Monro, Inc. · NASDAQ:MNRO
Monro — Investor Presentation (January 2015)
24 slides from Monro's investor presentation, January 2015
Slide 1: Investor Presentation January 2015
Updated January 2015 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
Z c CRULCE Who We Are
Slide 4: Company Overview
Company Overview • Largest chain of Company-operated undercar care facilities in the United States • As of December 27, 2014, the Company operated 1,017 stores in 25 states 4
Slide 5: Geographic Presence
Geographic Presence MAINTAINING DOMINANCE Service Tire Stores Stores IN THE NORTHEASTERN U.S. Connecticut 36 Delaware 2 6 Florida 35 Georgia 9 Illinois 5 Indiana 8 31 Kentucky 33 Maine 14 Maryland 12 65 Massachusetts 43 9 Michigan 17 Missouri 22 New Hampshire 11 17 New Jersey 14 31 New York 123 11 N
Slide 6: Service Mix
Service Mix FY13 Gross Margin % Brakes and Steering = +15 Maintenance and Exhaust = baseline company margin Tires = -15 FY14 FY14-Q3 FY15-Q3 Brakes Exhaust Steering Maintenance* Tires *Includes state inspections, lube, oil, filter, engine cooling service, scheduled maintenance and other. Note: Monro
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, June 2014 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 6 years and older increasing Significant average annual miles driven per vehicle Decreasing number of service outlets and bays Increasing complexity of vehicles
Slide 13: Favorable Industry Trends: 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 and September 2014 Lang Report U.S. Annual Light Ve
Slide 14: EPS Trends
EPS Trends Est. $1.86 - $1.90 ’99 ’00 ’01 ’02 ‘03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ‘11 ‘12 ’13 ’14 ’15E % Change 178% 24% 17% 17% 22% 17% 12% (4)% 3% 20% 34% 35% 17% (22%) 27% 11%-14% •Adjusted for three-for-two stock split paid to shareholders of record as of October 21, 2003, September 21, 2007 and Dec
Slide 15: Historical Financials
Historical Financials rd rd (Dollars in millions except per share data) 3 Quarter 3 Quarter Fiscal Year Fiscal Year Fiscal Year 2015 2014 2014 2013 2012 Sales $236.6 $216.7 $831.4 $732.0 $686.6 Sales Growth (vs. prior year) 9.2% 13.8% 13.6% 6.6% 7.8% EBITDA $ 37.6 $ 35.7 $127.7 $101.5 $115.5 EBITDA
Slide 16: Balance Sheet Highlights
Balance Sheet Highlights Fiscal Q/E Fiscal Y/E December 27, March 29, 2014 2014 Current assets $184,594 $168,116 Property, plant & equipment, net 316,832 281,883 Other non-current assets 407,865 309,957 Total assets $909,291 $759,956 Current liabilities $155,372 $136,741 Capital leases and financing
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 12 to 20 stores per year 17
Slide 18: Acquisitions and Opportunities
Acquisitions and Opportunities Building Tire Store Category Combination of 32 acquisitions in the last 13 years - 526 stores - $640 million revenue Could have up to 1,300 tire stores and 1,300 service stores in our 25 states - Creates market dominance and pricing power - Diversifies risk - Expan
Slide 19: Recent Acquisitions
Recent Acquisitions 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 locations Colony Tire (June 2012) • 18 stores in North Carolina Tire Ki
Slide 20: Recent Acquisitions
Recent Acquisitions Lentz USA/Kan Rock Tire (June 2014) Gold Coast Tire & Auto Centers (December 2014) • 19 stores in Michigan • 9 stores in Florida • 2013 sales - $14 million • 2013 sales - $9 million • Purchased real estate for all locations • Breakeven to slightly accretive in first 12 months • B
Slide 21: FY15 Earnings Assumptions
FY15 Earnings Assumptions • Earnings estimate for FY15: $1.86 - $1.90 vs $1.67 in FY14 – Q1 – FY15: $.52 vs. $.42 Q1 FY14 – Q2 – FY15: $.50 vs. $.42 Q2 FY14 – Q3 – FY15: $.49 vs. $.47 Q3 FY14 – Q4 – FY 15: $.36 - $.40 vs. $.36 Q4 FY14 • Comparable Store Sales approximately flat to a decrease of .5%
Slide 22: FY15 Other Assumptions
FY15 Other Assumptions • Interest Expense of $10 million • $34 million depreciation and amortization • EBITDA approximately $145 million • $33 million of cap-ex – $22 million in maintenance cap-ex – $11 million for new stores 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 25 states S