Cintas Corporation Announces Fiscal 2013 Second Quarter Results

The Company’s operating income of $139.0 million was a 4.8% increase as compared to last year’s second quarter. Net income increased 4.9% to $78.0 million as compared to $74.4 million in last year’s second quarter. Earnings per diluted share (EPS) for the second quarter were $0.63, a 10.5% increase over the $0.57 earnings per diluted share in last year’s second quarter.

Scott D. Farmer, Chief Executive Officer, stated, “We continued to operate during the second quarter in a climate of much economic uncertainty. These uncertainties, largely regarding U.S. tax policies and changing healthcare regulation and costs, caused our customers to be very cautious about both spending and hiring.”

The Company’s balance sheet and cash flow remain very strong. Cash and marketable securities totaled $276.3 million at November 30, 2012. Cash flow from operations in the first half of fiscal 2013 improved to $227.3 million, a 29.2% increase over the first half of last fiscal year. As of November 30, 2012, the Company’s current ratio was 2.7 to one, and its debt to EBITDA was 1.9 to one.

During the second quarter of fiscal 2013, the Company purchased 1.9 million shares of its common stock at an aggregate cost of $81.1 million. While it had no impact on the second quarter EPS, this buyback is expected to benefit fiscal year 2013 EPS by approximately $0.01. The Cintas Board of Directors authorized a $500.0 million share buyback program in October 2011. As of November 30, 2012, the Company had $218.7 million available under the current Board authorization for future share repurchases.

Mr. Farmer added, “Last week, we paid our annual dividend to our shareholders amounting to $0.64 per share, an 18.5% increase from last year’s dividend of $0.54 per share. Our consistently strong operating results have allowed us to continue to increase our dividend while executing our stock buyback program, demonstrating our continued commitment to increase shareholder value.”

Mr. Farmer concluded, “Based on our second quarter results and the uncertain U.S. economic climate, we are updating our fiscal 2013 revenue expectations to be in the range of $4.275 billion to $4.325 billion. We are not changing our EPS guidance, which is an expectation of fiscal 2013 EPS to be in the range of $2.50 to $2.58. This guidance assumes no further deterioration in the U.S. economy and does not consider any additional share buybacks.”

Note:

Management uses free cash flow to assess the financial performance of the Company. Management