Cintas (CTAS) 8-K Results of Operations and Financial Condition

FOR IMMEDIATE RELEASE
December 22, 2005

Cintas Corporation Reports Second Quarter Fiscal 2006
Revenue and Earnings

•    Total Revenue increases 10.4%
•    Earnings Per Share increases 7.0%

CINCINNATI,OH,December22,2005 – Cintas Corporation (Nasdaq: CTAS) today reported healthy increases in revenue and profits in spite of the business interruption caused by hurricanes in the Gulf Coast region and escalating energy prices. Revenue for the second quarter of fiscal 2006 of $835.8 million increased 10.4 percent compared to last year’s revenue of $756.8 million. The Company also reported a 6 percent increase in net income of $78 million compared to $73.6 million last year. Earnings per diluted share of $.46 increased 7 percent from last year’s $.43 per diluted share.

Scott D. Farmer, Chief Executive Officer of Cintas, stated, “I am proud to report these solid results for the second quarter of fiscal 2006, which are a tribute to the hard work, dedication and team spirit of Cintas employee-partners throughout North America. In the aftermath of the devastating hurricanes in the Gulf Coast region, Cintas partners rallied together to help one another while continuing to provide important services to our customers.”

Mr. Farmer continued, “During the second quarter, we grew our total revenue at a double-digit pace, or 10.4 percent. Rental revenue increased 8.2 percent while Other Services revenue grew 18 percent over the previous year. Total organic growth was 8 percent and would have been more than 8.5 percent if the hurricanes had not disrupted our business. In addition, gross margins strengthened from 41.7 percent to 41.9 percent. Once again, these results reflect historically high energy costs, which increased 24 percent, or .6 percent of revenues, versus the first quarter of the fiscal year.”

For the six months ended November 30, revenue of $1.66 billion increased 10.4 percent compared to $1.5 billion, while earnings per share rose 9.4 percent from $.85 per diluted share to $.93 per diluted share. Mr. Farmer commented, “All of our business services are growing nicely. Cintas is well-positioned to provide a service to every business in North America, which has an estimated $42.5 billion potential market for all of our products and services.”

STRONG BALANCE SHEET

As of November 30, 2005, the Company had $256 million in cash and marketable securities. During the quarter, the Company also purchased an additional 288,400 shares of its stock. To date, the Company has purchased 4,360,930 shares of its stock at an average price of $39.53 per share. Total debt to capitalization dropped to 17.7 percent, reflecting the repayment of all commercial paper which the Company had utilized for its share repurchase program. Total shareholders’ equity stood at $2.2 billion as of November 30, 2005.

REVENUE AND EARNINGS GUIDANCE

Mr. Farmer stated, “Our financial results have taken the full brunt of the negative impact of the hurricanes that hit the Gulf Coast region. We have not settled any of these losses with the insurance company, nor have we recognized any anticipated settlements in our financial statements. At this point, we do not have a clear indication of when a settlement agreement will be reached with our insurance carrier.”

Mr. Farmer continued, “Additionally, the rapid increase in the cost of energy has impacted our results. Although there has been a mild retreat in gasoline prices, we anticipate continued cost pressures from energy prices. However, we are still reiterating our original revenue guidance for Fiscal 2006. That guidance is for revenue to be in the range of $3.35 billion to $3.45 billion. We are refining our full year earnings per share (diluted) guidance to be in the range of $1.93 to $2.00 because of the negative impact of the hurricanes as well as higher energy prices.”

ABOUT CINTAS

Headquartered in Cincinnati, Ohio, Cintas Corporation provides highly specialized services to businesses of all types throughout North America. Cintas designs, manufactures and implements corporate identity uniform programs, provides entrance mats, restroom supplies, promotional products, first aid and safety products, fire protection services and document management services for approximately 700,000 businesses. Cintas is a publicly held company traded over the Nasdaq National Market under the symbol CTAS, and is a Nasdaq-100 company and component of the Standard & Poor’s 500 Index. The Company has achieved 36 consecutive years of growth in sales and earnings, to date.

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”, “projects”, “plans”, “expects”, “intends”, “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 the Company and speak only as of the date made.  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 including fuel costs, lower sales volumes, 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, 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, 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 to reflect the events or circumstances arising after the date on which they are made.

For additional information, contact:

William C. Gale, Senior Vice President-Finance and CFO – 513/573-4211
Karen L. Carnahan, Vice President and Treasurer – 513/573-4013

Cintas Corporation
Consolidated Condensed Statements of Income
(Unaudited)
(In thousands except per share data)

	Three Months Ended								Six Months Ended
	Nov. 30, 2005			Nov. 30, 2004			% Chng.		Nov. 30, 2005			Nov. 30, 2004			% Chng.
Revenue:
Rentals	$	631,590		$	583,808			8.2	$	1,259,598		$	1,165,467			8.1
Other services		204,195			173,032			18.0		399,662			337,329			18.5
Total revenue	$	835,785		$	756,840			10.4	$	1,659,260		$	1,502,796			10.4
Costs and expenses (income):
Cost of rentals	$	349,658		$	323,289			8.2	$	689,083		$	641,043			7.5
Cost of other services		135,666			117,596			15.4		264,228			226,960			16.4
Selling and administrative expenses		219,912			194,431			13.1		443,349			393,240			12.7
Interest income		(1,332	)		(1,514	)		-12.0		(3,034	)		(2,636	)		15.1
Interest expense		7,484			6,218			20.4		14,820			12,051			23.0
Total costs and expenses	$	711,388		$	640,020			11.2	$	1,408,446		$	1,270,658			10.8
Income before income taxes	$	124,397		$	116,820			6.5	$	250,814		$	232,138			8.0
Income taxes		46,426			43,260			7.3		93,308			85,912			8.6
Net income	$	77,971		$	73,560			6.0	$	157,506		$	146,226			7.7
Per share data:
Basic earnings per share	$	0.46		$	0.43			7.0	$	0.93		$	0.85			9.4
Diluted earnings per share	$	0.46		$	0.43			7.0	$	0.93		$	0.85			9.4
Basic shares outstanding		167,975			171,638					168,460			171,544
Diluted shares outstanding		170,473			172,664					169,083			172,634

CINTAS CORPORATION SUPPLEMENTAL DATA

	Three Months Ended						Six Months Ended
	Nov. 30, 2005		Nov. 30, 2004		% Chng.		Nov. 30, 2005		Nov. 30, 2004		% Chng.
Rentals gross margin		44.6%		44.6%				45.3%		45.0%
Other services gross margin		33.6%		32.0%				33.9%		32.7%
Total gross margin		41.9%		41.7%				42.5%		42.2%
Net margin		9.3%		9.7%				9.5%		9.7%
Depreciation and amortization	$	39,307	$	36,636		7.3	$	77,660	$	73,064		6.3
Capital expenditures	$	34,037	$	38,527		-11.7	$	70,181	$	73,863		-5.0
Debt to total capitalization		17.7%		18.8%				17.7%		18.8%

Cintas Corporation
Consolidated Condensed Balance Sheets
(Unaudited)
(In thousands except share data)

	Nov. 30, 2005			May 31, 2005
ASSETS
Current assets:
Cash and cash equivalents	$	52,596		$	43,196
Marketable securities		203,338			266,232
Accounts receivable, net		359,696			326,896
Inventories, net		213,807			216,412
Uniforms and other rental items in service		315,477			305,450
Prepaid expenses		7,661			8,358
Total current assets		1,152,575			1,166,544
Property and equipment, at cost, net		829,258			817,198
Goodwill		953,909			889,538
Service contracts, net		148,324			146,596
Other assets, net		36,901			39,868
	$	3,120,967		$	3,059,744
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	58,557		$	69,296
Accrued compensation & related liabilities		41,167			38,710
Accrued liabilities		127,672			166,428
Income taxes:
Current		82,497			32,864
Deferred		49,466			41,883
Long-term debt due within one year		4,252			7,300
Total current liabilities		363,611			356,481
Long-term debt due after one year		461,890			465,291
Deferred income taxes		132,932			133,837
Shareholders' equity:
Preferred stock, no par value: 100,000 shares
authorized, none outstanding		--			--
Common stock, no par value: 425,000,000 shares
authorized
FY 2006: 172,353,371 shares issued and 167,992,441
shares outstanding
FY 2005: 172,127,502 shares issued and 170,658,601
shares outstanding		118,301			114,171
Retained earnings		2,193,498			2,035,992
Treasury stock
FY 2006: 4,360,930 shares; FY 2005: 1,468,901 shares		(172,374	)		(58,204	)
Other accumulated comprehensive income (loss):
Foreign currency translation		24,294			13,507
Unrealized loss on derivatives		(1,185	)		(1,331	)
Total shareholders' equity		2,162,534			2,104,135
	$	3,120,967		$	3,059,744

Cintas Corporation
Consolidated Condensed Statements of Cash Flows
(Unaudited)
(In thousands)

	Six Months Ended
	Nov. 30, 2005			Nov. 30, 2004
Cash flows from operating activities:
Net income	$	157,506		$	146,226
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		61,982			59,521
Amortization of deferred charges		15,678			13,543
Deferred income taxes		6,678			20,252
Change in current assets and liabilities, net of acquisitions of businesses:
Accounts receivable		(27,567	)		(21,901	)
Inventories		3,096			(13,079	)
Uniforms and other rental items in service		(10,027	)		(10,969	)
Prepaid expenses		710			(1,595	)
Accounts payable		(10,751	)		12,218
Accrued compensation and related liabilities		2,457			1,534
Accrued liabilities		(43,231	)		(46,290	)
Income taxes payable		49,633			37,164
Net cash provided by operating activities		206,164			196,624
Cash flows from investing activities:
Capital expenditures		(70,181	)		(73,863	)
Proceeds from sale or redemption of marketable securities		73,171			18,571
Purchase of marketable securities		(10,277	)		(94,376	)
Acquisitions of businesses, net of cash acquired		(87,078	)		(33,692	)
Other		3,111			(1,492	)
Net cash used in investing activities		(91,254	)		(184,852	)
Cash flows from financing activities:
Repayment of debt		(6,403	)		(6,660	)
Stock options exercised		3,829			2,654
Repurchase of common stock		(114,170	)		0
Other		11,234			18,272
Net cash (used in) provided by financing activities		(105,510	)		14,266
Net increase in cash and cash equivalents		9,400			26,038
Cash and cash equivalents at beginning of period		43,196			87,357
Cash and cash equivalents at end of period	$	52,596		$	113,395