Monro Muffler Brake Reports Fourth Quarter and Year-end Results
28 May 1999
Monro Muffler Brake Reports Fourth Quarter and Year-end Results
ROCHESTER, N.Y.--May 27, 1999--Monro Muffler Brake, Inc. , today reported sales and operating results for the fourth quarter and fiscal year ended March 31, 1999.Sales for the fiscal 1999 fourth quarter increased 38.3% to $49,289,000 compared to $35,645,000 for the quarter ended March 31, 1998. The Company reported a net loss for the quarter of $601,000, or $0.07 per diluted share, ahead of previously announced expectations of a $0.10 loss per diluted share. This compares to net income of $1,385,000 or $0.15 per diluted share, adjusted for a 5% stock dividend paid in June 1998, for the 1998 fourth quarter.
Sales for the fiscal year ended March 31, 1999 were $193,458,000, versus $154,294,000 in fiscal 1998, an increase of 25.4%. Net income for fiscal 1999 was $4,746,000, or $0.53 per diluted share, compared to $9,854,000, or $1.09 per diluted share, after giving retroactive effect to the aforementioned 5% stock dividend, for fiscal 1998.
Comparable store sales for the fiscal 1999 fourth quarter and year declined 3.3% and 1.3%, respectively. New stores contributed $16,745,000 and $42,496,000 for the fiscal 1999 fourth quarter and year, respectively, including sales from the acquired Speedy stores.
"We made substantial progress with the integration of the acquired Speedy Muffler King locations during the quarter, and we are meeting our plan for expense reductions," commented Robert Gross, President and Chief Executive Officer. "We have significantly reduced variable costs in areas such as materials purchasing and inventory management with all 155 Speedy stores operating on our point-of-sale system and serviced out of our centralized distribution warehouse. These specific cost reductions have resulted in a 190-basis point improvement in our gross margin from the third quarter.
"We are also determined to improve sales despite continued softness in market conditions. Our ongoing efforts include the reinstatement of customer service bonuses for store managers, a more performance-based compensation structure for technicians, increased incremental sales through attractive promotions and a more integrated marketing program, as well as extended operating hours. These activities are aimed at increasing traffic, customer convenience and sales."
Mr. Gross concluded, "In the past fiscal year, we opened 21 stores and closed, sold or subleased approximately 40 non-strategic locations, including 22 since the end of the third quarter. Strong market demand for retail space allowed us to be more aggressive than originally planned in our store closing objectives. The net effect of these closures will be to improve operating performance by over $1 million in fiscal 2000. Field management and corporate overhead have also been reduced to reflect our more focused, streamlined store network and operations. We are committed to delivering superior customer service and increasing market share while creating the most cost-efficient operation in the industry.
"Currently, we maintain #1 or #2 market positions in the majority of markets we serve. In fiscal 2000, we will bolster these leadership positions in existing markets by opening 10 to 15 new stores. The reduced store openings will enable us to focus on improving the performance of our current store base and leveraging operations, while improving cash flow and financial flexibility."
Monro Muffler Brake operates a chain of stores providing automotive undercar repair services in the United States. The Company currently operates 519 stores and has 19 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 and Michigan. Monro's stores provide a full range of services for brake systems, steering and suspension systems, exhaust 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 March 31,
1999 1998 % Change
Sales $ 49,289 $ 35,645 38.3%
Cost of sales, including
distribution and
occupancy costs 30,184 20,652 46.2
Gross profit 19,105 14,993 27.4
Operating, selling, general and
administrative expenses 17,894 11,484 55.8
Operating income 1,211 3,509 (65.5)
Interest expense, net 2,021 1,053 91.7
Other expense, net 105 65 61.5
(Loss) Income before provision for
income taxes (915) 2,391
(Recovery of) provision
for income taxes (314) 1,006
Net (loss) income $ (601) $ 1,385
Diluted (loss) earnings
per common share (a) $ (.07) $ 0.15
Number of stores open
(at end of quarter) 524 350
(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
(Dollars in thousands, except per share amounts)
Year Ended March 31,
1999 1998 % Change
Sales $ 193,458 $ 154,294 25.4%
Cost of sales, including
distribution and
occupancy costs 115,117 87,510 31.5
Gross profit 78,341 66,784 17.3
Operating, selling, general and
administrative expenses 64,062 46,120 38.9
Operating income 14,279 20,664 (30.9)
Interest expense, net 5,600 3,829 46.3
Other expense, net 730 331 120.5
Income before provision for
income taxes 7,949 16,504 (51.8)
Provision for income taxes 3,203 6,650 (51.8)
Net income $ 4,746 $ 9,854 (51.8)
Diluted earnings per
common share (a) $ .53 $ 1.09
(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
(Dollars in thousands)
March 31,
1999 1998
Assets
Cash $ 5,599 $ 5,315
Inventories 38,656 27,492
Other current assets 8,995 6,681
Total current assets 53,250 39,488
Property, plant and equipment, net 135,787 116,410
Other noncurrent assets 13,803 3,190
Total assets $ 202,840 $ 159,088
Liabilities and Shareholders' Equity
Current liabilities $ 34,941 $ 25,971
Long-term debt 78,672 54,102
Other long term liabilities 8,132 2,457
Total liabilities 121,745 82,530
Total shareholders' equity 81,095 76,558
Total liabilities and
shareholders' equity $ 202,840 $ 159,088