Cintas Corporation Announces Fiscal 2009 Results
CINCINNATI, July 15, 2009 — Cintas Corporation (Nasdaq: CTAS) today reported revenue for its fiscal year ended May 31, 2009, of $3.8 billion, a 4 percent decrease from the prior fiscal year. Net income for the year was $226 million and earnings per diluted share were $1.48. For the fourth quarter ended May 31, 2009, revenue was $879 million, a 13 percent decrease from prior year fourth quarter revenue. Fourth quarter net income was $4 million and earnings per diluted share were $0.03.
The Company announced on May 29, 2009, that, in response to economic conditions, current year results would include a restructuring, fixed asset impairment and inventory valuation charge. The $54 million after-tax charge was recorded in the fourth quarter. Excluding this charge, earnings per diluted share were $1.83 for the year and $0.38 for the fourth quarter
Scott D. Farmer, Chief Executive Officer, stated, "As we mentioned in May, the U.S. economy continues to lose employment at a rapid rate, directly impacting our customers and prospects. According to the US Department of Labor, the largest calendar year job loss on record was over 60 years ago when in 1945 the U.S. economy lost 2.75 million jobs. Over the last twelve months, the U.S. economy has lost approximately 5.5 million jobs, or twice that historical high. During May and June alone, over 800,000 U.S. jobs were lost."
Mr. Farmer continued, "The severity of these job losses resulted in the need for us to take significant cost reduction measures. We have continued to right-size our workforce and reduced our operating capacity to reflect current revenue levels. Over the last year we have also implemented stringent controls over discretionary spending."
Mr. Farmer emphasized, "While market conditions and related job loss are negatively impacting our business, when conditions improve and jobs are added, we expect to see improvement in our results. Cintas is a market leader in its businesses, has the most modern infrastructure, remains profitable, continues to generate significant cash flow and has a strong balance sheet."
Despite lower net income, free cash flow for Fiscal 2009 increased $11 million over Fiscal 2008. Using this strong cash flow, the Company was able to pay off all of its outstanding commercial paper as of May 31, 2009, increase its annual dividend payment to shareholders and increase its total cash position by over $60 million. In addition, the Company further strengthened its sound balance sheet, improving its current ratio to over four to one and improving its total debt to total capitalization ratio to 25%.
In closing, Mr. Farmer stated, "Our strong financial position and our commitment to continue to deliver exceptional quality and service to our customers will provide enhanced opportunities when economic conditions improve."
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 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 Quarterly Report. 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, 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 and the reactions of competitors in terms of price and service. 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, 2008 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
Senior Vice President-Finance and Chief Financial Officer
Michael L. Thompson
Vice President and Treasurer