Cintas is an American company specialized in the manufacture and sale of workwear and uniforms
FORM 10-Q SECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549
OR
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 by check mark whether the registrant is an accelerated filer (as defined in Rule 12 b-2 of the Exchange Act). 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.
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CINTAS CORPORATION
INDEX
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See accompanying notes.
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CINTAS CORPORATIONCONSOLIDATED CONDENSED BALANCE SHEETS(Unaudited)(In thousands except share data)
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CINTAS CORPORATIONCONSOLIDATEDCONDENSED STATEMENTS OF CASH FLOWS(Unaudited)(In thousands)
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CINTAS CORPORATIONNOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS(Unaudited)(Amounts in thousands except per share data)
1. Basis of Presentation
The consolidated condensed financial statements of Cintas Corporation included herein have been prepared by Cintas, 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 U.S. generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. While we believe that the disclosures are adequately presented, it is suggested that these consolidated condensed financial statements be read in conjunction with the financial statements and notes included in our most recent annual report for the fiscal year ended May 31, 2004. A summary of our significant accounting policies is presented on page 24 of our most recent annual report. There have been no material changes in the accounting policies followed by Cintas during the fiscal year.
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.
Certain prior year amounts have been reclassified to conform to current year presentation.
2. New Accounting Standard
On December 16, 2004, the Financial Accounting Standards Board (FASB) issued Statement No. 123 (revised 2004), Share-Based Payment, which is a revision of FASB Statement No. 123, Accounting for Stock-Based Compensation. Generally, the approach in Statement 123(R) is similar to the approach described in Statement 123. However, Statement 123(R) requires all share-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their fair values. Pro forma disclosure is no longer an alternative. The new standard will be effective for public entities (excluding small business issuers) in the first interim or annual reporting period beginning after June 15, 2005. Cintas will adopt this Statement in the second quarter of fiscal 2006.
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CINTAS CORPORATIONNOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS(Unaudited)(In thousands except per share data)
3. Earnings per Share
The following table represents a reconciliation of the shares used to calculate basic and diluted earnings per share for the respective years:
4. Goodwill, Service Contracts and Other Assets
Changes in the carrying amount of goodwill for the six months ended November 30, 2004, by operating segment, are as follows:
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Information regarding Cintas’ service contracts and other assets follows:
Amortization expense was $13,543 and $12,874 for the six months ended November 30, 2004 and November 30, 2003, respectively. Estimated amortization expense, excluding any future acquisitions, for each of the next five years is $27,082, $25,339, $23,634, $21,389 and $19,018, respectively.
5. Debt, Derivatives and Hedging Activities
Cintas formally documents all relationships between hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking various hedge transactions. Cintas’ hedging activities are transacted only with highly-rated institutions, reducing the exposure to credit risk in the event of nonperformance.
Cintas uses derivatives for both cash flow hedging and fair value hedging purposes. For derivative instruments that hedge the exposure of variability in short-term interest rates, designated as cash flow hedges, the effective portion of the net gain or loss on the derivative instrument is reported as a component of other comprehensive income and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. For the ineffective portion of the hedge, gains or losses are charged to earnings in the current period. For derivative instruments that hedge the exposure to changes in the fair value of certain fixed rate debt, designated as fair value hedges, the effective portion of the net gain or loss on the derivative instrument, as well as the offsetting gain or loss on the fixed rate debt attributable to the hedged risk, are recorded in current period earnings.
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Cintas uses interest rate swap and lock agreements as hedges against variability in short-term interest rates. These agreements effectively convert a portion of the floating rate debt to a fixed rate basis, thus reducing the impact of interest rate changes on future interest expense. Cintas uses the Hypothetical Derivative Method for assessing the effectiveness of these swaps. The effectiveness of these swaps is reviewed at least every fiscal quarter. Cintas also uses reverse interest rate swap agreements to convert a portion of fixed rate debt to a floating rate basis, thus hedging for changes in the fair value of the fixed rate debt being hedged. Cintas has determined that the current interest rate swap agreements, designated as fair value hedges, qualify for treatment under the short-cut method of measuring effectiveness. Under the provisions of SFAS 133, these hedges are determined to be perfectly effective and there is no requirement to periodically evaluate effectiveness.
The amortization of the cash flow hedge, pertaining to interest rate swap and lock agreements, resulted in a credit to other comprehensive income of $72 for the three months ended November 30, 2004, and $145 for the six months ended November 30, 2004. The reverse interest rate swap agreements are fair value hedges that convert $225 million of fixed rate debt to a floating rate. These agreements expire in 2007 and allow Cintas to receive an effective interest rate of 5.13% and pay an interest rate based on LIBOR. Because these fair value hedges are 100% effective, the $3 million unfavorable change in the fair value of these hedges for the three months ended November 30, 2004, and the net $2 million unfavorable change for the six months ended November 30, 2004, were directly offset by a decrease in the fair value of the debt.
Cintas has certain significant covenants related to debt agreements. These covenants limit Cintas’ ability to incur certain liens, to engage in sale-leaseback transactions and to merge, consolidate or sell all or substantially all of Cintas’ assets. These covenants also require Cintas to maintain certain debt to capitalization and interest coverage ratios. Cross default provisions exist between certain debt instruments. Cintas is in compliance with all of the significant debt covenants for all periods presented. Were a default of a significant covenant to occur, the default could result in an acceleration of indebtedness, impair liquidity and limit the ability to raise future capital. However, Cintas’ debt, net of cash and marketable securities, is only $119 million. For the six months ended November 30, 2004, alone, net cash provided by operating activities was $197 million. Capital expenditures were $74 million for the same period.
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6. Stock-Based Compensation
During the third quarter of fiscal 2003, Cintas adopted the disclosure requirements of FASB Statement No. 148, Accounting for Stock-Based Compensation — Transition and Disclosure, but will continue to apply Accounting Principles Board Opinion No. 25 as the method used to account for stock-based employee compensation arrangements. The following table illustrates the effect on net income and earnings per share as if the fair value based method had been applied to all outstanding and unvested awards in each period.
7. Comprehensive Income
Total comprehensive income represents the net change in shareholders’ equity during a period from sources other than transactions with shareholders and, as such, includes net earnings. For Cintas, the only components of total comprehensive income are the change in cumulative foreign currency translation adjustments and the change in the fair value forecasted cash flows associated with a derivative accounted for as a cash flow hedge. The components of comprehensive income for the three and six month periods ended November 30, 2004 and November 30, 2003 are as follows:
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8. Segment Information
Cintas classifies its businesses into two operating segments: Rentals and Other Services. The Rentals operating segment designs and manufactures corporate identity uniforms which it rents, along with entrance mats, shop towels, restroom supplies and other items, to its customers. The Other Services operating segment involves the design, manufacture and direct sale of uniforms to its customers, as well as the sale of ancillary products and services. These ancillary products and services include first aid and safety products and services, document management services and cleanroom supplies. All of these services are provided throughout the United States and Canada to businesses of all types — from small service and manufacturing companies to major corporations that employ thousands of people.
The $4,343 write-off of the loan receivable in the first quarter of fiscal 2004 has been included in the Corporate segment.
Information as to the operations of Cintas’ different business segments is set forth below based on the distribution of products and services offered. Cintas evaluates performances based on several factors of which the primary financial measures are business segment revenue and income before income taxes.
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9. Supplemental Guarantor Information
Effective June 1, 2000, Cintas reorganized its legal structure and created Cintas Corporation No. 2 (Corp. 2) as its indirectly, wholly-owned principal operating subsidiary. Cintas and its wholly-owned, direct and indirect domestic subsidiaries, other than Corp. 2, unconditionally guaranteed, jointly and severally, debt of Corp. 2.
On May 13, 2002, Cintas completed the acquisition of Omni Services, Inc. (Omni) for $656,071. The purchase price for Omni was funded with $450,000 in long-term notes, $100,000 of borrowings under a commercial paper program and $106,071 in cash. The $450,000 in long-term notes consists of $225,000 with five-year maturities at an interest rate of 5.125% and $225,000 with ten-year maturities at an interest rate of 6%. An additional working capital payment of $3,055 was made during the second quarter of fiscal 2003, bringing the total purchase price to $659,126. Corp. 2 was the issuer of the $450,000 long-term notes, which are unconditionally guaranteed, jointly and severally, by Cintas Corporation and the subsidiary guarantors.
As allowed by SEC rules, the following condensed consolidating financial statements are provided as an alternative to filing separate financial statements of the guarantors. Each of the subsidiaries presented in the condensed financial statements has been fully consolidated in Cintas’ financial statements. The condensed consolidating financial statements should be read in conjunction with the financial statements of Cintas and notes thereto of which this note is an integral part.
Condensed consolidating financial statements for Cintas, Corp. 2, the subsidiary guarantors and non-guarantors are presented below:
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CONDENSED CONSOLIDATED INCOME STATEMENTTHREE MONTHS ENDED NOVEMBER 30, 2004
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CONDENSED CONSOLIDATED INCOME STATEMENTTHREE MONTHS ENDED NOVEMBER 30, 2003
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CONDENSED CONSOLIDATED INCOME STATEMENTSIX MONTHS ENDED NOVEMBER 30, 2004
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CONDENSED CONSOLIDATED INCOME STATEMENTSIX MONTHS ENDED NOVEMBER 30, 2003
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CONDENSED CONSOLIDATED BALANCE SHEETAS OF NOVEMBER 30, 2004
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CONDENSED CONSOLIDATED BALANCE SHEETAS OF MAY 31, 2004
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CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWSSIX MONTHS ENDED NOVEMBER 30, 2004
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CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWSSIX MONTHS ENDED NOVEMBER 30, 2003
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CINTAS CORPORATION ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
BUSINESS STRATEGY
We are North America’s leading provider of corporate identity uniforms through rental and sales programs, as well as related business services, including entrance mats, restroom products, first aid and safety products and services, document management services and cleanroom services. Our services are designed to enhance our customers’ images and to provide additional safety and protection in the workplace.
Our business strategy is to increase our market share of the uniform rental and sales business in North America through the sale of new uniform programs and to provide our customers with all of the products and services we offer. We will also continue to identify additional product and service opportunities to provide to our current and future customers. Our long-term goal is to provide a product or service to every business in North America.
To pursue this strategy, we focus on the development of a highly talented and diverse team of employees (who we call partners) – a team that is properly trained and motivated to service our customers. We support our partners’ service efforts by providing superior products with distinct competitive advantages and we embrace technological advances.
We continue to leverage our size and core competencies to become a more valued business service provider to our current and future customers. We will also continue to supplement our internal growth with strategic acquisitions and the cultivation of new businesses.
RESULTS OF OPERATIONS
Cintas classifies its businesses into two operating segments: Rentals and Other Services. The Rentals operating segment designs and manufactures corporate identity uniforms which it rents, along with mats, shop towels, restroom supplies and other items, to its customers. The Other Services operating segment involves the design, manufacture and direct sale of uniforms to customers as well as the sale of ancillary products and services. These ancillary products and services include first aid and safety products and services, document management services and cleanroom supplies. Our products and services are provided throughout the United States and Canada to businesses of all types — from small service and manufacturing companies to major corporations that employ thousands of people.
Revenue, Expenses and Income
Revenue Comparison
Total revenue increased 8% for the three months ended November 30, 2004, over the same period in fiscal 2004. Internal growth for this period was 5%. The remaining 3% represents external growth derived mainly through the acquisitions of first aid and safety and document management businesses within our Other Services segment.
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Net Rentals revenue increased 6% for the three months ended November 30, 2004, over the same period in the prior fiscal year. Rentals operating segment internal growth for the second quarter of fiscal 2005 was 6% as compared to the three months ended November 30, 2003. This increase is primarily due to the sale of new rental programs to new customers as well as the continued penetration of ancillary products into our existing customer base. This Rentals revenue growth is net of any lost business.
Other Services revenue increased 13% for the three months ended November 30, 2004, over the same period in the prior year. This increase was mainly due to a combination of acquisitions of first aid and safety service and document management businesses. Other Services operating segment internal growth for the second quarter of fiscal 2005 was 2% as compared to the three months ended November 30, 2003. This internal growth was generated by increased sales of first aid and safety products and services to new and existing customers.
Expense Comparison
Cost of rentals consists primarily of production expenses, delivery expenses and amortization of in service uniforms and other rental items. Cost of rentals increased 6% for the three months ended November 30, 2004, as compared to the three months ended November 30, 2003, which corresponds to the growth in Rentals revenue. Energy costs increased 30 basis points for this period; however, other efficiencies offset this increase.
Cost of other services consists primarily of cost of goods sold (predominantly uniforms and first aid products), delivery expenses and distribution expenses. Cost of other services increased 15% for the three months ended November 30, 2004, as compared to the three months ended November 30, 2003. This increase was mainly due to the increased sales in this segment. The cost of other services increased greater than the growth in segment sales due to customer sales mix. Gross margin within this segment will fluctuate depending on the type of product or service sold, as products which require additional services generate higher gross margins. Generally, the gross margin for Other Services is in the 30% to 35% range. The current quarter’s gross margin is 32%, which is well within that range.
Selling and administrative expenses increased 10% for the three months ended November 30, 2004, as compared to the three months ended November 30, 2003. Selling and administrative expenses increased mainly due to selling expenses. In order to accelerate revenue growth, we have increased our sales force by approximately 10% over the last year and also increased marketing and sales promotions. These measures combined to increase our selling costs by approximately $10 million over the prior year. The cost of providing medical benefits to our employees also increased $4 million.
We anticipate a continued rise in energy and labor-related costs.
Net interest expense (interest expense less interest income) was $5 million for the three months ended November 30, 2004, compared to $6 million for the same period in the prior fiscal year. This decrease was primarily a result of lower outstanding debt levels as compared to the prior year.
Cintas’ effective tax rate was 37.0% for both the three months ended November 30, 2004 and November 30, 2003.
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Income Comparison
Net income increased 6% for the three months ended November 30, 2004, over the same period in fiscal 2004, primarily due to revenue growth. Diluted earnings per share increased 8% for the three months ended November 30, 2004, over the same period in the prior fiscal year.
Total revenue increased 9% for the six months ended November 30, 2004, over the same period in fiscal 2004. Internal growth for this period was 6%. (When adjusted for the additional workday for the six months ended November 30, 2004, internal growth was 5% over the prior year.) The remaining 3% increase represents external growth derived mainly through the acquisitions of first aid and safety and document management businesses within our Other Services segment.
Net Rentals revenue increased 7% for the six months ended November 30, 2004, over the same period in the prior fiscal year. Rentals operating segment internal growth was also 7%. (When adjusted for the additional workday for the six months ended November 30, 2004, Rentals internal growth was 6%.) This increase is primarily due to the sale of new rental programs to new customers and the continued penetration of ancillary products into our existing customer base. Rentals revenue growth was negatively impacted by lost business.
Other Services revenue increased 16% for the six months ended November 30, 2004, over the same period in the prior year. This increase was mainly due to a combination of acquisitions of first aid and safety service and document management businesses. Other Services operating segment internal growth through the second quarter of fiscal 2005 was 4% as compared to the six months ended November 30, 2003. This internal growth was generated by increased sales of first aid and safety products and services to new and existing customers.
Cost of rentals consists primarily of production expenses, delivery expenses and amortization of in service uniforms and other rental items. Cost of rentals increased 6% for the six months ended November 30, 2004, as compared to the six months ended November 30, 2003, which corresponds to the growth in Rentals revenue. Energy costs increased 25 basis points for this period; however, other efficiencies offset this increase.
Cost of other services consists primarily of cost of goods sold (predominantly uniforms and first aid products), delivery expenses and distribution expenses. Cost of other services increased 17% for the six months ended November 30, 2004, as compared to the six months ended November 30, 2003. This increase was mainly due to the increased sales in this segment. The cost of other services increased greater than the growth in segment sales due to customer sales mix. Gross margin within this segment will fluctuate depending on the type of product or service sold, as products which require additional services generate higher gross margins. Generally, the gross margin for Other Services is in the 30% to 35% range. This period’s gross margin was 33%, which is well within that range.
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Selling and administrative expenses increased 11% for the six months ended November 30, 2004, as compared to the six months ended November 30, 2003. Selling and administrative expenses increased mainly due to selling expenses. In order to accelerate revenue growth, we have increased our sales force by approximately 10% over the last year and also increased marketing and sales promotions. These measures combined to increase our selling costs by approximately $20 million over the prior year. The cost of providing medical benefits to our employees also increased $8 million.
Net interest expense (interest expense less interest income) was $9 million for the six months ended November 30, 2004, compared to $12 million for the same period in the prior fiscal year. This decrease was primarily a result of lower outstanding debt levels as compared to the prior year.
Cintas’ effective tax rate was 37.0% for both the six months ended November 30, 2004 and November 30, 2003.
Included in net income for the first quarter of fiscal 2004 was a pre-tax charge of $4.3 million from a write-off of a receivable from a garment manufacturer. Based on concerns on the supplier’s viability to remain as a going concern, the receivable was completely written off.
Net income increased 10% for the six months ended November 30, 2004, over the same period in fiscal 2004, primarily due to increased revenues. Diluted earnings per share increased 10% for the six months ended November 30, 2004, over the same period in the prior fiscal year.
Financial Condition
At November 30, 2004, there was $356 million in cash, cash equivalents and marketable securities, an increase of $102 million from May 31, 2004, primarily due to additional cash generation from increased operating income. Capital expenditures were $74 million for the six months ended November 30, 2004, and we expect capital expenditures for the year to be between $140 and $160 million. Cash, cash equivalents and marketable securities will be used to finance future growth, capital expenditures, repayment of debt and dividends. Cintas also has additional borrowing capacity for use in future acquisitions. We believe that our current cash position, funds generated from operations and the strength of our banking relationships are sufficient to meet our anticipated operational and capital requirements.
Net property and equipment increased by $15 million from May 31, 2004 to November 30, 2004, due to continued investment in rental facilities and equipment. At the end of the second quarter of fiscal 2005, Cintas had four uniform rental facilities in various stages of construction.
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Following is information regarding Cintas’ long-term contractual obligations and other commitments outstanding as of November 30, 2004:
Cintas also makes payments to defined contribution plans. The amounts of contributions made to the plans are made at the discretion of Cintas. Future contributions are assumed to increase 15% annually. Assuming this 15% increase, payments due in one year or less would be $26,697, two to three years would be $66,009 and four to five years would be $87,297. Payments for years thereafter are assumed to continue increasing by 15% each year.
Cintas has no off-balance sheet arrangements other than the synthetic leases on the two corporate jets. The synthetic leases on the aircraft do not currently have, and are not reasonably likely to have, a current or future material effect on Cintas’ financial condition, changes in Cintas’ financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
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Litigation and Other Contingencies
Cintas is subject to legal proceedings and claims arising from the ordinary course of its business, including personal injury, customer contract, environmental and employment claims. In the opinion of management, the aggregate liability, if any, with respect to such ordinary course of business actions, will not have a material adverse effect on the financial position or results of operations of Cintas. Cintas is party to additional litigation not considered in the ordinary course of business, including the litigation discussed below.
Cintas is a defendant in a purported class action lawsuit, Paul Veliz, et al., v. Cintas Corporation, filed on March 19, 2003, in the United States District Court, Northern District of California, Oakland Division, alleging that Cintas violated certain federal and state wage and hour laws applicable to its service sales representatives, whom Cintas considers exempt employees, and asserting additional related ERISA claims. The plaintiffs are seeking unspecified monetary damages, injunctive relief, or both. Cintas denies these claims and is defending the plaintiffs’ allegations. The court ordered arbitration for all potential plaintiffs except for those that fall into one of four narrowly defined exceptions. As a result, Cintas believes that a majority of the potential plaintiffs will be required to arbitrate their claims. No determination has been made by the court or an arbitrator regarding class certification. There can be no assurance as to whether a class will be certified or, if a class is certified, as to the geographic or other scope of such class. If a court or arbitrator certifies a class in this action and there is an adverse verdict on the merits, or in the event of a negotiated settlement of the action, the resulting liability and/or any increased costs of operations on an ongoing basis could be material to Cintas. Any estimated liability relating to this lawsuit is not determinable at this time.
Cintas is also a defendant in a purported class action lawsuit, Robert Ramirez, et al., v. Cintas Corporation, filed on January 20, 2004, and pending in the United States District Court, Northern District of California, San Francisco Division. The case was brought on behalf of all past and present female, African-American and Hispanic employees of Cintas and its subsidiaries. The complaint alleges that Cintas has engaged in a pattern and practice of discriminating against women and minorities in recruitment, hiring, promotions, transfers, job assignments and pay. The complaint seeks injunctive relief, compensatory damages, punitive damages and attorney’s fees, among other things. Cintas denies these claims and is defending the plaintiffs’ allegations. No filings or determination has been made as to class certification. There can be no assurance as to whether a class will be certified or, if a class is certified, as to the geographic or other scope of such class. If a court certifies a class in this action and there is an adverse verdict on the merits, or in the event of a negotiated settlement of the action, the resulting liability and/or any increased costs of operations on an ongoing basis could be material to Cintas. Any estimated liability relating to this lawsuit is not determinable at this time.
Cintas is also a defendant in a lawsuit, J. Lester Alexander, III vs. Cintas Corp., et al., which was originally filed on October 25, 2004, and is currently pending in the United States Bankruptcy Court for the Middle District of Alabama, Eastern Division. The case was brought by J. Lester Alexander, III, the Chapter 7 Trustee (the “Trustee”) of Terry Manufacturing Company, Inc. (“TMC”) and Terry Uniform Company, LLC (“TUC”), against Cintas in Randolph County, Alabama. The Trustee seeks damages against Cintas for allegedly breaching fiduciary duties to TMC and TUC and for allegedly aiding and abetting breaches of fiduciary duties by others to those entities. The complaint also includes allegations that Cintas breached certain limited liability company agreements, or alternatively, misrepresented their intention to perform their obligations in those agreements and acted as alter egos of the bankrupt TMC and are therefore liable for all of TMC’s debts. The Trustee is seeking $50 million in compensatory damages and $100 million in punitive damages. Cintas denies these claims and is vigorously defending itself against all claims in the complaint. If there is an adverse verdict on the merits or in the event of a negotiated settlement of this lawsuit, the resulting liability could be material to Cintas. Any estimated liability relating to this lawsuit is not determinable at this time.
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The litigation discussed above, if decided adversely to or settled by Cintas, may, individually or in the aggregate, result in liability material to Cintas’ financial condition or results of operations. Cintas may enter into discussions regarding settlement of these and other lawsuits, and may enter into settlement agreements if it believes such settlement is in the best interests of Cintas’ shareholders.
ITEM 3.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
In our normal operations, Cintas has market risk exposure to interest rates. There has been no significant change in our exposure to these risks, which has been previously disclosed on page 47 of our most recent annual report.
ITEM 4.
CONTROLS AND PROCEDURES.
An evaluation was completed under the supervision and with the participation of Cintas’ management, including Cintas’ President and Chief Executive Officer, Chief Financial Officer, General Counsel and Controllers, of the effectiveness of the design and operation of Cintas’ disclosure controls and procedures as of November 30, 2004. Based on these evaluations, Cintas’ management, including the President and Chief Executive Officer, Chief Financial Officer, General Counsel and Controllers, concluded that Cintas’ disclosure controls and procedures were effective as of November 30, 2004. There has been no change to Cintas’ internal control over financial reporting that occurred during the second quarter of fiscal 2005 that has materially affected, or is reasonably likely to materially affect, Cintas’ internal control over financial reporting.
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, projects, plans, expects, intends, believes, should and similar 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. These statements are subject to various risks, uncertainties and other factors that could cause actual results to differ from those set forth in this report. 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, costs and possible effects of union organizing activities, outcome of pending environmental matters, the cost, results and timely completion of assessment and remediation of internal controls for financial reporting required by the Sarbanes-Oxley Act of 2002, the initiation or outcome of litigation, higher assumed sourcing or distribution costs of products and the reactions of competitors in terms of price and service. Cintas undertakes no obligation to update any forward-looking statements to reflect the events or circumstances arising after the date on which they are made.
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Part II. Other Information
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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.
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