10-KPeriod: FY2011

CINTAS CORP Annual Report, Year Ended May 31, 2011

Filed July 29, 2011For Securities:CTAS

Summary

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 billion. 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 million. 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.

Financial Highlights

54 data points
Beta

Revenue

$3.81B

42.2% Gross Margin

Net Income

$246.99M

6.5% Net Margin

EPS (Diluted)

$0.42

Total Assets

$4.35B

Cash & Equivalents

$438.11M

Free Cash Flow

$158.29M

Financial Statements
Beta
Revenue$3.81B
Gross Profit$1.61B
SG&A Expenses$1.17B
Operating Income$440.34M
Interest Expense$49.70M
Net Income$246.99M
EPS (Basic)$0.42
EPS (Diluted)$0.42
Shares Outstanding (Basic)586.34M
Shares Outstanding (Diluted)586.34M

Key Highlights

  • 1Total revenue increased by 7.4% to $3.81 billion, indicating a strong recovery from the previous year.
  • 2Operating income grew by 12.7% to $440.3 million, reflecting improved operational efficiency and revenue growth.
  • 3Net income increased by 14.5% to $247.0 million, with diluted EPS rising by 20.0% to $1.68.
  • 4The Document Management Services segment showed exceptional growth, with revenue up 27.0% due to organic expansion and acquisitions.
  • 5The company continued its share repurchase program, buying back approximately 7.7 million shares in the fourth quarter of FY2011, contributing to EPS growth.
  • 6Cintas maintained a strong balance sheet and liquidity position, with $438.1 million in cash and cash equivalents and a stable credit rating.
  • 7The company celebrated its 28th consecutive year of increasing its annual dividend, demonstrating a commitment to shareholder returns.

Frequently Asked Questions

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.

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.

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.

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.