Monro Muffler Brake, Inc. Reports Third Quarter Results
21 January 2000
Monro Muffler Brake, Inc. Reports Third Quarter Results: Company Reports $4.1 Million in Operating Income: Earns $0.13 Per Diluted Share
ROCHESTER, N.Y.--Jan. 21, 2000--Monro Muffler Brake, Inc. , today reported sales and operating results for its third quarter and nine months ended December 31, 1999.Sales for the fiscal 2000 third quarter were $52.1 million, compared to $53.7 million for the corresponding quarter ended December 31, 1998. The sales decline was primarily due to Speedy store closings which caused a net sales decrease of $3.8 million from the 1999 third quarter. Comparable store sales increased .4% and sales from stores opened since April 1, 1998 increased $2.1 million over the prior year's quarter.
Net income for the quarter was $1.1 million, or $0.13 earnings per diluted share as compared to a net loss of $0.9 million, or $0.11 loss per diluted share for the corresponding 1999 quarter. Operating income increased to $4.1 million from $.4 million in the prior year period as a result of a 5.8 percentage point reduction in selling, general and administrative expenses.
Sales for the nine months ended December 31, 1999 increased 20.4% to $173.6 million from $144.2 million in the prior year period. Net income for the first nine months of fiscal 2000 increased 32.0% to $7.1 million, or $0.79 per diluted share as compared to $5.3 million, or $0.59 per diluted share in the 1999 period.
Robert Gross, President and Chief Executive Officer of Monro Muffler Brake, commented, "The third quarter represents the Company's first positive comparable store increase in six quarters, since the fourth quarter of fiscal 1998. The improved comparable store sales can be attributed, in part, to better than expected sales of exhaust products. This is a result of a combination of customer service initiatives, store execution and improving industry trends."
Mr. Gross continued, "During the quarter our Speedy locations achieved an approximate 2% comparable store increase, as we continue to experience month-to-month improvement in the performance of the acquired stores. Integration of the Speedy locations remains on track, and Monro is increasingly realizing the anticipated benefits of the Speedy acquisition. We continue to achieve cost savings in direct store expenses, corporate and field overhead expenses, advertising, and purchasing."
Mr. Gross concluded, "In addition to leveraging our expense structure, we continue to focus on top line growth. Our commercial sales initiative, which started in September, has already signed contracts with several leasing companies and fleet organizations, and we expect to realize these benefits in fiscal 2001. Overall, we are pleased with the progress we have made during the quarter and look to build upon this momentum in the future."
During the quarter, the Company opened three new stores and closed six existing locations.
Separately, the Company announced a share repurchase program during the quarter. To date, the Company has purchased approximately 47,000 shares of common stock.
Monro Muffler Brake operates a chain of stores providing automotive undercar repair services in the United States. The Company currently operates 510 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 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 December 31,
1999 1998 % Change
Sales $ 52,077 $ 53,672 (3.0)%
Cost of sales, including
distribution and occupancy
costs 32,145 33,844 (5.0)
Gross profit 19,932 19,828 0.5
Operating, selling, general and
administrative expenses 15,807 19,449 (18.7)
Operating income 4,125 379 988.4
Interest expense, net 1,692 1,598 5.9
Other expense, net 524 322 62.7
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Income (loss) before
provision for income taxes 1,909 (1,541)
Provision for (recovery of)
income taxes 760 (618)
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Net income (loss) $ 1,149 $ (923)
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Diluted earnings (loss)
per share $ 0.13 $ (0.11)
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Number of stores open
(at end of quarter) 512 532
MONRO MUFFLER BRAKE, INC.
Financial Highlights
(Unaudited)
(Dollars in thousands, except per share amounts)
Nine Months Ended December 31,
1999 1998 % Change
Sales $ 173,569 $ 144,170 20.4%
Cost of sales, including
distribution and
occupancy costs 102,892 84,934 21.1
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Gross profit 70,677 59,236 19.3
Operating, selling, general and
administrative expenses 52,616 46,168 14.0
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Operating income 18,061 13,068 38.2
Interest expense, net 5,098 3,580 42.4
Other expense, net 1,239 625 98.2
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Income before provision for
income taxes 11,724 8,863 32.3
Provision for income taxes 4,669 3,518 32.7
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Net income $ 7,055 $ 5,345 32.0
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Diluted earnings per share $ 0.79 $ 0.59 33.9
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MONRO MUFFLER BRAKE, INC.
Financial Highlights
(Unaudited)
(Dollars in thousands)
December 31, March 31,
1999 1999
Assets
Current assets:
Cash $ 0 $ 5,599
Inventories 45,533 38,656
Other current assets 8,330 9,092
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Total current assets 53,863 53,347
Property, plant and equipment, net 135,815 135,787
Other noncurrent assets 12,829 13,800
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Total assets $ 202,507 $ 202,934
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Liabilities and Shareholders' Equity
Current liabilities $ 37,521 $ 35,179
Long-term debt 71,043 78,672
Other long term liabilities 6,144 8,132
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Total liabilities 114,708 121,983
Total shareholders' equity 87,799 80,951
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Total liabilities and
shareholders' equity $ 202,507 $ 202,934
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