Monro Muffler Brake, Inc. Comparable Store Sales Increase 4%;
ROCHESTER, N.Y.--Jan. 1, 20045, 2004--Monro Muffler Brake, Inc. today announced record sales and net income for the third quarter and nine months ended December 27, 2003.During the third quarter, sales totaled $64.5 million compared to $60.7 million last year. Comparable store sales remained strong at a 4.0% increase following a 3.8% comparable store sales increase in the year ago period. The key drivers of the comparable store sales increase included an approximate 10% increase in the brake category, a 2% increase in exhaust sales, a 25% increase in scheduled maintenance, and a 12% increase in commercial sales.
For the quarter, net income increased 25.6% to $3.0 million compared to $2.4 million in the prior year. Diluted earnings per share were $0.21 versus $0.17, taking into account the three-for-two stock split that became effective October 31, 2003. During the quarter, the Company opened five stores and closed two for a total of 565 at the end of the period.
Robert G. Gross, President and Chief Executive Officer stated, "We are pleased with our results for the third quarter, which demonstrate the traction we have gained in terms of consumer awareness, trust, and preference in the geographic areas in which we operate. Of particular note, our sixth consecutive quarterly comparable store sales increase was driven by strong performance across our business. For example, we continue to build momentum and drive year-over-year increases in our newer businesses, such as scheduled maintenance, via our direct marketing strategy and point-of-sale systems. In addition, we are experiencing steady gains in our core services, such as brakes, which are relatively complex, higher margin transactions. These increases validate that our commitment to driving traffic and providing industry-leading customer service have resulted in consumer willingness to trust Monro with a wide range of services."
Sales for the nine-month period ended December 2003 were $212.3 million versus $196.6 million last year. Net income for the nine months increased 31.7% to $14.8 million, or $1.02 per diluted share, compared to $11.3 million, or $0.80 per diluted share last year, as adjusted for the three-for-two stock split.
Mr. Gross continued, "In addition to successfully driving comparable store sales growth, we have remained focused on maintaining our operating discipline and efficient infrastructure. This has created leverage and driven bottom line growth in excess of sales growth. As we continue to expand our store base in both our existing and contiguous markets, we expect to be able to further leverage our infrastructure, utilize our strong cash flow, and benefit from our company-owned business model. With regard to our expansion strategy, we opened five new BJs locations this quarter, for a total of ten as of December 27. We are happy to report that, overall, these locations are exceeding our sales and profitability expectations and we look forward to continuing our relationship with BJs in the year ahead.
"Looking to the fourth quarter, to date we have seen a continuation of the strong performance we achieved in the third quarter. As such, we reiterate our previously stated fourth quarter guidance for diluted earnings per share in the split-adjusted range of $0.14 to $0.17."
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 566 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, Michigan and Maine. Monro's stores provide a full range of services for exhaust systems, brake systems, tires, steering and suspension systems and many vehicle maintenance services.
MONRO MUFFLER BRAKE, INC.
Financial Highlights
(Unaudited)
(Dollars in thousands, except per share amounts)
Quarter Ended Fiscal December
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2003 2002 % Change
---- ---- --------
Sales $64,549 $60,716 6.3%
Cost of sales, including
distribution and occupancy costs 39,291 37,787 4.0
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Gross profit 25,258 22,929 10.2
Operating, selling, general and
administrative expenses 19,981 18,418 8.5
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Operating income 5,277 4,511 17.0
Interest expense, net 515 623 (17.3)
Other income, net (123) (2)
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Income before provision for income
taxes 4,885 3,890 25.6
Provision for income taxes 1,854 1,477 25.5
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Net income $ 3,031 $ 2,413 25.6
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Diluted earnings per common share $ 0.21 $ 0.17 23.5%
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Weighted average number of diluted
shares outstanding 14,612 14,037
Number of stores open (at end of
quarter) 565 550
MONRO MUFFLER BRAKE, INC.
Financial Highlights
(Unaudited)
(Dollars in thousands, except per share amounts)
Nine Months Ended Fiscal December
---------------------------------
2003 2002 % Change
---- ---- --------
Restated
Sales $212,298 $196,628 8.0%
Cost of sales, including
distribution and occupancy costs 123,351 115,192 7.1
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Gross profit 88,947 81,436 9.2
Operating, selling, general and
administrative expenses 63,127 61,345 2.9
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Operating income 25,820 20,091 28.5
Interest expense, net 1,997 2,032 (1.7)
Other income, net (123) (122)
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Income before provision for income
taxes 23,946 18,181 31.7
Provision for income taxes 9,099 6,907 31.7
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Net income $ 14,847 $ 11,274 31.7
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Diluted earnings per share $ 1.02 $ 0.80 27.5%
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Weighted average number of diluted
shares outstanding 14,537 14,081
MONRO MUFFLER BRAKE, INC.
Financial Highlights
(Unaudited)
(Dollars in thousands)
December 27, March 29,
2003 2003
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Assets
Current assets
Cash $ 73 $ 69
Inventories 52,247 51,256
Other current assets 13,343 12,552
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Total current assets 65,663 63,877
Property, plant and equipment, net 160,588 132,148
Other noncurrent assets 10,864 11,175
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Total assets $237,115 $207,200
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Liabilities and Shareholders' Equity
Current liabilities $ 43,811 $ 41,997
Long-term debt 45,135 36,183
Other long-term liabilities 7,067 4,628
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Total liabilities 96,013 82,808
Total shareholders' equity 141,102 124,392
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Total liabilities and shareholders'
equity $237,115 $207,200
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