On Dec. 19 after the market closed, uniform-rental company Cintas (NASDAQ:CTAS) released fiscal 2007 second-quarter earnings for the period ended Nov. 30, 2006.

  • Sales grew 10.5% to $923.3 million, continuing a long-term trend of strong top-line growth.

  • Total diluted earnings grew 10.9% because of increased profitability and fewer shares outstanding.

  • For fiscal 2007, management is projecting diluted earnings per share in the range of $2.10 to $2.20.

(Figures in thousands, except per-share data)

Income Statement Highlights

Avg. Est.

Q2 2007

Q2 2006

Change

Sales

$933,250

$923,266

$835,785

10.5%

Net Profit

--

$82,527

$76,839

7.4%

EPS

$0.52

$0.51

$0.46

10.9%

Diluted Shares

--

160,721

168,611

(4.7%)

For the three months ended Nov. 30, 2006, and Nov. 30, 2005.

Get back to basics with a look at the income statement.

Margin Checkup

Q2 2007

Q2 2006

Change*

Gross Margin

42.36%

41.93%

0.43

Operating Margin

14.25%

14.75%

(0.50)

Net Margin

8.94%

9.19%

(0.25)

*Expressed in percentage points.

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets

Q2 2007

Q2 2006

Change

Cash + ST Invest.

$172,221

$255,934

(32.7%)

Accounts Rec.

$405,042

$359,696

12.6%

Inventory

$217,575

$213,807

1.8%

Liabilities

Q2 2007

Q2 2006

Change

Accounts Payable

$79,144

$58,557

35.2%

Long-Term Debt

$561,796

$461,890

21.6%



Learn the ways of the balance sheet.

Cash Flow Highlights

Q2 2007

Q2 2006

Change

Cash From Ops.

$227,334

$205,899

$21,435

Capital Expenditures

$81,321

$70,181

$11,140

Free Cash Flow

$146,013

$135,718

$10,295

For the six months ended Nov. 30, 2006, and Nov. 30, 2005.

Find out why Fools always follow the money.

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Fool contributor Ryan Fuhrmann has no financial interest in any company mentioned. Feel free to email him with feedback or to discuss any companies mentioned further. The Fool has an ironclad disclosure policy.