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Monro Muffler Brake Announces Record First Quarter 2009 Financial Results

Monro Muffler Brake has announced record financial results for its fiscal 2009 first quarter ended June 28. Sales for the first quarter of fiscal 2009 increased 11.8 percent to a record $120.4 million compared to $107.6 million for the first quarter of fiscal 2008. The company said sales were positively impacted by strong in-store execution, a 2.5 percent comparable store traffic increase driven by effective advertising programs and additional price increases in certain product categories.

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ROCHESTER, N.Y. — Monro Muffler Brake has announced record financial results for its fiscal 2009 first quarter ended June 28.

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Sales for the first quarter of fiscal 2009 increased 11.8 percent to a record $120.4 million compared to $107.6 million for the first quarter of fiscal 2008. The company said sales were positively impacted by strong in-store execution, a 2.5 percent comparable store traffic increase driven by effective advertising programs and additional price increases in certain product categories.

Comparable store sales increased 5.6 percent, on top of an increase of 6.2 percent for the first quarter of fiscal 2008 and exceeded the company’s previously estimated range of 3 percent to 5 percent. Comparable store sales for the first quarter of fiscal 2009 include a comparable store sales increase of 8.2 percent for the former ProCare stores. For specific product categories, comparable store sales increased approximately 5 percent for brakes, 6 percent for maintenance services, 12 percent for alignments and 9 percent for tires.

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The total sales for the quarter included an increase in sales from new stores of $7.4 million. The new store sales increase included $6.6 million in sales from the 19 former Craven and Valley Forge stores acquired in July 2007 and the seven former Broad Elm group stores acquired in January 2008.

Gross margin was 42.3 percent in the first quarter compared to 43.4 percent in the prior year quarter due primarily to increased raw material costs, partially offset by price increases implemented throughout the quarter. Total operating expenses were $36.9 million, or 30.7 percent of sales, compared with 30.5 percent of sales for the same period of the prior year. Total operating expenses for the first quarters of fiscal 2009 and 2008 include amounts that were historically included in Other Income and Expense, primarily related to gains and losses on property disposals, and amortization expense.

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Net income for the quarter was $7.8 million as compared to $8.2 million for the prior year period. Diluted earnings per share for the quarter were a record 39 cents and were at the high-end of the company’s previously expected range. This compares to diluted earnings per share of 36 cents in the first quarter of fiscal 2008.

Robert Gross, chairman and chief executive officer stated, "We are very encouraged by our continued strong performance and the positive momentum that our business has sustained over the past five months. We believe that our unwavering commitment to providing consistent quality service to our loyal customers, coupled with our solid marketing and advertising efforts, has enabled us to increase our market share and drive store traffic in what has been a difficult time for many of our competitors. Further, our reputation as a trusted service provider has enabled us to raise our prices in order to partially offset higher raw materials costs while maintaining strong relationships with our customers."

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The company closed seven locations during the quarter, ending first quarter fiscal 2009 with 713 stores.

Based on year-to-date performance and current business trends, the company anticipates comparable store sales growth in the range of 3 percent to 5 percent for the second quarter of fiscal 2009. The company also expects diluted earnings per share for the second quarter to be in the range of 36 to 38 cents, compared to 29 cents for the second quarter of fiscal 2008.

For fiscal 2009, the company now anticipates comparable store sales growth of 3 percent to 4 percent and diluted earnings per share in the range of $1.10 to $1.18, compared with previous expectations of 2 percent to 4 percent comparable store sales growth and diluted earnings per share in the range of $1.08 to $1.18. The estimates are based on 20.4 million weighted average shares outstanding and exclude the impact of any potential acquisitions. The company continues to expect total fiscal 2009 sales in the range of $455 million to $465 million.

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"We are very pleased to see that our positive trends have extended into our current quarter, with our July monthly comparable store sales increasing approximately 8 percent as of last weekend,” Gross added. “While we are cognizant of the challenging macro environment, we are cautiously optimistic about our outlook for the remainder of the year and expect that our company-operated stores and low cost business model will allow us to continue to produce solid results. Moreover, we believe that our strong foundation will afford us the stability and flexibility to capitalize on fairly-priced acquisitions, which we anticipate may arise in this difficult environment."

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For more information about Monro Muffler Brake, visit: www.monro.com.

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