01—Abstract
Summary
Summary of the 10-K/A filed May 18, 2011. Cited figures are marked; the original filing is the authoritative source.
Cintas Corporation's 2010 Form 10-K/A filing, an amendment to its original report, primarily provides updated disclosures related to credit ratings following the Dodd-Frank Act.
The report covers the fiscal year ended May 31, 2010, a period significantly impacted by the economic downturn. Despite a 6.0% decrease in total revenue to $3.5 billiona, the company demonstrated resilience by improving cash flow, with net cash provided by operating activities increasing by 7.3% to $561.6 million. Key operational highlights include a -6.4% internal growth rate for the full year, with a notable improvement in the fourth quarter to 1.9%.
The company maintained its commitment to shareholders by increasing its dividend for the 27th consecutive year. Cintas' diversified business segments, including Rental Uniforms and Ancillary Products, Uniform Direct Sales, First Aid & Safety, and Document Management, experienced varying impacts from the economic conditions, with Document Management showing strong growth. The company focused on cost reduction initiatives and strategic adjustments to navigate the challenging economic landscape while maintaining its long-term objective of exceeding customer expectations.
02—Key points
Key Highlights
- Total revenue for fiscal year 2010 was $3.5 billion, a 6.0% decrease from the prior year, largely due to the economic downturn.
- Despite revenue decline, net cash provided by operating activities increased by 7.3% to $561.6 million, demonstrating improved cash flow generation.
- The company experienced a -6.4% internal growth rate for the fiscal year, with a positive trend emerging in the fourth quarter, showing 1.9% growth.
- Cintas increased its quarterly dividend to $0.48 per share, marking the 27th consecutive annual dividend increase.
- The Document Management Services segment showed robust growth, with revenue increasing by 18.6% and internal growth of 14.4%, partially driven by higher recycled paper prices.
- Significant cost reduction efforts were undertaken, including inventory valuation adjustments and restructuring charges in prior periods, which helped mitigate the impact of lower volumes.
- Selling and administrative expenses saw a slight increase of 0.3% in fiscal 2010, attributed to higher medical expenses and system implementation costs, but were managed effectively in the context of revenue.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2010, Cintas Corp kept $0.06.
- Revenue$3.55B100.0%
- Cost of revenue−$2.05B57.8%
- Gross profit$1.50B42.2%
- Operating costs−$1.11B31.2%
- Operating income$390.8M11.0%
- Interest, other & tax−$175.2M4.9%
- Net income$215.6M6.1%
Where FY2010 revenue went
$3.55B- Cost of revenue: $2.05B, 58% of revenue
- SG&A: $1.09B, 31% of revenue
- Net income: $215.6M, 6.1% of revenue
- Other operating costs: $20.6M, 0.6% of revenue
- Interest, other & tax: $175.2M, 4.9% of revenue
Kept 6.1% as net incomeNet income $215.6M · 6.1%Other operating costs $20.6M · 0.6%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-K/AFY2010filed May 18, 2011Financial Statements
FY2010 against FY2009
| Line item | FY2010FY2009 | Change |
|---|---|---|
| Revenue | $3.55B$3.77B | −6.0% |
| Gross Profit | $1.50B— | — |
| SG&A Expenses | $1.09B$1.08B | +0.3% |
| Operating Income | $390.81M$409.06M | −4.5% |
| Interest Expense | $48.61M$50.24M | −3.2% |
| Net Income | $215.62M$226.36M | −4.7% |
| EPS (Basic) | $0.35$0.37 | −5.4% |
| EPS (Diluted) | $0.35$0.37 | −5.4% |
| Shares Outstanding (Basic) | 611.43M— | — |
| Shares Outstanding (Diluted) | 611.43M— | — |
05—Questions
Frequently Asked Questions
What was the primary reason for Cintas filing an Amendment (10-K/A) to its 2010 annual report?
The primary reason for the 10-K/A filing was to amend disclosures and references to Cintas' credit ratings. This was necessitated by the repeal of Rule 436(g) under the Securities Act of 1933 due to the Dodd-Frank Act, which changed requirements for including credit rating information in filings.
How did the economic downturn in fiscal 2010 affect Cintas' revenue?
The economic downturn significantly impacted Cintas' revenue, leading to a 6.0% decrease to $3.5 billion. This was primarily due to reduced customer employee levels, leading to lower demand for uniform rentals, direct sales, and hygiene/first aid products. Facility spending reductions also affected hygiene and fire protection services.
Despite the revenue decline, how did Cintas manage its financial performance?
Cintas demonstrated strong financial management by improving cash flow. Net cash provided by operating activities increased by 7.3% to $561.6 million. The company also implemented cost reduction initiatives and managed expenses effectively, allowing for a dividend increase and maintaining a strong balance sheet.
Which business segment performed particularly well in fiscal 2010?
The Document Management Services segment was a standout performer, with revenue increasing by 18.6% and achieving an internal growth rate of 14.4%. This growth was driven by new customer acquisition for destruction services and increased revenue from recycled paper sales, benefiting from higher paper prices.
06—Continue