Cintas (CTAS) 8-K Cintas Corporation Announces First Quarter Fiscal 2009 Results

FOR IMMEDIATE RELEASE

September 18, 2008

Cintas Corporation Announces First Quarter Fiscal 2009 Results

Indicates Results In-Line with Fiscal 2009 Plan

CINCINNATI, September 18, 2008 -- Cintas Corporation (Nasdaq: CTAS) today reported results for its first quarter of fiscal 2009, which ended on August 31, 2008.  Revenue for the quarter was $1.0 billion, an increase of 5.0% over the first quarter revenue in fiscal 2008, on a comparable workday basis.  Without this workday adjustment, revenue increased 3.4%.  Net income, which was also impacted by the lesser number of workdays, was $78.6 million, a 3.0% decrease from the prior year first quarter.  Diluted earnings per share were $0.51, the same as the first quarter of last fiscal year.

Scott D. Farmer, President and Chief Executive Officer, stated, “The current difficult economic conditions are certainly impacting our customers, causing them to respond with head count reductions and facility consolidations.  When combined with the significant increases in our energy and other commodity costs, our results clearly have been impacted.  Despite these issues, our results through the first quarter are in line with our full year fiscal 2009 plan.  We have continued to demonstrate the benefit of our products and services to our customers as well as new prospects, growing our top line revenue.  We also continue to leverage and improve our infrastructure and gain scale in our First Aid, Safety and Fire Protection and Document Management segments, which has helped to offset some of the increases in external costs.”

Financial Strength

Cintas continues to generate strong cash flow and maintains a solid balance sheet.  Net cash provided by operations was $88.3 million for the first quarter and the Company’s current ratio was 3.75 to 1 at August 31, 2008.  The Company’s debt to total capitalization remained below 30% despite purchasing 900,000 shares of its outstanding common stock during the quarter at a cost of $25.8 million.

Outlook

Mr. Farmer stated, “Based on our first quarter results, we are reiterating our full year fiscal 2009 guidance of revenue to be in the range of $4.1 to $4.2 billion and fully diluted earnings per share to be in the range of $2.22 to $2.30.  While we are cautious due to current economic conditions and the potential impact from recent weather conditions, this guidance continues to be appropriate.”

About Cintas

Headquartered in Cincinnati, Cintas Corporation provides highly specialized services to businesses of all types 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 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.

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 Quarterly Report.  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, investigations or other proceedings, higher assumed sourcing or distribution costs of products, the disruption of operations from catastrophic or extraordinary events, changes in federal and state tax and labor laws and the reactions of competitors in terms of price and service.  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.  Also note that we provide a cautionary discussion of risks, uncertainties and possibly inaccurate assumptions relevant to our businesses in our Annual Report on Form 10-K for the year ended May 31, 2008. We incorporate those items here and you should refer to them. These are factors that, individually or in the aggregate, we think could cause our actual results to differ materially from expected and historical results. We note these factors for investors as permitted by the Private Securities Litigation Reform Act of 1995. You should understand that it is not possible to predict or identify all such factors. 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.  Consequently, you should not consider the risk factors identified in our Form 10-K for the year ended May 31, 2008, to be a complete discussion of all potential risks or uncertainties.

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
	Aug. 31, 2008			Aug. 31, 2007			% Chng.
Revenue:
Rental uniforms and ancillary products	$	721,373		$	710,354			1.6
Other services		280,806			258,774			8.5
Total revenue	$	1,002,179		$	969,128			3.4
Costs and expenses (income):
Cost of rental uniforms and ancillary products	$	407,290		$	391,490			4.0
Cost of other services		169,806			160,266			6.0
Selling and administrative expenses		287,295			276,710			3.8
Operating Income	$	137,788		$	140,662			-2.0
Interest income		(1,065	)		(1,462	)		-27.2
Interest expense		13,031			12,837			1.5
Income before income taxes	$	125,822		$	129,287			-2.7
Income taxes		47,186			48,224			-2.2
Net income	$	78,636		$	81,063			-3.0
Per share data:
Basic earnings per share	$	0.51		$	0.51			0.0
Diluted earnings per share	$	0.51		$	0.51			0.0
Basic shares outstanding		153,394			158,771
Diluted shares outstanding		153,621			159,038

CINTAS CORPORATION SUPPLEMENTAL DATA

	Three Months Ended
	Aug. 31, 2008		Aug. 31, 2007		% Chng.
Rental uniforms and ancillary products gross margin		43.5%		44.9%
Other services gross margin		39.5%		38.1%
Total gross margin		42.4%		43.1%
Net margin		7.8%		8.4%
Depreciation and amortization	$	49,885	$	46,222		7.9
Capital expenditures	$	54,461	$	45,344		20.1
Debt to total capitalization		29.3%		28.2%

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 August 31, 2008
Revenue	$	721,373	$	117,483	$	108,532	$	54,791	$	0		$	1,002,179
Gross margin	$	314,083	$	37,377	$	44,124	$	29,499	$	0		$	425,083
Selling and administrative expenses	$	207,024	$	25,374	$	32,774	$	22,123	$	0		$	287,295
Income (loss) before income taxes	$	107,059	$	12,003	$	11,350	$	7,376	$	(11,966	)	$	125,822
Assets	$	2,641,223	$	191,101	$	352,932	$	460,448	$	180,895		$	3,826,599
For the three months ended August 31, 2007
Revenue	$	710,354	$	118,805	$	102,256	$	37,713	$	0		$	969,128
Gross margin	$	318,864	$	36,470	$	41,820	$	20,218	$	0		$	417,372
Selling and administrative expenses	$	204,071	$	25,343	$	31,199	$	16,097	$	0		$	276,710
Income (loss) before income taxes	$	114,793	$	11,127	$	10,621	$	4,121	$	(11,375	)	$	129,287
Assets	$	2,592,401	$	182,278	$	332,757	$	375,122	$	138,272		$	3,620,830

RECONCILIATION TO GAAP MEASURES

	Three Months Ended Aug. 31, 2008
Revenue growth, on a comparable workday basis	5.0%
Workday adjustment*		1.6%
Revenue growth	3.4%

* There were 65 workdays in the quarter ended August 31, 2008, and 66 workdays in the quarter ended August 31, 2007.  The workday adjustment is calculated by dividing revenue growth by the number of workdays in the first quarter of fiscal 2009 and then multiplying by the number of workdays in the first quarter of the prior fiscal year.

Cintas Corporation

Consolidated Condensed Balance Sheets

(In thousands except share data)

	Aug. 31, 2008 (Unaudited)			May 31, 2008
ASSETS
Current assets:
Cash and cash equivalents	$	58,243		$	66,224
Marketable securities		122,652			125,471
Accounts receivable, net		431,681			430,078
Inventories, net		242,094			238,669
Uniforms and other rental items in service		373,241			370,416
Deferred tax asset		40,656			39,410
Prepaid expenses		18,381			12,068
Total current assets		1,286,948			1,282,336
Property and equipment, at cost, net		987,582			974,575
Goodwill		1,320,501			1,315,569
Service contracts, net		146,197			152,757
Other assets, net		85,371			83,364
	$	3,826,599		$	3,808,601
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	87,418		$	94,755
Accrued compensation & related liabilities		33,778			50,605
Accrued liabilities		176,053			207,925
Current income taxes payable		45,657			12,887
Long-term debt due within one year		957			1,070
Total current liabilities		343,863			367,242
Long-term liabilities:
Long-term debt due after one year		949,588			942,736
Deferred income taxes		123,425			124,184
Accrued liabilities		118,872			120,308
Total long-term liabilities		1,191,885			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:  173,083,426 issued and 152,788,444 outstanding
FY 2008:  173,083,426 issued and 153,691,103 outstanding		129,182			129,182
Paid-in capital		63,943			60,408
Retained earnings		2,862,938			2,784,302
Treasury stock FY 2009: 20,294,982; FY 2008: 19,392,323		(797,888	)		(772,041	)
Other accumulated comprehensive income
Foreign currency translation		41,393			61,206
Unrealized loss on derivatives		(8,623	)		(8,815	)
Unrealized loss on available-for-sale securities		(94	)		(111	)
Total shareholders' equity		2,290,851			2,254,131
	$	3,826,599		$	3,808,601

Cintas Corporation

Consolidated Condensed Statements of Cash Flows

(Unaudited)

(In thousands)

	Three Months Ended
	Aug. 31, 2008			Aug. 31, 2007
Cash flows from operating activities:
Net income	$	78,636		$	81,063
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		39,040			35,636
Amortization of deferred charges		10,845			10,586
Stock-based compensation		3,535			2,132
Deferred income taxes		(1,482	)		17,418
Change in current assets and liabilities, net of acquisitions of businesses:
Accounts receivable		(3,369	)		644
Inventories, net		(3,795	)		(4,293	)
Uniforms and other rental items in service		(4,437	)		(7,128	)
Prepaid expenses		(6,332	)		(2,117	)
Accounts payable		(7,567	)		5,435
Accrued compensation and related liabilities		(16,696	)		(28,386	)
Accrued liabilities		(32,758	)		(77,926	)
Income taxes payable		32,718			24,001
Net cash provided by operating activities		88,338			57,065
Cash flows from investing activities:
Capital expenditures		(54,461	)		(45,344	)
Proceeds from sale or redemption of marketable securities		171			29,156
Purchase of marketable securities and investments		(10,379	)		(6,237	)
Acquisitions of businesses, net of cash acquired		(12,106	)		(32,630	)
Other		627			177
Net cash used in investing activities		(76,148	)		(54,878	)
Cash flows from financing activities:
Proceeds from issuance of debt		7,000			224,750
Repayment of debt		(261	)		(225,282	)
Stock options exercised		-			7,230
Repurchase of common stock		(25,847	)		-
Other		287			(3,465	)
Net cash (used in) provided by financing activities		(18,821	)		3,233
Effect of exchange rate changes on cash and cash equivalents		(1,350	)		61
Net (decrease) increase in cash and cash equivalents		(7,981	)		5,481
Cash and cash equivalents at beginning of period		66,224			35,360
Cash and cash equivalents at end of period	$	58,243		$	40,841