Midas Second Quarter and Year 2000 Outlook
14 June 2000
Midas Second Quarter and Year 2000 Outlook
ITASCA, Ill.- Midas, Inc., today announced that it expects financial results for the second quarter and full year, excluding special items, to fall below consensus estimates."In the second quarter, we had planned to introduce the New Midas program of upgraded shop appearance and expanded services in April, but were forced to delay the launch because the minimum of 80 percent of the shops were not New Midas ready," said Wendel H. Province, Midas' chairman and chief executive officer. "This delay, combined with the cool and rainy weather had a negative effect on our retail sales."
Province said that since the launch of New Midas, the company's retail sales have improved and should finish the second quarter about even with 1999.
"On the wholesale side of our business, second quarter parts sales will exceed last year due to new products and services, but the mix and rate of growth will be below our expectations," Province said.
Midas also experienced additional costs associated with the launch of New Midas, expanding distribution of the company's climate control products, development of new performance and economy exhaust products and the transfer of certain production processes to the company's exhaust manufacturing plant.
Based on the company's current projections, second quarter earnings before special items will be in the range of $.67 to $.70 per share, or about even with last year's second quarter after adjustment for special items. The 1999 second quarter earnings were $.72 per share, including a $.04 per share gain from the finalization of the sale of Midas' European operations.
In the second quarter, Midas sold its Australian operations, which will add a one-time gain of $.11 per share to the second quarter results, bringing the total to a range of $.78 to $.81 per share.
"On May 15, we finally launched the New Midas program, after two years of tremendous effort by the company and its franchisees," Province said. "Initial results have been encouraging, especially considering the challenging weather conditions across much of North America in the last few weeks.
"The launch of the New Midas marks the completion of the first phase of the rebuilding of Midas," he said. "We now must begin the next phase by growing our sales and market share of the new service categories introduced as part of the New Midas. We are optimistic that our retail and wholesale sales will benefit from the addition of new services, such as climate control and maintenance services."
Province said it is difficult to predict the pace of when and to what degree the many changes to the Midas system will begin to be reflected in sales and earnings.
"Accordingly, full-year projections must be based on the trends we are seeing today," he said. "Based on current trends, full-year 2000 earnings per share, before special items, should be approximately level with 1999 earnings of $2.23, excluding special items."
Midas will release its second quarter earnings on July 20.
Midas is one of the world's largest providers of automotive service, providing exhaust, brake, steering and suspension services, as well as batteries, climate control and maintenance services at 2,700 franchised and licensed Midas shops in 19 countries, including 2,100 in the United States and Canada.
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 the 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, is included in the company's filings with the Securities and Exchange Commission, including the company's 1999 annual report on Form 10-K.