ITASCA, Ill. — Midas has reported net earnings of $0.7 million — or 5 cents per diluted share — for the first quarter ended April 3, compared to $1 million — or 7 cents per diluted share — in the first quarter of 2009.

Total sales and revenues for the quarter were $47.7 million, compared to $44.3 million in the first quarter last year.

First quarter 2010 results were negatively affected by $1.1 million of incremental legal and other expenses incurred in preparation for the July 2010 arbitration with the company’s master licensee in Europe. These arbitration costs had an after-tax impact of 5 cents per diluted share.

“The positive momentum in retail sales that we experienced in the fourth quarter of 2009 continued into this year, as retail sales in U.S. Midas shops grew by 2.6 percent during the quarter on a comparable shop basis,” said Alan Feldman, Midas’ chairman and CEO. “March comparable shop sales at U.S. shops were up by 5 percent, the best single-month performance improvement since September 2006.”

Feldman said that the sales increase was driven by continued growth in customer count and a slowdown in the decline in average ticket.

“Average daily car count at U.S. Midas shops increased by 13 percent during the quarter — on top of double-digit increases for all of 2009, while the average ticket declined by 7.4 percent in the first quarter compared to 12 percent for all of 2009, ” Feldman said.

“Midas is continuing to attract customers with value-priced oil changes, which includes a comprehensive courtesy check on all vehicles,” he said. “Oil change revenues increased by 21 percent in U.S. shops during the quarter, on top of an increase of 24 percent in the first quarter last year when Midas began aggressive local promotions of oil changes through network radio commercials and direct mail.

“This marketing strategy is enabling our shops to attract new customers and to begin to establish long-term relationships with them,” Feldman said.

In U.S. Midas shops, tire sales grew by 13 percent in the quarter and suspension sales were up by 6 percent, while exhaust was slightly positive and brakes declined by 3 percent, better than the 5 percent decline for all of 2009.

To improve brake sales, there is a system-wide training effort underway for franchisees and shop employees called the “Midas Way.” The program is based on a disciplined series of inspection and customer communication procedures for every contact point with customers.

“We launched a ‘Midas Way’ pilot in Philadelphia last November, where comparable retail sales in participating shops have increased by 13 percent from December through March over the same period a year ago, with brake sales up 11 percent,” Feldman said. “We launched a second ‘Midas Way’ test market in St. Louis in February and the preliminary results show comparable shop sales at participating shops up approximately 10 percent.”

Comprehensive training for the “Midas Way” operational and customer communication process will be rolled out throughout North America during 2010. To date, the training has been completed for Midas shops in Denver, Dallas, Detroit, Chicago and California.

“We are confident that our marketing strategy to attract customers with value-priced oil changes will lead to continued improvements in customer count and retail sales,” Feldman said.

“We also are encouraged by the sales gains at company-operated shops, the preliminary results of our ‘Midas Way’ efforts and the slowing decline in our brake business, as well as the continuing success in building sales at Midas-SpeeDee co-branded locations,” he said.

He said Midas and SpeeDee are well-positioned to benefit from increased consumer spending to maintain the aging vehicle population of more than 240 million cars and light trucks on U.S. highways.

Feldman said the company will continue its strict management of costs to improve profitability as revenues increase.