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
FD Morgen-Walke
(212) 850-5600
FOR IMMEDIATE RELEASE
MONRO MUFFLER BRAKE, INC. ISSUES FINAL RESULTS FOR THE FOURTH QUARTER AND FISCAL YEAR ENDED MARCH 29, 2003
~ Company Reports Audited EPS of $1.46 ~
ROCHESTER, N.Y. – May 30, 2003 – Monro Muffler Brake, Inc. (Nasdaq: MNRO) today issued final fiscal 2003 fourth quarter and audited results for the year ended March 29, 2003, which were pending final review by the Company’s external auditors, as previously discussed in the Company’s press release dated May 22, 2003.
PricewaterhouseCoopers (“PWC”), the Company’s external auditors, has completed its review of the Company’s accounting for barter credits received when the Company sublet or sold a total of 14 closed store properties to Icon International, a barter company, in fiscal years 1998, 1999 and 2000. The review resulted in a revision to the Company’s and PWC’s original accounting for barter transactions and the resulting barter credits. Accordingly, the Company’s historical audited financial statements, to be included in its Form 10-K, will reflect a cumulative $2.5 million after-tax reduction to retained earnings at April 1, 2001 to record the retroactive impairment charge related to the store closures in fiscal 1998 through 2000. The Company’s related balance sheets, which will soon be filed with the Forms 8-K and 10-K, will also reflect adjustments to fixed assets, accrued liabilities, deferred taxes, and other current and non-current assets in connection with this revision.
As management is confident in the use of the barter credits, the revised accounting method affects the timing of the recognition of income and expense. The Company’s earnings, beginning in fiscal 2002, will ultimately increase in an amount equal to the aforementioned charge based on the Company’s utilization of the barter credits. As such, audited net income for fiscal year 2003 increased $.1 million to $13.7 million, or $1.46 per diluted share, versus the previously reported $13.6 million, or $1.45 per diluted share.
The Company also reiterated its previously stated first quarter fiscal 2004 guidance for diluted earnings per share in the range of $0.58 to $0.62 and its full year EPS forecast of $1.70 to $1.80, excluding any positive impact from this accounting matter. The Company is currently assessing the magnitude of the positive adjustment on fiscal 2004, and plans to provide updated guidance before the end of its fiscal June quarter.
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 561 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 and Michigan. Monro’s stores provide a full range of services for exhaust systems, brake systems, steering and suspension systems, tires 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 30, 2002.
MONRO MUFFLER BRAKE, INC.
Financial Highlights
(Unaudited)
(Dollars in thousands, except per share amounts)
Quarter Ended Fiscal March
|
|
2003 |
2002 |
% Change |
|
|
|
|
|
|
Sales |
$61,399 |
$50,540 |
21.5% |
|
|
|
|
|
|
Cost of sales, including |
|
|
|
|
distribution and occupancy costs |
37,240 |
31,307 |
18.9 |
|
|
|
|
|
|
Gross profit |
24,159 |
19,233 |
25.6 |
|
|
|
|
|
|
Operating, selling, general and |
|
|
|
|
administrative expenses |
19,696 |
14,811 |
33.0 |
|
|
|
|
|
|
Operating income |
4,463 |
4,422 |
0.9 |
|
|
|
|
|
|
Interest expense, net |
570 |
778 |
(26.8) |
|
|
|
|
|
|
Other (income) expense, net |
(68) |
455 |
|
|
|
|
|
|
|
Income before provision for |
|
|
|
|
income taxes |
3,961 |
3,189 |
24.2 |
|
|
|
|
|
|
Provision for income taxes |
1,507 |
1,209 |
24.6 |
|
|
|
|
|
|
Net income |
$2,454 |
$1,980 |
23.9 |
|
|
|
|
|
|
Diluted earnings per share |
$0.26 |
$0.22 |
18.2% |
|
|
|
|
|
|
Weighted average number of |
|
|
|
|
diluted shares outstanding |
9,437 |
9,168 |
|
|
|
|
|
|
|
Number of stores open |
|
|
|
|
(at end of quarter) |
560 |
514 |
|
MONRO MUFFLER BRAKE, INC.
Financial Highlights
(Dollars in thousands, except per share amounts)
Year Ended Fiscal March
|
|
2003 |
2002 |
% Change |
|
|
|
|
|
|
Sales |
$258,026 |
$224,853 |
14.8% |
|
|
|
|
|
|
Cost of sales, including |
|
|
|
|
distribution and occupancy costs |
152,432 |
133,042 |
14.6 |
|
|
|
|
|
|
Gross profit |
105,594 |
91,811 |
15.0 |
|
|
|
|
|
|
Operating, selling, general and |
|
|
|
|
administrative expenses |
81,040 |
69,604 |
16.4 |
|
|
|
|
|
|
Operating income |
24,554 |
22,207 |
10.6 |
|
|
|
|
|
|
Interest expense, net |
2,601 |
3,731 |
(30.3) |
|
|
|
|
|
|
Other (income) expense, net |
(189) |
833 |
|
|
|
|
|
|
|
Income before provision for |
|
|
|
|
income taxes |
22,142 |
17,643 |
25.5 |
|
|
|
|
|
|
Provision for income taxes |
8,414 |
6,336 |
32.8 |
|
|
|
|
|
|
Net income |
$13,728 |
$11,307 |
21.4 |
|
|
|
|
|
|
Diluted earnings per share |
$1.46 |
$1.25 |
16.8% |
|
|
|
|
|
|
Weighted average number of |
|
|
|
|
diluted shares outstanding |
9,403 |
9,055 |
|
###