CINCINNATI, December 19, 2000 -- Cintas Corporation (Nasdaq: CTAS - news) today reported that total revenue for its fiscal second quarter ended November 30, 2000, rose 16 percent to $539 million from $466 million a year ago. Net income of $56.5 million for the second quarter was 17 percent above the $48.3 million reported in last year's second quarter. Earnings per share advanced 14 percent to 33 cents per share (diluted) from 29 cents.
"Our results again illustrate Cintas' ability to leverage its business base and take advantage of the tremendous market opportunities," noted Richard T. Farmer, Chairman and Founder of Cintas. "All elements of our business continue to expand, with both existing and new customers. Further, we are combining that growth with strong profit performance."
Cintas' rental revenue was up 14 percent from last year's second quarter. Other services revenue, which includes the sale of uniforms as well as the sale of other products and services, also rose, gaining 21 percent over a year ago.
“In addition to uniform services, customers are relying on Cintas for many other products and services,” Farmer said. “Entrance mats, hygiene supplies and first aid and safety services all are important details that make workplaces cleaner, safer and more pleasant. They are details that add value to the already strong customer relationships Cintas enjoys.”
Six Months Results Put Cintas on Track to Continue Growth Record
For the first six months of its fiscal 2001, total revenue advanced 15 percent to $1.06 billion from $923 million in the comparable prior period. Net income reached $107.4 million, or 63 cents per share (diluted), up 17 percent from $91.5 million, or 54 cents, last year.
For the six-month period, Cintas' rental revenue was up 14 percent while other services revenue rose 19 percent over a year ago.
"Cintas has reported 31 consecutive years of uninterrupted growth in sales and profits, and results for the first half of 2001 bode well for continuation of that record," Farmer said.
Leveraging Distribution Systems through Strong Customer Relationships
Robert J. Kohlhepp, Cintas’ Chief Executive Officer, noted that attention to customer relationships gives Cintas a competitive advantage in the marketplace. "Cintas has one of the largest distribution systems in North America and our service sales representatives are in regular contact with more than 400,000 business customers," Kohlhepp said.
Kohlhepp continued, "The combination of our distribution system and our strong customer relationships is a core competence, which provides a platform from which we can launch and expand additional businesses quickly and economically. These other business areas represent 25 percent of our total revenue and are continuing to contribute to our overall growth and profitability.”
Strong Margin Trend Continues
Despite planned increases in sales and marketing costs to propel future growth, productivity improvements and cost control efforts have allowed Cintas to continue to deliver excellent operating performance. During the current quarter, gross margins continued to improve compared with the prior year. The pre-tax margin registered a strong 16.8 percent of revenue.
During the current fiscal year, Cintas has opened two new distribution centers -- in Ashland, Kentucky and Scranton, Pennsylvania -- to augment the existing distribution center operations. "These new facilities, designed with highly efficient inventory management systems, are helping to improve our response time to customers and reduce overall operating expenses as well as provide us with capacity to support our planned growth over the next three to five years. The start-up phase of each facility, however, included initial stocking, which is reflected in inventory increases on our balance sheet," Kohlhepp said.
Outlook Remains Positive
Due to strong demand for uniforms as well as the Company’s favorable market position, Cintas continues to expect growth in revenue and income for the remainder of the current fiscal year and the fiscal year ending May 31, 2002. Kohlhepp noted, “Our revenue projections for the remainder of fiscal 2001 do not include any significant acquisitions and do not anticipate a further slowdown in the growth of the economy. Our targets translate into a revenue range of $2.17 to $2.20 billion for fiscal 2001, and a diluted earnings per share range of $1.33 to $1.35.”
Broader-based Business Still True to Objective
At November 30, 2000, total assets were $1.7 billion compared with $1.5 billion last year. Shareholders' equity reached $1.15 billion, up from $970 million. Total debt to capitalization was 18 percent at November 30, 2000.
During the second quarter, Cintas was recognized by financial consultant John Slatter as one of the "100 Best Stocks You Can Buy." Slatter's list is built on growth potential and minimal risk. In addition, the Company was recognized by the Staton Institute as one of "America's Finest Companies". This is the 11th consecutive year that Cintas has received Staton's recognition.
“Cintas has an excellent record of growth – internally and externally,” Farmer said. “New products, new services, new markets and new acquisitions have made Cintas a broader-based company than ever before. As we grow, our principal objective – to maximize the long-term value of Cintas for our shareholders and our working partners by exceeding our customers’ expectations – guides our every decision. That focus allows us to continue to deliver outstanding results to our customers, our partners and our shareholders.”
About Cintas
Headquartered in Cincinnati, Ohio, Cintas Corporation is a leader in the corporate identity uniform industry and also provides a wide range of ancillary services, including entrance mats, sanitation supplies, clean room services, and first aid products and services. Cintas is a publicly held company traded over the Nasdaq National Market under the symbol CTAS. Every day, more than 4 million people go to work in a Cintas uniform.
The Private Securities Litigation Reform Act of 1995 provides a safe harbor from civil litigation for forward-looking statements. This news release contains forward-looking statements that reflect the Company's current views as to future events and financial performance with respect to its operations. These statements are subject to risks and uncertainties which could cause actual results to differ materially from those set forth in this press release. Factors that might cause such a difference include the possibility of greater than anticipated operating costs, lower sales volumes, the performance and costs of integration of acquisitions, fluctuations in costs of materials and labor, the outcome of pending environmental matters, higher assumed sourcing or distribution costs of products and the reactions of competitors in terms of price and service. Forward-looking statements speak only as of the date made. Cintas undertakes no obligation to update any forward-looking statements to reflect the events or circumstances arising after the date of which they are made.
For further information | <||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||