BUSINESS STRATEGY

Cintas provides highly specialized products and services to businesses of all types throughout the United States and Canada. We refer to ourselves as "The Service Professionals." We bring value to our customers by helping them provide a cleaner, safer, more pleasant atmosphere for their customers and employees. Our products and services are designed to improve our customers' images. We also help our customers protect their employees and their company by enhancing workplace safety and helping to ensure legal compliance in key areas of their business.

We are North America's leading provider of corporate identity uniforms through rental and sales programs, as well as a significant provider of related business services, including entrance mats, restroom products and services, first aid, safety and fire protection products and services, document management services and branded promotional products.

Our business strategy is to achieve revenue growth for all of our products and services by increasing our penetration at existing customers and by broadening our customer base to include business segments to which Cintas has not historically served. We will also continue to identify additional product and service opportunities for our current and future customers.

To pursue the strategy of increasing penetration, we have a highly talented and diverse team of service professionals visiting our customers on a regular basis. This frequent contact with our customers enables us to develop close personal relationships. The combination of our distribution system and these strong customer relationships provides a platform from which we launch additional products and services.

We pursue the strategy of broadening our customer base in a few ways. Cintas has a national sales organization introducing all of our products and services to prospects in all business segments. Our ever expanding range of products and services allows our sales organization to consider any type of business a prospect. We also broaden our customer base through geographic expansion, especially in our emerging businesses of first aid and safety, fire protection and document management. Finally, we will continue to evaluate strategic acquisitions as opportunities arise.

RESULTS OF OPERATIONS

Cintas classifies its businesses into four operating segments in accordance with the criteria set forth in Financial Accounting Standards Board (FASB) Statement No. 131, Disclosures about Segments of an Enterprise and Related Information. The Rental Uniforms and Ancillary Products operating segment reflects the rental and servicing of uniforms and other garments, mats, mops and shop towels and other ancillary items. In addition to these rental items, restroom and hygiene products and services are also provided within this operating segment. The Uniform Direct Sales operating segment consists of the direct sale of uniforms and related items and branded promotional products. The First Aid, Safety and Fire Protection Services operating segment consists of first aid, safety and fire protection products and services. The Document Management Services operating segment consists of document destruction, document imaging and document retention services. Revenue and income before income taxes for each of these operating segments for the three month periods ended August 31, 2008 and August 31, 2007, are presented in Note 10 entitled Segment Information of "Notes to Consolidated Condensed Financial Statements."

New Accounting Pronouncements

In September 2006, the FASB issued Statement No. 157, Fair Value Measurements (FAS 157), which defines fair value, establishes a framework for measuring fair value under GAAP and expands disclosure requirements about fair value measurements. In February 2008, the FASB released a FASB Staff

Position (FSP FAS 157-2, Effective Date of FASB Statement No. 157) which delayed the effective date of FAS 157 for all non-financial assets and non-financial liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually). Cintas adopted FAS 157 on June 1, 2008, as required. The adoption of FAS 157 for our financial assets and liabilities did not have a material impact on Cintas' results of operations or financial condition. Cintas' adoption of FAS 157 is more fully described in Note 3 entitled Fair Value Measurements of "Notes to Consolidated Condensed Financial Statements."

In December 2007, the FASB issued Statement No. 141 (revised 2007), Business Combinations (FAS 141(R)). Under FAS 141(R), an entity is required to recognize the assets acquired, liabilities assumed, contractual contingencies, and contingent consideration at their fair value on the acquisition date. It further requires that acquisition-related costs be recognized separately from the acquisition and expensed as incurred, restructuring costs generally be expensed in periods subsequent to the acquisition date, and changes in accounting for deferred tax asset valuation allowances and acquired income tax uncertainties after the measurement period impact income tax expense. For Cintas, FAS 141(R) is effective for acquisitions and adjustments to an acquired entity's deferred tax asset and liability balances occurring after May 31, 2009. Cintas is currently evaluating the future impact and disclosures under FAS 141(R).

Three Months Ended August 31, 2008 Compared to Three Months Ended August 31, 2007

Total revenue increased 3.4% for the three months ended August 31, 2008, over the same period in the prior fiscal year. The three month period ended August 31, 2008, included 65 workdays, which is one fewer than last fiscal year's first quarter. On a same workday basis, total revenue increased 5.0%. Internal growth accounted for 3.9% of this increase. The remaining 1.1% represents growth derived through acquisitions in our First Aid, Safety and Fire Protection Services operating segment and our Document Management Services operating segment.

Rental Uniforms and Ancillary Products revenue increased 3.1% on a same workday basis for the three months ended August 31, 2008, over the same period in the prior fiscal year. Internal growth accounted for the entire 3.1% increase, primarily as a result of the sale of new rental programs to customers, offset by lost business.

Other Services revenue, consisting of revenue from the reportable operating segments of Uniform Direct Sales, First Aid, Safety and Fire Protection Services and Document Management Services, increased 10.2% on a same workday basis for the three months ended August 31, 2008, over the same period in the prior fiscal year. Internal growth accounted for 6.1% of this increase. Internal growth was generated primarily through the increased sales of first aid, safety and fire protection products and services and document management services to customers. The additional 4.1% growth was generated through a combination of acquisitions of first aid, safety and fire protection businesses and document management businesses.

Cost of rental uniforms and ancillary products consists primarily of production expenses, delivery expenses and the amortization of in service inventory, including uniforms, mats, shop towels and other rental items. Cost of rental uniforms and ancillary products increased $15.8 million, or 4.0%, for the three months ended August 31, 2008, as compared to the three months ended August 31, 2007. This increase was mainly due to increased Rental Uniforms and Ancillary Products operating segment revenue, increased energy related costs and increased hanger costs.

Cost of other services consists primarily of cost of goods sold (predominantly uniforms and first aid products), delivery expenses and distribution expenses in the Uniform Direct Sales operating segment, the First Aid, Safety and Fire Protection Services operating segment and the Document Management Services operating segment. Cost of other services increased $9.5 million, or 6.0%, for the three months ended August 31, 2008, as compared to the three months ended August 31, 2007. This increase was mainly due to increased Other Services sales volume and increased energy related costs.

Selling and administrative expenses increased $10.6 million, or 3.8%, for the three months ended August 31, 2008, as compared to the three months ended August 31, 2007. Medical costs increased by $7.4 million over the same period in the prior fiscal year reflecting continued rising costs in the healthcare industry and additional claims incurred. In addition, bad debt expense increased by $2.1 million.

Net interest expense (interest expense less interest income) was $12.0 million for the three months ended August 31, 2008, compared to $11.4 million for the same period in the prior fiscal year. This increase in net interest expense is primarily due to the increased level of borrowing used to fund acquisitions and to fund the share buyback program. Please refer to the Liquidity and Capital Resources section below.

Cintas' effective tax rate was 37.5% for the three months ended August 31, 2008, reflecting the reserve requirements of FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes - an interpretation of FASB Statement No. 109.

Net income decreased 3.0% for the three months ended August 31, 2008, from the same period in the prior fiscal year. Diluted earnings per share remained flat for the three months ended August 31, 2008, compared to the same period in the prior fiscal year. The diluted earnings per share results exceeded the net income decrease of 3.0% due to the impact of the share buyback program, which is discussed in more detail in the Liquidity and Capital Resources section below.

Rental Uniforms and Ancillary Products Operating Segment

Three Months Ended August 31, 2008 Compared to Three Months Ended August 31, 2007

As discussed above, Rental Uniforms and Ancillary Products revenue increased $11.0 million, or 3.1% on a same workday basis, and the cost of rental uniforms and ancillary products increased $15.8 million, or 4.0%. The operating segment's gross margin was $314.1 million, or 43.5% of revenue. This gross margin percent to sales of 43.5% was lower than last fiscal year's first quarter of 44.9% mainly due to increased energy related costs and hanger costs. Energy related costs include natural gas, electric and gas, and they increased a combined 100 basis points over last year's first quarter. Hanger costs increased 50 basis points primarily as a result of an import tariff imposed by the U.S. government on hangers produced in China.

Selling and administrative expenses in the Rental Uniforms and Ancillary Products operating segment as a percent to sales, at 28.7%, remained consistent with the same period of the prior fiscal year.

Income before income taxes decreased $7.7 million to $107.1 million for the Rental Uniforms and Ancillary Products operating segment for the period compared to the same period last fiscal year. Income before income taxes was 14.8% of the operating segment's revenue, which is a 140 basis point decrease compared to the first quarter of the prior fiscal year. This is primarily due to the increased energy related costs and hanger costs indicated above.

Uniform Direct Sales Operating Segment

Three Months Ended August 31, 2008 Compared to Three Months Ended August 31, 2007

Uniform Direct Sales operating segment revenue decreased $1.3 million, or 1.1%, for the three months ended August 31, 2008, over the same period in the prior fiscal year. On a same workday basis, though, Uniform Direct Sales operating segment revenue increased by 0.4%. There were no acquisitions in the Uniform Direct Sales operating segment during the three months ended August 31, 2008.

Cost of uniform direct sales decreased $2.2 million, or 2.7%, for the three months ended August 31, 2008, due to decreased Uniform Direct Sales volume. The gross margin as a percent of revenue was 31.8% for the quarter ended August 31, 2008, which was a 110 basis point increase over the same period in the prior fiscal year. This increase is primarily due to continuing improvement in sourcing operations.

Selling and administrative expenses as a percent of revenue, at 21.6%, increased 30 basis points compared to the first quarter of the prior fiscal year. This increase is due to higher bad debt expense, which increased approximately 38 basis points over last fiscal year's first quarter.

Income before income taxes increased $0.9 million to $12.0 million for the Uniform Direct Sales operating segment for the period compared to the same period in the prior fiscal year. Income before income taxes was 10.2% of the operating segment's revenue, which is an 80 basis point increase compared to the same period in the prior fiscal year. This increase is due to the gross margin increase offset by the increased bad debt expense.

First Aid, Safety and Fire Protection Services Operating Segment

Three Months Ended August 31, 2008 Compared to Three Months Ended August 31, 2007

First Aid, Safety and Fire Protection Services operating segment revenue increased $6.3 million, or 7.8% on a same workday basis for the three months ended August 31, 2008. This operating segment's internal growth for the period was 5.6% over the same period last fiscal year. The remaining growth was generated through the acquisition of first aid, safety and fire protection businesses.

Cost of first aid, safety and fire protection services increased $4.0 million, or 6.6%, for the three months ended August 31, 2008, due to increased First Aid, Safety and Fire Protection Services volume. Gross margin for the First Aid, Safety and Fire Protection Services operating segment is defined as revenue less cost of goods, warehouse expenses, service expenses and training expenses. The gross margin as a percent of revenue was 40.7% for the quarter ended August 31, 2008, which is a 20 basis point decrease compared to the gross margin percentage in the first quarter of the prior fiscal year. This decline is due to higher energy related costs offset by improved labor efficiency. Energy related costs increased 60 basis points compared to last fiscal year's first quarter. This increase was offset by a 20 basis point reduction in warehouse labor as well as other efficiency gains.

Selling and administrative expenses as a percent of revenue, at 30.2%, decreased 30 basis points compared to the first quarter of the prior fiscal year. This decrease was due to lower bad debt expense.

Income before income taxes for the First Aid, Safety and Fire Protection Services operating segment increased $0.7 million to $11.4 million for the period compared to the same period of the prior fiscal year. Income before income taxes was 10.5% of the operating segment's revenue, which is a 10 basis point increase compared to the first quarter of the prior fiscal year as a result of the various items described above.

Document Management Services Operating Segment

Three Months Ended August 31, 2008 Compared to Three Months Ended August 31, 2007

Document Management Services operating segment revenue increased $17.1 million, or 47.5% on a same workday basis for the three months ended August 31, 2008, over the same period in the prior fiscal year. This operating segment's internal growth for the period was 25.3% over the same period in the prior fiscal year. The internal growth was primarily due to the sale of shredding services to new customers and favorable recycled paper prices relative to last fiscal year. The remaining growth was generated through the acquisition of document management businesses.

Cost of document management services increased $7.8 million, or 44.6%, for the three months ended August 31, 2008, due to increased Document Management Services operating segment sales volume. Gross margin for the Document Management Services operating segment is defined as revenue less production and service costs. The gross margin as a percent of revenue was 53.8% for the quarter ended August 31, 2008, which is a 20 basis point increase over the gross margin percentage in the first quarter of the prior fiscal year. This improvement was made despite an increase in energy related costs of approximately 170 basis points and was primarily due to the operating segment's improved leveraging of its infrastructure caused by increased sales volume.

Selling and administrative expenses as a percent of revenue, at 40.4%, decreased 230 basis points compared to the first quarter of the prior fiscal year. This decrease is due to improved scale of administrative functions resulting from the operating segment's increased sales volume.

Income before income taxes for the Document Management Services operating segment increased $3.3 million to $7.4 million for the period compared to the same period in the prior fiscal year. Income before income taxes was 13.5% of the operating segment's revenue, which is a 260 basis point improvement over the operating segment's revenue for the same period last fiscal year, primarily as a result of the operating segment's increased sales volume.

Liquidity and Capital Resources

At August 31, 2008, Cintas had $180.9 million in cash and cash equivalents and marketable securities which is comparable to the $191.7 million at May 31, 2008. Capital expenditures were $54.5 million for the three months ended August 31, 2008. We expect capital expenditures for the year ended May 31, 2009 to be between $180 million and $200 million. Cash and cash equivalents and marketable securities are expected to be used to finance future acquisitions, capital expenditures, expansion and additional purchases under the share buyback program as detailed below. We believe that our current cash position, funds generated from operations and the strength of our banking relationships provides sufficient means to meet our anticipated operational and capital requirements.

Net property and equipment increased by $13.0 million from May 31, 2008 to August 31, 2008, due to our investment in computer software, rental facilities and equipment and our document management services fleet. Cintas had five uniform rental facilities under construction as of August 31, 2008.

In May 2005, Cintas announced that the Board of Directors authorized a $500.0 million share buyback program at market prices. In July 2006, Cintas announced that the Board of Directors approved the expansion of its share buyback program by an additional $500.0 million. From the inception of the share buyback program through September 30, 2008, Cintas has purchased a total of approximately 20.3 million shares of Cintas common stock, or approximately 12% of the total shares outstanding at the beginning of the program, at an average price of $39.31 per share for a total purchase price of approximately $797.9 million. The maximum approximate dollar value of shares that may yet be purchased under the plan as of September 30, 2008, is $202.1 million. The Board of Directors did not specify an expiration date for this program.

Following is information regarding Cintas' long-term contractual obligations and other commitments outstanding as of August 31, 2008:

(In thousands)                                                Payments Due by Period
                                                                     Two to
                                                      One year        three         Four to        After five
Long-term contractual obligations       Total         or less         years        five years         Years

Long-term debt (1)                   $   949,532     $      544     $ 171,198     $    226,291     $   551,499
Capital lease obligations (2)              1,013            413           240              240             120
Operating leases (3)                      84,812         23,131        32,970           16,504          12,207
Interest payments (4)                    698,973         53,854       104,830           81,138         459,151
Interest swap agreements (5)                ----           ----          ----             ----            ----
Unconditional purchase obligations          ----           ----          ----             ----            ----
Total contractual cash obligations   $ 1,734,330     $   77,942     $ 309,238     $    324,173     $ 1,022,977

(1) Long-term debt primarily consists of $775,000 in long-term notes and $170,000 in commercial paper.

(2) Capital lease obligations are classified as debt on the consolidated balance sheets.

(3) Operating leases consist primarily of building leases and a synthetic lease on a corporate aircraft.

(4) Interest payments include interest on both fixed and variable rate debt. Rates have been assumed to remain constant for the remainder of fiscal 2009, increase 25 basis points each year in fiscal 2010 and fiscal 2011, and increase 50 basis points each year in fiscal 2012, fiscal 2013 and fiscal 2014.

(5) Reference Note 6 entitled Debt, Derivatives and Hedging Activities of "Notes to Consolidated Condensed Financial Statements" for a detailed discussion of interest swap agreements.

(In thousands)                                   Amount of Commitment Expiration Per Period
                                                                 Two to
                                                  One year        three        Four to         After five
Other commercial commitments        Total         or less         years       five years          Years

Lines of credit (1)               $  526,349     $     ----     $ 526,349       $     ----     $      ----
Standby letter of credit (2)          73,651         73,642             9             ----            ----
Guarantees                              ----           ----          ----             ----            ----
Standby repurchase obligations          ----           ----          ----             ----            ----
Other commercial commitments            ----           ----          ----             ----            ----
Total commercial commitments      $  600,000     $   73,642     $ 526,358       $     ----     $      ----

(1) Back-up facility for the commercial paper program.

(2) Support certain outstanding long-term debt and self-insured workers' compensation and general liability insurance programs.

Cintas has no off-balance sheet arrangements other than a synthetic lease on a corporate aircraft. The synthetic lease on the aircraft does not currently have, and is not reasonably likely to have, a current or future material effect on Cintas' financial condition, changes in Cintas' financial condition, revenue or expenses, results of operations, liquidity, capital expenditures or capital resources.

Litigation and Other Contingencies

Cintas is subject to legal proceedings 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 financial position or results of operations of Cintas. Cintas is party to additional litigation not considered in the ordinary course of business. Please refer to Note 9 entitled Litigation and Other Contingencies of "Notes to Consolidated Condensed Financial Statements" for a detailed discussion of certain specific litigation.

Outlook

External market conditions have deteriorated in our first quarter of fiscal 2009, and we expect these conditions to continue throughout the remainder of the fiscal year. These challenging conditions also adversely affect our customers' businesses. When combined with the significant increases in our energy related costs and hanger costs, we anticipate that our results will continue to be negatively impacted. As a result, we intend to aggressively challenge our cost structure in order to maintain our margins during the remainder of fiscal 2009.

We will continue searching out additional products and services in an effort to become an even more valuable resource for our customers. We believe that the high level of customer service provided by our employee-partners and supported by our infrastructure, quality products, financial resources and corporate culture will provide for continued business success. As such, we believe we have upside potential for all of our business units. Although difficult to predict, we anticipate revenue growth in all of our operating segments.

In the marketplace, competition and related pricing pressure will continue; however, we believe cost containment initiatives, technological advances and continued leverage of our infrastructure will soften or offset any impact.

When appropriate opportunities arise, we will supplement our internal growth with strategic acquisitions.

The financial markets have been extremely volatile since September 15, 2008. This volatility has affected our commercial paper rates. However, our exposure to higher rates is limited because most of our debt has a fixed rate of interest and is long-term. Additionally, our highly rated commercial paper program has allowed us continued access to the financial markets. In the event that the commercial paper market becomes inaccessible, we will be able to borrow the funds we need up to our commercial paper program limits from highly-rated banking institutions. We believe these programs will be adequate to provide necessary funding for our operations. Our commercial paper program expires in February, 2011.

Like most other companies, we experienced, and anticipate continuing to experience, increased costs for energy and medical benefits. Changes in federal and state tax laws also impact our results.

Cintas' effective tax rate was 37.5% for the three months ended August 31, 2008. For the full fiscal year 2009, we expect our effective tax rate to be approximately 37.1%.

ITEM 3.