Monro, Inc. · NASDAQ:MNRO
Monro — Non-Deal Roadshow (October 2006)
23 slides from Monro's roadshow presentation, October 2006
Slide 1: Nasdaq: MNRO – Updated October 2006
Updated October 2006 Nasdaq: MNRO 1 1
Slide 2: Forward Looking Information
Forward Looking Information Statements contained in these materials regarding Monro’s expectations with respect to future operations and other information, which can be identified by the use of forward looking terminology, such as “may,” “will,” “expect,” “project,” “anticipate,” “estimate” or “cont
Slide 3: Who We Are
Who We Are 3 3
Slide 4: Company Overview
Company Overview • Largest chain of Company-operated undercar care facilities in the United States • As of September 23, 2006, the Company operated 701 stores in 17 states 4 4
Slide 5: Service Mix
Service Mix FY05 26% Gross Margin % Brakes and Exhaust = +10 20% Service and Steering = baseline company margin 26% FY06 Tires = -10 15% 28% 13% 23% Q2 FY07 24% 31% 14% 23% 11% 24% 13% 9% Brakes Exhaust Steering Maintenance* Tires *Includes state inspections, lube, oil, filter, engine cooling servic
Slide 6: Geographic Presence
Geographic Presence MONRO MARKETS COMPANY. OPERATED STORES RKETS
Slide 7: Competitive Advantages: Operating Model
Competitive Advantages Operating Model • Company-operated stores – Faster, Better, Cheaper – Centralized purchasing and distribution – Efficient marketing (database mailing and direct mail) – Superior customer service • Pricing power and fixed cost leverage – Low cost operator 7 7
Slide 8: Competitive Advantages: Customer Value Proposition
Competitive Advantages Customer Value Proposition • Monro establishes relationships with customers based on TRUST • Direct marketing to customers fosters repeat business and long-term relationship • Company-operated store model enhances customer experience through: – High standards of customer care
Slide 9: Industry Overview
Industry Overview Monro operates in $122 billion “Do-It-For-Me” segment of $160 billion U.S. automotive aftermarket industry U.S. Automotive Service Outlet Share: Aftermarket Industry 1999 – 2009(E) 32 Do-It-For-Me Service Outlet Product Share % 28 76.2% 24 20 2009(E) 16 1999 12 Do-It-Yourself 8 23.
Slide 10: Favorable Industry Trends
Favorable Industry Trends O Increasing number of vehicles O Increasing age of vehicles O Number of vehicles age 6 - 10 years old will increase 15% to 70 million over the next five years O Significant average annual miles driven per vehicle O Decreasing number of service outlets and bays O Increasing
Slide 11: Favorable Industry Trends
Favorable Industry Trends Cars and Light Trucks in Service Average Age of Car and Light Truck on the Road 225 10.5 225 215 10.0 215 Number of Vehicles (in Millions) 205 9.5 204 Age (in years) 195 201 9.4 9.5 9.0 9.3 9.3 185 192 9.0 9.1 187 8.5 8.8 175 8.6 178 8.0 165 7.5 155 145 7.0 1993 1995 1997 1
Slide 12: EPS Trends
EPS Trends $1.75 $1.20 $1.50 $1.00 $1.25 $1.03 - $1.72 ** $0.80 $1.00 $0.93$1.51 $1.35 $1.13 $0.75 $0.60 $1.09 $1.09 $1.68 $1.02 $0.92 $0.85 $0.95 $1.15 $0.50 $0.40 $0.81 $0.69 $0.57 $0.25 $0.53 $0.20 $0.20 $0.00 $0.00 '99 '00 '01 '02 '03 '04 '05 '06 FY07 '95 '96 '97 '98 '99 '00 '01 '01 (Est.) '02 %
Slide 13: Historical Financials
Historical Financials (Dollars in millions except 2nd Qtr. 1st Qtr. Fiscal Year Fiscal Year Fiscal Year per share data) 2007* 2007 2006 2005 2004 Sales $107.3 $98.4 $368.7 $337.4 $279.5 Sales Growth (vs. prior year) 12.2% 4.0% 9.3% 20.7% 8.3% EBITDA $ 14.7 $16.6 $ 58.1 $ 49.7 $ 43.3 EBITDA Margin 13
Slide 14: Balance Sheet Highlights
Balance Sheet Highlights Quarter Ended Fiscal Y/E September 23, March 25, 2006 2006 Current assets $ 85,326 $ 85,108 Property, plant & equipment 169,399 163,625 Other 59,651 54,662 Total $ 314,376 $303,395 Current liabilities $ 53,847 $ 53,716 Long-term debt 42,289 46,327 Other 10,236 10,362 106,372
Slide 15: Growth Strategy
Growth Strategy h Increase market share through same store sales growth h Expand product offerings h Acquire competitors cheaply h Continue new store openings in existing markets qApproximately 15 stores per year 15 15
Slide 16: Acquisitions and Opportunities: Building Tire Store Category
Acquisitions and Opportunities Building Tire Store Category h Combination of six acquisitions in the last three years (including certain ProCare stores) q 115 stores q $130 million revenue h Could have up to 1,000 tire stores and 1,000 service stores in our 17 states - Creates market dominance and p
Slide 17: Acquisitions and Opportunities: ProCare Acquisition
Acquisitions and Opportunities ProCare Acquisition h 75 stores in Ohio and Pennsylvania acquired for $14.7M in cash h Great locations at reasonable rents, well integrated with our markets and same POS system h Bankruptcy Court approved Monro bid on April 28, closed transaction April 29 and opened al
Slide 18: Acquisitions and Opportunities: BJ's Wholesale Clubs
Acquisitions and Opportunities BJ’s Wholesale Clubs h Converting BJ’s tire centers to full service Monro Muffler Brake & Service shops h Currently 35 open, more on the way h Conversion costs $160,000 per location (5 bays) plus $50,000 of inventory h Potential 85 locations, $50 million in sales, $2-$
Slide 19: FY07 Earnings Assumptions
FY07 Earnings Assumptions • Earnings estimate for FY07 = $1.68 - $1.72* vs. $1.51 for FY06 – Q1 – FY07 $.50 vs. $.52 in FY06 – Q2 – FY07 $.48* vs. $.51 in FY06 – Q3 – FY07 $.31 - $.34 vs. $.27 in FY06 – Q4 – FY07 +90% - 100% over last year • Comparable Store Sales increase of 1% to 3% for the year a
Slide 20: FY07 Other Assumptions
FY07 Other Assumptions • SG&A approximately 30% of sales (including 1% impact of EITF 02-16 accounting) • Interest Expense of $4.0 million • $28 million of Cap-ex – $15 million in maintenance cap-ex – $7 million for new stores – $6 million for ProCare, including re-branding • $20 million depreciatio
Slide 21: FY07 Overall Priorities
FY07 Overall Priorities h Increase comparable store sales (1%-3%) – 53 weeks in FY07 vs. 52 weeks in FY06 – extra week in Q4 – Continue to increase store traffic – Increase prices – Increase Commercial sales – Focus on Scheduled Maintenance and Tires h Successfully integrate new acquisitions h Top l
Slide 22: FY07 Cash Flow Priorities
FY07 Cash Flow Priorities h Acquisitions q Same or contiguous markets q Buy right q Accretive to earnings in a reasonable timeframe h Pay down debt 22 22
Slide 23: Investment Highlights
Investment Highlights h Largest chain of Company-operated undercar care facilities in the United States h Breadth of product and service offerings h Leading market position in northeast and mid-Atlantic with a presence in 17 states h Superior customer service h Favorable industry trends h Consistent