EX-99.1 2 dex991.htm PRESS RELEASE, DATED JANUARY 25, 2011

Press Release, dated January 25, 2011

Exhibit 99.1

CONTACT: Robert Gross

Chairman and Chief Executive Officer

(585) 647-6400

Catherine D’Amico

Executive Vice President – Finance

Chief Financial Officer

(585) 647-6400

Investors: Jessica Greenberger

Media: Samantha Cohen

FD

(212) 850-5600

FOR IMMEDIATE RELEASE

MONRO MUFFLER BRAKE, INC. ANNOUNCES RECORD THIRD QUARTER

FISCAL 2011 FINANCIAL RESULTS

~ Third Quarter EPS Increased 40.0% to $.35, Above Previously Forecasted Range of $.29 - $.33 ~

~ Third Quarter Comparable Store Sales Increase 5.4% ~

~ Fourth Quarter Fiscal 2011 Estimated EPS Range of $.22 to $.26 versus $.19 Last Year ~

~ Increase Estimated Fiscal 2011 EPS Range to $1.41 to $1.45 from $1.33 to $1.37~

ROCHESTER, N.Y. – January 25, 2011 – Monro Muffler Brake, Inc. (Nasdaq: MNRO), a leading provider of automotive undercar repair and tire services, today announced record financial results for its third quarter ended December 25, 2010. Due to the Company’s three-for-two stock split which was effective as of December 23, 2010, per share data for all periods is presented on a split adjusted basis.

Third Quarter Results

Sales for the third quarter of fiscal 2011 increased 8.4% to a record $165.5 million compared to $152.7 million for the third quarter of fiscal 2010. Sales growth was driven by strong in-store sales execution, as well as recent acquisitions. Comparable store sales increased 5.4% on top of a 7.2% increase last year. Comparable store sales increased approximately 8% for tires, 7% for shocks, 6% for maintenance services and 2% for brakes, with exhaust flat and alignments down slightly as compared to the third quarter last year.

Gross margin increased to 39.1% in the third quarter from 38.3% in the prior year quarter as a result of the implementation of price increases, the leveraging of distribution and occupancy costs against higher sales, increased vendor rebates and improved labor productivity. Total operating expenses were $46.1 million, or 27.8% of sales, compared with $44.3 million, or 29.0% of sales, for the same period of the prior year. The reduction in operating expenses as a percent of sales is largely due to leveraging of these costs against the significant increase in sales, combined with the impact of cost control on discretionary expenses.

Operating income for the quarter increased 31.0% to $18.7 million from $14.3 million in the third quarter of fiscal 2010. Interest expense was $1.2 million as compared to $1.0 million in the third quarter of fiscal 2010.

Net income for the third quarter increased 39.9% to a record $11.1 million from $7.9 million in the prior year period. Diluted earnings per share for the quarter increased 40.0% to $.35, as compared to diluted earnings per share of $.25 in the third quarter of fiscal 2010, and exceeded the Company’s previously estimated range of $.29 to $.33. Net income for the third quarter reflects an effective tax rate of 38.3% as compared with 40.7% for the prior year period.

The Company separately opened four locations and closed four other locations during the quarter, ending the third quarter of fiscal 2011 with 783 stores.

First Nine Month Results

For the nine-month period, net sales increased 16.4% to a record $485.9 million from $417.4 million in the same period of the prior year. Comparable store sales for the nine months were up 5.7%. Net income for the first nine months of fiscal 2011 increased 37.6% to a record $37.6 million, or $1.18 per diluted share, compared with $27.3 million, or $.89 per diluted share in the comparable period of fiscal 2010.

Robert G. Gross, Chairman and Chief Executive Officer stated, “We are very pleased that we were able to sustain our strong momentum into the second half of fiscal 2011. Our record top- and bottom-line results in the third quarter demonstrate our ongoing ability to leverage our increased scale, capitalize on favorable macroeconomic conditions that continue to drive our business, and gain market share. Importantly, our strong value proposition and reputation as a trusted service provider continue to resonate with our customers and we continue to see consumers choosing Monro to help them maintain

older vehicles for a longer period of time. As a result, we once again achieved a same store traffic increase of more than 5% and generated a solid performance across most of our major service categories during the third quarter.”

Company Outlook

Based on current visibility and business and economic trends, the Company anticipates fourth quarter comparable store sales growth in the range of 2% to 4% on top of an 8% increase last year. The Company expects diluted earnings per share for the fourth quarter to be between $.22 and $.26, compared to $.19 for the fourth quarter of fiscal 2010.

For fiscal 2011, the Company is increasing its expected sales range for the year to $635 million to $645 million, from $625 million to $640 million. The Company is narrowing its estimated fiscal 2011 comparable store sales growth to a range of 4.5% to 5.5%, from 4% to 6%. The Company is also increasing its estimated fiscal 2011 diluted earnings per share to a range of $1.41 to $1.45, from $1.33 to $1.37, compared to $1.07 last year. The estimate is based on 32 million weighted average shares outstanding.

Mr. Gross concluded, “Overall, we are pleased with our performance through the first nine months of the year. The macroeconomic drivers of our results over the past few years are still in place and support our positive outlook. Our recent acquisitions are outperforming expectations and we anticipate further expansion of our market share through additional fairly-priced, opportunistic acquisitions in our existing markets. With our sales and earnings outlook for fiscal 2011, we are on track to achieve our tenth consecutive year of comparable store sales increases and to generate compound annual earnings growth of approximately 30% over the last three years.”

Earnings Conference Call and Webcast

The Company will host a conference call and audio webcast on Tuesday, January 25, 2011 at 11:00 a.m. Eastern Time. The conference call may be accessed by dialing 877-874-1589 and using the required pass code 4414758. A replay will be available approximately one hour after the recording through Tuesday, February 8, 2011, and can be accessed by dialing 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 February 8, 2011.

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 and Tire Warehouse. The Company currently operates 783 stores 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, Illinois and Missouri. Monro’s stores provide a full range of services for brake systems, steering and suspension systems, tires, exhaust systems and many vehicle maintenance services.

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MONRO MUFFLER BRAKE, INC.

Financial Highlights

(Unaudited)

(Dollars and share counts in thousands)

		Quarter Ended Fiscal December								% Change
		2010				2009
Sales		$	165,528			$	152,729				8.4	%
Cost of sales, including distribution and occupancy costs			100,812				94,171				7.1
Gross profit			64,716				58,558				10.5
Operating, selling, general and administrative expenses			45,365				43,531				4.2
Intangible amortization			500				374				33.8
Loss on disposal of assets			185				402				(53.9	)
Total operating expenses			46,050				44,307				3.9
Operating income			18,666				14,251				31.0
Interest expense, net			1,183				998				18.6
Other income, net			(427	)			(71	)
Income before provision for income taxes			17,910				13,324				34.4
Provision for income taxes			6,852				5,417				26.5
Net income		$	11,058			$	7,907				39.9
Diluted earnings per share		$	.35			$	.25				40.0	%
Weighted average number of diluted shares outstanding			31,915				31,169
Number of stores open (at end of quarter)			783				780

MONRO MUFFLER BRAKE, INC.

Financial Highlights

(Unaudited)

(Dollars and share counts in thousands)

		Nine Months Ended Fiscal December								% Change
		2010				2009
Sales		$	485,870			$	417,408				16.4	%
Cost of sales, including distribution and occupancy costs			288,787				243,588				18.6
Gross profit			197,083				173,820				13.4
Operating, selling, general and administrative expenses			131,564				123,836				6.2
Intangible amortization			1,091				705				54.8
Loss on disposal of assets			436				522				(16.5	)
Total operating expenses			133,091				125,063				6.4
Operating income			63,992				48,757				31.2
Interest expense, net			3,863				4,337				(10.9	)
Other income, net			(567	)			(189	)
Income before provision for income taxes			60,696				44,609				36.1
Provision for income taxes			23,103				17,289				33.6
Net income		$	37,593			$	27,320				37.6
Diluted earnings per share		$	1.18			$	.89				32.6	%
Weighted average number of diluted shares outstanding			31,747				30,863

MONRO MUFFLER BRAKE, INC.

Financial Highlights

(Unaudited)

(Dollars in thousands)

		December 25, 2010				March 27, 2010
Current assets
Cash		$	2,041			$	11,180
Inventories			95,619				85,817
Other current assets			27,981				27,095
Total current assets			125,641				124,092
Property, plant and equipment, net			198,557				202,746
Other noncurrent assets			123,099				117,305
Total assets		$	447,297			$	444,143
Liabilities and Shareholders’ Equity
Current liabilities		$	101,042			$	99,377
Long-term debt			54,114				96,427
Other long term liabilities			19,258				15,669
Total liabilities			174,414				211,473
Total shareholders’ equity			272,883				232,670
Total liabilities and shareholders’ equity		$	447,297			$	444,143