ROCHESTER, N.Y. (July 30, 2002)—Monro Muffler Brake Inc. reported record sales and earnings for the quarter ended June 29, as the recently acquired Kimmel Automotive stores in Maryland and Virginia “exceeded our expectations,” according to Robert G. Gross, president and CEO.
Sales for the firm's fiscal 2003 first quarter were up 10.6 percent to $67.9 million, with the gain attributable entirely to new stores (primarily the 34 Kimmel stores), Monro said. Net income of $3.9 million was unchanged from a year ago.
Monro had anticipated the integration of Kimmel would have a negative effect on first-quarter earnings but “due to the effort and teamwork put forth by our new Kimmel associates and existing members of our organization,…Kimmel retail stores posted a 5.3-percent comparable store sales increase,” Mr. Gross said.
“Additionally, the acquisition was accretive to earnings this quarter,” he said. “We expect to see Kimmel's margins continue to improve as they benefit further from Monro's purchasing power.”
In addition, Monro sold Kimmel's two commercial outlets and retread plant during the quarter (see related story), and bought out the preferred Kimmel shareholders at a discount, effectively reducing the acquisition price of the retained retail store operations. Monro said earlier that the Kimmel acquistion was worth $9 million—$6 million in cash and the assumption of $3 million in debt.
Monro Muffler Brake operates 548 automotive undercar repair and tire service stores in the U.S., operating Monro Muffler Brake and Service, Speedy Auto Service by Monro, Kimmel Tires — Auto Service and Tread Quarters Discount Tires. Stores are located throughout 17 New England, Easteran Seaboard and Midwest states. Monro's stores provide a full range of services for exhaust systems, brake systems, steering and suspension systems, tires and many vehicle maintenance services.