SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 For the Fiscal Year Ended May 31, 1996
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File No. 0-11399
CINTAS CORPORATION
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Incorporated under IRS Employer ID
the Laws of Washington No. 31-1188630
- ---------------------------------- ----------------------------
(State or other jurisdiction of
incorporation or organization)
6800 Cintas Boulevard
P.O. Box 625737
Cincinnati, Ohio 45262-5737
Phone: (513) 459-1200
- --------------------------------------------------------------------------------
(Address of principal executive offices) Securities
Registered Pursuant to Section 12(b) of the Act:
None
- --------------------------------------------------------------------------------
Securities Registered Pursuant to Section 12(g) of the Act:
Common Stock, No Par Value
- --------------------------------------------------------------------------------
(Title of class)
This Form 10-K/A is being filed to amend and restate Part 1 Item 1 of the
Form 10-K for the Fiscal Year Ended May 31, 1996, and to file certain exhibits.
<PAGE>
PART I
ITEM 1.
BUSINESS
Information regarding revenues from products and services, the number of
employees and competition are listed or described below:
The table sets forth the revenues derived from each service provided by Cintas.
Year Ended May 31
--------------------------------------
1996 1995 1994
-------- ---------- ----------
(in thousands)
Uniform Rental $492,369 $415,035 $351,495
Uniform Sales 81,373 69,825 58,294
Non-Uniform Rentals 148,652 124,045 108,360
Other 7,736 6,193 5,067
-------- ---------- ----------
$730,130 $615,098 $523,216
======== ======== ========
The Company began business in 1929 as an Ohio Corporation and changed its state
of incorporation to Washington in 1986. At May 31, 1996, the Company employed
10,803 employees of which 88 are represented by labor unions. The Company
considers its relationship with its employees to be satisfactory.
Cintas provides a highly specialized service to businesses of all types - from
small service companies to major corporations that employ thousands of people.
The Company designs, manufactures and implements corporate identity uniform
programs throughout the United States.
The rental markets served by the Company are highly fragmented and competition
for this business varies at each of the Company's locations. There are other
companies in the uniform rental business which have financial resources
comparable to those of the Company, although much of the competition consists of
smaller local and regional firms. In certain instances, local competitors may
also have financial resources comparable to those deployed by the Company in a
particular market.
The service provided to the rental markets served by the Company principally
consists of the rental and cleaning of uniforms as well as providing on-going
uniform upgrades to each customer. The Company also offers ancillary products
which includes the rental or sale of walk-off mats, fender covers, towels, mops
and linen products.
Due to its diverse customer base and average account size, the loss of one
account would not have a significant financial impact on the Company.
In its sale of customized uniforms, Cintas competes on a national basis with
other uniform suppliers and manufacturers, some of which have financial
resources comparable to the Company's.
The Company operates four manufacturing facilities which provide for a
substantial amount of its standard uniform needs. Additional products are
purchased from several outside suppliers. Because of the Company's ability to
manufacture much of its own uniform needs, the loss of one vendor would not have
a significant effect on the Company. In regard to the availability of fabric for
the manufacturing process, the Company purchases fabric from several suppliers.
The Company is not aware of any circumstances which would hinder its ability to
obtain these materials.
The Company does not anticipate any material capital expenditures for
environmental controls that would have a material effect on its financial
condition. The Company is not aware of any material non-compliance with
environmental laws.
The Company believes that the primary competitive factors that affect its
operations are quality, service, design and price, in that order.
<PAGE>
PART IV
ITEM 14.
EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORT ON FORM 8-K
(a) (3) Exhibits.
Exhibit
Number Description of Exhibit Filing Status
- -------- -------------------------------------------- -------------
3.1 Restated Articles of Incorporation (1)
3.3 Bylaws (1)
Management Compensatory Contracts (Exhibits 10.1-10.5)
10.1 Incentive Stock Option Plan (2)
10.2 Partners' Plan, as Amended (3)
10.3 1990 Directors' Stock Option Plan (4)
10.4 1992 Employee Stock Option Plan, as Amended (5)
10.5 1994 Directors' Stock Option Plan (6)
11 Statement re computation of filed herewith
per share earnings
13 1996 Annual Report to Shareholders filed herewith
21 Subsidiaries of the Registrant filed herewith
23 Consent of Independent Auditors filed herewith
27 Financial Data Schedule filed herewith
(1) Incorporated by reference to the Company's Annual Report on Form 10-K for
the year ended May 31, 1989.
(2) Incorporated by reference to the Company's Registration Statement No.
33-23228 on Form S-8 filed under the Securities Act of 1933.
(3) Incorporated by reference to the Company's Registration Statement No.
33-56623 on Form S-8 filed under the Securities Act of 1933.
(4) Incorporated by reference to the Company's Registration Statement No.
33-71124 on Form S-8 filed under the Securities Act of 1933.
(5) Incorporated by reference to the Company's Proxy Statement for its 1995
Annual Shareholders' Meeting.
(6) Incorporated by reference to the Company's Proxy Statement for its 1994
Annual Shareholders' Meeting.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.
CINTAS CORPORATION
DATE SIGNED: April 30, 1997 By: /s/ William C. Gale
----------------------------
William C. Gale
Vice President - Finance
(Chief Accounting Officer)
EXHIBIT 11
STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
(in thousands except per share data)
A. Weighted average shares outstanding basis:
Fiscal year ended May 31
-------------------------------------
1996 1995 1994
------- ------- ---------
Net income $75,183 $62,743 $52,170
======= ======= =======
Weighted average
shares outstanding 47,099 46,891 46,706
====== ======= ======
Earnings per share $1.596 $1.338 $1.117
====== ====== ======
B. Primary basis:
Fiscal year ended May 31
-------------------------------------
1996 1995 1994
------- ------- ---------
Net income $75,183 $62,743 $52,170
======= ======= =======
Weighted average
shares outstanding 47,099 46,891 46,706
Plus - net shares to be
issued upon exercise
of dilutive stock
options after applying
treasury stock method 752 773 778
--------- --------- --------
47,851 47,664 47,484
========= ======== ========
Earnings per share $1.571 $1.316 $1.099
========= ======== ========
<PAGE>
C. Fully diluted basis:
Fiscal year ended May 31
-------------------------------------
1996 1995 1994
------- ------- ---------
Net income $75,183 $62,743 $52,170
======= ======= =======
Weighted average
shares outstanding 47,099 46,891 46,706
Plus - net shares to be
issued upon exercise
of dilutive stock
options after applying
treasury stock method 905 859 838
-------- -------- --------
48,004 47,750 47,544
======== ======== ========
Earnings per share $1.566 $1.314 $1.097
======== ======== ========
Note: Reported earnings per share for each year was based upon weighted
average shares outstanding since neither the primary nor fully diluted
amounts of per share earnings resulted in a reduction of 3% or more.
FINANCIAL HIGHLIGHTS
Years Ended May 31
(In thousands except per share data)
%
1996 1995 Change
-------- --------- ---------
Operating Results
Net Revenues $730,130 $615,098 18.7%
Net Income 75,183 62,743 19.8%
Return on Average Equity 18.9% 18.6% 1.6%
Financial Condition
Shareholders' Equity $429,497 $364,344 17.9%
Working Capital 194,908 146,410 33.1%
Current Ratio 2.90:1 2.54:1 14.2%
Per Share Data
Net Income $1.60 $1.34 19.4%
Shareholders' Equity
(book value) 9.10 7.75 17.4%
Dividends 0.25 0.20 25.0%
<PAGE>
TO OUR SHAREHOLDERS AND FRIENDS
Fiscal year 1996 marks our twenty-seventh consecutive year of
uninterrupted growth in sales and profits. During these twenty-seven years, our
sales have grown at a compound annual rate of 24% and profits have grown at a
compound annual rate of 34%. Our dedication to customer satisfaction, attention
to detail and commitment to improved quality are the keys to our continued
success. These, along with our outstanding team of dedicated working partners,
have produced a company that truly IS THE ANSWER to customer and shareholder
satisfaction.
Revenues for fiscal year 1996 totaled $730.1 million, a 19% increase from
last year. Pretax income of $122.2 million increased 21% from $101.0 million
last year, while net income of $75.2 million increased 20% over fiscal 1995. Our
earnings per share increased 19% to $1.60 per share from $1.34 last year.
When Cintas went public in August 1983, we were comparable in size to the
other public companies in our industry. Since then, Cintas has grown at a faster
rate and now is the largest public company almost twice as large as the next
largest company in the industry. This chart conveys the progress we have made:
Fiscal 1983 Fiscal 1996
----------- -----------
Revenues $62.8 million $730.1 million
Net Income $5.5 million $75.2 million
Earnings Per Share $.17 $1.60
Uniform Rental Locations 23 117
Manufacturing Plants 1 4
Distribution Centers 2 3
Business Customers 14,000 166,000
Individuals in Uniform 200,000 1.7 million
Market Share 3.5% 17.0%
Market Value $111 million (IPO) $2.5 billion
Our successful track record, corporate culture and reputation enable us to
attract a special group of talented people who are united in a common cause and
enjoy what they do. Recently, three of our key partners were promoted. Jim
Critchfield, with eighteen years at Cintas, has been promoted to Vice President
- - North Central Region, after serving as a General Manager of our Schaumburg,
Illinois, operation. Larry Harmon, a thirteen-year veteran, has been promoted to
Vice President - Human Resources after serving as Vice President - Western
Region. Jim Krupansky, having served Cintas for fifteen years in various
positions, has been promoted to Vice President - Western Region. His most recent
position was General Manager of our Detroit, Michigan, operation.
These seasoned managers have proven track records in sales, service and
operations. Their skills are many - but they are masters at building teams and
motivating our partners to be the best they can be. They are highly qualified
and well prepared for their new positions.
<PAGE>
With the highest customer satisfaction in the industry, Cintas is poised
for the future. We are the largest, fastest growing and most profitable public
company in the business. We have excellent financial resources, we have modern,
productive plants, and we believe we can continue our successful track record
because of our great ownership-driven team. We thank you for your continued
support and interest.
Sincerely yours,
Richard T. Farmer
Chairman of the Board
Robert J. Kohlhepp
President and Chief Executive Officer
<PAGE>
FISCAL 1996 IN REVIEW
LEADERSHIP? CINTAS IS THE ANSWER.
The dictionary defines a leader as one who shows the way, or directs the course,
by going before another. Cintas is the leader in the uniform rental industry.
o We are the largest public company in our industry.
o We have the highest long-term growth rates in sales and profits.
o We have a 17% share of the $4.3 billion market and 5% share of a $13.5
billion potential market.
o In the last five years, we expanded our service to more than 70 new cities;
13 in the year that just ended.
o We have an outstanding management team, most of whom have been with our
Company for many years.
o We are ownership-driven. The majority of our management team's personal net
worth is invested in Cintas.
o We do extensive market research to identify new and better ways to satisfy
our customers.
o We are the innovator of new products and services for our customers.
o We have an excellent reputation that attracts new partners and new
customers.
PRODUCTIVITY? CINTAS IS THE ANSWER.
We continue to be the leader in the industry in building modern and productive
facilities. Cintas has a research and development team that works closely with
our operations and our suppliers to determine the most cost effective and
efficient processes for every facility we build or renovate. In fiscal 1996
alone we spent approximately $5 million in research and development, testing new
technology and processes to improve our productivity.
EXPANDING CAPACITY? CINTAS IS THE ANSWER.
We constantly expand capacity to keep pace with our growth. Fiscal 1996 was no
exception. We completed two new plants - one in Las Vegas, Nevada, and the other
in Denver, Colorado - and renovated or expanded three additional plants.
Currently, new plants are under construction in Indianapolis, Indiana; Austin,
Texas; Ontario, California; and Boston, Massachusetts. We also expanded our
Mason, Ohio, Distribution Center in order to increase capacity and more
effectively service the Company's continued growth in the Midwest, on the East
Coast, and in Canada. A third distribution center, in Montgomery, Alabama, was
opened to service operations in the South, Southeast, and Southwest regions of
the United States.
ACQUISITIONS? CINTAS IS THE ANSWER.
There are currently more than 700 mostly family-owned companies serving the
uniform rental market in the United States. The industry has been in a
consolidation phase for many years. Since going public in 1983, Cintas has made
more than 80 acquisitions, which account for approximately a third of our total
growth. Acquisitions will continue to play a major role in the growth of our
Company going forward.
FINANCIAL RESOURCES? CINTAS IS THE ANSWER.
The Company has strong financial resources to continue our track record into the
future. Total cash and marketable securities of $82.5 million increased 81% from
$45.5 million last year. Operating cash flow per share was $2.39 for fiscal
1996, a 49% increase over last year. Our current ratio improved from 2.54:1 to
2.90:1. Our debt to total capital stands at 22.5%, which provides significant
additional borrowing capacity for acquisitions and internal growth. We are well
positioned to take advantage of the many opportunities we have for continued
outstanding growth.
<PAGE>
DEDICATED, HARDWORKING TEAM? CINTAS IS THE ANSWER.
At Cintas, we consider each other partners and we call each other "partner". We
applaud all of our partners and continue to dedicate resources to education in
all areas of our Company. Education is an everyday occurrence at Cintas. In
fiscal 1996, we invested approximately 425,000 hours in formalized classroom
training - imparting more knowledge in sales skills, world-class service, human
relations, motivation skills, productivity and quality.
LEADING THE WAY TO WORLD-CLASS SERVICE? CINTAS IS THE ANSWER.
Our goal of achieving world-class service is clearly the most important
objective we have as a Company. Our customers expect good service, but "good" is
never good enough. We must provide exceptional service, and we do. Take Avis for
example: since 1983, we have been providing industrial uniforms to their
employees who work "behind the scenes," cleaning and preparing the vehicles for
their customers. Our performance won the coveted "Avis Total Quality Award,"
given to top suppliers. Avis recently chose Cintas to provide the tailored
uniform service to the rest of their employees - those who have a higher level
of customer contact, such as their rental sales agents and managers. Quality
pays off and our insistence on excellence will fuel our future growth. As a
result, our partners can count on rewarding careers and our shareholders will
have an attractive return.
<PAGE>
ELEVEN YEAR FINANCIAL SUMMARY
Years Ended May 31
(In thousands except per share data)
<TABLE>
<CAPTION>
1986 1987 1988 1989 1990 1991
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Net Revenues.......... $144,621 185,101 228,091 269,260 311,776 352,480
Net Income............ $ 12,318 14,737 18,550 23,101 27,994 31,339
Earnings Per Share.... $ 0.30 0.35 0.44 0.52 0.62 0.69
Dividends Per Share... $ 0.02 0.03 0.04 0.05 0.07 0.09
Total Assets.......... $165,474 194,847 213,958 228,000 274,103 326,752
Shareholders' Equity.. $ 72,961 86,646 104,710 138,079 163,026 191,124
Return on Average
Equity............. 18.3% 18.5% 19.4% 19.0% 18.6% 17.7%
Long-Term Debt........ $ 62,797 70,757 65,490 43,303 54,079 68,974
</TABLE>
<TABLE>
<CAPTION>
10 Year
Compd
1992 1993 1994 1995 1996 Growth
---- ---- ---- ---- ---- ------
<S> <C> <C> <C> <C> <C> <C>
Net Revenues.......... $401,563 452,722 523,216 615,098 730,130 17.6%
Net Income............ $ 39,195 44,873 52,170 62,743 75,183 19.8%
Earnings Per Share.... $0.85(a) 0.97 1.12 1.34 1)6 18.2%
Dividends Per Share... $ 0.11 0.14 0.17 0.20 0 28.7%
Total Assets.......... $361,261 454,165 501,632 596,181 668,762 15.0%
Shareholders' Equity.. $225,864 264,914 309,652 364,344 429,497 19.4%
Return on Average
Equity.............. 18.8% 18.3% 18.2% 18.6% 18.9%
Long-Term Debt........ $ 67,790 103,611 84,184 120,275 117,924
<FN>
(a) Includes earnings of $.06 per share due to the adoption of SFAS No. 96.
Note:Results prior to October 1, 1991, have been restated to include Rental
Uniform Service of Greenville, S.C., Inc.
</FN>
</TABLE>
<PAGE>
Cintas Corporation
CONSOLIDATED STATEMENTS OF INCOME
Years Ended May 31
(In thousands except per share data)
1996 1995 1994
-------- -------- --------
Revenues:
Net rentals...................................$648,616 $545,267 $464,922
Net sales..................................... 81,514 69,831 58,294
------ ------ ------
730,130 615,098 523,216
Costs and expenses (income):
Cost of rentals............................... 369,386 312,313 264,477
Cost of sales................................. 67,424 58,952 48,868
Selling and administrative expenses........... 164,471 137,675 119,446
Interest income............................... (2,454) (2,148) (1,690)
Interest expense.............................. 9,073 7,345 6,664
------- ------- -------
607,900 514,137 437,765
------- ------- -------
Income before income taxes....................... 122,230 100,961 85,451
Income taxes..................................... 47,047 38,218 33,281
------- ------- -------
Net income....................................... $75,183 $62,743 $52,170
======= ======= =======
Weighted average number of shares outstanding.... 47,099 46,891 46,706
====== ====== ======
Earnings per share............................... $1.60 $1.34 $1.12
===== ===== =====
Dividends per share.............................. $0.25 $0.20 $0.17
===== ===== =====
See accompanying notes.
<PAGE>
Cintas Corporation
CONSOLIDATED BALANCE SHEETS
As of May 31
(In thousands except share data)
1996 1995
------- ------
Assets
Current assets:
Cash and cash equivalents....................... $9,066 $6,685
Marketable securities........................... 73,477 38,797
Accounts receivable, principally trade,
less allowance of $1,958
and $2,029, respectively...................... 78,244 69,032
Inventories..................................... 34,678 36,883
Uniforms and other rental items in service...... 100,307 88,670
Prepaid expenses................................ 1,730 1,355
----- -----
Total current assets............................... 297,502 241,422
Property, plant and equipment, at cost, net........ 252,597 227,997
Other assets....................................... 118,663 126,762
$668,762 $596,181
======== ========
Liabilities and Shareholders' Equity
- ------------------------------------
Current liabilities:
Accounts payable................................ $19,363 $17,265
Accrued liabilities............................. 49,168 42,158
Income taxes:
Current....................................... --- 2,191
Deferred...................................... 27,471 23,368
Long-term debt due within one year.............. 6,592 10,030
Total current liabilities.......................... 102,594 95,012
Long-term debt due after one year.................. 117,924 120,275
Deferred income taxes.............................. 18,747 16,550
Shareholders' equity:
Preferred stock, no par value;
100,000 shares authorized,
none outstanding.............................. --- ---
Common stock, no par value;
120,000,000 shares authorized,
47,199,299 and 47,005,340
shares issued and outstanding,
respectively.................................. 43,657 42,035
Retained earnings............................... 386,673 323,284
Foreign currency translation adjustment......... (833) (975)
----- -----
Total shareholders' equity......................... 429,497 364,344
------- -------
$668,762 $596,181
======== ========
See accompanying notes.
<PAGE>
Cintas Corporation
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(In thousands)
<TABLE>
<CAPTION>
Foreign
Currency Total
Common Stock Retained Translation Shareholders'
Shares Amount Earnings Adjustment Equity
------ --------- --------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Balance at May 31, 1993 ...............................46,579 $ 39,869 $ 225,722 $ (677) $ 264,914
Net income ........................................ -- -- 52,170 52,170
Dividends ......................................... -- -- (7,953) -- (7,953)
Stock options exercised net of
shares surrendered ............................ 222 750 -- -- 750
Tax benefit resulting from exercise of
employee stock options ........................ -- 320 -- -- 320
Foreign currency translation adjustment ........... -- -- -- (549) (549)
------ --------- --------- --------- ---------
Balance at May 31, 1994 ...............................46,801 40,939 269,939 (1,226) 309,652
Net income ........................................ -- -- 62,743 -- 62,743
Dividends ......................................... -- -- (9,398) -- 9,398
Stock options exercised net of
shares surrendered ............................ 204 906 -- -- 906
Tax benefit resulting from exercise of
employee stock options ........................ -- 190 -- -- 190
Foreign currency translation adjustment ........... -- -- -- 251 251
------ --------- --------- --------- ---------
Balance at May 31, 1995 ...............................47,005 42,035 323,284 (975) 364,344
Net income ........................................ -- -- 75,183 -- 75,183
Dividends ......................................... -- -- (11,794) -- (11,794)
Stock options exercised net of
shares surrendered ............................ 194 768 -- -- 768
Tax benefit resulting from exercise of
employee stock options...................... -- 854 -- -- 854
Foreign currency translation adjustment ........... -- -- -- 142 142
Balance at May 31, 1996................................47,199 $43,657 $386,673 $(833) $429,497
====== ======= ======== ====== ========
</TABLE>
See accompanying notes.
<PAGE>
Cintas Corporation
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended May 31
(In thousands)
<TABLE>
<CAPTION>
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Cash flows from operating activities:
Net income............................................................. $75,183 $62,743 $52,170
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation................................................. 30,586 26,179 24,271
Amortization of deferred charges............................. 12,518 11,527 10,789
Deferred income taxes........................................ 6,300 2,162 7,184
Equity in earnings of affiliate.............................. --- (428) (347)
Change in current assets and liabilities, net of
acquisitions of businesses:
Accounts receivable......................................... (9,171) (10,180) (7,055)
Inventories................................................. (9,432) (21,400) (19,777)
Prepaid expenses............................................ (375) (3) 503
Accounts payable............................................ 2,098 (2,162) (1,842)
Accrued liabilities......................................... 6,910 6,628 4,850
Income taxes payable........................................ (2,191) 184 684
------- ------- -------
Net cash provided by operating activities.............................. 112,426 75,250 71,430
Cash flows from investing activities:
Proceeds from sale of property, plant and equipment.............. 1,715 2,333 1,326
Capital expenditures............................................. (56,780) (58,879) (37,164)
Proceeds from sale or redemption of marketable securities........ 74,220 196,204 47,053
Purchase of marketable securities................................ (108,900) (182,668) (58,609)
Acquisitions of businesses, net of cash acquired................. (2,307) (50,095) (11,796)
Other............................................................ (2,173) 1,126 (2,753)
------- -------- -------
Net cash used by investing activities.................................. (94,225) (91,979) (61,943)
Cash flows from financing activities:
Proceeds from issuance of long-term debt......................... 424 52,208 63
Repayment of long-term debt...................................... (6,213) (21,829) (8,410)
Issuance of common stock......................................... 768 906 750
Repurchase of common stock....................................... --- (7,112) ---
Dividends paid................................................... (11,794) (9,398) (7,953)
Other............................................................ 995 190 320
-------- -------- -------
Net cash provided by (used in) financing activities.................... (15,820) 14,965 (15,230)
-------- -------- --------
Net increase (decrease) in cash and cash equivalents................... 2,381 (1,764) (5,743)
Cash and cash equivalents at beginning of year......................... 6,685 8,449 14,192
-------- ------- -------
Cash and cash equivalents at end of year............................... $9,066 $6,685 $8,449
====== ====== ======
</TABLE>
See accompanying notes.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(AMOUNTS IN THOUSANDS EXCEPT PER SHARE AND SHARE DATA)
1. SIGNIFICANT ACCOUNTING POLICIES
Business description. Cintas designs, manufactures and implements corporate
identity uniform programs which it rents or sells to customers throughout the
United States and Canada. The Company provides this highly specialized service
to businesses of all types--from small service companies to major corporations
that employ thousands of people.
Principles of consolidation. The consolidated financial statements include
the accounts of Cintas Corporation and its subsidiaries, all of which are
wholly-owned. Intercompany balances and transactions have been eliminated.
Use of estimates. The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes.
Cash flows. For purposes of the statement of cash flows, the Company
considers all highly liquid investments with a maturity of three months or less,
at date of purchase, to be cash equivalents.
Inventories. Inventories are valued at the lower of cost (first-in,
first-out) or market. Substantially all inventories represent finished goods.
Uniforms and other rental items in service. These items are valued at cost
less amortization, calculated using the straight-line method generally over
periods of eight to eighteen months.
Depreciation. The Company calculates depreciation using the straight-line
method over the estimated useful lives of the assets.
Other assets. Other assets consist primarily of service contracts and
non-compete or consulting agreements obtained through the acquisition of
businesses, which are amortized by use of the straight-line method over the
estimated lives of the agreements which are generally five to ten years, and
goodwill, which is amortized using the straight-line method over forty years.
Stock options. The Company grants stock options to certain employees at the
fair market value of the underlying common stock on the date of the grant. The
stock option grants are accounted for in accordance with APB Opinion No. 25,
Accounting for Stock Issued to Employees, and accordingly no compensation
expense is recorded for the stock option grants.
Earnings per share. Earnings per share is calculated on the basis of the
weighted average number of shares of common stock outstanding during the year,
including the dilutive effect, if any, of assumed conversion of common stock
equivalents.
2. MARKETABLE SECURITIES
All marketable equity securities and debt securities are classified as
available-for-sale. The amortized cost of debt securities in this category is
adjusted for amortization of premiums and accretion of discounts to maturity.
Such amortization is included in investment income. Realized gains and losses
and declines in value determined to be other than temporary on
available-for-sale securities are included in investment income. The cost of the
securities sold is based on the specific identification method. Interest and
dividends on securities classified as available-for-sale are included in
investment income.
The following is a summary of marketable securities at May 31, 1996 and 1995:
1996 1995
--------------------- -------------------
Estimated Estimated
Cost Fair Value Cost Fair Value
------- ---------- ------- ----------
Obligations of state and
political subdivisions $57,318 $57,249 $26,434 $26,130
U.S. Treasury securities and
obligations of U.S.
government agencies............. 6,142 6,077 5,306 5,317
Other debt securities................ 10,017 10,053 7,057 7,036
------ ------ ----- -----
$73,477 $73,379 $38,797 $38,483
======= ======= ======= =======
The gross realized gains on sales of available-for-sale securities totaled $77,
$154 and $42 for the years ended May 31, 1996, 1995 and 1994, and the gross
realized losses totaled $127, $203 and $78, respectively. Net unrealized losses
are $98 and $314 at May 31, 1996 and 1995, respectively. Marketable securities
are carried at cost which approximates market.
The amortized cost and estimated fair value of debt and marketable equity
securities at May 31, 1996, by contractual maturity, are shown below. Expected
maturities will differ from contractual maturities because the issuers of the
securities may have the right to prepay the obligations without prepayment
penalties.
<PAGE>
Estimated
Cost Fair Value
------- ----------
Due in one year or less.................................... $50,167 $50,208
Due after one year through three years..................... 19,603 19,526
Due after three years...................................... 3,707 3,645
------- -------
$73,477 $73,379
======= =======
3. PROPERTY, PLANT AND EQUIPMENT 1996 1995
-------- --------
Land....................................................... $24,458 $22,526
Buildings and improvements................................. 124,590 119,109
Equipment.................................................. 198,384 175,858
Leasehold improvements..................................... 1,016 1,035
Construction in progress................................... 18,030 14,862
------ ------
366,478 333,390
Less accumulated depreciation.............................. 113,881 105,393
------- -------
$252,597 $227,997
======== ========
4. OTHER ASSETS 1996 1995
-------- --------
Goodwill................................................... $57,962 $56,562
Service contracts.......................................... 61,329 64,171
Non-compete and consulting agreements...................... 47,175 48,452
------ ------
166,466 169,185
Less accumulated amortization.............................. 55,630 49,564
------ ------
110,836 119,621
Other...................................................... 7,827 7,141
----- -----
$118,663 $126,762
======== ========
1996 1995
-------- --------
5. LONG-TERM DEBT
Secured term notes due through 2003
at an average rate of 7.99%..................... $37,351 $39,756
Unsecured term notes due through 2002
at an average rate of 7.48%..................... 38,571 40,000
Unsecured notes due through 2009
at an average rate of 5.87% .................... 29,055 29,819
Unsecured revolving note due in 2000
at a rate of 5.94%.............................. 10,000 10,000
Industrial development revenue bonds
due through 2003 at an average rate of 5.17%.... 7,202 8,236
Other long-term obligations.......................... 2,337 2,494
------- -------
124,516 130,305
Less amounts due within one year..................... 6,592 10,030
------- -------
$117,924 $120,275
======== ========
Debt in the amount of $46,712 is secured by assets with a carrying value of
$43,475 at May 31, 1996, and letters of credit in the amount of $11,116 .
Maturities of long-term debt during the five years ending May 31, 2001, are:
$6,592, $6,733, $33,821, $33,705 and $5,379, respectively. At May 31, 1996, the
fair value of the Company's outstanding debt approximates its carrying value.
Interest expense is net of capitalization of $435, $638 and $449 for the
years ended May 31, 1996, 1995 and 1994, respectively. Interest paid, net of the
amount capitalized, was $9,532, $7,453 and $7,008 for the years ended May 31,
1996, 1995 and 1994, respectively.
<PAGE>
6. LEASES
The Company conducts certain operations from leased facilities and leases
certain equipment. Most leases contain renewal options for periods from one to
ten years. The lease agreements provide for increases in rentals if the options
are exercised, based on increases in certain price level factors or prearranged
increases. The minimum rental payments for the five years ending May 31, 2001,
are: $3,442, $3,106, $2,666, $2,243 and $1,992, respectively. Rent expense under
operating leases during the years ended May 31, 1996, 1995 and 1994, was
approximately $5,572, $5,369 and $4,258, respectively.
7. INCOME TAXES 1996 1995 1994
---- ---- ----
Income taxes consist of the following
components:
Current:
Federal............................... $35,001 $29,787 $21,900
State and local....................... 5,746 5,389 4,197
------- ------- -------
40,747 35,176 26,097
Deferred.................................. 6,300 3,042 7,184
------- ------- -------
$47,047 $38,218 $33,281
======= ======= =======
Reconciliation of income tax expense
using the statutory rate and actual income
tax expense is as follows:
Income taxes at the U.S. federal
statutory rate........................ $42,781 $35,336 $29,908
State and local income taxes,
net of federal benefit................ 4,239 3,659 3,412
Non-taxable income earned................. (599) (599) (554)
Tax credits............................... (216) (395) (602)
Effect of tax rate changes on
tax liabilities....................... -- -- 1,064
Other..................................... 842 217 53
----- ------- -------
$47,047 $38,218 $33,281
======= ======= =======
The components of deferred income taxes included on the balance sheets at
May 31, 1996, 1995, and 1994, are as follows:
1996 1995 1994
---- ---- ----
Deferred tax assets:
Employee benefits ......................... $6,936 $6,450 $4,272
Allowance for bad debts and other.......... 5,821 6,009 2,667
----- ----- -----
12,757 12,459 6,939
Deferred tax liabilities:
In-service inventory....................... 36,348 32,627 27,575
Depreciation............................... 17,682 15,104 13,509
Other...................................... 4,945 4,646 3,326
----- ----- -----
58,975 52,377 44,410
------ ------ ------
Net deferred tax liability.......................$46,218 $39,918 $37,471
======= ======= =======
Income taxes paid were $40,817, $35,362 and $29,741 for the years ended May
31, 1996, 1995 and 1994, respectively.
8. ACQUISITIONS
Information relating to the acquisitions of uniform rental businesses which were
accounted for as purchases is as follows:
1996 1995 1994
------ ------- --------
Number of acquisitions....................... 3 12 8
Fair value of assets acquired................ $2,407 $52,684 $11,996
Liabilities assumed and incurred ............ 100 2,589 200
------ ------- -------
Total cash paid for acquisitions ............ $2,307 $50,095 $11,796
====== ======= =======
On February 13, 1995, the Company acquired 80% of the outstanding stock of
Cadet Uniform Services, Ltd., a uniform rental company in Toronto, Ontario, for
approximately $41 million which was financed through borrowings. The purchase
increased the Company's ownership from 20% to 100%.
In addition to the acquisitions reflected in the table, the Company
acquired one business in fiscal 1995 by reissuing 219,765 treasury shares and
accounted for the acquisition as a purchase.
The results of operations from the acquired businesses are included in the
consolidated statements of income from the dates of acquisition. The unaudited
pro forma results of operations for the years ended May 31, 1996 and 1995,
assuming the acquisitions had occurred on June 1 of each respective year, would
be approximately as follows:
1996 1995
-------- --------
Revenues.......................... $731,319 $637,497
Net income........................ $75,223 $64,058
Earnings per share................ $1.60 $1.37
The unaudited pro forma results of operations are not necessarily
indicative of the actual operating results that would have occurred had the
acquisitions been consummated on June 1 of each respective fiscal year or of
future operating results of the combined companies.
9. CINTAS PARTNERS' PLAN
The Cintas Partners' Plan (the Plan) is a non-contributory profit sharing
plan and ESOP for the benefit of Company employees who have completed one year
of service. The Plan also includes a 401(k) savings feature covering
substantially all employees. The amount of contributions to the profit sharing
plan and ESOP and the matching contribution to the 401(k) are at the discretion
of the Company. Total contributions, including the Company's matching
contributions, were $6,188, $4,956 and $4,300 for the years ended May 31, 1996,
1995 and 1994, respectively.
10. STOCK OPTIONS
Under a stock option plan adopted by the Company in fiscal 1993, the
Company may grant officers and key employees incentive stock options and/or
non-qualified stock options to purchase an aggregate of 2,300,000 shares of the
Company's common stock. Options are generally granted at the fair market value
of the underlying common stock on the date of grant and generally become
exercisable at the rate of 20% per year commencing five years after grant, so
long as the holder remains an employee of the Company.
The information presented in the table relates to incentive stock options
granted and outstanding under either the plan adopted in fiscal 1993 or under a
similar plan which expired in June 1993.
Stock Option
Shares Price Range
--------- -------------
Outstanding May 31, 1993
(297,654 shares exercisable)................ 1,317,476 $2.67-$28.75
Granted.......................................... 193,750 26.50-27.50
Cancelled........................................ (48,710) 5.92-28.25
Exercised........................................ (226,682) 2.67-12.17
--------- -------------
Outstanding May 31, 1994
(246,551 shares exercisable)................ 1,235,834 3.46-28.75
Granted.......................................... 237,200 31.88-38.38
Cancelled........................................ (88,950) 5.92-31.88
Exercised........................................ (219,515) 3.46-12.17
--------- ------------
Outstanding May 31, 1995
(167,109 shares exercisable)................ 1,164,569 5.92-38.38
Granted ......................................... 225,250 34.75-52.50
Cancelled........................................ (28,420) 7.96-43.25
Exercised........................................ (159,923) 5.92-13.33
--------- ------------
Outstanding May 31, 1996
(123,706 shares exercisable) ............... 1,201,476 $7.96-$52.50
--------- ------------
In addition to the outstanding incentive stock options reflected in the
table, there were 210,970, 205,170 and 188,750 outstanding non-qualified stock
options at May 31, 1996, 1995 and 1994, respectively. During fiscal 1996, 88,500
non-qualified stock options were granted and 82,700 were exercised. At May 31,
1996, the exercise prices of these outstanding options ranged from $7.96 to
$43.25 per share, and 74,300 of these outstanding options were exercisable.
At May 31, 1996, 3,792,000 shares of common stock are reserved for future
issuance.
11. QUARTERLY FINANCIAL DATA (UNAUDITED)
The following is a summary of the results of operations for each of the
quarters within the years ended May 31, 1996 and 1995:
First Second Third Fourth
May 31, 1996 Quarter Quarter Quarter Quarter
- ------------ ------- ------- ------- -------
Revenues from rentals and sales........$170,343 182,369 182,977 194,441
Gross profit........................... $69,256 72,959 73,122 77,983
Net income............................. $16,288 18,847 18,524 21,524
Earnings per share..................... $0.35 0.40 0.39 0.46
Weighted average number of shares
outstanding.......................... 47,033 47,053 47,122 47,190
May 31, 1995
- ------------
Revenues from rentals and sales........$142,037 151,591 151,217 170,253
Gross profit........................... $57,481 59,502 59,359 67,491
Net income............................. $13,760 15,756 15,315 17,912
Earnings per share..................... $0.29 0.34 0.33 0.38
Weighted average number of shares
outstanding.......................... 46,805 46,829 46,932 47,000
<PAGE>
REPORT OF AUDIT COMMITTEE
The Audit Committee (the Committee) of the Board of Directors is composed
of three independent directors. The Committee, which held two audit meetings
during fiscal 1996, oversees the Company's financial reporting process on behalf
of the Board of Directors.
In fulfilling its responsibility, the Committee recommended to the Board
of Directors the selection of the Company's independent auditors. The Committee
discussed with the independent auditors the overall scope and specific plan for
their audits. The Committee also discussed the Company's consolidated financial
statements and the adequacy of the Company's system of internal control.
The Committee meets with the Company's independent auditors, without
management present, to discuss the results of their audits, their evaluation of
the system of internal control and the overall quality of the Company's
financial reporting. The meetings also are designed to facilitate any private
communications with the Committee desired by the independent auditors.
Roger L. Howe, Chairman
Audit Committee
July 8, 1996
REPORT OF ERNST & YOUNG LLP,
INDEPENDENT AUDITORS
The Board of Directors
Cintas Corporation
We have audited the accompanying consolidated balance sheets of Cintas
Corporation as of May 31, 1996 and 1995, and the related consolidated statements
of income, shareholders' equity and cash flows for each of the three years in
the period ended May 31, 1996. These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Cintas
Corporation at May 31, 1996 and 1995, and the consolidated results of its
operations and its cash flows for each of the three years in the period ended
May 31, 1996, in conformity with generally accepted accounting principles.
Cincinnati, Ohio Ernst & Young LLP
July 8, 1996
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
FISCAL 1996 COMPARED TO FISCAL 1995
Fiscal 1996 marked another year of uninterrupted growth for the Company.
Total revenues were $730 million, an increase of 19% over fiscal 1995. Net
income of $75 million and earnings per share of $1.60 represented increases of
20% and 19%, respectively, over the prior fiscal year. Net rental revenues
increased 19%; revenues in existing rental operations increased 15%, while
acquisitions accounted for the remaining growth. Net sales revenues increased
17%. Return on equity of 19% was comparable with the prior year.
Income before taxes increased 21% to $122 million. Net interest expense
increased $1 million primarily due to an increase in the amount of long-term
debt associated with the acquisition of Cadet Uniform Services, Ltd. in fiscal
1995. The Company's effective tax rate was 38% in both 1996 and 1995.
Cash, cash equivalents and marketable securities increased by $37 million,
primarily due to strong cash flow from operations. The cash, cash equivalents
and marketable securities will be used to finance future acquisitions and
capital expenditures. Marketable securities consist primarily of municipal bonds
and federal government securities.
Inventories decreased $2 million as the Company focused on improving the
efficiency of its distribution operations while still maintaining service levels
for anticipated growth.
Net property, plant and equipment increased by $25 million. In fiscal
1996, the Company constructed two new uniform rental facilities to accommodate
growth in rental operations.
FISCAL 1995 COMPARED TO FISCAL 1994
During fiscal 1995, total revenues were $615 million, net income was $63
million and earnings per share was $1.34, increasing 18%, 20% and 20%,
respectively. Net rental revenues increased 17%. Revenues in existing rental
operations increased 14%, while acquisitions accounted for the remaining growth.
Net sales revenues increased 20% due to new business and expansion of business
within existing national accounts. Return on equity of 19% was comparable with
the prior year.
Income before taxes increased 18% to $101 million. The Company's effective
tax rate decreased from 39% to 38%. In fiscal 1994, the Company recorded a
one-time charge for the retroactive impact (to January 1, 1993) of an increase
in corporate marginal tax rates due to the enactment of the Omnibus Budget
Reconciliation Act of 1993.
In fiscal 1995, the Company acquired 80% of the outstanding stock of Cadet
Uniform Services, Ltd., for approximately $41 million which was financed through
borrowings. The purchase increased the Company's ownership from 20% to 100%.
Cash, cash equivalents and marketable securities decreased by $15 million
due to capital expenditures and acquisitions, which was partially offset by
strong cash flow from operations. The cash, cash equivalents and marketable
securities will be used to finance future acquisitions and capital expenditures.
Inventories increased $8 million as the Company added products for the catalog
program and proprietary products in the rental line.
Net property, plant and equipment increased by $35 million. In fiscal
1995, the Company constructed five new uniform rental facilities to accommodate
growth in rental operations. Other assets increased by $39 million, reflecting
goodwill, service contracts, and non-compete and consulting agreements obtained
through the acquisition of uniform businesses.
<PAGE>
FINANCIAL CONDITION
At May 31, 1996, the Company had $83 million in cash, cash equivalents and
marketable securities. The Company's investment policy pertaining to marketable
securities is conservative. Preservation of principal while earning an
attractive yield are the criteria used in making investments. Working capital
increased $49 million to $195 million due primarily to the increase in cash,
cash equivalents and marketable securities.
Capital expenditures for fiscal 1996 totaled $57 million. The Company
continues to reinvest profits into land, buildings and equipment in order to
expand capacity for future growth. The Company anticipates that capital
expenditures for fiscal 1997 will approximate $62 million.
The Company's percentage of debt to total capitalization was 22% at May
31, 1996, versus 26% at May 31, 1995.
During the year, the Company paid dividends of $12 million or $0.25 per
share. This dividend is an increase of 25% over that paid in fiscal 1995.
INFLATION AND CHANGING PRICES
Management believes inflation has not had a material impact on the
Company's financial condition or a negative effect on operations.
IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS
The Financial Accounting Standards Board (FASB) issued Statement No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed Of," in March 1995. The statement established standards for
recording impairment losses on long-lived assets used in operations, as well as
long-lived assets that are expected to be disposed. The Company will adopt
Statement No. 121 in the first quarter of fiscal 1997 and does not believe the
effect of adoption will be material.
<PAGE>
DIRECTORS AND OFFICERS
BOARD OF DIRECTORS OFFICERS
Gerald V. Dirvin Robert R. Buck Carl W. Kettenacker
Retired Executive Vice President Senior Vice President Vice President
and Director of The Procter &
Gamble Company Bruce L. Burgess Robert J. Kohlhepp
Vice President President and Chief
Richard T. Farmer Executive Officer
Chairman of the Board Karen L. Carnahan
Treasurer James J. Krupansky
Scott D. Farmer Vice President
Vice President of the Corporation James (Jay) Case
Vice President Robert A. Oswald
James J. Gardner Vice President
Retired Vice President James V. Critchfield
of the Corporation Vice President David Pollak, Jr.
Vice President
Roger L. Howe Richard T. Farmer
Chairman of the Board Chairman of the Board William L. Pratt
of U.S. Precision Lens, Inc. Vice President
Scott D. Farmer
Donald P. Klekamp Vice President Rodger V. Reed
Senior Partner of Keating, Muething Vice President
and Klekamp William C. Gale
Vice President, Finance Bruce E. Rotte
Robert J. Kohlhepp Vice President
President and Chief Executive Larry A. Harmon
Officer of the Corporation Vice President G. Thomas Thornley
Vice President
John S. Lillard David T. Jeanmougin
Retired Chairman-Founder of JMB Senior Vice President
Institutional Realty Corporation
John S. Kean III
Senior Vice President
<PAGE>
SHAREHOLDER INFORMATION
EXECUTIVE OFFICES 10-K REPORT
Cintas Corporation A copy of the Form 10-K annual report
6800 Cintas Boulevard filed with the Securities and Exchange
P.O. Box 625737 Commission for the year ended May 31,
Cincinnati, Ohio 45262-5737 1996, is available at no charge to
shareholders. Direct requests in
writing for this report or other
information to:
AUDITORS William C. Gale
Vice President, Finance
Ernst & Young LLP Cintas Corporation
1300 Chiquita Center 6800 Cintas Boulevard
250 East Fifth Street P.O. Box 625737
Cincinnati, Ohio 45202 Cincinnati, Ohio 45262-5737
(513) 459-1200
MARKET FOR REGISTRANT'S COMMON STOCK SECURITY HOLDER INFORMATION
Cintas Corporation Common Stock is
traded on the NASDAQ National Market At May 31, 1996, there were approxi-
System. The symbol is CTAS. mately 1,700 stockholders of record
of the Corporation's Common Stock.
The Company believes that this
represents approximately 13,000
beneficial owners.
REGISTRAR AND TRANSFER AGENT
The Fifth Third Bank
38 Fountain Square Plaza
Cincinnati, Ohio 45263
(513) 579-5300
ANNUAL MEETING
October 10, 1996
Cintas Corporate Office
6800 Cintas Boulevard
Cincinnati, Ohio
10:00 a.m.
The following table shows the high and low closing prices by quarter during the
last two fiscal years.
FISCAL 1996 FISCAL 1995
----------- -----------
Quarter ended High Low Quarter ended High Low
May 1996 56 47 May 1995 40-1/4 33-3/4
February 1996 50-1/2 41-3/4 February 1995 38-3/4 33-1/2
November 1995 48 37-1/2 November 1994 36-1/4 31-3/4
August 1995 40-3/8 33-1/2 August 1994 33-1/4 29-3/4
<PAGE>
EXHIBIT 21
SUBSIDIARIES OF REGISTRANT
STATE/PROVINCE OF
NAME INCORPORATION
Cintas Corporation - East Coast Massachusetts
Cintas Corporation - Ohio Ohio
Cintas Corporation No. 1 Ohio
Cintas Corp. No. 5 Michigan
Cintas Corp. No. 13 Pennsylvania
Cintas Corporation No. 41 Maryland
Cintas Sales Corporation Ohio
Cintas Corp. No. 45 North Carolina
Corporate Business Services, Inc. Illinois
Cintas - R.U.S., Inc. South Carolina
Cintas Cleaning Services, Inc. Ohio
Cintas Executive Services, Inc. Nevada
Cadet Uniform Services Limited Ontario, Canada
Cintas Investment Corp. Ontario, Canada
910946 Ontario, Inc. Ontario, Canada
Exhibit 23
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Annual Report on Form
10-K of Cintas Corporation of our report dated July 8, 1996, included in the
1996 Annual Report to Shareholders of Cintas Corporation.
Our audits also included the financial statement schedule of Cintas
Corporation listed in Item 14(a). This schedule is the responsibility of the
Company's management. Our responsibility is to express an opinion based on our
audits. In our opinion, the financial statement schedule referred to above, when
considered in relation to the basic financial statements as a whole, presents
fairly in all material respects the information set forth therein.
We also consent to the incorporation by reference in the Registration
Statement Number 33- 56623 on Form S-8 pertaining to the Partners' Plan, the
Registration Statement Number 33- 23228 on Form S-8 pertaining to the Incentive
Stock Option Plan and Registration Statement Number 33-71124 on Form S-8
pertaining to the 1990 Directors Plan and 1992 Stock Option Plan, of our report
dated July 8, 1996, with respect to the financial statements and schedule of
Cintas Corporation incorporated by reference in this Annual Report on Form 10-K
for the year ended May 31, 1996.
Ernst & Young LLP
Cincinnati, Ohio
August 20, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAY-31-1996
<PERIOD-START> JUN-01-1995
<PERIOD-END> MAY-31-1996
<CASH> 9,066,000
<SECURITIES> 73,477,000
<RECEIVABLES> 80,202,000
<ALLOWANCES> 1,958,000
<INVENTORY> 134,985,000
<CURRENT-ASSETS> 297,502,000
<PP&E> 366,478,000
<DEPRECIATION> 113,881,000
<TOTAL-ASSETS> 668,762,000
<CURRENT-LIABILITIES> 102,594,000
<BONDS> 0
0
0
<COMMON> 43,657,000
<OTHER-SE> 385,840,000
<TOTAL-LIABILITY-AND-EQUITY> 668,762,000
<SALES> 81,514,000
<TOTAL-REVENUES> 730,130,000
<CGS> 67,424,000
<TOTAL-COSTS> 436,810,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 9,073,000
<INCOME-PRETAX> 122,230,000
<INCOME-TAX> 47,047,000
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 75,183,000
<EPS-PRIMARY> 1.60
<EPS-DILUTED> 0
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