What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2026-07-29 compared with 2025-07-28 · 65 added, 66 removed, 298 unchanged (31% of the section changed)

29 unchanged sentences

Revenue and operating income for the reportable operating segments for the fiscal years ended May 31, 2026, 2025 and 2024 are presented in Note 14 entitled Operating Segment Information of "Notes to Consolidated Financial Statements." The Company regularly reviews its operating segments for reporting purposes based on the information its chief operating decision maker (CODM) regularly reviews for purposes of allocating resources and assessing performance and makes changes when appropriate.

On March 10, 2026, the Company entered into a Merger Agreement pursuant to which the Company will acquire all outstanding shares of UniFirst common stock.

UniFirst is a North American company in the supply and servicing of uniform and workwear programs, facility service products, as well as first aid and safety supplies and services.

Under the terms of the Merger Agreement, subject to the satisfaction (or, to the extent permitted by applicable law in accordance with the Merger Agreement, waiver) of certain conditions, Cintas will acquire all the outstanding shares of UniFirst common stock in a transaction valued at approximately $5.5 billion.

Each share of UniFirst common stock will be converted into the right to receive $155.00 in cash and 0.7720 shares of validly issued, fully paid and non-assessable Cintas common stock, with no par value (with, if applicable, cash in lieu of fractional shares), in each case without interest and subject to any applicable withholding taxes.

Completion of the Transaction is subject to a number of conditions, including, among others, the receipt of required regulatory approvals, including the expiration or termination of applicable waiting periods under the HSR Act.

The following table sets forth certain consolidated statements of income data as a percent of revenue by reportable operating segment, All Other and in total for the fiscal years ended May 31:

18 unchanged sentences

Total selling and administrative expenses 27.4% 27.2%

UniFirst transaction expenses 0.1% —%

Operating income:

8 unchanged sentences

Revenue increased organically by 8.3% primarily as a result of increased sales volume.

Organic revenue growth adjusts for the impact of acquisitions, workday differences and foreign currency exchange rate fluctuations.

Total revenue was positively impacted by 0.8% due to acquisitions, negatively impacted by 0.9% due to two less workdays in fiscal 2025 compared to fiscal 2024 and negatively impacted by 0.2% due to foreign currency exchange rate fluctuations.

Organic revenue growth adjusts for the impact of acquisitions and foreign currency exchange rate fluctuations.

Total revenue was positively impacted by 0.6% due to acquisitions.

Organic revenue growth by quarter for fiscal 2026 is as follows:

7 unchanged sentences

Organic revenue growth for this reportable operating segment was 7.6%.

Revenue growth was positively impacted by 0.8% due to acquisitions, negatively impacted by 0.9% due to two less workdays in fiscal 2025 compared to fiscal 2024 and negatively impacted by 0.1% due to foreign currency exchange rate fluctuations.

Revenue growth was positively impacted by 0.4% due to acquisitions and 0.1% due to foreign currency exchange rate fluctuations.

Revenue growth was a result of new business, the penetration of additional products and services into existing customers and price increases, partially offset by lost business.

4 unchanged sentences

Revenue increased organically by 10.6%.

Revenue growth was positively impacted by 0.6% due to acquisitions, negatively impacted by 0.9% due to two less workdays in fiscal 2025 compared to fiscal 2024 and negatively impacted by 0.1% due to foreign currency exchange rate fluctuations.

Revenue growth was positively impacted by 1.2% due to acquisitions.

Cost of uniform rental and facility services increased 6.7% compared to fiscal 2025.

1 unchanged sentence

The change from the prior year was primarily due to higher Uniform Rental and Facility Services reportable operating segment sales volume, as well as an increase in material cost to support increased revenue growth.

The cost of uniform rental and facility services as a percent of revenue improved compared to fiscal 2024 from 51.8% to 50.7% primarily due to efficiency gains in energy usage, more efficient use of in-service inventory and production efficiency gains.

As a percent of revenue, the cost of uniform rental and facility services improved from 50.7% in fiscal 2025, to 50.0% in fiscal 2026, primarily due to more efficient use of in-service inventory and production efficiency gains.

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.

2 unchanged sentences

Selling and administrative expenses increased $271.7 million, to 27.4% as a percent of revenue, compared to 27.2% in fiscal 2025.

In fiscal 2025 we recorded a $15 million gain on a sale of property, and in fiscal 2024 we recorded $15 million associated with a legal settlement, both of which impacted all segments by the same percent of revenue.

Excluding those items, selling and administrative expenses as a percent of revenue increased from fiscal 2024 to fiscal 2025.

The resulting increase as a percent of revenue was primarily due to investments in technology and additional selling resources.

Net interest expense (interest expense less interest income) was $95.5 million in fiscal 2025 compared to $95.0 million in fiscal 2024.

Net interest expense was the same as a percent of revenue.

In fiscal 2025 we recorded a $15.0 million gain on a sale of property which impacted all segments by the same percent of revenue of approximately 0.2%.

Excluding that gain on the sale of property, selling and administrative expenses were consistent from fiscal 2025 to fiscal 2026.

As a result of the Transaction with UniFirst, the Company incurred $16.1 million in transaction expenses in fiscal 2026 which relate primarily to legal and professional services, regulatory fees and financing fees.

Of the $16.1 million, $15.1 million was recorded in selling and administrative expenses, and $1.0 million was recorded in interest expense, on the consolidated statements of income.

No transaction expenses were incurred in fiscal 2025.

Net interest expense (interest expense less interest income) was $101.2 million in fiscal 2026 compared to $95.5 million in fiscal 2025 but was the same as a percent of revenue.

Income before income taxes was $2,505.3 million, an increase of $241.1 million, or 10.6%, compared to fiscal 2025.

3 unchanged sentences

Net income for fiscal 2026 of $2,000.0 million was a 10.4% increase compared to fiscal 2025.

Diluted earnings per share of $4.40 was a 16.1% increase compared to fiscal 2024 diluted earnings per share of $3.79.

Diluted earnings per share of $4.91 was an 11.6% increase compared to fiscal 2025 diluted earnings per share of $4.40.

Diluted earnings per share increased primarily due to the increase in net income.

2 unchanged sentences

The reportable operating segment's fiscal 2026 gross margin was 50.0% of revenue compared to 49.3% in fiscal 2025.

The improvement in gross margin was primarily due to efficiency gains in energy usage, more efficient use of in-service inventory and production efficiency gains.

The improvement in gross margin was primarily due to more efficient use of in-service inventory and production efficiency gains.

Selling and administrative expenses for the Uniform Rental and Facility Services reportable operating segment increased $170.7 million in fiscal 2026 compared to fiscal 2025 in order to support revenue growth as well as invest in technology and selling resources.

Selling and administrative expense as a percent of revenue for fiscal 2026 was 25.9% compared to 25.8% in fiscal 2025.

Excluding the items noted previously, selling and administrative expenses as a percent of revenue were largely consistent as compared to the prior fiscal year.

Income before income taxes for the Uniform Rental and Facility Services reportable operating segment increased $213.9 million, or 12.9%, for fiscal 2025 compared to fiscal 2024.

The increase in income before income taxes was due to the previously discussed growth in revenue and improvements in gross margin.

Income before income taxes as a percent of revenue was 23.5% compared to 22.2% in fiscal 2024.

Excluding the gain on sale of property noted previously, selling and administrative expenses as a percent of revenue were largely consistent as compared to the prior fiscal year.

Operating income for the Uniform Rental and Facility Services reportable operating segment increased $203.6 million, or 10.9%, for fiscal 2026 compared to fiscal 2025.

The increase in operating income was due to the previously discussed growth in revenue and improvements in gross margin.

Operating income as a percent of revenue was 24.1% compared to 23.5% in fiscal 2025.

The improvement over the prior fiscal year was primarily a result of the previously discussed improvement in gross margin.

2 unchanged sentences

Organic revenue growth for this reportable operating segment was 14.0%.

Revenue growth was positively impacted by 0.1% due to acquisitions, negatively impacted by 0.9% due to two less workdays in fiscal 2025 compared to fiscal 2024 and negatively impacted by 0.1% due to foreign currency exchange rate fluctuations.

Revenue growth was positively impacted by 0.3% due to acquisitions.

The increase in revenue was driven by many factors including increases in new business sold by sales representatives, penetration of additional products and services into existing customers, price increases and strong customer retention.

4 unchanged sentences

Selling and administrative expenses for the First Aid and Safety Services reportable operating segment increased by $47.2 million, or 11.7%, in fiscal 2026 compared to fiscal 2025, but decreased as a percent of revenue to 32.3% in fiscal 2026 compared to 33.0% in fiscal 2025.

Excluding the items noted previously, selling and administrative expenses as a percent of revenue were largely consistent as compared to the prior fiscal year.

Income before income taxes for the First Aid and Safety Services reportable operating segment was $294.7 million in fiscal 2025, an increase of $55.6 million, or 23.2%, compared to fiscal 2024.

Income before income taxes as a percent of revenue at 24.2%, increased from 22.4% in fiscal 2024 due to the previously discussed growth in revenue and improvements in gross margin.

The improvement in selling and administrative expenses as a percent of revenue was largely due to operating leverage as revenue grew at a faster rate than expenses.

Operating income for the First Aid and Safety Services reportable operating segment was $353.4 million in fiscal 2026, an increase of $58.7 million, or 19.9%, compared to fiscal 2025.

Operating income as a percent of revenue at 25.4%, increased from 24.2% in fiscal 2025 due to the previously discussed growth in revenue and improvements in gross margin and selling and administrative expenses.

Liquidity and Capital Resources

10 unchanged sentences

We expect our cash flows from operating activities to remain sufficient to provide us with adequate levels of liquidity.

In addition, we have access to $2.0 billion of debt capacity from our amended and restated revolving credit facility.

In addition, we have access to $2.0 billion of debt capacity from our revolving credit facility under our credit agreement.

We believe the Company has sufficient liquidity to operate in the current business environment for at least the next 12 months and the foreseeable future thereafter.

1 unchanged sentence

Net cash provided by operating activities was $2,276.3 million for fiscal 2026, which was an increase of $110.4 million, or 5.1%, compared to fiscal 2025.

The increase was primarily the result of an increase in net income and favorable changes in working capital, primarily accounts payable and accrued compensation and related liabilities.

These improvements were partially offset by unfavorable changes in working capital, specifically inventories, net, accounts receivable, net and uniforms and other rental items in service.

The increase was primarily the result of an increase in net income, deferred income taxes and favorable changes in working capital, primarily income taxes, current, accounts receivable, net, and inventories, net.

These improvements were partially offset by unfavorable changes in working capital, specifically accounts payable, accrued liabilities and other, and uniforms and other rental items in service.

Net cash used in investing activities was $568.4 million in fiscal 2026, compared to $623.6 million in fiscal 2025.

Net cash used in investing activities includes capital expenditures, purchases of investments and cash paid for acquisitions of businesses.

These outflows were partially offset by proceeds from the sale of property.

Capital expenditures were $395.1 million and $408.9 million for fiscal 2026 and fiscal 2025, respectively.

5 unchanged sentences

Net cash used in financing activities was $1,682.1 million for fiscal 2026, compared to $1,619.0 million in fiscal 2025.

The increase in cash used in financing activities was due to the increase in repayment of debt, share buyback activity and an increase in dividends paid.

These increases were partially offset by an increase in proceeds from the issuance of debt in fiscal 2025 compared to fiscal 2024.

Cintas announced on July 27, 2021, that the Board authorized a $1.5 billion share buyback program, which was completed during the fourth quarter of fiscal 2024.

On July 26, 2022 and July 23, 2024, Cintas announced that the Board authorized new share buyback programs, each for $1.0 billion.

The increase in cash used in financing activities was primarily due to an increase in dividends paid, repurchases of common stock and debt issuance costs.

On July 26, 2022, July 23, 2024 and October 28, 2025, Cintas announced that the Board authorized share buyback programs, each for $1.0 billion.

The July 26, 2022 share buyback program was completed during the second quarter of fiscal 2026.

Neither of the outstanding share buyback programs have an expiration date.

8 unchanged sentences

July 23, 2024 2,688 191.29 514,221 — — —

July 23, 2024 — — — — — —

October 28, 2025 — — — — — —

3,960 $ 196.38 $ 777,785 3,794 $ 179.07 $ 679,329

3 unchanged sentences

(1) Shares of Cintas stock acquired for employee-partner payroll taxes due on options exercised and vested restricted stock awards.

There were no share buybacks in the period subsequent to May 31, 2025, through July 28, 2025.

In the period subsequent to May 31, 2026, through July 29, 2026, we purchased 0.2 million shares of Cintas common stock at an average price of $199.70 per share, for a total purchase price of $48.4 million.

From the inception of the July 23, 2024 share buyback program through July 29, 2026, Cintas has purchased 2.9 million shares of Cintas common stock in the aggregate, at an average price of $191.99 per share, for a total purchase price of $562.7 million.

Cintas has made no purchases under the July 23, 2024 share buyback program.

Our Board of Directors declared the following dividends:

Cintas has made no purchases under the October 28, 2025 share buyback program.

Our Board declared the following dividends:

Paid Dividends

24 unchanged sentences

Any future dividend declarations, including the amount of any dividends, are at the discretion of the Board and dependent upon then-existing conditions, including the Company's consolidated results of operations and consolidated financial condition, capital requirements, contractual restrictions, business prospects and other factors that the Board may deem relevant.

On April 15, 2025, in accordance with the terms of the senior notes, Cintas paid the $50.0 million aggregate principal amount outstanding of its 3.11%, private placement, 10-year senior notes that matured on that date with cash on hand.

On May 1, 2025, in accordance with the terms of the senior notes, Cintas paid the $400.0 million aggregate principal outstanding of its 3.45%, 3-year senior notes that matured on that date with cash on hand.

On May 2, 2025, Cintas issued $400.0 million aggregate principal amount of senior notes that bear an interest rate of 4.20% and mature on May 1, 2028.

During the fiscal year ended May 31, 2024, Cintas repurchased and subsequently retired, $13.5 million of its 6.15%, 30-year senior notes.

In conjunction with these transactions, Cintas recognized a loss of $0.9 million, which is recorded in interest expense on the consolidated statement of income for the fiscal year ended May 31, 2024.

During the fiscal year ended May 31, 2026, Cintas paid $5.2 million in prepaid short term debt financing fees related to bridge loan financing in connection with the Transaction.

The following table summarizes Cintas' outstanding debt at May 31:

5 unchanged sentences

Senior notes 3.70% 2017 2027 $ 1,000,000 $ —

3.11% 2015 2025 $ — $ 50,294

Senior notes 3.45% 2022 2025 — 400,000

Debt issuance costs (1,013) —

7 unchanged sentences

Total debt due after one year $ 1,429,086 $ 2,424,999

(1) Cintas assumed these senior notes with the acquisition of G&K Services, Inc.

(G&K) in fiscal 2017, and they were recorded at fair value.

The interest rate shown above is the effective interest rate until repayment in fiscal 2025.

The credit agreement that supports our commercial paper program has capacity under the revolving credit facility of $2.0 billion.

The credit agreement has an accordion feature that provides Cintas the ability to request increases to the borrowing commitments under the revolving credit facility of up to $500.0 million in the aggregate, subject to customary conditions.

Cintas Corporation No.

2) entered into a credit agreement which supports our commercial paper program on March 27, 2026 (the Credit Agreement).

The Credit Agreement has capacity under the revolving credit facility of $2.0 billion and contains a letter of credit sub-facility of up to $300.0 million and a swing line sub-facility of up to $150.0 million.

The Credit Agreement has an accordion feature that provides Cintas with the ability to request increases to the borrowing commitments under the revolving credit facility of up to $1.0 billion in the aggregate, subject to customary conditions.

The maturity date of the revolving credit facility is March 27, 2031.

In connection with the entry into the Credit Agreement, on March 27, 2026, Corp.

2 terminated all commitments and repaid all obligations under its existing Third Amended and Restated Credit Agreement, dated as of March 23, 2022 (as amended, restated, supplemented or otherwise modified from time to time prior to such date, the “Existing Credit Agreement”).

Upon the termination of the Existing Credit Agreement, all the obligations under the Existing Credit Agreement were terminated.

As of both May 31, 2026 and 2025, there was no commercial paper outstanding and no borrowings on our revolving credit facility.

In connection with the Transaction, we also entered into a commitment letter on March 10, 2026 with certain debt commitment parties, who have committed to provide a 364-day senior unsecured bridge facility in an aggregate principal amount of $2.85 billion (the Bridge Facility) consisting of two separate tranches.

The funding of the Bridge Facility provided for in the commitment letter is subject to the satisfaction of certain customary limited conditions, including the consummation of the mergers in accordance with the merger agreement and the execution and delivery of definitive documentation with respect to the Bridge Facility in accordance with the terms set forth in the commitment letter.

As of May 31, 2026, there was no borrowings on our Bridge Facility.

The Credit Agreement includes, among other things, “certain funds” provisions pursuant to which $1.25 billion of the commitments under the Credit Agreement are available for, subject to the satisfaction of certain limited conditions (including the consummation of the mergers in accordance with the merger agreement), the consummation of the Transaction.

The commitments under one of the two tranches of the Bridge Facility were replaced by the revolving credit facility.

Cintas' debt agreements contain certain covenants.

These covenants limit our ability to incur certain liens and priority debt, 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 consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) and interest coverage ratios.

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 a certain debt to consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) ratio.

Cross-default provisions exist between certain debt instruments.

18 unchanged sentences

Financial and Nonfinancial Disclosure About Issuers and Guarantors of Cintas’ Senior Notes

Cintas Corporation No.

2 is the indirectly, wholly owned principal operating subsidiary of Cintas.

61 unchanged sentences

Cintas is subject to 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.

Cintas is also party to additional litigation not considered in the ordinary course of business.

See Note 15 entitled Litigation and Other Contingencies of "Notes to Consolidated Financial Statements" for a detailed discussion of such additional litigation.

While the results of any such legal proceedings cannot be predicted with certainty, management believes, 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.

New Accounting Standards

In November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-07, Segment Reporting (Topic 280), Improvements to Reportable Segment Disclosures (ASU 2023-07).

ASU 2023-07 requires additional disclosures pertaining to significant expenses that are regularly provided to the CODM and other items of an entity’s reportable operating segments.

This standard was adopted by Cintas on May 31, 2025 and did not have a material impact on the Company's consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740), Improvements to Income Tax Disclosures (ASU 2023-09), which expands disclosures in an entity’s income tax rate reconciliation table and regarding cash taxes paid both in the U.S.

In December 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-09, Income Taxes (Topic 740), Improvements to Income Tax Disclosures (ASU 2023-09), which expands disclosures in an entity’s income tax rate reconciliation table and regarding cash taxes paid both in the U.S.

and foreign jurisdictions.

ASU 2023-09 will be effective for annual periods beginning after December 15, 2024 (fiscal 2026).

The Company is currently evaluating the impact of ASU 2023-09 on the consolidated financial statements.

The Company adopted the standard on a prospective basis, for the fiscal year ended May 31, 2026, see additional disclosures in the "Notes to Consolidated Financial Statements."

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40):

2 unchanged sentences

The Company is currently evaluating the impact of ASU 2024-03 on the consolidated financial statements.

In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software (ASU 2025-06), which amends the guidance in Accounting Standards Codification (ASC) 350-40, Intangibles—Goodwill and Other—Internal-Use Software.

The amendments modernize the recognition and disclosure framework for internal-use software costs, removing the previous “development stage” model and introducing a more judgment-based approach.

ASU 2025-06 is effective for fiscal years beginning after December 15, 2027 (fiscal 2029) and for interim periods within those annual reporting periods, with early adoption permitted.

The Company is currently evaluating the impact of ASU 2025-06 on the consolidated financial statements.

There are no other accounting pronouncements recently issued or newly effective that had, or are expected to have, a material impact on Cintas' consolidated financial statements.

4 unchanged sentences

Revenue recognition.

Approximately 95% of the Company's revenue is derived from fees for route servicing of Uniform Rental and Facility Services, First Aid and Safety Services and Fire Protection Services customers, performed by a Cintas employee-partner, at the customer's location of business.

Over 95% of the Company's revenue is derived from fees for route servicing of Uniform Rental and Facility Services, First Aid and Safety Services and Fire Protection Services customers, performed by a Cintas employee-partner, at the customer's location of business.

Revenue from our route servicing customer contracts represent a single-performance obligation.

The Company recognizes revenue over time as services are performed, based on the nature of services provided and contractual rates (output method) or at a point in time when the performance obligation under the terms of the contract with a customer are satisfied, at the customer's location of business.

The Company's remaining revenue, primarily within the Uniform Direct Sales operating segment, and representing approximately 5% of the Company's total revenue, is recognized when the obligations under the terms of a contract with a customer are satisfied.

This generally occurs when the goods are transferred to the customer.

The Company recognizes revenue over time as services are

performed, based on the nature of services provided and contractual rates (output method) or at a point in time when the performance obligation under the terms of the contract with a customer are satisfied, at the customer's location of business.

Revenue recorded is presented net of sales and other taxes we collect on behalf of governmental authorities.

Shipping and handling costs charged to customers are treated as fulfillment activities and are recorded in both revenue and cost of sales at the time control is transferred to the customer.

Certain of our customer contracts include pricing terms and conditions that include components of variable consideration.

The variable consideration is typically in the form of consideration paid to a customer based on performance metrics specified within the contract and is not material in any period presented.

When determining if variable consideration should be constrained, the Company considers whether factors outside its control could result in a significant reversal of revenue.

In making these assessments, the Company considers the likelihood and magnitude of a potential reversal.

The Company's performance period generally corresponds with the monthly invoice period.

No constraints on our revenue recognition were applied during the fiscal years ended May 31, 2025, 2024 or 2023.

See Note 2 entitled Revenue Recognition of "Notes to Consolidated Financial Statements".

3 unchanged sentences

Other rental items, including shop towels, mats, mops, cleanroom garments, linens and restroom dispensers, are amortized over their useful lives, which range from 8 to 60 months.

The amortization rates used are based on industry experience, Cintas' specific experience and wear tests performed by Cintas.

The amortization rates used are based on industry experience and Cintas' specific experience.

These factors are critical to determining the amount of in-service inventory and related cost of uniforms and facility services that are presented in the consolidated financial statements.

2 unchanged sentences

Our incurred but not reported reserves are estimated through actuarial procedures, with the assistance of third-party actuarial specialists, of the insurance industry and by using industry assumptions, adjusted for specific expectations based on our claims history.

Cintas records an increase or decrease in selling and administrative expenses related to development of prior claims, higher claims activity and other industry factors in the period in which it becomes known.

Cintas records an increase or decrease in selling and administrative expenses related to development of prior claims, recent claims activity and other industry factors in the period in which it becomes known.

These changes in estimates may be material to the consolidated financial statements.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis