10-Q 1 mnro-20231223x10q.htm 10-Q mnro-20231223x10q
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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 23, 2023

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 19, 2024, 29,902,141 shares of the registrant's common stock, $0.01 par value per share, were outstanding.

 


Monro, Inc. Picture 1135050635 Q3 2024 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 23, 2023

March 25, 2023

Assets

Current assets

Cash and equivalents

$

23,846 

$

4,884 

Accounts receivable

14,434 

13,294 

Federal and state income taxes receivable

808 

Inventories

160,360 

147,397 

Other current assets

72,246 

92,892 

Total current assets

271,694 

258,467 

Property and equipment, net

284,563 

304,989 

Finance lease and financing obligation assets, net

189,774 

217,174 

Operating lease assets, net

205,244 

211,101 

Goodwill

736,435 

736,457 

Intangible assets, net

14,087 

16,562 

Assets held for sale

5,883 

Other non-current assets

24,971 

29,365 

Long-term deferred income tax assets

446 

2,762 

Total assets

$

1,733,097 

$

1,776,877 

Liabilities and shareholders' equity

Current liabilities

Current portion of finance leases and financing obligations

$

38,858 

$

39,982 

Current portion of operating lease liabilities

38,953 

37,520 

Accounts payable

287,330 

261,724 

Federal and state income taxes payable

541 

Accrued payroll, payroll taxes and other payroll benefits

19,805 

15,951 

Accrued insurance

53,601 

47,741 

Deferred revenue

15,427 

15,422 

Other current liabilities

32,658 

30,296 

Total current liabilities

486,632 

449,177 

Long-term debt

94,000 

105,000 

Long-term finance leases and financing obligations

259,794 

295,281 

Long-term operating lease liabilities

184,777 

191,107 

Other long-term liabilities

10,168 

10,721 

Long-term deferred income tax liabilities

37,799 

30,460 

Long-term income taxes payable

209 

209 

Total liabilities

1,073,379 

1,081,955 

Commitments and contingencies - Note 9

 

 

Shareholders' equity:

Class C Convertible Preferred stock

29 

29 

Common stock

400 

400 

Treasury stock

(250,115)

(205,648)

Additional paid-in capital

252,801 

250,702 

Accumulated other comprehensive loss

(3,834)

(4,115)

Retained earnings

660,437 

653,554 

Total shareholders' equity

659,718 

694,922 

Total liabilities and shareholders' equity

$

1,733,097 

$

1,776,877 

Class C Convertible Preferred stock Authorized 150,000 shares, $1.50 par value, one preferred stock share to 61.275 common stock shares and one preferred stock share to 23.389 common stock shares conversion value as of December 23, 2023 and March 25, 2023, respectively; 19,664 shares issued and outstanding

Common stock Authorized 65,000,000 shares, $0.01 par value; 40,006,829 shares issued as of December 23, 2023 and 39,966,401 shares issued as of March 25, 2023

Treasury stock 10,104,688 and 8,561,121 shares as of December 23, 2023 and March 25, 2023, respectively, at cost

See accompanying Notes to Consolidated Financial Statements.

Monro, Inc. Picture 1135050635 Q3 2024 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 23, 2023

December 24, 2022

December 23, 2023

December 24, 2022

Sales

$

317,653 

$

335,193 

$

966,712 

$

1,014,546 

Cost of sales, including distribution and occupancy costs

204,976 

221,742 

624,666 

662,171 

Gross profit

112,677 

113,451 

342,046 

352,375 

Operating, selling, general and administrative expenses

91,294 

89,605 

280,959 

278,802 

Operating income

21,383 

23,846 

61,087 

73,573 

Interest expense, net of interest income

5,043 

5,949 

15,052 

17,312 

Other income, net

(62)

(98)

(153)

(275)

Income before income taxes

16,402 

17,995 

46,188 

56,536 

Provision for income taxes

4,232 

4,961 

12,317 

17,897 

Net income

$

12,170 

$

13,034 

$

33,871 

$

38,639 

Other comprehensive income (loss)

Changes in pension, net of tax

94 

(98)

281 

(296)

Other comprehensive income (loss)

94 

(98)

281 

(296)

Comprehensive income

$

12,264 

$

12,936 

$

34,152 

$

38,343 

Earnings per share

Basic

$

0.38 

$

0.41 

$

1.06 

$

1.18 

Diluted

$

0.38 

$

0.41 

$

1.05 

$

1.17 

Weighted average common shares outstanding

Basic

30,934 

31,470 

31,263 

32,386 

Diluted

32,188 

31,985 

32,142 

32,890 

See accompanying Notes to Consolidated Financial Statements


Monro, Inc. Picture 1135050635 Q3 2024 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 24, 2022

20 

$

29 

39,957 

$

400 

7,977 

$

(179,944)

$

247,907 

$

(4,692)

$

658,070 

$

721,770 

Net income

13,034 

13,034 

Other comprehensive loss

Pension liability adjustment

(98)

(98)

Dividends declared

Preferred

(129)

(129)

Common

(8,791)

(8,791)

Dividend payable

(64)

(64)

Repurchase of stock

584 

(25,704)

(25,704)

Stock options and restricted stock

10 

10 

Stock-based compensation

1,155 

1,155 

Balance at December 24, 2022

20 

$

29 

39,957 

$

400 

8,561 

$

(205,648)

$

249,072 

$

(4,790)

$

662,120 

$

701,183 

Balance at September 23, 2023

20 

$

29 

40,006 

$

400 

8,561 

$

(205,648)

$

252,212 

$

(3,928)

$

657,078 

$

700,143 

Net income

12,170 

12,170 

Other comprehensive income

Pension liability adjustment

94 

94 

Dividends declared

Preferred