Cintas Corporation Reports First Quarter Fiscal 2008 Revenue and Earnings and Announces International Expansion.New Sales Organization Gaining Momentum Company Acquires Business in Europe CINCINNATI -- Cintas Corporation (Nasdaq:CTAS CTAS Center-TRACON Automation System CTAS Create Table As Select (Oracle database) CTAS County Technical Assistance Service CTAS Cornell Taiwanese American Society CTAS Canadian Emergency Department Triage and Acuity Scale ) today reported revenue for the first quarter of fiscal 2008 of $969.1 million, a 6.0% increase from the previous year's first quarter revenue of $914.2 million. Net income was $81.1 million and earnings per diluted share were $0.51. Scott D. Farmer, President and Chief Executive Officer, stated, "Our results for the first quarter are in line with our expectations. Our new sales organization is now fully staffed and operational. We believe that the initial disruption in new business sales caused by the rollout of this new organization is behind us and we are beginning to see an improvement in new business results. We expect the new sales organization to continue to gain strength and momentum, resulting in improving revenue growth as we progress through the rest of our fiscal year." While net income and earnings per diluted share decreased 4.6% and 3.8%, respectively, as compared to the first quarter of last fiscal year, the results were in line with Company projections. The Company indicated that the investment in the new sales organization has impacted profitability, as expected. Mr. Farmer stated, "The investment in the new organization has been made in order to enhance future growth opportunities. As the amount of new business sold improves under this new organization, we expect our selling costs as a percent of revenue to begin to trend back to more traditional levels." International Expansion In addition to their first quarter results, Cintas announced that it has expanded internationally. Scott Farmer stated, "I am very pleased to announce that we have acquired Certo Information Management, a privately-held document shredding and storage business located in the Netherlands. We are very excited about the opportunity to now expand our services outside of North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. . While the revenue added directly from this acquisition is not material to our operations, our hope and intent is that experience gained from operating this business will provide a platform for further international expansion." Strong Balance Sheet and Cash Flow The Company's balance sheet continues to be strong. As of August 31, 2007, the Company's current assets Current Assets Appearing on a company's balance sheet, it represents cash, accounts receivable, inventory, marketable securities, prepaid expenses, and other assets that can be converted to cash within one year. exceeded current liabilities Current Liabilities Usually appearing on a company's balance sheet, it represents the amount owed for interest, accounts payable, short-term loans, expenses incurred but unpaid, and other debts due within one year. by over a four to one ratio and debt to total capitalization Total capitalization The total long-term debt and all types of equity of a company that constitutes its capital structure. total capitalization See capitalization. was 28.2%. The Company's cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses continues to be healthy. As of June 1, 2007, the Company adopted FASB FASB See: Financial Accounting Standards Board FASB See Financial Accounting Standards Board (FASB). Interpretation No. 48 (FIN 48), Accounting for Uncertainty in Income Taxes - an interpretation of FASB Statement FASB Statement A standard set by the Financial Accounting Standards Board regarding a financial accounting and reporting method. Essentially, FASB statements determine the acceptable accounting practices that Certified Public Accountants use in reporting No. 109. As a result of the implementation of FIN 48, the Company recorded a $14 million decrease to opening retained earnings Retained Earnings The percentage of net earnings not paid out in dividends, but retained by the company to be reinvested in its core business or to pay debt. It is recorded under shareholders equity on the balance sheet. as of June 1, 2007, and a corresponding tax reserve was established. New Segment Reporting segment reporting A type of financial reporting in which the firm discloses information by identifiable industry segments. For example, Union Pacific Corporation reports revenues, income, assets, depreciation, and capital expenditures for each of four Cintas also announced that beginning this quarter it will increase the number of operating segments reported in the Company's financial statements. Scott Farmer stated, "Our Document Management business and our First Aid, Safety and Fire business have grown to a sufficient size and scale that we believe reporting these businesses as separate operating segments is appropriate. These emerging businesses, which have historically been included in our "Other Services" operating segment, will now be broken out separately." As a result of this change, the Company will now report results for five operating segments: Rental Uniforms and Ancillary Products; Uniform Direct Sales; First Aid, Safety and Fire Protection Services; Document Management Services; and Corporate. Outlook Mr. Farmer stated, "Our first quarter results are in line with our expectations for the quarter. Based on these results and the improvement we are beginning to experience in our new business sales, we reiterate our full fiscal year guidance of $3.9 billion to $4.1 billion in revenue and earnings per diluted share of $2.15 to $2.25. Achieving this guidance would allow us to reach our 39th consecutive year of growth in revenue and earnings." About Cintas Headquartered in Cincinnati, Cintas Corporation provides highly specialized services to businesses of all types predominantly in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and Canada. 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 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. The Company has achieved 38 consecutive years of growth in sales and earnings, to date. CAUTION CONCERNING FORWARD-LOOKING STATEMENTS The Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995 provides a safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. from civil litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called 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 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. We cannot guarantee that any forward-looking statement will be realized. 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 operating costs npl → gastos mpl operacionales 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 See SOX. 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 whether as a result of new information or to reflect events or circumstances arising after the date on which they are made. You are advised, however, to consult any further disclosures we make on related subjects in our Form 10-Q Form 10-Q See 10-Q. , 8K and 10-K reports to the SEC. [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] |
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