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Monro Muffler Brake, Inc. Announces Second Quarter Fiscal 2014 Financial Results



Monro Muffler Brake, Inc. Announces Second Quarter Fiscal 2014 Financial
Results

             ~ Second Quarter Sales Up 16.3% to $205.3 Million ~
  ~ Second Quarter Net Income Up 18.2% to $13.6 Million; EPS of $.42 In Line
                               With Guidance ~
 ~ Signs Definitive Agreements to Acquire 10 Stores Representing Annual Sales
                        of Approximately $15 Million ~
        ~ Narrows Estimated Fiscal 2014 EPS Range to $1.58 to $1.65 ~

ROCHESTER, N.Y., Oct. 24, 2013 (GLOBE NEWSWIRE) -- Monro Muffler Brake, Inc.
(Nasdaq:MNRO) ("Monro" or the "Company"), a leading provider of automotive
undercar repair and tire services, today announced financial results for its
second quarter ended September 28, 2013.

Second Quarter Results

Sales for the second quarter of fiscal 2014 increased 16.3% to $205.3 million
as compared to $176.5 million for the second quarter of fiscal 2013. The total
sales increase for the second quarter of $28.8 million was due to an increase
in sales from new stores, including recently acquired stores of $33.9 million,
partially offset by a decrease in comparable store sales of 2.1%. Comparable
store sales increased approximately 5% for exhaust and 4% for brakes, and were
flat for front end/shocks, while comparable store sales decreased
approximately 2% for maintenance, 4% for alignments, and 6% for tires.

Gross margin increased to 39.8% in the second quarter from 39.6% in the prior
year quarter due to lower material costs and payroll control in comparable
stores. These factors and leverage of fixed costs from higher overall sales
more than offset the sales mix shift to the lower margin tire category related
to recently acquired stores. Total operating expenses were $57.8 million, or
28.2% of sales, as compared with $50.1 million, or 28.4% of sales, for the
same period of the prior year.

Operating income for the quarter increased 21.2% to $23.9 million from $19.7
million in the second quarter of fiscal 2013. Interest expense was $2.0
million as compared to $1.4 million in the second quarter of fiscal 2013. 

Net income for the second quarter increased 18.2% to $13.6 million from $11.5
million in the prior year period. Diluted earnings per share for the quarter
increased 16.7% to $.42, as compared to diluted earnings per share of $.36 in
the second quarter of fiscal 2013, and were within the Company's estimated
range of $.41 to $.45. Net income for the second quarter reflects an effective
tax rate of 38.1% as compared with 37.6% for the prior year period.

The Company added 12 locations and closed six locations during the quarter,
ending the quarter with 940 stores.

John Van Heel, President and Chief Executive Officer stated, "Our results in
the second quarter indicate that customers remain conservative in their
spending. However, they continue to turn to Monro for purchases that can no
longer be delayed as well as to perform basic maintenance on their vehicles.
While we were disappointed that our tire sales remained weak during the second
quarter, we were encouraged by a recovery in our service business, with
comparable store sales in exhaust and brakes both up more than 4%
year-over-year. We were also pleased to see continuing strength in comparable
store oil changes, up approximately 2% year-over-year. Driven by improvement
in our margins and the continued outperformance of our recent acquisitions, we
were able to deliver bottom line results within our expected range. We remain
confident in our ability to further increase our market share and deliver
strong overall sales and earnings growth regardless of the economic or
operating environment, by leveraging our strong business model and pursuing
our disciplined acquisition strategy."

First Six Month Results

For the six-month period, sales increased 19.0% to $411.5 million from $345.7
million in the same period of the prior year. Comparable store sales decreased
.5%. Net income for the first six months of fiscal 2014 increased 17.4% to
$27.2 million, or $.84 per diluted share, as compared with $23.2 million, or
$.72 per diluted share in the comparable period of fiscal 2013. 

Completed Acquisition and Definitive Acquisition Agreements

On August 18, 2013, Monro Muffler Brake completed the acquisition of 10
Curry's Auto Service stores located in the Washington D.C. metropolitan area,
enabling the Company to fill in an existing market. Annual sales for these
stores are approximately $18 million, comprised of approximately 80% auto
service and 20% tires. In addition, the Company announced today that it has
signed definitive agreements to acquire 10 stores in Delaware, Maryland, and
Kentucky. Annual sales for these 10 stores are approximately $15 million and
are approximately 55% tires and 45% service. These locations will enable the
Company to fill in existing markets and leverage the Company's existing Mr.
Tire and Towery's Tire brands, in these respective markets. The Company plans
to retain store-level employees and the closings are expected to occur in late
November 2013.

Company Outlook

Based on current visibility, business and economic trends, and the recent and
pending acquisitions, the Company anticipates the change in fiscal 2014
comparable store sales to be in the range of minus 1% to 0% and is narrowing
its estimated fiscal 2014 diluted earnings per share to a range of $1.58 to
$1.65, from the prior range of $1.58 to $1.70. This compares to $1.32 diluted
earnings per share in fiscal 2013. The estimate is based on 32.6 million
weighted average diluted shares outstanding. The Company now expects its sales
for the year to be in the range of $830 to $845 million.

For the third quarter of fiscal 2014, the Company anticipates a decline in
comparable store sales in the range of 1% to 3%. The Company expects diluted
earnings per share for the third quarter to be between $.41 and $.46, as
compared to $.35 for the third quarter of fiscal 2013. 

Mr. Van Heel concluded, "Our near- and long-term outlook remain the same as we
noted earlier in the year. Our long-term view of the industry and our business
remains positive, although trends-to-date in the third quarter have been
challenging, with month-to-date comparable store sales through October 22^nd
down 2.8%, due primarily to weak tire sales. We expect that near-term trends
will remain somewhat volatile as the economic environment continues to
influence consumer purchasing behavior. Our outlook for the remainder of the
year reflects our year-to-date sales run rate, benefits from our improving
margins and cost control, and the contribution from our recent
acquisitions. However, we continue to believe that sales, particularly of
tires, should benefit in the second half of the year with more normalized
weather patterns throughout our markets following two consecutive years of
warm winters and associated customer deferrals, although we have not
incorporated this potential upside into our outlook. As we have previously
noted, we will actively manage our business in the current environment, with a
focus on driving top-line growth, while controlling costs and gaining greater
economies of scale through acquisitions.  On a combined basis, the
acquisitions we have completed and announced to date in fiscal 2014 represent
nearly 5% annualized sales growth, and we are encouraged by the opportunities
for additional attractive acquisitions by our fiscal year-end. We will
continue to leverage our strong business model, and we are confident that our
long-term strategic plan will enable us to continue expanding market share and
deliver shareholder value regardless of the economic or operating
environment."

November Investment Conferences

Monro Muffler Brake also announced today that the Company's management will be
presenting at several investor conferences in November. John Van Heel,
President and Chief Executive Officer, will present at the Gabelli Conference
in Las Vegas on Tuesday, November 5, 2013 at 6:15 p.m. ET. Robert Gross,
Executive Chairman, will present at Goldman Sachs' SMID Cap Growth Conference
in New York on Thursday, November 14, 2013 at 12:40 p.m. ET and the IDEAS
Conference in Dallas on Thursday, November 21, 2013 at 10:20 a.m. ET. Live
webcasts of the presentations will be available via the Investor Relations
section of the Company's website (www.monro.com) and each will be archived for
two weeks. 

Earnings Conference Call and Webcast

The Company will host a conference call and audio webcast on Thursday, October
24, 2013 at 11:00 a.m. Eastern Time. The conference call may be accessed by
dialing 1-888-500-6950 and using the required pass code 7816091. A replay will
be available approximately one hour after the recording through Thursday,
November 7, 2013 and can be accessed by dialing 1-877-870-5176. 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 November 7, 2013.

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, Tread Quarters Discount Tires,
Autotire, Tire Warehouse, Tire Barn and Towery's Tire and Auto Care. The
Company currently operates 941 stores in New York, Pennsylvania, Ohio,
Connecticut, Massachusetts, West Virginia, District of Columbia, Virginia,
Maryland, Vermont, New Hampshire, New Jersey, North Carolina, South Carolina,
Indiana, Rhode Island, Delaware, Maine, Illinois, Missouri, Tennessee,
Kentucky and Wisconsin. 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, seasonality, 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 Company's annual report on Form 10-K for the fiscal
year ended March 30, 2013.

 
 
MONRO MUFFLER BRAKE, INC.
Financial Highlights
(Unaudited)
(Dollars and share counts in thousands)
 
                                                Quarter Ended Fiscal   
                                                September
                                                2013      2012        % Change
                                                                       
Sales                                           $ 205,321  $ 176,475  16.3%
                                                                       
Cost of sales, including distribution and       123,573    106,624    15.9%
occupancy costs
                                                                       
Gross profit                                    81,748     69,851     17.0%
                                                                       
Operating, selling, general and administrative  57,837     50,126     15.4%
expenses
                                                                       
Operating income                                23,911     19,725     21.2%
                                                                       
Interest expense, net                           2,048      1,370      49.5%
                                                                       
Other income, net                               (179)      (139)      28.7%
                                                                       
Income before provision for income taxes        22,042     18,494     19.2%
                                                                       
Provision for income taxes                      8,392      6,946      20.8%
                                                                       
Net income                                      $ 13,650   $ 11,548   18.2%
                                                                       
Diluted earnings per share:                     $ .42     $ .36       16.7%
                                                                       
Weighted average number of diluted shares       32,553     32,206      
outstanding
                                                                       
Number of stores open (at end of quarter)       940        853         

 
 
MONRO MUFFLER BRAKE, INC.
Financial Highlights
(Unaudited)
(Dollars and share counts in thousands)
 
                                              Six Months Ended Fiscal  
                                              September
                                              2013       2012         % Change
                                                                       
Sales                                         $ 411,492   $ 345,650   19.0%
                                                                       
Cost of sales, including distribution and     250,866     207,687     20.8%
occupancy costs
                                                                       
Gross profit                                   160,626    137,963     16.4%
                                                                       
Operating, selling, general and               113,607     98,550      15.3%
administrative expenses
                                                                       
Operating income                              47,019      39,413      19.3%
                                                                       
Interest expense, net                          3,858      2,668       44.6%
                                                                       
Other income, net                             (231)       (192)       20.6%
                                                                       
Income before provision for income taxes      43,392      36,937      17.5%
                                                                       
Provision for income taxes                    16,171      13,752      17.6%
                                                                       
Net income                                    $ 27,221    $ 23,185    17.4%
                                                                       
Diluted earnings per share                    $ .84      $ .72        16.7%
                                                                       
Weighted average number of diluted shares     32,523      32,215       
outstanding

 
 
MONRO MUFFLER BRAKE, INC.
Financial Highlights
(Unaudited)
(Dollars in thousands)
                                                          
                                           September 28, March 30,
                                           2013          2013 
                                                          
Current Assets                                            
                                                          
Cash                                       $ 2,067       $ 1,463 
                                                          
Inventories                                120,827        118,210 
                                                          
Other current assets                       46,967         46,737 
                                                          
Total current assets                       169,861        166,410 
                                                          
Property, plant and equipment, net         274,201        270,858 
                                                          
Other non-current assets                   290,300        274,264 
                                                          
Total assets                               $ 734,362     $ 711,532 
                                                          
Liabilities and Shareholders' Equity                      
                                                          
Current liabilities                        $ 139,179     $ 136,399 
                                                          
Capital leases and financing obligations   59,887         58,899 
                                                          
Other long-term debt                       119,368        127,847 
                                                          
Other long-term liabilities                24,747         23,345 
                                                          
Total liabilities                          343,181        346,490 
                                                          
Total shareholders' equity                 391,181        365,042 
                                                          
Total liabilities and shareholders' equity $ 734,362     $ 711,532 

CONTACT: John Van Heel
         Chief Executive Officer
         (585) 647-6400
        
         Robert Gross
         Executive Chairman
         (585) 647-6400
        
         Catherine D'Amico
         Executive Vice President - Finance
         Chief Financial Officer
         (585) 647-6400
        
         Investors: Jennifer Milan
         Media: Kelly Whitten
         FTI Consulting
         (212) 850-5600
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