Cintas (CTAS) 8-K Cintas Corporation Reports Third Quarter Fiscal 2008

FOR IMMEDIATE RELEASE

March 19, 2008

Cintas Corporation Reports Third Quarter Fiscal 2008

Revenue Increases 8%; Net Income Increases 7%

Earnings per Diluted Share Increase 10%

CINCINNATI, March 19, 2008 -- Cintas Corporation (Nasdaq:CTAS) today reported revenue for the third quarter of fiscal 2008 of $976.0 million, a 7.8% increase from the previous year’s third quarter revenue of $905.4 million.  Net income increased 6.6% to $81.8 million as compared to $76.7 million in last year’s third quarter.  Earnings per diluted share were $0.53, a 10.4% increase over the $0.48 per diluted share achieved in last year’s third quarter.

Scott D. Farmer, President and Chief Executive Officer, stated, “We are pleased to announce our third quarter results.  Our new sales organization performed well during the quarter, despite challenging economic conditions.  New business generated under this new organization continues to meet our expectations.  These improved new business results, however, were partially offset by weakness in our existing customer base.  The workforce reductions and business contraction that our customers experienced at the end of our second quarter continued through our third quarter, as economic conditions became more demanding.”

Higher energy costs, particularly in delivery fuel, caused gross margins to be pressured.  Net income results continue to reflect the increased investment the Company has made in its sales organization over the past year.  Selling costs have decreased as a percent to sales compared to the second quarter but remain at higher levels as compared to the third quarter of fiscal 2007.  The increased sales costs were offset by an improvement in medical expenses as compared to the prior year third quarter.

The Company’s year-to-date effective income tax rate was 36.9%.  Through the first three quarters of last fiscal year, the Company’s effective income tax rate was 37.3%.  This decrease was due to the impact of FASB Interpretation No. 48 (FIN 48), Accounting for Uncertainty in Income Taxes – an interpretation of FASB Statement No. 109.  The Company expects its full year fiscal 2008 effective income tax rate to be approximately 37.1%, an improvement from last year’s effective income tax rate of 37.3%.

Strong Balance Sheet and Cash Flow

The Company’s balance sheet and cash flow from operations continue to be strong.  As of February 29, 2008, the Company’s current assets exceeded current liabilities by over a three to one ratio and debt to total capitalization was 30.8%.

During the third quarter, the Company issued a total of $300 million of 6.125% Senior Debt.  The proceeds generated from this debt issuance were used to reduce the Company’s outstanding balance under its commercial paper program.  This refinancing provides the Company a more balanced debt portfolio.

During the third quarter, the Company also announced an 18% increase in its annual dividend, providing $0.46 per share to shareholders of record as of February 6, 2008.  The payment of this dividend occurred on March 12, 2008, which was subsequent to quarter end.

Outlook

Mr. Farmer stated, “We posted solid third quarter results.  However, while our sales organization continues to perform as expected, the economic environment has become more demanding.  We anticipate this weakness to continue and are aggressively challenging our cost structure in order to maintain our margins during this difficult operating environment.  We now expect fiscal year 2008 revenues of $3.930 billion to $3.965 billion and earnings per diluted share of $2.12 to $2.16.”

About Cintas

Headquartered in Cincinnati, Cintas Corporation provides highly specialized services to businesses of all types predominantly in the United States 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. Fortune Magazine has consistently listed Cintas as a “Most Admired Company” in its annual survey.

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 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 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, 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, 8K and 10-K reports to the SEC.

For additional information, contact:

William C. Gale, Senior Vice President-Finance and Chief Financial Officer - 513-573-4211

Michael L. Thompson, Vice President and Treasurer – 513-573-4133

Cintas Corporation

Consolidated Condensed Statements of Income

(Unaudited)

(In thousands except per share data)

	Three Months Ended								Nine Months Ended
	Feb. 29, 2008			Feb. 28, 2007			% Chng.		Feb. 29, 2008			Feb. 28, 2007			% Chng.
Revenue:	��
Rental uniforms and ancillary products	$	703,641		$	665,647			5.7	$	2,122,840		$	2,037,796			4.2
Other services		272,311			239,751			13.6		806,105			705,029			14.3
Total revenue	$	975,952		$	905,398			7.8	$	2,928,945		$	2,742,825			6.8
Costs and expenses (income):
Cost of rental uniforms and ancillary products	$	398,318		$	371,185			7.3	$	1,182,019		$	1,129,500			4.6
Cost of other services		166,409			148,386			12.1		497,761			445,944			11.6
Selling and administrative expenses		273,194			253,128			7.9		825,029			745,884			10.6
Interest income		(1,510	)		(1,339	)		12.8		(4,768	)		(4,488	)		6.2
Interest expense		13,622			11,584			17.6		39,452			36,499			8.1
Total costs and expenses	$	850,033		$	782,944			8.6	$	2,539,493		$	2,353,339			7.9
Income before income taxes	$	125,919		$	122,454			2.8	$	389,452		$	389,486			0.0
Income taxes		44,091			45,727			-3.6		143,708			145,270			-1.1
Net income	$	81,828		$	76,727			6.6	$	245,744		$	244,216			0.6
Per share data:
Basic earnings per share	$	0.53		$	0.48			10.4	$	1.57		$	1.52			3.3
Diluted earnings per share	$	0.53		$	0.48			10.4	$	1.57		$	1.52			3.3
Basic shares outstanding		153,679			159,311					156,346			160,144
Diluted shares outstanding		153,882			159,699					156,633			160,550

CINTAS CORPORATION SUPPLEMENTAL DATA
	Three Months Ended								Nine Months Ended
	Feb. 29, 2008			Feb. 28, 2007			% Chng.		Feb. 29, 2008			Feb. 28, 2007			% Chng.
Rental uniforms and ancillary products gross margin		43.4	%		44.2	%				44.3	%		44.6	%
Other services gross margin		38.9	%		38.1	%				38.3	%		36.7	%
Total gross margin		42.1	%		42.6	%				42.6	%		42.6	%
Net margin		8.4	%		8.5	%				8.4	%		8.9	%
Depreciation and amortization	$	48,835		$	44,298			10.2	$	142,447		$	130,051			9.5
Capital expenditures	$	51,641		$	47,315			9.1	$	144,848		$	128,636			12.6
Debt to total capitalization		30.8	%		30.1	%				30.8	%		30.1	%

RECONCILIATION TO GAAP MEASURES
	Three Months Ended								Nine Months Ended
	Feb. 29, 2008			Feb. 28, 2007			% Chng.		Feb. 29, 2008			Feb. 28, 2007			% Chng.
Income before income taxes	$	125,919		$	122,454			2.8	$	389,452		$	389,486			0.0
Interest income		(1,510	)		(1,339	)		12.8		(4,768	)		(4,488	)		6.2
Interest expense		13,622			11,584			17.6		39,452			36,499			8.1
Earnings before interest and taxes	$	138,031		$	132,699			4.0	$	424,136		$	421,497			0.6

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 February 29, 2008
Revenue	$	703,641	$	125,277	$	97,594	$	49,440	$	0		$	975,952
Gross margin	$	305,323	$	40,218	$	38,244	$	27,440	$	0		$	411,225
Selling and administrative expenses	$	198,837	$	24,032	$	30,917	$	19,408	$	0		$	273,194
Income (loss) before income taxes	$	106,486	$	16,186	$	7,327	$	8,032	$	(12,112	)	$	125,919
For the three months ended February 28, 2007
Revenue	$	665,647	$	124,214	$	87,107	$	28,430	$	0		$	905,398
Gross margin	$	294,462	$	41,519	$	35,324	$	14,522	$	0		$	385,827
Selling and administrative expenses	$	189,283	$	23,689	$	26,727	$	13,429	$	0		$	253,128
Income (loss) before income taxes	$	105,179	$	17,830	$	8,597	$	1,093	$	(10,245	)	$	122,454
As of and for the nine months ended February 29, 2008
Revenue	$	2,122,840	$	378,537	$	299,003	$	128,565	$	0		$	2,928,945
Gross margin	$	940,821	$	120,003	$	118,479	$	69,862	$	0		$	1,249,165
Selling and administrative expenses	$	601,543	$	76,940	$	93,185	$	53,361	$	0		$	825,029
Income (loss) before income taxes	$	339,278	$	43,063	$	25,294	$	16,501	$	(34,684	)	$	389,452
Assets	$	2,621,696	$	191,715	$	342,033	$	443,188	$	163,646		$	3,762,278
As of and for the nine months ended February 28, 2007
Revenue	$	2,037,796	$	369,179	$	262,911	$	72,939	$	0		$	2,742,825
Gross margin	$	908,296	$	117,470	$	104,566	$	37,049	$	0		$	1,167,381
Selling and administrative expenses	$	561,240	$	72,211	$	78,028	$	34,405	$	0		$	745,884
Income (loss) before income taxes	$	347,056	$	45,259	$	26,538	$	2,644	$	(32,011	)	$	389,486
Assets	$	2,525,832	$	174,538	$	323,726	$	325,900	$	157,493		$	3,507,489

Cintas Corporation

Consolidated Condensed Balance Sheets

(In thousands except share data)

	Feb. 29, 2008 (Unaudited)			May 31, 2007
ASSETS
Current assets:
Cash and cash equivalents	$	55,675		$	35,360
Marketable securities		107,971			120,053
Accounts receivable, net		413,781			408,870
Inventories, net		241,326			231,741
Uniforms and other rental items in service		365,396			344,931
Deferred tax asset		39,971			-
Prepaid expenses		14,698			15,781
Total current assets		1,238,818			1,156,736
Property and equipment, at cost, net		968,584			920,243
Goodwill		1,311,089			1,245,877
Service contracts, net		158,515			171,361
Other assets, net		85,272			76,263
	$	3,762,278		$	3,570,480
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	64,472		$	64,622
Accrued compensation & related liabilities		51,316			62,826
Accrued liabilities		253,604			200,686
Income taxes:
Current		21,941			18,584
Deferred		-			52,179
Long-term debt due within one year		1,342			4,141
Total current liabilities		392,675			403,038
Long-term liabilities:
Long-term debt due after one year		964,065			877,074
Deferred income taxes		122,726			122,630
Accrued liabilities		117,349			0
Total long-term liabilities		1,204,140			999,704
Shareholders' equity:
Preferred stock, no par value: 100,000 shares authorized, none outstanding		-			-
Common stock, no par value: 425,000,000 shares authorized
FY 2008:  173,075,926 shares issued and 153,683,603 shares outstanding
FY 2007:  172,874,195 shares issued and 158,676,872 shares outstanding		128,841			120,811
Paid-in capital		60,471			56,909
Retained earnings		2,694,630			2,533,459
Treasury stock
FY 2008:  19,392,323 shares; FY 2007:  14,197,323 shares		(772,041	)		(580,562	)
Other accumulated comprehensive income		53,562			37,121
Total shareholders' equity		2,165,463			2,167,738
	$	3,762,278		$	3,570,480

Cintas Corporation

Consolidated Condensed Statements of Cash Flows

(Unaudited)

(In thousands)

	Nine Months Ended
	Feb. 29, 2008			Feb. 28, 2007
Cash flows from operating activities:
Net income	$	245,744		$	244,216
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		110,076			100,036
Amortization of deferred charges		32,371			30,015
Stock-based compensation		7,406			2,746
Deferred income taxes		(456	)		(19,062	)
Change in current assets and liabilities, net of acquisitions of businesses:
Accounts receivable, net		862			911
Inventories, net		(8,925	)		(28,176	)
Uniforms and other rental items in service		(18,628	)		(1,595	)
Prepaid expenses		1,177			(3,676	)
Accounts payable		(448	)		(2,070	)
Accrued compensation and related liabilities		(11,730	)		6,880
Accrued liabilities and other		(6,114	)		(15,511	)
Income taxes payable		17,886			7,363
Net cash provided by operating activities		369,221			322,077
Cash flows from investing activities:
Capital expenditures		(144,848	)		(128,636	)
Proceeds from sale or redemption of marketable securities		42,393			102,871
Purchase of marketable securities and investments		(32,434	)		(41,621	)
Acquisitions of businesses, net of cash acquired		(102,103	)		(135,011	)
Other		(1,202	)		417
Net cash used in investing activities		(238,194	)		(201,980	)
Cash flows from financing activities:
Proceeds from issuance of debt		313,000			252,460
Repayment of debt		(228,808	)		(167,687	)
Stock options exercised		8,030			9,529
Repurchase of common stock		(191,479	)		(198,949	)
Other		(11,455	)		(22,806	)
Net cash used in financing activities		(110,712	)		(127,453	)
Net increase (decrease) in cash and cash equivalents		20,315			(7,356	)
Cash and cash equivalents at beginning of period		35,360			38,914
Cash and cash equivalents at end of period	$	55,675		$	31,558