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Company Name: Cintas Corp.

Company Ticker: CTAS US Date: 2011-07-19 Event Description: Q4 2011 Earnings Call

Market Cap: 4,484.06 Current PX: 30.86 YTD Change($): +2.90 YTD Change(%): +10.372

Bloomberg Estimates - EPS Current Quarter: 0.443 Current Year: 1.824 Bloomberg Estimates - Sales Current Quarter: 883.000 Current Year: 3803.429

Q4 2011 Earnings Call Company Participants
• William Clifton Gale • J. Michael Hansen

Other Participants
• • • • • • • • • Sara Gubins James Samford Gary E. Bisbee Andrew C. Steinerman Scott A. Schneeberger John Healy Shlomo H. Rosenbaum Greg W. Halter Justin P. Hauke

Good day, everyone, and welcome to the Cintas Quarterly Earnings Results Conference Call. Today's call is being recorded. At this time, I would like to turn the call over to Mr. Bill Gale, Senior Vice President of Finance and Chief Financial Officer. Please go ahead, sir.

William Clifton Gale
Thank you for joining us this evening to report our fourth quarter results for fiscal 2011. With me is Mike Hansen, Cintas' Vice President and Treasurer. After some commentary on the results, we will be happy to answer questions. We are pleased to report that our revenue for the fourth quarter grew 11.3% from last year's fourth quarter to a record revenue of $1.012 billion. Net income increased by 27.6% to $70.8 million and earnings per share were $0.49, a 36% increase over last year. As noted in the release, total year revenue of over $3.8 billion was 7.4% higher than last year and total earnings per share of $1.68 was 20% higher. Stabilization of revenue at existing customers, excellent new business results and cost control measures as well as improved productivity within our organization were all factors in these very good results. We want to express our sincere appreciation to all of our employees, who we call our partners for their contribution to this successful year. On May 18, we issued $500 million of public debt spread in two tranches, $250 million with a five-year maturity and the other at 10 years. We found the rates to be very attractive and demand was strong for our bonds. Given the price of our stock and the positive outlook for our company's performance, our Board of Directors authorized management to use these funds to pay-off short-term debt and to purchase Cintas stock under parameters established by the board. The $500 million expenditure resulted in total purchases of 15.8 million shares, of which 7.7 million shares were purchased as of May 31 and the remaining 8.1 million shares were purchased between June 1 and July 6.

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484. energy and oil related products such as polyester. 66 in the first quarter. Page 2 of 15 . The Private Securities Litigation Reform Act of 1995 provides a safe harbor from civil litigation for forward-looking statements. we expect that the North American economy and employment picture will moderately improve in the next 12 months. Let me address some assumptions used in developing this guidance. but has declined significantly in recent months. the cotton impact could be heavier in our fiscal 2013 by an amount around $5 million. While this will create some margin pressure for Cintas and our competitors. We also believe that the improved environment will lead us to being able to obtain higher prices for our services. J. We expect that we and other companies in industries in which we operate could face input cost headwinds in the next 12 months. As many of you know. And as mentioned. As Bill mentioned. please note that there were 66 work days in our fourth quarter.Sales Current Quarter: 883. which equates to about $0. The impact of the share purchases in fiscal 2011 added about $0.05. sourcing decisions and manufacturing lead times. Michael Hansen Thank you and good evening. However as noted. many factors contribute to the cotton impact and we will continue to monitor and analyze this throughout fiscal 2012.86 YTD Change($): +2.05 to our earnings per share from what we would have reported with no share purchases. certainly the price of cotton but also Cintas' fabric inventory. as well as amortization periods of in-service inventory and the overall uniform industry pricing environment. We expect that the fiscal 2012 impact will be less than $15 million on our cost of rentals and other services. Total company gross margin for the fourth quarter was 42. we expect the margin pressure will also ease the extremely aggressive pricing environment that we have experienced over the last several years. I would like to turn the call over to Mike Hansen for more details on the fourth quarter.12 a share when also factoring in the additional interest expense from the debt offering in May. our work days will be as follows. While recent economic news including the Bureau of Labor announcements for May and June were not as bright as we would like. particularly related to cotton.824 Bloomberg Estimates . 65 in the third quarter and 66 in the fourth quarter for a total of 262 work days in fiscal 2012. This conference call contains forward-looking statements that reflect the company's current views as to future events and financial performance.06 Current PX: 30. These forward-looking statements are subject to risks and uncertainties. Our guidance for fiscal 2012 revenue is to be in the range of $4 billion to $4. This guidance incorporates the impact of the recently completed $500 million share buyback program.372 Bloomberg Estimates .4 million shares since last July.5% of sales.000 Current Year: 3803. the price of cotton significantly increased last fall and has remained at relatively high levels. which is the same as last year. Many factors contribute to the effect that cotton has on Cintas. Cintas purchased 23. As a planning note for fiscal 2012. I refer you to the discussion on these points contained in our most recent filings with the SEC.1 billion and earnings per diluted share to be in the range of $1. These rising input costs will add negative pressure to our industry's costs. Due to the amortizing effect of in-service inventory. We have been managing and analyzing each of these areas to minimize the impact on our results.90 YTD Change(%): +10. Before providing you with details about Cintas' fourth quarter performance. which is up from last year's fourth quarter gross margin of 42. Company Ticker: CTAS US Date: 2011-07-19 Event Description: Q4 2011 Earnings Call Market Cap: 4.Company Name: Cintas Corp. as well as finished goods inventory levels.3% from the fourth quarter of last year with total company organic growth being 8%.443 Current Year: 1.4%. 65 in the second quarter. we have assumed that energy related costs would continue at our fourth quarter level of 3. which could cause actual results to differ materially from those we may discuss. This was the highest level we have seen since our fiscal 2009.429 Coupled with the share purchases made earlier in fiscal 2011. More specifically for our guidance.97 to $2. this impact is incorporated into our guidance. Now. total revenue increased 11.EPS Current Quarter: 0.8%.

and fire protection products. dust control which is mainly entrance mats accounted for 20%. Rental revenue was $711. Sales rep productivity particularly as it relates to new accounts continued to be strong and our new business sold during the fourth quarter was up over 20% compared to last year's fourth quarter.1 million represents an increase of 5. While we are pleased with our new account performance and increases in wears.9% for the fourth quarter.7% for the fourth quarter. Shop towel revenue was 6%. safety products and training.7% compared to last year's fourth quarter. based on our fourth quarter revenue levels. Organic growth was also 5. We are pleased with our revenue momentum in this business. mats. Rental uniforms and ancillary products revenue accounted for 70% of company revenue in the fourth quarter. a very solid improvement over last year's fourth quarter gross Page 3 of 15 .7%. Sales rep productivity particularly in the first aid and safety side continued to be strong in our fourth quarter. The improvement from the third quarter is primarily due to better capacity utilization at our distribution centers due to the higher volumes. Company Ticker: CTAS US Date: 2011-07-19 Event Description: Q4 2011 Earnings Call Market Cap: 4. and Document Management Services. including products sold to rental customers through our direct sale catalog.9 million for the quarter.000 Current Year: 3803. an increase of 13. first Aid. revenues within this operating segment were $99. Uniform Direct Sales gross margin was 30. Safety and Fire Protection Services operating segment includes revenue from the sale and servicing of first aid products. 9. and other related products to national and regional customers.824 Bloomberg Estimates . Organic growth was 9. Our First Aid.6% for the fourth quarter.86 YTD Change($): +2. This segment also includes restroom supplies and other facility products and services.Sales Current Quarter: 883. During the quarter. uniform rental accounted for approximately 51% of the revenue. Within rental. Improved capacity utilization from higher volumes more than offset the higher energy-related costs and higher material costs due to the injection of in-service inventory associated with new accounts. branded promotional products.06 Current PX: 30.5%. Organic growth was 7.6 million. Fourth quarter revenue of $109.372 Bloomberg Estimates .443 Current Year: 1. we noted no significant changes in the pricing environment. Our rental segment gross margin was 43.2% over last year. we have yet to see impactful hiring within existing customers. During the fourth quarter. The add-on wears associated with hiring at existing customers allows us to take advantage of our stock room inventories.4%. Our Uniform Direct Sales operating segment includes the direct sale of uniforms.3% and 9. which is mainly non-person specific garments. The rental uniforms and ancillary products operating segment consists of the rental and servicing of uniforms. although pricing at contract renewal and for large national accounts remained very competitive. and Document Management Services are combined and presented as Other Services on the face of the income statement.Company Name: Cintas Corp.90 YTD Change(%): +10. and linen and other. such as aprons and butcher coats was 11%.5%. an improvement of 10 basis points over last year's fourth quarter gross margin of 43. We are pleased with the increase in uniform wears and the growth generated by our newer product lines.9% compared to last year's fourth quarter.429 We have four reportable operating segments: Rental Uniforms and Ancillary Products. Uniform Direct Sales.484.7%. uniform Direct Sales. This segment's gross margin was 41. we expect the current input cost pressures faced by competitors and us to result in some easing of the pricing pressures and in fact will likely lead us and our competitors to increase prices in the coming fiscal year. towels and other related items.3%. Uniforms and other related products are also sold to local customers.7%.4% versus last year's fourth quarter.EPS Current Quarter: 0. First Aid Safety and Fire Protection Services. First Aid. Safety and Fire Protection revenue accounted for 10% of company revenue in the fourth quarter. which is an improvement from last quarter's organic growth of 4. which is relatively consistent with last year's fourth quarter gross margin of 31% and an improvement from the third quarter gross margin of 29. Uniform Direct Sales revenue accounted for 11% of company revenue in the fourth quarter. which is up 9. Hygiene. which is mainly restroom supply and cleaning was 12%. Safety and Fire Protection Services. As Bill noted though. Energy-related costs were 20 basis points higher than last year. as organic growth for the last three quarters has been 8.

5%. Within Document Management. The growing revenue this year has resulted in increased accounts receivable and inventory levels compared to last year. If we would have completed the share buybacks by May 31. And was largely due to better capacity utilization due to higher volumes. Because the recycled paper prices are so high.3%.90 YTD Change(%): +10.1%. Revenue increased 29.4% is an improvement over the 49. a decrease from last year's 53%.4%. In addition. Uniforms and other rental items in service increased by $19. This improvement was equally strong in both First Aid and Safety and in Fire Protection Services.8 million from February 28 to May 31 due to the higher volume levels throughout the fourth quarter. Total debt was two times fiscal '11 EBITDA and as a percentage of total book capitalization was 36%. storage. For the full fiscal year – for the full fiscal 2011 year. our flame-resistant clothing line and our women's wear. Accrued liabilities increased $22 million compared to February 28. Our cash and marketable securities were $525. primarily because of the higher revenue levels. pricing for service has been very competitive. but the same as at May 31. Accounts receivables increased by $12. As mentioned earlier. which is consistent with the $132.372 Bloomberg Estimates .8 million since February 28. Document Management's gross margin for the fourth quarter was 51.3% during the fourth quarter. DSOs on accounts receivable was 42. keep in mind that $259.1%.484.4% in this year's third quarter. While net debt or long-term debt less cash and marketable securities as a percentage of total capitalization was 25%.9 million was used in June and July to purchase shares of Cintas stock.824 Bloomberg Estimates . As discussed.5 million of cash and marketable securities was used to purchase shares of Cintas' stock in June and July. our average rate on the outstanding debt is 5.2% last year.9 million.000 Current Year: 3803. Page 4 of 15 . organic growth was 11. The SAP system has been performing as expected. The improvement also came despite a 40 basis point increase in energy related costs compared to last year.5% for the quarter.3 million at May 31. and imaging services. the European business accounted for 13% of total segment revenues during the fourth quarter. Administrative expenses as a percent of total revenue also decreased due to cost control initiatives and lower medical expenses. while the net debt-to-capitalization would have been 33%. We expect to see inventory levels decrease in fiscal 2012. Document Management accounted for 9% of fourth quarter total company revenue. Company Ticker: CTAS US Date: 2011-07-19 Event Description: Q4 2011 Earnings Call Market Cap: 4.7 million. up $17. New goods inventory at May 31 was $249. $259. 2010.EPS Current Quarter: 0. Long-term debt at May 31 was $1. compared to 38. cash provided by operating activities in the fourth quarter was $132.5% in last year's fourth quarter. As expected.Sales Current Quarter: 883.4 million from last year's fourth quarter.86 YTD Change($): +2.3 billion.06 Current PX: 30. particularly related to new accounts has driven the higher injection of in-service inventory. a decrease from 31. Energy-related costs increased by 60 basis points compared to last year. Recycled paper prices increased throughout the quarter and contributed to the organic growth rate. The fourth quarter gross margin of 51. due to $12 million of accrued bond interest and $9 million of accrued profit sharing.6 million with organic growth of 16.443 Current Year: 1.5% over last year's fourth quarter to $91. We expect our effective tax rate for fiscal 2012 to be approximately 37.Company Name: Cintas Corp. but we also took a more cautious approach to our inventory levels during the quarter to ensure that all of our customer needs were met. our improved sales productivity. As mentioned in the press release. our debt-to-capitalization would have been 39%.1% of revenue. These start-ups are running as planned but do have a drag on overall gross margins in the early stages. Moving to selling and administrative expenses.4 million from February 28. the fourth quarter consolidated selling and administrative expenses were 30. Moving on to cash flow. Excluding recycled paper revenue.4%. our effective tax rate was 37. up from 40 at February 28. Our Document Management Services operating segment includes document destruction. This increase is mainly due to the higher demand levels particularly in our Carhartt program. Our effective tax rate was 39. our storage business had several Greenfield starts earlier this fiscal year. Turning now to the balance sheet. which builds throughout the fiscal year. our selling expenses continue to be lower as a percent of total revenue due to greater rep productivity.429 margin of 39.

Page 5 of 15 . Sara.90 YTD Change(%): +10. they're not reducing head count like they were last year.372 Bloomberg Estimates .Sara Gubins>: Hi.6 million shares. as of right now would be even better.484. at the end of the year or as of right now? <Q . they're really telling us much of what their plans are. Our next question comes from James Samford with Citi. We saw stabilization in our existing customers within the last couple of quarters.William Clifton Gale>: Yeah. thanks. we're certainly anticipating some improved productivity within our sales organization.1 million in Document Management. Our CapEx by operating segment was as follows: $25. Sara. Operator Thank you.429 CapEx for the fourth quarter was $40. The net of the two figures is the $500 million.William Clifton Gale>: Yeah. And then.Sara Gubins>: Actually. generally speaking.3 million. and we will now take any of your questions. It's about 129. The good news though of course is. <Q .J. it's about 130 million shares. So we're hoping that perhaps once confidence builds that we'll begin to see some hiring at existing customers.William Clifton Gale>: Well. that will result in a lower SG&A as a percent of revenue and that's embedded in our guidance. could you talk about what their. Company Ticker: CTAS US Date: 2011-07-19 Event Description: Q4 2011 Earnings Call Market Cap: 4. Michael Hansen>: Good afternoon. $4.Sara Gubins>: Great. <A . You may notice that our cash flow statement shows proceeds from issuance of debt of slightly over $1 billion and repayment of debt of $502 million.William Clifton Gale>: Good afternoon.2 million in First Aid. So we're thinking that trend will continue. slightly less than $1 million in Uniform Direct Sales. <Q .000 Current Year: 3803. and I can just tell you from reading what you read in the public domain and it seems like most businesses are cautious in adding new employees.Sara Gubins>: Great. just like – no. which represents the financing that we completed in May. could you give us share count at the end of the year? <A . And then just last question. Therefore. Thanks a lot. Please go ahead.2 million in rental.06 Current PX: 30. I'm not sure. <Q . how the discussions with them are going around the next couple of months and into the fall? <A . And we certainly have seen that with our customers over the last couple of quarters.Company Name: Cintas Corp. good afternoon.Sara Gubins>: You mentioned seeing stabilization at existing clients.William Clifton Gale>: Well. We expect CapEx for fiscal 2012 to be relatively consistent with fiscal 2011 and in the range of $180 million to $200 million. <A .443 Current Year: 1.824 Bloomberg Estimates . Keep in mind that accounting guidance requires us to separately show the ins and outs of commercial paper activity. <Q . [Operator Instructions] Our first question comes from Sara Gubins with Bank of America. Please go ahead. I'm hoping to get some more detail within the guidance for next year about how you're thinking about SG&A? How much more room there is for rep productivity? <A . <Q . We had a very good year this year with improved productivity. <A . Q&A Operator Thank you.86 YTD Change($): +2.Sara Gubins>: Okay. Safety and Fire Protection and $10. That concludes our prepared remarks.Sales Current Quarter: 883.EPS Current Quarter: 0.

but sort of 14%.James Samford>: Okay. We haven't seen any impact from that. <Q . I would say that our loss business rates have improved from what we were seeing in late fiscal '09 and '10. And then shop towels and linen up significantly. Company Ticker: CTAS US Date: 2011-07-19 Event Description: Q4 2011 Earnings Call Market Cap: 4. guys.James Samford>: Pre-tax. Thanks.Gary E. in rentals in terms of the change versus last quarter. is that math correct? <A . I'd say that what's driving it are three factors. We had very nice growth among all our products including the rentals. thanks for taking my question. <A .443 Current Year: 1. It sort of indicates 1% revenue growth. it looks like the uniform rental segment really didn't grow. Michael Hansen>: And certainly the. generally speaking.86 YTD Change($): +2. Bisbee>: And maybe I'm being a little cute with the numbers.William Clifton Gale>: Well.484. we've seen improving organic growth all year. but the last few years in the fourth quarter. Just. Gary.000 Current Year: 3803. Bisbee>: Two surprises. Michael Hansen>: Well.EPS Current Quarter: 0. So I think it's just a rounding issue. the one thing to keep in mind James is that we do have the extra interest from our $500 million in debt. now that we have the share count for potentially for next year. have been remaining stable. <Q . <A .James Samford>: Got it. Now maybe that's just. The Carhartt business.J.James Samford>: Okay. Great quarter. Congratulations on. the women's wear garments.429 <Q . the organic growth. So we've gotten a broad increase throughout that product line. keep in mind Gary. And finally. Gary. <Q . 15% for hygiene and dust control actually down a little bit. When I plug those percentages in versus the percentages you gave a year ago. So there is margin expansion if you look at the EBIT levels. I guess. Please go ahead. If I can ask about the first of those. Perfect. I'll hop back in the queue. <Q .William Clifton Gale>: Pre-tax. the tile and carpet.06 Current PX: 30.90 YTD Change(%): +10. Every quarter has been a little bit better. you've given that mix of business generically within rentals. Does that how -? <A . And anticipated interest expense I guess is the other question I could ask for that? <A . First off. as we've seen the last couple quarters existing customers.824 Bloomberg Estimates .Company Name: Cintas Corp. Page 6 of 15 . the organic growth and the buyback. some of our newer products and services are helping.372 Bloomberg Estimates . What exactly is going on there? Is it really the new sales activity and if so. Bisbee>: Hi. <Q . it was particularly strong. Can you help us understand at all. Our next question comes from Gary Bisbee with Barclays Capital. we've got the prospects being more willing to take on the new program. tougher comp. too. you did give us rounded numbers.James Samford>: Hey. Have you guys been seeing any additional impact? I know we have another quarter behind us from Japan in terms of other manufacturing? <A . can you give us some examples of maybe the types of accounts you're signing up or sort of what – how that's going so well? <A .Sales Current Quarter: 883.William Clifton Gale>: No. <Q . <A . I guess. <Q . So we haven't had the drag from them reducing head count.Gary E.J. <Q . Third. we've been selective in selling business at good prices and making sure that – it's good profitable business and I think that's helped. Not really. I guess. it seems to me that implies almost no margin expansion in the – for the full year. Operator Thank you. our chemical business.William Clifton Gale>: It's about $20 million. against what looks like a somewhat I guess. Secondly.William Clifton Gale>: I think that's all it is.Gary E. Bisbee>: Okay. within that rental business our new.Gary E.William Clifton Gale>: Thanks.

So it is an expectation that we're going to see that happening generally across the industry.Andrew C. We are just cautiously optimistic that we'll see some improvement. obviously. and we're going to have to make sure that they would make sense for our shareholders. We've been saying that for the last several quarters. I think will result in a firming of pricing going forward. and it's pretty well proved out what our expectations were. But that will be decided at the – I'm sure the next couple of board meetings. Andrew.5 generically for the year? <A . But it's not going to be robust.William Clifton Gale>: If any acquisitions do come to the table. Bisbee>: Okay. Steinerman>: I want to talk about the share buyback.Andrew C. <Q . it just means that we felt that this was an opportune time to take advantage of what we thought were good debt markets and an attractive value of our stock.Gary E.429 <Q .824 Bloomberg Estimates . and obviously the choice of cash has been share buyback? <A . Operator Thank you.Gary E. we still expect we think nice organic growth. it was pretty massive. which we did not see.William Clifton Gale>: It's almost all organic. Steinerman>: Right. but they're going to have to meet our hurdle rates. How do you have confidence in that? Thank you. is that something you're expecting to help offset some of the commodity cost. what's your proclivity to doing additional share buybacks meaning authorizations. My question is. <A .372 Bloomberg Estimates . All right. Company Ticker: CTAS US Date: 2011-07-19 Event Description: Q4 2011 Earnings Call Market Cap: 4.90 YTD Change(%): +10.William Clifton Gale>: Well. Bisbee>: Okay. Steinerman>: Okay.Gary E.Andrew C.William Clifton Gale>: The answer to your question. <Q . And our next question comes from Andrew Steinerman with JPMorgan.06 Current PX: 30. And Bill my other question was.William Clifton Gale>: Hi. Thanks a lot.484. So – but even with a very modestly improving economy.86 YTD Change($): +2. And I am sure if they were inclined to do so they may provide us with another authorization and parameters on which to execute that. I guess the revenue growth guidance looks like it's 5 to 7. I'd say that actions give you some indication of what we thought was the best use of our cash and our debt capacity at this time. We've got a little bit of carryover effect from the acquisitions that we made this year. is that is going to be certainly a topic of discussion at our board. And I know they will review the success that we had of this program. Please go ahead. <Q .EPS Current Quarter: 0. We do not have any anticipated acquisitions in there. I would. <A . And we're not real bullish on the economy. we will certainly look at them. Bill and Mike. <Q .Andrew C.Gary E.William Clifton Gale>: Right. <A . <Q . So.. What we accomplished this year. and I think you said. <Q .William Clifton Gale>: Well. And then I was curious about the comment that you're confident that pricing will firm. we have confidence in it because I think the impact of these higher costs in commodities and some of the comments that have been made by some of the competitors in that they are going to have to do something with pricing to offset those cost increases because they're seeing margin deterioration.443 Current Year: 1. will and not has. but they have seen. does it speak to anything about acquisitions? What's the company's proclivity towards acquisitions. which is almost $700 million of buybacks this fiscal year. <Q .Company Name: Cintas Corp.000 Current Year: 3803. And does the large share buyback indicate anything about activity around acquisitions? <A . Gary. And that doesn't mean that we are out of the acquisition game. Steinerman>: Hi.Sales Current Quarter: 883. Bisbee>: Any willingness to comment on organic? Is that mostly organic at this point? <A . But the bulk of that is organic growth. Bisbee>: And then just one last one if I could.. Page 7 of 15 .

Our next question comes from Scott Schneeberger with Oppenheimer. So because we have that amortization affect. As it relates to the different factors. Schneeberger>: Thanks. <Q . There is a lot that can happen in the next 12 months and particularly as it relates to cotton yields. Operator Thank you. when we look at it. <A . Okay. you guys are anticipating a gradual improvement in the economy. did you calculate if flat from here. <Q .Scott A. Thank you very much.William Clifton Gale>: Thanks. the demand for cotton. Schneeberger>: Thanks. And I think we have shown some success in that regard over the last several quarters. I was a little confused about the $5 million in fiscal '13.429 <Q . what that would represent with regard to the guidance? <A . Thank you.Sales Current Quarter: 883. <Q . We certainly are always challenging the construction of our garments. we're going to continue to look at all of them.824 Bloomberg Estimates . And I – we're not publicly talking about it. Can I just jump back to a response on a prior question. Have you made any major changes with regard to cotton synthetic mix or anything on your end proactively that's been dramatic? Thanks. Each of our business units and operations within each units have plans and expectations of what we want them to achieve.J.William Clifton Gale>: It'd be the low end of the guidance. with regard to. guys. but what we have said is that we certainly are moving toward getting back to margins we used to have.William Clifton Gale>: We're certainly targeting improved margins. <Q . And our next question comes from John Healy with Northcoast Research. that you were targeting. Please go ahead. potentially an impact of $15 million. and we will hopefully continue that as we go through the next couple of years. Just curious and a follow-up there. Michael Hansen>: We have not at this point.443 Current Year: 1. Company Ticker: CTAS US Date: 2011-07-19 Event Description: Q4 2011 Earnings Call Market Cap: 4. John.EPS Current Quarter: 0.John Healy>: Hi. Thanks. we've bought the best available company in the last quarter. <Q . <A .000 Current Year: 3803. Schneeberger>: Okay. it kind of pushes the full impact of some of the higher prices that we've seen.372 Bloomberg Estimates . Schneeberger>: Okay.Andrew C.Andrew C. to answer your first question Scott.Scott A. Thanks for that. One more if I could. but we have not made any significant changes at this point. Do you have a margin target that you – well. Steinerman>: Excellent.J. <Q .J. Schneeberger>: Okay. Please go ahead. Michael Hansen>: Well. <A .484.06 Current PX: 30.Scott A. Michael Hansen>: Thanks. with regard to cotton prices and thanks for the quantification that you think incrementally. Steinerman>: Okay. Thanks and congrats on a good quarter. Thanks for taking all my questions. <A . Page 8 of 15 .Scott A. Operator Thank you.86 YTD Change($): +2.90 YTD Change(%): +10.Scott A.J. Is that incremental on top of what you're looking for in '12? And could you just take us a level deeper in how you're thinking about that with regard to the five or six levers you were thinking about? <A . And so we're going to be keeping our eyes on all of those different factors and working to make sure that we minimize the impact going forward. <Q . a longer term type question or at least intermediate term? <A . the $5 million for fiscal '13 is incremental on top of the less than $15 million in fiscal '12.Company Name: Cintas Corp. Michael Hansen>: Andrew.

I think.86 YTD Change($): +2. I guess along those same lines too when you look at kind of the momentum in the business. And I think it speaks to some of the success we've had with our new products and services and really selling the value of those to customers that haven't had a program in the past. It has been reinvigorated with a new relationship we now have with Diversey that has given us the ability and the credibility to get into a lot of the markets that Diversey has been successful in the past and now that we have the service organization.EPS Current Quarter: 0.90 YTD Change(%): +10.824 Bloomberg Estimates . this might have just been me noticing it.000 Current Year: 3803.John Healy>: Got you.Company Name: Cintas Corp. So we think that's helped.Sales Current Quarter: 883.William Clifton Gale>: I don't want to leave that impression. <Q . So we have been increasing our marketing efforts and making it known and I think that you're going to be very pleased with the results that you're going to see in that as we go forward.06 Current PX: 30. So we'll see how things go over the next couple of quarters and whether – we are hopeful that that trend can continue. <Q .429 <Q . <Q . we've seen a movement back towards 60% no-programmer to 40% programmer. It was pretty consistent throughout the quarter. when we – we've talked a little bit about our programmer versus no-programmer numbers. have you noticed any kind of change in tone from the customers though? Does there appear to be any sort of different feedback you're hearing from the sales reps in terms of a willingness to spend by the small-business customer recently? <A . and in the recession we saw that come down to about a 50/50 level. I think. we had a good fourth quarter. When you look at it. <Q . You're right. as well as the value we're providing. So I think it's all of those factors. Operator Page 9 of 15 . and if it is that certainly would indicate that some of this is caused by better business confidence. I'm not sure we can quantify that. I think we've been able to demonstrate that we're able to provide value that is attractive to many companies as they look to reduce their costs. the Carhartt product. I think it's some of both. We've certainly been very successful in the introduction of some of the products that Mike mentioned earlier. I look forward to it.William Clifton Gale>: We just completed a rollout nationally within our own sales organization just within the last few weeks. become more tenured and therefore have become obviously more productive with the vast array of products that we're offering. I guess maybe over the last six to eight weeks or the last two months or so.John Healy>: Got you. some of our standard uniforms are still of a quality better than what our competitors can obtain from their third party sources. I was hoping to get your thoughts on how much of that you feel is just the market opening up for you guys? And how much of that do you think is really a result of a activity and some of the initiatives you've put forth to kind of stimulate some demand? <A . I believe some of the additional products that Mike mentioned that are in – within our rental division have helped.John Healy>: That's great. and has it been redesigned recently or redeployed or is it just that I'm maybe seeing new ads that I hadn't seen before? <A . up 20% seems like a very – again another strong number. Michael Hansen>: John. the women's garments.John Healy>: Is that a business that's rolled out nationally now or available in most of your large markets? <A .John Healy>: Wanted to ask about the new sales comment you made.J. but it really was just building on the momentum we saw earlier in the fiscal year.484. But there certainly is an improvement in business attitude toward taking on these services.372 Bloomberg Estimates . and they see the value they're getting from what we can do for them. And we've got a very good sales group that has. Bill. Company Ticker: CTAS US Date: 2011-07-19 Event Description: Q4 2011 Earnings Call Market Cap: 4.John Healy>: Got you. if you could shed some light on kind of the scale that operation today. <A . <Q .William Clifton Gale>: No. And just one last question. our partnership with them is going to help us in that regard. but I noticed you guys are marketing the chemicals business a little bit more there. So it's just beginning.443 Current Year: 1.William Clifton Gale>: Well. And we're encouraged that in the last quarter or so. And I was wondering.

J.Shlomo H. Rosenbaum>: Sure.Sales Current Quarter: 883. Our next question comes from Nate Brochmann with William Blair & Company. I'll come back to you with that on offline then. Michael Hansen>: Okay. But it is still relatively small.William Clifton Gale>: Well. And then last question in the Uniform Direct Sales. It has a bit of a margin pressure on us. Please go ahead. Michael Hansen>: No. We're going to be able to service about 90 of the top 100 markets. Rosenbaum>: Hi. and there wasn't a lot of structural change. <Q .372 Bloomberg Estimates . It's just coming from such a low base that it's not really going to impact the overall growth rate for a little while. Nicolaus. because of the energy and fuel increases or how is that working? Are you having those discussions with customers and are you aware from your discussions with customers if your competitors are having those same discussions? <A .06 Current PX: 30. despite a nice uptick in the sales.William Clifton Gale>: Well. And I think what you need to look at is. guys.Shlomo H. I just want to ask a little bit about some of the commentary in the press release about competitors competing on price while you guys are focusing very much on value.Company Name: Cintas Corp. that's the tile and carpet business. Have you guys been following that at all.Shlomo H. <Q . and it is growing very well as we continue to roll it across the country. <Q . Was there a particular infrastructure or sales investment that incurred in that unit in the quarter? <A . Michael Hansen>: Thanks. <Q .Shlomo H. <A . that's the end of my questions.000 Current Year: 3803.443 Current Year: 1.429 Thank you. We had a nice fourth quarter last year. we saw as an operating margin that was flat sequentially. Our next question will come from Shlomo Rosenbaum with Stifel. There wasn't. Thanks for taking my call. But we expect it to grow quite nicely throughout the next couple of years. And kudos again on good quarter. any color to add on that as to what you guys think is causing it to fall off a little bit here recently? Page 10 of 15 .EPS Current Quarter: 0. can you comment a little bit how the floor cleaning business that's kind of nascent is doing and how that's grown over the quarter? <A .J. Bill. what competitors do show up in their margins versus what shows up in our margins. but even with that you still saw nice margins in the rental division.Shlomo H. <A .484. Operator Thank you. We had a nice improvement over the third quarter. Are you guys at all attempting to push through any pricing increases. it's Dave for Nate. actually we're in about 90. And thanks a lot. We are approaching our customers on the renewal dates of the contract which allows us to increase prices. Company Ticker: CTAS US Date: 2011-07-19 Event Description: Q4 2011 Earnings Call Market Cap: 4.824 Bloomberg Estimates .William Clifton Gale>: Thanks.J. <Q>: Hi. Shlomo. Michael Hansen>: Yeah.Shlomo H. Thank you for taking my questions.86 YTD Change($): +2. I don't know but I would say it's got to be close to 50 or so. Rosenbaum>: And how many markets are you in there now? <A . I mean it's miniscule in comparison to our rental business and even into our dust and hygiene business. and we're certainly talking to them about the cost pressures that we have had. we are certainly reviewing all of our book prices that our salespeople use for new business. Rosenbaum>: Okay. So I would just advise you to compare among us and you can kind of see who is doing what. and if so do you. Shlomo. <A . <A . <Q .90 YTD Change(%): +10. and we will be certainly making sure that we're covering our cost increases. Please go ahead.William Clifton Gale>: You know. mainly because of the volume.J. you know. I've seen recently cotton prices seem to have fallen off pretty dramatically. Rosenbaum>: Okay. guys. <Q . Rosenbaum>: All right.

William Clifton Gale>: Well. very good. Halter>: On the debt.90 YTD Change(%): +10. Just wondered if you had any sort of breakout in terms of new facilities for maybe your different segments and so forth? <A . the two pieces there due in 2016 and '21. Yeah. there still was a lot of high-priced stuff that was put into fabrics. <Q>: Okay. <A .William Clifton Gale>: Hi. it looked like for the quarter it was only about $14 million. So that will be a plus. Halter>: Okay.William Clifton Gale>: An interest rate lock.824 Bloomberg Estimates . I think in the past you guys have said it. <Q . I think this was maybe mentioned earlier on about the acquisitions and so forth.000 Current Year: 3803. And so you're right.Sales Current Quarter: 883.443 Current Year: 1. what's kind of left in the toolbox there? <A . no. we're prepared to handle it however it may present itself. what we. Our global supply chain group does that and – the things that we read and hear are that the yields from some of the cotton growing regions excluding perhaps Texas. <Q . there has been a diminishment of demand throughout the world. We continue to invest in systems and other productivity initiatives within the company.06 Current PX: 30. Greg. You discuss the CapEx. Expectations are high that the yields are going to be good. That we put into place in advance and the cost of that will be amortized as part of the interest expense over the life of the bonds. But just wondering if that was something that you may have not done as much as in the quarter given that the buyback and possibly what you're seeing in the market these days? Page 11 of 15 . Mike.. A lot of the capital expectation is really for growth within existing facilities more than brand new facilities going forward. we don't break that out.Greg W. and then ultimately into finished goods that's got to work its way through the system. it would help us as we got into late '12 and '13. the price – the commodity – the spot price of cotton has fallen pretty quickly. And we hope that it continues down at those levels. but also top line growth covers more of the fixed costs and a lot of the SG&A. Halter>: Yes. which has had a big drought. And it even starts impacting '14 because of the lead time and the way costs are amortized.William Clifton Gale>: Well. And then the only one – other question I have was in terms of. So this would be more of a 2013 impact. when we look at SG&A. In terms of getting more leverage out of SG&A.Company Name: Cintas Corp. especially the G&A is generally fixed costs that will not increase proportionally with increase in revenue. Company Ticker: CTAS US Date: 2011-07-19 Event Description: Q4 2011 Earnings Call Market Cap: 4. <Q . thanks.Greg W. Michael Hansen>: An interest rate lock. $180 million to $200 million expectations. Keep in mind that just because the price drops down for a couple of weeks or a couple months.429 <A .86 YTD Change($): +2. are there any swaps used to hedge any of that or convert or anything like that? <A . <Q>: Right. in detail.J.484.372 Bloomberg Estimates .William Clifton Gale>: We did put in place a – I guess a. There may have been a little bit of hoarding going on back in the fall. <Q>: Okay. but they're very. But that appears to have dissipated some. And then secondly.Greg W. it takes a sales person anywhere from six to 12 months to kind of get on board and get up to speed and become productive. <A . it's a big assumption here if prices were to stay lower. but we. If my math is correct and obviously there's always timing there and willing buyer and willing seller and all that.EPS Current Quarter: 0.Greg W. Guys. <Q . good afternoon. Thanks for taking my call. Halter>: Okay.William Clifton Gale>: Well. SG&A is driven by obviously improved productivity of our sales force. Greg. Operator Thank you. that will be a plus going forward. And so it's an area of focus throughout our organization to minimize any increase in our SG&A and yet continue to increase the top line. We will have new facilities. Our next question comes from Greg Halter with Great Lakes Review.William Clifton Gale>: Well. there's several things left. Great. Please go ahead.. <A . we certainly follow it very closely. <A .

<A . <Q . Michael Hansen>: You're right.429 <A . Michael Hansen>: No. And I know through your third-quarter. <A . <Q .90 YTD Change(%): +10. Michael Hansen>: Correct.Greg W.J.824 Bloomberg Estimates . <Q . Halter>: Okay. early on when you were discussing the uniform rental business. <Q . and you gave those percentages of 51.Company Name: Cintas Corp. Let me ask you to hold off on that until we. 12.Greg W. 6 and 11. <Q . Halter>: Okay. <A . Greg. It's the additional impact is not that significant. And you've discussed the pricing.Greg W.Greg W.William Clifton Gale>: Greg. <A . I think as we said earlier. So not many of those will be going into the share count unless the share price continues to do well.J. Michael Hansen>: Yes.000 Current Year: 3803. Halter>: All right. you're absolutely correct. Halter>: Okay. Halter>: Okay. I think you mentioned it was just under 130 million shares as of now. Michael Hansen>: Yes.5 million shares with just everything that restrictive stock that gets issued and some stock options. which we hope obviously and I'm sure you do.86 YTD Change($): +2.Greg W.J. <Q .484.J. Halter>: Which works out to about 36% of the total? <A . $36 and higher.Greg W. <A . and I just wanted to make sure to clarify that. <A . not of the company total. that's correct.Greg W. I don't think there was any difference between basic and diluted share count. Michael Hansen>: We will typically plan for. for the five different areas within uniform rental. Halter>: So there would not be a shift or a big shift as maybe one of the callers may have asked about earlier.443 Current Year: 1. <Q . I know that was the focus that we had in the quarter.J. <Q . we thought that we were buying the best thing available by buying ourselves. just wondering what your goals and aspirations are for that particular area? Page 12 of 15 . And on the share buyback and the count. we do not – we're not willing to disclose that right now. we'll be issuing our 10-K. Michael Hansen>: Yes.Greg W.J.Sales Current Quarter: 883. I thought I'd give you a chance. Halter>: Okay. <Q . about 0. Halter>: Okay.EPS Current Quarter: 0. And I know that your options between options and restricted stock awards total about $8 million but most of them are at higher prices.Greg W. but you're right in your assumptions. <Q .J. Michael Hansen>: Correct.William Clifton Gale>: Well. your assumption is correct. that's 51% of the 70% of the rental segment. I believe you mentioned that was of the segment total. So those percentages would be less as a percentage of the total.Greg W. But just want to make sure that my take on that is accurate in terms of those exercise prices. Company Ticker: CTAS US Date: 2011-07-19 Event Description: Q4 2011 Earnings Call Market Cap: 4. Halter>: Okay.372 Bloomberg Estimates . And Mike. the end of next week and included in that are the footnote disclosures with all the restricted shares and the option and their prices. 20. So when I mentioned I believe it was uniform rental of 51%.06 Current PX: 30. and given your guidance what kind of additional shares you're looking at in terms of going into that diluted share count? <A .J. probably $35. Your European business looks like it's about $50 million on an annual basis now if my math is correct. Just wonder if you had any commentary on what percentage type increase may be contemplated? <A . But generally speaking.

William Clifton Gale>: Yeah. We're continuing to tweak it.86 YTD Change($): +2. I think again that I have to defer. and it primarily services the retail and commercial industries. We've got presence in four countries over there. and I know you get into these businesses just to see how they're going to perform as maybe an incubator. Thank you. not look at another acquisition. Typically now under the new timeframe that would be contemplated and made at the October timeframe by the board. is to improve the margins and to grow those businesses. All I can also tell you is that we've increased the dividend every year since we went public in 1983. And so that's the difficulty right now.06 Current PX: 30. but with the numbers you gave. First.Sales Current Quarter: 883. one of the issues we have with breaking that business out separately is that much of it is on the same route as either a facility services mat route or in some cases on a uniform route. Please go ahead.EPS Current Quarter: 0. Halter>: Okay. the expectations for future results as well as the results in the previous year when they make the decision on what to declare. It might be some fill-ins for some services that we may not be providing in one particular area that we'd like to have to complement what we've got. Operator Page 13 of 15 .484.Justin P. <Q . We will certainly continue to look at it. But right now. Hauke>: Good afternoon.William Clifton Gale>: Well. guys. And so. Hauke>: Fair enough. it would seem like your hygiene business is actually the same size as your document management business. <Q . <Q . That was – that acquisition was made last fall. Halter>: Okay. I guess I was just curious. Company Ticker: CTAS US Date: 2011-07-19 Event Description: Q4 2011 Earnings Call Market Cap: 4. I think the main emphasis in fiscal '12. Thank you very much. We've got very good businesses that we acquired.William Clifton Gale>: Justin. we talked a lot about the buyback.Greg W. It was more than just a door business. something like $320 million in annual revenue. As far as the amount of the dividend. with the authorization being spent? Is there a chance that maybe the dividend's going to become a more meaningful part of your shareholder returns going forward? And also I noticed that you shifted the timing of when the dividend is normally paid and just curious if it's going to continue to be a end of calendar year dividend? <A . And while we would not.Justin P. right now our focus is to work with what we have. Great. Okay. <Q . we'll think about breaking that out. And my last question is a little bit of a clarification. I'm just curious if there is any chance that we might start to see that segment broken out separately? <A .William Clifton Gale>: Justin. And right now. we are very pleased with the results as we incorporate it into our other facility service offerings.William Clifton Gale>: It's probably a little bit less than that.90 YTD Change(%): +10. I don't think it would be anything significant at this time. <Q .824 Bloomberg Estimates .Company Name: Cintas Corp. Baird.443 Current Year: 1. And if it becomes feasible. but how are you guys thinking about the dividend here.Greg W. Is that correct though that it's about the same size as the document management business? <A .372 Bloomberg Estimates . Hauke>: Sure. we have some difficulty in coming up with the specific product line results. Just two very quick ones here.000 Current Year: 3803. And so I'm sure the board will factor the share buyback. It has performed very well. It's facilities services. my expectation is that the timing of the payment of the dividend will continue to occur just like it did last year where we accelerated the payment from March into December.Justin P. Our next question comes from Justin Hauke with Robert W. late fall. <Q .Justin P.429 <A . Hauke>: Sure. that will be a decision made by the board. Operator Thank you. Just wondering if you could provide any thoughts in regard to that particular area? <A . I think a while back maybe a year ago you bought a door business. And one last one if I could. great management teams. than the document management business.

And there – so just in terms of the SAP milestones. <Q . So hopefully we'll be able to demonstrate that we can reduce those inventories back to more appropriate levels in line with our revenues as we proceed throughout '12. [Operator Instructions] And we'll go back to Shlomo Rosenbaum.Shlomo H. I understand that there is – that the SAP implementation there are different aspects to it <A . Please go ahead.06 Current PX: 30. Rosenbaum>: – so there are different points in time that you guys are going to be measuring success and I just want to know because – as I know that those things tend to be complicated <A .Shlomo H.William Clifton Gale>: As far as the conversion to the global supply chain or SAP in general? <Q . and we certainly have individual goals and expectations as a result of that. which is in janitorial services and their margin's less than half what yours is.372 Bloomberg Estimates .000 Current Year: 3803.Sales Current Quarter: 883. are there any key milestones going on over the next – over the year that we should be looking towards? <A . Our next question comes from Gary Bisbee with Barclays Capital. internally that we hope to start reducing those inventory levels all else being equal as we proceed through fiscal '12. We'll do so many operations each month. and we will begin converting those later this fall and through the winter on a kind of a very measured basis. <Q . but I think you can make the assumption that facility services business will have margins pretty similar to what we obtain in our garment rental business.William Clifton Gale>: Yeah. I just wanted to ask about your inventory. So as we get later into fiscal '12. and what those businesses are doing? I know you'll say this is a bad comparison.Shlomo H. <A . Company Ticker: CTAS US Date: 2011-07-19 Event Description: Q4 2011 Earnings Call Market Cap: 4. We are working right now Shlomo on implementing SAP at a couple of our different business units.William Clifton Gale>: Yeah. Rosenbaum>: Okay. which is within the facility services businesses in general.443 Current Year: 1.824 Bloomberg Estimates . Rosenbaum>: Well. Operator Thank you.Shlomo H. <Q .Company Name: Cintas Corp. Please go ahead. But for me to just give you a general number there is so much different stuff in there it wouldn't be meaningful.William Clifton Gale>: Right. Wanted to know if there are any milestones or times in the next year that we should be looking to which afterwards you guys will feel comfortable if it goes well to bring the inventory levels back down a bit? <A . Rosenbaum>: – and can have some repercussions throughout the rest of the business? <A . and I really would not want to start providing that on a ongoing basis. <Q .Shlomo H. I know you guys have been stocking a little bit because of the SAP implementation. And so how do you think about the profitability of that business? Thank you. Rosenbaum>: One more question. Thank you. We're still in the final testing and design phase – or final testing phases right now. <Q .Shlomo H. but I look at something like ABM.William Clifton Gale>: We have a plan Shlomo.86 YTD Change($): +2. Bisbee>: Okay. we'll be able to report to you on how well we're doing with that and is it going according to plan.Gary E. and hopefully we'll start some pile of implementations here in the next few months. <Q . Page 14 of 15 .90 YTD Change(%): +10.Gary E.429 Thank you.William Clifton Gale>: Gary. the profitability of the facility services business is comparable to the overall profitability that we report in rental. Rosenbaum>: And is there an inventory DSO that you guys feel comfortable with or how should I think about that? <A . <Q .William Clifton Gale>: That – we certainly have targets but it's very complicated because we have inventory that ranges from raw fabric to in-process inventory to finished goods in all of our different businesses. is it – can you give us a sense what your margin goals or targets are.EPS Current Quarter: 0. Bisbee>: Just one quick follow up. It really depends a lot on different markets.484.

Thanks a lot. losses. Any opinion expressed in the transcript does not necessarily reflect the views of Bloomberg LP. special or punitive damages in connection with the furnishing. Bloomberg retains all rights to this transcript and provides it solely for your personal.824 Bloomberg Estimates . Any reproduction. So we'll look forward to talking to you again in September. [Operator Instructions]. Operator Thank you. redistribution or retransmission is expressly prohibited. then we'll start rolling out on a more aggressive basis as we complete the year. I want to thank everyone for joining us. We look forward to an even better results as we move into fiscal '12. © COPYRIGHT 2011. Company Ticker: CTAS US Date: 2011-07-19 Event Description: Q4 2011 Earnings Call Market Cap: 4. We're very pleased with these results. Page 15 of 15 .484.90 YTD Change(%): +10.06 Current PX: 30.Shlomo H. or direct.Sales Current Quarter: 883.429 And then if those are successful. And at this time. non-commercial use.443 Current Year: 1. we have no other questions from the phones.Company Name: Cintas Corp. All rights reserved. This transcript is provided "as is". performance or use of such transcript. late September when we release our first quarter results. Bloomberg. its suppliers and third-party agents shall have no liability for errors in this transcript or for lost profits.372 Bloomberg Estimates . Rosenbaum>: Okay. and we are very happy with the momentum that our company has achieved here over the last several quarters. This transcript may not be 100 percent accurate and may contain misspellings and other inaccuracies. indirect. without express or implied warranties of any kind.000 Current Year: 3803. <Q .EPS Current Quarter: 0.86 YTD Change($): +2. incidental. BLOOMBERG LP. consequential. Neither the information nor any opinion expressed in this transcript constitutes a solicitation of the purchase or sale of securities or commodities. William Clifton Gale Well.