EXHIBIT 99.1
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
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MONRO MUFFLER BRAKE, INC. ANNOUNCES RECORD Q1 SALES AND EARNINGS
~ COMPARABLE STORE SALES INCREASE 5.9% ~
~ FULLY DILUTED EPS INCREASES TO $0.62 ~
ROCHESTER, N.Y. - JULY 24, 2003 - MONRO MUFFLER BRAKE, INC. (NASDAQ:
MNRO) today announced record sales and earnings for the first quarter ended June
28, 2003.
Sales increased 8.4% to $73.6 million from $67.9 million. The sales
increase was driven in large part by a 5.9% increase in comparable store sales.
Additionally, new stores added $1.9 million to the increase, including $1.5
million from the 10 Frasier Tire Stores acquired in February 2003. The
comparable store sales increase resulted in part from a 36% increase in the
Company's commercial business, a 21% increase in the miscellaneous services
category including an 11% increase in scheduled maintenance services, and an 8%
increase in comparable store tire sales. Comparable store traffic was up
approximately 4%.
Gross margin was 43.8% of sales compared to 44.0% of sales last year
due primarily to increased tire sales which carry a lower gross margin.
- more -
Net income was $5.9 million, or $0.62 per share, compared to $4.0
million, or $0.42 per share, in last year's first quarter. Diluted earnings per
share for the quarter ended June 29, 2002 was net of an $0.11 charge related to
performance-based executive stock options. Excluding this charge, diluted
earnings per share were $0.53 in last year's first quarter.
Robert G. Gross, President and Chief Executive Officer stated, "Our
record results were driven by sustained positive momentum across all aspects of
our business. The catalyst continues to be our focus on consistently delivering
superior customer service, which allows us to build trust and drive store
traffic. To fully capitalize on our strong customer loyalty and increasing store
traffic, we continue to focus on diversifying our revenue stream. For example,
we again experienced significant gains in our scheduled maintenance, tire and
commercial businesses during the quarter, while achieving solid performance in
our core business. Our strong results are also a testament to our company-owned
business model. Not only do company-owned stores allow us to develop and promote
our core company value of customer service, but also provide the economic
benefits of centralized purchasing of key items such as parts, equipment and
information technology."
Mr. Gross continued, "We plan to continue to drive top and bottom line
growth by increasing comparable stores sales and by acquiring businesses that
are both accretive in a timely manner and complement our existing geographic
footprint. Our two new BJ's Wholesale Club locations are performing
significantly ahead of our expectations and we expect to open more locations in
the near future."
"We are confident that the investments and strategic initiatives
currently underway will contribute to short and long-term sustainable growth for
Monro. In fact, we have seen our strong comparable store sales trend continue
into July. As such, we are comfortable tightening our earnings per share
guidance for the full year to $1.74 to $1.80, which compares to diluted earnings
per share of $1.46 last fiscal year. It should be noted that, beginning in the
second quarter, this year's guidance includes increased depreciation expense,
equivalent to $0.03 per share, resulting from the consolidation of the remaining
properties under our synthetic lease. We anticipate diluted earnings per share
for the second quarter will be in the range of $0.59 to $0.61."
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 562 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 29, 2003.
(Tables Follow)
MONRO MUFFLER BRAKE, INC.
Financial Highlights
(Unaudited)
(Dollars in thousands, except per share amounts)
Quarter Ended Fiscal June
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2003 2002 % Change
-------- -------- --------
Sales $ 73,643 $ 67,908 8.4%
Cost of sales, including
distribution and occupancy costs 41,408 38,013 8.9
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Gross profit 32,235 29,895 7.8
Operating, selling, general and
administrative expenses 22,051 22,900 (3.7)
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Operating income 10,184 6,995 45.6
Interest expense, net 593 766 (22.7)
Other expense (income), net 44 (151)
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Income before provision for
income taxes 9,547 6,380 49.6
Provision for income taxes 3,628 2,424 49.7
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Net income $ 5,919 $ 3,956 49.6
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Diluted earnings per common share $ 0.62 $ 0.42 47.6%
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Number of stores open
(at end of quarter) 561 548
Weighted average number of
diluted shares outstanding 9,587 9,389
MONRO MUFFLER BRAKE, INC.
Financial Highlights
(Unaudited)
(Dollars in thousands)
June 28, March 29,
2003 2003
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ASSETS
Current assets
Cash $ 391 $ 69
Inventories 53,061 51,256
Other current assets 13,124 12,552
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Total current assets 66,576 63,877
Property, plant and equipment, net 159,396 132,148
Other noncurrent assets 11,000 11,175
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Total assets $236,972 $207,200
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities $ 45,428 $ 41,997
Long-term debt 54,663 36,183
Other long-term liabilities 5,414 4,628
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Total liabilities 105,505 82,808
Total shareholders' equity 131,467 124,392
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Total liabilities and shareholders' equity $236,972 $207,200
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