Monro, Inc. · NASDAQ:MNRO
Monro — Investor Presentation (June 2012)
22 slides from Monro's investor presentation, June 2012
Slide 1: Nasdaq: MNRO
Updated June 2012 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 continue or the n
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 May 28, 2012, the Company operated 819 stores in 19 states 4
Slide 5: Geographic Presence
Geographic Presence MAINTAINING DOMINANCE IN THE NORTHEASTERN U.S. By Service/Tire Designation: ‘no 1 Penosyivania, a Toa c Rhode Isiand n Tota an South Carolina 8 = Vermont 4 Thal as of 926/11: BI
Slide 6: Service Mix
Service Mix Gross Margin % FY10 Brakes and Steering = +15 Maintenance and Exhaust = baseline company margin Tires = -15 FY11 FY12 Brakes Exhaust Steering Maintenance* Tires *Includes state inspections, lube, oil, filter, engine cooling service, scheduled maintenance and other. Note: Monro s fiscal y
Slide 7: Competitive Advantages
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
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 – 2010 Total Bays / Mkt Share % Do-It-For-Me: (000 s) 1999 - 74.3% 2010 2008 2009 - 78.0% 350/29.6 338/
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 Weak new car sales 245 million vehicles on road Increasing age of vehicles Number of vehicles age 4 - 12 years old increasing Significant average annual miles driven per vehicle Decreasing number of service outlets and bays Dealer consolidation and closures
Slide 12: Favorable Industry Trends
Favorable Industry Trends Cars and Light Trucks in Service Average Age of Car and Light Truck on the Road Number of Vehicles (in Millions) Age (in years) Source: APAA Aftermarket Factbook and Lang Report. Source: April 2010 Lang Report and 2012 Wall Street Journal. U.S. Annual Light Vehicle Sales Ve
Slide 13: EPS Trends
EPS Trends $1.69 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 % Change (70)% 178% 21% 17% 17% 22% 17% 12% (4)% 3% 20% 34% 35% 17% (2)%–9% •Adjusted for three-for-two stock split paid to shareholders of record as of October 21, 2003, September 21, 2007 and December 13, 2010. •Note: Monro s fiscal yea
Slide 14: Historical Financials
Historical Financials (Dollars in millions except per share data) 4th Quarter 4th Quarter Fiscal Year Fiscal Year Fiscal Year 2012 2011 2012 2011 2010 Sales $171.7 $150.8 $ 686.6 $636.7 $564.6 Sales Growth (vs. prior year) 13.9% 2.4% 7.8% 12.8% 18.6% EBITDA $ 18.6 $20.0 $115.5 $101.4 $ 81.8 EBITDA M
Slide 15: Balance Sheet Highlights
Balance Sheet Highlights Fiscal Y/E Fiscal Y/E March 31, March 26, 2012 2011 Current assets $134,300 $ 128,783 Property, plant & equipment 212,994 200,596 Other 162,798 122,461 Total Assets $510,092 $ 451,840 Current liabilities $109,794 $ 109,440 Long-term debt 51,164 41,990 Other 21,635 20,161 Tot
Slide 16: Growth Strategy
Growth Strategy h Increase market share through same store sales growth h Acquire competitors cheaply h Continue new store openings in existing markets – Approximately six stores per year 16
Slide 17: Acquisitions and Opportunities
Acquisitions and Opportunities Building Tire Store Category h Combination of 18 acquisitions in the last 11 years - 333 stores - $376 million revenue h Could have up to 1,200 tire stores and 1,200 service stores in our 19 states - Creates market dominance and pricing power - Diversifies risk - Expan
Slide 18: Acquisitions and Opportunities
Acquisitions and Opportunities Courthouse Tire (October 2010) Vespia Tire Centers (June 2011) h 3 stores in Fredericksburg, Virginia • 24 stores in New Jersey and Eastern Pennsylvania h 2009 sales $5 million • 2010 Sales - $36 million h $3 million asset purchase • Slightly accretive in fiscal 2012 I
Slide 19: FY13 Earnings Assumptions
FY13 Earnings Assumptions • Earnings estimate for FY13: $1.65 - $1.85 vs $1.69 in FY12 – Q1 – FY13: $.35 - $.40 vs. $.48 Q1 FY12 • Comparable Store Sales increase of 0.0% to 3.0%, adjusted for days for FY13; Q1 FY13: (5)% - (7)% • Gross Sales approximately $750 - $775 million • Operating Margin redu
Slide 20: FY13 Other Assumptions
FY13 Other Assumptions • Interest Expense of $4.6 million • $25 million depreciation and amortization • $25 million of Cap-ex – $19 million in maintenance cap-ex – $5 million for new stores – $1 million for headquarters expansion • EBITDA $120 - 123 million 20
Slide 21: FY13 Cash Flow Priorities
FY13 Cash Flow Priorities hAcquisitions q Same or contiguous markets q Buy right q Accretive to earnings in a reasonable timeframe h Pay down debt 21
Slide 22: Investment Highlights
Investment Highlights h Largest chain of Company-operated undercar care facilities in the United States h Wide breadth of product and service offerings h Superior customer service h Favorable industry trends h Leading market position in northeast and mid-Atlantic with a presence in 19 states h Stron