Good day, everyone and welcome to the Cintas quarterly earnings results conference call. Today’s call is being recorded. At this time, I would like to turn the call over to Mr. Bill Gale, Senior Vice President of Finance and Chief Financial Officer. Please go ahead, sir.

Good evening and thank you for joining us tonight. The current recession continues to impact our customers in a significant way. As a result of the ongoing job losses, which have exceeded $5.5 million in the last 12 months, our revenues are showing a decline for the first time in 40 years. According to the U.S. Department of Labor, this job loss is 40% greater than losses experienced in 1982 and 2001 combined. Today we announced fourth quarter revenue of $879 million, a 13% decrease from last year’s fourth quarter. As we announced in late May, fourth quarter results include a restructuring, impairment, and inventory valuation charge amounting to $54 million after tax. Excluding this charge, earnings per diluted share were $0.38 in the fourth quarter, or $0.01 higher than the upper end of the range we provided in the May 29th announcement. The economic conditions being faced by our customers continued to impact our revenue as customers reduce headcount. While we are adjusting our cost structure to meet these lower revenue levels, the severity and speed of the job reductions make it difficult to consolidate routes and plant capacity fast enough to offset the revenue declines. However, we will continue to remain profitable and generate solid cash flow. Also, when employment begins to increase again, the marginal profitability of the additional uniform wearer or first aid user will be significant. We are very pleased with our overall financial condition. During the fourth quarter, we generated over $185 million in cash from operating activities. During fiscal 2009, we paid off $165 million of commercial paper, paid our annual dividend amounting to $72 million, and yet increased our cash and marketable securities by $60 million. As of May 31, 2009, we had no commercial paper outstanding and have cash and marketable…

Thank you, Bill and good evening. As Bill mentioned, total revenues were $879 million for the quarter, a 13% decrease from $1.01 billion reported for the fourth quarter of last year. Internal growth was also a negative 13%. As Bill mentioned, all of our businesses are being impacted by the significant ongoing job losses and a difficult economic environment. Revenue was also negatively impacted by 1% due to a weaker Canadian dollar. Before I discuss the quarter in more detail, as a planning note for fiscal 2010, the number of work days by quarter for next year are 66 works days in the first quarter, 65 in Q2, 64 in Q3, and 66 in Q4. As a reminder, each quarter in fiscal year 2009 had 65 work days. We classify our businesses into four reportable operating segments -- rental uniforms and ancillary products, uniform direct sales, first aid safety and fire protection services, and document management services. Uniform direct sales, first aid safety and fire protection services and document management services are combined and presented as other services on the face of the income statement. The rental uniforms and ancillary products operating segment consists of the rental and servicing of uniforms and other garments, mats, mops, shop towels, and other related items. Our restroom and hygiene products and services are also included within this segment. Rental uniforms and ancillary products revenue accounted for 74% of total company revenue in the fourth quarter. Within rental, based on fourth quarter revenue levels, uniform rental accounts were approximately 53% of the revenue. Dust control, which is mainly entrance mats, accounts for 22%. Hygiene, which is mainly restroom supply and cleaning, is 11%. Shop towels, 5%. And linen and other is 9%. As a reminder, linen is mainly non-person specific garments such as aprons…

At this point, we’ll be happy to answer any questions that you have, so Jessica, if you want to explain how to do that, we will start.

(Operator Instructions) Our first question comes from Ashwin Shirvaikar.

My first question is actually about the sustainability of the lower cost structure as revenues eventually come back. So to what extent would you expect costs to go back up with revenues in an eventual recovery? If you could take us through the math or the thought process and maybe some examples of what kind of cost you are taking out?

Okay. Well, I guess let’s assume that there’s no significant change in cost components like energy but assuming that, what you will see initially is as we add -- as our customers add back employees, we will begin to see the marginal profitability of that additional revenue to improve margins going forward. Now once you -- your top line growth that’s caused by new business continues to go up, you are going to start injecting more garments but we believe that the margins for the business segments will actually improve in an improving economic environment.

Would you expect the profitability of the rental segment to get back down to the 16%, or possibly higher level in the next couple of years?

We would -- assuming again the basis that I said on energy costs, as an example, we absolutely believe we can get our margins back to more historical levels.

A side note on that as well, Ashwin, is that with the restructure project, we were very careful that we were not taking all our capacity out of markets. We want to ensure that we have the ability to grow when the market does turn around.

Okay, and a couple of housekeeping questions -- one is, could you provide the split for the inventory adjustment charge between all the various segments?

Mike can give you that again.

The piece -- it was $27.5 million was the total inventory valuation charge. Of that, $8.4 million was in the cost of rentals and 19.1 is cost of other services. Of the 19.1 in cost of other services, 16.1 is in uniform direct sale and $3 million is first aid safety and fire.

And with regard to document management, the impact of paper prices obviously is there. You’ve said in the past that you had a contract that went through the end of the fiscal year for paper price sales, for paper sales. What’s the status of the renegotiation? What kind of pricing are you getting as you go forward?

We actually indicated it goes out through part of this fiscal year, so we are currently in those negotiations but that contract still remains in place at this point in time.

So the old contract stays for now?

Yes.

Okay. Thank you.

Our next question comes from Vance Edelson from Morgan Stanley.

Thanks a lot. In terms of moving out of the fire installation business, you know, even though the bad debt is still pretty low on a percentage basis, at least company-wide, if in the coming years building activity were to pick up again, is that something you could easily get back into, or would you even want to?

At this point in time, I would say that we would only remain in that business in those markets where we have a -- where we are going to continue to have a significant presence. I doubt if we would decide to expand in any aggressive way in the installation business, even if economic conditions improved.

Okay, and regarding expansion around the world, do you see attractive M&A opportunities right now? In other words, have valuations come down such that now is the time, or close to being the time, or would you rather wait until global growth prospects are stronger?

Vance, I’d say right now, other than in a very few selected situations, the majority of valuations have not come down to the appropriate levels to justify an acquisition.

Okay, and turning back to the domestic side, are there any areas for investment going forward that you think are likely to turn sooner, a bit more early cycle when you look at your different verticals, or the different business lines in the area that you are thinking over the next 12 months you might actually be investing in?

Well, I think it all depends on where do the jobs stop declining and where do they start coming back, and we are poised to take advantage based on some of our businesses that we are in where those job -- that job growth may be. For example, if it’s in healthcare, you know, we have direct sale programs in our document management business and even some of our first aid and safety businesses lend themselves very well to the healthcare market, so we are ready to take advantage of that. In the hospitality and gaming businesses, we’re certainly the largest company in uniform supplier in those businesses and we’ll certainly be the one to take advantage of any growth in that potential. You know, I think in the uniform rental side, you know, our strategy has been to broaden our customer base over the last several years to take advantage of where the economy is going, so I think that we will be in a position to take advantage of any improvement that does happen, regardless of which business it’s in. I just at this time can’t predict where that’s going to be or how quickly that’s going to happen.

Okay, appreciate the color. Thanks.

We’ll now go to John Healy from North Coast Research.

Good evening. A strategy question for you, Bill -- after the last economic downturn, you guys took the opportunity to move from I guess the uniform professional into the service professional. With the balance sheet as strong as it is today and the cash flow that you guys are generating, is there any appetite to begin to kind of I guess further that move into the service professional world, or are you at a level where you guys feel like you are going to remain conservative with the investments? I mean, is there an appetite I guess to begin to try to roll out more services or pilot more services and kind of use this opportunity to try to test things out?

Well John, despite the economic downturn, our company continues to evaluate other services that we feel have some potential and that we could have a competitive advantage. So those activities are continuing, and I would say that we will continue to look for opportunities to become more of a service professional as long as it meets the criteria that we’ve talked about over the years of being relatively fast-growth businesses, high margin businesses, things that we could get into, you know, and develop a presence and move the needle -- businesses that may be used by a lot of our other customers. So that criteria continues. We will always be a relatively conservative company in that we are not going to jump into something in a major way until we have proven it to ourselves that it makes sense, but let me tell you that there are several things going on, some of which are very promising right now that we think could enable us to just expand our offerings as the economy begins to improve.

That’s encouraging. And then you made the comment, Bill, that the average customer that you guys service continues to become smaller. I guess going forward, I have to imagine that the days of servicing -- finding new sales in terms of the 500 employee manufacturing facility, there’s probably not a lot of those opportunities but a lot of opportunities going forward, I imagine, on smaller businesses. Do you see that as a benefit to margins, selling to smaller customers rather than to bigger customers over the long run? Or is that something that is not necessarily a benefit to operating margins I guess going forward?

Well, you know, keep in mind, all of our customers have always been relatively small customers. The average stop typically has always run between eight and 12 employees. Yeah, we have large manufacturing or large distribution type operations but our bread and butter has always been the smaller -- basically the smaller company or smaller stops of bigger companies. So that strategy doesn’t change. I think the opportunity we have because of our broad offering of products and services is probably going to be more appealing to the smaller business, so I think that we will become a more valued provider in a number of different things to the small business owner as they look for ways to cut their cost and look for ways to make sure that things are done properly, that they are maintaining a safe environment, maintaining the proper image for their employees. So the growth that we hope will begin to take place here soon in the economy will be driven by small business and that really has always been our sweet spot, so I think we are probably in even a better position now than we were 10, 15 years ago.

And with that, I think we’ve been battling the manufacturing job loss in the United States for years now and I think Bill’s comments were more that because of the job loss, we’re not losing that many more customers. It’s mainly that the customers we have are smaller because they are all losing positions. We expect those to grow back but I agree with your point, John, that there aren’t as many large factories out there that are going to sprout back up in the near future.

Got it. And then just last question, was there any sort of identifiable trend during the quarter in terms of the declines in revenue? You know, was it steady throughout the quarter -- you know, did it kind of accelerate either at the front-end or the back-end of things?

Well, you know, you have changes week to week, John, but as we look at trend, I’ll tell you, it was relatively steady, it was probably a little heavier in the early part of the quarter and then it might have seemed to get a little bit better. But it’s still an ugly situation out there with regard to job losses, so it continued pretty much through the quarter.

Okay, great. Thank you so much.

We’ll now go to Scott Schneeberger with Oppenheimer.

Good afternoon. This is [Alice] for Scott. I guess first of all, can you guys help clarify how much dollar savings that you are having fiscal year ’10 from all the cost reductions from the employment reduction and the closure of locations?

We are estimating that the impact on fiscal year ’10 from the actions that we took right at the end of our fiscal year ’09 are going to add about $0.03 to $0.04 a share for the year. Now, part of the issue that we have is, as Mike talked about this inventory valuation charge, it’s very difficult to predict when that impact would happen, so what we are talking about when we say $0.03 to $0.04, that’s primarily as a result of this reduction in valuation of some of these fixed assets and the severance costs associated with the termination of certain employees, but that’s the number you are looking for. It’s about $0.03 to $0.04.

Okay, thanks for the color. And in terms of capital spending, could you provide some colors for the guidance for the next year and what will be your primary areas of investment for fiscal ’10?

At this point, we are not going to give specific guidance with regard to capital spending but we will tell you that it will be less than what was spent this year because the majority of the information technology spending on the new ERP system that Mike talked about is pretty well behind us for right now. But the level of capital spending will vary depending on how quickly the economy recovers, so if the economy recovers quicker, then we would tend to spend a little bit more money buying trucks or expanding, buying equipment. But if the economy continues to be relatively sluggish, then that capital spending, we’ll adjust it to be lower. But I would say for planning purposes, you certainly can assume that it will be less in fiscal ’10 then it was in ’09.

And we will continue, just like we did this year, to infuse capital into document management, as long as it continues to grow double-digit, as it did this year.

We always have maintenance capital. We have to replace trucks, we have to replace some equipment here and there and as Mike said expand, you know, document management should continue to grow and expand. But beyond that, as far as new plants, we don’t anticipate a lot of new plants being built and there’s not going to be a lot of new trucks needed other than to replace those that wear out.

All right. Thank you, guys.

(Operator Instructions) We’ll now go to Gary Bisbee from Barclays Capital.

This is Matt Gulati on behalf of Gary Bisbee. Just a quick question -- I was wondering if you could provide some commentary on kind of the U.S. reorganization of the automotive industry and what kind of impact that has on both the uniform business, as well as some of the ancillary offerings?

Well, the biggest impact that we are going to probably feel is going to -- has to do with what happens with the dealership networks. You know, Chrysler has announced a significant reduction in the number of their dealerships, as has General Motors. A lot of the General Motors dealerships haven’t yet been publicly announced, so it’s hard for us to say what that would be. But offsetting that is going to be determined by what these owners of these dealerships do. Many of them have indicated that they may remain in business as a repair shop, which actually will be to our benefit, because that’s primarily what we are servicing. You know, we have had some impact of some of the plant shut-downs by the big three and some of the supporting industries to those big three. That stuff may not come back, so that may be a permanent loss. But the vantage that Cintas has always had is that we have a very diverse customer base. We have over 800,000 customers that we are providing different services to. No one customer amounts to any significant amount of our revenue -- in fact, no one customer amounts to more than one-half of 1% of our revenue. So even with the significant reduction in employment in that industry, you know, it’s not going to have a detrimental impact on the company. We are going to be able to continue to service a lot of the industry that fixes cars, the after market, that’s going to continue. And it’s -- as far as the exposure we had to new auto construction is relatively insignificant.

And as well, you talked about dealerships, it’s interesting too in that we’ve already been impacted to some degree in that many of the sales professionals have changed to where rented uniforms, and obviously those professionals, the job ranks have been squeezed quite a bit over the last few months. And then you start talking about the back of the house with the mechanics, that work will still need to get done in some fashion. So while there will certainly be an impact, it’s difficult to quantify, just because that work that they are doing in the back of the house, so to speak, from the mechanic side, will end up somewhere.

Great, thanks for that. And then if I could ask a follow-up -- could you quantify or provide an approximate amount, I guess, the level of paper pricing? And also what type of impact that paper pricing has on the document management? I guess what percent of overall document management is made up from the sale of paper?

We haven’t disclosed that level of detail at this point. Now, Mike did talk about the impact it had on the overall growth rate. I believe the number was -- you know, without the impact of the paper price reduction, the growth of the document management business was 17%; with the paper prices, it was a negative 1%. But we -- you know, for competitive reasons, we don’t want to disclose publicly what our price is and we are concerned that people could back into what our contract is and that’s all very proprietary and we have to keep that quiet.

Okay, fair enough. Thanks for your time. Appreciate it.

We’ll now go to Vishnu Lekraj from Morningstar.

I want to talk a little bit more big picture here, looking out maybe two, three years -- your core competency has been uniform rental, obviously but looking at your newer lines of business, the historical [model] here over the last year-and-a-half, given the recession, how do you guys view this and how should we be thinking about the profitability and the return of these businesses over the next couple of years and if they are going to ramp up to a level where you’ve had in regards to the rental uniform business?

I think first in response to that, I’m not sure that the other businesses have suffered dramatically, other than uniform direct sale. Certainly first aid has been impacted by less traffic and the installation business, the construction industry has hurt us there and we are exiting that business. The document management has continued to grow very well and our service side of the fire business is, while it was down a little bit during the year, it was not down dramatically. So I think our emerging business has continued to do pretty well, but certainly just like uniform rental, the economy has impacted them. As jobs come back, we expect them to come back in that business as well as in uniform rental and we continue to put all of our efforts into maintaining those customers so that we can gain that market share when they do come back.

I’d say we actually feel very confident that as the economy improves, businesses and our customers are going to continue to look for ways to get things done in their operations without having to add people, without having to worry about it themselves, and we are going to be the company that’s going to be poised to do a lot of that and do it professionally, handle a lot of -- you know, the small details, not just uniforms but facility services, first aid and safety, fire services, document shredding services, and the other things that we are still working on, and we believe that that will enable us to resume very good growth rates into the future.

So on a profitability level, on the return level in terms of investment, would these newer businesses get on par with what you guys have done with rental uniforms?

Oh, yes. We’ve always stated that other than the direct sale of uniforms, all of these other businesses when they get to the appropriate scale in a market, have profitability levels equal to or greater than our uniform rental business.

That’s a very important point that it’s a local operation that needs to get the size. I think many times, people look at the division and say oh, it’s getting big but you’ve got to look at the individual location size from our perspective and it has to get up to critical mass. And we can tell you that when those locations do, in first aid, fire, and document management, the profitability is there.

Okay. One more quick question for you -- I think this has been touched on previously but given that employment here is expected to be at depressed levels, or levels below pre-recession levels for the next couple of years, how do you guys plan on maintaining the profitability within your route distribution network, in terms of --

Well first off, I don’t know if it will remain at these levels or not, so we are going to be prepared to react to whatever situation that comes our way and the way we are going to do that is the way we started to do that over the last nine months, is that we will do route consolidations, we will do plant consolidations, if necessary. We look for other opportunities to reduce overhead in our operations and in our corporate office, so our -- we’ve already started this process and we can -- we’ve got a very flexible organization that enables us to adjust for these type of things and it just takes us a while to get there. So as Mike said, you know, material costs, the uniforms, once you inject them into a new customer and then if that customer reduces headcount, we bring those garments back into our stock room and if we don’t have another place to use them, then we continue to bear the cost of that in our cost structure because part of it is the way we, you know, through our conservative accounting that we deal with this. So I think that over time, we can adjust our cost structure to the revenue levels that we will be dealing with because the company wasn’t -- it wasn’t too long ago we wrapped these type of revenue levels. So we know what to do, we just have to be careful you don’t overreact because you want to be able to take advantage of the improvement in the economy whenever that takes place, which we believe certainly is going to take place -- we just don’t know when.

Certainly what would help is if the job loss just doesn’t continue to deteriorate. If we would get to an unemployment level that’s stable, then we believe we can start recovering from that and then beyond that, when you get to growth, a good example for uniforms, for example, is on a typical customer, if you he had 11 wearers six months ago and we’re down to nine today, you’re dropping about 18%. Well, if we go back to just one additional wearer in the next six months, you get 12% growth out of that 11% growth. And the marginal profitability of that growth is significant because you were already stopping the truck, in many times you have the garments already in your stock room, you are already paying the driver, the production is pretty easy to pick up on, so the profitability can really pick up quite quickly.

Great. Thanks, appreciate it.

And we’ll now go to Greg Halter with Great Lakes Review.

Good afternoon and thanks for taking the questions. I wonder if you could comment on overall pricing for the -- especially on the rental side, and then on the cost side, the hangars and medical costs, which have at least during fiscal ’09 appeared to be an issue at certain points in the quarter, of the year.

Well pricing has certainly become a much more difficult situation with regard to getting price increases through because obviously with CPI down, there has been -- you know, and due to a lot of customers having their own issues, we’ve had to basically work with our customers to keep price increases in line. New business pricing remains very competitive. It always has. There have been certain markets where it’s become even more competitive but we continue to evaluate the business based on the future profitability of that business to the company and the growth of that customer, and we will react accordingly but we are not going to just continue to chase prices down if a competitor decides that they want to try to do that in a particular market. With regard to some of the cost issues, I would say that the hanger prices have now returned back to more normal levels, after the run-up that we saw about a year ago. They are back down to more normalized levels and the -- what was the other one that you asked, Greg?

Medical.

Medical costs were relatively flat on a percent of sales basis, while medical costs continued to increase, some of the programs that we have put in effect are having an impact. Of course, we have lower headcount, which that is helping us. And you know, it’s something that we are concerned about in the future. We continue to try to make sure that we balance providing our employee partners with the proper level of medical benefits while at the same time making sure that we are not, you know, spending too much money on it from a company and a shareholder perspective. So it’s -- but I would say it’s been staying in line on a percent of sales basis over the last 12 months.

Okay, and I wondered if you could provide some commentary on the SAP installation, if you’ve turned on any of the different features of that yet and how you would judge it going so far?

Well, we have not turned on any features yet. Our plan is that during this fiscal year, certain parts of it are going to be turned on. So far we are happy with the project and what we are seeing and we are still in line with our cost estimates of what it was going to take to put this first couple of phases in. So again, we haven’t converted anything but we will be converting something this fiscal year.

Okay, and I know you are not giving the commentary on the CapEx but relative to depreciation and amortization, I think it was $200 million in fiscal ’09, would you expect that level to be higher or lower, especially with some of the IT CapEx that has a -- probably a quicker depreciation rate than other things?

I don’t think it would move materially because of the restructure pieces coming down. We don’t have an exact number for you at this point but we don’t expect a significant movement.

Okay, and I know it’s a board decision but any commentary you could provide on the company’s dividend policy, if you would like to keep that moving upward, as has been history for I think 30-plus years?

Well you know, I can’t say, Greg, for sure. I know the board, it does look at that very closely. It’s an annual decision. As you know, we only pay it on an annual basis but the board felt very confident this past spring to raise the dividend and I would think that they will take into consideration current year results, as well as the expectations going forward and it would be nice to hold on to that continued increase but I can’t guarantee anything at this point in this environment, so we’ll just have to see how things go.

Okay, and one last one for you -- it may be too early in the year, but can you remind us what the breakdown is by industry, especially on the rental side?

You mean as far as what our percentage is in the various industries?

Correct.

We really don’t have anything more than what we’ve provided before. That’s something that is not necessarily done at any one point in time. It’s looked at periodically so I really can’t give you any update to that right now.

Okay. Thank you.

Our next question comes from Justin [Hautt] from Robert W. Baird.

Actually, all of my questions have been answered except for one quick housekeeping one -- back to the scrap paper prices, I know you guys mentioned in the past you had some price floors on those contracts and I guess I was just wondering with the sequential up-tick we’ve seen on the prices, are we still below those floors or are we kind of moved past that?

We are still slightly below.

Okay. Thank you very much.

And we’ll now go to Andrew Steinerman from J.P. Morgan.

This is William Lee for Andrew Steinerman -- just one quick clarification; in terms of the internal growth for document management, including paper prices, was that a negative 1% or negative 4%?

With paper prices, the internal growth was negative 4%, the total growth of the division, including acquisitions, was positive 1%.

Okay, great. Thanks.

And there are no further questions. I would like to turn the conference back over to you, Mr. Gale, for any additional or closing remarks.

Well, thank you, everyone for joining us this evening. We are -- we appreciate your continued support. We will be planning on releasing our first quarter earnings some time in the mid to latter part of September. Good night.

This concludes today’s presentation. Thank you for your participation.