Monro Muffler Brake, Inc. Issues Final Results for the Fourth Quarter and Fiscal Year Ended March 29, 2003; Company Reports Audited EPS of $1.46
ROCHESTER, N.Y.--May 30, 2003--Monro Muffler Brake, Inc. today issued final fiscal 2003 fourth quarter and audited results for the year ended March 29, 2003, which were pending final review by the Company's external auditors, as previously discussed in the Company's press release dated May 22, 2003.PricewaterhouseCoopers ("PWC"), the Company's external auditors, has completed its review of the Company's accounting for barter credits received when the Company sublet or sold a total of 14 closed store properties to Icon International, a barter company, in fiscal years 1998, 1999 and 2000. The review resulted in a revision to the Company's and PWC's original accounting for barter transactions and the resulting barter credits. Accordingly, the Company's historical audited financial statements, to be included in its Form 10-K, will reflect a cumulative $2.5 million after-tax reduction to retained earnings at April 1, 2001 to record the retroactive impairment charge related to the store closures in fiscal 1998 through 2000. The Company's related balance sheets, which will soon be filed with the Forms 8-K and 10-K, will also reflect adjustments to fixed assets, accrued liabilities, deferred taxes, and other current and non-current assets in connection with this revision.
As management is confident in the use of the barter credits, the revised accounting method affects the timing of the recognition of income and expense. The Company's earnings, beginning in fiscal 2002, will ultimately increase in an amount equal to the aforementioned charge based on the Company's utilization of the barter credits. As such, audited net income for fiscal year 2003 increased $.1 million to $13.7 million, or $1.46 per diluted share, versus the previously reported $13.6 million, or $1.45 per diluted share.
The Company also reiterated its previously stated first quarter fiscal 2004 guidance for diluted earnings per share in the range of $0.58 to $0.62 and its full year EPS forecast of $1.70 to $1.80, excluding any positive impact from this accounting matter. The Company is currently assessing the magnitude of the positive adjustment on fiscal 2004, and plans to provide updated guidance before the end of its fiscal June quarter.
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, Speedy Auto Service by Monro, Kimmel Tires - Auto Service and Tread Quarters Discount Tires. The Company currently operates 561 stores and has 18 dealer locations in New York, Pennsylvania, Ohio, Connecticut, Massachusetts, West Virginia, Virginia, Maryland, Vermont, New Hampshire, New Jersey, North Carolina, South Carolina, Indiana, Rhode Island, Delaware and Michigan. Monro's stores provide a full range of services for exhaust systems, brake systems, steering and suspension systems, tires and many vehicle maintenance services.
MONRO MUFFLER BRAKE, INC.
Financial Highlights
(Unaudited)
(Dollars in thousands, except per share amounts)
Quarter Ended Fiscal March
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2003 2002 % Change
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Sales $ 61,399 $ 50,540 21.5%
Cost of sales, including
distribution and occupancy costs 37,240 31,307 18.9
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Gross profit 24,159 19,233 25.6
Operating, selling, general and
administrative expenses 19,696 14,811 33.0
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Operating income 4,463 4,422 0.9
Interest expense, net 570 778 (26.8)
Other (income) expense, net (68) 455
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Income before provision for income
taxes 3,961 3,189 24.2
Provision for income taxes 1,507 1,209 24.6
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Net income $ 2,454 $ 1,980 23.9
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Diluted earnings per share $ 0.26 $ 0.22 18.2%
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Weighted average number of diluted
shares outstanding 9,437 9,168
Number of stores open (at end of
quarter) 560 514
MONRO MUFFLER BRAKE, INC.
Financial Highlights
(Dollars in thousands, except per share amounts)
Year Ended Fiscal March
------------------------
2003 2002 % Change
----------- ------------ ----------
Sales $ 258,026 $ 224,853 14.8%
Cost of sales, including
distribution and occupancy costs 152,432 133,042 14.6
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Gross profit 105,594 91,811 15.0
Operating, selling, general and
administrative expenses 81,040 69,604 16.4
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Operating income 24,554 22,207 10.6
Interest expense, net 2,601 3,731 (30.3)
Other (income) expense, net (189) 833
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Income before provision for income
taxes 22,142 17,643 25.5
Provision for income taxes 8,414 6,336 32.8
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Net income $ 13,728 $ 11,307 21.4
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Diluted earnings per share $ 1.46 $ 1.25 16.8%
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Weighted average number of diluted
shares outstanding 9,403 9,055
