MONRO, INC. [MNRO] Filings

10-Q 1 mnro-20240629x10q.htm 10-Q mnro-20240629x10q

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

____________________________________________________________

FORM 10-Q

____________________________________________________________

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 29, 2024

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____________ to _____________

Commission File Number: 0-19357

____________________________________________________________

Monro, Inc.

(Exact name of registrant as specified in its charter)

____________________________________________________________


New York	16-0838627
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

200 Holleder Parkway, Rochester, New York	14615
(Address of principal executive offices)	(Zip code)

Registrant’s telephone number, including area code: (585) 647-6400

_________________________________________

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading

Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.01 per share

MNRO

The Nasdaq Stock Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. x Yes ¨ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). x Yes ¨ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer x Accelerated filer ¨ Non-accelerated filer ¨ Smaller reporting company ¨ Emerging growth company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ¨ Yes x No

As of July 20, 2024, 29,920,866 shares of the registrant's common stock, $0.01 par value per share, were outstanding.

Table of Contents

TABLE OF CONTENTS


PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Consolidated Balance Sheets	3
Consolidated Statements of Income and Comprehensive Income	4
Consolidated Statements of Changes in Shareholders’ Equity	5
Consolidated Statements of Cash Flows	6
Notes to Consolidated Financial Statements	8
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	14
Item 3. Quantitative and Qualitative Disclosures About Market Risk	22
Item 4. Controls and Procedures	22
PART II. OTHER INFORMATION
Item 1. Legal Proceedings	23
Item 6. Exhibits	24
Signatures	25

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Monro, Inc. Q1 2025 Form 10-Q

Table of Contents

CONSOLIDATED FINANCIAL STATEMENTS

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

Consolidated Balance Sheets



(thousands, except footnotes) (unaudited)	June 29, 2024		March 30, 2024
Assets
Current assets
Cash and equivalents	$	18,665	$	6,561
Accounts receivable		12,054		11,738
Inventory		162,251		154,085
Other current assets		85,113		80,905
Total current assets		278,083		253,289
Property and equipment, net		276,121		280,154
Finance lease and financing obligation assets, net		182,860		180,803
Operating lease assets, net		200,169		202,718
Goodwill		736,435		736,435
Intangible assets, net		12,521		13,298
Assets held for sale		6,961		6,961
Other non-current assets		19,086		19,156
Total assets	$	1,712,236	$	1,692,814
Liabilities and shareholders' equity
Current liabilities
Current portion of finance leases and financing obligations	$	37,921	$	38,233
Current portion of operating lease liabilities		39,566		39,442
Accounts payable		278,903		251,940
Federal and state income taxes payable		1,539		880
Accrued payroll, payroll taxes and other payroll benefits		14,307		21,205
Accrued insurance		53,374		55,547
Deferred revenue		14,867		15,155
Other current liabilities		28,177		32,754
Total current liabilities		468,654		455,156
Long-term debt		112,000		102,000
Long-term finance leases and financing obligations		248,862		249,484
Long-term operating lease liabilities		179,187		181,852
Other long-term liabilities		10,485		10,553
Long-term deferred income tax liabilities		38,595		36,962
Long-term income taxes payable		32		32
Total liabilities		1,057,815		1,036,039
Commitments and contingencies - Note 9
Shareholders' equity:
Class C Convertible Preferred stock		29		29
Common stock		400		400
Treasury stock		(250,111)		(250,115)
Additional paid-in capital		255,039		254,484
Accumulated other comprehensive loss		(3,417)		(3,451)
Retained earnings		652,481		655,428
Total shareholders' equity		654,421		656,775
Total liabilities and shareholders' equity	$	1,712,236	$	1,692,814

Class C Convertible Preferred stock Authorized 150,000 shares, $1.50 par value, one preferred stock share to 61.275 common stock shares conversion value, 19,664 shares issued and outstanding as of June 29, 2024 and March 30, 2024

Common stock Authorized 65,000,000 shares, $0.01 par value; 40,025,554 shares issued as of June 29, 2024 and 40,017,264 shares issued as of March 30, 2024

Treasury stock 10,104,688 shares as of June 29, 2024 and March 30, 2024, at cost

See accompanying Notes to Consolidated Financial Statements.

Monro, Inc. Q1 2025 Form 10-Q

Table of Contents

CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Statements of Income and Comprehensive Income



	Three Months Ended
(thousands, except per share data) (unaudited)	June 29, 2024		June 24, 2023
Sales	$	293,182	$	326,968
Cost of sales, including occupancy costs		183,997		212,572
Gross profit		109,185		114,396
Operating, selling, general and administrative expenses		95,939		97,047
Operating income		13,246		17,349
Interest expense, net of interest income		5,144		5,208
Other income, net		(93)		(58)
Income before income taxes		8,195		12,199
Provision for income taxes		2,332		3,370
Net income	$	5,863	$	8,829
Other comprehensive income
Changes in pension, net of tax		34		94
Other comprehensive income		34		94
Comprehensive income	$	5,897	$	8,923
Earnings per share
Basic	$	0.19	$	0.28
Diluted	$	0.19	$	0.28
Weighted average common shares outstanding
Basic		29,916		31,415
Diluted		31,219		31,954

See accompanying Notes to Consolidated Financial Statements.

‎

Monro, Inc. Q1 2025 Form 10-Q

Table of Contents

CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Statements of Changes in Shareholders’ Equity



	Class C											Accumulated
	Convertible									Additional		Other
	Preferred Stock			Common Stock			Treasury Stock			Paid-In		Comprehensive		Retained		Total
(thousands) (unaudited)	Shares	Amount		Shares	Amount		Shares	Amount		Capital		Loss		Earnings		Equity
Balance at March 25, 2023	20	$	29	39,966	$	400	8,561	$	(205,648)	$	250,702	$	(4,115)	$	653,554	$	694,922
Net income															8,829		8,829
Other comprehensive income
Pension liability adjustment													94				94
Dividends declared
Preferred															(129)		(129)
Common															(8,797)		(8,797)
Dividend payable															(30)		(30)
Stock options and restricted stock				13							(260)						(260)
Stock-based compensation											539						539
Balance at June 24, 2023	20	$	29	39,979	$	400	8,561	$	(205,648)	$	250,981	$	(4,021)	$	653,427	$	695,168

Balance at March 30, 2024	20	$	29	40,017	$	400	10,105	$	(250,115)	$	254,484	$	(3,451)	$	655,428	$	656,775
Net income															5,863		5,863
Other comprehensive income
Pension liability adjustment													34				34
Dividends declared
Preferred															(337)		(337)
Common															(8,377)		(8,377)
Dividend payable															(96)		(96)
Stock options and restricted stock				9					4		(109)						(105)
Stock-based compensation											664						664
Balance at June 29, 2024	20	$	29	40,026	$	400	10,105	$	(250,111)	$	255,039	$	(3,417)	$	652,481	$	654,421

We declared $0.28 dividends per common share or equivalent for the three months ended June 29, 2024 and the three months ended June 24, 2023.

See accompanying Notes to Consolidated Financial Statements.

‎

Monro, Inc. Q1 2025 Form 10-Q

Table of Contents

CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Statements of Cash Flows



	Three Months Ended
(thousands) (unaudited)	June 29, 2024		June 24, 2023
Operating activities
Net income	$	5,863	$	8,829
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization		17,742		18,390
Share-based compensation expense		664		539
Loss (gain) on disposal of assets		319		(

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