EX-99.1 2 c95158exv99w1.htm EXHIBIT 99.1 Exhibit 99.1
         
Exhibit 99.1
     
CONTACT:
  Robert Gross
 
  Chairman and Chief Executive Officer
 
  (585) 647-6400
 
   
 
  Catherine D’Amico
 
  Executive Vice President — Finance
 
  Chief Financial Officer
 
  (585) 647-6400
 
   
 
  Investors: Jessica Greenberger
 
  Media: Diane Zappas
 
  FD
 
  (212) 850-5600
FOR IMMEDIATE RELEASE
MONRO MUFFLER BRAKE, INC. ANNOUNCES RECORD THIRD QUARTER 2010
FINANCIAL RESULTS
~ Third Quarter EPS Increased 35.7% to $.38, Above Previously Forecasted Range of $.32 — $.35 ~
~ Third Quarter Sales Up 28.7%, Comparable Store Sales Increased 7.2% ~
~Pretax Income Up 57%~
~ Company Raises Full Year 2010 Estimated EPS Range to $1.53 to $1.56 ~
ROCHESTER, N.Y. — January 28, 2010 — Monro Muffler Brake, Inc. (Nasdaq: MNRO), a leading provider of automotive undercar repair and tire services, today announced record financial results for its fiscal 2010 third quarter ended December 26, 2009.
Third Quarter Results
Sales for the third quarter of fiscal 2010 increased 28.7% to a record $152.7 million compared to $118.7 million for the third quarter of fiscal 2009. Sales were driven largely by strong in-store sales execution across all categories and increased store traffic. Comparable store sales increased 7.2%, on top of a 5.9% comparable store sales increase in the third quarter of the prior year, and in-line with the Company’s previously estimated range of 6% to 8%. By category, comparable store sales increased approximately 13% for alignments, 11% for shocks, 10% for tires, 8% for exhaust, 6% for brakes, and 3% for maintenance services.
The total sales for the quarter included an increase in sales from new stores of $28.8 million. The 26 Autotire stores acquired in June 2009 contributed $8.6 million of the increase, and the 45 Midwest Tire and Tire Warehouse stores acquired in September and October 2009, respectively, contributed $18.7 million of the increase.

 

 


 

Gross margin was 38.3% in the third quarter compared to 38.1% in the prior year quarter and reflects previously implemented price increases, improved labor productivity and leveraging of fixed occupancy costs included in cost of sales. These factors were offset by a continued sales mix shift toward lower margin tire sales mostly driven by the addition of the 71 recently acquired tire stores.
Total operating expenses were $44.3 million, or 29.0% of sales, compared with $35.3 million, or 29.7% of sales, for the same period of the prior year and reflect leveraging of the cost structure on increased sales. Operating income for the quarter increased 43.7% to $14.3 million from $9.9 million in the third quarter of fiscal year 2009. Interest expense was $1.0 million, down from $1.5 million in the prior year’s third quarter.
Net income for the third quarter increased 41.8% to a record $7.9 million compared to $5.6 million for the prior year period. Diluted earnings per share for the quarter increased 35.7% to $.38, above the Company’s previously estimated range of $.32 to $.35, and compared to diluted earnings per share of $.28 in the third quarter of fiscal 2009. Net income for the third quarter reflects an effective tax rate of 40.7% compared with 34.2% for the prior year period. Pre-tax income for the third quarter increased to a record $13.3 million, a 57.1% increase over the prior year period.
The Company added 42 locations through acquisitions and closed one location during the quarter, ending the third quarter of fiscal 2010 with 780 stores.
First Nine Month Results
For the nine-month period, net sales increased 16.3% to a record $417.4 million from $359.0 million in the same period of the prior year. Net income for the first nine months of fiscal 2010 increased 29.8% to a record $27.3 million, or $1.33 per diluted share, compared with $21.0 million, or $1.05 per diluted share in the comparable period of fiscal 2009.
Robert G. Gross, Chairman and Chief Executive Officer stated, “We are very pleased that the momentum we built over the last two years has continued into the second half of fiscal 2010. Our strong results for the third quarter demonstrate that we continue to gain market share and capitalize on favorable macro economic factors, most importantly, continued weak new vehicle sales and dealer closings. Additionally, we are very encouraged by our recent opportunistic, value-added acquisitions, all of which have been accretive to earnings from the start. During the quarter, we continued to focus on our store

 

 


 

execution and to invest in advertising and employee training. These initiatives, coupled with our strong reputation as a trusted service provider, have us on track for our ninth straight year of same store sales increases, with an increase of approximately 7% for the third quarter and year-to-date.”
Company Outlook
Based on year-to-date performance and current business and economic trends, the Company anticipates fourth quarter comparable store sales growth to be in the range of 5% to 7% and diluted earnings per share to be in the range of $.20 to $.23, compared to $.15 for the fourth quarter of fiscal 2009.
For fiscal 2010, the Company continues to expect comparable store sales growth of 6% to 7%. The Company now expects total fiscal 2010 sales in the range of $555 million to $561 million compared to $476 million last year. The Company raised its estimated range for fiscal 2010 diluted earnings per share to $1.53 to $1.56 from its previously estimated range of $1.44 to $1.48, and $1.20 last year. The estimate is based on 20.6 million weighted average shares outstanding.
Mr. Gross concluded, “We have continued to execute well against our business strategy and remain optimistic as we head into the fourth quarter. Our January comparable store sales increased approximately 9%, on top of a very strong 14.6% last January. We are extremely pleased with the performance of our recent acquisitions, which also provide us with an opportunity to convert 53 service stores in New England to our Black Gold format over the next three months. Additionally, we would hope to close acquisition deals by the end of this quarter that would add approximately $20 million in annual sales. As we look to the fourth quarter, we continue to view the current trends in our industry, our business and acquisition opportunities favorably, and are excited about what fiscal year 2011 will bring.”
Webcast and Earnings Conference Call
The Company will host a conference call and audio webcast on January 28, 2010 at 11:00 a.m. Eastern Time. The conference call may be accessed by dialing 877-795-3647 and using the required pass code 4879354. A replay will be available approximately one hour after the recording through Thursday, February 4, 2010 and can be accessed by dialing 888-203-1112. The live conference call and replay can also be accessed via audio webcast at the Investor Info section of the Company’s website, located at www.monro.com. An archive will be available at this website through February 4, 2010.

 

 


 

About Monro Muffler Brake
Monro Muffler Brake operates a chain of stores providing automotive undercar repair and tire services in the United States, operating under the brand names of Monro Muffler Brake and Service, Mr. Tire, Tread Quarters Discount Tires, Autotire and Tire Warehouse. The Company currently operates 778 stores in New York, Pennsylvania, Ohio, Connecticut, Massachusetts, West Virginia, Virginia, Maryland, Vermont, New Hampshire, New Jersey, North Carolina, South Carolina, Indiana, Rhode Island, Delaware, Maine, Illinois and Missouri. Monro’s stores provide a full range of services for brake systems, steering and suspension systems, tires, exhaust systems and many vehicle maintenance services.

 

 


 

MONRO MUFFLER BRAKE, INC.
Financial Highlights
(Unaudited)
(Dollars and share counts in thousands)
                         
    Quarter Ended Fiscal December  
    2009     2008     % Change  
Sales
  $ 152,729     $ 118,680       28.7 %
Cost of sales, including distribution and occupancy costs
    94,171       73,465       28.2  
 
                   
Gross profit
    58,558       45,215       29.5  
 
                   
Operating, selling, general and administrative expenses
    43,531       35,694       22.0  
Intangible amortization
    374       112          
Loss (gain) on disposal of assets
    402       (510 )        
 
                   
Total operating expenses
    44,307       35,296       25.5  
 
                   
Operating income
    14,251       9,919       43.7  
Interest expense, net
    998       1,536       (35.0 )
Other income, net
    (71 )     (99 )     (28.0 )
 
                   
Income before provision for income taxes
    13,324       8,482       57.1  
Provision for income taxes
    5,417       2,904       86.5  
 
                   
Net income
  $ 7,907     $ 5,578       41.8  
 
                   
Diluted earnings per share
  $ .38     $ .28       35.7 %
 
                   
Weighted average number of diluted shares outstanding
    20,779       20,095          
Number of stores open (at end of quarter)
    780       711          

 

 


 

MONRO MUFFLER BRAKE, INC.
Financial Highlights
(Unaudited)
(Dollars and share counts in thousands)
                         
    Nine Months Ended Fiscal December  
    2009     2008     % Change  
Sales
  $ 417,408     $ 358,961       16.3 %
Cost of sales, including distribution and occupancy costs
    243,588       212,456       14.7  
 
                   
Gross profit
    173,820       146,505       18.6  
 
                   
Operating, selling, general and administrative expenses
    123,836       109,332       13.3  
Intangible amortization
    705       368       91.6  
Loss (gain) on disposal of assets
    522       (828 )        
 
                   
Total operating expenses
    125,063       108,872       14.9  
 
                   
Operating income
    48,757       37,633       29.6  
Interest expense, net
    4,337       4,648       (6.7 )
Other income, net
    (189 )     (360 )     (47.5 )
 
                   
Income before provision for income taxes
    44,609       33,345       33.8  
Provision for income taxes
    17,289       12,301       40.5  
 
                   
Net income
  $ 27,320     $ 21,044       29.8  
 
                   
Diluted earnings per share
  $ 1.33     $ 1.05       26.7 %
 
                   
Weighted average number of diluted shares outstanding
    20,576       20,062          

 

 


 

MONRO MUFFLER BRAKE, INC.
Financial Highlights
(Unaudited)
(Dollars in thousands)
                 
    December 26,     March 28,  
    2009     2009  
Current assets
               
Cash
  $ 4,874     $ 3,336  
Inventories
    85,931       71,443  
Other current assets
    26,593       26,935  
 
           
Total current assets
    117,398       101,714  
Property, plant and equipment, net
    203,899       185,061  
Other noncurrent assets
    100,417       89,976  
 
           
Total assets
  $ 421,714     $ 376,751  
 
           
Liabilities and Shareholders’ Equity
               
Current liabilities
  $ 91,059     $ 71,325  
Long-term debt
    87,714       97,098  
Other long term liabilities
    17,760       14,037  
 
           
Total liabilities
    196,533       182,460  
Total shareholders’ equity
    225,181       194,291  
 
           
Total liabilities and shareholders’ equity
  $ 421,714     $ 376,751