FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 29, 2001.
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________________ to _________________
Commission File No. 0-19357
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MONRO MUFFLER BRAKE, INC.
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(Exact name of registrant as specified in its charter)
New York 16-0838627
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification #)
200 Holleder Parkway, Rochester, New York 14615
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(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code 585-647-6400
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Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [ X ] No [ ]
As of February 11, 2002, 8,217,431 shares of the Registrant's Common Stock,
par value $ .01 per share, were outstanding.
MONRO MUFFLER BRAKE, INC.
INDEX
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Part I. Financial Information Page No.
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Consolidated Balance Sheet at
December 29, 2001 and March 31, 2001 3
Consolidated Statement of Income for the quarter
and nine months ended December 29, 2001 and
December 31, 2000 4
Consolidated Statement of Changes in Common
Shareholders' Equity for the nine months ended
December 29, 2001 5
Consolidated Statement of Cash Flows for the
nine months ended December 29, 2001 and
December 31, 2000 6
Notes to Consolidated Financial Statements 7
Management's Discussion and Analysis of
Financial Condition and Results of Operations 9
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K 13
Signatures 14
Exhibit Index 15
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MONRO MUFFLER BRAKE, INC.
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
DECEMBER 29, MARCH 31,
2001 2001
---- ----
(DOLLARS IN THOUSANDS)
ASSETS
Current assets:
Cash and equivalents, including interest-bearing accounts of $0 at
December 29, 2001 and $751 at March 31, 2001 $ 0 $ 751
Trade receivables 1,396 1,161
Inventories, at LIFO cost 44,214 41,071
Deferred income tax asset 899 899
Other current assets 8,739 5,885
------------ ------------
Total current assets 55,248 49,767
------------ ------------
Property, plant and equipment 213,619 209,420
Less - Accumulated depreciation and amortization (85,321) (77,934)
------------ ------------
Net property, plant and equipment 128,298 131,486
Other noncurrent assets 11,842 12,586
------------ ------------
Total assets $ 195,388 $ 193,839
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 8,190 $ 10,646
Trade payables 13,321 11,148
Federal and state income taxes payable 1,982 648
Accrued interest 309 477
Accrued payroll, payroll taxes and other payroll benefits 4,963 5,150
Accrued insurance 2,948 948
Accrued restructuring costs 400 400
Other current liabilities 7,698 7,152
------------ ------------
Total current liabilities 39,811 36,569
Long-term debt 39,213 50,857
Other long-term liabilities 2,277 730
Accrued long-term restructuring costs 1,577 1,859
Deferred income tax liability 5,085 6,014
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Total liabilities 87,963 96,029
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Commitments
Shareholders' equity:
Class C Convertible Preferred Stock, $1.50 par value, $.216 conversion value;
150,000 shares authorized; 91,727 shares issued and outstanding 138 138
Common Stock, $.01 par value, 15,000,000 shares authorized; 8,427,215
shares issued at December 29, 2001; 8,373,678 shares issued at
March 31, 2001 84 84
Treasury Stock, 216,800 shares at December 29, 2001 and
March 31, 2001, at cost (1,831) (1,831)
Additional paid-in capital 37,596 36,344
Other comprehensive income (964)
Retained earnings 72,402 63,075
------------ ------------
Total shareholders' equity 107,425 97,810
------------ ------------
Total liabilities and shareholders' equity $ 195,388 $ 193,839
============ ============
These financial statements should be read in conjunction with the financial
statements and notes thereto included in the Annual Report on Form 10-K (File
No. 0-19357), filed by the Company with the Securities and Exchange Commission
on June 28, 2001.
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MONRO MUFFLER BRAKE, INC.
CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
FOR THE QUARTER ENDED FOR THE NINE MONTHS ENDED
FISCAL DECEMBER FISCAL DECEMBER
--------------- ---------------
2001 2000 2001 2000
---- ---- ---- ----
(13 WEEKS) (a) (39 WEEKS) (a)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
Sales $ 52,443 $ 51,792 $174,313 $172,883
Cost of sales, including distribution and
occupancy costs 32,589 31,952 101,735 102,051
-------- -------- -------- --------
Gross profit 19,854 19,840 72,578 70,832
Operating, selling, general and
administrative expenses 16,068 15,930 54,793 52,042
-------- -------- -------- --------
Operating income 3,786 3,910 17,785 18,790
Interest expense, net of interest income for
the quarter of $8 in 2001 and $26 in
2000, and year-to-date of $22 in 2001
and $78 in 2000 835 1,399 2,953 4,524
Other expense, net 78 239 378 501
-------- -------- -------- --------
Income before provision for income taxes 2,873 2,272 14,454 13,765
Provision for income taxes 1,092 904 5,127 5,478
-------- -------- -------- --------
Net income $ 1,781 $ 1,368 $ 9,327 $ 8,287
======== ======== ======== ========
Earnings per share:
Basic $ 0.22 $ 0.17 $ 1.14 $ 1.01
======== ======== ======== ========
Diluted $ 0.20 $ 0.15 $ 1.03 $ 0.93
======== ======== ======== ========
Weighted average number of shares of
common stock and common stock
equivalents used in computing earnings
per share:
Basic 8,209 8,177 8,188 8,192
======== ======== ======== ========
Diluted 9,043 8,884 9,020 8,899
======== ======== ======== ========
(a) See Note 1 to these financial statements.
These financial statements should be read in conjunction with the financial
statements and notes thereto included in the Annual Report on Form 10-K (File
No. 0-19357), filed by the Company with the Securities and Exchange Commission
on June 28, 2001.
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MONRO MUFFLER BRAKE, INC.
CONSOLIDATED STATEMENT OF CHANGES IN COMMON SHAREHOLDERS' EQUITY
(UNAUDITED)
(DOLLARS IN THOUSANDS)
LESS:
NOTE NET ACCUMULATED
ADDITIONAL RECEIVABLE ADDITIONAL OTHER
PREFERRED COMMON TREASURY PAID-IN FROM PAID-IN RETAINED COMPENSATION
STOCK STOCK STOCK CAPITAL SHAREHOLDER CAPITAL EARNINGS INCOME TOTAL
----- ----- ----- ------- ----------- ------- -------- ------ -----
Balance at March 31, 2001 $138 $84 $(1,831) $36,632 $(288) $36,344 $63,075 $97,810
Other comprehensive income:
Cumulative effect at
April 1, 2001 $(352) (352)
Net income 9,327 9,327
Other comprehensive income:
SFAS No. 133 adjustment
for the nine months ended
December 29, 2001 (612) (612)
--------
Total comprehensive income 8,715
Exercise of stock options 655 655 655
Vesting of non-qualified stock 519 519 519
options
Note receivable from shareholder 78 78 78
-------- -------- --------- --------- --------- --------- --------- -------- --------
Balance at December 29, 2001 $138 $84 $(1,831) $37,806 $(210) $37,596 $72,402 $(964) $107,425
======== ======== ========= ========= ========= ========= ========= ======== ========
These financial statements should be read in conjunction with the financial
statements and notes thereto included in the Annual Report on Form 10-K (File
No. 0-19357), filed by the Company with the Securities and Exchange Commission
on June 28, 2001.
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MONRO MUFFLER BRAKE, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
FOR THE NINE MONTHS
ENDED FISCAL DECEMBER
2001 2000
---- ----
(DOLLARS IN THOUSANDS)
INCREASE (DECREASE) IN CASH
Cash flows from operating activities:
Net income $ 9,327 $ 8,287
------------ ------------
Adjustments to reconcile net income to net cash provided
by operating activities -
Depreciation and amortization 9,503 9,645
Non-qualified stock option expense 727
Net change in deferred income taxes (291)
Gain on disposal of property, plant and equipment (59) (176)
Increase in trade receivables (235) (479)
Increase in inventories (3,143) (566)
Increase in other current assets (2,854) (106)
Decrease in other noncurrent assets 304 460
Increase in trade payables 2,173 955
Increase (decrease) in accrued expenses 2,396 (531)
Increase in federal and state income taxes payable 1,334 2,418
Decrease in other long-term liabilities (357) (1,204)
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Total adjustments 9,498 10,416
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Net cash provided by operating activities 18,825 18,703
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Cash flows from investing activities:
Capital expenditures (6,205) (8,618)
Proceeds from the disposal of property, plant and equipment 74 728
------------ ------------
Net cash used for investing activities (6,131) (7,890)
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Cash flows from financing activities:
Proceeds from borrowings 75,773 77,050
Principal payments on long-term debt and capital
lease obligations (89,873) (87,009)
Exercise of stock options 655 126
Repurchase of common stock (980)
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Net cash used for financing activities (13,445) (10,813)
------------ ------------
Decrease in cash (751) 0
Cash at beginning of period 751 507
------------ ------------
Cash at end of period $ 0 $ 507
============ ============
These financial statements should be read in conjunction with the financial
statements and notes thereto included in the Annual Report on Form 10-K (File
No. 0-19357), filed by the Company with the Securities and Exchange Commission
on June 28, 2001.
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MONRO MUFFLER BRAKE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1 - Change in Fiscal Year
- ------------------------------
During the fiscal year ended March 31, 2001, the Board of Directors of
the Company elected to change the Company's fiscal year end from March 31 to the
last Saturday in March. This change was effective with fiscal year 2002 which
began on April 1, 2001.
The following are the dates represented by each fiscal period:
<Table>
"Quarter Ended Fiscal December 2001": September 30, 2001 - December 29, 2001 (13 weeks)
"Quarter Ended Fiscal December 2000": October 1, 2000 - December 31, 2000
"Nine Months Ended Fiscal December 2001": April 1, 2001 - December 29, 2001 (39 weeks)
"Nine Months Ended Fiscal December 2000": April 1, 2000 - December 31, 2000
</Table>
Note 2 - Derivative Financial Instruments
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On June 17, 1998, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 133 ("SFAS 133"), "Accounting
for Derivative Instruments and Hedging Activities" effective for fiscal years
beginning after June 15, 2000. This statement standardizes the accounting for
derivatives and hedging activities and requires that all derivatives be
recognized in the statement of financial position as either assets or
liabilities at fair value. Changes in the fair value of derivatives that do not
meet the hedge accounting criteria are to be reported in earnings. The Company
adopted this standard effective April 1, 2001. The adoption of SFAS No. 133 did
not materially affect the Company's results of operations or financial position.
The notional amount of derivative financial instruments, which
consisted solely of interest rate swaps used to minimize the risk and/or costs
associated with changes in interest rates, was approximately $42 million at
December 29, 2001. At that date, swap maturities ranged from November 2002
through October 2005. These swap contracts require the Company to pay fixed
rates of interest ranging from 5.21% to 7.15%, and receive variable rates of
interest based on the 30 day LIBOR rate (plus a spread of 80 basis points in the
case of the 7.15% fixed rate contract).
At December 29, 2001, the fair value of the contracts, net of tax, is
recorded as a component of other comprehensive income in the Statement of
Changes in Common Shareholders' Equity.
Note 3 - Stock Repurchase
- -------------------------
In November 1999, the Board of Directors approved a share repurchase
program initially authorizing the Company to purchase up to 300,000 shares of
its common stock at market prices. In May 2000, the Board of Directors approved
an increase of 120,000 shares, bringing the total authorization to 420,000
shares. The amount and timing of any purchase will depend upon a number of
factors, including the price and availability of the Company's shares and
general market conditions. The Company's purchases of common stock are recorded
as "Treasury Stock" and result in a reduction of "Shareholders' equity". At
December 29, 2001, the Company had repurchased 216,800 shares under such
program.
Note 4 - Inventories
- --------------------
The Company's inventories consist of automotive parts and tires.
Substantially all merchandise inventories are valued under the last-in,
first-out (LIFO) method. Under the first-in, first-out (FIFO) method, these
inventories would have been $15,000 and $47,000 higher at December 29, 2001 and
March 31, 2001, respectively. The FIFO value of inventory approximates the
current replacement cost.
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MONRO MUFFLER BRAKE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 5 - Cash and Equivalents
- -----------------------------
The Company's policy is to invest cash in excess of operating
requirements in income producing investments. Cash equivalents of $751,000 at
March 31, 2001 include money market accounts which have maturities of three
months or less.
Note 6 - Supplemental Disclosure of Cash Flow Information
- ---------------------------------------------------------
Debt borrowings and repayments shown in the Consolidated Statement of
Cash Flows represent gross borrowings and gross repayments during the period.
Under its Revolving Credit Facility, the Company either borrows or repays debt
daily depending on its cash needs.
The following transactions represent noncash investing and financing
activities during the periods indicated:
NINE MONTHS ENDED DECEMBER 29, 2001:
In connection with the sale or disposal of assets, the Company reduced
fixed assets and other current liabilities by $161,000.
In connection with performance-based executive compensation, the
Company recognized compensation expense of $727,000, increased other long-term
liabilities by $208,000 and increased additional paid-in capital by $519,000.
In connection with recording the value of the Company's swap contracts,
other comprehensive income decreased by $964,000, other long-term liabilities
increased by $1,602,000 and the deferred income tax liability was reduced by
$638,000.
NINE MONTHS ENDED DECEMBER 31, 2000:
In connection with the termination of a capital lease, the Company
reduced debt and fixed assets by $114,000 and $50,000, respectively, and
recorded a gain of $64,000.
In connection with the sale or disposal of assets, the Company reduced
fixed assets and other current liabilities by $126,000.
CASH PAID DURING THE PERIOD:
NINE MONTHS ENDED FISCAL DECEMBER
---------------------------------
2001 2000
---- ----
Interest, net $2,915,000 $4,292,000
Income taxes 4,084,000 3,060,000
Note 7 - Reclassifications
- --------------------------
Certain amounts in the Consolidated Statement of Cash Flows have been
reclassified to improve reporting and maintain comparability among the periods
presented.
Note 8 - Other
- --------------
These financial statements should be read in conjunction with the
financial statements and notes thereto included in the Annual Report on Form
10-K (File No. 0-19357), filed by the Company with the Securities and Exchange
Commission on June 28, 2001.
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MONRO MUFFLER BRAKE, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The statements contained in this Form 10-Q which are not historical
facts, including (without limitation) statements made in the Management's
Discussion and Analysis of Financial Condition and Results of Operations, may
contain statements of future expectations and other forward-looking statements
that are subject to important factors that could cause actual results to differ
materially from those in the forward-looking statements, including (without
limitation) product demand, the effect of economic conditions, the impact of
competitive services and pricing, product development, parts supply restraints
or difficulties, industry regulation, the continued availability of capital
resources and financing and other risks set forth or incorporated elsewhere
herein and in the Company's Securities and Exchange Commission filings.
RESULTS OF OPERATIONS
The following table sets forth income statement data of Monro Muffler
Brake, Inc. ("Monro" or the "Company") expressed as a percentage of sales for
the fiscal periods indicated.
FOR THE QUARTER ENDED FOR THE NINE MONTHS ENDED
FISCAL DECEMBER FISCAL DECEMBER
--------------- ---------------
2001 2000 2001 2000
---- ---- ---- ----
Sales 100.0% 100.0% 100.0% 100.0%
Cost of sales, including distribution
and occupancy costs 62.1 61.7 58.4 59.0
------- ------- ------- -------
Gross profit 37.9 38.3 41.6 41.0
Operating, selling, general and
administrative expenses 30.7 30.8 31.4 30.1
------- ------- ------- -------
Operating income 7.2 7.5 10.2 10.9
Interest expense - net 1.6 2.7 1.7 2.6
Other expenses - net .1 .5 .2 .3
------- ------- ------- -------
Income before provision for
income taxes 5.5 4.3 8.3 8.0
Provision for income taxes 2.1 1.7 2.9 3.2
------- ------- ------- -------
Net income 3.4% 2.6% 5.4% 4.8%
======= ======= ======= =======
- 9 -
THIRD QUARTER AND NINE MONTHS ENDED DECEMBER 29, 2001 COMPARED TO
THIRD QUARTER AND NINE MONTHS ENDED DECEMBER 31, 2000.
Sales were $52.4 million for the quarter ended December 29, 2001
compared with $51.8 million in the quarter ended December 31, 2000. The sales
increase of $.7 million, or 1.3%, was due to a comparable store sales increase
of .6%, as well as an increase in sales of $.5 million from stores opened since
the beginning of fiscal 2001.
Sales for the nine months ended December 29, 2001 were $174.3 million
compared with $172.9 million for the same period of the prior year. The sales
increase of $1.4 million, or .8% was due, in part, to an increase in comparable
store sales of .2%, as well as an increase in sales from new stores of $2.0
million. This increase was partially offset by a decrease of $.8 million in
sales from stores closed in fiscal years 2001 and 2002. When adjusted for days,
comparable store sales increased .6% year-to-date.
At December 29, 2001 and December 31, 2000 the Company had 513
company-operated stores.
Gross profit for the quarter ended December 29, 2001 was $19.9 million,
or 37.9% of sales, as compared to $19.8 million, or 38.3% of sales for the
quarter ended December 31, 2000. Gross profit for the nine months ended December
29, 2001 was $72.6 million, or 41.6% of sales, as compared to $70.8 million, or
41.0% of sales for the nine months ended December 31, 2000.
The decrease in gross profit for the quarter ended December 29, 2001 as
a percentage of sales is due to an increase in material costs, primarily
related to an increase in oil prices, as well as an increase related to the
timing of the provision of inventory shrink and LIFO reserves. Outside
purchases also remain a challenge as the Company continues to expand its
service offerings, and with the continuing parts proliferation. These increases
were largely offset by a decrease in distribution and occupancy costs, as well
as a decrease in technician labor due to improved productivity and control.
Operating, selling, general and administrative ("OSG & A") expenses for
the quarter ended December 29, 2001 increased by $.1 million to $16.1 million
from the quarter ended December 31, 2000, and were 30.7% of sales compared to
30.8% in the same quarter of the prior year. For the nine months ended December
29, 2001, these expenses increased by $2.8 million to $54.8 million from the
comparable period of the prior year and were 31.4% of sales compared to 30.1% in
the comparable period of the prior year.
The third quarter decrease in OSG & A expenses as a percent of sales is
primarily due to relatively flat expenses against a comparable store sales
increase.
Net interest expense for the quarter ended December 29, 2001 decreased
by approximately $.6 million compared to the same period in the prior year, and
decreased from 2.7% to 1.6% as a percentage of sales for the same periods. Net
interest expense for the nine months ended December 29, 2001 decreased by
approximately $1.6 million compared to the comparable period in the prior year,
and decreased from 2.6% to 1.7% as a percentage of sales for the same periods.
The weighted average interest rate for the quarter ended December 29, 2001 was
approximately 230 basis points lower than the rate for the quarter ended
December 31, 2000. Additionally, the weighted average debt outstanding decreased
by approximately $14 million, resulting in a decrease in expense between the two
quarters.
Other expense, net, for the quarter ended December 29, 2001 decreased
by $.2 million to $78,000 from the quarter ended December 31, 2000. For the nine
months ended December 29, 2001, other expense, net, decreased by $.1 million to
$.4 million from the nine months ended December 31, 2000. The primary reason for
the decline in fiscal 2002 is a decrease in store closing expense related to
Monro store closures.
The effective tax rate for the quarter ended December 29, 2001 was 38%
of pre-tax income as compared to 39.8% for the quarter ended December 31, 2000.
There has been a reduction in the Company's overall effective state income tax
rate because of the Company's growth in lower-taxing states, especially in
connection with the fiscal year 1999 Speedy acquisition. The Company recorded a
one-time tax benefit of $.4 million in the quarter ended June 30, 2001, which
reduced the tax rate by 640 basis points from the prior year quarter, due to a
reduction in the Company's effective tax rate. This one-time adjustment reduced
the accrual for amounts provided in prior fiscal years. Additionally, the
Company expects this state rate reduction to continue for the entire fiscal year
2002, and accordingly, has reduced the provision for taxes from 39.8% to 38.0%
of pre-tax income for fiscal 2002.
- 10 -
Net income for the quarter ended December 29, 2001 was approximately
$1.8 million as compared to a net income of $1.4 million reported for the
quarter ended December 31, 2000, an increase of 30.2%. For the nine months ended
December 29, 2001, net income of approximately $9.3 million increased 12.5%, due
to the factors discussed above. Earnings per share for the quarter and nine
months ended December 29, 2001 increased 33.3% and 10.8%, respectively.
Interim Period Reporting
The data included in this report are unaudited and are subject to
year-end adjustments; however, in the opinion of management, all known
adjustments (which consist only of normal recurring adjustments) have been made
to present fairly the Company's operating results for the unaudited periods. The
results for interim periods are not necessarily indicative of results to be
expected for the fiscal year.
CAPITAL RESOURCES AND LIQUIDITY
Capital Resources
In fiscal year 2001, the Company's primary capital requirements have
been the funding of its new store expansion program and the upgrading of
facilities and systems in existing stores. For the nine months ended December
29, 2001, the Company spent approximately $6.2 million for equipment and new
store construction. Funds were provided primarily by cash flow from operations.
Management believes that the Company has sufficient resources available
(including cash and equivalents, net cash flow from operations and bank
financing) to expand its business as currently planned.
Liquidity
Concurrent with the closing of the Speedy acquisition in September
1998, the Company obtained a new $135 million secured credit facility ("the
Credit Facility" or "the Facility") from a syndicate of lenders led by The Chase
Manhattan Bank. Approximately $55 million was borrowed under this Facility to
pay the all-cash purchase price, including transaction expenses of approximately
$4 million. In addition, the Company refinanced approximately $35 million of
indebtedness through the new Credit Facility, with the balance of the Facility
available for future working capital needs. More specifically, the new financing
structure consists of a $25 million term loan (of which approximately $9.4
million was outstanding at December 29, 2001), a $75 million Revolving credit
facility (of which approximately $26.9 million was outstanding at December 29,
2001), and synthetic lease (off-balance sheet) financing for a significant
portion of the Speedy real estate, totaling $35 million (of which approximately
$32.4 million was outstanding at December 29, 2001). The loans bear interest at
the prime rate or LIBOR-based rate options tied to the Company's financial
performance. The Company must also pay a facility fee on the unused portion of
the commitment.
The Credit Facility has a five-year term. Interest only is payable
monthly on the Revolving credit and synthetic lease borrowings throughout the
term. In addition to monthly interest payments, the $25 million term loan
requires quarterly principal payments. Principal payments totalling $15.6
million have been paid through December 29, 2001.
The term loan and Revolving credit facility are secured by all accounts
receivable, inventory and other personal property. The Company has also entered
into a negative pledge agreement whereby it is restricted from encumbering real
property, with certain permissible exceptions. The synthetic lease is secured by
the real property to which it relates.
Certain of the Company's stores are financed by mortgages currently
bearing interest at LIBOR plus 100 basis points.
The Company has financed its office/warehouse facility via a 10 year
mortgage with a current balance of $2.1 million, amortizable over 20 years, and
an eight year term loan with a balance of $.2 million.
Certain of the Company's long-term debt agreements require, among other
things, the maintenance of specified current ratios, interest and rent coverage
ratios and amounts of tangible net worth. They also contain restrictions on cash
dividend payments.
The Company enters into interest rate hedge agreements which involve
the exchange of fixed and floating rate interest payments periodically over the
life of the agreement without the exchange of the underlying principal amounts.
The differential to be paid or received is accrued as interest rates change and
is recognized over the life of the agreements as an adjustment to interest
expense.
- 11 -
FINANCIAL ACCOUNTING STANDARDS
On June 29, 2001, the Financial Accounting Standards Board issued
Statements of Financial Accounting Standards No. 141 and 142 ("SFAS 141 and SFAS
142"), "Business Combinations" and "Goodwill and Other Intangible Assets",
respectively. SFAS 141 is effective immediately and SFAS 142 is effective for
fiscal years beginning after December 15, 2001. The Company plans to adopt SFAS
No. 142 effective March 31, 2002. The adoption of SFAS Nos. 141 and 142 is not
expected to materially affect the Company's results of operations or financial
position.
- 12 -
MONRO MUFFLER BRAKE, INC.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
---------------------------------
a. Exhibits
11 - Statement of Computation of Per Share Earnings.
b. Reports on Form 8-K.
No reports on Form 8-K were filed during the quarter ended
December 29, 2001.
- 13 -
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MONRO MUFFLER BRAKE, INC.
DATE: February 12, 2002 By /s/ Robert G. Gross
------------------------------------------
Robert G. Gross
President and Chief Executive Officer
DATE: February 12, 2002 By /s/ Catherine D'Amico
------------------------------------------
Catherine D'Amico
Senior Vice President-Finance, Treasurer
and Chief Financial Officer
- 14 -
EXHIBIT INDEX
Exhibit No. Description Page No.
----------- ----------- --------
11 Statement of Computation of Per Share Earnings 16
- 15 -