-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, RBbFLLZX+OlnywTQeuVOArcyyv5GUNYPdO/Re9JM8ki/nsLU3Bsn2Wbn41Ct9vmH k1CTTaUuwYGwjvwE2xR3CA== 0000723254-96-000008.txt : 19961016 0000723254-96-000008.hdr.sgml : 19961016 ACCESSION NUMBER: 0000723254-96-000008 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960831 FILED AS OF DATE: 19961015 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: CINTAS CORP CENTRAL INDEX KEY: 0000723254 STANDARD INDUSTRIAL CLASSIFICATION: MEN'S & BOYS' FURNISHINGS, WORK CLOTHING, AND ALLIED GARMENTS [2320] IRS NUMBER: 311188630 STATE OF INCORPORATION: WA FISCAL YEAR END: 0531 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-11399 FILM NUMBER: 96642982 BUSINESS ADDRESS: STREET 1: 6800 CINTAS BLVD STREET 2: P O BOX 625737 CITY: CINCINNATI STATE: OH ZIP: 45262 BUSINESS PHONE: 5135734016 MAIL ADDRESS: STREET 1: 6800 CINTAS BOULEVARD STREET 2: P O BOX 625737 CITY: CINCINNATI STATE: OH ZIP: 45262 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ( X ) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended August 31, 1996 OR ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____________________ to ___________________ Commission file number 0-11399 CINTAS CORPORATION (Exact name of registrant as specified in its charter) WASHINGTON 31-1188630 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 6800 CINTAS BOULEVARD P.O. BOX 625737 CINCINNATI, OHIO 45262-5737 (Address of principal executive offices) (Zip Code) (513) 459-1200 (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Class Outstanding September 30, 1996 Common Stock, no par value 47,393,516 CINTAS CORPORATION INDEX Page No. Part I. Financial Information: Consolidated Condensed Balance Sheets - August 31, 1996 and May 31, 1996 3 Consolidated Condensed Statements of Income - Three Months Ended August 31, 1996 and 1995 4 Consolidated Condensed Statements of Cash Flows - Three Months Ended August 31, 1996 and 1995 5 Notes to Consolidated Condensed Financial Statements 6 Management's Discussion and Analysis of Financial Condition and Results of Operations 7 Part II. Other Information 8 Signatures 8 -2- CINTAS CORPORATION CONSOLIDATED CONDENSED BALANCE SHEETS (In thousands except share data)
August 31, May 31, 1996 1996 (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 11,576 $ 9,066 Marketable securities 81,797 73,477 Accounts receivable (net) 79,615 78,244 Inventories 37,501 34,678 Uniforms and other rental items in service 102,075 100,307 Prepaid expenses 1,510 1,730 Total current assets 314,074 297,502 Property, plant and equipment, at cost, net 259,038 252,597 Other assets 117,157 118,663 $ 690,269 $ 668,762 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 22,021 $ 19,363 Accrued liabilities 36,484 49,168 Income taxes - Current 6,490 ---- Deferred 30,813 27,471 Long-term debt due within one year 6,498 6,592 Total current liabilities 102,306 102,594 Long-term debt due after one year 117,568 117,924 Deferred income taxes 19,736 18,747 Shareholders' equity: Preferred stock, no par value, 100,000 shares authorized, none outstanding ----- ----- Common stock, no par value, 120,000,000 shares authorized, 47,376,572 shares issued and outstanding (47,199,299 at May 31, 1996) 43,927 43,657 Retained earnings 407,552 386,673 Foreign currency translation adjustment (820) (833) Total shareholders' equity 450,659 429,497 $690,269 $668,762
See accompanying notes. -3- CINTAS CORPORATION CONSOLIDATED CONDENSED STATEMENTS OF INCOME (Unaudited) (In thousands except per share data)
Three Months Ended August 31, 1996 1995 Revenues: Net rentals $ 174,499 $ 154,268 Net sales 18,287 16,075 192,786 170,343 Costs and expenses (income): Cost of rentals 98,464 87,276 Cost of sales 16,083 13,811 Selling and administrative expenses 45,221 40,718 Interest income (854) (421) Interest expense 1,989 2,510 160,903 143,894 Income before income taxes 31,883 26,449 Income taxes 12,186 10,161 Net income $ 19,697 $ 16,288 Earnings per share $ .42 $ .35 Weighted average number of shares outstanding 47,266 47,033
See accompanying notes. -4- CINTAS CORPORATION CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) (In thousands)
Three Months Ended August 31, 1996 1995 Cash flows from operating activities: Net income $19,697 $16,288 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 8,258 6,968 Amortization of deferred charges 2,993 3,163 Deferred income taxes 4,331 4,598 Change in current assets and liabilities, net of acquisitions of businesses: Accounts receivable (1,134) (993) Inventories (4,524) (1,563) Prepaid expenses 231 (787) Accounts payable 2,492 1,041 Accrued liabilities (12,900) (3,482) Income taxes payable 6,490 5,549 Net cash provided by operating activities 25,934 30,782 Cash flows from investing activities: Proceeds from sale of property, plant and equipment 120 ---- Capital expenditures (14,367) (13,541) Proceeds from sale or redemption of marketable securities 6,182 8,066 Purchase of marketable securities (14,501) (22,939) Acquisitions of businesses, net of cash acquired (360) (496) Other (277) (1,082) Net cash used by investing activities (23,203) (29,992) Cash flows from financing activities: Proceeds from issuance of long-term debt ---- 407 Repayment of long-term debt (450) (570) Issuance of common stock 247 214 Other (18) ---- Net cash provided by (used in) financing activities (221) 51 Net increase in cash and cash equivalents 2,510 841 Cash and cash equivalents at beginning of period 9,066 6,685 Cash and cash equivalents at end of period $11,576 $ 7,526
See accompanying notes. -5- CINTAS CORPORATION NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (Unaudited) 1. The consolidated condensed financial statements of Cintas Corporation (the "Company") included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. While the Company believes that the disclosures presented are adequate to make the information not misleading, it is suggested that these consolidated condensed financial statements be read in conjunction with the financial statements and notes included in the Company's most recent annual report for the fiscal year ended May 31, 1996. 2. Interim results are subject to variations and are not necessarily indicative of the results of operations for a full fiscal year. In the opinion of management, adjustments (which include only normal recurring adjustments) necessary for a fair statement of the results of the interim periods shown have been made. 3. The Company adopted SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of", in the first quarter of fiscal 1996. The adoption of this statement did not have a material financial impact on the Company. -6- CINTAS CORPORATION MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Total revenues increased 13% in the first quarter of fiscal 1997 over the same period in fiscal 1996. Net rental revenue also increased 13% for the three months ended August 31, 1996, over the same period in the prior fiscal year. The first quarter of fiscal 1997 had one less workday than the first quarter of fiscal 1996. First quarter revenues from the sale of uniforms and other direct sale items increased 14% over the prior year's first quarter, principally as a result of an increase in unit sales and other direct sale items. Net income and earnings per share increased 21% and 20%, respectively, for the three months ended August 31, 1996, over the same period in fiscal 1996. Net interest expense (interest expense less interest income) was $1,135,000 for the first quarter of fiscal 1997 compared to $2,089,000 in the first quarter of fiscal 1996. Net interest expense has decreased primarily due to an increase in interest income (related to a higher level of cash and marketable securities on hand) combined with a decrease in interest expense (related to a lower amount of long-term debt and improved interest rates). The Company's effective tax rate was 38% in both periods. Cash, cash equivalents and marketable securities increased by $11 million at August 31, 1996 from May 31, 1996, primarily due to strong cash flow from operations. The cash, cash equivalents and marketable securities will be used to finance future acquisitions and capital expenditures. Net property, plant and equipment increased by $6 million from May 31, 1996 to August 31, 1996. At the end of the first quarter of fiscal 1997, the Company had six uniform rental facilities in various stages of construction. During the first quarter of fiscal 1997, the Company's new distribution center in Montgomery, Alabama began operations. The new distribution center will service the Company's operations in the South, Southeast and Southwest regions of the United States. The expansion into Montgomery, as well as the expansion of the Cincinnati distribution center completed in fiscal 1996, will free up capacity in Cincinnati in order to more effectively service growth in the Midwest, on the East Coast and Canada. Financial Condition At August 31, 1996, the Company had $93 million in cash, cash equivalents and marketable securities. The Company believes that its current cash position, funds anticipated to be generated from operations and the strength of its banking relationships are sufficient to meet its anticipated operational and capital needs requirements. -7- CINTAS CORPORATION Part II. Other Information Item 6. Exhibits and Reports on Form 8-K (a.) Exhibit Index Exhibit Number Description of Exhibit 27 Financial Data Schedule (b.) No reports were filed on Form 8-K during the quarter. Signatures Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. CINTAS CORPORATION (Registrant) Date: October 11, 1996 /s/ William C. Gale William C. Gale Vice President - Finance (Chief Accounting Officer) -8- EX-27 2
5 3-MOS MAY-31-1997 AUG-31-1996 11,576,000 81,797,000 81,960,000 2,345,000 139,576,000 314,074,000 379,582,000 120,544,000 690,269,000 102,306,000 0 0 0 43,927,000 406,732,000 690,269,000 18,287,000 192,786,000 16,083,000 114,547,000 0 0 1,989,000 31,883,000 12,186,000 0 0 0 0 19,697,000 .42 0
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