Cintas Corporation Announces Fiscal 2011 Results
CINCINNATI, July 19, 2011 — Cintas Corporation (Nasdaq:CTAS) today reported results for its fourth quarter ended May 31, 2011. Revenue was $1,012.1 million, representing an 11.3% increase compared to last year’s fourth quarter. Organic growth, which adjusts for the impact of acquisitions, was 8.0%. Net income increased 27.6% to $70.8 million as compared to $55.5 million in last year’s fourth quarter. Earnings per diluted share for the fourth quarter were $0.49, a 36.1% increase over the $0.36 earnings per diluted share reported in last year’s fourth quarter. Last year’s fourth quarter results included a restructuring item which increased net income by $1.9 million and earnings per diluted share by $0.01.
For the fiscal year ended May 31, 2011, revenue was $3.8 billion, a 7.4% increase from the prior fiscal year. Earnings per diluted share were $1.68, a 20.0% increase over last year’s $1.40. Last year’s earnings per diluted share included legal settlements and a restructuring item which reduced earnings per diluted share by $0.09.
Scott D. Farmer, Chief Executive Officer, stated, “Our fourth quarter organic growth rate of 8.0% represents the fifth straight quarter that our organic growth rate improved. We are pleased by the continued revenue momentum in all of our businesses.”
Mr. Farmer added, “The added volume from this revenue momentum, as well as our on-going cost control efforts, helped to expand our operating margins to 12.7% in this year’s fourth quarter from 11.2% in last year’s fourth quarter. While many of our competitors have focused on lower pricing to grow their business, we have focused on selling value and growing our business profitably. Our solid fourth quarter results conclude a successful year for Cintas achieved in large part by the hard work and dedication of our employees, who we call partners.”
Mr. Farmer also announced, “During our fourth quarter and into July, we purchased 15.8 million shares of our common stock at a cost of $500 million. These purchases completed our share buyback program authorized by our Board on October 26, 2010. The value of our common stock during this period, along with the access to debt financing at very attractive rates, created a great opportunity to maximize the long-term value of Cintas for our shareholders and working partners.” The total share purchases included acquiring 7.7 million shares at an aggregate cost of approximately $240.5 million during the fourth quarter, and the remaining 8.1 million shares were purchased during June and July at an aggregate cost of $259.5 million. When combined with purchases made earlier in fiscal 2011, Cintas purchased 23.4 million shares at an aggregate cost of $702.0 million over the last twelve months.
As of May 31, 2011, Cintas’ cash and marketable securities were $525.3 million, but $259.5 million was used for the share buyback program in June and July. Total debt at May 31, 2011, was $1,286.1 million, and total debt to total capitalization was 36%. Cash flow from operations for fiscal 2011 was $340.9 million, including $132.9 million generated in the fourth quarter.
Mr. Farmer concluded, “We continue to be encouraged by the performance of our businesses and look forward to fiscal 2012. We expect our fiscal 2012 revenue to be in the range of $4.0 billion to $4.1 billion, with full year earnings per diluted share in the range of $1.97 to $2.05. This guidance assumes a moderately improving economy and employment environment. It also incorporates our estimated impact of the relatively high cotton prices experienced in our fiscal 2011 and no significant increases in energy related costs from our fourth quarter of fiscal 2011 levels.”
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 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 and fuel 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 inaccessibility of computer systems data, 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, the amount and timing of repurchases of our common stock, if any, 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 quarter and year ended May 31, 2011. 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