CINTAS CORP Annual Report, Year Ended May 31, 2005

Cintas Corporation's 2005 10-K report showcases another year of consistent growth, marking the 36th consecutive year of uninterrupted sales and profit increases. The company demonstrated robust financial health with improvements in profitability, cash flow, and balance sheet strength. Revenue grew by 9.0% to $3.1 billion, driven by both organic growth (6.3%) and strategic acquisitions, particularly in the "Other Services" segment. The "Rentals" segment also saw healthy growth, indicating a strong demand for their core uniform services. Management highlights a continued focus on strategic expansion, cost containment through initiatives like Six Sigma, and leveraging their scale to enhance customer value. While facing increased costs in areas like medical benefits and fuel, Cintas has managed these pressures effectively, leading to improved gross margins and pre-tax income. The company's financial position remains strong, with significant cash reserves and a decreasing debt-to-capitalization ratio. Investors can take comfort in the consistent dividend increases and the initiation of a substantial stock repurchase program. However, potential investors should note the ongoing unionization campaign and several significant legal proceedings that, while managed, carry inherent risks.