10-Q 1 mnro-20211225x10q.htm 10-Q mnro-20211225x10q
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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 December 25, 2021

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 January 21, 2022, 33,546,040 shares of the registrant's common stock, $0.01 par value per share, were outstanding.

 


Monro, Inc. Picture 2 Q3 2022 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)

December 25, 2021

March 27, 2021

Assets

Current assets

Cash and equivalents

$

9,514 

$

29,960 

Accounts receivable

14,709 

15,324 

Federal and state income taxes receivable

10,844 

Inventories

169,664 

162,282 

Other current assets

57,349 

48,115 

Total current assets

251,236 

266,525 

Property and equipment, net

315,302 

327,063 

Finance lease and financing obligation assets, net

272,550 

275,360 

Operating lease assets, net

222,934 

203,329 

Goodwill

779,091 

689,524 

Intangible assets, net

26,082 

26,068 

Other non-current assets

17,099 

18,332 

Long-term deferred income tax assets

4,896 

5,613 

Total assets

$

1,889,190 

$

1,811,814 

Liabilities and shareholders' equity

Current liabilities

Current portion of finance leases and financing obligations

$

41,192 

$

37,803 

Current portion of operating lease liabilities

34,685 

30,903 

Accounts payable

117,893 

112,378 

Federal and state income taxes payable

55 

Accrued payroll, payroll taxes and other payroll benefits

23,634 

20,842 

Accrued insurance

52,906 

49,681 

Deferred revenue

13,833 

11,956 

Other current liabilities

27,923 

27,053 

Total current liabilities

312,121 

290,616 

Long-term debt

195,000 

190,000 

Long-term finance leases and financing obligations

362,522 

366,330 

Long-term operating lease liabilities

201,081 

177,724 

Other long-term liabilities

11,496 

16,649 

Long-term deferred income tax liabilities

24,259 

19,783 

Long-term income taxes payable

1,200 

1,028 

Total liabilities

1,107,679 

1,062,130 

Commitments and contingencies - Note 10

 

 

Shareholders' equity:

Class C Convertible Preferred stock

29 

29 

Common stock

399 

398 

Treasury stock

(108,729)

(108,729)

Additional paid-in capital

243,349 

238,244 

Accumulated other comprehensive loss

(4,927)

(4,619)

Retained earnings

651,390 

624,361 

Total shareholders' equity

781,511 

749,684 

Total liabilities and shareholders' equity

$

1,889,190 

$

1,811,814 

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; 39,905,671 shares issued as of December 25, 2021 and 39,848,093 shares issued as of March 27, 2021

Treasury stock 6,359,871 shares, at cost

See accompanying Notes to Consolidated Financial Statements.

Monro, Inc. Picture 2 Q3 2022 Form 10-Q

3


Table of Contents

CONSOLIDATED FINANCIAL STATEMENTS

 

Consolidated Statements of Income and Comprehensive Income

Three Months Ended

Nine Months Ended

(thousands, except per share data) (unaudited)

December 25, 2021

December 26, 2020

December 25, 2021

December 26, 2020

Sales

$

341,781 

$

284,591 

$

1,031,298 

$

820,237 

Cost of sales, including distribution and occupancy costs

221,199 

188,453 

654,102 

532,119 

Gross profit

120,582 

96,138 

377,196 

288,118 

Operating, selling, general and administrative expenses

93,146 

80,450 

287,366 

236,603 

Operating income

27,436 

15,688 

89,830 

51,515 

Interest expense, net of interest income

5,676 

6,819 

18,893 

21,526 

Other income, net

(43)

(65)

(138)

(132)

Income before income taxes

21,803 

8,934 

71,075 

30,121 

Provision for income taxes

5,516 

2,251 

18,122 

7,605 

Net income

$

16,287 

$

6,683 

$

52,953 

$

22,516 

Other comprehensive loss

Changes in pension, net of tax

(102)

(170)

(308)

(510)

Other comprehensive loss

(102)

(170)

(308)

(510)

Comprehensive income

$

16,185 

$

6,513 

$

52,645 

$

22,006 

Earnings per share

Basic

$

0.48 

$

0.20 

$

1.57

$

0.67

Diluted

$

0.48 

$

0.20 

$

1.56

$

0.67

Weighted average common shares outstanding

Basic

33,542 

33,307 

33,521 

33,296 

Diluted

34,056 

33,827 

34,036 

33,840 

See accompanying Notes to Consolidated Financial Statements


Monro, Inc. Picture 2 Q3 2022 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 September 26, 2020

22 

$

33 

39,667 

$

397 

6,360 

$

(108,729)

$

231,095 

$

(7,229)

$

620,800 

$

736,367 

Net income

6,683 

6,683 

Other comprehensive loss

Pension liability adjustment

(170)

(170)

Dividends declared

Preferred

(112)

(112)

Common

(7,328)

(7,328)

Dividend payable

(10)

(10)

Stock options and restricted stock

Stock-based compensation

613 

613 

Balance at December 26, 2020

22 

$

33 

39,667 

$

397 

6,360 

$

(108,729)

$

231,708 

$

(7,399)

$

620,033 

$

736,043 

Balance at September 25, 2021

20 

$

29 

39,900 

$

399 

6,360 

$

(108,729)

$

242,061 

$

(4,825)

$

643,983 

$

772,918 

Net income

16,287 

16,287 

Other comprehensive loss

Pension liability adjustment

(102)

(102)

Dividends declared

Preferred

(120)

(120)

Common

(8,722)

(8,722)

Dividend payable

(38)

(38)

Stock options and restricted stock

6