Monro Muffler Brake, Inc. Announces Record First Quarter Sales and Earnings; Sales Increase 19%; Net Income Increases 18%
ROCHESTER, N.Y.--July 15, 2004--Monro Muffler Brake, Inc. today announced financial results for the first quarter ended June 26, 2004 including record sales and earnings.Financial Results
First quarter sales increased 18.6% to a record $87.3 million from $73.6 million in the year-ago period. The sales increase was driven by a .9% improvement in comparable store sales, versus 5.9% last year. New stores added $13.6 million, including $12.3 million from the newly-acquired Mr. Tire stores. The improvement in comparable store sales was primarily attributable to an approximate 12% increase in maintenance services and a 6% increase in comparable sales in tire stores.
Gross profit was 42.7% of sales compared to 43.8% of sales in the first quarter of fiscal 2004, primarily due to increased sales in the lower-margin tire category. Selling, general and administrative expenses decreased to 28.9% of sales from 29.9% of sales. Net income rose 17.8% to a record $7.0 million, or $.48 per diluted share, within the Company's previously announced expectations. In the comparable period last year, net income was $5.9 million, or $.41 per diluted share. The Company opened three new stores, all BJ's Wholesale Club locations, and closed one in the first quarter.
Robert G. Gross, President and Chief Executive Officer, commented, "Despite a challenging retail and industry environment marked by a consumer spending slowdown in June, we are pleased with our overall performance in the first quarter, during which we continued to expand both our top and bottom lines. We drove positive comparable store sales through increases in our oil changes and maintenance services. At the same time, we achieved lower SG&A expense as a percent of sales which allowed us to maintain our operating margins and our position as the low cost operator in the industry. Also, during the quarter, our Mr. Tire acquisition contributed additional tire sales, cost savings and economies of scale, which are reflected in our record first quarter sales and earnings."
Company Outlook
Mr. Gross added, "As we move further into fiscal 2005, we intend to build on the solid results of the first quarter. For the second quarter, we currently estimate comparable store sales growth to be between 1% and 3%, against a 6.6% increase last year, and earnings per diluted share to be between $.46 and $.50 versus $.41 in the year-ago period. Additionally, our expansion strategy continues to be an important part of our growth, especially in a weak marketplace where the opportunity to acquire businesses at advantageous prices is greater. We are continually evaluating acquisition candidates who will further expand our market share and develop synergies that will drive our long-term profitability.
"Looking ahead, we expect our oil change and maintenance service businesses to remain strong, and that our Mr. Tire locations will continue to perform well. Additionally, we should benefit from the 3% price increase we implemented in July, as well as the fact that last year's comparable store sales were softer in the second half of the year. However, our first quarter results, combined with the uncertainty of the retail sales environment, have caused us to reduce the high end of our previously estimated range for fiscal 2005 earnings from $1.50 to $1.46," concluded Mr. Gross.
The Company's revised full year guidance is $1.40 to $1.46 per diluted share, versus $1.18 last year. Annual sales are still expected to range between approximately $345 million to $355 million, which incorporates comparable store sales increases of 2% to 4% and the opening of 25 new stores in fiscal 2005, of which 20 are projected to be BJ's Wholesale Club locations.
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, Mr. Tire and Tread Quarters Discount Tires. The Company currently operates 597 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, Maine 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 June
2004 2003 % Change
Sales $ 87,347 $ 73,643 18.6%
Cost of sales, including
distribution and occupancy costs 50,083 41,408 20.9
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Gross profit 37,264 32,235 15.6
Operating, selling, general and
administrative expenses 25,283 22,051 14.7
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Operating income 11,981 10,184 17.7
Interest expense, net 585 593 (1.3)
Other expense, net 147 44
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Income before provision for
income taxes 11,249 9,547 17.8
Provision for income taxes 4,275 3,628 17.8
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Net income $ 6,974 $ 5,919 17.8
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Diluted earnings per common share $ .48 $ .41 17.1%
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Number of stores open
(at end of quarter) 597 561
Weighted average number of
diluted shares outstanding 14,520 14,381
MONRO MUFFLER BRAKE, INC.
Financial Highlights
(Unaudited)
(Dollars in thousands)
June 26, March 27,
2004 2004
Assets
Current assets
Cash $ 2,953 $ 1,533
Inventories 55,479 54,050
Other current assets 13,889 15,159
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Total current assets 72,321 70,742
Property, plant and equipment, net 160,463 159,716
Other noncurrent assets 32,838 32,332
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Total assets $ 265,622 $ 262,790
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Liabilities and Shareholders' Equity
Current liabilities $ 50,234 $ 42,578
Long-term debt 55,407 68,763
Other long-term liabilities 8,491 7,650
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Total liabilities 114,132 118,991
Total shareholders' equity 151,490 143,799
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Total liabilities and shareholders' equity $ 265,622 $ 262,790
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