EX-99 2 ex997-13.htm EXHIBIT 99 Ex 99 7-13


Exhibit 99
 
FOR IMMEDIATE RELEASE                             
July 15, 2013


Cintas Corporation Announces Fiscal 2013 Results

CINCINNATI, July 15, 2013 -- Cintas Corporation (Nasdaq:CTAS) today reported results for its fourth quarter ended May 31, 2013. Revenue for the fourth quarter was $1.13 billion, representing a 7.2% increase compared to last year's fourth quarter. Organic growth, which adjusts for the impact of acquisitions, compared to last year's fourth quarter, was 6.2%. Net income increased 9.4% to $86.0 million as compared to $78.6 million in last year's fourth quarter. Earnings per diluted share (EPS) for the fourth quarter were $0.69, a 15.0% increase over the $0.60 EPS in last year's fourth quarter.

Scott D. Farmer, Chief Executive Officer, stated, “We are pleased to report another quarter of record revenue. In addition, our fourth quarter operating margin of 13.6% of revenue reflects the execution of our plan to sell profitable business, manage our cost structure and continuously improve the efficiency of our processes. These solid results conclude a successful year for Cintas achieved in large part by the hard work and dedication of our employees, who we call partners.”

For the fiscal year ended May 31, 2013, revenue was a record $4.32 billion, a 5.2% increase from the prior fiscal year. Adjusting for one less workday in this fiscal year compared to last fiscal year, revenue grew 5.6% over last fiscal year. Organic growth, which adjusts for the impact of acquisitions and the impact of one less workday compared to last fiscal year, was 4.9%. Net income increased 6.0% to $315.4 million compared to last fiscal year. EPS increased 11.0% to $2.52 as compared to last fiscal year.

Mr. Farmer added, “I am proud to report that we achieved record fiscal year sales and EPS in fiscal year 2013. It was the third consecutive fiscal year of double digit EPS growth. In addition, our balance sheet and cash flow remain very strong. As of May 31, 2013, cash and marketable securities totaled $358.0 million, and debt to EBITDA was 1.9 to one. Cash flow from operations for the fiscal year increased 17.6% to $552.7 million compared to last fiscal year.”

Mr. Farmer concluded, “While the U.S. economy has shown some signs of improvement in the past several months, much uncertainty remains. This uncertainty, due to a number of factors including the effect of the Affordable Care Act, continues to cause many of our customers to delay hiring and investment decisions. We have developed our fiscal 2014 expectations with this uncertain economic landscape in mind. We expect fiscal 2014 revenue to be in the range of $4.5 billion to $4.6 billion, and full year EPS to be in the range of $2.66 to $2.75. This guidance assumes no deterioration in the U.S. economy and does not consider any additional share buybacks. It does incorporate the impact of having one less workday in fiscal 2014 compared to fiscal 2013 and our current estimate of the impact of the Affordable Care Act on our cost structure during fiscal year 2014.”


About 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 over one million 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, the ultimate impact of the Affordable Care Act and the finalization of our financial statements for the year ended May 31, 2013. 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, 2012 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 - 513-573-4211
J. Michael Hansen, Vice President and Treasurer - 513-701-2079







 Cintas Corporation
Consolidated Condensed Statements of Income
(Unaudited)
(In thousands except per share data)
 
 
Three Months Ended
 
 
May 31,
2013
 
May 31,
2012
 
% Chng.
Revenue:
 
 

 
 

 
 
Rental uniforms and ancillary products
 
$
785,018

 
$
749,037

 
4.8%
Other services
 
344,068

 
304,545

 
13.0%
Total revenue
 
$
1,129,086

 
$
1,053,582

 
7.2%
 
 
 
 
 
 
 
Costs and expenses:
 
 

 
 

 
 
Cost of rental uniforms and ancillary products
 
$
454,438

 
$
424,940

 
6.9%
Cost of other services
 
207,433

 
184,774

 
12.3%
Selling and administrative expenses
 
313,344

 
303,036

 
3.4%
 
 
 
 
 
 
 
Operating income
 
$
153,871

 
$
140,832

 
9.3%
 
 
 
 
 
 
 
Interest income
 
$
(51
)
 
$
(801
)
 
(93.6)%
Interest expense
 
16,518

 
18,344

 
(10.0)%
 
 
 
 
 
 
 
Income before income taxes
 
$
137,404

 
$
123,289

 
11.4%
Income taxes
 
51,427

 
44,675

 
15.1%
Net income
 
$
85,977

 
$
78,614

 
9.4%
 
 
 
 
 
 
 
Per share data:
 
 

 
 

 
 
Basic earnings per share
 
$
0.69

 
$
0.60

 
15.0%
Diluted earnings per share
 
$
0.69

 
$
0.60

 
15.0%
 
 
 
 
 
 
 
Weighted average number of shares outstanding
 
122,392

 
128,788

 
 
Diluted average number of shares outstanding
 
123,103

 
129,040

 
 
 
 
 
 
 
 
 
 



























Cintas Corporation
Consolidated Condensed Statements of Income
(In thousands except per share data)
 
 
Twelve Months Ended
 
 
May 31,
2013
 
May 31,
2012
 
% Chng.
Revenue:
 
 
 
 
 
 
Rental uniforms and ancillary products
 
$
3,044,587

 
$
2,912,261

 
4.5%
Other services
 
1,271,884

 
1,189,739

 
6.9%
Total revenue
 
$
4,316,471

 
$
4,102,000

 
5.2%
 
 
 
 
 
 
 
Costs and expenses:
 
 
 
 
 
 
Cost of rental uniforms and ancillary products
 
$
1,756,297

 
$
1,648,551

 
6.5%
Cost of other services
 
773,107

 
714,841

 
8.2%
Selling and administrative expenses
 
1,221,856

 
1,198,981

 
1.9%
 
 
 
 
 
 
 
Operating income
 
$
565,211

 
$
539,627

 
4.7%
 
 
 
 
 
 
 
Interest income
 
$
(409
)
 
$
(1,942
)
 
(78.9)%
Interest expense
 
65,712

 
70,625

 
(7.0)%
 
 
 
 
 
 
 
Income before income taxes
 
$
499,908

 
$
470,944

 
6.2%
Income taxes
 
184,466

 
173,307

 
6.4%
Net income
 
$
315,442

 
$
297,637

 
6.0%
 
 
 
 
 
 
 
Per share data:
 
 
 
 
 
 
Basic earnings per share
 
$
2.53

 
$
2.27

 
11.5%
Diluted earnings per share
 
$
2.52

 
$
2.27

 
11.0%
 
 
 
 
 
 
 
Weighted average number of shares outstanding
 
123,956

 
129,891

 
 
Diluted average number of shares outstanding
 
124,531

 
130,033

 
 






























CINTAS CORPORATION SUPPLEMENTAL DATA
 
 
Three Months Ended
 
 
May 31,
2013
 
May 31,
2012
Rental uniforms and ancillary products gross margin
 
42.1
%
 
43.3
%
Other services gross margin
 
39.7
%
 
39.3
%
Total gross margin
 
41.4
%
 
42.1
%
Net margin
 
7.6
%
 
7.5
%
 
 
 
 
 
Depreciation and amortization
 
$
48,251

 
$
49,080

Capital expenditures
 
$
44,687

 
$
43,086

 
 
 
 
 
 
 
Twelve Months Ended
 
 
May 31,
2013
 
May 31,
2012
Rental uniforms and ancillary products gross margin
 
42.3
%
 
43.4
%
Other services gross margin
 
39.2
%
 
39.9
%
Total gross margin
 
41.4
%
 
42.4
%
Net margin
 
7.3
%
 
7.3
%
 
 
 
 
 
Depreciation and amortization
 
$
189,377

 
$
194,165

Capital expenditures
 
$
196,486

 
$
160,802

 
 
 
 
 
Debt / EBITDA
 
1.9

 
1.9

 
 
 
 
 


Reconciliation of Non-GAAP Financial Measures and Regulation G Disclosure

The press release contains non-GAAP financial measures within the meaning of Regulation G promulgated by the Securities and Exchange Commission. To supplement its consolidated financial statements presented in accordance with U.S. generally accepted accounting principles (GAAP), the Company provides additional measures of revenue growth, debt and cash flow. The Company believes that these non-GAAP financial measures are appropriate to enhance understanding of its past performance as well as prospects for future performance. A reconciliation of the differences between these non-GAAP financial measures with the most directly comparable financial measures calculated in accordance with GAAP is shown below.


Computation of Workday Adjusted Revenue Growth
 
 
 
Twelve Months Ended
 
 
 
May 31,
2013
 
May 31,
2012
 
Growth %
 
 
 
A
 
B
 
G
Revenue
 
 
$
4,316,471

 
$
4,102,000

 
5.2%
 
 
 
 
 
 
 
G=(A-B)/B
 
 
 
C
 
D
 
 
Workdays in the period
 
 
261
 
262
 
 
 
 
 
 
 
 
 
 
 
 
 
E
 
F
 
H
Revenue adjusted for workday difference
 
 
$
4,333,009

 
$
4,102,000

 
5.6%
 
 
 
 
 
 
 
H=(E-F)/F
 
 
 
E=(A/C)*D
 
F=(B/D)*D
 
 
Management believes that Workday Adjusted Revenue Growth is valuable to investors because it reflects the revenue performance compared to a prior period with the same number of revenue generating days.







Computation of Debt to EBITDA
 
As of
 
May 31, 2013
 
May 31, 2012
Long-term debt
$
1,309,166

 
$
1,284,802

Letters of credit
85,775

 
85,716

Debt
$
1,394,941

 
$
1,370,518

 
 
 
 
 
 
 
 
 
Twelve Months Ended
 
May 31, 2013
 
May 31, 2012
Net Income
$
315,442

 
$
297,637

 
 
 
 
Add back:
 
 
 
Interest expense
65,712

 
70,625

Taxes
184,466

 
173,307

Depreciation
165,664

 
155,831

Amortization
23,713

 
38,334

EBITDA
$
754,997

 
$
735,734

 
 
 
 
Debt / EBITDA
1.9

 
1.9

 
 
 
 

Management believes the ratio of debt to earnings before interest, taxes, depreciation and amortization (EBITDA) is valuable to investors, particularly investors of the company's debt, because it is a common metric that reflects the company's earnings and cash flow available for debt service payments.


Computation of Free Cash Flow
 
 
Twelve Months Ended
 
 
May 31,
2013
 
May 31,
2012
Net Cash Provided by Operations
 
$
552,748

 
$
469,862

Capital Expenditures
 
$
(196,486
)
 
$
(160,802
)
Free Cash Flow
 
$
356,262

 
$
309,060

Management uses free cash flow to assess the financial performance of the Company.  Management believes that free cash flow is useful to investors because it relates the operating cash flow of the Company to the capital that is spent to continue, improve and grow business operations.





SUPPLEMENTAL SEGMENT DATA
 
Rental
Uniforms and
Ancillary
Products
 
Uniform
Direct Sales
 
First Aid,
Safety and
Fire
Protection
 
Document
Management
 
Corporate
 
Total
For the three months ended May 31, 2013
 
 

 
 

 
 

 
 

 
 

 
 

Revenue
 
$
785,018

 
$
124,717

 
$
125,360

 
$
93,991

 
$

 
$
1,129,086

Gross margin
 
$
330,580

 
$
38,472

 
$
54,593

 
$
43,570

 
$

 
$
467,215

Selling and administrative expenses
 
$
213,044

 
$
20,421

 
$
40,716

 
$
39,163

 
$

 
$
313,344

Interest income
 
$

 
$

 
$

 
$

 
$
(51
)
 
$
(51
)
Interest expense
 
$

 
$

 
$

 
$

 
$
16,518

 
$
16,518

Income (loss) before income taxes
 
$
117,536

 
$
18,051

 
$
13,877

 
$
4,407

 
$
(16,467
)
 
$
137,404

 
 
 
 
 
 
 
 
 
 
 
 
 
For the three months ended May 31, 2012
 
 
 
 
 
 
 
 
 
 
 
 

Revenue
 
$
749,037

 
$
111,232

 
$
108,895

 
$
84,418

 
$

 
$
1,053,582

Gross margin
 
$
324,097

 
$
34,153

 
$
46,119

 
$
39,499

 
$

 
$
443,868

Selling and administrative expenses
 
$
210,963

 
$
21,246

 
$
36,061

 
$
34,766

 
$

 
$
303,036

Interest income
 
$

 
$

 
$

 
$

 
$
(801
)
 
$
(801
)
Interest expense
 
$

 
$

 
$

 
$

 
$
18,344

 
$
18,344

Income (loss) before income taxes
 
$
113,134

 
$
12,907

 
$
10,058

 
$
4,733

 
$
(17,543
)
 
$
123,289

 
 
 
 
 
 
 
 
 
 
 
 
 
For the twelve months ended May 31, 2013
 
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
$
3,044,587

 
$
461,328

 
$
460,592

 
$
349,964

 
$

 
$
4,316,471

Gross margin
 
$
1,288,290

 
$
134,985

 
$
199,314

 
$
164,478

 
$

 
$
1,787,067

Selling and administrative expenses
 
$
835,249

 
$
81,739

 
$
156,232

 
$
148,636

 
$

 
$
1,221,856

Interest income
 
$

 
$

 
$

 
$

 
$
(409
)
 
$
(409
)
Interest expense
 
$

 
$

 
$

 
$

 
$
65,712

 
$
65,712

Income (loss) before income taxes
 
$
453,041

 
$
53,246

 
$
43,082

 
$
15,842

 
$
(65,303
)
 
$
499,908

Assets
 
$
2,830,941

 
$
152,551

 
$
398,614

 
$
605,573

 
$
357,953

 
$
4,345,632

 
 
 
 
 
 
 
 
 
 
 
 
 
For the twelve months ended May 31, 2012
 
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
$
2,912,261

 
$
433,994

 
$
415,703

 
$
340,042

 
$

 
$
4,102,000

Gross margin
 
$
1,263,710

 
$
129,614

 
$
178,465

 
$
166,819

 
$

 
$
1,738,608

Selling and administrative expenses
 
$
834,210

 
$
80,577

 
$
143,338

 
$
140,856

 
$

 
$
1,198,981

Interest income
 
$

 
$

 
$

 
$

 
$
(1,942
)
 
$
(1,942
)
Interest expense
 
$

 
$

 
$

 
$

 
$
70,625

 
$
70,625

Income (loss) before income taxes
 
$
429,500

 
$
49,037

 
$
35,127

 
$
25,963

 
$
(68,683
)
 
$
470,944

Assets
 
$
2,770,491

 
$
136,478

 
$
362,128

 
$
556,784

 
$
339,825

 
$
4,165,706

 
 
 
 
 
 
 
 
 
 
 
 
 





Cintas Corporation
Consolidated Balance Sheets
(In thousands except share data)
 
 
May 31,
2013
 
May 31,
2012
 
 

 
 
ASSETS
 
 

 
 

Current assets:
 
 

 
 

Cash & cash equivalents
 
$
352,273

 
$
339,825

Marketable securities
 
5,680

 

Accounts receivable, net
 
496,049

 
450,861

Inventories, net
 
240,440

 
251,205

Uniforms and other rental items in service
 
496,752

 
452,785

Income taxes, current
 
9,102

 
22,188

Prepaid expenses
 
24,530

 
21,222

Total current assets
 
1,624,826

 
1,538,086

 
 
 
 
 
Property and equipment, at cost, net
 
986,703

 
952,587

 
 
 
 
 
Goodwill
 
1,517,560

 
1,485,375

Service contracts, net
 
92,153

 
76,822

Other assets, net
 
124,390

 
112,836

 
 
$
4,345,632

 
$
4,165,706

 
 
 
 
 
LIABILITIES AND SHAREHOLDERS’ EQUITY
 
 

 
 

Current liabilities:
 
 

 
 

Accounts payable
 
$
121,029

 
$
94,840

Accrued compensation and related liabilities
 
78,050

 
91,214

Accrued liabilities
 
271,821

 
261,442

Deferred tax liability
 
77,169

 
2,559

Long-term debt due within one year
 
8,187

 
225,636

Total current liabilities
 
556,256

 
675,691

 
 
 
 
 
Long-term liabilities:
 
 

 
 

Long-term debt due after one year
 
1,300,979

 
1,059,166

Deferred income taxes
 
210,483

 
204,581

Accrued liabilities
 
76,422

 
87,133

Total long-term liabilities
 
1,587,884

 
1,350,880

 
 
 
 
 
Shareholders’ equity:
 
 

 
 

Preferred stock, no par value:
         100,000 shares authorized, none outstanding
 

 

Common stock, no par value:
425,000,000 shares authorized
FY13: 174,786,010 issued and 122,281,507 outstanding
FY12: 173,745,913 issued and 126,519,758 outstanding
 
186,332

 
148,255

Paid-in capital
 
109,822

 
107,019

Retained earnings
 
3,717,771

 
3,482,073

Treasury stock:
FY13: 52,504,503 shares
FY12: 47,226,155 shares
 
(1,850,556
)
 
(1,634,875
)
Other accumulated comprehensive income (loss):
 
 
 
 
Foreign currency translation
 
51,312

 
52,399

Unrealized loss on derivatives
 
(14,339
)
 
(16,104
)
Other
 
1,150

 
368

Total shareholders’ equity
 
2,201,492

 
2,139,135

 
 
 
 
 
 
 
$
4,345,632

 
$
4,165,706







Cintas Corporation
Consolidated Condensed Statements of Cash Flows
(In thousands)
 
 
 
Twelve Months Ended
 
 
May 31,
 2013
 
May 31,
 2012
Cash flows from operating activities:
 
 

 
 

Net income
 
$
315,442

 
$
297,637

 
 
 
 
 
Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
 

Depreciation
 
165,664

 
155,831

Amortization of intangible assets
 
23,713

 
38,334

Stock-based compensation
 
23,310

 
20,312

Deferred income taxes
 
48,023

 
56,727

Change in current assets and liabilities, net of acquisitions of businesses:
 
 
 
 
Accounts receivable, net
 
(42,704
)
 
(24,261
)
Inventories, net
 
10,997

 
(2,330
)
Uniforms and other rental items in service
 
(44,179
)
 
(60,279
)
Prepaid expenses
 
(3,281
)
 
(1,496
)
Accounts payable
 
25,023

 
(12,557
)
Accrued compensation and related liabilities
 
(13,161
)
 
11,625

Accrued liabilities
 
31,873

 
(20,371
)
Income taxes payable
 
12,028

 
10,690

Net cash provided by operating activities
 
552,748

 
469,862

 
 
 
 
 
Cash flows from investing activities:
 
 

 
 

Capital expenditures
 
(196,486
)
 
(160,802
)
Proceeds from redemption of marketable securities
 
161,478

 
665,016

Purchase of marketable securities and investments
 
(178,464
)
 
(585,655
)
Acquisitions of businesses, net of cash acquired
 
(69,370
)
 
(24,864
)
Other, net
 
(1,339
)
 
2,011

Net cash used in investing activities
 
(284,181
)
 
(104,294
)
 
 
 
 
 
Cash flows from financing activities:
 
 
 
 

Proceeds from issuance of debt
 
250,000

 

Repayment of debt
 
(225,636
)
 
(1,323
)
Proceeds from exercise of stock-based compensation awards
 
14,807

 
3,341

Dividends paid
 
(79,744
)
 
(70,820
)
Repurchase of common stock
 
(215,681
)
 
(392,328
)
Other, net
 
196

 
555

Net cash used in financing activities
 
(256,058
)
 
(460,575
)
 
 
 
 
 
Effect of exchange rate changes on cash and cash equivalents
 
(61
)
 
(3,274
)
 
 
 
 
 
Net increase (decrease) in cash and cash equivalents
 
12,448

 
(98,281
)
Cash and cash equivalents at beginning of period
 
339,825

 
438,106

Cash and cash equivalents at end of period
 
$
352,273

 
$
339,825