Investor
Relations:
Cintas Corporation Announces Record Sales and Earnings for the
Fiscal Year Ended May 31, 1999
CINCINNATI, July 8, 1999 — Cintas Corporation announced today its results for fiscal year ended May 31, 1999, marking its thirtieth consecutive year of record sales and profits. On March 24, 1999, Cintas merged with Unitog Company (Unitog) headquartered in Kansas City, Missouri. The merger was accounted for as a pooling of interests and therefore all financial results have been restated to include the results for Unitog as if both companies had always been combined.
The following table represents selected information for the twelve months ended May 31, 1999 and 1998. More detailed information can be found below.
| TWELVE MONTHS ENDED (in millions) | |||
| MAY 31, 1999 | MAY 31, 1998 | PERCENT CHANGE | |
| CINTAS REVENUES (excluding Unitog) |
$1,472 | $1,198 | 23% |
| UNITOG REVENUES | 280 | 279 | -- |
| TOTAL REVENUES | $1,752 | $1,477 | 19% |
| PRE-TAX INCOME BEFORE ONE-TIME CHARGES |
$270 | $214 | 26% |
Revenues for the year were $1.75 billion, up 19% from last year's revenues. Pre-tax income, before one-time charges, increased 26%. In conjunction with the merger, Unitog incurred certain one-time costs related to completing the transaction and certain retention and severance programs for employees. Cintas also recorded certain impairment charges during the fourth quarter related to Unitog assets. These one-time costs amounted to $39 million pretax, or $.21 per share after-tax. In addition to those costs, Unitog also recorded in January, 1999, a $5 million charge related to certain environmental matters. Net income, without these charges, was $167 million, a 27% increase over the prior year or $1.48 per share. After these one-time charges, net income and earnings per share were $139 million and $1.23 respectively.
The following table represents selected information for the three months ended May 31, 1999 and 1998. More detailed information can be found below.
| THREE MONTHS ENDED (in millions) | |||
| MAY 31, 1999 | MAY 31, 1998 | PERCENT CHANGE | |
| CINTAS REVENUES (excluding Unitog) |
$390 | $330 | 18% |
| UNITOG REVENUES | 65 | 70 | -7% |
| TOTAL REVENUES | $455 | $400 | 14% |
| PRE-TAX INCOME BEFORE ONE-TIME CHARGES |
$ 70 | $ 59 | 19% |
For the fourth quarter, revenues were $455 million, up 14% from $400 million last year. The percentage increase in revenue was negatively impacted in the quarter as a result of the Unitog merger. Unitog's revenues decreased 7% in the quarter ended May 31, 1999 vs. the period ended May 31, 1998. The reasons for the decline were due to Unitog's sale of a portion of its linen business in September, 1998 and disruptions to its sales efforts during the period while Unitog management was exploring strategic alternatives. Excluding the impact of Unitog, Cintas revenues increased 18% over the prior year's fourth quarter. Pre-tax income before one-time charges increased 19% compared to the fourth quarter of fiscal 1998. Net income, without these one-time charges, was $44 million, a 23% increase over the prior year, and related earnings per share was $.39 per share. After these one time charges, net income and earnings per share were $20 million and $.17, respectively.
Richard T. Farmer, Chairman and Founder of the Cincinnati-based uniform company, commented, "We are very pleased with our results for the year. Many new records were set, including the largest transaction in the history of the Company. We have more than doubled the size of Cintas Corporation's revenues in the past two years. More importantly, our working partners at Cintas, now 22,000 strong, are ready and energized to enter the 21st Century. We are armed with superior products, outstanding service systems and an intense focus on exceeding our customers' expectations and the 4 million people who wear our uniforms to work every day. We are well positioned, both financially and operationally, to take advantage of the many opportunities in our business. We can provide the appropriate uniforms to anyone, no matter what their business or where they are located on the North American continent. We can provide ancillary products and services through our extensive route structure, and we will continue to make strategic acquisitions as opportunities arise."
Cintas is a leader in the corporate identity uniform business and also provides many ancillary services including entrance mats, sanitation supplies, first aid products and services and cleanroom services. Cintas is publicly- traded over the Nasdaq under the symbol CTAS.
| CINTAS CORPORATION INCOME STATEMENT RESTATED TO INCLUDE UNITOG COMPANY THREE MONTHS ENDED | |||||
| MAY 31, 1999 | % TO SALES | MAY 31, 1998 | % TO SALES | PERCENT VARIANCE | |
| REVENUES | $454,971 | 100.0% | $400,251 | 100.0% | 13.7% |
| COSTS AND EXPENSES |
384,573 | 84.5% | 341,193 | 85.2% | 12.7% |
| PRE-TAX INCOME BEFORE ONE-TIME CHARGES |
70,398 | 15.5% | 59,058 | 14.8% | 19.2% |
| EXPENSES RELATED TO BUSINESS COMBINATIONS: ONE-TIME CHARGES (EXCLUDING ENVIRONMENTAL) |
39,716 | 8.7% | 16,697 | 4.2% | |
| ENVIRONMENTAL CHARGE |
0 | 0 | |||
| INCOME BEFORE INCOME TAXES |
30,682 | 6.8% | 42,361 | 10.6% | -27.6% |
| INCOME TAXES | 11,003 | 35.9% | 17,350 | 41.0% | -36.6% |
| INCOME TAXES DEFERRED TAX BENEFIT FROM ACQUISITION |
0 | 0 | (8,280) | -19.6% | |
| SUBTOTAL INCOME TAXES |
11,003 | 35.9% | 9,070 | 21.4% | 21.3% |
| NET INCOME | 19,679 | 4.3% | 33,291 | 8.3% | -40.9% |
| BASIC EARNINGS PER SHARE |
$0.18 | $0.31 | -41.9% | ||
| DILUTED EARNINGS PER SHARE |
$0.17 | $0.30 | -43.3% | ||
| BASIC WEIGHTED AVG. NUMBER OF SHARES OUTSTANDING |
110,858 | 108,133 | |||
| DILUTED WEIGHTED AVG. NUMBER OF SHARES OUTSTANDING |
113,218 | 110,312 | |||
|
The above numbers exclude an income tax provision prior to 4/8/98 for Uniforms To You based on accounting rules. If Uniforms To You had been a "C" Corporation, Cintas' results would have been as follows: | |||||
| PRO FORMA INCOME TAX | 11,003 | 9,593 | 14.7% | ||
| PRO FORMA NET INCOME | 19,679 | 32,768 | -40.0% | ||
| PRO FORMA BASIC EPS | 0.18 | 0.30 | -40.0% | ||
| PRO FORMA DILUTED EPS | 0.17 | 0.30 | -43.3% | ||
| TWELVE MONTHS ENDED | |||||
| MAY 31, 1999 | % TO SALES | MAY 31, 1998 | % TO SALES | PERCENT VARIANCE | |
| REVENUES | $1,751,568 | 100.0% | $1,476,945 | 100.0% | 18.6% |
| COSTS AND EXPENSES | 1,482,057 | 84.6% | 1,262,973 | 85.5% | 17.3% |
| PRE-TAX INCOME BEFORE ONE-TIME CHARGES | 269,511 | 15.4% | 213,972 | 14.5% | 26.0% |
| EXPENSES RELATED TO BUSINESS COMBINATIONS: ONE-TIME CHARGES (EXCLUDING ENVIRONMENTAL) |
40,517 | 2.3% | 17,116 | 1.2% | |
| ENVIRONMENTAL CHARGE | 5,000 | 0.3% | 0 | ||
| INCOME BEFORE INCOME TAXES | 223,994 | 12.8% | 196,856 | 13.3% | 13.8% |
| INCOME TAXES | 85,055 | 38.0% | 71,482 | 36.3% | 19.0% |
| INCOME TAXES DEFERRED TAX BENEFIT FROM ACQUISITION | 0 | .0% | (8,280) | -4.2% | |
| SUBTOTAL INCOME TAXES | 85,055 | 38.0% | 63,202 | 32.1% | 34.6% |
| NET INCOME | 138,939 | 7.9% | 133,654 | 9.0% | 4.0% |
| BASIC EARNINGS PER SHARE | $1.26 | $1.25 | .8% | ||
| DILUTED EARNINGS PER SHARE | $1.23 | $1.23 | |||
| BASIC WEIGHTED AVG. NUMBER OF SHARES OUTSTANDING | 110,402 | 107,025 | |||
| DILUTED WEIGHTED AVG. NUMBER OF SHARES OUTSTANDING | 112,894 | 108,936 | |||
|
The above numbers exclude an income tax provision prior to 4/8/98 for Uniforms To You based on accounting rules. If Uniforms To You had been a "C" Corporation, Cintas' results would have been as follows: | |||||
| PRO FORMA INCOME TAX | 85,055 | 68,152 | 24.8% | ||
| PRO FORMA NET INCOME | 138,939 | 128,704 | 8.0% | ||
| PRO FORMA BASIC EPS | $1.26 | $1.20 | 5.0% | ||
| PRO FORMA DILUTED EPS | $1.23 | $1.18 | 4.2% | ||
SOURCE: Cintas Corporation
For additional
information, contact:
William C. Gale, Vice President-Finance and CFO -
513/573-4211
Karen L. Carnahan, Vice President and Treasurer
513/573-4013