Monro Muffler Brake, Inc. Reports Q2 Results; 19 New Store Openings
17 October 1997Monro Muffler Brake, Inc. Reports Second Quarter Results; Company Expansion on Target With 19 New Store Openings to Date
ROCHESTER, N.Y., Oct. 17 -- Monro Muffler Brake, Inc. today announced sales and earnings for its second quarter ended September 30, 1997, in line with the Company's previously announced expectations. Sales for the fiscal 1998 second quarter were $41,540,000, compared to $37,799,000 for the corresponding quarter ended September 30, 1996. Monro attributed the sales growth of 9.9% to an increase of approximately $3,759,000 from stores opened since April 1, 1996. Comparable store sales were even with sales from the prior year period. Monro's net income for its fiscal 1998 second quarter was $3,352,000, or $.39 per share. Net income was $3,742,000, or $.43 per share, for the same period of fiscal 1997, after giving retroactive effect to the 5% stock dividend paid August 4, 1997. Sales for the six months ended September 30, 1997 were $82,313,000, an increase of $6,769,000, or 9.0%, over the first half of fiscal 1997. Net income for the first half of fiscal 1998 was $6,770,000, or $.79 per share. This compares with net income for the corresponding period of fiscal 1997 of $7,121,000, or $.83 per share, after giving retroactive effect to the aforementioned 5% stock dividend. Lawrence C. Day, President and Chief Executive Officer, commented: "Our second quarter sales results continued to reflect soft market conditions for the automotive service industry in the Northeast. However, we continue to carefully manage the business and control our discretionary spending. Accordingly, we were able to deliver after tax income of 8.1% of sales for the quarter and 8.2% for the six months ended September 30, 1997." Mr. Day continued: "We also are taking proactive steps to increase customer traffic in our stores and improve average ticket. These include continued co-branding initiatives, expanded manager training, and our ongoing effort to educate the consumer on the breadth of services Monro provides." The Company is moving ahead with its strong store expansion program with plans to open 40 to 50 stores in the current fiscal year, 19 of which are now open and 14 of which are currently under construction. Monro's present strategy is to expand its presence within the 14 states in which it currently operates to leverage marketing and distribution costs, as well as consumer awareness. Monro Muffler Brake operates a chain of stores providing automotive undercar repair services in the United States. The Company currently operates 332 stores in New York, Pennsylvania, Ohio, Connecticut, Massachusetts, West Virginia, Virginia, Maryland, Vermont, New Hampshire, New Jersey, North Carolina, South Carolina and Indiana. 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, 1997. MONRO MUFFLER BRAKE, INC. Financial Highlights (Unaudited) (Dollars in thousands, except per share amounts) Quarter Ended September 30, 1997 1996 % Change Sales $41,540 $37,799 9.9% Cost of sales, including distribution and occupancy costs 23,231 20,291 14.5 Gross profit 18,309 17,508 4.6 Operating, selling, general and administrative expenses 11,735 10,386 13.0 Operating income 6,574 7,122 (7.7) Interest expense, net 903 851 6.1 Other expense, net 86 55 -- Income before provision for income taxes 5,585 6,216 (10 .2) Provision for income taxes 2,233 2,474 (9.8) Net income $ 3,352 $ 3,742 (10.4) Earnings per share (a) $ .39 $ .43 (9.3%) Weighted average number of shares of common stock outstanding (including common stock equivalents) (000) (a) 8,608 8,620 -- Number of stores open (at end of quarter) 332 293 -- (a) All share data has been restated to reflect the 5% stock dividend paid to shareholders on August 4, 1997. MONRO MUFFLER BRAKE, INC. Financial Highlights (Unaudited) (Dollars in thousands, except per share amounts) Six Months Ended September 30, 1997 1996 % Change Sales $82,313 $75,544 9.0% Cost of sales, including distribution and occupancy costs 45,862 40,957 12.0 Gross profit 36,451 34,587 5.4 Operating, selling, general and administrative expenses 23,227 21,031 10.4 Operating income 13,224 13,556 (2.5) Interest expense, net 1,770 1,665 6.3 Other expense, net 171 71 -- Income before provision for income taxes 11,283 11,820 (4.6) Provision for income taxes 4,513 4,699 (4.0) Net income $ 6,770 $ 7,121 (4.9) Earnings per share (a) $ .79 $ .83 (4.8%) Weighted average number of shares of common stock outstanding (including common stock equivalents) (000) (a) 8,607 8,580 -- (a) All share data has been restated to reflect the 5% stock dividend paid to shareholders on August 4, 1997. MONRO MUFFLER BRAKE, INC. Financial Highlights (Unaudited) (Dollars in thousands) September 30, March 31, 1997 1997 Assets Current assets: Cash $ 3,919 $ 6,438 Inventories, at LIFO cost 23,789 20,010 Other current assets 5,425 6,149 Total current assets 33,133 32,597 Property, plant and equipment 118,069 109,683 Other noncurrent assets 3,822 3,987 Total assets $155,025 $146,267 Liabilities and Shareholders' Equity Current liabilities: Current portion of long-term debt $ 3,128 $ 3,128 Other current liabilities 21,843 19,890 Total current liabilities 24,971 23,018 Long-term debt 54,848 54,864 Deferred income tax liability 1,760 1,760 Total liabilities 81,579 79,642 Commitments Total shareholders' equity 73,446 66,625 Total liabilities and shareholders' equity $155,025 $146,267 SOURCE Monro Muffler Brake, Inc.