CINTAS CORP

Cintas Corporation helps more than one million businesses of all types and sizes, primarily in the United States, as well as Canada and Latin America, by providing products and services that enhance customers’ image and help keep their facilities and employees clean, safe and looking their best. The company operates in highly competitive and highly fragmented local markets, competing with national, regional and local providers, large national retailers, small local retailers, and companies with a significant online presence, as well as businesses that may decide to perform certain services in-house. Competition is based on product, design, price, quality, service and convenience to the customer.

Cintas is North America's leading provider of corporate identity uniforms through rental and sales programs and 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. The company competes with national, regional and local providers, large national retailers and small local retailers as well as companies with a significant online presence. No individual customer accounts for greater than one percent of Cintas' total revenue, so the loss of one account would not have a material financial impact.

Cintas generates revenue through a route-based service model, providing products and services to customers via local delivery routes originating from rental processing plants and branches, as well as through its distribution network and local delivery routes or local representatives. The business model is built on recurring revenue from rental and service contracts, with frequent customer contact enabling the development of close personal relationships and providing a platform from which to launch additional products and services. The company's strategy is to achieve revenue growth by increasing penetration at existing customers and broadening its customer base to include market segments not historically served, as well as identifying additional product and service opportunities.

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, shop towels and other ancillary items, as well as restroom cleaning services and supplies and the sale of items from catalogs to customers on route. For fiscal 2026, this segment generated revenue of $8,621.6 million ¹, representing 76.5% ² of total revenue, with a gross margin of 50.0% ³ and operating income as a percent of revenue of 24.1% ⁴. The First Aid and Safety Services reportable operating segment consists of first aid and safety products and services, as well as workplace water services, generating revenue of $1,391.9 million ⁵ in fiscal 2026, or 12.4% ⁶ of total revenue, with a gross margin of 57.7% ⁷ and operating income as a percent of revenue of 25.4% ⁸.

All Other, which includes the Fire Protection Services operating segment and the Uniform Direct Sale operating segment, generated revenue of $1,251.3 million ⁹ in fiscal 2026, representing 11.1% ¹⁰ of total revenue, with a gross margin of 47.6% ¹¹ and operating income as a percent of revenue of 15.3% ¹². The Fire Protection Services segment provides fire extinguishers, sprinkler systems and alarm testing, while the Uniform Direct Sale segment involves the direct sale of uniforms and related items.

On March 10, 2026, Cintas entered into an Agreement and Plan of Merger to acquire all outstanding shares of UniFirst Corporation in a transaction valued at approximately $5.5 billion ¹³, with UniFirst shareholders receiving $155.00 ¹⁴ in cash and 0.7720 ¹⁵ shares of Cintas common stock per share. During fiscal 2026, Cintas repurchased 3,960,000 ¹⁶ shares of common stock under its share buyback programs for a total purchase price of $777.8 million ¹⁷, and acquired an additional 829,000 ¹⁸ shares for employee-partner payroll taxes due for $174.3 million ¹⁹. The company paid dividends totaling $1.74 ²⁰ per share, amounting to $701.5 million ²¹ in total dividends paid during the fiscal year. Capital expenditures were $395.1 million ²² and cash paid for acquisitions, net of cash acquired, was $164.5 million ²³.

Fiscal 2026 total revenue was $11.3 billion ²⁴, an increase of 8.9% ²⁵ over the prior fiscal year, with organic revenue growth of 8.3% ²⁶. Net income for fiscal 2026 was $2,000.0 million ²⁷, a 10.4% ²⁸ increase compared to fiscal 2025, and diluted earnings per share was $4.91 ²⁹, an 11.6% ³⁰ increase compared to $4.40 ³¹ in fiscal 2025. Operating income as a percent of revenue was 23.1% ³² compared to 22.8% ³³ in the prior year, and total gross margin improved to 50.6% ³⁴ from 50.0% ³⁵.

Cintas expects the Transaction with UniFirst to close in the second half of calendar 2026. The company expects to incur approximately $2.8 billion ³⁶ in additional indebtedness in connection with the proposed Transaction, which would result in consolidated indebtedness of approximately $5.2 billion ³⁷. The Transaction is subject to the satisfaction of certain conditions including the receipt of required regulatory approvals, the expiration or termination of applicable waiting periods under the HSR Act, and the approval of Cintas common stock for listing on NASDAQ.

Cintas pursues growth by increasing penetration at existing customers through a highly talented and diverse team of service professionals visiting customers on a regular basis, enabling the development of close personal relationships that provide a platform from which to launch additional products and services. The company also broadens its customer base through a national sales organization introducing all its products and services to prospects in all market segments, geographic expansion, and strategic acquisitions as opportunities arise. The company's broad range of products and services allows its sales organization to consider any type of business a prospect.

The company's gross margin improved in fiscal 2026, with Uniform Rental and Facility Services gross margin improving to 50.0% ³⁸ from 49.3% ³⁹ primarily due to more efficient use of in-service inventory and production efficiency gains, and First Aid and Safety Services gross margin improving to 57.7% ⁴⁰ from 57.2% ⁴¹ driven by favorable changes in sales mix, sourcing and productivity initiatives, improved leverage of fixed costs, and a reduction in energy expense as a percent of revenue. Selling and administrative expenses as a percent of revenue were 27.4% ⁴² compared to 27.2% ⁴³ in fiscal 2025, with the increase primarily due to the absence of a $15.0 million ⁴⁴ gain on sale of property recorded in fiscal 2025.

At May 31, 2026, Cintas had approximately 12,500 ⁴⁵ local delivery routes, 484 ⁴⁶ operational facilities, and 12 ⁴⁷ distribution centers. The company operates five manufacturing facilities that provide for standard uniform needs. Cintas employs approximately 48,100 ⁴⁸ employee-partners in its global workforce, of which approximately 800 ⁴⁹ were represented by labor unions. The company has implemented an occupational health and safety management system in accordance with OSHA modeled after ISO 45001 and OSHA VPP, and has reduced its recordable injury rate by over 80% ⁵⁰ since 2008, with 140 ⁵¹ OSHA VPP Star sites awarded.

Capital expenditures were $395.1 million ⁵² in fiscal 2026, including $279.4 million ⁵³ for the Uniform Rental and Facility Services reportable operating segment and $59.0 million ⁵⁴ for the First Aid and Safety Services reportable operating segment. The company has access to $2.0 billion ⁵⁵ of debt capacity from its revolving credit facility under its credit agreement. On July 23, 2024, the Board authorized a $1.0 billion ⁵⁶ share buyback program, and on October 28, 2025, the Board authorized a new $1.0 billion ⁵⁷ share buyback program, neither of which has an expiration date. Dividends declared during fiscal 2026 totaled $1.80 ⁵⁸ per share.

Negative economic conditions including higher levels of unemployment, inflation, recessionary conditions, geopolitical developments, changes in trade agreements, tax rates and other economic factors could adversely affect demand for Cintas' products and services. Increases in labor costs, including the cost to provide employee-partner related healthcare benefits, minimum wages, labor shortages, higher material costs, higher interest rates, inflation, and changes in U.S. and foreign trade policies including the imposition of new tariffs and increases in existing tariffs could increase costs and may not be fully offset through price increases due to competitive conditions or contractual arrangements.

The company faces risks related to the proposed acquisition of UniFirst, including the possibility that the Transaction does not close when expected or at all because required regulatory or other approvals are not received or satisfied on a timely basis, the risk that the benefits from the Transaction may not be fully realized or may take longer to realize than expected, and the risk that integration of UniFirst's business may be complex, costly and time-consuming. Under certain circumstances, Cintas may be obligated to pay UniFirst a termination fee of $350.0 million ⁵⁹.

The proposed acquisition of UniFirst, valued at approximately $5.5 billion ⁶⁰, is subject to significant completion risk, including the receipt of required regulatory approvals and the expiration or termination of applicable waiting periods under the HSR Act, and if not completed, Cintas could be obligated to pay a termination fee of $350.0 million ⁶¹. The company expects to incur approximately $2.8 billion ⁶² in additional indebtedness in connection with the Transaction, which would result in consolidated indebtedness of approximately $5.2 billion ⁶³, reducing financial flexibility and increasing borrowing costs. Changes in U.S. and foreign trade policies, including the imposition of new tariffs and increases in existing tariffs, could increase the cost of raw materials, finished goods, equipment and other products sourced directly or indirectly, and competitive conditions or contractual arrangements may limit the ability to pass increased costs on to customers. The company's business is subject to complex and stringent state and federal regulations, including environmental regulations, and environmental spending related to water treatment and waste removal was approximately $30.0 million ⁶⁴ in fiscal 2026, with capital expenditures to limit or monitor hazardous substances totaling approximately $5.8 million ⁶⁵.

Management's message emphasizes that Cintas' principal objective is 'to exceed customers' expectations in order to maximize the long-term value of Cintas for shareholders and working partners,' which provides the framework and focus for the company's business strategy. The strategic priorities emphasized for the period ahead are achieving revenue growth for all products and services by increasing penetration at existing customers and broadening the customer base to include market segments not historically served, as well as continuing to identify additional product and service opportunities for current and future customers. Management also highlights the pending acquisition of UniFirst, valued at approximately $5.5 billion ⁶⁶, as a significant strategic event, with the expectation that the Transaction will close in the second half of calendar 2026.