Monro Muffler Brake Reports Q1 Results
20 July 2000
Company reports 30% increase in earnings per share
ROCHESTER, N.Y. - Monro Muffler Brake, Inc. , today reported sales and operating results for its first quarter ended June 30, 2000.Sales for the fiscal 2001 first quarter were $60.7 million, compared to $61.0 million for the corresponding quarter ended June 30, 1999. The decrease is due to a decrease of $1.3 million of sales from stores closed in the previous fiscal year, and a comparable store sales decrease of .3%. These decreases were partially offset by an increase in sales from new stores of approximately $1.2 million. At June 30, 2000, the Company had 512 company-operated stores compared to 517 at June 30, 1999.
For the three months ended June 30, 2000, operating income increased to $7.4 million as compared to $6.5 million in the comparable prior year period. Net income for fiscal 2001's first quarter rose 28% to $3.4 million, or $0.39 earnings per diluted share as compared to $2.7 million, or $0.30 per diluted share for the corresponding first quarter in the prior year.
Catherine D'Amico, Senior Vice President and Chief Financial Officer of Monro Muffler Brake, commented, "We are making steady progress in controlling expenses in our efforts to maximize profitability and produce a higher gross profit percentage. This quarter's gross profit percentage was 42.6% of sales, an improvement over the 42.0% of sales in the comparable quarter of the previous year. We have decreased labor costs through improved productivity and reduced material costs by continuing to refine our inventory management methodology."
Robert Gross, President and Chief Executive Officer stated, "We remain very focused on top-line revenue growth. Initiatives such as air conditioning service and commercial sales, while still a small part of our business, have the potential to be stable, longer-term sources of business. We will continue to emphasize our miscellaneous revenue categories. Tires, batteries, starters, alternators, scheduled maintenance and oil changes have been, and will continue to be, strong growth opportunities for Monro. I believe superior customer service and store execution will also have a positive impact on sales going forward. This will afford us improving margins through better salesmanship and pricing flexibility due to a stronger value equation.
"Finally, in the near future, we will be announcing a number of agreements relating to our Internet strategy. These deals will revolve around efficient direct marketing and significant exposure of the Monro brand on various web sites," concluded Mr. Gross.
Separately, the Company announced that it has purchased a total of 125,600 shares of common stock as part of its 420,000 share repurchase program announced in fiscal 2000.
Monro Muffler Brake operates a chain of stores providing automotive undercar repair services in the United States. The Company currently operates 512 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.
MONRO MUFFLER BRAKE, INC.
Financial Highlights
(Unaudited)
(Dollars in thousands, except per share amounts)
Quarter Ended June 30,
2000 1999 % Change
Sales $ 60,693 $60,979 (0.5) %
Cost of sales, including
distribution and
occupancy costs 34,826 35,391 (1.6)
Gross profit 25,867 25,588 1.1
Operating, selling, general
and administrative expenses 18,437 19,082 (3.4)
Operating income 7,430 6,506 14.2
Interest expense, net 1,600 1,717 (6.8)
Other expense, net 105 315 (67.0)
Income before provision for
income taxes 5,725 4,474 28.0
Provision for income taxes 2,278 1,781 28.0
Net income $ 3,447 $ 2,693 28.0
Diluted earnings per
common share $ 0.39 $ 0.30 30.0
Weighted average number of
diluted common shares
outstanding 8,882 8,977
Number of stores open
(at end of quarter) 512 517
MONRO MUFFLER BRAKE, INC.
Financial Highlights
(Unaudited)
(Dollars in thousands)
Quarter Ended
June 30, March 31,
2000 2000
Assets
Current assets
Cash $ 1,205 $ 507
Inventories 40,719 39,698
Other current assets 8,099 7,420
Total current assets 50,023 47,625
Property, plant and equipment,
net 133,074 133,875
Other noncurrent assets 13,615 14,013
Total assets $ 196,712 $ 195,513
Liabilities and Shareholders' Equity
Current liabilities $ 41,650 $ 35,962
Long-term debt 56,175 63,639
Other long-term liabilities 6,847 7,137
Total liabilities 104,672 106,738
Total shareholders' equity 92,040 88,775
Total liabilities and
shareholders' equity $ 196,712 $ 195,513