Midas Reports Third Quarter Earnings Per Share of $.73
14 October 1999
Midas Reports Third Quarter Earnings Per Share of $.73
ITASCA, Ill.--Oct. 14, 1999--Midas, Inc. , today announced its results for the third quarter ended Sept. 25, 1999. Diluted earnings per share were $.73, compared to $.76 last year."On balance, we are pleased with Midas' continued execution of its strategic plan," said Wendel H. Province, Midas' chairman and chief executive officer. "We had anticipated a decline in sales, revenues and earnings for the third quarter due to the sale of European operations and the divestiture of virtually all company-operated shops in North America. While these strategic actions will improve annual results, year-to-year quarterly earnings comparisons are difficult.
"Nearly 90 percent of the decline in sales and revenues was due to a combination of these initiatives. The remainder was due to a reduction in prices we charge for replacement parts and the continued decline in demand for replacement exhaust parts," Province said.
Sales and revenues for the 1999 third quarter were $92.4 million, a decrease of 33 percent from $138.6 million last year.
Net income for the quarter was $12.2 million, down 7 percent from the $13.1 million reported in 1998. Operating income for the quarter was $21.5 million, off 12 percent from last year's $24.4 million.
Midas' net income for the first three quarters of 1999 was $31.0 million, an increase of 9 percent from $28.5 million last year. Diluted earnings per share for the first three quarters of 1999 were $1.82, up 10 percent from $1.65 a year ago.
Sales and revenues for the first three quarters this year were $275.6 million, down 33 percent from $411.6 million in 1998.
"We believe that initiatives we have put into place will grow sales and revenues, increase earnings and help to insulate us from fluctuations in the exhaust market," he said. "By closing our exhaust pipe manufacturing plant in Bedford Park, Ill., on Oct. 1, and consolidating exhaust manufacturing operations at our Hartford, Wisc., facility, we have assured a continuing supply of high quality, competitively priced exhaust products."
Province said that other Midas initiatives under way include major information and distribution systems upgrades, new marketing programs, a revamped shop image and improved shop operations.
During the third quarter, the company repurchased 129,000 of its common shares as part of the previously announced share repurchase program. Midas has repurchased a total of 1.3 million of its common shares in 1999.
Midas is one of the world's largest providers of automotive service, including exhaust, brakes, steering and suspension services, as well as batteries and maintenance services. There are more than 2,700 franchised and licensed Midas locations in 20 countries, including more than 2,100 in North America.
NOTE: This news release contains certain forward-looking statements that are based on management's beliefs as well as assumptions made by and information currently available to management. Such statements are subject to risks and uncertainties, both known and unknown, that could cause actual results, performance or achievement to vary materially from those expressed or implied in forward-looking statements. Readers are cautioned not to put undue reliance on such forward-looking statements. The company may experience significant fluctuations in future results, performance or achievements due to a number of economic, competitive, governmental, technological or other factors. Additional information with respect to these and other factors which could materially affect the company and its operations are included in the company's filings with the Securities and Exchange Commission, including the company's 1998 annual report on Form 10-K.
MIDAS, INC.
CONDENSED STATEMENTS OF OPERATIONS (Unaudited)
(In millions, except for earnings and dividends per share)
For the quarter For the nine months
ended September ended September
--------------- ---------------
1999 1998 1999 1998
---- ---- ---- ----
(13 Weeks) (13 Weeks) (39 Weeks) (40 Weeks)
Sales and revenues $ 92.4 $ 138.6 $ 275.6 $ 411.6
Cost of sales and revenues 50.0 68.0 147.9 198.1
Selling, general, and
administrative expenses 20.9 46.2 72.5 155.7
------ ------ ------ ------
Operating income 21.5 24.4 55.2 57.8
------ ------ ------ ------
Whitman charges - - - ( 1.1)
------ ------ ------ ------
Interest expense:
Whitman - - - ( 0.5)
Other ( 2.0) ( 3.0) ( 6.3) ( 9.7)
------ ------ ------ ------
Total interest expense ( 2.0) ( 3.0) ( 6.3) (10.2)
------ ------ ------ ------
Other income (expense), net 0.8 0.6 2.7 1.4
------ ------ ------ ------
Income before taxes 20.3 22.0 51.6 47.9
Income taxes 8.1 8.9 20.6 19.4
------ ------ ------ ------
Net income $ 12.2 $ 13.1 $ 31.0 $ 28.5
====== ====== ====== ======
Earnings per share:
Basic $ .75 $ .77 $ 1.87 $ 1.68
====== ====== ====== ======
Diluted $ .73 $ .76 $ 1.82 $ 1.65
====== ====== ====== ======
Dividends per common share $ .02 $ .02 $ .06 $ .04
====== ====== ====== ======
Average number of shares
Common shares outstanding 16.3 16.9 16.6 16.9
Equivalent shares on
outstanding stock options .3 .4 .4 .4
------ ------ ------ ------
Shares applicable to
diluted earnings 16.6 17.3 17.0 17.3
====== ====== ====== ======
MIDAS, INC.
RESULTS OF OPERATIONS
1999 Third Quarter Compared with 1998 Third Quarter (Unaudited)
The following is a summary of the Company's sales and revenues
for the three months ended September 1999 and September 1998,
respectively: ($ Millions)
Percent Percent
1999 To Total 1998 To Total
---- -------- ---- --------
Replacement parts sales $ 61.9 67.0% $ 67.8 48.9%
Company-operated shop retail sales 1.5 1.6 39.1 28.2
Royalties and license fees 18.6 20.1 19.8 14.3
Real estate rental revenues 10.2 11.0 9.5 6.9
Other 0.2 0.3 2.4 1.7
------ ------ ------ ------
Sales and revenues $ 92.4 100.0% $138.6 100.0%
====== ====== ====== ======
Nine months ended September 1999
Compared with the Nine months ended September 1998
(Unaudited)
The following is a summary of the Company's sales and
revenues for the nine months ended September 1999 and
September 1998, respectively: ($ Millions)
Percent Percent
1999 To Total 1998 To Total
---- -------- ---- --------
Replacement parts sales $182.0 66.0% $198.4 48.2%
Company-operated shop retail sales 9.3 3.4 122.8 29.8
Royalties and license fees 52.6 19.1 56.0 13.6
Real estate rental revenues 30.1 10.9 27.8 6.8
Other 1.6 0.6 6.6 1.6
------ ------ ------ -------
Sales and revenues $275.6 100.0% $411.6 100.0%
====== ====== ====== =======
MIDAS, INC.
RESULTS OF OPERATIONS
SALES AND REVENUES (Unaudited)
(In millions)
For the quarter For the nine months
ended September ended September
--------------- ---------------
1999 1998 1999 1998
---- ---- ---- ----
North American Operations:
U.S. Operations:
Franchise activities $ 77.3 $ 83.2 $ 228.5 $ 243.5
Company-operated shops 0.5 9.7 5.9 39.7
------ ------ ------- -------
Total U.S. 77.8 92.9 234.4 283.2
------ ------ ------- -------
Canadian Operations:
Franchise activities 11.3 10.6 30.8 30.2
Company-operated shops - 1.9 0.6 8.4
------ ------ ------- -------
Total Canada 11.3 12.5 31.4 38.6
------ ------ ------- -------
Total North American
Operations 89.1 105.4 265.8 321.8
------ ------ ------- -------
International Operations:
Europe 1.7 31.6 5.1 84.5
Other 1.6 1.6 4.7 5.3
------ ------ ------- -------
Total International
Operations 3.3 33.2 9.8 89.8
------ ------ ------- -------
Total $ 92.4 $138.6 $ 275.6 $ 411.6
====== ====== ======= =======
RESULTS OF OPERATIONS
OPERATING INCOME (Unaudited)
(In millions)
For the quarter For the nine months
ended September ended September
--------------- ---------------
1999 1998 1999 1998
---- ---- ---- ----
North American Operations:
U.S. Operations:
Franchise activities $ 19.9 $ 21.1 $ 53.0 $ 57.8
Company-operated shops 0.1 (0.1) (0.1) (1.0)
------ ------ ------ ------
Total U.S. 20.0 21.0 52.9 56.8
------ ------ ------ ------
Canadian Operations:
Franchise activities 1.0 0.7 1.9 1.6
Company-operated shops - 0.8 (0.2) 0.9
------ ------ ------ ------
Total Canada 1.0 1.5 1.7 2.5
------ ------ ------ ------
Total North American
Operations 21.0 22.5 54.6 59.3
------ ------ ------ ------
International Operations:
Europe 1.7 3.9 5.1 4.1
Other - (0.3) - (0.4)
------ ------ ------ ------
Total International
Operations 1.7 3.6 5.1 3.7
------ ------ ------ ------
Total before corporate
administrative expenses 22.7 26.1 59.7 63.0
Corporate administrative
expenses (1.2) (1.7) (4.5) (5.2)
------ ------ ------ ------
Total operating income $ 21.5 $ 24.4 $ 55.2 $ 57.8
====== ====== ====== ======