Monro Muffler Brake, Inc. Announces Record Q1 Sales And Earnings
ROCHESTER, N.Y.--July 24, 2003--Monro Muffler Brake, Inc. today announced record sales and earnings for the first quarter ended June 28, 2003.Sales increased 8.4% to $73.6 million from $67.9 million. The sales increase was driven in large part by a 5.9% increase in comparable store sales. Additionally, new stores added $1.9 million to the increase, including $1.5 million from the 10 Frasier Tire Stores acquired in February 2003. The comparable store sales increase resulted in part from a 36% increase in the Company's commercial business, a 21% increase in the miscellaneous services category including an 11% increase in scheduled maintenance services, and an 8% increase in comparable store tire sales. Comparable store traffic was up approximately 4%.
Gross margin was 43.8% of sales compared to 44.0% of sales last year due primarily to increased tire sales which carry a lower gross margin.
Net income was $5.9 million, or $0.62 per share, compared to $4.0 million, or $0.42 per share, in last year's first quarter. Diluted earnings per share for the quarter ended June 29, 2002 was net of an $0.11 charge related to performance-based executive stock options. Excluding this charge, diluted earnings per share were $0.53 in last year's first quarter.
Robert G. Gross, President and Chief Executive Officer stated, "Our record results were driven by sustained positive momentum across all aspects of our business. The catalyst continues to be our focus on consistently delivering superior customer service, which allows us to build trust and drive store traffic. To fully capitalize on our strong customer loyalty and increasing store traffic, we continue to focus on diversifying our revenue stream. For example, we again experienced significant gains in our scheduled maintenance, tire and commercial businesses during the quarter, while achieving solid performance in our core business. Our strong results are also a testament to our company-owned business model. Not only do company-owned stores allow us to develop and promote our core company value of customer service, but also provide the economic benefits of centralized purchasing of key items such as parts, equipment and information technology."
Gross continued, "We plan to continue to drive top and bottom line growth by increasing comparable stores sales and by acquiring businesses that are both accretive in a timely manner and complement our existing geographic footprint. Our two new BJ's Wholesale Club locations are performing significantly ahead of our expectations and we expect to open more locations in the near future.
"We are confident that the investments and strategic initiatives currently underway will contribute to short- and long-term sustainable growth for Monro. In fact, we have seen our strong comparable store sales trend continue into July. As such, we are comfortable tightening our earnings per share guidance for the full year to $1.74 to $1.80, which compares to diluted earnings per share of $1.46 last fiscal year. It should be noted that, beginning in the second quarter, this year's guidance includes increased depreciation expense, equivalent to $0.03 per share, resulting from the consolidation of the remaining properties under our synthetic lease. We anticipate diluted earnings per share for the second quarter will be in the range of $0.59 to $0.61."
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 562 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.
The statements contained in this press release that are not historical facts may contain statements of future expectations and other forward-looking statements made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to risks, uncertainties and other important factors that could cause actual results to differ materially from those expressed. These factors include, but are not necessarily limited to, product demand, 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, the effect of economic conditions, the impact of competitive services and pricing, product development, parts supply restraints or difficulties, industry regulation, risks relating to leverage and debt service (including sensitivity to fluctuations in interest rates), continued availability of capital resources and financing, risks relating to integration of acquired businesses and other factors set forth elsewhere herein and in the Company's Securities and Exchange Commission filings, including the report on Form 10-K for the fiscal year ended March 29, 2003.
MONRO MUFFLER BRAKE, INC.
Financial Highlights
(Unaudited)
(Dollars in thousands, except per share amounts)
Quarter Ended Fiscal June
-------------------------
2003 2002 % Change
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Sales $ 73,643 $ 67,908 8.4%
Cost of sales, including
distribution and occupancy costs 41,408 38,013 8.9
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Gross profit 32,235 29,895 7.8
Operating, selling, general and
administrative expenses 22,051 22,900 (3.7)
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Operating income 10,184 6,995 45.6
Interest expense, net 593 766 (22.7)
Other expense (income), net 44 (151)
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Income before provision for income
taxes 9,547 6,380 49.6
Provision for income taxes 3,628 2,424 49.7
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Net income $ 5,919 $ 3,956 49.6
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Diluted earnings per common share $ 0.62 $ 0.42 47.6%
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Number of stores open (at end of
quarter) 561 548
Weighted average number of diluted
shares outstanding 9,587 9,389
MONRO MUFFLER BRAKE, INC.
Financial Highlights
(Unaudited)
(Dollars in thousands)
June 28, March 29,
2003 2003
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Assets
Current assets
Cash $ 391 $ 69
Inventories 53,061 51,256
Other current assets 13,124 12,552
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Total current assets 66,576 63,877
Property, plant and equipment, net 159,396 132,148
Other noncurrent assets 11,000 11,175
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Total assets $ 236,972 $ 207,200
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Liabilities and Shareholders' Equity
Current liabilities $ 45,428 $ 41,997
Long-term debt 54,663 36,183
Other long-term liabilities 5,414 4,628
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Total liabilities 105,505 82,808
Total shareholders' equity 131,467 124,392
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Total liabilities and shareholders'
equity $ 236,972 $ 207,200
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