ITASCA, Ill. — Midas Inc. has reported net earnings of $2.1 million, or 15 cents per diluted share, for the second quarter ended July 2, compared to $0.8 million, or 6 cents per diluted share, in the second quarter of 2010.
For the first six months of 2011, net earnings were $3 million, or 21 cents per diluted share, an increase from $1.5 million, or 11 cents per diluted share, in 2010.
Second quarter 2011 results were negatively impacted by 2 cents per share as a result of losses on the sale of eight company-operated shops to franchisees and a final foreign currency exchange loss related to the April payment to the company’s master European licensee as part of the now-concluded arbitration. However, these losses were offset by a 3 cents per share warranty liability reduction due to the declining trend in claims experience, the company said.
“The positive trend in retail sales continues as comparable shop sales at Midas shops in the United States were up by 2.2 percent, the seventh consecutive quarter of increases,” said Alan Feldman, Midas’ chairman and CEO. “Average daily car count at U.S. Midas shops increased by two percent during the quarter — following a four percent increase in the first quarter and a 10 percent increase for all of 2010.”
In U.S. Midas shops, oil changes increased by five percent and tire sales grew by 3.2 percent in the quarter. Suspension sales were up by 8.1 percent, while exhaust was flat and brakes declined by 2.5 percent.
“The positive sales trends we experienced at Midas shops in the first half of the year have continued into the third quarter, with preliminary reports for July showing a comparable shop sales increase per selling day of more than four percent for U.S. Midas shops,” Feldman said.
Total sales and revenues for the quarter were $47.7 million, compared to $49.3 million in the second quarter last year. Sales for the first six months were $93.8 million down from $97 million in the first half of last year. This anticipated decline in the second quarter was due to having 20 fewer company-operated Midas and SpeeDee shops compared to 2010, as a result of the company’s ongoing re-franchising efforts.
Assuming these comparable shop sales increases are achieved, Midas expects earnings per diluted share of between 18 cents and 22 cents, excluding the impact of gains or losses on the sale of assets, for the second half of the year.
