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LONDON, UK / ACCESSWIRE / May 23, 2018 / If you want access to our free research report on Monro, Inc. (NASDAQ: MNRO), all you need to do is sign up now by clicking the following link www.active-investors.com/registration-sg/?symbol=MNRO as the Company's latest news hit the wire. On May 21, 2018, the Company announced that it has completed the acquisition of Johnson City, Tennessee-based Free Service Tire Co. The purchase consideration was not disclosed. Register today and get access to over 1,000 Free Research Reports by joining our site below:
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- The acquisition includes Free Service Tire's 12 retail and commercial stores, 4 wholesale distribution centers, and 1 retread facility, adding to Monro's more than 130 existing retail, commercial, and wholesale locations in Tennessee, North Carolina, and Virginia.
- Monro will continue to operate all Free Service Tire locations and retain store-level, wholesale, and retread associates.
- The transaction is expected to add approximately $47 million in annualized sales, representing a sales mix of 15% service and 85% tires.
- The acquisition is also expected to be breakeven to diluted earnings per share (EPS) in the fiscal year 2019.
Acquisition Expands Monro's Footprint in the South, Providing Monro with an Even Stronger Platform for Further Growth in these Markets
Brett Ponton, President and Chief Executive Officer (CEO) of Monro, stated that this acquisition expands the Company's footprint in the South while providing Monro with an even stronger platform for further growth in these markets. Ponton added that Monro is extremely pleased to welcome these outstanding teammates and locations to the Company, and looks forward to working with the entire Free Service Tire team.
Monro's Tradition and Business Model is Similar to Free Service Tire
Commenting on the acquisition, Lewis Wexler, Jr., President of Free Service Tire, stated that Free Service Tire has been approached by many companies over the years, but it was not until Monro came along that it found the right fit for its customers, employees, and Company. Wexler, Jr. added that Monro has a tradition and business model much like Free Service Tire, and it is confident that Free Service Tire's tradition of outstanding customer service will continue under Monro's ownership.
Monro's Fourth Quarter Financial Results
On May 21, 2018, the Company announced its financial results for the fourth quarter ended March 31, 2018 (Q4 FY18). The Company's sales increased 13.3% to $285.6 million in Q4 FY18 compared to $252.0 million in Q4 FY17. The fiscal year 2018 was a 53-week year with 368 selling days compared to 361 selling days in FY17, and therefore included an extra week of sales in Q4 FY18. Monro's gross margin increased 70 basis points to 37.7% in Q4 FY18 from 37.0% in the prior year's same period, primarily due to leverage from higher comparable store sales. The Company's total operating expenses increased by $4.2 million to $77.3 million, or 27.1% of sales, in Q4 FY18 compared to $73.1 million, or 29.0% of sales, in Q4 FY17.
Monro's net income was $17.5 million in Q4 FY18 compared to $9.7 million in the prior year's comparable period. The Company's diluted EPS were $0.52 in Q4 FY18, including $0.02 per share in management transition costs; $0.04 per share of benefit related to the Tax Cuts and Jobs Act 2017 (TCJA); and $0.10 of contribution from the extra week. This compared to diluted EPS of $0.29 in Q4 FY17. During Q4 FY18, Monro opened 15 and closed 3 Company-operated locations, ending the quarter with 1,150 Company-operated stores and 102 franchised locations.
Monro's Acquisition Deals in Q4 FY18
During Q4 FY18, Monro completed the previously announced acquisitions of 7 stores in Ohio, Kentucky, West Virginia, and Virginia. These stores fill in existing markets and are expected to add approximately $7 million in annualized sales, representing a sales mix of 45% service and 55% tires. Till date, the Company has completed over 80 acquisitions of multi-outlet and single store businesses.
About Monro, Inc.
Founded in 1957 and headquartered in Rochester, New York, Monro is the largest independently-owned and operated auto service chain in the United States, with 1,140 stores in 27 states, and the third-largest independent tire dealer. In 2017, the Company celebrated its 60th year in business.
Stock Performance Snapshot
May 22, 2018 - At Tuesday's closing bell, Monro's stock dropped 8.43%, ending the trading session at $52.15.
Volume traded for the day: 1.13 million shares, which was above the 3-month average volume of 315.66 thousand shares.
Stock performance in the last three-month – up 0.77%; previous six-month period – up 7.64%; and past twelve-month period – up 1.36%
After yesterday's close, Monro's market cap was at $1.73 billion.
Price to Earnings (P/E) ratio was at 28.45.
The stock has a dividend yield of 1.38%.
The stock is part of the Consumer Goods sector, categorized under the Auto Parts industry.
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