WASHINGTON
|
31-1188630
|
|
(State
or other jurisdiction of
|
(I.R.S.
Employer
|
|
incorporation
or organization)
|
Identification
No.)
|
Class
|
Outstanding
March 31, 2009
|
|
Common
Stock, no par value
|
152,790,170
|
Page
No.
|
|||
Part
I.
|
Financial
Information
|
||
Item
1.
|
Financial
Statements.
|
||
Consolidated
Condensed Statements of Income -
Three
Months and Nine Months Ended February 28, 2009
and
February 29, 2008
|
3
|
||
Consolidated
Condensed Balance Sheets -
February
28, 2009 and May 31, 2008
|
4
|
||
Consolidated
Condensed Statements of Cash Flows -
Nine
Months Ended February 28, 2009 and February 29, 2008
|
5
|
||
Notes
to Consolidated Condensed Financial Statements
|
6
|
||
Item
2.
|
Management's
Discussion and Analysis of Financial
Condition
and Results of Operations.
|
24
|
|
Item
3.
|
Quantitative
and Qualitative Disclosures About Market Risk.
|
34
|
|
Item
4.
|
Controls
and Procedures.
|
35
|
|
Part
II.
|
Other
Information
|
|
|
Item
1.
|
Legal
Proceedings.
|
36
|
|
Item
5.
|
Other
Information.
|
36
|
|
Item
6.
|
Exhibits.
|
36
|
|
Signatures
|
36
|
||
Exhibits
|
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
February
28, 2009
|
February
29, 2008
|
February
28, 2009
|
February
29, 2008
|
|||||||||||||
Revenue:
|
||||||||||||||||
Rental
uniforms and ancillary products
|
$ | 674,701 | $ | 703,641 | $ | 2,107,528 | $ | 2,122,840 | ||||||||
Other
services
|
233,938 | 272,311 | 788,474 | 806,105 | ||||||||||||
908,639 | 975,952 | 2,896,002 | 2,928,945 | |||||||||||||
Costs
and expenses:
|
||||||||||||||||
Cost
of rental uniforms and ancillary products
|
379,466 | 398,318 | 1,188,370 | 1,182,019 | ||||||||||||
Cost
of other services
|
152,736 | 166,409 | 491,112 | 497,761 | ||||||||||||
Selling
and administrative expenses
|
257,129 | 273,194 | 829,032 | 825,029 | ||||||||||||
Operating
income
|
119,308 | 138,031 | 387,488 | 424,136 | ||||||||||||
Interest
income
|
(540 | ) | (1,510 | ) | (2,435 | ) | (4,768 | ) | ||||||||
Interest
expense
|
12,407 | 13,622 | 38,206 | 39,452 | ||||||||||||
Income
before income taxes
|
107,441 | 125,919 | 351,717 | 389,452 | ||||||||||||
Income
taxes
|
35,630 | 44,091 | 129,432 | 143,708 | ||||||||||||
Net
income
|
$ | 71,811 | $ | 81,828 | $ | 222,285 | $ | 245,744 | ||||||||
Basic
earnings per share
|
$ | 0.47 | $ | 0.53 | $ | 1.45 | $ | 1.57 | ||||||||
Diluted
earnings per share
|
$ | 0.47 | $ | 0.53 | $ | 1.45 | $ | 1.57 | ||||||||
Dividends
declared per share
|
$ | 0.47 | $ | 0.46 |
February
28, 2009
|
May
31,
2008
|
|||||||
(Unaudited)
|
||||||||
ASSETS
|
||||||||
Current
assets:
|
||||||||
Cash
and cash equivalents
|
$ | 54,251 | $ | 66,224 | ||||
Marketable
securities
|
97,653 | 125,471 | ||||||
Accounts
receivable, net
|
384,912 | 430,078 | ||||||
Inventories,
net
|
252,483 | 238,669 | ||||||
Uniforms
and other rental items in service
|
352,032 | 370,416 | ||||||
Deferred
income tax asset
|
42,840 | 39,410 | ||||||
Prepaid
expenses
|
17,751 | 12,068 | ||||||
Total
current assets
|
1,201,922 | 1,282,336 | ||||||
Property
and equipment, at cost, net
|
980,646 | 974,575 | ||||||
Goodwill
|
1,325,377 | 1,315,569 | ||||||
Service
contracts, net
|
131,288 | 152,757 | ||||||
Other
assets, net
|
80,211 | 83,364 | ||||||
$ | 3,719,444 | $ | 3,808,601 | |||||
LIABILITIES
AND SHAREHOLDERS' EQUITY
|
||||||||
Current
liabilities:
|
||||||||
Accounts
payable
|
$ | 75,677 | $ | 94,755 | ||||
Accrued
compensation and related liabilities
|
46,836 | 50,605 | ||||||
Accrued
liabilities
|
250,209 | 207,925 | ||||||
Current
income taxes payable
|
895 | 12,887 | ||||||
Long-term
debt due within one year
|
592 | 1,070 | ||||||
Total
current liabilities
|
374,209 | 367,242 | ||||||
Long-term
liabilities:
|
||||||||
Long-term
debt due after one year
|
786,204 | 942,736 | ||||||
Deferred
income taxes
|
135,083 | 124,184 | ||||||
Accrued
liabilities
|
103,962 | 120,308 | ||||||
Total
long-term liabilities
|
1,025,249 | 1,187,228 | ||||||
Shareholders'
equity:
|
||||||||
Preferred
stock, no par value:
|
||||||||
100,000
shares authorized, none outstanding
|
---- | ---- | ||||||
Common
stock, no par value:
|
||||||||
425,000,000
shares authorized,
|
||||||||
FY
2009: 173,085,926
issued and 152,790,170 outstanding
|
||||||||
FY
2008: 173,083,426 issued
and 153,691,103 outstanding
|
129,215 | 129,182 | ||||||
Paid-in
capital
|
69,312 | 60,408 | ||||||
Retained
earnings
|
2,934,354 | 2,784,302 | ||||||
Treasury
stock:
|
||||||||
FY
2009: 20,295,756 shares
|
||||||||
FY
2008: 19,392,323 shares
|
(797,888 | ) | (772,041 | ) | ||||
Other
accumulated comprehensive (loss) income
|
(15,007 | ) | 52,280 | |||||
Total
shareholders' equity
|
2,319,986 | 2,254,131 | ||||||
$ | 3,719,444 | $ | 3,808,601 |
Nine
Months Ended
|
||||||||
February
28, 2009
|
February
29, 2008
|
|||||||
Cash
flows from operating
activities:
|
||||||||
Net
income
|
$ | 222,285 | $ | 245,744 | ||||
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
||||||||
Depreciation
|
118,119 | 110,076 | ||||||
Amortization
of deferred charges
|
32,023 | 32,371 | ||||||
Stock-based
compensation
|
8,904 | 7,406 | ||||||
Deferred
income taxes
|
9,052 | (456 | ) | |||||
Change in
current assets and liabilities, net of acquisitions of
businesses:
|
||||||||
Accounts
receivable, net
|
42,118 | 862 | ||||||
Inventories,
net
|
(16,427 | ) | (8,925 | ) | ||||
Uniforms and other rental
items in service
|
12,998 | (18,628 | ) | |||||
Prepaid
expenses
|
(5,802 | ) | 1,177 | |||||
Accounts
payable
|
(22,247 | ) | (448 | ) | ||||
Accrued compensation and
related liabilities
|
(3,250 | ) | (11,730 | ) | ||||
Accrued liabilities and
other
|
(45,734 | ) | (7,405 | ) | ||||
Income taxes
payable
|
(12,320 | ) | 17,886 | |||||
Net
cash provided by operating activities
|
339,719 | 367,930 | ||||||
Cash
flows from investing
activities:
|
||||||||
Capital
expenditures
|
(132,783 | ) | (144,848 | ) | ||||
Proceeds
from sale or redemption of marketable
securities
|
92,061 | 42,393 | ||||||
Purchase
of marketable securities and investments
|
(94,985 | ) | (32,434 | ) | ||||
Acquisitions
of businesses, net of cash acquired
|
(29,381 | ) | (102,103 | ) | ||||
Other
|
(428 | ) | (1,202 | ) | ||||
Net
cash used in investing activities
|
(165,516 | ) | (238,194 | ) | ||||
Cash
flows from financing
activities:
|
||||||||
Proceeds
from issuance of debt
|
7,500 | 313,000 | ||||||
Repayment
of debt
|
(164,510 | ) | (228,808 | ) | ||||
Stock
options exercised
|
--- | 8,030 | ||||||
Repurchase
of common stock
|
(25,847 | ) | (191,479 | ) | ||||
Other
|
736 | (11,455 | ) | |||||
Net
cash used in financing activities
|
(182,121 | ) | (110,712 | ) | ||||
Effect
of exchange rate changes on cash and cash equivalents
|
(4,055 | ) | 1,291 | |||||
Net
(decrease) increase in cash and cash equivalents
|
(11,973 | ) | 20,315 | |||||
Cash
and cash equivalents at beginning of period
|
66,224 | 35,360 | ||||||
Cash
and cash equivalents at end of period
|
$ | 54,251 | $ | 55,675 |
1.
|
Basis
of Presentation
|
2.
|
New
Accounting Standards
|
3.
|
Fair
Value Measurements
|
Level 1 –
|
Quoted
prices in active markets for identical assets or
liabilities.
|
Level 2 –
|
Observable
inputs other than quoted prices included in Level 1, such as quoted
prices for similar assets and liabilities in active markets; quoted prices
for identical or similar assets and liabilities in markets that are not
active; or other inputs that are observable or can be corroborated by
observable market data.
|
Level 3 –
|
Unobservable
inputs that are supported by little or no market activity and that are
significant to the fair value of the assets or liabilities. This includes
certain pricing models, discounted cash flow methodologies and similar
techniques that use significant unobservable
inputs.
|
As
of February 28, 2009
|
||||||||||||||||
Level
1
|
Level
2
|
Level
3
|
Fair
Value
|
|||||||||||||
Cash
and cash equivalents
|
$ | 54,251 | $ | ---- | $ | ---- | $ | 54,251 | ||||||||
Marketable
securities, available-for-sale
|
97,653 | ---- | ---- | 97,653 | ||||||||||||
Accounts
receivable, net
|
---- | 695 | ---- | 695 | ||||||||||||
Other
assets, net
|
14,419 | ---- | ---- | 14,419 | ||||||||||||
Total
assets at fair value
|
$ | 166,323 | $ | 695 | $ | ---- | $ | 167,018 | ||||||||
Current
accrued liabilities
|
$ | ---- | $ | 381 | $ | ---- | $ | 381 | ||||||||
Total
liabilities at fair value
|
$ | ---- | $ | 381 | $ | ---- | $ | 381 |
4.
|
Earnings
per Share
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
February
28, 2009
|
February
29, 2008
|
February
28, 2009
|
February
29, 2008
|
|||||||||||||
Numerator:
|
||||||||||||||||
Net
income
|
$ | 71,811 | $ | 81,828 | $ | 222,285 | $ | 245,744 | ||||||||
Denominator:
|
||||||||||||||||
Denominator
for basic earnings per share - weighted average
shares
|
152,993 | 153,679 | 152,993 | 156,346 | ||||||||||||
|
||||||||||||||||
Effect
of dilutive securities - non-vested equity compensation
shares
|
288 | 203 | 334 | 287 | ||||||||||||
Denominator
for diluted earnings per share - adjusted weighted
average
shares
and assumed conversions
|
153,281 | 153,882 | 153,327 | 156,633 | ||||||||||||
Basic
earnings per share
|
$ | 0.47 | $ | 0.53 | $ | 1.45 | $ | 1.57 | ||||||||
Diluted
earnings per share
|
$ | 0.47 | $ | 0.53 | $ | 1.45 | $ | 1.57 |
5.
|
Goodwill,
Service Contracts and Other Assets
|
Rental
Uniforms
&
Ancillary
Products
|
Uniform
Direct
Sales
|
First
Aid,
Safety
&
Fire
Protection
|
Document
Management
|
Total
|
||||||||||||||||
Goodwill
|
||||||||||||||||||||
Balance
as of June 1, 2008
|
$ | 863,581 | $ | 23,956 | $ | 165,544 | $ | 262,488 | $ | 1,315,569 | ||||||||||
Goodwill
acquired
|
--- | --- | 1,169 | 16,341 | 17,510 | |||||||||||||||
Foreign
currency translation
|
(3,955 | ) | (185 | ) | --- | (3,562 | ) | (7,702 | ) | |||||||||||
Balance
as of February 28, 2009
|
$ | 859,626 | $ | 23,771 | $ | 166,713 | $ | 275,267 | $ | 1,325,377 |
Rental
Uniforms
&
Ancillary
Products
|
Uniform
Direct
Sales
|
First
Aid,
Safety
&
Fire
Protection
|
Document
Management
|
Total
|
||||||||||||||||
Service
Contracts
|
||||||||||||||||||||
Balance
as of June 1, 2008
|
$ | 84,574 | $ | 328 | $ | 41,944 | $ | 25,911 | $ | 152,757 | ||||||||||
Service
contracts acquired
|
--- | --- | 264 | 3,728 | 3,992 | |||||||||||||||
Service
contracts amortization
|
(8,881 | ) | (182 | ) | (4,639 | ) | (5,560 | ) | (19,262 | ) | ||||||||||
Foreign
currency translation
|
(5,546 | ) | (92 | ) | --- | (561 | ) | (6,199 | ) | |||||||||||
Balance
as of February 28, 2009
|
$ | 70,147 | $ | 54 | $ | 37,569 | $ | 23,518 | $ | 131,288 |
As
of February 28, 2009
|
||||||||||||
Carrying
Amount
|
Accumulated
Amortization
|
Net
|
||||||||||
Service
contracts
|
$ | 331,336 | $ | 200,048 | $ | 131,288 | ||||||
Noncompete
and consulting agreements
|
$ | 65,024 | $ | 41,673 | $ | 23,351 | ||||||
Investments
|
49,480 | ---- | 49,480 | |||||||||
Other
|
10,653 | 3,273 | 7,380 | |||||||||
Total
|
$ | 125,157 | $ | 44,946 | $ | 80,211 | ||||||
As
of May 31, 2008
|
||||||||||||
Carrying
Amount
|
Accumulated
Amortization
|
Net
|
||||||||||
Service
contracts
|
$ | 333,543 | $ | 180,786 | $ | 152,757 | ||||||
Noncompete
and consulting agreements
|
$ | 63,894 | $ | 34,625 | $ | 29,269 | ||||||
Investments
|
46,012 | ---- | 46,012 | |||||||||
Other
|
10,790 | 2,707 | 8,083 | |||||||||
Total
|
$ | 120,696 | $ | 37,332 | $ | 83,364 |
6.
|
Debt,
Derivatives and Hedging Activities
|
7.
|
Income
Taxes
|
8.
|
Comprehensive
Income
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
February
28, 2009
|
February
29, 2008
|
February
28, 2009
|
February
29, 2008
|
|||||||||||||
Net
income
|
$ | 71,811 | $ | 81,828 | $ | 222,285 | $ | 245,744 | ||||||||
Other
comprehensive income:
|
||||||||||||||||
Foreign
currency translation adjustment
|
(6,367 | ) | 4,840 | (68,042 | ) | 20,791 | ||||||||||
Change
in fair value of derivatives*
|
(117 | ) | (1,043 | ) | 97 | (4,916 | ) | |||||||||
Amortization of interest rate lock agreements | 192 | 192 | 575 | 330 | ||||||||||||
Change
in fair value of available-for-sale
securities**
|
(73 | ) | 84 | 83 | 236 | |||||||||||
Comprehensive
income
|
$ | 65,446 | $ | 85,901 | $ | 154,998 | $ | 262,185 |
*
|
Net
of $(69) and $(620) of tax for the three months ended February 28, 2009
and February 29, 2008, respectively. Net of $57 and $(2,924) of
tax (benefit) for the nine months ended February 28, 2009 and February 29,
2008, respectively.
|
**
|
Net
of $63 and $47 of tax for the three months ended February 28, 2009 and
February 29, 2008, respectively. Net of $33 and $138 of tax for
the nine months ended February 28, 2009 and February 29, 2008,
respectively.
|
9.
|
Litigation
and Other Contingencies
|
10.
|
Segment
Information
|
Rental
Uniforms
&
Ancillary
Products
|
Uniform
Direct
Sales
|
First
Aid,
Safety
&
Fire
Protection
|
Document
Management
|
Corporate
|
Total
|
|||||||||||||||||||
For
the three months ended February 28, 2009
|
||||||||||||||||||||||||
Revenue
|
$ | 674,701 | $ | 97,010 | $ | 86,037 | $ | 50,891 | $ | ---- | $ | 908,639 | ||||||||||||
Income (loss) before income
taxes
|
$ | 110,447 | $ | 803 | $ | 4,141 | $ | 3,917 | $ | (11,867 | ) | $ | 107,441 | |||||||||||
For
the three months ended February 29, 2008
|
||||||||||||||||||||||||
Revenue
|
$ | 703,641 | $ | 125,277 | $ | 97,594 | $ | 49,440 | $ | ---- | $ | 975,952 | ||||||||||||
Income (loss) before income
taxes
|
$ | 106,486 | $ | 16,186 | $ | 7,327 | $ | 8,032 | $ | (12,112 | ) | $ | 125,919 | |||||||||||
As
of and for the nine months ended February 28, 2009
|
||||||||||||||||||||||||
Revenue
|
$ | 2,107,528 | $ | 334,528 | $ | 295,059 | $ | 158,887 | $ | ---- | $ | 2,896,002 | ||||||||||||
Income (loss) before income
taxes
|
$ | 325,876 | $ | 22,043 | $ | 23,159 | $ | 16,410 | $ | (35,771 | ) | $ | 351,717 | |||||||||||
Total
assets
|
$ | 2,595,144 | $ | 165,976 | $ | 338,509 | $ | 467,911 | $ | 151,904 | $ | 3,719,444 | ||||||||||||
As
of and for the nine months ended February 29, 2008
|
||||||||||||||||||||||||
Revenue
|
$ | 2,122,840 | $ | 378,537 | $ | 299,003 | $ | 128,565 | $ | ---- | $ | 2,928,945 | ||||||||||||
Income (loss) before income
taxes
|
$ | 339,278 | $ | 43,063 | $ | 25,294 | $ | 16,501 | $ | (34,684 | ) | $ | 389,452 | |||||||||||
Total
assets
|
$ | 2,621,696 | $ | 191,715 | $ | 342,033 | $ | 443,188 | $ | 163,646 | $ | 3,762,278 |
11.
|
Supplemental
Guarantor Information
|
Cintas
Corporation
|
Corp.
2
|
Subsidiary
Guarantors
|
Non-
Guarantors
|
Eliminations
|
Cintas
Corporation
Consolidated
|
|||||||||||||||||||
Revenue:
|
||||||||||||||||||||||||
Rental uniforms and
ancillary products
|
$ | ---- | $ | 514,482 | $ | 140,567 | $ | 41,818 | $ | (22,166 | ) | $ | 674,701 | |||||||||||
Other
services
|
---- | 294,282 | 89,869 | 12,013 | (162,226 | ) | 233,938 | |||||||||||||||||
Equity in net
income of affiliates
|
71,811 | ---- | ---- | ---- | (71,811 | ) | ---- | |||||||||||||||||
71,811 | 808,764 | 230,436 | 53,831 | (256,203 | ) | 908,639 | ||||||||||||||||||
Costs
and expenses (income):
|
||||||||||||||||||||||||
Cost of rental
uniforms and ancillary products
|
---- | 304,321 | 86,358 | 25,195 | (36,408 | ) | 379,466 | |||||||||||||||||
Cost of other
services
|
---- | 217,163 | 79,876 | 7,398 | (151,701 | ) | 152,736 | |||||||||||||||||
Selling and
administrative expenses
|
---- | 244,568 | (389 | ) | 13,443 | (493 | ) | 257,129 | ||||||||||||||||
Operating
income
|
71,811 | 42,712 | 64,591 | 7,795 | (67,601 | ) | 119,308 | |||||||||||||||||
Interest
income
|
---- | ---- | (220 | ) | (320 | ) | ---- | (540 | ) | |||||||||||||||
Interest expense
(income)
|
---- | 12,820 | (425 | ) | 12 | ---- | 12,407 | |||||||||||||||||
Income
before income taxes
|
71,811 | 29,892 | 65,236 | 8,103 | (67,601 | ) | 107,441 | |||||||||||||||||
Income
taxes
|
---- | 8,358 | 24,509 | 2,763 | ---- | 35,630 | ||||||||||||||||||
Net
income
|
$ | 71,811 | $ | 21,534 | $ | 40,727 | $ | 5,340 | $ | (67,601 | ) | $ | 71,811 |
Cintas
Corporation
|
Corp.
2
|
Subsidiary
Guarantors
|
Non-
Guarantors
|
Eliminations
|
Cintas
Corporation
Consolidated
|
|||||||||||||||||||
Revenue:
|
||||||||||||||||||||||||
Rental uniforms and
ancillary products
|
$ | ---- | $ | 509,064 | $ | 143,124 | $ | 51,774 | $ | (321 | ) | $ | 703,641 | |||||||||||
Other
services
|
---- | 342,152 | 131,522 | 16,191 | (217,554 | ) | 272,311 | |||||||||||||||||
Equity in net
income of affiliates
|
81,828 | ---- | ---- | ---- | (81,828 | ) | ---- | |||||||||||||||||
81,828 | 851,216 | 274,646 | 67,965 | (299,703 | ) | 975,952 | ||||||||||||||||||
Costs
and expenses (income):
|
||||||||||||||||||||||||
Cost of rental
uniforms and ancillary products
|
---- | 320,595 | 86,270 | 30,167 | (38,714 | ) | 398,318 | |||||||||||||||||
Cost of other
services
|
---- | 226,617 | 109,144 | 10,137 | (179,489 | ) | 166,409 | |||||||||||||||||
Selling and
administrative expenses
|
---- | 219,289 | 40,934 | 14,813 | (1,842 | ) | 273,194 | |||||||||||||||||
Operating
income
|
81,828 | 84,715 | 38,298 | 12,848 | (79,658 | ) | 138,031 | |||||||||||||||||
Interest
income
|
---- | ---- | (358 | ) | (1,152 | ) | ---- | (1,510 | ) | |||||||||||||||
Interest expense
(income)
|
---- | 14,087 | (2,049 | ) | 1,584 | ---- | 13,622 | |||||||||||||||||
Income
before income taxes
|
81,828 | 70,628 | 40,705 | 12,416 | (79,658 | ) | 125,919 | |||||||||||||||||
Income
taxes
|
---- | 25,108 | 14,682 | 4,301 | ---- | 44,091 | ||||||||||||||||||
Net
income
|
$ | 81,828 | $ | 45,520 | $ | 26,023 | $ | 8,115 | $ | (79,658 | ) | $ | 81,828 |
Cintas
Corporation
|
Corp.
2
|
Subsidiary
Guarantors
|
Non-
Guarantors
|
Eliminations
|
Cintas
Corporation
Consolidated
|
|||||||||||||||||||
Revenue:
|
||||||||||||||||||||||||
Rental uniforms and
ancillary products
|
$ | ---- | $ | 1,600,762 | $ | 438,888 | $ | 135,745 | $ | (67,867 | ) | $ | 2,107,528 | |||||||||||
Other
services
|
---- | 1,004,930 | 327,512 | 44,165 | (588,133 | ) | 788,474 | |||||||||||||||||
Equity in net
income of affiliates
|
222,285 | ---- | ---- | ---- | (222,285 | ) | ---- | |||||||||||||||||
222,285 | 2,605,692 | 766,400 | 179,910 | (878,285 | ) | 2,896,002 | ||||||||||||||||||
Costs
and expenses (income):
|
||||||||||||||||||||||||
Cost of rental
uniforms and ancillary products
|
---- | 960,159 | 266,138 | 82,068 | (119,995 | ) | 1,188,370 | |||||||||||||||||
Cost of other
services
|
---- | 720,896 | 288,509 | 27,372 | (545,665 | ) | 491,112 | |||||||||||||||||
Selling and
administrative expenses
|
---- | 782,461 | 3,734 | 44,147 | (1,310 | ) | 829,032 | |||||||||||||||||
Operating
income
|
222,285 | 142,176 | 208,019 | 26,323 | (211,315 | ) | 387,488 | |||||||||||||||||
Interest
income
|
---- | ---- | (661 | ) | (1,774 | ) | ---- | (2,435 | ) | |||||||||||||||
Interest expense
(income)
|
---- | 39,588 | (1,397 | ) | 15 | ---- | 38,206 | |||||||||||||||||
Income
before income taxes
|
222,285 | 102,588 | 210,077 | 28,082 | (211,315 | ) | 351,717 | |||||||||||||||||
Income
taxes
|
---- | 33,734 | 86,964 | 8,734 | ---- | 129,432 | ||||||||||||||||||
Net
income
|
$ | 222,285 | $ | 68,854 | $ | 123,113 | $ | 19,348 | $ | (211,315 | ) | $ | 222,285 |
Cintas
Corporation
|
Corp.
2
|
Subsidiary
Guarantors
|
Non-
Guarantors
|
Eliminations
|
Cintas
Corporation
Consolidated
|
|||||||||||||||||||
Revenue:
|
||||||||||||||||||||||||
Rental uniforms and
ancillary products
|
$ | ---- | $ | 1,540,356 | $ | 432,819 | $ | 150,494 | $ | (829 | ) | $ | 2,122,840 | |||||||||||
Other
services
|
---- | 1,045,347 | 413,216 | 46,614 | (699,072 | ) | 806,105 | |||||||||||||||||
Equity in net
income of affiliates
|
245,744 | ---- | ---- | ---- | (245,744 | ) | ---- | |||||||||||||||||
245,744 | 2,585,703 | 846,035 | 197,108 | (945,645 | ) | 2,928,945 | ||||||||||||||||||
Costs
and expenses (income):
|
||||||||||||||||||||||||
Cost of rental
uniforms and ancillary products
|
---- | 959,923 | 260,506 | 87,698 | (126,108 | ) | 1,182,019 | |||||||||||||||||
Cost of other
services
|
---- | 694,245 | 347,782 | 29,532 | (573,798 | ) | 497,761 | |||||||||||||||||
Selling and
administrative expenses
|
---- | 654,446 | 132,678 | 42,388 | (4,483 | ) | 825,029 | |||||||||||||||||
Operating
income
|
245,744 | 277,089 | 105,069 | 37,490 | (241,256 | ) | 424,136 | |||||||||||||||||
Interest
income
|
---- | ---- | (1,191 | ) | (3,577 | ) | ---- | (4,768 | ) | |||||||||||||||
Interest expense
(income)
|
---- | 39,954 | (5,162 | ) | 4,660 | ---- | 39,452 | |||||||||||||||||
Income
before income taxes
|
245,744 | 237,135 | 111,422 | 36,407 | (241,256 | ) | 389,452 | |||||||||||||||||
Income
taxes
|
---- | 88,971 | 41,805 | 12,932 | ---- | 143,708 | ||||||||||||||||||
Net
income
|
$ | 245,744 | $ | 148,164 | $ | 69,617 | $ | 23,475 | $ | (241,256 | ) | $ | 245,744 |
Cintas
Corporation
|
Corp.
2
|
Subsidiary
Guarantors
|
Non-
Guarantors
|
Eliminations
|
Cintas
Corporation
Consolidated
|
|||||||||||||||||||
Assets
|
||||||||||||||||||||||||
Current
assets
|
||||||||||||||||||||||||
Cash and cash
equivalents
|
$ | ---- | $ | 37,790 | $ | 9,659 | $ | 6,802 | $ | ---- | $ | 54,251 | ||||||||||||
Marketable
securities
|
---- | ---- | ---- | 97,653 | ---- | 97,653 | ||||||||||||||||||
Accounts
receivable, net
|
---- | 298,911 | 94,504 | 19,183 | (27,686 | ) | 384,912 | |||||||||||||||||
Inventories,
net
|
---- | 226,864 | 18,441 | 8,379 | (1,201 | ) | 252,483 | |||||||||||||||||
Uniforms and other
rental items in service
|
---- | 272,885 | 82,066 | 19,327 | (22,246 | ) | 352,032 | |||||||||||||||||
Deferred income tax
asset (liability)
|
---- | ---- | 44,633 | (1,793 | ) | ---- | 42,840 | |||||||||||||||||
Prepaid
expenses
|
---- | 5,379 | 11,099 | 1,273 | ---- | 17,751 | ||||||||||||||||||
Total
current assets
|
---- | 841,829 | 260,402 | 150,824 | (51,133 | ) | 1,201,922 | |||||||||||||||||
Property
and equipment, at cost, net
|
---- | 665,134 | 267,617 | 47,895 | ---- | 980,646 | ||||||||||||||||||
Goodwill
|
---- | ---- | 1,292,628 | 32,749 | ---- | 1,325,377 | ||||||||||||||||||
Service
contracts, net
|
---- | 125,454 | 1,880 | 3,954 | ---- | 131,288 | ||||||||||||||||||
Other
assets, net
|
1,869,746 | 1,600,771 | 1,779,796 | 270,778 | (5,440,880 | ) | 80,211 | |||||||||||||||||
$ | 1,869,746 | $ | 3,233,188 | $ | 3,602,323 | $ | 506,200 | $ | (5,492,013 | ) | $ | 3,719,444 | ||||||||||||
Liabilities
and Shareholders' Equity
|
||||||||||||||||||||||||
Current
liabilities:
|
||||||||||||||||||||||||
Accounts
(receivable) payable
|
$ | (465,247 | ) | $ | 293,122 | $ | 249,536 | $ | (22,824 | ) | $ | 21,090 | $ | 75,677 | ||||||||||
Accrued
compensation and related liabilities
|
---- | 30,923 | 14,172 | 1,741 | ---- | 46,836 | ||||||||||||||||||
Accrued
liabilities
|
---- | 27,571 | 216,326 | 6,312 | ---- | 250,209 | ||||||||||||||||||
Current income
taxes payable (receivable)
|
---- | 8,848 | (4,348 | ) | (3,605 | ) | ---- | 895 | ||||||||||||||||
Long-term debt due
within one year
|
---- | 739 | 72 | ---- | (219 | ) | 592 | |||||||||||||||||
Total
current liabilities
|
(465,247 | ) | 361,203 | 475,758 | (18,376 | ) | 20,871 | 374,209 | ||||||||||||||||
Long-term
liabilities:
|
||||||||||||||||||||||||
Long-term debt due
after one year
|
---- | 796,497 | 241 | 18,951 | (29,485 | ) | 786,204 | |||||||||||||||||
Deferred income
taxes
|
---- | ---- | 130,625 | 4,458 | ---- | 135,083 | ||||||||||||||||||
Accrued
liabilities
|
---- | ---- | 103,962 | ---- | ---- | 103,962 | ||||||||||||||||||
Total
long-term liabilities
|
---- | 796,497 | 234,828 | 23,409 | (29,485 | ) | 1,025,249 | |||||||||||||||||
Total
shareholders’ equity
|
2,334,993 | 2,075,488 | 2,891,737 | 501,167 | (5,483,399 | ) | 2,319,986 | |||||||||||||||||
$ | 1,869,746 | $ | 3,233,188 | $ | 3,602,323 | $ | 506,200 | $ | (5,492,013 | ) | $ | 3,719,444 |
Cintas
Corporation
|
Corp.
2
|
Subsidiary
Guarantors
|
Non-
Guarantors
|
Eliminations
|
Cintas
Corporation
Consolidated
|
|||||||||||||||||||
Assets
|
||||||||||||||||||||||||
Current
assets:
|
||||||||||||||||||||||||
Cash and cash
equivalents
|
$ | ---- | $ | 37,472 | $ | 7,851 | $ | 20,901 | $ | ---- | $ | 66,224 | ||||||||||||
Marketable
securities
|
---- | ---- | ---- | 125,471 | ---- | 125,471 | ||||||||||||||||||
Accounts
receivable, net
|
---- | 313,050 | 119,592 | 28,703 | (31,267 | ) | 430,078 | |||||||||||||||||
Inventories,
net
|
---- | 218,109 | 18,349 | 8,928 | (6,717 | ) | 238,669 | |||||||||||||||||
Uniforms and other
rental items in service
|
---- | 288,493 | 85,753 | 23,923 | (27,753 | ) | 370,416 | |||||||||||||||||
Deferred income tax
asset (liability)
|
---- | ---- | 41,664 | (2,254 | ) | ---- | 39,410 | |||||||||||||||||
Prepaid
expenses
|
---- | 5,048 | 5,876 | 1,144 | ---- | 12,068 | ||||||||||||||||||
Total
current assets
|
---- | 862,172 | 279,085 | 206,816 | (65,737 | ) | 1,282,336 | |||||||||||||||||
Property
and equipment, at cost, net
|
---- | 678,239 | 236,519 | 59,817 | ---- | 974,575 | ||||||||||||||||||
Goodwill
|
---- | ---- | 1,279,819 | 35,750 | ---- | 1,315,569 | ||||||||||||||||||
Service
contracts, net
|
---- | 145,115 | 2,612 | 5,030 | ---- | 152,757 | ||||||||||||||||||
Other
assets, net
|
1,736,604 | 1,608,496 | 1,751,433 | 369,232 | (5,382,401 | ) | 83,364 | |||||||||||||||||
$ | 1,736,604 | $ | 3,294,022 | $ | 3,549,468 | $ | 676,645 | $ | (5,448,138 | ) | $ | 3,808,601 | ||||||||||||
Liabilities
and Shareholders' Equity
|
||||||||||||||||||||||||
Current
liabilities:
|
||||||||||||||||||||||||
Accounts
(receivable) payable
|
$ | (465,247 | ) | $ | 292,027 | $ | 255,399 | $ | (6,000 | ) | $ | 18,576 | $ | 94,755 | ||||||||||
Accrued
compensation and related liabilities
|
---- | 29,919 | 18,210 | 2,476 | ---- | 50,605 | ||||||||||||||||||
Accrued
liabilities
|
---- | 54,260 | 146,669 | 7,916 | (920 | ) | 207,925 | |||||||||||||||||
Current income
taxes payable (receivable)
|
---- | 340 | 12,686 | (139 | ) | ---- | 12,887 | |||||||||||||||||
Long-term debt due
within one year
|
---- | 698 | 574 | ---- | (202 | ) | 1,070 | |||||||||||||||||
Total
current liabilities
|
(465,247 | ) | 377,244 | 433,538 | 4,253 | 17,454 | 367,242 | |||||||||||||||||
Long-term
liabilities:
|
||||||||||||||||||||||||
Long-term debt due
after one year
|
---- | 952,595 | 893 | 27,213 | (37,965 | ) | 942,736 | |||||||||||||||||
Deferred income
taxes
|
---- | ---- | 118,479 | 5,705 | ---- | 124,184 | ||||||||||||||||||
Accrued
liabilities
|
---- | ---- | 120,308 | ---- | ---- | 120,308 | ||||||||||||||||||
Total
long-term liabilities
|
---- | 952,595 | 239,680 | 32,918 | (37,965 | ) | 1,187,228 | |||||||||||||||||
Total
shareholders’ equity
|
2,201,851 | 1,964,183 | 2,876,250 | 639,474 | (5,427,627 | ) | 2,254,131 | |||||||||||||||||
$ | 1,736,604 | $ | 3,294,022 | $ | 3,549,468 | $ | 676,645 | $ | (5,448,138 | ) | $ | 3,808,601 |
Cintas
Corporation
|
Corp.
2
|
Subsidiary
Guarantors
|
Non-
Guarantors
|
Eliminations
|
Cintas
Corporation
Consolidated
|
|||||||||||||||||||
Cash
flows from operating activities:
|
||||||||||||||||||||||||
Net
income
|
$ | 222,285 | $ | 68,854 | $ | 123,113 | $ | 19,348 | $ | (211,315 | ) | $ | 222,285 | |||||||||||
Adjustments to
reconcile net income to net cash
provided by
(used in) operating activities:
|
||||||||||||||||||||||||
Depreciation
|
---- | 74,977 | 37,085 | 6,057 | ---- | 118,119 | ||||||||||||||||||
Amortization of
deferred charges
|
---- | 29,871 | 857 | 1,295 | ---- | 32,023 | ||||||||||||||||||
Stock-based
compensation
|
8,904 | ---- | ---- | ---- | ---- | 8,904 | ||||||||||||||||||
Deferred income
taxes
|
---- | ---- | 9,052 | ---- | ---- | 9,052 | ||||||||||||||||||
Changes in current
assets and liabilities,
net of
acquisitions of businesses:
|
||||||||||||||||||||||||
Accounts
receivable, net
|
---- | 15,402 | 25,087 | 5,210 | (3,581 | ) | 42,118 | |||||||||||||||||
Inventories,
net
|
---- | (8,739 | ) | (94 | ) | (2,078 | ) | (5,516 | ) | (16,427 | ) | |||||||||||||
Uniforms and other
rental items
in
service
|
---- | 15,520 | 3,689 | (704 | ) | (5,507 | ) | 12,998 | ||||||||||||||||
Prepaid
expenses
|
---- | (334 | ) | (5,223 | ) | (245 | ) | ---- | (5,802 | ) | ||||||||||||||
Accounts
payable
|
---- | 14,969 | (19,110 | ) | (20,619 | ) | 2,513 | (22,247 | ) | |||||||||||||||
Accrued
compensation and related
liabilities
|
---- | 1,009 | (4,031 | ) | (228 | ) | ---- | (3,250 | ) | |||||||||||||||
Accrued liabilities
and other
|
---- | (27,179 | ) | (18,884 | ) | (591 | ) | 920 | (45,734 | ) | ||||||||||||||
Income taxes
payable
|
---- | 8,614 | (17,034 | ) | (3,900 | ) | ---- | (12,320 | ) | |||||||||||||||
Net
cash provided by (used in) operating activities
|
231,189 | 192,964 | 134,507 | 3,545 | (222,486 | ) | 339,719 | |||||||||||||||||
Cash
flows from investing activities:
|
||||||||||||||||||||||||
Capital
expenditures
|
---- | (59,740 | ) | (67,572 | ) | (5,471 | ) | ---- | (132,783 | ) | ||||||||||||||
Proceeds from sale
or redemption of marketable
securities
|
---- | ---- | ---- | 92,061 | ---- | 92,061 | ||||||||||||||||||
Purchase of
marketable securities and
investments
|
---- | 1,411 | 63,708 | (91,517 | ) | (68,587 | ) | (94,985 | ) | |||||||||||||||
Acquisitions of
businesses, net of cash acquired
|
---- | (19,927 | ) | ---- | (9,454 | ) | ---- | (29,381 | ) | |||||||||||||||
Other
|
(205,342 | ) | 41,748 | (119,418 | ) | (25 | ) | 282,609 | (428 | ) | ||||||||||||||
Net
cash (used in) provided by investing activities
|
(205,342 | ) | (36,508 | ) | (123,282 | ) | (14,406 | ) | 214,022 | (165,516 | ) | |||||||||||||
Cash
flows from financing activities:
|
||||||||||||||||||||||||
Proceeds from
issuance of debt
|
---- | 7,500 | ---- | ---- | ---- | 7,500 | ||||||||||||||||||
Repayment of
debt
|
---- | (163,557 | ) | (9,417 | ) | ---- | 8,464 | (164,510 | ) | |||||||||||||||
Repurchase of
common stock
|
(25,847 | ) | ---- | ---- | ---- | ---- | (25,847 | ) | ||||||||||||||||
Other
|
---- | 458 | ---- | 278 | ---- | 736 | ||||||||||||||||||
Net
cash (used in) provided by financing activities
|
(25,847 | ) | (155,599 | ) | (9,417 | ) | 278 | 8,464 | (182,121 | ) | ||||||||||||||
Effect
of exchange rate changes on cash and cash
equivalents
|
---- | (539 | ) | ---- | (3,516 | ) | ---- | (4,055 | ) | |||||||||||||||
Net
increase (decrease) in cash and cash
equivalents
|
---- | 318 | 1,808 | (14,099 | ) | ---- | (11,973 | ) | ||||||||||||||||
Cash
and cash equivalents at beginning of period
|
---- | 37,472 | 7,851 | 20,901 | ---- | 66,224 | ||||||||||||||||||
Cash
and cash equivalents at end of period
|
$ | ---- | $ | 37,790 | $ | 9,659 | $ | 6,802 | $ | ---- | $ | 54,251 |
Cintas
Corporation
|
Corp.
2
|
Subsidiary
Guarantors
|
Non-
Guarantors
|
Eliminations
|
Cintas
Corporation
Consolidated
|
|||||||||||||||||||
Cash
flows from operating activities:
|
||||||||||||||||||||||||
Net
income
|
$ | 245,744 | $ | 148,164 | $ | 69,617 | $ | 23,475 | $ | (241,256 | ) | $ | 245,744 | |||||||||||
Adjustments to
reconcile net income to net cash
provided by
(used in) operating activities:
|
||||||||||||||||||||||||
Depreciation
|
---- | 68,920 | 34,872 | 6,284 | ---- | 110,076 | ||||||||||||||||||
Amortization of
deferred charges
|
---- | 29,780 | 1,004 | 1,587 | ---- | 32,371 | ||||||||||||||||||
Stock-based
compensation
|
7,406 | ---- | ---- | ---- | ---- | 7,406 | ||||||||||||||||||
Deferred income
taxes
|
---- | ---- | (456 | ) | ---- | ---- | (456 | ) | ||||||||||||||||
Changes in current
assets and liabilities,
net
of acquisitions
of businesses:
|
||||||||||||||||||||||||
Accounts receivable,
net
|
---- | (1,894 | ) | 2,808 | (395 | ) | 343 | 862 | ||||||||||||||||
Inventories,
net
|
---- | (11,052 | ) | 5,041 | (930 | ) | (1,984 | ) | (8,925 | ) | ||||||||||||||
Uniforms and other
rental items in
service
|
---- | (12,983 | ) | (2,280 | ) | (860 | ) | (2,505 | ) | (18,628 | ) | |||||||||||||
Prepaid
expenses
|
---- | (90 | ) | 1,143 | 124 | ---- | 1,177 | |||||||||||||||||
Accounts
payable
|
---- | (215,887 | ) | 203,504 | 13,355 | (1,420 | ) | (448 | ) | |||||||||||||||
Accrued compensation
and related
liabilities
|
---- | (7,240 | ) | (3,515 | ) | (975 | ) | ---- | (11,730 | ) | ||||||||||||||
Accrued liabilities
and other
|
---- | (16,671 | ) | 9,117 | (740 | ) | 889 | (7,405 | ) | |||||||||||||||
Income taxes
payable
|
---- | 8,893 | 10,307 | (1,314 | ) | ---- | 17,886 | |||||||||||||||||
Net
cash provided by (used in) operating activities
|
253,150 | (10,060 | ) | 331,162 | 39,611 | (245,933 | ) | 367,930 | ||||||||||||||||
Cash
flows from investing activities:
|
||||||||||||||||||||||||
Capital
expenditures
|
---- | (88,397 | ) | (50,875 | ) | (5,576 | ) | ---- | (144,848 | ) | ||||||||||||||
Proceeds from sale
or redemption of marketable
securities
|
---- | ---- | 34,559 | 7,834 | ---- | 42,393 | ||||||||||||||||||
Purchase of marketable
securities and
investments
|
---- | (3,065 | ) | (65,284 | ) | (21,445 | ) | 57,360 | (32,434 | ) | ||||||||||||||
Acquisitions of
businesses, net of cash acquired
|
---- | (86,314 | ) | ---- | (15,789 | ) | ---- | (102,103 | ) | |||||||||||||||
Other
|
(65,857 | ) | 108,166 | (234,074 | ) | (7 | ) | 190,570 | (1,202 | ) | ||||||||||||||
Net
cash (used in) provided by investing activities
|
(65,857 | ) | (69,610 | ) | (315,674 | ) | (34,983 | ) | 247,930 | (238,194 | ) | |||||||||||||
Cash
flows from financing activities:
|
||||||||||||||||||||||||
Proceeds from issuance of
debt
|
---- | 313,000 | ---- | ---- | ---- | 313,000 | ||||||||||||||||||
Repayment of
debt
|
---- | (225,613 | ) | (1,198 | ) | ---- | (1,997 | ) | (228,808 | ) | ||||||||||||||
Stock options
exercised
|
8,030 | ---- | ---- | ---- | ---- | 8,030 | ||||||||||||||||||
Repurchase of
common stock
|
(191,479 | ) | ---- | ---- | ---- | ---- | (191,479 | ) | ||||||||||||||||
Other
|
(3,844 | ) | (7,510 | ) | ---- | (101 | ) | ---- | (11,455 | ) | ||||||||||||||
Net
cash (used in) provided by financing activities
|
(187,293 | ) | 79,877 | (1,198 | ) | (101 | ) | (1,997 | ) | (110,712 | ) | |||||||||||||
Effect
of exchange rate changes on cash and cash
equivalents
|
---- | ---- | ---- | 1,291 | ---- | 1,291 | ||||||||||||||||||
Net
increase in cash and cash equivalents
|
---- | 207 | 14,290 | 5,818 | ---- | 20,315 | ||||||||||||||||||
Cash
and cash equivalents at beginning of period
|
---- | 33,949 | (24,834 | ) | 26,245 | ---- | 35,360 | |||||||||||||||||
Cash
and cash equivalents at end of period
|
$ | ---- | $ | 34,156 | $ | (10,544 | ) | $ | 32,063 | $ | ---- | $ | 55,675 |
(In
thousands)
|
Payments
Due by Period
|
|||||||||||||||||||
Two
to
|
||||||||||||||||||||
One
year
|
three
|
Four
to
|
After
five
|
|||||||||||||||||
Long-term
contractual obligations
|
Total
|
or
less
|
years
|
five
years
|
Years
|
|||||||||||||||
Long-term
debt (1)
|
$ | 786,767 | $ | 563 | $ | 1,240 | $ | 233,808 | $ | 551,156 | ||||||||||
Capital
lease obligations (2)
|
29 | 29 | ---- | ---- | ---- | |||||||||||||||
Operating
leases (3)
|
72,710 | 20,976 | 28,292 | 13,428 | 10,014 | |||||||||||||||
Interest
payments (4)
|
665,450 | 49,739 | 99,079 | 74,679 | 441,953 | |||||||||||||||
Interest
swap agreements (5)
|
---- | ---- | ---- | ---- | ---- | |||||||||||||||
Unconditional
purchase obligations
|
---- | ---- | ---- | ---- | ---- | |||||||||||||||
Total
contractual cash obligations
|
$ | 1,524,956 | $ | 71,307 | $ | 128,611 | $ | 321,915 | $ | 1,003,123 |
(1)
|
Long-term
debt primarily consists of $775,000 in long-term fixed rate
notes.
|
(2)
|
Capital
lease obligations are classified as debt on the consolidated balance
sheets.
|
(3)
|
Operating
leases consist primarily of building leases and a synthetic lease on a
corporate aircraft.
|
(4)
|
Interest
payments include interest on both fixed and variable rate
debt. Rates have been assumed to remain constant for the
remainder of fiscal 2009, increase 25 basis points in fiscal 2010,
increase 75 basis points in fiscal 2011, increase 100 basis points each
year in fiscal 2012 and fiscal 2013 and increase 50 basis points in fiscal
2014.
|
(5)
|
Reference
Note 6 entitled Debt, Derivatives and Hedging Activities of “Notes to
Consolidated Condensed Financial Statements” for a detailed discussion of
interest swap agreements.
|
(In
thousands)
|
Amount
of Commitment Expiration Per Period
|
|||||||||||||||||||
Two
to
|
||||||||||||||||||||
One
year
|
three
|
Four
to
|
After
five
|
|||||||||||||||||
Other
commercial commitments
|
Total
|
or
less
|
years
|
five
years
|
Years
|
|||||||||||||||
Lines
of credit (1)
|
$ | 526,326 | $ | ---- | $ | 526,326 | $ | ---- | $ | ---- | ||||||||||
Standby
letter of credit (2)
|
73,674 | 73,641 | 33 | ---- | ---- | |||||||||||||||
Guarantees
|
---- | ---- | ---- | ---- | ---- | |||||||||||||||
Standby
repurchase obligations
|
---- | ---- | ---- | ---- | ---- | |||||||||||||||
Other
commercial commitments
|
---- | ---- | ---- | ---- | ---- | |||||||||||||||
Total
commercial commitments
|
$ | 600,000 | $ | 73,641 | $ | 526,359 | $ | ---- | $ | ---- |
(1)
|
Back-up
facility for the commercial paper
program.
|
(2)
|
Support
certain outstanding long-term debt and self-insured workers' compensation
and general liability insurance
programs.
|
|
31.1
|
Certification
of Principal Executive Officer required by Rule
13a-14(a)
|
|
31.2
|
Certification
of Principal Financial Officer required by Rule
13a-14(a)
|
|
32.1
|
Section
1350 Certification of Chief Executive
Officer
|
|
32.2
|
Section
1350 Certification of Chief Financial
Officer
|
CINTAS
CORPORATION
(Registrant)
|
|||
Date:
April 8, 2009
|
/s/ William C. Gale | ||
William C. Gale | |||
Senior Vice President and Chief Financial Officer | |||
(Chief Accounting Officer) |