Monro Muffler Brake, Inc. Reports Third Quarter Results
19 January 2001
Monro Muffler Brake, Inc. Reports Third Quarter Results; Company Reports 19% Increase in Net Income
ROCHESTER, N.Y.--Jan. 18, 2001--Monro Muffler Brake, Inc. , today reported sales and operating results for its third quarter and nine months ended December 31, 2000.Sales for the fiscal 2001 third quarter were $51.8 million, compared to $52.1 million for the corresponding quarter ended December 31, 1999. The decrease was due to a comparable store sales decrease of 3.2% caused, in part, by one less sales day. Management believes that inclement weather also contributed to the decline. This decrease was partially offset by an increase in sales from new stores of $0.7 million.
Net income for fiscal 2001's third quarter rose 19.1% to $1.4 million, or $0.15 per diluted share, as compared to $1.1 million, or $0.13 per diluted share, in the prior year period.
Sales for the nine months ended December 31, 2000 decreased 0.4% to $172.9 million from $173.6 million in the comparable period last year. Net income for the nine months ended December 31, 2000 increased 17.5% to $8.3 million, as compared to $7.1 million in the first nine months of the prior year.
Robert G. Gross, President and Chief Executive Officer stated, "While we are pleased to be reaping the benefits of improved productivity, strong cost control, and further leveraging of the Speedy acquisition, all resulting in a 19% earnings growth, we are disappointed in sales. The encouraging news is that the average daily traffic was up again this quarter by 0.8%. This now represents the third consecutive quarter of increasing traffic counts and, with our numerous other sales initiatives, bodes well for future sales growth.
"We are comfortable with our current fourth quarter and full year projections of $0.15 and $1.09, respectively, and expect full year FY02 earnings to grow 10 to 15%.
"We are also pleased to announce that we have been building on our strategy to market more well-recognized product brands in our stores to enhance sales. During December, we began selling Goodyear tires in addition to the Firestone brand, offering our customers further choice. In March, once most of the cold weather is behind us, we plan to start selling the popular Monroe(R) brand shocks and struts, the most recognized brand of ride control products in the industry. We expect these products to contribute to a future growth in sales, as they will create significant sales promotional opportunities.
"Oil changes were up 9% over last year's third quarter, a clear indication that there has been virtually no resistance to our $2.00 price increase implemented in October. We believe this is because we remain at least $4.00 less expensive than most competitors. Recently, we instituted a service fee to cover shop supply and environmental costs previously not passed on to the customer. We are one of the last companies to adopt this practice, and it has received nearly universal acceptance by our customers. We expect these service fees to have a 1% positive impact on revenues beginning next quarter.
"Regarding our additional sales and Internet initiatives, feedback from our new website launched in October has been very positive. Our new web-based e-VIP Club's membership is growing daily, which we believe will lead to more visits from our current customers. Next month, we are implementing a major initiative to target potential customers who live within one mile of a Monro store but have not visited."
Mr. Gross concluded, "We believe we are well on our way to achieving future top line growth, and our goal is to continue to outperform the industry in the coming quarters."
Separately, the Company announced that it has purchased 111,300 shares of common stock this quarter as part of its share repurchase program announced last year. This brings the total shares purchased to 211,400 through December 31, 2000.
MONRO MUFFLER BRAKE, INC.
Financial Highlights
(Unaudited)
(Dollars in thousands, except per share amounts)
Quarter Ended December 31,
2000 1999 % Change
------------- ---------- ----------
Sales $ 51,792 $ 52,077 (0.5)%
Cost of sales,
including
distribution
and occupancy costs 31,952 32,145 (0.6)
------------- ------------
Gross profit 19,840 19,932 (0.5)
Operating, selling,
general and
administrative
expenses 15,930 15,807 0.8
------------- ------------
Operating income 3,910 4,125 (5.2)
Interest expense,
net 1,399 1,692 (17.3)
Other expense,
net 239 524 (54.4)
------------- ------------
Income before
provision for
income taxes 2,272 1,909 19.0
Provision for
income taxes 904 760 19.0
------------- -------------
Net income $ 1,368 $ 1,149 19.1
============== ============
Diluted earnings
per share $ 0.15 $ 0.13 15.4%
============= =============
Number of stores
open (at end of
quarter) 513 512
MONRO MUFFLER BRAKE, INC.
Financial Highlights
(Unaudited)
(Dollars in thousands, except per share amounts)
Nine Months Ended December 31,
2000 1999 % Change
-------------- ------------ ------------
Sales $ 172,883 $ 173,569 (0.4)%
Cost of sales,
including
distribution and
occupancy costs 102,051 102,892 (0.8)
-------------- -------------
Gross profit 70,832 70,677 0.2
Operating, selling,
general and
administrative
expenses 52,042 52,616 (1.1)
-------------- --------------
Operating income 18,790 18,061 4.0
Interest expense,
net 4,524 5,098 (11.3)
Other expense,
net 501 1,239 (59.6)
-------------- -------------
Income before
provision for
income taxes 13,765 11,724 17.4
Provision for
income taxes 5,478 4,669 17.3
-------------- --------------
Net income $ 8,287 $ 7,055 17.5
============== ==============
Diluted earnings
per share $ 0.93 $ 0.79 17.7%
============= ===============
MONRO MUFFLER BRAKE, INC.
Financial Highlights
(Unaudited)
(Dollars in thousands)
December 31, March 31,
2000 2000
---------------- ------------------
Assets
Current assets
Cash $ 507 $ 507
Inventories 40,307 39,698
Other current assets 7,960 7,420
---------------- ------------------
Total current assets 48,774 47,625
Property, plant and
equipment, net 132,927 133,875
Other noncurrent
assets 13,032 14,013
---------------- ------------------
Total assets $ 194,733 $ 195,513
================== ================
Liabilities and
Shareholders'
Equity
Current
liabilities $ 38,715 $ 35,962
Long-term debt 53,566 63,639
Other long term
liabilities 6,166 7,137
------------------ ----------------
Total liabilities 98,447 106,738
Total shareholders'
equity 96,286 88,775
------------------ -----------------
Total liabilities and
shareholders' equity $ 194,733 $ 195,513
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