February 7, 2020
J. Michael Hansen
Chief Financial Officer
Cintas Corporation
6800 Cintas Boulevard
P.O.Box 625737
Cincinnati, Ohio 45262
Re: Cintas Corporation
Form 10-K for the Fiscal Year Ended May 31, 2019
Filed July 26, 2019
File No. 000-11399
Dear Mr. Hansen:
We have reviewed your filing and have the following comments. In some of
our
comments, we may ask you to provide us with information so we may better
understand your
disclosure.
Please respond to these comments within ten business days by providing
the requested
information or advise us as soon as possible when you will respond. If you do
not believe our
comments apply to your facts and circumstances, please tell us why in your
response.
After reviewing your response to these comments, we may have additional
comments.
Form 10-K for the Fiscal Year Ended May 31, 2019
Item 1. Business, page 3
1. You disclose that you provide your products and services to customers
primarily in North
America, as well as Latin America, Europe and Asia but we note no further
discussions in
the filing of your business activities outside the United States. To help
us understand your
conclusion on the need for such disclosure, please tell us the specific
countries in which
you operate, the types of services and products you offer, the channels
through which you
provide these services and products, and a measure of your long-lived
assets and
employees in each country. Also, describe to us any risks attendant to
these operations.
Please refer to Item 101 of Regulation S-K.
J. Michael Hansen
FirstName LastNameJ. Michael Hansen
Cintas Corporation
Comapany NameCintas Corporation
February 7, 2020
February 7, 2020 Page 2
Page 2
FirstName LastName
Notes to Consolidated Financial Statements
Note 1. Significant Accounting Policies
Inventories, net, page 41
2. We note the disclosure of your use of inventory turns and that the
judgments and estimates
used to calculate inventory turns will have an impact on the valuation
of inventories.
Please revise the Critical Accounting Estimates section of MD&A in
future filings to
include a discussion of the methodologies, key assumptions and
judgments used in
accounting for your inventory, and explain how changes in these
assumptions could
impact your accounting estimates. Also, clearly describe your policies
for writing down
impaired inventory.
3. Explain to us how your accounting for impaired inventory complies with
ASC 330-10-35-
14 and SAB Topic 5.BB and revise this note in future filings to
clearly indicate such
compliance.
Litigation and other contingencies, page 44
4. We note the policy presented in this section and no further
discussions of your
contingencies in the filing, although we note news articles relating
to matters that would
normally give rise to contingencies for the company. Please tell us
how you considered
the requirements of ASC 450-20-50, in particular ASC 450-20-50-3
through 50-5, in
concluding on the adequacy of your disclosure. Otherwise, confirm that
you will revise
your future filings to provide the more detailed disclosures required
by that guidance.
Note 12. Earning per Share, page 62
5. Please revise this note in future filings to describe the
participating securities outstanding
that necessitates your use of the two-class method for computing
earnings per share, or to
refer the reader to a note where you provide that information. See ASC
260-10-50-1.
Note 15. Operating Segment Information, page 67
6. You disclose two reportable operating segments in this note and also
refer to your Fire
Protection Services and Uniform Direct Sales businesses that are
presented in the All
Other category. Please clarify for us, and revise the note in future
filings to identify each
of your operating segments and to disclose whether operating segments
have been
aggregated into the reportable segments. Refer to ASC 280-10-50-21.
7. We note the eight groups of products and services displayed on the
company's website,
namely, (i) Uniforms & Apparel, (ii) Facility Services, (iii) Tile &
Carpet Cleaning, (iv)
Restroom & Hygiene Solutions, (v) Training & Compliance, (vi) Flame
Resistant
Clothing, (vii) First Aid & Safety, and (viii) Fire Protection. Please
address the following:
J. Michael Hansen
Cintas Corporation
February 7, 2020
Page 3
Explain to us how these eight lines of business are reflected in
your two reportable
segments and the All Other category.
Tell us whether the lines of business represent operating
segments for which discrete
financial information is available.
If so, explain to us your conclusion that they exhibited similar
economic
characteristics and met the other criteria outlined in ASC
280-10-50-11 to
be aggregated.
Tell us who is your chief operating decision maker and briefly
describe the
information he reviews and when.
8. To the extent each line of business does not represent an operating
segment, describe to us
the similarities in the businesses, including the nature of the
services and products,
the types or classes of customers, the distribution methods, etc., and
any other factors you
considered in concluding that they could be grouped into one or more
operating
segments.
Schedule II - Valuation and Qualifying Accounts and Reserves, page 85
9. Please remove the information relating to the Reserve for Obsolete
Inventory from this
schedule in future filings. Note that amounts recorded in separate
accounts to recognize
obsolete and slow-moving inventory are not considered reserves for the
purpose of this
schedule because those amounts in substance represent normal
adjustments / impairment
of inventory rather than true "reserves". Refer to Rule 12-09 of
Regulation S-X, SAB
Topic 5.BB and ASC 330-10-35-14.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
You may contact Ernest Greene, Staff Accountant, at 202-551-3733 or
Martin
James, Senior Advisor, at 202-551-3671 with any questions.
FirstName LastNameJ. Michael Hansen Sincerely,
Comapany NameCintas Corporation
Division of
Corporation Finance
February 7, 2020 Page 3 Office of
Manufacturing
FirstName LastName