01—Abstract
Summary
Summary of the 10-K filed July 29, 2011. Cited figures are marked; the original filing is the authoritative source.
Cintas Corporation's 2011 10-K filing highlights a year of recovery and growth following a challenging economic period.
The company demonstrated resilience, with total revenue increasing by 7.4% to $3.8 billiona. This growth was driven by a combination of organic expansion, particularly in the Document Management Services segment (up 27.0%), and strategic acquisitions across multiple segments. The Rental Uniforms and Ancillary Products segment, the largest contributor to revenue, saw a solid 4.8% increase, signaling a rebound in core business activity.
Profitability also improved, with operating income rising by 12.7% and net income up 14.5% to $247.0 millionb. Diluted Earnings Per Share (EPS) saw a significant 20.0% increase, partly due to effective share repurchases. The company maintained a strong financial position, with robust operating cash flows and a stable credit rating, allowing for continued investment in growth initiatives and shareholder returns, including a 28th consecutive year of dividend increases.
02—Key points
Key Highlights
- Total revenue increased by 7.4% to $3.81 billion, indicating a strong recovery from the previous year.
- Operating income grew by 12.7% to $440.3 million, reflecting improved operational efficiency and revenue growth.
- Net income increased by 14.5% to $247.0 million, with diluted EPS rising by 20.0% to $1.68.
- The Document Management Services segment showed exceptional growth, with revenue up 27.0% due to organic expansion and acquisitions.
- The company continued its share repurchase program, buying back approximately 7.7 million shares in the fourth quarter of FY2011, contributing to EPS growth.
- Cintas maintained a strong balance sheet and liquidity position, with $438.1 million in cash and cash equivalents and a stable credit rating.
- The company celebrated its 28th consecutive year of increasing its annual dividend, demonstrating a commitment to shareholder returns.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2011, Cintas Corp kept $0.06.
- Revenue$3.81B100.0%
- Cost of revenue−$2.20B57.8%
- Gross profit$1.61B42.2%
- Operating costs−$1.17B30.7%
- Operating income$440.3M11.6%
- Interest, other & tax−$193.4M5.1%
- Net income$247.0M6.5%
Where FY2011 revenue went
$3.81B- Cost of revenue: $2.20B, 58% of revenue
- SG&A: $1.17B, 31% of revenue
- Net income: $247.0M, 6.5% of revenue
- Interest, other & tax: $193.4M, 5.1% of revenue
Kept 6.5% as net incomeNet income $247.0M · 6.5%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2011filed July 29, 2011Financial Statements
FY2011 against FY2010
| Line item | FY2011FY2010 | Change |
|---|---|---|
| Revenue | $3.81B$3.55B | +7.4% |
| Gross Profit | $1.61B$1.50B | +7.4% |
| SG&A Expenses | $1.17B$1.09B | +7.6% |
| Operating Income | $440.34M$390.81M | +12.7% |
| Interest Expense | $49.70M$48.61M | +2.2% |
| Net Income | $246.99M$215.62M | +14.5% |
| EPS (Basic) | $0.42$0.35 | +20.0% |
| EPS (Diluted) | $0.42$0.35 | +20.0% |
| Shares Outstanding (Basic) | 586.34M611.43M | −4.1% |
| Shares Outstanding (Diluted) | 586.34M611.43M | −4.1% |
05—Questions
Frequently Asked Questions
What was the overall financial performance of Cintas in fiscal year 2011?
Cintas reported a strong financial performance in fiscal year 2011, with total revenue increasing by 7.4% to $3.81 billion. Net income rose by 14.5% to $247.0 million, and diluted Earnings Per Share (EPS) saw a significant 20.0% increase to $1.68. This performance indicates a recovery and growth trajectory following economic challenges.
Which operating segments performed best, and what were the key drivers?
The Document Management Services segment was a standout performer, with revenue increasing by 27.0%. This growth was driven by a 15.3% organic increase, bolstered by higher recycled paper prices and new customer acquisitions, along with 11.7% growth from acquisitions. The Rental Uniforms and Ancillary Products segment, the largest, also showed solid growth of 4.8%, attributed to improved sales representative productivity and customer retention.
How did Cintas manage its capital and shareholder returns during the fiscal year?
Cintas maintained a healthy liquidity position with $438.1 million in cash and cash equivalents. The company actively managed its capital structure and returned value to shareholders through its ongoing share repurchase program, completing the $500 million authorization and increasing its annual dividend for the 28th consecutive year.
What are the key risks identified by Cintas in its 2011 filing?
Cintas identified several risks, including negative global economic factors impacting demand, increased competition leading to pricing pressures, risks associated with acquisitions and integration, rising fuel and energy costs, potential unionization campaigns, supplier-related risks, foreign currency fluctuations, regulatory compliance (OSHA, environmental), legal proceedings, and disruptions from computer system failures or other unexpected events.
06—Continue