Monro, Inc. · NASDAQ:MNRO
Monro — Investor Presentation (September 2011)
22 slides from Monro's investor presentation, September 2011
Slide 1: Monro Investor Presentation, Updated September
Updated September 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 September 12, 2011, the Company operated 802 stores in 19 states 4
Slide 5: Service Mix
Service Mix Gross Margin % FY10 Brakes and Steering = +15 31% Maintenance and Exhaust = baseline company margin Tires = -15 FY11 28% Q1 FY12 32% 20% 18% 29% 11% 6% 38% 5% 20% 11% 35% 5% 11% Brakes Exhaust Steering Maintenance* Tires *Includes state inspections, lube, oil, filter, engine cooling serv
Slide 6: Geographic Presence
Geographic Presence CLOLCE MAINTAINING DOMINANCE IN THE NORTHEASTERN U.S. By Service/Tire Designation: ‘Ohio Pal Pennsyivania Total Sore § 57 Rhode Island i Total as of 3/28/11: 781 vrginia 29
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
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: 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 – 2010 Total Bays / Mkt Share % (000’s) Do-It-For-Me: 1999 - 74.3% 2010 2008 -56 2009 - 78.0% 350/29.
Slide 10: Vehicle Age
Vehicle Age The rising average age of vehicles may shift consumer spending from new cars to aftermarket parts and maintenance. For about 55% of U.S. drivers, ``the sky is the limit'' for the mileage they plan to put on their primary vehicle, according to an AutoMD.com survey. Longer ownership cycles
Slide 11: Favorable Industry Trends
Favorable Industry Trends Weak new car sales Increasing number of vehicles on road Increasing age of vehicles Number of vehicles age 4 - 12 years old increasing Significant average annual miles driven per vehicle Decreasing number of service outlets and bays Dealer consolidation and cl
Slide 12: Favorable Industry Trends
Favorable Industry Trends Cars and Light Trucks in Service Average Age of Car and Light Truck on the Road 250 12.5 249 249 235 245 238 11.5 12.0 220 225 205 215 10.5 201 204 190 10.1 9.5 9.9 9.6 9.6 9.7 175 9.4 9.4 9.2 8.5 160 145 7.5 1999 2000 2003 2005 2006 2008 2009 2010 2001 2003 2004 2005 2006
Slide 13: EPS Trends
EPS Trends $1.75 $1.50 Est. $1.65 - $1.77 $1.44 $1.25 $1.00 $1.07 $0.75 $0.80 $0.67 $0.67 $0.65 $0.50 $0.60 $0.51 $0.42 $0.36 $0.25 $0.31 $0.25 $0.00 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 % Change 192% 21% 17% 17% 22% 17% 12% (4)% 3% 20% 34% 35% 15%-23% •Adjusted for three-for-two stoc
Slide 14: Historical Financials
Historical Financials (Dollars in millions except per share data) 1st Quarter 1st Quarter Fiscal Year Fiscal Year Fiscal Year 2012 2011 2011 2010 2009 Sales $164.8 $158.2 $636.7 $ 564.6 $476.1 Sales Growth (vs. prior year) 4.2% 23.6% 12.8% 18.6% 8.4% EBITDA $31.9 $28.2 $101.4 $ 81.8 $ 64.6 EBITDA Ma
Slide 15: Balance Sheet Highlights
Balance Sheet Highlights 1st Quarter Fiscal Y/E Ended June 25, March 26, 2011 2011 Current assets $136,990 $ 128,783 Property, plant & equipment 199,246 200,596 Other 151,657 122,461 Total Assets $487,893 $ 451,840 Current liabilities $108,930 $ 109,440 Long-term debt 62,635 41,990 Other 21,005 20,1
Slide 16: Growth Strategy
Growth Strategy Increase market share through same store sales growth Expand product offerings Acquire competitors cheaply Continue new store openings in existing markets Approximately six stores per year 16
Slide 17: Acquisitions and Opportunities
Acquisitions and Opportunities Building Tire Store Category Combination of 15 acquisitions in the last ten years - 288 stores - $310 million revenue Could have up to 1,200 tire stores and 1,200 service stores in our 19 states - Creates market dominance and pricing power - Diversifies risk - Expa
Slide 18: Acquisitions and Opportunities
Acquisitions and Opportunities Courthouse Tire (October 2010) Vespia Tire Centers (June 2011) 3 stores in Fredericksburg, Virginia • 24 stores in New Jersey and Eastern Pennsylvania 2009 sales $5 million • 2010 Sales $36 million $3 million asset purchase • Slightly accretive in fiscal 2012 Imp
Slide 19: FY12 Earnings Assumptions
FY12 Earnings Assumptions • Earnings estimate for FY12: $1.65 - $1.77 vs $1.44 in FY11 – Q1 – FY12: $.48 vs. $.42 in FY11 – Q2 – FY12: $.46 - $.50 vs. $.42 in Q2 FY11 • Comparable Store Sales increase of 2.0% to 4.0% (4.0% to 6.0% includes 53rd week) for FY12; Q1 FY12: 2.1%; Q2 FY12: 1.0% to 3.0% •
Slide 20: FY12 Other Assumptions
FY12 Other Assumptions • Interest Expense of $5.5 million • $31 million of Cap-ex – $19 million in maintenance cap-ex – $7 million for new stores – $5 million for headquarters expansion • $23 million depreciation and amortization • EBITDA $116 - $123 million 20
Slide 21: FY12 Cash Flow Priorities
FY12 Cash Flow Priorities Acquisitions Same or contiguous markets Buy right Accretive to earnings in a reasonable timeframe Pay down debt 21
Slide 22: Investment Highlights
Investment Highlights Largest chain of Company-operated undercar care facilities in the United States Breadth of product and service offerings Superior customer service Favorable industry trends Leading market position in northeast and mid-Atlantic with a presence in 19 states Strong bal