Cintas Corporation 10-K Summary
Business Context and Reporting Period
This filing is an Annual Report (Form 10-K) for Cintas Corporation for the fiscal year ended May 31, 2001. Cintas is a corporate identity uniform company providing rental and sale of uniforms, along with ancillary services including sanitation supplies, first aid, safety products, and cleanroom supplies. The company operates two segments: Rentals (rental and cleaning of uniforms) and Other Services (direct sales of uniforms and ancillary products). As of May 31, 2001, the company employed approximately 24,193 people and operated 273 facilities across 214 cities.
Key Financial Metrics
Based on the revenue table provided in Item 1, the following financial data is available for the fiscal year ended May 31, 2001 (in thousands):
| Segment | 2001 Revenue | 2000 Revenue | 1999 Revenue |
|---|---|---|---|
| Rentals | $1,610,606 | $1,424,892 | $1,297,248 |
| Other Services | $550,094 | $477,099 | $454,320 |
| Total Revenue | $2,160,700 | $1,901,991 | $1,751,568 |
Other Financial Data:
- Dividends: $0.22 per share paid in fiscal 2001 (compared to $0.19 in 2000).
- Market Value: Aggregate market value of non-affiliate common stock was approximately $8.1 billion as of August 20, 2001.
- Environmental Liability: An undiscounted liability of $4.6 million was recorded as of May 31, 2001, for environmental remediation matters.
- Profit, Cash Flow, Debt, and Margins: The filing text incorporates the Consolidated Statements of Income, Cash Flows, and Balance Sheets by reference to the Annual Report to Shareholders. Specific values for net income, operating cash flow, total debt, and profit margins are not provided in the text of this 10-K summary.
Material Changes
- Revenue Growth: Total revenue increased by approximately 13.6% from $1.90 billion in 2000 to $2.16 billion in 2001. The Rentals segment grew by 13.0%, while Other Services grew by 15.3%.
- Dividend Increase: The annual dividend per share increased by approximately 15.8% from $0.19 to $0.22.
- Inventory Reserves: The Reserve for Obsolete Inventory decreased from $22.3 million in 2000 to $20.1 million in 2001, reflecting continued improvements in product development and sourcing.
Guidance, Risks, and Contingencies
Management Commentary and Outlook: The detailed Management's Discussion and Analysis (MD&A) and guidance are incorporated by reference to the Annual Report to Shareholders and are not present in the text of this filing.
Risks and Contingencies:
- Environmental Remediation: Cintas faces potential liability for soil and groundwater contamination at a San Leandro, California facility (estimated cost ~$750,000) and a Tempe, Arizona facility (part of a Superfund site with EPA estimated costs of $22 million, though Cintas' specific liability is uncertain). A $5 million charge was recorded in fiscal 1999 for these matters.
- Competition: The rental market is highly fragmented with competition from local, regional, and national firms. Competitive factors are ranked as quality, service, design, and price.
- Vendor Concentration: Cintas manufactures much of its own uniform needs and purchases fabric from several suppliers; the loss of one vendor is not expected to have a significant impact.
- Customer Concentration: Due to a diverse customer base, the loss of a single account would not have a significant financial impact.
Key Facts for Investor Verification
- Verify the specific Net Income, Operating Cash Flow, and Total Debt figures in the referenced Annual Report to Shareholders, as they are not explicitly stated in this 10-K text.
- Confirm the status of the EPA Record of Decision regarding the Tempe, Arizona Superfund site to assess potential future liability beyond the current $4.6 million reserve.
- Review the "Eleven Year Financial Summary" (incorporated by reference) to analyze long-term margin trends and capital expenditure history.
- Monitor the "Reserve for Obsolete Inventory" trend, which has decreased significantly since 1999, to ensure inventory management efficiencies are sustainable.