Despite a weak economy during the past year, fiscal 2002 was a banner year for Monro Muffler Brake Inc., which posted record results for its fourth quarter and year ended March 30.
The auto repair chain, which has 514 company-operated stores in 17 Atlantic Seaboard and Midwestern states, saw 35.3-percent and 15.9-percent increases in net income for the fourth quarter and year, respectively, compared with the previous year. That store count includes approximately 110 Speedy Muffler King shops the company acquired in 1998.
Rochester-based Monro reported that sales for the 12 months ended March 30 increased 0.9 percent to $224.9 million from $223 million in the prior year period.
Comparable store sales grew by 0.3 percent for the year and were up 0.6 percent when adjusted for days, it said. Net income for the year increased to $11.2 million, vs. $9.7 million for fiscal 2001.
Sales for the fiscal 2002 fourth quarter were $50.5 million, compared with $50.1 million for the fourth quarter ended March 31, 2001. Comparable store sales increased 0.7 percent, Monro said, and new store sales rose approximately $0.2 million. Net income for the fiscal 2002 fourth quarter increased to $1.9 million as compared to $1.4 million for the previous year's period. During the quarter, the company opened one new store.
Robert G. Gross, Monro's president and CEO, said the company's record sales, record net income and record profits per share came ``in spite of a weak economic environment and conservative consumer spending.''
``We continue to maintain our top-line, while driving store traffic through a variety of programs including a solid 22-percent increase in our oil change business, a strong 55-percent increase in scheduled maintenance services, as well as a 9-percent increase in our commercial/fleet business,'' he said. ``All of this translated into an average per-store traffic increase of approximately 9 percent for the quarter over last year's fourth quarter.''
Several strategic initiatives were successfully executed during fiscal 2002, Mr. Gross continued, that were ``aimed at fueling top-line growth, including broadening our range of product and service offerings, employee incentive programs, differentiated marketing programs and advanced point-of-sale systems in all Monro and Speedy stores.''
He said the company is ``very encouraged'' by its April 1 acquisition of Baltimore-based Kimmel Automotive Inc. and already has begun realizing some of the synergies of that transaction.
``Looking ahead, we remain optimistic about our near-term and long-term prospects,'' Mr. Gross said. ``We are committed to pursuing other attractive acquisition candidates.''
On the heels of its initiatives, coupled with the Kimmel acquisition, he said the company is confident it will continue to experience positive earnings growth throughout fiscal 2003. ``While recent business conditions have been somewhat challenging, we expect first- quarter earnings per share to be $0.34 to $0.36, after the final $0.11 charge for vested performance-based stock options awarded under my employment agreement with the company. Before this one-time charge, we expect to grow earnings between 15 and 20 percent again this year.''
The purchase of Kimmel gave Monro 34 retail stores in Maryland and Virginia that in 2001 accounted for almost 77 percent of Kimmel's overall sales of $29.5 million. The Kimmel deal was expected to expand Monro's annual sales by about 10 percent.
Monro's automotive undercar repair and tire business in the U.S. operates under the brand names Monro Muffler Brake and Service, Speedy Auto Service by Monro, Kimmel Tires-Auto Service, and Tread Quarters Discount Tires. Overall, the company operates 550 stores and has 19 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. Its outlets provide a full range of services for exhaust systems, brake systems, steering and suspension systems and a number of vehicle maintenance services.
Brakes account for Monro's biggest ticket, at 34 percent of sales, followed by mufflers and exhausts at 26 percent, and steering, suspension and alignment work at 16 percent. Tires-the chain handles the Goodyear and Firestone brands-had represented about 10 percent of Monro's sales prior to the Kimmel buyout, while Kimmel derived nearly 60 percent of its retail sales from tires and related services.
Meanwhile, Monro also announced several changes to its board involving three long-time directors with more than a century of combined service to the company.
Charles August, 82, who founded Monro in 1957, has been appointed director emeritus and has resigned as an active director, effective May 13.
Burton August, 86, a director since 1969, will not seek reelection when his term ends in August 2002, Monro said.
Jack Gallagher, 64, a board member since 1987, resigned his seat effective May 13. He served as CEO of the chain from 1987 until 1995, growing the company to about 250 stores and taking it public.
The company also said Francis R. Strawbridge, former chairman of Strawbridge & Clothier, a general merchandise retailer, has been named to the board, which has decreased from 10 members to eight.