Comparable Store Sales Increase 11.2% for Fourth Quarter; 6.7% for
Fiscal 2009
Fourth Quarter EPS Up 50% to $.15
First Quarter 2010 Estimated EPS Range of $.42 to $.47
Announces Intended Acquisition of 26 Autotire Car Care Center Stores
ROCHESTER, N.Y., May 28, 2009 (GLOBE NEWSWIRE) -- Monro Muffler Brake, Inc. (Nasdaq:MNRO), a leading provider of automotive undercar repair and tire services, today announced financial results for its fourth quarter and fiscal year ended March 28, 2009.
Fourth Quarter Results
Sales for the fourth quarter of fiscal 2009 increased 9.3% to a record $117.1 million compared to $107.2 million for the fourth quarter of fiscal 2008. Sales growth was driven by strong in-store sales execution across all product and service categories as well as continued highly effective promotional activities and advertising campaigns. Comparable store sales increased 11.2%, exceeding the Company's previous estimate of approximately 10%. Comparable store sales increased approximately 6% for brakes, 16% for maintenance services, 13% for alignments, and 14% for tires. For the former ProCare stores, comparable store sales increased 16.6% for the fourth quarter.
Gross margin increased to 38.4% in the fourth quarter from 37.3% in the prior year quarter due to price increases that were implemented in response to increased material costs, improved labor productivity, and leveraging of fixed occupancy costs. The expansion in gross margin was partially offset by the shift in sales mix towards the lower-margin tire and maintenance services categories. Total operating expenses were $38.9 million, or 33.2% of sales, compared with $35.8 million, or 33.4% of sales, for the same period of the prior year.
Operating income for the quarter increased 45.7% to $6.0 million from $4.1 million in the fourth quarter of fiscal 2008. Interest expense was $1.3 million, a decrease of 26.1% from the fourth quarter of fiscal 2008, due primarily to the Company's reduction in total long-term debt.
Net income for the fourth quarter increased 57.2% to $3.0 million compared to $1.9 million for the prior year period. Diluted earnings per share for the quarter increased 50% to $.15, compared to diluted earnings per share of $.10 in the fourth quarter of fiscal 2008, and came in at the high end of the Company's recently increased range of $.12 to $.15. Net income for the fourth quarter reflects an effective tax rate of 36% compared with 21% for the prior year period.
The Company did not open any locations and closed one during the quarter, ending fiscal 2009 with 710 stores.
Robert G. Gross, Chairman and Chief Executive Officer stated, "We are extraordinarily pleased with our strong performance for the fourth quarter and fiscal year 2009, as we continued to demonstrate that our business model is well-positioned to deliver solid results in both favorable and challenging economic times. We are delighted with our comparable store sales increase of 6.7% for the year, which was consistently strong for each quarter and especially high at 11.2% for the fourth quarter, as we continued to expand our market share through effective advertising and quality service. Further, store traffic trends improved as we benefited from consumers keeping their older cars longer given the difficult economic environment and from reduced competition as a result of dealership closures. As a result, we experienced a significant 5.5% increase in comparable store traffic for the fourth quarter. Overall, we remain very pleased with the superior performance of our company-operated store base and the ability of our employees to execute well and provide excellent service to our loyal customers."
Fiscal Year Results
Net sales for fiscal 2009 increased 8.4% to a record $476.1 million from $439.4 million for fiscal 2008. Comparable store sales increased 6.7% for the year, marking the eighth consecutive year of comparable store sales increases for the Company. For the former ProCare stores, comparable store sales increased 10.1% for the year.
Gross margin increased to 40.2% for fiscal 2009 from 39.7% in the prior year. Total operating expenses were $147.8 million, or 31.0% of sales, for fiscal 2009, compared with $136.2 million, or 31.0% of sales, for the prior fiscal year.
Net income for fiscal 2009 increased to a record $24.1 million, or $1.20 per diluted share, from $21.9 million, or $1.00 per diluted share, for fiscal 2008, at the high end of the Company's recently increased range.
Definitive Agreement to Acquire Autotire Car Care Centers
Monro today announced that it has signed a definitive asset purchase agreement to acquire 26 Autotire Car Care Center ("Autotire") locations from Am-Pac Tire Distributors Inc., a wholly-owned subsidiary of American Tire Distributors. The transaction is expected to close by the end of June 2009. The 26 Autotire locations purchased in Missouri and Illinois will expand Monro's footprint into St. Louis and the surrounding area. The purchase price for the chain is approximately $10 million and will be funded primarily through the Company's existing line of credit. Autotire generated annual net sales of approximately $31 million in 2008. It is management's intention to retain Autotire's store employees.
Mr. Gross commented, "We are delighted with the prospect of integrating the Autotire stores into the Monro business to broaden our market position and further our strategy of achieving growth through reasonably priced, value-added acquisitions. Autotire's established store density, average sales of $1.2 million per location and loyal customer base will allow us to quickly and seamlessly expand Monro's footprint into the broader St. Louis metropolitan area, a new and exciting market for us. Further, we have entered into this agreement on attractive terms which we believe have the potential for high shareholder return on investment."
Company Outlook
Based on current visibility and business and economic trends, the Company continues to anticipate fiscal 2010 comparable store sales growth in the range of 4% to 7% and fiscal 2010 diluted earnings per share in the range of $1.30 to $1.45, as previously announced on March 24, 2009. The estimate is based on 20.4 million weighted average shares outstanding and includes the impact of the Autotire acquisition. The Company's expected sales range for the year is $515 million to $530 million, including Autotire but not any other acquisitions.
For the first quarter of fiscal 2010, the Company anticipates comparable store sales growth in the range of 4% to 7%. The Company expects diluted earnings per share for the first quarter to be between $.42 and $.47, compared to $.39 for the first quarter of fiscal 2009. These estimates include the impact of the Autotire acquisition.
Mr. Gross concluded, "We continue to experience very positive trends in our business as we enter our new fiscal year. To date in the first quarter, we achieved comparable store sales growth of 5.5% in April and approximately 8.0% thus far in May. We are encouraged by this continuing momentum and are optimistic about the future prospects of our business, particularly as macro trends in the automotive sector work to our advantage and consumer confidence begins to improve slightly. We are excited about the opportunities for further market share expansion in fiscal 2010 as we integrate Autotire into our model and look forward to becoming the trusted auto service provider for a broader base of loyal customers."
Earnings Conference Call and Webcast
The Company will host a conference call and audio webcast, today, May 28, 2009 at 11:00 a.m. Eastern Time. The conference call may be accessed by dialing 866-316-1366 and using the required pass code 9947843. A replay will be available approximately one hour after the recording through Thursday, June 4, 2009 and can be accessed by dialing 888-203-1112. The live conference call and replay can also be accessed via audio webcast at the Investor Info section of the Company's website, located at www.monro.com. An archive will be available at this website through June 4, 2009.
About Monro Muffler Brake
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, Mr. Tire and Tread Quarters Discount Tires. The Company currently operates 714 stores 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 Maine. Monro's stores provide a full range of services for brake systems, steering and suspension systems, tires, exhaust 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, 2008.
MONRO MUFFLER BRAKE, INC.
Financial Highlights
(Unaudited)
(Dollars and share counts in thousands)
Quarter Ended
Fiscal March
-------------
2009 2008 %Change
--------- --------- -----
Sales $ 117,144 $ 107,211 9.3%
Cost of sales, including
distribution and occupancy costs 72,184 67,270 7.3
--------- ---------
Gross profit 44,960 39,941 12.6
--------- ---------
Operating, selling, general and
administrative expenses 39,043 36,473 7.0
Intangible amortization 121 150 (19.3)
Gain on disposal of assets (233) (819) (71.5)
--------- ---------
Total operating expenses 38,931 35,804 8.7
--------- ---------
Operating income 6,029 4,137 45.7
Interest expense, net 1,330 1,801 (26.1)
Other income, net (70) (114) (38.7)
--------- ---------
Income before provision for
income taxes 4,769 2,450 94.6
Provision for income taxes 1,725 514 235.5
--------- ---------
Net income $ 3,044 $ 1,936 57.2
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Diluted earnings per share $ .15 $ .10 50.0%
========= =========
Weighted average number of
diluted shares outstanding 20,199 20,168
Number of stores open
(at end of quarter) 710 720
MONRO MUFFLER BRAKE, INC.
Financial Highlights
(Unaudited)
(Dollars and share counts in thousands)
Year Ended
Fiscal March
------------
2009 2008 %Change
--------- --------- -----
Sales $ 476,106 $ 439,389 8.4%
Cost of sales, including
distribution and occupancy costs 284,640 264,783 7.5
--------- ---------
Gross profit 191,466 174,606 9.7
--------- ---------
Operating, selling, general and
administrative expenses 148,374 137,338 8.0
Intangible amortization 490 564 (13.1)
Gain on disposal of assets (1,061) (1,670) (36.4)
--------- ---------
Total operating expenses 147,803 136,232 8.5
--------- ---------
Operating income 43,663 38,374 13.8
Interest expense, net 5,979 5,753 3.9
Other income, net (430) (799) (46.2)
--------- ---------
Income before provision for
income taxes 38,114 33,420 14.0
Provision for income taxes 14,026 11,499 22.0
--------- ---------
Net income $ 24,088 $ 21,921 9.9
========= =========
Diluted earnings per common share $ 1.20 $ 1.00 20.0%
========= =========
Weighted average number of
diluted shares outstanding 20,099 21,871
MONRO MUFFLER BRAKE, INC.
Financial Highlights
(Unaudited)
(Dollars in thousands)
March 28, March 29,
2009 2008
--------- ---------
Current assets
Cash $ 3,336 $ 2,108
Inventories 71,443 66,183
Other current assets 26,935 24,582
--------- ---------
Total current assets 101,714 92,873
Property, plant and equipment, net 185,061 184,184
Other noncurrent assets 89,976 93,412
--------- ---------
Total assets $ 376,751 $ 370,469
========= =========
Liabilities and Shareholders' Equity
Current liabilities $ 71,325 $ 58,311
Long-term debt 97,098 122,585
Other long term liabilities 14,037 14,725
--------- ---------
Total liabilities 182,460 195,621
Total shareholders' equity 194,291 174,848
--------- ---------
Total liabilities and shareholders' equity $ 376,751 $ 370,469
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