Cintas Corporation Announces Fiscal 2010 Results
CINCINNATI, July 20, 2010 — Cintas Corporation (Nasdaq:CTAS) today reported its results for the quarter ended May 31, 2010. Revenues were $909 million, a 3.5% increase from last year’s fourth quarter. Earnings per diluted share were $0.36 compared to $0.03 last year. This year’s fourth quarter earnings were positively impacted by a $2 million after tax change in estimate to last year’s restructuring charge, or $0.01 per diluted share, and last year’s fourth quarter earnings were negatively impacted by various one-time charges amounting to $54 million after tax, or $0.35 per diluted share.
For the fiscal year ended May 31, 2010, revenues were $3.5 billion, a 6.0% decrease from the prior fiscal year. Earnings per diluted share were $1.40, and excluding special items in fiscal 2010, earnings per diluted share were $1.49.
Scott D. Farmer, Chief Executive Officer, stated, "We are pleased with our fourth quarter results, which exceeded our internal plan. Throughout this recent economic downturn, we have worked hard to position ourselves to grow revenue when conditions improve and jobs are added. Although the U.S. private sector job growth during our fourth quarter was slight, we were able to increase revenue."
The Company’s balance sheet and cash flow remain very strong. Cash and marketable securities increased by $316 million in fiscal 2010 to a total of $566 million at May 31, 2010. As of May 31, 2010, the current ratio was four to one and total debt to total capitalization was 24%. Free cash flow was $450 million in fiscal 2010, an increase of 24% over fiscal 2009.
Mr. Farmer continued, "Although we are encouraged by our fourth quarter performance, we continue to believe that U.S. private sector job recovery will be sluggish, and the return to pre-recession employment levels will take time. While we are poised to take advantage of opportunities presented by any employment improvement, we will not rely only on job creation for growth. Instead, we will continue to focus on adding new customers and penetrating existing customer accounts with additional products and services. 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."
Mr. Farmer concluded, "After two years of very difficult economic times, we expect a return to growth in sales and profits in fiscal 2011. Our expectations are for revenue in fiscal 2011 to be in the range of $3.55 billion to $3.75 billion, with full year earnings per diluted share in the range of $1.50 to $1.58. The hard work and dedication of our working partners continue to make us a market leader in all of our businesses. We look forward to the opportunities that lie ahead for Cintas."
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 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, 2009 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