10-Q 1 mnro-20220924x10q.htm 10-Q mnro-20220924x10q
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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 September 24, 2022

OR

¨ 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

____________________________________________________________

Picture 5

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 ParkwayRochesterNew 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 October 21, 2022, 31,455,472 shares of the registrant's common stock, $0.01 par value per share, were outstanding.

 


Monro, Inc. Picture 1 Q2 2023 Form 10-Q

2


Table of Contents

CONSOLIDATED FINANCIAL STATEMENTS

 

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

Consolidated Balance Sheets

(thousands, except footnotes) (unaudited)

September 24, 2022

March 26, 2022

Assets

Current assets

Cash and equivalents

$

9,794 

$

7,948 

Accounts receivable

12,603 

14,797 

Inventories

135,006 

166,271 

Other current assets

83,408 

56,486 

Total current assets

240,811 

245,502 

Property and equipment, net

307,585 

315,193 

Finance lease and financing obligation assets, net

236,734 

268,406 

Operating lease assets, net

213,715 

213,588 

Goodwill

730,253 

776,714 

Intangible assets, net

18,162 

26,682 

Other non-current assets

38,172 

20,174 

Long-term deferred income tax assets

3,637 

5,153 

Total assets

$

1,789,069 

$

1,871,412 

Liabilities and shareholders' equity

Current liabilities

Current portion of finance leases and financing obligations

$

40,433 

$

42,092 

Current portion of operating lease liabilities

35,557 

34,692 

Accounts payable

184,098 

131,989 

Federal and state income taxes payable

9,806 

2,921 

Accrued payroll, payroll taxes and other payroll benefits

14,971 

18,540 

Accrued insurance

52,017 

49,391 

Deferred revenue

14,812 

14,153 

Other current liabilities

33,467 

28,186 

Total current liabilities

385,161 

321,964 

Long-term debt

130,000 

176,466 

Long-term finance leases and financing obligations

320,102 

357,475 

Long-term operating lease liabilities

193,660 

192,637 

Other long-term liabilities

11,314 

10,821 

Long-term deferred income tax liabilities

26,415 

28,560 

Long-term income taxes payable

647 

583 

Total liabilities

1,067,299 

1,088,506 

Commitments and contingencies - Note 9

 

 

Shareholders' equity:

Class C Convertible Preferred stock

29 

29 

Common stock

400 

399 

Treasury stock

(179,944)

(108,729)

Additional paid-in capital

247,907 

244,577 

Accumulated other comprehensive loss

(4,692)

(4,494)

Retained earnings

658,070 

651,124 

Total shareholders' equity

721,770 

782,906 

Total liabilities and shareholders' equity

$

1,789,069 

$

1,871,412 

Class C Convertible Preferred stock Authorized 150,000 shares, $1.50 par value, $0.064 conversion value; 19,664 shares issued and outstanding

Common stock Authorized 65,000,000 shares, $0.01 par value; 39,957,223 shares issued as of September 24, 2022 and 39,906,561 shares issued as of March 26, 2022

Treasury stock 7,977,316 shares as of September 24, 2022 and 6,359,871 shares as of March 26, 2022, at cost

See accompanying Notes to Consolidated Financial Statements.

Monro, Inc. Picture 1 Q2 2023 Form 10-Q

3


Table of Contents

CONSOLIDATED FINANCIAL STATEMENTS

 

Consolidated Statements of Income and Comprehensive Income

Three Months Ended

Six Months Ended

(thousands, except per share data) (unaudited)

September 24, 2022

September 25, 2021

September 24, 2022

September 25, 2021

Sales

$

329,818 

$

347,699 

$

679,353 

$

689,517 

Cost of sales, including distribution and occupancy costs

213,083 

217,016 

440,429 

432,903 

Gross profit

116,735 

130,683 

238,924 

256,614 

Operating, selling, general and administrative expenses

93,262 

96,205 

189,197 

194,219 

Operating income

23,473 

34,478 

49,727 

62,395 

Interest expense, net of interest income

5,705 

6,276 

11,364 

13,217 

Other income, net

(98)

(50)

(178)

(93)

Income before income taxes

17,866 

28,252 

38,541 

49,271 

Provision for income taxes

4,745 

7,267 

12,936 

12,605 

Net income

$

13,121 

$

20,985 

$

25,605 

$

36,666 

Other comprehensive loss

Changes in pension, net of tax

(99)

(103)

(198)

(206)

Other comprehensive loss

(99)

(103)

(198)

(206)

Comprehensive income

$

13,022 

$

20,882 

$

25,407 

$

36,460 

Earnings per share

Basic

$

0.40 

$

0.62 

$

0.77

$

1.09

Diluted

$

0.40 

$

0.62 

$

0.77

$

1.08

Weighted average common shares outstanding

Basic

32,204 

33,523 

32,844 

33,510 

Diluted

32,729 

34,027 

33,349 

34,026 

See accompanying Notes to Consolidated Financial Statements


Monro, Inc. Picture 1 Q2 2023 Form 10-Q

4


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 June 26, 2021

20 

$

29 

39,865 

$

399 

6,360 

$

(108,729)

$

239,738 

$

(4,722)

$

631,876 

$

758,591 

Net income

20,985 

20,985 

Other comprehensive loss

Pension liability adjustment

(103)

(103)

Dividends declared

Preferred

(120)

(120)

Common

(8,719)

(8,719)

Dividend payable

(39)

(39)

Stock options and restricted stock

35 

1,206 

1,206 

Stock-based compensation

1,117 

1,117 

Balance at September 25, 2021

20 

$

29 

39,900 

$

399 

6,360 

$

(108,729)

$

242,061 

$

(4,825)

$

643,983 

$

772,918 

Balance at June 25, 2022

20 

$

29 

39,920 

$

399 

6,773 

$

(125,945)

$

245,689 

$

(4,593)

$

654,097 

$

769,676 

Net income

13,121 

13,121 

Other comprehensive loss

Pension liability adjustment

(99)

(99)

Dividends declared

Preferred

(129)

(129)

Common

(8,967)

(8,967)

Dividend payable