ITASCA, Ill. -- Midas has reported net earnings of $0.4 million, or 3 cents per diluted share, for the second quarter ended July 4, compared to $2.2 million, or 16 cents per diluted share, in the second quarter of 2008. The second quarter 2009 results include 9 cents of non-cash special items, primarily related to the vesting of restricted stock issued in 2005 and 2006. These non-cash special items resulted in approximately $0.7 million of administrative expense and $0.8 million of additional income tax expense, which drove the effective tax rate to 78.6 percent for the quarter.

Midas also reported that marketing efforts to grow its U.S. customer base with oil change promotions successfully resulted in an 11 percent increase in traffic during the quarter following a 6 percent gain last quarter. However, these gains in customer count were offset by a 12 percent decrease in the average ticket. As a result, comparable shop retail sales declined by 3.5 percent in U.S. Midas shops. Comparable shop sales at Midas shops in Canada were down by 2.6 percent.

“Consumers are looking for value and high-quality service now more than ever,” said Alan Feldman, Midas’ chairman and chief executive officer. “Our marketing efforts are aimed at getting consumers to give us a chance to earn their trust by experiencing an oil change at Midas. If we do a good job, many of these oil change customers will return to Midas for brakes, tires and other higher-dollar services.”

Feldman said that comparable shop sales in U.S. company-operated shops increased by 1.9 percent in the second quarter.

System comparable sales at franchised shops in the Southeast region were flat and were down by less than 1 percent in the Northeast. The West region declined by 5 percent. Overall system customer satisfaction scores in the U.S. improved by nearly 2 percentage points over second quarter 2008.

“Second quarter increases of 25 percent in oil changes and 7 percent in tires in U.S. shops were offset by continuing weakness in U.S. brake sales, which declined by six percent,” Feldman said. “We are encouraged by the increase in traffic, in retail sales at company-operated shops, continued improvement in customer satisfaction and by trends showing some improvement in sales in the Southeast and West regions, the areas which had been weakest over the past 18 months.”

“These trends indicate that while we have not turned the corner yet, we can at least see it,” he said.