Monro Muffler Brake, Inc. Reports Second Quarter Results
ROCHESTER, N.Y.--Oct. 18, 2001--Monro Muffler Brake, Inc. today reported results for the second quarter ended September 29, 2001.Sales for the fiscal 2002 second quarter were $60.5 million, compared with $60.4 million for the second quarter ended September 30, 2000. Comparable store sales, adjusted for one less selling day in the period, increased 0.7%, while overall they decreased 0.7% in the quarter. New store sales increased $0.7 million.
At September 29, 2001, the Company had 513 company-operated stores. The Company opened one store and closed none in the second quarter.
Net income for the second quarter of fiscal 2002 rose 6% to $3.7 million, or $0.41 per diluted share, as compared with $3.5 million, or $0.39 per diluted share, in the prior-year period.
Sales for the six months ended September 29, 2001 increased to $121.9 million from $121.1 million in the comparable period last year. Net income for first half of fiscal 2002 rose 9.1% to $7.5 million, or $0.84 per diluted share, as compared with $6.9 million or $0.78 per diluted share in the first six months of the prior year.
"This is our second consecutive quarter of positive same store sales growth, after adjusting for days," commented Robert G. Gross, President and Chief Executive Officer. "While overall sales were slightly lower than initially anticipated, we succeeded, nonetheless, in achieving top-line growth in a period of economic softness characterized by a particularly challenging retail environment, exacerbated by the tragic events of September 11.
"Our solid performance in the quarter benefited from a number of positive trends that should also help drive revenue in the second half of the year. Our average sales ticket, excluding oil changes, increased 3% for the period. Oil changes increased 18% overall during the second quarter and 33% at our Speedy stores. While oil changes represent a lower price-point service, they offer us the opportunity to build long-term relationships with new customers. We believe that building upon Monro's loyal customer base is essential as we work to capture market share. Average store traffic per day also increased 2.3% during the second quarter, including a 6.3% increase for our Speedy stores compared with last year. Additionally, our focus on and promotion of scheduled maintenance produced a 35% increase this quarter over last year, up from a 22% increase in the first quarter of this year."
Mr. Gross continued, "We are also excited about the progress of the commercial side of our business which grew 19% during the quarter on top of a 24% increase last year. This performance was driven by more repeat business, new regional accounts and a solid increase in dealership business. The commercial business is clearly developing into an important revenue stream for us, and we are on track to achieve our goal of $9 million in commercial sales for the year."
"Despite uncertain economic conditions, we are encouraged by the trends in our business particularly as they relate to store traffic and average ticket price. Looking ahead, we are targeting positive same store sales growth into the third quarter, and we expect diluted earnings per share to increase at least 25% for the quarter, in the range of $0.19 to $0.22, as compared to $0.15 in the same quarter of last year. For the full year, we reiterate our earlier guidance of $1.20 to $1.25 per diluted share, which assumes a same-store sales increase of 0 to 3%."
Mr. Gross concluded, "We also remain focused on our acquisition strategy, as our balance sheet is strong and the soft economy has led to reduced valuations of potential targets. Accordingly, we intend to quickly and effectively capitalize on the right opportunities and believe we are ideally positioned to complete an acquisition by the end of our fiscal year."
Monro Muffler Brake operates a chain of stores providing automotive undercar repair services in the United States. The Company currently operates 513 stores and has 19 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 and many vehicle maintenance services.
Certain statements made above may be forward-looking and are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve uncertainties which may cause the Company's actual results in future periods to differ materially from those expressed. These uncertainties include, but are not necessarily limited to, uncertainties affecting retail generally (such as consumer confidence and demand for auto repair); risks relating to leverage and debt service (including sensitivity to fluctuations in interest rates); dependence on, and competition within, the primary markets in which the Company's stores are located; the need for, and costs associated with, store renovations and other capital expenditures; and the risks described from time to time in the Company's SEC reports which include the report on Form 10K for the fiscal year ended March 31, 2001.
MONRO MUFFLER BRAKE, INC.
Financial Highlights
(Unaudited)
(Dollars in thousands, except per share amounts)
Quarter Ended Fiscal September
2001 2000 % Change
--------- --------- -------
Sales $ 60,477 $ 60,398 0.1%
Cost of sales, including
distribution and occupancy costs 34,908 35,273 (1.0)
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Gross profit 25,569 25,125 1.8
Operating, selling, general and
administrative expenses 18,546 17,675 4.9
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Operating income 7,023 7,450 (5.7)
Interest expense, net 960 1,525 (37.0)
Other expense, net 110 157 (30.9)
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Income before provision for
income taxes 5,953 5,768 3.2
Provision for income taxes 2,260 2,296 (1.5)
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Net income $ 3,693 $ 3,472 6.4
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Diluted earnings per common share $ 0.41 $ 0.39 5.1
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Number of stores open
(at end of quarter) 513 510
Weighted average number of
diluted shares outstanding 9,040 8,930
MONRO MUFFLER BRAKE, INC.
Financial Highlights
(Unaudited)
(Dollars in thousands, except per share amounts)
Six Months Ended Fiscal September
2001 2000 % Change
--------- --------- -------
Sales $ 121,870 $ 121,091 0.6%
Cost of sales, including
distribution and occupancy costs 69,146 70,099 (1.4)
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Gross profit 52,724 50,992 3.4
Operating, selling, general and
administrative expenses 38,725 36,112 7.2
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Operating income 13,999 14,880 (5.9)
Interest expense, net 2,118 3,125 (32.2)
Other expense, net 300 262 14.3
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Income before provision for
income taxes 11,581 11,493 0.8
Provision for income taxes 4,035 4,574 (11.8)
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Net income $ 7,546 $ 6,919 9.1
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Diluted earnings per share $ 0.84 $ 0.78 7.7
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Weighted average number of
diluted shares outstanding 9,010 8,906
MONRO MUFFLER BRAKE, INC.
Financial Highlights
(Unaudited)
(Dollars in thousands)
September 29, March 31,
2001 2000
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Assets
Current assets
Cash $ 1,379 $ 751
Inventories 43,433 41,071
Other current assets 10,255 7,945
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Total current assets 55,067 49,767
Property, plant and equipment, net 130,028 131,486
Other noncurrent assets 12,020 12,586
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Total assets $ 197,115 $ 193,839
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Liabilities and Shareholders' Equity
Current liabilities $ 43,459 $ 36,569
Long-term debt 38,991 50,857
Other long-term liabilities 9,131 8,603
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Total liabilities 91,581 96,029
Total shareholders' equity 105,534 97,810
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Total liabilities and shareholders'
equity $ 197,115 $ 193,839
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