Corporate apparel and uniform provider Cintas Corporation (NASDAQ: CTAS) recently released both 4Q 2007 and FY 2007 figures. Overall the news is positive, but there are some complicating factors investors need to be aware of before investing in this stock. FY 2007 revenue growth increased 9% to $3.7 billion despite the fact that Cintas' reorganization of its global sales force has taken much longer than predicted, cost more, and resulted thus far in below anticipated gains. Recent press releases do not address this important issue, other than to say that the reorganization is proceeding and will pay off down the line. Net income for FY 2007 was up 3.4% to $334.5 million, and FY EPS increased the same amount as revenues, 9%, to $2.09 diluted.

The fact remains, however, that 4Q 2007 was rough for Cintas. Revenue for the quarter increased 6.2% to $964 million. EPS diluted increased only half as much, 3.6% to 57 cents. Net income was up, barely, by 1.3%, but interest costs and debt levels also increased due to acquisitions and stock buybacks. Cintas has a handle on cost control. Administrative expenses increased slightly due to higher medical insurance costs, but the company still showed a slight decline in net income as a percent of revenue in 2007 compared to 2006. The stock has lost almost 10% of its value since it opened at $40.43 at the beginning of the year. The stock closed yesterday at $37.41. Its P/E of 17.90 is significantly below industry average of 25.11, and CEO Scott Farmer predicts Cintas will grow its customer base from its current level of 800,000. Farmer remains optimistic that FY 2008 revenues will be in the $3.9-$4.1 billion range, and EPS diluted will be in the $2.15-$2.25 range. The stock currently pays a 39-cent dividend.