ITASCA, Ill. -- Midas has reported net earnings of $0.9 million, or 7 cents per diluted share, for the first quarter ended April 2, compared to $0.7 million, or 5 cents per diluted share, in the first quarter of 2010.

Midas said first quarter results were negatively impacted by $1.3 million of net foreign currency exchange losses –or 5 cents per diluted share – because of the re-measurement of the Euro-denominated arbitration settlement related to the company’s now-concluded contractual dispute with its master European licensee, MESA S.p.A.

Total sales and revenues for the quarter were $46.1 million, compared to $47.7 million in the first quarter last year. This anticipated decline was primarily the result of the ongoing re-franchising program in which 18 company operated shops have been sold to franchisees over the past 12 months.

Midas’ franchising revenues were $13 million for the quarter, up from $12.9 million in 2010. A decline in the franchised shop count was offset by comparable franchised shop sales gains in the U.S. Midas shops.

Real estate revenues were $7.9 million, flat with last year, as increased retail sales offset a slight decline in rent-producing Midas shops.

Revenues from retail sales at company shops were $18 million during the quarter, down from $19.8 million last year. The decline was the result of having 18 fewer company shops this year compared to the first quarter of 2010 as a result of re-franchising, offset by the five percent comparable shop sales increase.

Replacement part sales and product royalties were $5.2 million, down from $5.4 million a year ago, primarily due to a decline in tire sales to shops.

Revenues from the company’s R.O. Writer software business were $1.6 million in the first quarter, compared to $1.5 million last year.

First quarter operating income was $4.7 million, compared to $3.5 million for the same period a year ago, reflecting a 2.9 percentage point improvement in operating margin.

Company-operated shops were breakeven in the first quarter of 2011, compared to a loss of $0.2 million in the first quarter last year. There were also improvements of $0.3 million in operating contributions from R.O. Writer and the real estate businesses.