EX-99 2 ex992021-8x31.htm EX-99
Exhibit 99
FOR IMMEDIATE RELEASE
September 29, 2021
Cintas Corporation Announces
Fiscal 2022 First Quarter Results
CINCINNATI, September 29, 2021 -- Cintas Corporation (Nasdaq: CTAS) today reported results for its fiscal 2022 first quarter ended August 31, 2021. Revenue for the first quarter of fiscal 2022 was $1.90 billion compared to $1.75 billion in last year’s first quarter, an increase of 8.6%. The organic revenue growth rate for the first quarter of fiscal 2022, which adjusts for the impacts of acquisitions, divestitures and foreign currency exchange rate fluctuations, was also 8.6%. Diluted earnings per share (EPS) were $3.11 in the first quarter of fiscal 2022, an increase of 11.9% from last year's first quarter diluted EPS.
Gross margin for the first quarter of fiscal 2022 was $902.8 million compared to $826.2 million in last year’s first quarter. Gross margin as a percentage of revenue increased 30 basis points to 47.6% for the first quarter of fiscal 2022 compared to 47.3% in the first quarter of fiscal 2021.
Operating income for the first quarter of fiscal 2022 of $394.1 million increased 12.7% from last year’s first quarter operating income of $349.7 million. Operating income as a percentage of revenue increased 80 basis points to 20.8% in the first quarter of fiscal 2022 compared to 20.0% in the first quarter of fiscal 2021.
Net income was $331.2 million for the first quarter of fiscal 2022, an increase of 10.4% from last year's first quarter net income of $300.0 million. First quarter of fiscal 2022 diluted EPS was $3.11, an increase of 11.9% from last year's first quarter diluted EPS of $2.78.
On September 15, 2021, Cintas paid shareholders $98.8 million in quarterly dividends in the aggregate. The amount per share of common stock paid of $0.95 represents a 26.7% increase over the Company's previous quarterly dividend.
Todd M. Schneider, Cintas' President and Chief Executive Officer, stated, "We are pleased with our start to fiscal 2022. I am proud of the execution of our employee-partners. They continue to navigate an unsettled environment by focusing on providing businesses with the products and services needed to help our customers get Ready for the Workday®. I look forward to another successful fiscal year."
Mr. Schneider concluded, "We are increasing our fiscal 2022 financial guidance. We are raising our annual revenue expectations from a range of $7.53 billion to $7.63 billion to a range of $7.58 billion to $7.67 billion and diluted EPS from a range of $10.35 to $10.75 to a range of $10.60 to $10.90. Please note the following regarding guidance:
•Our fiscal 2022 effective tax rate is expected to be approximately 19.5% compared to a rate of 13.7% for fiscal 2021. The higher effective tax rate negatively impacts fiscal 2022 diluted EPS guidance by about $0.77 and diluted EPS growth by about 760 basis points;
•Guidance does not include the impact of any future share buybacks or potential tax reform; and
•Guidance assumes an uneven economic recovery caused by the surging COVID-19 delta variant. However, guidance does not contemplate significant COVID-19 pandemic-related setbacks such as stay-at-home orders and other restrictions, commonly referred to as lockdowns."

Cintas
Cintas Corporation helps more than one million businesses of all types and sizes get Ready™to open their doors with confidence every day by providing products and services that help keep their customers’ facilities and employees clean, safe and looking their best. With offerings including uniforms, mats, mops, restroom supplies, first aid and safety products, fire extinguishers and testing, and safety training, Cintas helps customers get Ready for the Workday®. The Company is also the creator of the Total Clean Program™ — a first-of-its-kind service that includes scheduled delivery of essential cleaning supplies, hygienically clean laundering, and sanitizing and disinfecting products and services. Headquartered in Cincinnati, Cintas is a publicly held Fortune 500 company traded over the Nasdaq Global Select Market under the symbol CTAS and is a component of both the Standard & Poor’s 500 Index and Nasdaq-100 Index.
Cintas will host a live webcast to review the fiscal 2022 first quarter results today at 10:00 a.m., Eastern Time. The webcast will be available to the public on Cintas' website at www.Cintas.com. A replay of the webcast will be available approximately two hours after the completion of the live call and will remain available for two weeks.
CAUTION CONCERNING FORWARD-LOOKING STATEMENTS
The Private Securities Litigation Reform Act of 1995 provides a safe harbor from civil litigation for forward-looking statements. Forward-looking statements may be identified by words such as “estimates,” “anticipates,” “predicts,” “projects,” “plans,” “expects,” “intends,” “target,” “forecast,” “believes,” “seeks,” “could,” “should,” “may” and “will” or the negative versions thereof and similar words, terms and expressions and by the context in which they are used. Such statements are based upon current expectations of Cintas and speak only as of the date made. You should not place undue reliance on any forward-looking statement. We cannot guarantee that any forward-looking statement will be realized. These statements are subject to various risks, uncertainties, potentially inaccurate assumptions and other factors that could cause actual results to differ from those set forth in or implied by this Press Release. Factors that might cause such a difference include, but are not limited to, the possibility of greater than anticipated operating costs including energy and fuel costs; lower sales volumes; loss of customers due to outsourcing trends; the performance and costs of integration of acquisitions; fluctuations in costs of materials and labor including increased medical costs; costs and possible effects of union organizing activities; failure to comply with government regulations concerning employment discrimination, employee pay and benefits and employee health and safety; the effect on operations of exchange rate fluctuations, tariffs and other political, economic and regulatory risks; uncertainties regarding any existing or newly-discovered expenses and liabilities related to environmental compliance and remediation; the cost, results and ongoing assessment of internal controls for financial reporting; the effect of new accounting pronouncements; disruptions caused by the inaccessibility of computer systems data, including cybersecurity risks; the initiation or outcome of litigation, investigations or other proceedings; higher assumed sourcing or distribution costs of products; the disruption of operations from catastrophic or extraordinary events including viral pandemics such as the COVID-19 coronavirus; the amount and timing of repurchases of our common stock, if any; changes in federal and state tax and labor laws; and the reactions of competitors in terms of price and service. Cintas undertakes no obligation to publicly release any revisions to any forward-looking statements or to otherwise update any forward-looking statements whether as a result of new information or to reflect events, circumstances or any other unanticipated developments arising after the date on which such statements are made. A further list and description of risks, uncertainties and other matters can be found in our Annual Report on Form 10-K for the year ended May 31, 2021 and in our reports on Forms 10-Q and 8-K. The risks and uncertainties described herein are not the only ones we may face. Additional risks and uncertainties presently not known to us, or that we currently believe to be immaterial, may also harm our business.
For additional information, contact:
J. Michael Hansen, Executive Vice President and Chief Financial Officer - 513-972-2079
Paul F. Adler, Vice President - Treasurer & Investor Relations - 513-972-4195

Cintas Corporation
Consolidated Condensed Statements of Income
(Unaudited)
(In thousands except per share data)

| Three Months Ended
| August 31, 2021 |  | August 31, 2020 |  | % Change
Revenue: |  |  |  |  |
Uniform rental and facility services | $ | 1,508,176 |  |  | $ | 1,394,411 |  |  | 8.2%
Other | 388,774 |  |  | 352,164 |  |  | 10.4%
Total revenue | 1,896,950 |  |  | 1,746,575 |  |  | 8.6%
Costs and expenses: |  |  |  |  |
Cost of uniform rental and facility services | 779,301 |  |  | 715,412 |  |  | 8.9%
Cost of other | 214,893 |  |  | 204,962 |  |  | 4.8%
Selling and administrative expenses | 508,655 |  |  | 476,495 |  |  | 6.7%
Operating income | 394,101 |  |  | 349,706 |  |  | 12.7%
Interest income | (56) |  |  | (64) |  |  | (12.5)%
Interest expense | 21,854 |  |  | 24,550 |  |  | (11.0)%
Income before income taxes | 372,303 |  |  | 325,220 |  |  | 14.5%
Income taxes | 41,124 |  |  | 25,215 |  |  | 63.1%
Net income | $ | 331,179 |  |  | $ | 300,005 |  |  | 10.4%
Basic earnings per share | $ | 3.19 |  |  | $ | 2.86 |  |  | 11.5%
Diluted earnings per share | $ | 3.11 |  |  | $ | 2.78 |  |  | 11.9%
Basic weighted average common shares outstanding | 103,295 |  |  | 104,110 |  |  |
Diluted weighted average common shares outstanding | 105,944 |  |  | 107,129 |  |  |

CINTAS CORPORATION SUPPLEMENTAL DATA
Gross Margin and Net Income Margin Results

| Three Months Ended
| August 31, 2021 |  | August 31, 2020
Uniform rental and facility services gross margin | 48.3% |  | 48.7%
Other gross margin | 44.7% |  | 41.8%
Total gross margin | 47.6% |  | 47.3%
Net income margin | 17.5% |  | 17.2%

Reconciliation of Non-GAAP Financial Measures and Regulation G Disclosure
The press release contains a non-GAAP financial measure within the meaning of Regulation G promulgated by the Securities and Exchange Commission. To supplement its consolidated condensed financial statements presented in accordance with U.S. generally accepted accounting principles (GAAP), the Company provides the additional non-GAAP financial measure of cash flow. The Company believes that this non-GAAP financial measure is appropriate to enhance understanding of its past performance as well as prospects for future performance. A reconciliation of the difference between this non-GAAP financial measure with the most directly comparable financial measure calculated in accordance with GAAP is shown in the table within the narrative of the press release or below.
Computation of Free Cash Flow

| Three Months Ended
| August 31, 2021 |  | August 31, 2020
Net cash provided by operations | $ | 262,141 |  |  | $ | 312,292 |
Capital expenditures | (48,748) |  |  | (30,876) |
Free cash flow | $ | 213,393 |  |  | $ | 281,416 |

Management uses free cash flow to assess the financial performance of the Company. Management believes that free cash flow is useful to investors because it relates the operating cash flow of the Company to the capital that is spent to continue, improve and grow business operations.

SUPPLEMENTAL SEGMENT DATA

| Uniform Rental and Facility Services |  | First Aid and Safety Services |  | All Other |  | Corporate |  | Total
For the three months ended August 31, 2021 |  |  |  |  |  |  |  |
Revenue | $ | 1,508,176 |  |  | $ | 199,116 |  |  | $ | 189,658 |  |  | $ | — |  |  | $ | 1,896,950 |
Gross margin | $ | 728,875 |  |  | $ | 89,275 |  |  | $ | 84,606 |  |  | $ | — |  |  | $ | 902,756 |
Selling and administrative expenses | $ | 399,493 |  |  | $ | 63,547 |  |  | $ | 45,615 |  |  | $ | — |  |  | $ | 508,655 |
Interest income | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | (56) |  |  | $ | (56) |
Interest expense | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 21,854 |  |  | $ | 21,854 |
Income (loss) before income taxes | $ | 329,382 |  |  | $ | 25,728 |  |  | $ | 38,991 |  |  | $ | (21,798) |  |  | $ | 372,303 |
For the three months ended August 31, 2020 |  |  |  |  |  |  |  |
Revenue | $ | 1,394,411 |  |  | $ | 204,481 |  |  | $ | 147,683 |  |  | $ | — |  |  | $ | 1,746,575 |
Gross margin | $ | 678,999 |  |  | $ | 82,104 |  |  | $ | 65,098 |  |  | $ | — |  |  | $ | 826,201 |
Selling and administrative expenses | $ | 363,971 |  |  | $ | 63,577 |  |  | $ | 48,947 |  |  | $ | — |  |  | $ | 476,495 |
Interest income | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | (64) |  |  | $ | (64) |
Interest expense | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 24,550 |  |  | $ | 24,550 |
Income (loss) before income taxes | $ | 315,028 |  |  | $ | 18,527 |  |  | $ | 16,151 |  |  | $ | (24,486) |  |  | $ | 325,220 |

Cintas Corporation
Consolidated Condensed Balance Sheets
(In thousands except per share data)

| August 31, 2021 |  | May 31, 2021
| (Unaudited) |  |
ASSETS |  |  |
Current assets: |  |  |
Cash and cash equivalents | $ | 79,749 |  |  | $ | 493,640 |
Accounts receivable, net | 927,360 |  |  | 901,710 |
Inventories, net | 463,692 |  |  | 481,797 |
Uniforms and other rental items in service | 846,656 |  |  | 810,104 |
Income taxes, current | 11,249 |  |  | 22,282 |
Prepaid expenses and other current assets | 148,960 |  |  | 133,776 |
Total current assets | 2,477,666 |  |  | 2,843,309 |
Property and equipment, net | 1,301,233 |  |  | 1,318,438 |
Investments | 295,268 |  |  | 274,616 |
Goodwill | 2,924,993 |  |  | 2,913,069 |
Service contracts, net | 403,982 |  |  | 408,445 |
Operating lease right-of-use assets, net | 159,289 |  |  | 168,532 |
Other assets, net | 295,319 |  |  | 310,414 |
| $ | 7,857,750 |  |  | $ | 8,236,823 |
LIABILITIES AND SHAREHOLDERS’ EQUITY |  |  |
Current liabilities: |  |  |
Accounts payable | $ | 202,968 |  |  | $ | 230,786 |
Accrued compensation and related liabilities | 155,212 |  |  | 241,469 |
Accrued liabilities | 592,384 |  |  | 518,910 |
Operating lease liabilities, current | 43,308 |  |  | 43,850 |
Debt due within one year | 1,275,167 |  |  | 899,070 |
Total current liabilities | 2,269,039 |  |  | 1,934,085 |
Long-term liabilities: |  |  |
Debt due after one year | 1,343,222 |  |  | 1,642,833 |
Deferred income taxes | 395,599 |  |  | 386,647 |
Operating lease liabilities | 122,291 |  |  | 130,774 |
Accrued liabilities | 418,396 |  |  | 454,637 |
Total long-term liabilities | 2,279,508 |  |  | 2,614,891 |
Shareholders’ equity: |  |  |
Preferred stock, no par value: 100,000 shares authorized, none outstanding | — |  |  | — |
Common stock, no par value, and paid-in capital: 425,000,000 shares authorized FY 2022: 190,127,513 issued and 103,329,218 outstanding FY 2021: 189,071,185 issued and 104,061,391 outstanding | 1,625,594 |  |  | 1,516,202 |
Retained earnings | 8,109,368 |  |  | 7,877,015 |
Treasury stock: FY 2022: 86,798,295 shares FY 2021: 85,009,794 shares | (6,395,493) |  |  | (5,736,258) |
Accumulated other comprehensive (loss) income | (30,266) |  |  | 30,888 |
Total shareholders’ equity | 3,309,203 |  |  | 3,687,847 |
| $ | 7,857,750 |  |  | $ | 8,236,823 |

Cintas Corporation
Consolidated Condensed Statements of Cash Flows
(Unaudited)
(In thousands)

| Three Months Ended
| August 31, 2021 |  | August 31, 2020
Cash flows from operating activities: |  |  |
Net income | $ | 331,179 |  |  | $ | 300,005 |
Adjustments to reconcile net income to net cash provided by operating activities: |  |  |
Depreciation | 60,955 |  |  | 60,574 |
Amortization of intangible assets and capitalized contract costs | 36,994 |  |  | 35,605 |
Stock-based compensation | 36,496 |  |  | 29,055 |
Gain on sale of operating assets | (12,178) |  |  | — |
Deferred income taxes | 22,887 |  |  | (8,716) |
Change in current assets and liabilities, net of acquisitions of businesses: |  |  |
Accounts receivable, net | (27,742) |  |  | 7,118 |
Inventories, net | 14,986 |  |  | (77,944) |
Uniforms and other rental items in service | (39,274) |  |  | 16,552 |
Prepaid expenses and other current assets and capitalized contract costs | (36,724) |  |  | (42,277) |
Accounts payable | (26,272) |  |  | 20,358 |
Accrued compensation and related liabilities | (85,834) |  |  | (10,067) |
Accrued liabilities and other | (24,342) |  |  | (14,297) |
Income taxes, current | 11,010 |  |  | (3,674) |
Net cash provided by operating activities | 262,141 |  |  | 312,292 |
Cash flows from investing activities: |  |  |
Capital expenditures | (48,748) |  |  | (30,876) |
Purchases of investments | (8,738) |  |  | (4,940) |
Proceeds from sale of operating assets | 15,070 |  |  | — |
Acquisitions of businesses, net of cash acquired | (35,725) |  |  | (1,984) |
Other, net | (6,180) |  |  | (2,142) |
Net cash used in investing activities | (84,321) |  |  | (39,942) |
Cash flows from financing activities: |  |  |
Issuance of commercial paper, net | 326,000 |  |  | — |
Repayment of debt | (250,000) |  |  | — |
Proceeds from exercise of stock-based compensation awards | 72,896 |  |  | 72,123 |
Dividends paid | (79,135) |  |  | — |
Repurchase of common stock | (659,235) |  |  | (69,011) |
Other, net | (610) |  |  | (869) |
Net cash (used in) provided by financing activities | (590,084) |  |  | 2,243 |
Effect of exchange rate changes on cash and cash equivalents | (1,627) |  |  | 1,547 |
Net (decrease) increase in cash and cash equivalents | (413,891) |  |  | 276,140 |
Cash and cash equivalents at beginning of period | 493,640 |  |  | 145,402 |
Cash and cash equivalents at end of period | $ | 79,749 |  |  | $ | 421,542 |