CINTAS CORPORATION Business Strategy Cintas helps more than one million businesses of all types and sizes, primarily inthe United States (U.S. ), as well asCanada ,Latin America ,Europe andAsia , get READY™ to open their doors with confidence every day by providing a wide range of products and services that enhance our customers' image and help keep their facilities and employees clean, safe and looking their best. With products and services including uniforms, mats, mops, restroom supplies, first aid and safety products, fire extinguishers and testing, and training and compliance courses, Cintas helps customers get Ready for the Workday®. We areNorth America's leading provider of corporate identity uniforms through rental and sales programs, as well as a significant provider of related business services, including entrance mats, restroom cleaning services and supplies, first aid and safety services and fire protection products and services. Cintas' principal objective is "to exceed customers' expectations in order to maximize the long-term value of Cintas for shareholders and working partners," and it provides the framework and focus for Cintas' business strategy. This strategy is to achieve revenue growth for all our products and services by increasing our penetration at existing customers and by broadening our customer base to include business segments to which we have not historically served. We will also continue to identify additional product and service opportunities for our current and future customers. To pursue the strategy of increasing penetration, we have a highly talented and diverse team of service professionals visiting our customers on a regular basis. This frequent contact with our customers enables us to develop close personal relationships. The combination of our distribution system and these strong customer relationships provides a platform from which we launch additional products and services. We pursue the strategy of broadening our customer base in several ways. Cintas has a national sales organization introducing all its products and services to prospects in all business segments. Our broad range of products and services allows our sales organization to consider any type of business a prospect. We also broaden our customer base through geographic expansion, especially in our fire protection operating segment. Finally, we evaluate strategic acquisitions as opportunities arise. Results of Operations Cintas classifies its business into two reportable operating segments and places the remainder of its operating segments in an All Other category. Cintas' two reportable operating segments are Uniform Rental and Facility Services and First Aid and Safety Services. The Uniform Rental and Facility Services reportable operating segment consists of the rental and servicing of uniforms and other garments including flame resistant clothing, mats, mops and shop towels and other ancillary items. In addition to these rental items, restroom cleaning services and supplies and the sale of items from our catalogs to our customers on route are included within this reportable operating segment. The First Aid and Safety Services reportable operating segment consists of first aid and safety products and services. The remainder of Cintas' business, which consists of the Fire Protection Services operating segment and the Uniform Direct Sale operating segment, is included in All Other. These operating segments consist of fire protection products and services and the direct sale of uniforms and related items. Revenue and income before income taxes for the three months endedAugust 31, 2020 and 2019, for the two reportable operating segments and All Other is presented in Note 12 entitled Segment Information of "Notes to Consolidated Condensed Financial Statements." InDecember 2019 , a novel strain of coronavirus (COVID-19) was reported to have surfaced inWuhan, China , and has since spread globally. InMarch 2020 , theWorld Health Organization characterized COVID-19 as a pandemic. Efforts to contain the spread of COVID-19 intensified during our fiscal 2020 fourth quarter and remained in effect throughout our fiscal 2021 first quarter. Most states and municipalities within theU.S. enacted temporary closures of businesses, issued quarantine orders and took other restrictive measures in response to the COVID-19 pandemic. Within theU.S. , our business has been designated an essential business, which allows us to continue to serve customers that remain open. We have operations throughout theU.S. and participate in a global supply chain. During the first quarter of fiscal 2021, the existence of the COVID-19 pandemic, the fear associated with the COVID-19 pandemic and the reactions 19 -------------------------------------------------------------------------------- of governments around the world in response to the COVID-19 pandemic to regulate the flow of labor and products and impede the business of our customers, continued to impact our ability to conduct normal business operations, which had an adverse effect on our business. If we need to close a significant number of our facilities or a critical number of our employees become too ill to work, our business operations could be materially adversely affected in a rapid manner. Similarly, if our customers experience adverse business consequences due to the COVID-19 pandemic, including being required to shut down their operations, demand for our services and products could also be materially adversely affected in a rapid manner. In response to the impact of COVID-19, Cintas put in place health and safety measures to keep Cintas employees, contractors and customers safe. These health and safety measures have not materially impacted our ability to service our customers. Many of Cintas' customers were also impacted by COVID-19 and we did see an impact on some customer's ability to pay. While there was minimal disruption to our supply chain, Cintas did experience an increase in inventory, primarily personal protective equipment and facility services inventory, caused by the impact of COVID-19. The impact of the COVID-19 pandemic is fluid and continues to evolve, and therefore, we cannot predict the extent to which our business, consolidated results of operations, consolidated financial condition or liquidity will ultimately be impacted. Consolidated Results Three Months EndedAugust 31, 2020 Compared to Three Months EndedAugust 31, 2019 Total revenue decreased 3.6% for the three months endedAugust 31, 2020 , over the same period in the prior fiscal year, from$1,811.1 million to$1,746.6 million . Revenue also declined organically by 5.0% as a result of decreased sales volume from the COVID-19 pandemic business closures. Organic growth adjusts for the impact of acquisitions, foreign currency exchange rate fluctuations and workday differences. Revenue growth was negatively impacted by 0.1% due to foreign currency exchange rate fluctuations and positively impacted by 0.1% due to growth derived through acquisitions and 1.4% due to one more workday in the three months endedAugust 31, 2020 compared to the three months endedAugust 31, 2019 . As previously discussed, the government enactment of temporary closures of certain businesses in response to the COVID-19 pandemic continued to impact our ability to service some of our customers during the first quarter of fiscal 2021. Due to the constantly changing impact of the COVID-19 pandemic, uncertainty remains about the pace of the economic recovery and about its impact on future Cintas consolidated financial results. Uniform Rental and Facility Services reportable operating segment revenue decreased 4.1% for the three months endedAugust 31, 2020 , over the same period in the prior fiscal year, from$1,454.5 million to$1,394.4 million . Revenue declined organically by 5.4%. Revenue growth was negatively impacted by 0.2% due to foreign currency exchange rate fluctuations and positively impacted by 1.5% due to one more workday in the three months endedAugust 31, 2020 , compared to the three months endedAugust 31, 2019 . Other revenue, consisting of revenue from the First Aid and Safety Services reportable operating segment and All Other, decreased 1.2% for the three months endedAugust 31, 2020 , compared to the same period in the prior fiscal year, from$356.6 million to$352.2 million . Revenue declined organically by 3.3%. Revenue growth was positively impacted by 0.6% due to growth derived through acquisitions in our Fire Protection operating segment, which is included in All Other. In addition, revenue growth was positively impacted by 1.5% due to one more workday in the three months endedAugust 31, 2020 , compared to the three months endedAugust 31, 2019 . Cost of uniform rental and facility services consists primarily of production expenses, delivery expenses and the amortization of in service inventory, including uniforms, mats, shop towels and other ancillary items. Cost of uniform rental and facility services decreased$53.3 million , or 6.9%, for the three months endedAugust 31, 2020 , compared to the three months endedAugust 31, 2019 . This decrease was due to lower Uniform Rental and Facility Services reportable operating segment sales volume as well as certain cost control measures such as reduced supplies, labor and energy costs that were partially offset by increases in material cost. Cost of other consists primarily of cost of goods sold (predominantly first aid and safety products, personal protective equipment, uniforms, and fire protection products), delivery expenses and distribution expenses in the First Aid and Safety Services reportable operating segment and All Other. Cost of other increased$11.6 million , or 6.0%, for the three months endedAugust 31, 2020 , compared to the three months endedAugust 31, 2019 . The increase was primarily due to an increase in the proportion of sales from personal protective equipment in the First Aid and Safety Services reportable operating segment and All Other.
Selling and administrative expenses decreased
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of revenue was primarily due to decreases in labor and employee-partner related
expenses as well as lower discretionary spending.
Operating income was $349.7 million for the three months ended August 31, 2020 ,
compared to $306.1 million for the three months ended August 31, 2019 . Operating
income was positively impacted by lower cost of sales as a percent of revenue
and the decrease in selling and administrative expenses for the three months
ended August 31, 2020 .
Net interest expense (interest expense less interest income) was $24.5 million
for the three months ended August 31, 2020 , compared to $27.2 million for the
three months ended August 31, 2019 . The decrease was primarily due to the
decrease in total debt outstanding during the quarter.
Cintas' effective tax rate was 7.8% and 10.1% for the three months ended
August 31, 2020 and 2019, respectively. The effective tax rate in both periods
was impacted by certain discrete items, primarily the tax accounting impact for
stock-based compensation.
Net income for the three months ended August 31, 2020 increased $49.2 million ,
or 19.6%, compared to the three months ended August 31, 2019 . Diluted earnings
per share were $2.78 for the three months ended August 31, 2020 , which was an
increase of 19.8% compared to the same period in the prior fiscal year. Diluted
earnings per share increased due to the increase in earnings.
Uniform Rental and Facility Services Reportable Operating Segment
Three Months Ended
Uniform Rental and Facility Services reportable operating segment revenue decreased from$1,454.5 million to$1,394.4 million , or 4.1%, for the three months endedAugust 31, 2020 , over the same period in the prior fiscal year, and the cost of uniform rental and facility services decreased$53.3 million , or 6.9%. Revenue declined organically by 5.4%. The reportable operating segment's gross margin was$679.0 million , or 48.7% of revenue. The gross margin was 150 basis points higher than the prior fiscal year's first quarter gross margin of 47.2%. The increase in gross margin as a percent to revenue was driven by certain cost control measures such as reduced supplies, labor and energy costs that were partially offset by increases in material cost. Selling and administrative expenses decreased$52.9 million and decreased as a percent of revenue to 26.1%, compared to 28.7% in the first quarter of the prior fiscal year. The decrease as a percent of revenue was primarily due to decreases in labor and employee-partner related expenses as well as lower discretionary spending. Income before income taxes increased$46.0 million , or 17.1%, for the Uniform Rental and Facility Services reportable operating segment for the three months endedAugust 31, 2020 , compared to the same period in the prior fiscal year. Income before income taxes was 22.6% of the reportable operating segment's revenue, which was a 410 basis point increase compared to the first quarter of the prior fiscal year of 18.5%. This increase was primarily due to the previously discussed increase in gross margin and the decrease in selling and administrative expenses.
First Aid and Safety Services Reportable Operating Segment
Three Months Ended
First Aid and Safety Services reportable operating segment revenue increased from$172.1 million to$204.5 million , or 18.8%, for the three months endedAugust 31, 2020 , over the same period in the prior fiscal year. Revenue also increased organically by 17.1%. Total revenue was positively impacted by 1.8% due to one more workday in the three months endedAugust 31, 2020 compared to the three months endedAugust 31, 2019 and negatively impacted by 0.1% due to foreign currency exchange rate fluctuations. Growth was driven by many factors including new business sold by sales representatives, penetration of additional products and services into existing customers and sales of personal protective equipment in response to the COVID-19 pandemic. Cost of first aid and safety services increased$34.6 million , or 39.4%, for the three months endedAugust 31, 2020 , over the three months endedAugust 31, 2019 , due to higher sales volume. The gross margin as a percent of revenue was 40.2% for the quarter endedAugust 31, 2020 compared to the gross margin as a percent of revenue of 49.0% in the same period of the prior fiscal year. The decrease was primarily driven by an increase in the proportion of sales of personal protective equipment, which have lower margins, as a result of the impact of the COVID-19 pandemic. 21 -------------------------------------------------------------------------------- Selling and administrative expenses increased$4.1 million , but decreased as a percent of revenue to 31.1%, compared to 34.6% in the first quarter of the prior fiscal year. The decrease in selling and administrative expenses as a percent of revenue was due to revenue growing at a faster pace than labor and employee-partner related expenses and discretionary spending. Income before income taxes for the First Aid and Safety Services reportable operating segment decreased$6.2 million to$18.5 million for the three months endedAugust 31, 2020 , compared to the same period in the prior fiscal year. Income before income taxes was 9.1% of the reportable operating segment's revenue compared to the first quarter of the prior fiscal year of 14.4%. This decrease was primarily due to the previously discussed decrease in gross margin. Liquidity and Capital Resources The following is a summary of our cash flows and cash and cash equivalents as of and for the three months endedAugust 31 : (In thousands) 2020
2019
Net cash provided by operating activities$ 312,292 $
276,901
Net cash used in investing activities$ (39,942) $
(78,139)
Net cash provided by (used in) financing activities
Cash and cash equivalents at the end of the period
Cash and cash equivalents as ofAugust 31, 2020 and 2019 include$36.3 million and$25.4 million , respectively, that is located outside ofthe United States . Cash flows provided by operating activities have historically supplied us with a significant source of liquidity. We generally use these cash flows to fund most, if not all, of our operations and expansion activities and dividends on our common stock. We may also use cash flows provided by operating activities, as well as proceeds from long-term debt and short-term borrowings, to fund growth and expansion opportunities, as well as other cash requirements such as the repurchase of our common stock and payment of long-term debt. The disruption from the COVID-19 pandemic continued to have a negative impact on Cintas' fiscal 2021 first quarter financial results, however, net cash flow provided by operating activities in the first quarter was not significantly impacted. AtAugust 31, 2020 , our short-term liquidity position remained solid, as our cash flows from operating activities are expected to remain sufficient to provide us with adequate levels of short-term liquidity. In addition, we have access to$1.0 billion of short-term debt from our revolving credit facility. However, our long-term liquidity position remains unclear due to the constantly changing scope and nature of the impacts of the COVID-19 pandemic. Accordingly, we have taken proactive measures to maintain financial flexibility within the landscape of the COVID-19 pandemic. We believe we have sufficient liquidity to operate in the current business environment as a result of these actions. Net cash provided by operating activities was$312.3 million for the three months endedAugust 31, 2020 , an increase of$35.4 million compared to the three months endedAugust 31, 2019 . The increase was primarily the result of increased net income. Net cash used in investing activities includes capital expenditures, purchases of investments and cash paid for acquisitions of businesses. Capital expenditures were$30.9 million and$64.7 million for the three months endedAugust 31, 2020 and 2019, respectively. Capital expenditures in fiscal 2021 included$20.9 million for the Uniform Rental and Facility Services reportable operating segment and$9.0 million for the First Aid and Safety Services reportable operating segment. Cash paid for acquisitions of businesses was$2.0 million and$3.9 million for the three months endedAugust 31, 2020 and 2019, respectively. The acquisitions during the three months endedAugust 31, 2020 occurred in our Uniform Rental and Facility Services reportable operating segment. The acquisitions during the three months endedAugust 31, 2019 occurred in our First Aid and Safety Services reportable operating segment and our Fire Protection business, which is included in All Other. Net cash used in investing activities also includes$4.9 million and$9.4 million from purchases of investments during the three months endedAugust 31, 2020 and 2019, respectively. 22 -------------------------------------------------------------------------------- Net cash provided by financing activities was$2.2 million for the three months endedAugust 31, 2020 , and net cash used in financing activities was$193.6 million for the three months endedAugust 31, 2019 . OnOctober 30, 2018 , we announced that the Board of Directors authorized a$1.0 billion share buyback program, which does not have an expiration date. OnOctober 29, 2019 , we announced the Board of Directors authorized a new$1.0 billion share buyback program, which does not have an expiration date. The following table summarizes the buyback activity by program and for the three months endedAugust 31 : 2020 2019 Buyback Program (In thousands except per Avg. Price Purchase Avg. Price Purchase share data) Shares per Share Price Shares per Share Price October 30, 2018 - $ - $ - 837$ 230.66 $ 193,109 October 29, 2019 - $ - $ - - $ - $ - - $ - $ - 837$ 230.66 $ 193,109 There were no share buybacks in the period subsequent toAugust 31, 2020 , throughOctober 9, 2020 , under any share buyback program. From the inception of theOctober 30, 2018 share buyback program throughOctober 9, 2020 , Cintas has purchased a total of 4.3 million shares of Cintas common stock at an average price of$219.42 for a total purchase price of$939.1 million . In addition, for the three months endedAugust 31, 2020 , Cintas acquired 0.2 million shares of Cintas common stock for employee payroll taxes due on restricted stock awards that vested during the three months endedAugust 31, 2020 . These shares were acquired at an average price of$300.01 per share for a total purchase price of$69.0 million . For the three months endedAugust 31, 2019 , Cintas acquired 0.2 million shares of Cintas common stock for employee payroll taxes dues on restricted stock awards that vested during the three months endedAugust 31, 2019 . These shares were acquired at an average price of$260.83 per share for a total purchase price of$63.7 million . During the three months endedAugust 31, 2019 , Cintas issued$26.5 million , net of commercial paper borrowings. The following table summarizes Cintas' outstanding debt: Interest Fiscal Year Fiscal Year August 31, May 31, (In thousands) Rate Issued Maturity 2020 2020 Debt due within one year Senior notes 4.30 % 2012 2022$ 250,000 $ - Debt issuance costs (192) - Total debt due within one year$ 249,808 $ - Debt due after one year Senior notes 4.30 % 2012 2022 $ -$ 250,000 Senior notes 2.90 % 2017 2022 650,000 650,000 Senior notes 3.25 % 2013 2023 300,000 300,000 Senior notes (1) 2.78 % 2013 2023 51,141 51,250 Senior notes (2) 3.11 % 2015 2025 51,553 51,637 Senior notes 3.70 % 2017 2027 1,000,000 1,000,000 Senior notes 6.15 % 2007 2037 250,000 250,000 Debt issuance costs (12,247) (13,182) Total debt due after one year$ 2,290,447 $ 2,539,705 (1) Cintas assumed these senior notes with the acquisition ofG&K Services, Inc. (G&K) in the fourth quarter of fiscal 2017, and they were recorded at fair value. The interest rate shown above is the effective interest rate. The principal amount of these notes is$50.0 million with a stated interest rate of 3.73%. (2) Cintas assumed these senior notes with the acquisition of G&K in the fourth quarter of fiscal 2017, and they were recorded at fair value. The interest rate shown above is the effective interest rate. The principal amount of these notes is$50.0 million with a stated interest rate of 3.88%. The credit agreement that supports our commercial paper program was amended and restated onMay 24, 2019 . The amendment increased the capacity of the revolving credit facility from$600.0 million to$1.0 billion and created 23 -------------------------------------------------------------------------------- a new term loan of$200.0 million . The credit agreement has an accordion feature that provides Cintas the ability to request increases to the borrowing commitments under either the revolving credit facility or the term loan of up to$250.0 million in the aggregate, subject to customary conditions. The maturity date of the revolving credit facility isMay 23, 2024 . As ofAugust 31, 2020 andMay 31, 2020 , there was no commercial paper outstanding and no borrowings on our revolving credit facility. Cintas has certain covenants related to debt agreements. These covenants limit our 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 earnings before interest, taxes, depreciation and amortization (EBITDA) and interest coverage ratios. Cross-default provisions exist between certain debt instruments. If a default of a significant covenant were to occur, the default could result in an acceleration of the maturity of the indebtedness, impair liquidity and limit the ability to raise future capital. Cintas was in compliance with all of the debt covenants for all periods presented. Our access to the commercial paper and long-term debt markets has historically provided us with sources of liquidity. We do not anticipate having difficulty in obtaining financing from those markets in the future in view of our favorable experiences in the debt markets in the recent past. However, the COVID-19 pandemic, which has caused disruption in the capital markets, could make financing more difficult and/or expensive. Additionally, our ability to continue to access the commercial paper and long-term debt markets on favorable interest rate and other terms will depend, to a significant degree, on the ratings assigned by the credit rating agencies to our indebtedness. As ofAugust 31, 2020 , our ratings were as follows: Rating Agency Outlook Commercial Paper Long-term Debt Standard & Poor's Negative A-2 A- Moody's Investors Service Stable P-2 A3 Standard and Poor's negative outlook reflects the inherent uncertainty regarding the spread of COVID-19 and the potential impact to Cintas' operating conditions, which could result in Cintas being unable to maintain adjusted leverage of less than two times total debt to EBITDA. In the event that the ratings of our commercial paper or our outstanding long-term debt issues were substantially lowered or withdrawn for any reason, or if the ratings assigned to any new issue of long-term debt securities were significantly lower than those noted above, particularly if we no longer had investment grade ratings, our ability to access the debt markets may be adversely affected. In addition, in such a case, our cost of funds for new issues of commercial paper and long-term debt would be higher than our cost of funds would have been had the ratings of those new issues been at or above the level of the ratings noted above. The rating agency ratings are not recommendations to buy, sell or hold our commercial paper or debt securities. Each rating may be subject to revision or withdrawal at any time by the assigning rating organization and should be evaluated independently of any other rating. Moreover, each credit rating is specific to the security to which it applies. To monitor our credit rating and our capacity for long-term financing, we consider various qualitative and quantitative factors. One such factor is the ratio of our total debt to EBITDA. For the purpose of this calculation, debt is defined as the sum of short-term borrowings, long-term debt due within one year, long-term debt and standby letters of credit. We have assessed the impact of events subsequent to our consolidated condensed balance sheet date but prior to the issuance of this filing. The impact from the COVID-19 pandemic, however, continues to evolve, and the scope and nature of the impacts of the COVID-19 pandemic remain unclear. As such, our conclusions regarding both our short-term and long-term liquidity position remain unchanged. Management will continue to evaluate the Company's liquidity position and our near- and longer-term financial performance as we manage the Company through the uncertainty related to the COVID-19 pandemic. 24 -------------------------------------------------------------------------------- Financial and Nonfinancial Disclosure About Issuers and Guarantors of Cintas' Senior NotesCintas Corporation No. 2 (Corp. 2) is the indirectly, wholly owned principal operating subsidiary ofCintas. Corp. 2 is the issuer of the$2,550.0 million aggregate principal amount of senior notes outstanding as ofAugust 31, 2020 , which are unconditionally guaranteed, jointly and severally, byCintas Corporation and its wholly owned, direct and indirect domestic subsidiaries. Basis of Preparation of the Summarized Financial Information The following tables include summarized financial information ofCintas Corporation, Corp. 2 and subsidiary guarantors (together, theObligor Group ). Investments in and equity in the earnings of non-guarantors, which are not members of theObligor Group , have been excluded. Non-guarantor subsidiaries are located outside theU.S. , and therefore, excluded from theObligor Group . The summarized financial information of theObligor Group is presented on a combined basis with intercompany balances and transactions between entities in theObligor Group eliminated.The Obligor Group's amounts due from, amounts due to and transactions with non-guarantors have been presented in separate line items, if they are material. Summarized financial information of theObligor Group as of and for the three months endedAugust 31, 2020 is as follows: Summarized Consolidated Statement of Income Obligor (In thousands) Group Net sales to unrelated parties$ 1,647,338 Net sales to non-guarantors$ 831 Operating income$ 338,962 Net income$ 292,039 Summarized Consolidated Balance Sheet Obligor (In thousands) Group
ASSETS
Receivables due from non-obligor subsidiaries
$ 2,485,529 Total other noncurrent assets$ 4,935,408
LIABILITIES
Amounts due to non-obligor subsidiaries$ 4,099 Current liabilities$ 1,053,554 Noncurrent liabilities$ 3,289,723 25
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Litigation and Other Contingencies
Cintas is subject to other legal proceedings, insurance receipts, legal
settlements 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 consolidated financial position, consolidated results of
operations or consolidated cash flows of Cintas.
Forward-Looking Statements
This Quarterly Report on Form 10-Q contains forward-looking statements. The
Private Securities Litigation Reform Act of 1995 provides a safe harbor from
civil litigation for forward-looking statements. Forward-looking statements may
be identified by words such as "estimates," "anticipates," "predicts,"
"projects," "plans," "expects," "intends," "target," "forecast," "believes,"
"seeks," "could," "should," "may" and "will" or the negative versions thereof
and similar words, terms and expressions and by the context in which they are
used. Such statements are based upon current expectations of Cintas and speak
only as of the date made. You should not place undue reliance on any
forward-looking statement. We cannot guarantee that any forward-looking
statement will be realized. These statements are subject to various risks,
uncertainties, potentially inaccurate assumptions and other factors that could
cause actual results to differ from those set forth in or implied by this
Quarterly Report. Factors that might cause such a difference include, but are
not limited to, the possibility of greater than anticipated operating costs
including energy and fuel costs; lower sales volumes; loss of customers due to
outsourcing trends; the performance and costs of integration of acquisitions;
fluctuations in costs of materials and labor including increased medical costs;
costs and possible effects of union organizing activities; failure to comply
with government regulations concerning employment discrimination, employee pay
and benefits and employee health and safety; the effect on operations of
exchange rate fluctuations, tariffs and other political, economic and regulatory
risks; uncertainties regarding any existing or newly-discovered expenses and
liabilities related to environmental compliance and remediation; the cost,
results and ongoing assessment of internal controls for financial reporting
required by the Sarbanes-Oxley Act of 2002; the effect of new accounting
pronouncements; disruptions caused by the inaccessibility of computer systems
data, including cybersecurity risks; the initiation or outcome of litigation,
investigations or other proceedings; higher assumed sourcing or distribution
costs of products; the disruption of operations from catastrophic or
extraordinary events including viral pandemics such as the COVID-19 coronavirus;
the amount and timing of repurchases of our common stock, if any; changes in
federal and state tax and labor laws; and the reactions of competitors in terms
of price and service. Cintas undertakes no obligation to publicly release any
revisions to any forward-looking statements or to otherwise update any
forward-looking statements whether as a result of new information or to reflect
events, circumstances or any other unanticipated developments arising after the
date on which such statements are made. A further list and description of risks,
uncertainties and other matters can be found in our Annual Report on Form 10-K
for the year ended May 31, 2020 and in our reports on Forms 10-Q and 8-K. The
risks and uncertainties described herein are not the only ones we may face.
Additional risks and uncertainties presently not known to us, or that we
currently believe to be immaterial, may also harm our business.
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