Monro Muffler Brake, Inc. Q1 Results
22 July 1998
Monro Muffler Brake, Inc. Announces First Quarter Results
ROCHESTER, N.Y.--July 22, 1998--Monro Muffler Brake, Inc. , today announced sales and earnings for its first quarter ended June 30, 1998.Sales for the quarter ended June 30, 1998 were $44,113,000 compared to $40,773,000 for the corresponding quarter ended June 30, 1997. Monro attributed the 8.2% sales increase to the contribution of approximately $3,580,000 from stores opened since April 1, 1997. Comparable store sales were even with last year.
Monro's net income for the fiscal 1999 first quarter increased 13% to $3,857,000, or $0.43 per diluted share, compared to $3,417,000, or $0.38 per diluted share, for the prior-year period, after giving retroactive effect to a 5% stock dividend paid June 18, 1998 to shareholders of record as of June 8, 1998.
Jack M. Gallagher, President and Chief Executive Officer, commented, "Our first quarter results reflect our continued emphasis on cost containment and operating within budgetary constraints, resulting in improved operating margins compared to the prior-year period. Improvements resulted from, among other things, a reduction in outside purchases and insurance rate reductions including favorable workers' compensation results. We achieved revenue increases in a challenging market environment, while at the same time, have successfully managed our variable costs to maintain solid levels of profitability. Additionally, we were encouraged by the results of scheduled maintenance services which represented the fastest growing segment of our business in the first quarter.
"During the quarter, we also focused on the upcoming integration of the 205 Speedy U.S.A. stores. We are on schedule with this process as well as with the financing and closing of the acquisition and expect to complete the transaction in the near future. This acquisition is equivalent to buying service bays at a 20% discount to the cost of building new facilities, even considering the investment we will make in these locations after the closing of the transaction and the closing of approximately 20 stores. It will also offer us a larger platform from which to provide our diversified service and product offerings, including scheduled maintenance services."
The Company plans to continue its regular expansion strategy by opening approximately 30 new stores in fiscal 1999.
Monro Muffler Brake operates a chain of stores providing automotive undercar repair services in the United States. The Company currently operates 351 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, 1998.
MONRO MUFFLER BRAKE, INC.
Financial Highlights
(Unaudited)
(Dollars in thousands, except per share amounts)
Quarter Ended June 30,
1998 1997 % Change
Sales $ 44,113 $ 40,773 8.2%
Cost of sales, including
distribution and
occupancy costs 24,320 22,631 7.5
Gross profit 19,793 18,142 9.1
Operating, selling, general and
administrative expenses 12,390 11,492 7.8
Operating income 7,403 6,650 11.3
Interest expense, net 905 868 4.4
Other expense, net 109 85
Income before provision for
income taxes 6,389 5,697 12.1
Provision for income taxes 2,532 2,280 11.1
Net income $ 3,857 $ 3,417 12.9%
Basic earnings
per common share (a) $ 0.46 $ 0.41
Diluted earnings
per common share (a) $ 0.43 $ 0.38
Number of stores open
(at end of quarter) 351 324
(a) All share data has been restated to reflect the 5% stock
dividend paid to shareholders on June 18, 1998.
MONRO MUFFLER BRAKE, INC.
Financial Highlights
(Unaudited)
(Dollars in thousands)
Quarter Ended
June 30, March 31,
1998 1998
Assets
Current assets:
Cash $ 75 $ 5,315
Inventories, at LIFO cost 29,078 27,492
Other current assets 5,608 6,681
Total current assets 34,761 39,488
Property, plant and equipment 118,533 116,410
Other noncurrent assets 3,949 3,190
Total assets $ 157,243 $ 159,088
Liabilities and Shareholders Equity
Current liabilities:
Current portion of long-term debt 3,582 3,582
Other current liabilities 20,943 22,389
Total current liabilities 24,525 25,971
Long-term debt 49,440 54,102
Other long-term liabilities 547 576
Deferred income tax liability 1,881 1,881
Total liabilities 76,393 82,530
Total shareholders equity 80,850 76,588
Total liabilities and
shareholders equity $ 157,243 $ 159,088