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:
Melissa Merrill
Financial Dynamics
(212) 850-5600
FOR IMMEDIATE RELEASE
- ---------------------
MONRO MUFFLER BRAKE, INC. ANNOUNCES RECORD THIRD QUARTER RESULTS
~ Sales Increase 25% ~
~ Net Income Improves 21% ~
ROCHESTER, N.Y. - JANUARY 18, 2005 - MONRO MUFFLER BRAKE, INC. (NASDAQ:
MNRO) announced today record financial results for the third quarter ended
December 25, 2004.
Third quarter sales increased 24.7% to $80.5 million compared to $64.5
million last year. Comparable store sales were up 2.4% due in large part to an
approximate 15% increase in the comparable store maintenance service category,
including a 15% increase in comparable store oil changes, and a 5% increase in
comparable store tire sales. New stores contributed $14.8 million during the
quarter.
Gross margin was 39.6% versus 39.1% in the year-ago period. Gross
margin improved, despite the sales mix shift toward lower margin oil changes and
tires, largely due to the Company's leveraging of its fixed costs. Selling,
general, and administrative expenses, as a percentage of sales, increased
slightly to 31.5% from 31.0% last year, due in large part to higher than
anticipated costs associated with Sarbanes-Oxley requirements. Net income
increased 20.5% to a record $3.7 million, or $0.25 per diluted share, compared
to $3.0 million, or $0.21 per diluted share, in the comparable period last year.
The Company added 14 stores, including five stores acquired from Rice Tire and
seven BJ's locations, and closed two stores during the quarter.
Sales for the nine month period increased 20.7% to a record $256.3
million from $212.3 million in the comparable period last year. Net income
increased 16.5% to a record $17.3 million, or $1.19 per diluted share, compared
to $14.8 million, or $1.02 per diluted share, in the year ago period.
Robert G. Gross, President and Chief Executive Officer, commented,
"During the third quarter, we generated positive same store sales, as well as
net income growth in excess of 20%, despite the fact that consumers continued to
defer purchases of substantial items such as brakes, struts, and exhaust. Our
same store traffic, up approximately 6% in the quarter, continues to increase
and customer loyalty is strong. We believe this means we are well positioned to
benefit when consumers find they can no longer defer essential higher ticket
purchases."
Looking to the balance of the year, while pleased with overall trends
in the business such as a December comparable store sales increase of 5% and a
January month-to-date increase of approximately 5.5%, the Company remains
cautious with respect to macroeconomic factors and their impact on consumers.
Based on year-to-date results and the expectation for an approximate 3% to 5%
comparable store sales increase in the fourth quarter, the Company currently
expects diluted earnings per share for the full year to be near the low to
midpoint of its previously announced range of $1.36 to $1.40, compared to $1.18
per diluted share last year.
Mr. Gross concluded, "Despite continued challenges, we have achieved
double digit growth in both the top and bottom line year-to-date, and we are
very pleased with our overall results. Further, we are encouraged by our solid
position in the marketplace and believe we are rising above the competition
thanks to our dedicated employees, strict operating discipline, a sharp focus on
customer service, a targeted marketing strategy, and the competitive pricing of
oil changes, which has proven to be a key traffic driver."
"In addition, as we look to enhance on our industry leading position,
we continue to view our acquisition strategy as an important component of our
store expansion and growth objectives. This strategy remains on track, as
evidenced by our recent agreement to acquire ten Mr. Tire stores in southern
Maryland. These stores generate approximately $12.5 million in annual sales and
the purchase price of $7.5 million will be paid with $1 million in cash and $6.5
million in Monro common stock. We remain very focused on finding similar
opportunities that will allow us to grow our store base at compelling prices,
further build our market share in key geographic areas and increase
profitability over the short and long term."
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,
Mr. Tire and Tread Quarters Discount Tires. The Company currently operates 612
stores and has 16 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, 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 27, 2004.
MONRO MUFFLER BRAKE, INC.
Financial Highlights
(Unaudited)
(Amounts in thousands, except per share amounts)
Quarter Ended Fiscal December
-----------------------------------
2004 2003 % Change
---------------- --------------- --------
Sales $ 80,522 $ 64,549 24.7%
Cost of sales, including
distribution and occupancy costs 48,659 39,291 23.8
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Gross profit 31,863 25,258 26.2
Operating, selling, general and
administrative expenses 25,371 19,981 27.0
---------------- ---------------
Operating income 6,492 5,277 23.0
Interest expense, net 638 515 23.8
Other income, net (37) (123)
----------------- ----------------
Income before provision for
income taxes 5,891 4,885 20.6
Provision for income taxes 2,239 1,854 20.8
---------------- ---------------
Net income $ 3,652 $ 3,031 20.5
================ ===============
Diluted earnings per common share $ 0.25 $ 0.21 19.0%
================ ===============
Weighted average number of
diluted shares outstanding 14,554 14,612
Number of stores open
(at end of quarter) 611 565
MONRO MUFFLER BRAKE, INC.
Financial Highlights
(Unaudited)
(Amounts in thousands, except per share amounts)
Nine Months Ended Fiscal December
-----------------------------------
2004 2003 % Change
---------------- --------------- -------------
Sales $ 256,290 $ 212,298 20.7%
Cost of sales, including
distribution and occupancy costs 150,048 123,351 21.6
---------------- ---------------
Gross profit 106,242 88,947 19.4
Operating, selling, general and
administrative expenses 76,226 63,127 20.8
---------------- ---------------
Operating income 30,016 25,820 16.3
Interest expense, net 1,812 1,997 (9.3)
Other expense (income), net 303 (123)
---------------- ----------------
Income before provision for
income taxes 27,901 23,946 16.5
Provision for income taxes 10,603 9,099 16.5
---------------- ---------------
Net income $ 17,298 $ 14,847 16.5
================ ===============
Diluted earnings per share $ 1.19 $ 1.02 16.7%
=============== ===============
Weighted average number of
diluted shares outstanding 14,530 14,537
MONRO MUFFLER BRAKE, INC.
Financial Highlights
(Unaudited)
(Dollars in thousands)
December 25, March 27,
2004 2004
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ASSETS
Current assets
Cash $ 879 $ 1,533
Inventories 60,233 54,050
Other current assets 14,922 15,159
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Total current assets 76,034 70,742
Property, plant and equipment, net 162,399 159,716
Other noncurrent assets 35,625 32,332
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Total assets $ 274,058 $ 262,790
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities $ 50,233 $ 42,578
Long-term debt 51,844 68,763
Other long-term liabilities 9,023 7,650
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Total liabilities 111,100 118,991
Total shareholders' equity 162,958 143,799
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Total liabilities and shareholders' equity $ 274,058 $ 262,790
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