CONTACT: Robert Gross
President and Chief Executive Officer
(585) 647-6400
Catherine D’Amico
Executive Vice President – Finance
Chief Financial Officer
(585) 647-6400
Investor Relations:
Cara O’Brien/Melissa Myron
Media Contact:
Stephanie Sampiere
Financial Dynamics
(212) 850-5600
FOR IMMEDIATE RELEASE
MONRO MUFFLER BRAKE, INC. ANNOUNCES
RECORD Q2 SALES AND EARNINGS
~ Comparable Store Sales Increase 6.6% ~
~ Net Income Increases 20% Generating a Record $0.61 Diluted Earnings Per Share ~
ROCHESTER, N.Y. – October 16, 2003 – Monro Muffler Brake, Inc. (Nasdaq: MNRO) today announced record sales and earnings for the second quarter and six months ended September 27, 2003.
Sales for the second quarter increased 9.0% to $74.1 million compared to $68.0 million for the comparable quarter last year. Same store sales increased 6.6% for the second quarter, versus last year’s increase of 1.5%. These top line gains reflect consistent store traffic increases, a strong repeat customer business and continued growth of additional products and services that have translated into strength across nearly all of the Company’s major product and service lines. During the second quarter, the Company’s exhaust business was up approximately 8%, brakes increased approximately 10%, miscellaneous services grew approximately 11%, including a 6.5% increase in scheduled maintenance service and the commercial business posted an approximate 16% gain.
Gross profit for the quarter increased to $31.5 million, or 42.4% of sales, from $28.6 million, or 42.1% of sales, last year.
Net income for the second quarter increased 20.2% to a record $5.9 million, or $0.61 per diluted share, compared to $4.9 million, or $0.52 per share last year. The Company opened one store during the quarter, bringing the total store count at the end of the second quarter of 2003 to 562.
Robert G. Gross, President and Chief Executive Officer stated, “We achieved another record quarter by consistently executing our strategy to drive store traffic with oil changes and to win repeat customers through our industry-leading customer service, our wide range of services and our targeted direct-to-consumer marketing. We believe our strong 10% increase in the high-margin brake category provides evidence that we have been successful in gaining the trust of our customers to complete significant repair and maintenance work on their automobiles. In addition, we were able to achieve these strong results in spite of the negative impact the September hurricane had on our Southern-based stores, which we estimate negatively affected our comparable store sales results by approximately 0.5% for the quarter.”
Sales for the six-month period increased 8.7% to $147.7 million from $135.9 million for the comparable period last year. Net income for the six months increased 33.3% to $11.8 million, or $1.22 per diluted share, compared to $8.9 million, or $0.94 per diluted share, in the year-ago period.
Mr. Gross continued, “With five consecutive quarters of comparable store sales increases, our strategy to drive organic growth remains on target. In addition, we continue to actively pursue opportunities to increase our store base and anticipate further expansion during the balance of the year. As previously discussed, we seek to add high-quality stores that will strengthen our geographic presence and/or diversify our product mix while being accretive in a timely fashion.”
Mr. Gross concluded, “Our inclusion in the recently released Forbes 200 Best Small Companies list is a testament to the solid foundation we have built and the value we have delivered to our shareholders. Looking to the second half of the year, we will continue to build on our strong fundamentals and the traction we have gained in the marketplace. Currently, we are confident our strong performance will continue and expect diluted earnings per share for the third quarter to be in the range of $0.30 to $0.32 before accounting for the recently announced three-for-two stock split. In addition, we remain comfortable with our full year estimate of diluted earnings per share in the range of $1.74 to $1.80 pre-split.”
Monro Muffler Brake operates a chain of stores providing automotive undercar repair and tire services in the United States, operating under the brand names of Monro Muffler Brake and Service, Speedy Auto Service by Monro, Kimmel Tires - Auto Service and Tread Quarters Discount Tires. The Company currently operates 563 stores and has 18 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, Maine 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.
The statements contained in this press release that are not historical facts may contain statements of future expectations and other forward-looking statements made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to risks, uncertainties and other important factors that could cause actual results to differ materially from those expressed. These factors include, but are not necessarily limited to, product demand, 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, the effect of economic conditions, the impact of competitive services and pricing, product development, parts supply restraints or difficulties, industry regulation, risks relating to leverage and debt service (including sensitivity to fluctuations in interest rates), continued availability of capital resources and financing, risks relating to integration of acquired businesses and other factors set forth elsewhere herein and in the Company’s Securities and Exchange Commission filings, including the report on Form 10-K for the fiscal year ended March 29, 2003.
(Tables Follow)
MONRO MUFFLER BRAKE, INC.
Financial Highlights
(Unaudited)
(Dollars in thousands, except per share amounts)
Quarter Ended Fiscal September
|
|
2003 |
2002 |
% Change |
|
|
|
Restated |
|
|
|
|
|
|
|
Sales |
$74,107 |
$68,003 |
9.0% |
|
|
|
|
|
|
Cost of sales, including |
|
|
|
|
distribution and occupancy costs |
42,653 |
39,392 |
8.3 |
|
|
|
|
|
|
Gross profit |
31,454 |
28,611 |
9.9 |
|
|
|
|
|
|
Operating, selling, general and |
|
|
|
|
administrative expenses |
21,095 |
20,026 |
5.3 |
|
|
|
|
|
|
Operating income |
10,359 |
8,585 |
20.7 |
|
|
|
|
|
|
Interest expense, net |
889 |
642 |
38.5 |
|
|
|
|
|
|
Other (income) expense, net |
(44) |
31 |
|
|
|
|
|
|
|
Income before provision for |
|
|
|
|
income taxes |
9,514 |
7,912 |
20.3 |
|
|
|
|
|
|
Provision for income taxes |
3,618 |
3,007 |
20.3 |
|
|
|
|
|
|
Net income |
$5,896 |
$4,905 |
20.2 |
|
|
|
|
|
|
Diluted earnings per common share |
$0.61 |
$0.52 |
17.3% |
|
|
|
|
|
|
Weighted average number of |
|
|
|
|
diluted shares outstanding |
9,721 |
9,375 |
|
|
|
|
|
|
|
Number of stores open |
|
|
|
|
(at end of quarter) |
562 |
550 |
|
MONRO MUFFLER BRAKE, INC.
Financial Highlights
(Unaudited)
(Dollars in thousands, except per share amounts)
Six Months Ended Fiscal September
|
|
2003 |
2002 |
% Change |
|
|
|
Restated |
|
|
|
|
|
|
|
Sales |
$147,750 |
$135,912 |
8.7% |
|
|
|
|
|
|
Cost of sales, including |
|
|
|
|
distribution and occupancy costs |
84,061 |
77,406 |
8.6 |
|
|
|
|
|
|
Gross profit |
63,689 |
58,506 |
8.9 |
|
|
|
|
|
|
Operating, selling, general and |
|
|
|
|
administrative expenses |
43,146 |
42,925 |
0.5 |
|
|
|
|
|
|
Operating income |
20,543 |
15,581 |
31.8 |
|
|
|
|
|
|
Interest expense, net |
1,482 |
1,409 |
5.2 |
|
|
|
|
|
|
Other (income) expense, net |
|
(120) |
|
|
|
|
|
|
|
Income before provision for |
|
|
|
|
income taxes |
19,061 |
14,292 |
33.4 |
|
|
|
|
|
|
Provision for income taxes |
7,246 |
5,431 |
33.4 |
|
|
|
|
|
|
Net income |
$11,815 |
$8,861 |
33.3 |
|
|
|
|
|
|
Diluted earnings per share |
$1.22 |
$0.94 |
29.8% |
|
|
|
|
|
|
Weighted average number of |
|
|
|
|
diluted shares outstanding |
9,661 |
9,393 |
|
MONRO MUFFLER BRAKE, INC.
Financial Highlights
(Unaudited)
(Dollars in thousands)
|
|
September 27, |
March 29, |
|
|
2003 |
2003 |
|
Assets |
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
Cash |
$888 |
$69 |
|
|
|
|
|
Inventories |
52,195 |
51,256 |
|
|
|
|
|
Other current assets |
13,689 |
12,552 |
|
|
|
|
|
Total current assets |
66,772 |
63,877 |
|
|
|
|
|
Property, plant and equipment, net |
159,934 |
132,148 |
|
|
|
|
|
Other noncurrent assets |
10,728 |
11,175 |
|
|
|
|
|
Total assets |
$237,434 |
$207,200 |
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders’ Equity |
|
|
|
|
|
|
|
Current liabilities |
$43,363 |
$41,997 |
|
|
|
|
|
Long-term debt |
51,198 |
36,183 |
|
|
|
|
|
Other long-term liabilities |
5,161 |
4,628 |
|
|
|
|
|
Total liabilities |
99,722 |
82,808 |
|
|
|
|
|
Total shareholders’ equity |
137,712 |
124,392 |
|
|
|
|
|
Total liabilities and shareholders’ equity |
$237,434 |
$207,200 |
# # #