Monro, Inc. · NASDAQ:MNRO
Monro — Investor Presentation (July 2013)
23 slides from Monro's investor presentation, July 2013
Slide 1: Nasdaq: MNRO – Updated July 2013
Updated July 2013 Nasdaq: MNRO 1
Slide 2: Forward Looking Information
Forward Looking Information Statements contained in these materials regarding Monro’s expectations with respect to future operations and other information, which can be identified by the use of forward looking terminology, such as “may,” “will,” “expect,” “project,” “anticipate,” “estimate” or “cont
Slide 3: Who We Are
Who We Are 3
Slide 4: Company Overview
Company Overview • Largest chain of Company-operated undercar care facilities in the United States • As of June 29, 2013, the Company operated 935 stores in 22 states 4
Slide 5: Geographic Presence
Geographic Presence Service Tire Stores Stores MAINTAINING DOMINANCE Connecticut 36 IN THE NORTHEASTERN U.S. 16 Delaware 2 1 Illinois 5 Indiana 8 34 5 Kentucky 25 Maine 2 14 26 Maryland 13 62 13 53 Massachusetts 44 9 140 Missouri 22 36 New Hampshire 11 15 12 New Jersey 14 28 New York 129 11 139 Nort
Slide 6: Service Mix
Service Mix FY12 Gross Margin % Brakes and Steering = +15 Maintenance and Exhaust = baseline company margin Tires = -20 FY13 FY13 – Q1 FY14 – Q1 Brakes Exhaust Steering Maintenance* Tires *Includes state inspections, lube, oil, filter, engine cooling service, scheduled maintenance and other. Note: M
Slide 7: Competitive Advantages – Operating Model
Competitive Advantages Operating Model • Company-operated stores – Faster, Better, Cheaper – Centralized purchasing and distribution – Efficient marketing (database mailing, email, direct mail and internet) – Superior customer service • Pricing power and fixed cost leverage – Low cost operator 7
Slide 8: Competitive Advantages – Customer Value Proposition
Competitive Advantages Customer Value Proposition • Monro establishes relationships with customers based on TRUST • Direct marketing to customers fosters repeat business and long-term relationships • Company-operated store model enhances customer experience through: – High standards of customer care
Slide 9: Industry Overview
Industry Overview Monro operates in $158 billion “Do-It-For-Me” segment of $202 billion U.S. automotive aftermarket industry U.S. Automotive Service Bay Population Aftermarket Industry Changes: 1999 – 2012 Total Bays / Mkt Share % Do-It-For-Me: (000’s) 1999 - 74.3% 2012 2008 2009 - 78.0% 353/30.0 33
Slide 10: Vehicle Age
Vehicle Age The rising average age of vehicles may shift consumer spending from new cars to aftermarket parts and maintenance. For about 55% of U.S. drivers, ``the sky is the limit'' for the mileage they plan to put on their primary vehicle, according to an AutoMD.com survey. Longer ownership cycles
Slide 11: Favorable Industry Trends
Favorable Industry Trends Approximately 245 million vehicles on road Increasing age of vehicles (11 years) Number of vehicles 5 years and older increasing Significant average annual miles driven per vehicle Decreasing number of service outlets and bays Increasing complexity of vehicles
Slide 12: Favorable Industry Trends
Favorable Industry Trends Cars and Light Trucks in Service Average Age of Car and Light Truck on the Road Source: APAA Aftermarket Factbook, Lang Report and Analyst estimate. Source: November 2012 Lang Report and 2012 Wall Street Journal and Lang estimate. U.S. Annual Light Vehicle Sales Vehicles pe
Slide 13: EPS Trends
EPS Trends Est. $1.58 to $1.70 ‘99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 % Change 178% 24% 17% 17% 22% 17% 12% (4)% 3% 20% 34% 35% 17% (22%) 20%-29% •Adjusted for three-for-two stock split paid to shareholders of record as of October 21, 2003, September 21, 2007 and December 13
Slide 14: Historical Financials
Historical Financials st st (Dollars in millions except per share data) 1 Quarter 1 Quarter Fiscal Year Fiscal Year Fiscal Year 2014 2013 2013 2012 2011 Sales $206.2 $169.2 $732.0 $686.6 $636.7 Sales Growth (vs. prior year) 21.9% 2.6% 6.6% 7.8% 12.8% EBITDA $ 30.7 $ 26.0 $101.5 $115.5 $101.4 EBITDA
Slide 15: Balance Sheet Highlights
Balance Sheet Highlights Fiscal Y/E Fiscal Y/E June 29, March 30, 2013 2013 Current assets $159,743 $166,410 Property, plant & equipment 270,983 270,858 Other 272,887 274,264 Total Assets $703,613 $711,532 Current liabilities $139,019 $136,399 Capital Lease and Finance Obligations 57,163 58,899 Othe
Slide 16: Growth Strategy
Growth Strategy Increase market share through same store sales growth Acquire competitors cheaply Continue new store openings in existing markets – Approximately six to ten stores per year 16
Slide 17: Acquisitions and Opportunities
Acquisitions and Opportunities Building Tire Store Category Combination of 24 acquisitions in the last 11 years - 434 stores - $520 million revenue Could have up to 1,300 tire stores and 1,300 service stores in our 22 states - Creates market dominance and pricing power - Diversifies risk - Expan
Slide 18: Acquisitions and Opportunities
Acquisitions and Opportunities Autotire Car Care Centers (June 2009) Terry’s Tire Town (October 2011) • 26 tire stores in St. Louis, Missouri • 7 stores in Ohio and Pennsylvania • 2008 sales - $31million • 2010 sales - $9 million • Slightly accretive in fiscal 2012 Midwest Tire (September 2009) • 4
Slide 19: Acquisitions and Opportunities
Acquisitions and Opportunities Tire Barn (November 2012) Curry’s Auto Service (expected August 2013) • 31 Stores in Indiana (27), Tennessee (3) and Illinois (1) • 10 Stores in Virginia (9) and Maryland (1) • 2011 sales - $64 million • 2012 sales - $18 million • Breakeven to slightly accretive in fir
Slide 20: FY14 Earnings Assumptions
FY14 Earnings Assumptions • Earnings estimate for FY14: $1.58 - $1.70 vs $1.32 in FY13 – Q1 – FY14: $.42 vs. $.36 Q1 FY13 – Q2 – FY14: $.41 - $.45 vs. $.36 Q2 FY13 • Comparable Store Sales increase of 1.0% to 3.0%, for FY14; Q2 FY14: 0.0% - 2.0% • Gross Sales approximately $840 - $860 million • Oper
Slide 21: FY14 Other Assumptions
FY14 Other Assumptions • Interest Expense of $7.4 million • $31 million depreciation and amortization • $34 million of Cap-ex – $22 million in maintenance cap-ex – $12 million for new stores • EBITDA approximately $124 million 21
Slide 22: FY14 Cash Flow Priorities
FY14 Cash Flow Priorities Acquisitions Same or contiguous markets Buy right Accretive to earnings in a reasonable timeframe Pay down debt 22
Slide 23: Investment Highlights
Investment Highlights Largest chain of Company-operated undercar care facilities in the U.S. Wide breadth of product and service offerings Superior customer service Favorable industry trends Leading market position in northeast, Great Lakes and mid-Atlantic with a presence in 22 states S