Monro Muffler Brake, Inc. Announces Full Year Net Income Increases 24%
ROCHESTER, N.Y.--May 2, 20040, 2004--| Company Reaffirms Forecast for Record 2005 Net Income; Anticipates 19%-27% EPS Growth in 2005 |
Monro Muffler Brake, Inc. today announced its financial results for the fourth quarter and year ended March 27, 2004 that were in line with the Company's previously announced expectations.
Financial Results
Full year sales increased 8.3% to $279.5 million from $258.0 million in fiscal 2003. The sales increase was driven by a 4.7% increase in comparable store sales. New stores added $10.9 million, including $3.5 million from the newly-acquired Mr. Tire stores. The comparable store sales result was fueled by an approximate 16% increase in scheduled maintenance, a 6% increase in brake sales and a 19% increase in commercial sales. Gross profit improved to $114.8 million, or 41.1% of sales, from $105.6 million, or 40.9% of sales, last year. Annual net income increased 23.9% to a record $17.0 million, or $1.18 per diluted share, from $13.7 million, or $0.97 per diluted share.
Fourth quarter sales increased 9.4% to $67.2 million from $61.4 million in the fourth quarter of 2003, reflecting the positive impact of a 2.0% increase in comparable store sales. New stores added $5.1 million. Gross profit increased to $25.9 million, or 38.5% of sales, from $24.2 million, or 39.3% of sales, in the same period last year. Net income for the quarter was $2.2 million, or $0.15 per diluted share, as compared to $2.5 million, or $0.17 per diluted share, in the year-ago period. Net income declined, as previously discussed, due to several reasons including a shift in the seasonality of the business to the third quarter related to owning more tire stores, a shift in the timing of the recognition of insurance expense, and the impact of implementation of EITF 02-16 related to the recognition of cooperative advertising credits.
Robert G. Gross, President and Chief Executive Officer of Monro, commented, "Fiscal 2004 was an important year for our Company. While expanding our top and bottom lines and enhancing certain product and service offerings, we also improved penetration of key geographic areas. Our overall sales improvement, evidenced by the 4.7% increase in comparable store sales, in addition to an increase in oil changes and higher store traffic, contributed to the 24% improvement in our net income."
Mr. Gross continued, "While our organic growth developed further during the year, we also seized strategic expansion opportunities. Specifically, we opened 14 new stores, including 12 BJ's Wholesale Club locations, and completed the Mr. Tire acquisition in March, giving us an even more solid foothold in our markets. Our passion for customer service, which builds the loyalty and trust of our customers, and our database marketing efforts remain the cornerstone of our success. Overall, we are pleased with our performance and confident in our superior business model, driven by our dedicated employees and competitively priced, high quality automotive repair products and services."
Company Outlook
Given positive industry conditions and solid sales trends, the Company reaffirms its previously announced expectations for fiscal 2005. For the first quarter, the Company estimates earnings per diluted share to be between $0.48 and $0.52 versus $0.41 a year ago. On an annual basis, the Company anticipates sales of approximately $345 million to $355 million, with comparable store sales growth of 3% to 5%. This would translate into record earnings per diluted share in the range of $1.40 to $1.50, based upon weighted average shares outstanding of approximately 14.8 million. The Company currently plans to open 25 new stores in fiscal 2005, of which 20 are projected to be BJ's Wholesale Club locations.
Mr. Gross concluded, "We are encouraged by the results of fiscal 2004 and look forward to significant achievements in 2005. We anticipate even further growth in our business as we receive the benefits from our Mr. Tire purchase and continue to evaluate acquisition opportunities that will not only strengthen our geographic presence, but will also be accretive to earnings in a timely manner."
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, Tread Quarters Discount Tires and Mr. Tire. The Company currently operates 596 stores and 10 kiosks, 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, 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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2004 2003 % Change
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Sales $67,159 $61,399 9.4%
Cost of sales, including distribution
and occupancy costs 41,299 37,240 10.9
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Gross profit 25,860 24,159 7.0
Operating, selling, general and
administrative expenses 21,581 19,696 9.6
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Operating income 4,279 4,463 (4.1)
Interest expense, net 616 570 8.1
Other expense (income), net 182 (68)
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Income before provision for
income taxes 3,481 3,961 (12.1)
Provision for income taxes 1,323 1,507 (12.2)
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Net income $ 2,158 $ 2,454 (12.1)
Diluted earnings per share $ 0.15 $ 0.17 (11.8)%
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Weighted average number of
diluted shares outstanding 14,486 14,156
Number of stores open (at end
of quarter) 595 560
MONRO MUFFLER BRAKE, INC.
Financial Highlights
(Dollars in thousands, except per share amounts)
Year Ended Fiscal March
-----------------------
2004 2003 % Change
------- ------- ------
Sales $279,457 $258,026 8.3%
Cost of sales, including distribution
and occupancy costs 164,650 152,432 8.0
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Gross profit 114,807 105,594 8.7
Operating, selling, general and
administrative expenses 84,708 81,040 4.5
------- ------- ------
Operating income 30,099 24,554 22.6
Interest expense, net 2,613 2,601 0.5
Other expense (income), net 59 (189)
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Income before provision for income taxes 27,427 22,142 23.9
Provision for income taxes 10,422 8,414 23.9
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Net income $ 17,005 $ 13,728 23.9
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Diluted earnings per share $ 1.18 $ .97 21.6%
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Weighted average number of diluted
shares outstanding 14,400 14,105
MONRO MUFFLER BRAKE, INC.
Financial Highlights
(Dollars in thousands)
March 27, March 29,
2004 2003
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Assets
Current assets
Cash $ 1,533 $ 69
Inventories 54,050 51,256
Other current assets 15,159 12,552
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Total current assets 70,742 63,877
Property, plant and equipment, net 159,716 132,148
Other noncurrent assets 32,332 11,175
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Total assets $262,790 $207,200
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Liabilities and Shareholders' Equity
Current liabilities $ 42,578 $ 41,997
Long-term debt 68,763 36,183
Other long term liabilities 7,650 4,628
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Total liabilities 118,991 82,808
Total shareholders' equity 143,799 124,392
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Total liabilities and shareholders'
equity $262,790 $207,200
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