MNRO
Monro, Inc. Investor Presentation March 2024
Safe Harbor Statement and Non-GAAP Measures
Certain statements in this presentation, other than statements of historical fact, including estimates, projections, statements related to our business plans and operating results are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Monro has identified some of these forward-looking statements with words such
as "believes," "expects," "estimates," "outlook," "strive," "anticipates," "could," "may," "will," and the negative of these words
or other comparable terminology. These forward-looking statements are based on Monro's current expectations, estimates, projections and assumptions as of the date such statements are made, and are subject to risks and uncertainties that may cause results to differ materially from those expressed or implied in the forward-looking statements. Additional information regarding these risks and uncertainties are described in the Company's filings with the Securities and Exchange Commission, including in the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of our most recently filed periodic reports on Forms 10-K and Form 10-Q, which are available on Monro's website at https://corporate.monro.com/investors/financials/sec-filings/default.aspx. Monro assumes no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future.
In addition to including references to diluted earnings per share ("EPS"), which is a generally accepted accounting principles ("GAAP") measure, this presentation includes references to adjusted diluted earnings per share, which is a non- GAAP financial measure. Monro has included a reconciliation from adjusted diluted EPS to its most directly comparable GAAP measure, diluted EPS in Slide 8. Management views this non-GAAP financial measure as a way to better assess comparability between periods because management believes the non-GAAP financial measure shows the Company's core business operations while excluding certain non-recurring items such as costs related to shareholder matters from the Company's equity capital structure recapitalization, transition costs related to the Company's back-office optimization, corporate headquarters relocation costs, and items related to store closings, as well as acquisition initiatives.
This non-GAAP financial measure is not intended to represent, and should not be considered more meaningful than, or as an alternative to, its most directly comparable GAAP measure. This non-GAAP financial measure may be different from similarly titled non-GAAP financial measures used by other companies.
2
Company Overview
A Leading Chain of Independently Owned and Operated Tire and Auto Service Locations
Dominant in the Northeastern U.S.
Store locations as of 12/23/23
Expanding in Southern and Western markets
Fiscal 2023 sales of $1,325.4 million
1,296
company operated
stores in 32 states
51
franchised locations
33
acquisitions in the past
9 years adding
429 locations
and
$626M in revenue
and entry into
10 new states
3
Investment Thesis
Leading national
automotive service and tire
provider with 1,296 locations in 32 states
Well-positioned to
capitalize on a favorable
industry backdrop
Focus on operational
Scalable platform with
excellence to increase
significant growth
customer lifetime value
opportunity in acquisitions
Low-cost operator with
Strong balance sheet and
solid operating margins
operating cash flow
Commitment to driving
Monro.Forward
Responsibly
Delivering consistent shareholder returns through dividends & share repurchases
4
A Favorable Industry Backdrop
Favorable Industry Backdrop for Automotive Services
Despite a Decrease in Miles Traveled in 2020 Resulting from the COVID-19 Pandemic
U.S. Annual Light Vehicle Sales
20
18
16
14
12
10
8
6
4
2
0 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23
Source: FRED Economic Data, Light weight Vehicle Sales: Autos and Light Trucks (annual data)
Annual Vehicles Miles Traveled
3,300,000
3,225,000
3,150,000
3,075,000
3,000,000
2,925,000
2,850,000
2,775,000
2,700,000 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23
U.S. Light Vehicles in Operation (VIO)
290,000
280,000
270,000
260,000
250,000
240,000
230,000
220,000 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Source: Auto Care Association Factbook
Key Highlights
Source: Office of Highway Policy Information Traffic Volume Trends Data, Moving 12-Month Total Vehicle Miles Traveled
5
A Favorable Industry Backdrop
Monro Operates in the $311 Billion Do-It-For-Me* Segment of $389 Billion U.S. Automotive Aftermarket Industry
Automotive Aftermarket DIFM vs. DIY Sales
450,000
400,000
350,000
300,000
250,000
200,000
150,000
100,000
50,000
0
2017
2018
2019
2020
2021
2022
2023
DIFM
DIY
Source: Auto Care Association Factbook
Census data for 2017; estimates for 2018-2022; 2023 forecast
DIFM vs. DIY Trends
2014
%
2022
%
CAGR
(outlets)
(outlets)
Motor Vehicle Dealers
16,396
12.6%
16,773
12.3%
0.3%
General Repair Garages
79,240
60.7%
85,424
62.7%
0.9%
Tire Dealers
19,931
15.3%
20,424
15.0%
0.3%
Specialty Repair
7,534
5.8%
5,795
4.3%
(3.2%)
Oil Change/Lube
7,368
5.6%
7,693
5.7%
0.5%
Total
130,469
100.0%
136,109
100.0%
Source: Auto Care Association Factbook
For 2022, all data are as of Q3 2022, except for Tire Dealers and Specialty Repair
Key Highlights
* Includes Replacement Tire Segment
6
Third Quarter Fiscal 2024 Highlights
Comparable Store Sales Decline Due to Customer Deferrals Causing Industry-Wide Slowdown in Tire Unit Sales
Quarterly Comparable Store Sales Trends
10%
5.6%
Monthly Comparable Store Sales Trends
15%
10.5%
FY23
5%
0%
4.5%
0.5%
10%
3.7%
7.9%
FY24
5%
3.5%
0%
-5%
-10%
-2.3%
-6.1%
-5%
-5.7%
-6.6%
-5.6%
-6.0%
-10%
1
Q3FY23
Q4FY23
Q1FY24
Q2FY24
Q3FY24
Q3FY24
Key Highlights
October
November
December
January MTD
Q3FY24
Key Highlights
1 Preliminary results through January 20, 2024
7
Third Quarter Fiscal 2024 Results
Laser Focused on Maximizing Profitability through Prudent Cost Control
Q3FY24
Q3FY23
Δ
Sales (millions)
$317.7
$335.2
(5.2%)
Same Store Sales
(6.1%)
5.6%
(1,170) bps
Gross Margin
35.5%
33.8%
170 bps
Operating Margin
6.7%
7.1%
(40) bps
Diluted EPS
$.38
$.41
(7.3%)
Excluded Costs1
$.01
$.02
Adjusted Diluted EPS2
$.39
$.43
(9.3%)
8
Solid Financial Position
Operating Cash Flow Supports Growth Strategy and Capital Return to Shareholders
Disciplined Capital Allocation
YTD Fiscal 2024
Strong Balance Sheet and Liquidity
9
Strategic Priorities
Capitalize on Growing Retail Demand to Sustain Long Term Growth
Driving productivity improvements and delivering sales growth in all Retail locations with a focus on ~300 of our small or underperforming stores
Generate significant cash flow through improved profitability and working capital reductions Continue to evaluate M&A opportunities as we invest for growth in our existing stores Capital return to shareholders through a healthy dividend program and share repurchases Further integrate ESG and Corporate Responsibility efforts into our strategy and operations
10
Disclaimer
Monro Muffler Brake Inc. published this content on 11 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 11 March 2024 20:17:19 UTC.