Monro, Inc. · NASDAQ:MNRO
Monro — Investor Presentation (May 2014)
24 slides from Monro's investor presentation, May 2014
Slide 1: Nasdaq: MNRO
Updated May 2014 Nasdaq: MNRO 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
Slide 4: Company Overview
Company Overview • Largest chain of Company-operated undercar care facilities in the United States • As of March 29, 2014, the Company operated 953 stores in 22 states 4
Slide 5: Geographic Presence
Geographic Presence Service Tire Stores Stores MAINTAINING DOMINANCE Connecticut 36 IN THE NORTHEASTERN U.S. 15 Delaware 2 6 Illinois 5 Indiana 8 32 5 Kentucky 33 Maine 1 14 26 Maryland 13 64 13 52 Massachusetts 43 9 136 Missouri 22 36 New Hampshire 11 15 12 New Jersey 14 31 New York 125 11 137 Nort
Slide 6: Service Mix
Service Mix Gross Margin % Brakes and Steering = +15 Maintenance and Exhaust = baseline company margin Tires = -20, but improving FY12 FY13 FY14 Brakes Exhaust Steering Maintenance* Tires *Includes state inspections, lube, oil, filter, engine cooling service, scheduled maintenance and other. Note: M
Slide 7: Competitive Advantages: Operating Model
Competitive Advantages Operating Model • Company-operated stores – Faster, Better, Cheaper – Centralized purchasing and distribution – Efficient marketing (database mailing, email, direct mail and internet) – Superior customer service • Pricing power and fixed cost leverage – Low cost operator 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 relationships • Company-operated store model enhances customer experience through: – High standards of customer care
Slide 9: High Customer Satisfaction
High Customer Satisfaction Monro Website Internet Paid Ads 95% http://www.monro.com/CustomerSatisfaction.aspx 9
Slide 10: Industry Overview
Industry Overview Monro operates in $158 billion “Do-It-For-Me” segment of $202 billion U.S. automotive aftermarket industry U.S. Automotive Service Bay Population Aftermarket Industry Changes: 1999 – 2013 Total Bays / Mkt Share % Do-It-For-Me: (000’s) 1999 - 74.3% 2013 2008 2009 - 78.0% 352/30.0 33
Slide 11: Average Vehicle Age
Average Vehicle Age Average Age of Car and Light Truck on the Road Source: November 2012 Lang Report, 2012 Wall Street Journal, October 2013 Lang Report and Lang estimate. 11
Slide 12: Favorable Industry Trends
Favorable Industry Trends Approximately 245 million vehicles on road Increasing age of vehicles (11.7 years) Number of vehicles 5 years and older increasing Significant average annual miles driven per vehicle Decreasing number of service outlets and bays Increasing complexity of vehicles
Slide 13: Light Vehicle DIFM Product Share
Favorable Industry Trends Cars and Light Trucks in Service Growing Independent DIFM Product Share (vs. Dealers) Light Vehicle DIFM Product Share Source: APAA Aftermarket Factbook, Lang Report and Analyst estimate. Source: September 2013 Lang Report. U.S. Annual Light Vehicle Sales Vehicles per Servi
Slide 14: EPS Trends
EPS Trends Est. $1.95 - $2.15 ’00 ’01 ’02 ‘03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ‘11 ‘12 ’13 ’14 ’15E % Change 24% 17% 17% 22% 17% 12% (4)% 3% 20% 34% 35% 17% (22%) 27% 17% - 29% •Adjusted for three-for-two stock split paid to shareholders of record as of October 21, 2003, September 21, 2007 and December 1
Slide 15: Historical Financials
Historical Financials (Dollars in millions except per share data) Fiscal Year Fiscal Year Fiscal Year Fiscal Year 2014 2013 2012 2011 Sales $831.4 $732.0 $686.6 $636.7 Sales Growth (vs. prior year) 13.6% 6.6% 7.8% 12.8% EBITDA $127.7 $101.5 $115.5 $101.4 EBITDA Margin 15.4% 13.9% 16.8% 15.9% Operati
Slide 16: Balance Sheet Highlights
Balance Sheet Highlights Fiscal Y/E Fiscal Y/E March 29, March 30, 2014 2013 Current assets $168,116 $166,410 Property, plant & equipment, net 281,883 275,046 Other non-current assets 309,957 297,977 Total assets $759,956 $739,433 Current liabilities $136,741 $138,130 Capital leases and finance obli
Slide 17: Growth Strategy
Growth Strategy Increase market share through same store sales growth Acquire competitors cheaply Continue new store openings in existing markets – Approximately six to ten stores per year 17
Slide 18: Acquisitions and Opportunities
Acquisitions and Opportunities Building Tire Store Category Combination of 28 acquisitions in the last 12 years - 456 stores - $560 million revenue Could have up to 1,300 tire stores and 1,300 service stores in our 22 states - Creates market dominance and pricing power - Diversifies risk - Expan
Slide 19: Acquisitions and Opportunities
Acquisitions and Opportunities Kramer Tire (April 2012) Enger Tire Center/Enger Auto Service (December 2012) • 20 stores in Virginia • 12 stores in Ohio • 2011 sales - $25 million • 2011 sales - $9 million • Purchased real estate for eight location Colony Tire (June 2012) • 18 stores in North Caroli
Slide 20: Acquisitions and Opportunities
Acquisitions and Opportunities Carl King Tire (November 2013) • 6 stores in Delaware (5) and Maryland (1) • 2012 sales - $10 million • Breakeven to slightly accretive in first 12 months Lentz USA/Kan Rock Tire (close in June 2014) • 19 stores in Michigan • 2013 sales - $14 million • Purchased real e
Slide 21: FY15 Earnings Assumptions
FY15 Earnings Assumptions • Earnings estimate for FY15: $1.95 - $2.15 vs $1.67 in FY14 – Q1 – FY15: $.52- $.55 vs. $.42 Q1 FY14 • Comparable Store Sales increase of 1.0% to 4.0% for FY15; Q1 FY15: 2.0% - 3.0% • Gross Sales approximately $875 - $905 million • Operating Margin improvement of 125 to 17
Slide 22: FY15 Other Assumptions
FY15 Other Assumptions • Interest Expense of $8.0 million • $32 million depreciation and amortization • $33 million of cap-ex – $22 million in maintenance cap-ex – $11 million for new stores • EBITDA approximately $145 - $150 million 22
Slide 23: FY15 Cash Flow Priorities
FY15 Cash Flow Priorities Acquisitions Same or contiguous markets Buy right Accretive to earnings in a reasonable timeframe Pay down debt 23
Slide 24: Investment Highlights
Investment Highlights Largest chain of Company-operated undercar care facilities in the U.S. Wide breadth of product and service offerings Superior customer service Favorable industry trends Leading market position in northeast, Great Lakes and mid-Atlantic with a presence in 22 states S