Financial Officer
513-573-4211

Michael L. Thompson
Vice President and Treasurer
513-573-4133

 



Subscribe to Cintas RSS Feeds