Monro Muffler Brake, Inc. Reports Second Quarter Results
19 October 2000
Monro Muffler Brake, Inc. Reports Second Quarter Results
ROCHESTER, N.Y.--October 19, 2000--Monro Muffler Brake, Inc. , today reported sales and operating results for its second quarter and six months ended September 30, 2000.Sales for the fiscal 2001 second quarter were $60.4 million, compared to $60.5 million for the corresponding quarter ended September 30, 1999. The decrease is due to the loss of sales from stores closed in the current and the previous fiscal years of $0.9 million. This decrease was partially offset by an increase in sales from new stores of approximately $0.8 million. Comparable store sales were even with last year. The Company had five fewer stores at September 30, 2000 as compared to September 30, 1999.
Net income for fiscal 2001's second quarter rose 8% to $3.5 million, or $0.39 per diluted share as compared to $3.2 million, or $0.36 per diluted share, in the prior year period.
Sales for the six months ended September 30, 2000 decreased slightly to $121.1 million from $121.5 million in the comparable period last year. Net income for first half of fiscal 2001 rose 17% to $6.9 million, or $0.78 per diluted share (an 18% increase), as compared to $5.9 million or $0.66 per diluted share in the first six months of the prior year.
Robert G. Gross, President and Chief Executive Officer stated, "In spite of one less sales day in the quarter, comparable store sales were even with last year. We are continuing to work hard at driving top line growth, and I believe the groundwork has been laid. First, our various service categories continue to show improvement, most notably in exhaust and routine maintenance services. Second, the very positive trend of attracting more customers to Monro continues. Comparable customer traffic count was up 3% for this quarter, similar to the increase achieved in the first quarter of FY 2001. Third, commercial sales increased 23% this quarter over last year, up from a 10% increase in the first quarter. Also, going forward, we have identified opportunities to increase the price of our standard oil change and the labor rate we charge on exhaust jobs.
"Additionally, we will soon sign an agreement to supply a second brand of tires in all our stores. The addition of another well-known brand will help us grow the tire business more quickly, give the customer more choices, and attract new customers. We have also reached an agreement with Tenneco Automotive which enables Monro to offer the premium brand of Monroe (r) Sensatrac (r) shocks and struts. The Monroe (r) brand has the number one brand awareness in shocks and struts. As is the case with our other vendor deals, Tenneco will provide employee training as well as incentives.
"Lastly, we continue to pursue our Internet strategy and will be offering, via e-mail, various promotions to both new and existing customers. With the successful implementation and execution of these initiatives, we are looking forward to an acceleration of revenue growth in the near future."
Catherine D'Amico, Senior Vice President and Chief Financial Officer of Monro Muffler Brake, commented, "While we are pleased to report an earnings increase this quarter, we would have fared even better had it not been for two unusual items, each negatively impacting earnings per share by an estimated $0.01. First, we experienced some out-of-pocket costs, increased outside purchases and lost productivity related to the Firestone tire recall. Secondly, we experienced a vendor supply problem with one of our larger vendors. We foresee no future impact from either of these isolated events."
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, 2000. -0-
MONRO MUFFLER BRAKE, INC.
Financial Highlights
(Unaudited)
(Dollars in thousands, except per share amounts)
Quarter Ended September 30,
2000 1999 % Change
Sales $ 60,398 $ 60,513 (0.2)%
Cost of sales, including
distribution and occupancy costs 35,273 35,356 (0.2)
Gross profit 25,125 25,157 (0.1)
Operating, selling, general and
administrative expenses 17,675 17,727 (0.3)
Operating income 7,450 7,430 0.3
Interest expense, net 1,525 1,689 (9.7)
Other expense, net 157 400 (60.8)
Income before provision for
income taxes 5,768 5,341 8.0
Provision for income taxes 2,296 2,128 7.9
Net income $ 3,472 $ 3,213 8.1
Diluted earnings per common share $ 0.39 $ 0.36 8.3
Number of stores open
(at end of quarter) 510 515
MONRO MUFFLER BRAKE, INC.
Financial Highlights
(Unaudited)
(Dollars in thousands, except per share amounts)
Six Months Ended September 30,
2000 1999 % Change
Sales $ 121,091 $ 121,492 (0.3)%
Cost of sales, including
distribution and occupancy costs 70,099 70,747 (0.9)
Gross profit 50,992 50,745 0.5
Operating, selling, general and
administrative expenses 36,112 36,809 (1.9)
Operating income 14,880 13,936 6.8
Interest expense, net 3,125 3,406 (8.3)
Other expense, net 262 715 (63.4)
Income before provision for
income taxes 11,493 9,815 17.1
Provision for income taxes 4,574 3,909 17.0
Net income $ 6,919 $ 5,906 17.2
Diluted earnings per share $ 0.78 $ 0.66 18.2
MONRO MUFFLER BRAKE, INC.
Financial Highlights
(Unaudited)
(Dollars in thousands)
September 30, March 31,
2000 2000
Assets
Current assets
Cash $ 1,422 $ 507
Inventories 40,237 39,698
Other current assets 9,142 7,420
Total current assets 50,801 47,625
Property, plant and equipment, net 132,549 133,875
Other noncurrent assets 13,225 14,013
Total assets $ 196,575 $ 195,513
Liabilities and Shareholders' Equity
Current liabilities $ 42,797 $ 35,962
Long-term debt 51,659 63,639
Other long-term liabilities 6,531 7,137
Total liabilities 100,987 106,738
Total shareholders' equity 95,588 88,775
Total liabilities and
shareholders' equity $ 196,575 $ 195,513