-- Total Sales Increase 7.0% to Record $119.9 Million --
-- Comparable Store Sales Increase 4.5% --
-- Second Quarter 2009 EPS up 31% to Record $.38 --
-- Company Raises Full Year 2009 Estimated EPS Range to $1.14 to $1.19 --
ROCHESTER, N.Y., Oct. 21, 2008 (GLOBE NEWSWIRE) -- Monro Muffler Brake, Inc. (Nasdaq:MNRO), a leading provider of automotive undercar repair and tire services, today announced record financial results for its fiscal 2009 second quarter ended September 27, 2008.
Second Quarter Results
Sales for the second quarter of fiscal 2009 increased 7.0% to a record $119.9 million compared to $112.0 million for the second quarter of fiscal 2008. Sales were driven largely by strong in-store sales execution and continued effective advertising campaigns. Comparable store sales increased 4.5% and were at the high end of the Company's previously estimated range of 3% to 5%. Comparable store sales for the second quarter of fiscal 2009 include a comparable store sales increase of 6.6% for the former ProCare stores. For specific product categories, comparable store sales increased approximately 6% for brakes, 6% for maintenance services, 7% for alignments and 4% for tires.
The total sales for the quarter included an increase in sales from new stores of $4.0 million. The 19 former Craven and Valley Forge stores acquired in July 2007 and the seven former Broad Elm group stores acquired in January 2008 contributed $3.3 million of the increase. The total sales for these acquired stores were $6.8 million in the second quarter of fiscal 2009 as compared to $3.5 million in the prior year second quarter.
Gross margin was 42.0% in the second quarter compared to 40.6% in the prior year quarter and was driven primarily by price increases that were implemented in response to increased raw material costs, improved labor productivity and leveraging of fixed occupancy costs included in cost of sales. Total operating expenses were $36.6 million, or 30.5% of sales, compared with 30.4% of sales for the same period of the prior year. For the second quarters of fiscal 2009 and 2008, total operating expenses include amounts that were historically included in Other Income and Expense, primarily related to gains and losses on property disposals, and amortization expense.
Net income for the second quarter was a record $7.7 million as compared to $6.5 million for the prior year period. Diluted earnings per share for the quarter were a record $.38 and were at the high end of the Company's previously expected range. This compares to diluted earnings per share of $.29 in the second quarter of fiscal 2008.
The Company closed four locations during the quarter, ending the second quarter of fiscal 2009 with 709 stores.
First Six Month Results
For the six-month period, net sales increased 9.4% to a record $240.3 million from $219.7 million in the same period of the prior year. Net income for the first six months of fiscal 2009 was a record $15.5 million, or $.77 per diluted share, compared with $14.7 million, or $.64 per share in the comparable period of fiscal 2008.
Robert G. Gross, Chairman and Chief Executive Officer stated, "We are pleased to have delivered another strong quarterly performance in which our solid sales execution enabled us to increase our market share and drive continued growth in sales and earnings. We are encouraged by the positive traction that our business has sustained over the past seven months despite the macro conditions that have been challenging for Monro and many of our competitors. Moreover, we are gratified that our customers continue to return to us as their trusted service provider as tough economic conditions have in many cases caused them to extend the lives of their vehicles, thereby requiring more frequent and larger repairs."
Company Outlook
Based on year-to-date performance and current business trends, the Company anticipates third quarter comparable store sales growth to be in the range of 2% to 4% and diluted earnings per share for the third quarter to be in the range of $.27 to $.29, compared to $.25 for the third quarter of fiscal 2008.
For fiscal 2009, the Company now anticipates sales in the range of $460 million to $465 million and comparable store sales growth of 3% to 4%. The Company has increased its expected full year diluted earnings per share to a range of $1.14 to $1.19, compared to its previously expected range of $1.10 to $1.18. The estimates are based on 20.2 million weighted average shares outstanding and exclude the impact of any potential acquisitions.
Mr. Gross concluded, "We are encouraged by our solid performance for the first half of our fiscal year and are pleased that our business has continued to perform well into the third quarter, as comparable store sales for October are up approximately 4% as of last weekend, which should guarantee our eighth straight year of comparable store sales gains. We attribute much of our success to date to our low cost business model and to our value-added services, which have been especially appreciated by our consumers during these difficult economic times. In addition, certain macro trends are working in our favor, such as the decrease in new car purchases and the tightening of credit markets for auto loans. However, we recognize that our business is largely tied to overall consumer confidence, and therefore remain cautiously optimistic about our prospects for the rest of the year. Finally, on the acquisition front, we are moving forward on a mid-sized deal and would expect to announce it by the end of this quarter."
Webcasts and Earnings Conference Call
The Company will host a conference call and audio webcast, today, October 21, 2008, at 11:00 a.m. Eastern Time. The conference call may be accessed by dialing 800-762-8795 and using the required pass code 3928109. A replay will be available approximately one hour after the recording through Tuesday, October 28 2008, and can be accessed by dialing 800-406-7325. 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 October 28, 2008.
The Company also announced that it will participate in the Gabelli Auto Aftermarket Conference on November 4, 2008 in Las Vegas, NV at 4:30 p.m. PDT. The presentation and webcast for the aforementioned conference can be accessed via the Company's website on www.monro.com under the Investor Info link.
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 709 stores and has 14 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 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
September
----------------------
2008 2007 % Change
--------- --------- --------
Sales $ 119,912 $ 112,043 7.0%
Cost of sales, including
distribution and occupancy costs 69,511 66,505 4.5
--------- ---------
Gross profit 50,401 45,538 10.7
--------- ---------
Operating, selling, general and
administrative expenses 36,786 33,805 8.8
Intangible amortization 133 141 (5.6)
(Gain) loss on disposal of assets (286) 101 --
--------- ---------
Total operating expenses 36,633 34,047 7.6
--------- ---------
Operating income 13,768 11,491 19.8
Interest expense, net 1,592 1,255 26.9
Other income, net (188) (155) 21.2
--------- ---------
Income before provision for
income taxes 12,364 10,391 19.0
Provision for income taxes 4,692 3,890 20.6
--------- ---------
Net income $ 7,672 $ 6,501 18.0
========= =========
Diluted earnings per share $ .38 $ .29 31.0%
========= =========
Weighted average number of
diluted shares outstanding 20,230 22,791
Number of stores open
(at end of quarter) 709 714
MONRO MUFFLER BRAKE, INC.
Financial Highlights
(Unaudited)
(Dollars and share counts in thousands)
Six Months Ended Fiscal
September
----------------------
2008 2007 % Change
--------- --------- --------
Sales $ 240,281 $ 219,664 9.4%
Cost of sales, including
distribution and occupancy costs 138,991 127,449 9.1
--------- ---------
Gross profit 101,290 92,215 9.8
--------- ---------
Operating, selling, general and
administrative expenses 73,638 66,489 10.8
Intangible amortization 256 263 (2.8)
(Gain) loss on disposal of assets (319) 155
--------- ---------
Total operating expenses 73,575 66,907 10.0
--------- ---------
Operating income 27,715 25,308 9.5
Interest expense, net 3,112 2,444 27.3
Other income, net (260) (571) (54.4)
--------- ---------
Income before provision for
income taxes 24,863 23,435 6.1
Provision for income taxes 9,397 8,751 7.4
--------- ---------
Net income $ 15,466 $ 14,684 5.3
========= =========
Diluted earnings per share $ .77 $ .64 20.3%
========= =========
Weighted average number of
diluted shares outstanding 20,159 22,854
MONRO MUFFLER BRAKE, INC.
Financial Highlights
(Unaudited)
(Dollars in thousands)
Sept. 27, March 29,
2008 2008
--------- ---------
Current assets
Cash $ 1,677 $ 2,108
Inventories 69,954 66,183
Other current assets 25,594 24,582
--------- ---------
Total current assets 97,225 92,873
Property, plant and equipment, net 180,911 184,184
Other noncurrent assets 93,427 93,412
--------- ---------
Total assets $ 371,563 $ 370,469
========= =========
Liabilities and Shareholders' Equity
Current liabilities $ 68,569 $ 58,311
Long-term debt 99,250 122,585
Other long term liabilities 13,529 14,725
--------- ---------
Total liabilities 181,348 195,621
Total shareholders' equity 190,215 174,848
--------- ---------
Total liabilities and shareholders' equity $ 371,563 $ 370,469
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