Financial Performance - For the quarter ended September 26, 2020, sales were $288.6 million, a decrease of $35.5 million or 11.0% compared to $324.1 million for the same quarter in the prior year[69]. - Comparable store sales decreased by 11.4% for the quarter ended September 26, 2020, and by 18.7% for the six months ended September 26, 2020 compared to the same periods in the prior year[69][70]. - Gross profit for the quarter ended September 26, 2020 was $104.5 million, or 36.2% of sales, down from $122.1 million, or 37.7% of sales in the prior year quarter[73]. - Operating income for the quarter ended September 26, 2020 was approximately $24.4 million, a decrease of 26.8% compared to $33.4 million in the same quarter of the previous year, with a percentage of sales dropping from 10.3% to 8.5%[77]. - Net income for the quarter ended September 26, 2020 was $12.8 million, a decrease of 36.8% from $20.3 million in the same quarter of the previous year, with diluted EPS dropping to $0.38 from $0.60[85]. - For the six months ended September 26, 2020, net income was $15.8 million, down 63.1% from $42.9 million in the same period of the previous year, with diluted EPS decreasing to $0.47 from $1.26[86]. Store Operations - The company added one Company-operated store and closed six stores during the quarter ended September 26, 2020, resulting in a total of 1,242 Company-operated stores[71]. - The company experienced a decline in comparable store sales in various categories, including brakes and tires, which decreased by approximately 24% and 3%, respectively, from the prior year quarter[72]. - The company has resumed its rebrand and reimage initiatives, completing the transformation of approximately 40 stores during the quarter ended September 26, 2020[61]. Debt and Financing - The company borrowed $350 million under its credit facility in March 2020 and repaid $335 million during the six months ended September 26, 2020[57]. - As of October 30, 2020, the company had approximately $46 million in cash on hand and paid down an additional $41 million in borrowings during October 2020[65]. - Weighted average debt outstanding increased by approximately $363 million for the six months ended September 26, 2020, while the weighted average interest rate decreased by approximately 280 basis points compared to the same period of the previous year[80]. - The company has a $600 million revolving Credit Facility expiring in April 2024, with $231.3 million outstanding as of September 26, 2020[101]. - The net availability under the Credit Facility was $335.1 million as of September 26, 2020[103]. - The First Amendment to the Credit Facility allows for acquisitions up to $100 million and dividends up to $38.5 million, provided financial covenants are met[108]. - Debt financing had a carrying amount of $231.3 million as of September 26, 2020, compared to $566.4 million as of March 28, 2020[113]. Operating Expenses and Tax - Operating expenses for the quarter ended September 26, 2020 were $80.1 million, representing 27.8% of sales, a decrease from $88.7 million or 27.4% of sales in the same quarter of the previous year[75]. - Net interest expense for the quarter ended September 26, 2020 increased by approximately $0.4 million, rising from 2.1% to 2.5% as a percentage of sales[79]. - The effective income tax rate for the quarter ended September 26, 2020 was 25.2%, up from 23.6% in the same quarter of the previous year[83]. Capital Expenditures and Dividends - The company spent approximately $24.0 million on capital requirements for the six months ended September 26, 2020, including $16.1 million related to Monro.Forward initiatives[93]. - The company paid dividends of $14.9 million during the six months ended September 26, 2020, with future dividends subject to Board discretion based on financial conditions[94]. Market Risk - The company is exposed to market risk from interest rate changes, with potential annual interest expense fluctuations of approximately $2.3 million based on debt position as of September 26, 2020[112].

SECOND QUARTER FISCAL 2021 EARNINGS CALL OCTOBER 28, 2020 MONRO TRECHSKE MR.JRE 755666999 [1999 CHILDING GTW WARRANT HEAD CA Safe Harbor Statement and Non-GAAP Measures Certain statements in this presentation, other than statements of historical fact, including estimates, projections, statements related to our business plans and operating results are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Monro has identified some of these forward-looking state ...

Monro, Inc. (NASDAQ:MNRO) Q2 2021 Earnings Conference Call October 28, 2020 8:30 AM ET Company Participants Maureen Mulholland - SVP, General Counsel & Secretary Robert Mellor - Chairman & Interim CEO Robert Rajkowski - SVP & COO Brian D'Ambrosia - EVP, Finance, CFO, Treasurer & Assistant Secretary Conference Call Participants Brian Nagel - Oppenheimer Jonathan Lamers - BMO Capital Markets Bret Jordan - Jefferies Nels Nelson - Stephens Inc. David Bellinger - Wolfe Research Stephanie Benjamin - Truist Securi ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ____________________________________________________________ FORM 10-Q ____________________________________________________________ (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 27, 2020. OR ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____________ to _ ...

??? January 1, 0000 ET Q1 2021 Earnings Conference Call July 29, 2020, 8:30 AM ET Company Participants Maureen Mulholland - Senior Vice President, General Counsel and Secretary Brett Ponton - President and CEO Brian D'Ambrosia - Chief Financial Officer Conference Call Participants Brian Nagel - Oppenheimer Jonathan Lamers - BMO Capital Markets Bret Jordan - Jefferies Rick Nelson - Stephens Stephanie Benjamin - SunTrust Scott Stember - CL King Operator Good morning, ladies and gentlemen. And welcome to Monro ...

PART I [Item 1. Business](index=3&type=section&id=Item%201.%20Business) Monro operates a large network of automotive repair and tire service stores across the US, focusing on a customer-centric growth strategy - Monro, Inc. operates **1,283 Company-operated stores**, **98 franchised locations**, eight wholesale locations, three retread facilities, and two dealer-operated stores across 32 states, specializing in automotive undercar repair and tire sales and services[14](index=14&type=chunk) - The average age of cars and light trucks in the U.S. rose to **11.8 years** in 2019, a favorable industry trend for automotive aftermarket services[25](index=25&type=chunk) - The **COVID-19 pandemic** led to an immediate and significant decline in traffic during the fourth quarter of fiscal 2020, impacting consumer demand despite the industry being classified as an essential business[31](index=31&type=chunk)[32](index=32&type=chunk) - The **Monro.Forward** strategic plan, initiated in October 2017, focuses on four key pillars: improving guest experience, enhancing customer-centric engagement, optimizing product/service offerings, and accelerating productivity and team engagement[33](index=33&type=chunk)[35](index=35&type=chunk) Sales Mix by Category (Fiscal Years 2020, 2019, 2018) | Category | FY20 | FY19 | FY18 | | :--------- | :--- | :--- | :--- | | Brakes | 13 % | 14 % | 13 % | | Exhaust | 2 % | 2 % | 2 % | | Steering | 8 % | 8 % | 8 % | | Tires | 51 % | 50 % | 50 % | | Maintenance | 26 % | 26 % | 27 % | | **Total** | **100 %** | **100 %** | **100 %** | [Item 1A. Risk Factors](index=16&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks from the COVID-19 pandemic, industry competition, economic conditions, and trade policies - The **COVID-19 pandemic** has significantly and adversely impacted the business, leading to negative impacts on demand, potential supply chain disruptions, increased costs, and diversion of management's attention[101](index=101&type=chunk)[102](index=102&type=chunk)[104](index=104&type=chunk) - The automotive repair industry is **highly competitive and fragmented**, with competition based on customer service, reputation, location, name awareness, and price, potentially forcing price reductions[106](index=106&type=chunk) - The business is subject to **seasonality**, with lower profitability in slower sales months (e.g., November-February for undercar, January-April/September for tires) and winter months due to higher operating costs[107](index=107&type=chunk)[108](index=108&type=chunk)[109](index=109&type=chunk) - Changes in U.S. trade policies, including **import tariffs** on products like tires, could increase expenses and negatively affect profitability if cost increases cannot be passed on to customers[113](index=113&type=chunk)[114](index=114&type=chunk) - The company recorded an impairment of long-lived assets of **$2.3 million** for the year ended March 28, 2020, primarily due to the negative impact of the COVID-19 pandemic on forecasted store performance, and plans to close 36 underperforming stores in fiscal 2021, incurring **$4.3 million** in related impairment costs in fiscal 2020[133](index=133&type=chunk)[135](index=135&type=chunk) [Item 1B. Unresolved Staff Comments](index=22&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) There are no unresolved staff comments to report - No unresolved staff comments were reported[144](index=144&type=chunk) [Item 2. Properties](index=22&type=section&id=Item%202.%20Properties) Monro owns and leases numerous store, warehouse, and office facilities across its operating regions - Monro owns its primary office/warehouse facility (171,500 sq ft) in Rochester, New York, a second office/warehouse facility (28,000 sq ft) in Swanzey, New Hampshire, and one retread facility in North Carolina[145](index=145&type=chunk) - As of March 28, 2020, out of 1,283 Company-operated stores, **332 were owned**, **886 were leased**, and for 65 stores, only the land was leased[146](index=146&type=chunk) [Item 3. Legal Proceedings](index=22&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in various legal proceedings incidental to business, which are not expected to be materially adverse - Monro is a party to various claims and legal proceedings incidental to its business, but management does not believe they will have a material adverse effect on financial condition or results of operations[147](index=147&type=chunk) [Item 4. Mine Safety Disclosures](index=22&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Mine Safety Disclosures are not applicable to the registrant[148](index=148&type=chunk) PART II [Item 5. Market for the Company's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=23&type=section&id=Item%205.%20Market%20for%20the%20Company's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on Nasdaq, with future dividends subject to Board discretion and credit facility restrictions - Monro's common stock is traded on the Nasdaq Stock Market under the symbol **'MNRO'**[151](index=151&type=chunk) - As of May 22, 2020, there were approximately **46 shareholders of record**[152](index=152&type=chunk) - Future dividends are at the discretion of the Board and subject to financial conditions and credit facility restrictions, allowing up to **$38.5 million** in aggregate dividends from June 30, 2020, to June 30, 2021[153](index=153&type=chunk) [Item 6. Selected Financial Data](index=24&type=section&id=Item%206.%20Selected%20Financial%20Data) This section presents a five-year summary of key financial and operating data from audited statements Selected Financial and Operating Data (Fiscal Years 2016-2020) | Metric | 2020 | 2019 | 2018 | 2017 | 2016 | | :------------------------------------ | :----------- | :----------- | :----------- | :----------- | :----------- | | **Income Statement Data (in thousands):** | | | | | | | Sales | $ 1,256,524 | $ 1,200,230 | $ 1,127,815 | $ 1,021,511 | $ 943,651 | | Gross profit | $ 476,658 | $ 465,228 | $ 435,574 | $ 396,889 | $ 385,703 | | Operating income | $ 101,702 | $ 126,743 | $ 127,296 | $ 116,384 | $ 120,589 | | Net income | $ 58,024 | $ 79,752 | $ 63,935 | $ 61,526 | $ 66,805 | | Earnings per share (Diluted) | $ 1.71 | $ 2.37 | $ 1.92 | $ 1.85 | $ 2.00 | | Cash dividends per share | $ 0.88 | $ 0.80 | $ 0.72 | $ 0.68 | $ 0.60 | | **Selected Operating Data:** | | | | | | | Total Sales growth | 4.7 % | 6.4 % | 10.4 % | 8.3 % | 5.5 % | | Comparable store sales | (2.3) % | 0.4 % | 1.8 % | (4.3) % | (0.1) % | | Company-operated stores (end of year) | 1,283 | 1,197 | 1,150 | 1,118 | 1,029 | | Capital expenditures (in thousands) | $ 55,918 | $ 44,468 | $ 39,122 | $ 34,640 | $ 36,834 | | **Balance Sheet Data (at period end, in thousands):** | | | | | | | Net working capital | $ 341,084 | $ 21,460 | $ 13,251 | $ 13,337 | $ 2,504 | | Total assets | $ 2,049,457 | $ 1,312,288 | $ 1,218,432 | $ 1,185,264 | $ 999,438 | | Long-term obligations | $ 1,035,727 | $ 375,771 | $ 375,288 | $ 395,503 | $ 269,045 | | Shareholders' equity | $ 734,440 | $ 699,510 | $ 628,476 | $ 581,254 | $ 536,195 | [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Fiscal 2020 sales grew 4.7% to $1.257 billion, but net income declined 27.2% due to pandemic impacts and rising costs - Sales for fiscal 2020 increased by **$56.3 million (4.7%)** to **$1.257 billion**, primarily due to $83.3 million from new stores (including $73.2 million from acquisitions), partially offset by a **2.3% decrease** in comparable store sales[184](index=184&type=chunk) - Gross profit for fiscal 2020 was **$476.7 million (37.9% of sales)**, down from 38.8% in fiscal 2019, mainly due to increased distribution, occupancy, and labor costs[187](index=187&type=chunk) - Operating income decreased by **19.8% to $101.7 million** in fiscal 2020, representing 8.1% of sales, down from 10.6% in fiscal 2019[190](index=190&type=chunk) - In response to COVID-19, Monro drew down the remaining **$350 million** from its **$600 million Revolving Credit Facility** in March 2020, resulting in **$566.4 million outstanding** and no availability[173](index=173&type=chunk)[206](index=206&type=chunk) - A First Amendment to the Credit Facility was entered into on June 11, 2020, eliminating the interest coverage ratio covenant, requiring **$275 million monthly liquidity**, and adjusting the maximum adjusted debt to EBITDAR ratio for flexibility through Q1 fiscal 2022[207](index=207&type=chunk)[208](index=208&type=chunk) - As of June 5, 2020, the company had **$384.2 million in cash on hand**, believing it has sufficient liquidity for at least the next 12 months[181](index=181&type=chunk)[211](index=211&type=chunk) - Critical accounting policies include Business Combinations (fair value estimates for ROU assets and intangible assets), Carrying Values of Goodwill and Long-Lived Assets (annual impairment tests, qualitative assessments), Self-Insurance Reserves (actuarial estimates for workers' compensation, general liability, and medical claims), and Income Taxes (deferred tax assets/liabilities, uncertain tax positions)[159](index=159&type=chunk)[160](index=160&type=chunk)[164](index=164&type=chunk)[165](index=165&type=chunk) - The COVID-19 pandemic caused an immediate and significant decline in traffic and sales during Q4 fiscal 2020, impacting revenue and leading to a **$2.3 million impairment** on certain long-lived assets[171](index=171&type=chunk)[174](index=174&type=chunk) - In response to COVID-19, Monro drew down **$350 million** from its Revolving Credit Facility, suspended non-critical capital expenditures, reduced store hours and labor, furloughed non-store workforce, and paused acquisition activity[173](index=173&type=chunk) - Sales increased by **4.7% to $1.257 billion** in fiscal 2020, driven by new stores and acquisitions, despite a **2.3% decrease** in comparable store sales[184](index=184&type=chunk) - Gross profit as a percentage of sales decreased from **38.8%** in fiscal 2019 to **37.9%** in fiscal 2020, primarily due to increased distribution, occupancy, and labor costs[187](index=187&type=chunk) - Operating expenses increased by **$36.5 million**, or 10.8%, in fiscal 2020, including **$6.6 million** in impairment charges and **$1.4 million** in Monro.Forward initiative costs[189](index=189&type=chunk) - Net income decreased by **27.2% to $58.0 million**, and diluted EPS decreased by **27.8% to $1.71** in fiscal 2020 compared to fiscal 2019[194](index=194&type=chunk) - Primary capital requirements for fiscal 2020 included **$104.4 million for acquisitions** and **$55.9 million for facility upgrades**, systems, and store expansion, funded by cash flow from operations and the Revolving Credit Facility[198](index=198&type=chunk) - The company plans to open **10 to 20 new greenfield stores** in fiscal 2021 but has suspended capital expenditures for store rebrand/reimage and paused acquisition activity due to COVID-19[199](index=199&type=chunk) - Monro entered a new five-year **$600 million Revolving Credit Facility** in April 2019, with **$566.4 million outstanding** and no availability as of March 28, 2020, after drawing down $350 million in response to COVID-19[203](index=203&type=chunk)[206](index=206&type=chunk) - A First Amendment to the Credit Facility in June 2020 amended financial covenants, including eliminating the interest coverage ratio, requiring **$275 million in monthly liquidity**, and adjusting the maximum adjusted debt to EBITDAR ratio[207](index=207&type=chunk)[208](index=208&type=chunk) Income Statement Data as Percentage of Sales (Fiscal Years 2020, 2019) | Metric | 2020 | 2019 | | :------------------------------------------ | :--- | :--- | | Sales | 100.0 % | 100.0 % | | Cost of sales, including distribution and occupancy costs | 62.1 % | 61.2 % | | Gross profit | 37.9 % | 38.8 % | | Operating, selling, general and administrative expenses | 29.8 % | 28.2 % | | Operating income | 8.1 % | 10.6 % | | Interest expense, net | 2.2 % | 2.3 % | | Other income, net | (0.1) % | (0.1) % | | Income before income taxes | 5.9 % | 8.4 % | | Provision for income taxes | 1.3 % | 1.7 % | | Net income | 4.6 % | 6.6 % | Net Income and EPS (Fiscal Years 2020, 2019) | Metric | FY2020 | FY2019 | | :-------------------- | :------- | :------- | | Net income | $58,024 | $79,752 | | Diluted EPS | $1.71 | $2.37 | | Adjusted diluted EPS | $2.00 | $2.40 | Comparable Store Sales Decline (Year-over-Year) during COVID-19 (March-June 2020) | Week Ended | Comparable Store Sales % (Year-over-Year Decline) | | :----------- | :-------------------------------------------------- | | March 21 | (31)% | | March 28 | (47)% | | April 4 | (51)% | | April 11 | (52)% | | April 18 | (42)% | | April 25 | (35)% | | May 2 | (34)% | | May 9 | (29)% | | May 16 | (28)% | | May 23 | (25)% | | May 30 | (23)% | | June 6 | (19)% | Supplemental Reconciliation of Adjusted Net Income (Fiscal Years 2020, 2019) | Metric | 2020 (in thousands) | 2019 (in thousands) | | :------------------------------------------ | :------------------ | :------------------ | | Net income | $58,024 | $79,752 | | Store impairment charge | $6,579 | — | | Monro.Forward initiative costs | $3,976 | $2,543 | | Acquisition due diligence and integration costs | $1,363 | $740 | | Headquarters expansion costs | $346 | — | | Litigation settlement costs | $250 | — | | Corporate and field management realignment costs | — | $350 | | Provision for income taxes on adjustments | ($3,023) | ($869) | | One-time income tax benefit | — | ($2,050) | | **Adjusted net income** | **$67,515** | **$80,466** | Reconciliation of Adjusted Diluted EPS (Fiscal Years 2020, 2019) | Metric | 2020 | 2019 | | :------------------------------------------ | :--- | :--- | | Diluted EPS | $1.71 | $2.37 | | Store impairment charge | $0.15 | — | | Monro.Forward initiative costs | $0.09 | $0.06 | | Acquisition due diligence and integration costs | $0.03 | $0.02 | | Headquarters expansion costs | $0.01 | — | | Litigation settlement costs | $0.01 | — | | Corporate and field management realignment costs | — | $0.01 | | One-time income tax benefit | — | ($0.06) | | **Adjusted diluted EPS** | **$2.00** | **$2.40** | Contractual Obligations (as of March 28, 2020, in thousands) | Obligation Type | Total | Within 1 Year | 2 to 3 Years | 4 to 5 Years | After 5 Years | | :------------------------------------ | :---------- | :------------ | :----------- | :----------- | :------------ | | Principal payments on long-term debt | $566,400 | — | — | $566,400 | — | | Finance lease commitments/obligations | $461,187 | $52,480 | $105,877 | $87,866 | $214,964 | | Operating lease commitments | $238,622 | $36,590 | $62,574 | $46,226 | $93,232 | | Other liabilities | $1,933 | $800 | $1,133 | — | — | | **Total** | **$1,268,142** | **$89,870** | **$169,584** | **$700,492** | **$308,196** | [Item 7A. Quantitative and Qualitative Disclosures about Market Risk](index=32&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's primary market risk is interest rate fluctuation on its floating-rate debt - Monro's cash flow exposure on floating rate debt would result in annual interest expense fluctuations of approximately **$5.7 million** for every 100 basis point change in LIBOR, based on the debt position as of March 28, 2020[215](index=215&type=chunk) - Debt financing had a carrying amount and fair value of **$566.4 million** as of March 28, 2020, a significant increase from **$137.7 million** as of March 30, 2019[216](index=216&type=chunk) Item 8. Financial Statements and Supplementary Data [Report of Independent Registered Public Accounting Firm](index=34&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) PwC issued an unqualified opinion on the financial statements and internal controls, noting a change in lease accounting - PricewaterhouseCoopers LLP issued an **unqualified opinion** on Monro's consolidated financial statements and the effectiveness of its internal control over financial reporting as of March 28, 2020[222](index=222&type=chunk) - The company changed its accounting for leases in the year ended March 28, 2020, as discussed in Note 1 to the consolidated financial statements[223](index=223&type=chunk) - The **valuation of acquired Right of Use assets** was identified as a critical audit matter due to significant management judgment in estimating market terms and the high degree of auditor judgment and specialized skill required[230](index=230&type=chunk)[231](index=231&type=chunk) [Audited Financial Statements](index=36&type=section&id=Audited%20Financial%20Statements) This section includes the consolidated balance sheets, income statements, equity changes, and cash flows with accompanying notes - Monro adopted new accounting guidance for leases (ASC 842) as of March 31, 2019, using the modified retrospective approach, resulting in a **$165.3 million increase to total assets** and a **$165.9 million increase to total liabilities**[249](index=249&type=chunk)[251](index=251&type=chunk) - A long-lived assets impairment charge totaling **$6.6 million** was recorded in Q4 fiscal 2020, including **$4.3 million** related to 36 stores expected to close in fiscal 2021, due to operating performance and COVID-19 impact[263](index=263&type=chunk) - Goodwill and intangible assets are subject to annual impairment tests; a qualitative assessment in Q3 fiscal 2020 and further review due to COVID-19 indicated **no impairment of goodwill or intangible assets** as of March 28, 2020[271](index=271&type=chunk)[272](index=272&type=chunk)[273](index=273&type=chunk) - During fiscal 2020, Monro acquired businesses for an aggregate purchase price of **$103.6 million**, adding 88 retail tire and automotive repair stores, primarily in Nevada, Idaho, California, and Louisiana[289](index=289&type=chunk)[290](index=290&type=chunk) - Fiscal 2020 acquisitions resulted in **$106.9 million in goodwill** and **$2.8 million** in finite-lived intangible assets (customer lists)[291](index=291&type=chunk)[295](index=295&type=chunk) - Sales and net loss for fiscal 2020 acquired locations totaled **$59.3 million** and **($3.9) million**, respectively, from acquisition date through March 28, 2020[293](index=293&type=chunk) - During fiscal 2019, Monro acquired businesses for an aggregate purchase price of **$61.7 million**, adding 51 retail/commercial tire and automotive repair stores and one retread facility[296](index=296&type=chunk)[300](index=300&type=chunk) - Depreciation expense totaled **$39.2 million** in fiscal 2020, up from **$35.5 million** in fiscal 2019 and **$32.3 million** in fiscal 2018[304](index=304&type=chunk) - Amortization of intangible assets (excluding favorable leases) totaled **$4.8 million** in fiscal 2020, compared to **$5.3 million** in fiscal 2019[306](index=306&type=chunk) - Monro drew down the remaining **$350 million** from its **$600 million Revolving Credit Facility** in March 2020 to enhance liquidity due to COVID-19, resulting in **$566.4 million outstanding** and no availability at March 28, 2020[312](index=312&type=chunk) - A First Amendment to the Credit Facility on June 11, 2020, provided covenant relief, including eliminating the interest coverage ratio, requiring **$275 million in monthly liquidity**, and adjusting the maximum adjusted debt to EBITDAR ratio[313](index=313&type=chunk)[314](index=314&type=chunk) - Revenue from automotive undercar repair, tire sales, and services is recognized when customers take possession of their vehicle or merchandise[319](index=319&type=chunk) - Deferred revenue from tire road hazard warranty agreements totaled **$18.5 million** at March 28, 2020, recognized over the contract period (typically 21-36 months)[320](index=320&type=chunk) - The CARES Act, enacted March 27, 2020, impacted Monro's tax code, leading to an estimated **$17 million** in additional allowable depreciation for certain improvement property[326](index=326&type=chunk) - The effective income tax rate was **21.9%** in fiscal 2020, compared to **20.5%** in fiscal 2019[193](index=193&type=chunk)[328](index=328&type=chunk) - Holders of Class C preferred stock have significant voting power (**60% approval** for certain actions) and a liquidation preference of **$1.50 per share**[334](index=334&type=chunk) - Total stock-based compensation expense was **$3.8 million** in fiscal 2020, with **$5.0 million** in unrecognized compensation expense expected to be recognized over approximately two years[336](index=336&type=chunk) - The company grants non-qualified stock options, restricted stock awards, and restricted stock units under the 2007 Incentive Stock Option Plan, with **929,360 shares available for grant** at March 28, 2020[336](index=336&type=chunk)[337](index=337&type=chunk) - The adoption of new lease accounting guidance (ASC 842) resulted in a **$165.3 million increase to total assets** and a **$165.9 million increase to total liabilities** as of March 31, 2019[251](index=251&type=chunk) - Monro sponsors a noncontributory defined benefit pension plan, which was underfunded by **$3.0 million** as of March 28, 2020[353](index=353&type=chunk) - The company's 401(k)/Profit Sharing Plan incurred matching contributions of approximately **$1.7 million** in fiscal 2020[359](index=359&type=chunk) - A deferred compensation plan for select management had a total liability of approximately **$2.2 million** at March 28, 2020[360](index=360&type=chunk) - Monro is involved in various legal proceedings, but management believes the ultimate outcome will not have a material adverse effect on its financial position, results of operations, or cash flows[365](index=365&type=chunk) - In May 2020, Monro's Board declared a cash dividend of **$0.22 per share**, payable on June 22, 2020[366](index=366&type=chunk) - On June 11, 2020, a First Amendment to the credit agreement was executed, modifying financial covenants and permitting dividends and acquisitions under specific terms through Q1 fiscal 2022[367](index=367&type=chunk) - A material impairment charge totaling **$6.6 million** was recorded during the fourth quarter of fiscal 2020[370](index=370&type=chunk) Consolidated Balance Sheet Highlights (as of March 28, 2020 and March 30, 2019, in thousands) | Asset/Liability/Equity | March 28, 2020 | March 30, 2019 | | :-------------------------------------------------- | :------------- | :------------- | | Cash and equivalents | $345,476 | $6,214 | | Total current assets | $596,020 | $239,907 | | Property, plant and equipment, net | $328,637 | $312,552 | | Finance lease and financing obligation assets, net | $196,575 | $128,029 | | Operating lease assets, net | $199,729 | — | | Goodwill | $671,843 | $565,503 | | Total assets | $2,049,457 | $1,312,288 | | Total current liabilities | $254,936 | $218,447 | | Long-term debt | $566,400 | $137,682 | | Long-term finance leases and financing obligations | $298,373 | $238,089 | | Long-term operating lease liabilities | $170,954 | — | | Total liabilities | $1,315,017 | $612,778 | | Total shareholders' equity | $734,440 | $699,510 | Consolidated Statements of Comprehensive Income Highlights (Fiscal Years 2020, 2019, 2018, in thousands) | Metric | 2020 | 2019 | 2018 | | :------------------------------------------ | :----------- | :----------- | :----------- | | Sales | $1,256,524 | $1,200,230 | $1,127,815 | | Gross profit | $476,658 | $465,228 | $435,574 | | Operating income | $101,702 | $126,743 | $127,296 | | Income before income taxes | $74,274 | $100,360 | $103,454 | | Provision for income taxes | $16,250 | $20,608 | $39,519 | | Net income | $58,024 | $79,752 | $63,935 | | Comprehensive income | $55,671 | $79,464 | $63,545 | | Basic earnings per share | $1.73 | $2.41 | $1.94 | | Diluted earnings per share | $1.71 | $2.37 | $1.92 | Shareholders' Equity Changes (Fiscal Years 2018-2020, in thousands) | Metric | March 25, 2017 | March 31, 2018 | March 30, 2019 | March 28, 2020 | | :-------------------------------- | :------------- | :------------- | :------------- | :------------- | | Total Shareholders' Equity | $581,254 | $628,476 | $699,510 | $734,440 | | Net income | | $63,935 | $79,752 | $58,024 | | Dividends (Common) | | ($23,601) | ($26,406) | ($29,266) | | Stock-based compensation | | $2,858 | $4,022 | $3,813 | | Accounting change - cumulative effect | | | | ($582) | Consolidated Statements of Cash Flows Highlights (Fiscal Years 2020, 2019, 2018, in thousands) | Cash Flow Activity | 2020 | 2019 | 2018 | | :------------------------------------------ | :----------- | :----------- | :----------- | | Net cash provided by operating activities | $121,329 | $152,891 | $121,235 | | Net cash used for investing activities | ($158,811) | ($105,883) | ($58,490) | | Net cash provided by (used for) financing activities | $376,744 | ($42,703) | ($69,831) | | Increase (decrease) in cash | $339,262 | $4,305 | ($7,086) | | Cash at end of year | $345,476 | $6,214 | $1,909 | | Capital expenditures | ($55,918) | ($44,468) | ($39,122) | | Acquisitions, net of cash acquired | ($104,436) | ($62,427) | ($23,439) | | Proceeds from borrowings | $814,181 | $433,460 | $344,843 | | Principal payments on long-term debt, etc. | ($412,725) | ($463,989) | ($395,521) | Composition of Other Current Assets (Fiscal Years 2020, 2019, in thousands) | Asset | 2020 | 2019 | | :-------------------- | :------- | :------- | | Vendor rebates receivable | $16,232 | $14,169 | | Other | $24,305 | $28,283 | | **Total** | **$40,537** | **$42,452** | Major Classifications of Property, Plant and Equipment (Fiscal Years 2020, 2019, in thousands) | Classification | 2020 | 2019 | | :-------------------------------- | :----------- | :----------- | | Land | $84,765 | $85,623 | | Buildings and improvements | $272,724 | $251,431 | | Equipment, signage and fixtures | $278,324 | $256,411 | | Vehicles | $38,356 | $36,393 | | Construction-in-progress | $8,763 | $10,563 | | Property, plant and equipment | $682,932 | $640,421 | | Less - Accumulated depreciation | ($354,295) | ($327,869) | | **Property, plant and equipment, net** | **$328,637** | **$312,552** | Changes in Goodwill (Fiscal Years 2019-2020, in thousands) | Metric | Amount | | :-------------------------------- | :------- | | Balance at March 31, 2018 | $522,892 | | Fiscal 2019 acquisitions | $42,124 | | Adjustments to fiscal 2018 purchase accounting | $487 | | Balance at March 30, 2019 | $565,503 | | Fiscal 2020 acquisitions | $106,930 | | Adjustments to fiscal 2019 purchase accounting | ($590) | | **Balance at March 28, 2020** | **$671,843** | Composition of Other Intangible Assets (Fiscal Years 2020, 2019, in thousands) | Intangible Asset | 2020 Gross Carrying Amount | 2020 Accumulated Amortization | 2019 Gross Carrying Amount | 2019 Accumulated Amortization | | :----------------------- | :------------------------- | :---------------------------- | :------------------------- | :---------------------------- | | Customer lists | $42,511 | $26,333 | $39,710 | $23,258 | | Favorable leases | — | — | $30,315 | $11,049 | | Trade names | $21,252 | $12,072 | $21,252 | $10,851 | | Franchise agreements | $7,220 | $2,805 | $7,220 | $2,259 | | Other intangible assets | $590 | $582 | $590 | $563 | | **Total intangible assets** | **$71,573** | **$41,792** | **$99,087** | **$47,980** | Long-Term Debt (as of March 28, 2020 and March 30, 2019, in thousands) | Debt Type | March 28, 2020 | March 30, 2019 | | :-------------------------- | :------------- | :------------- | | Revolving Credit Facility | $566,400 | $137,682 | | Note payable | — | $40 | | **Long-term debt** | **$566,400** | **$137,682** | Disaggregated Revenue by Product Group (Fiscal Years 2020, 2019, 2018, in thousands) | Product Group | 2020 | 2019 | 2018 | | :-------------- | :----------- | :----------- | :----------- | | Brakes | $169,138 | $162,709 | $146,082 | | Exhaust | $25,058 | $28,713 | $26,969 | | Steering | $100,230 | $95,711 | $94,391 | | Tires | $634,513 | $601,295 | $560,398 | | Maintenance | $324,494 | $308,668 | $296,658 | | Other | $3,091 | $3,134 | $3,317 | | **Total** | **$1,256,524** | **$1,200,230** | **$1,127,815** | Components of Provision for Income Taxes (Fiscal Years 2020, 2019, 2018, in thousands) | Component | 2020 | 2019 | 2018 | | :---------- | :------- | :------- | :------- | | Current | $4,777 | $8,091 | $24,034 | | Deferred | $11,473 | $12,517 | $15,485 | | **Total** | **$16,250** | **$20,608** | **$39,519** | Net Deferred Tax (Liabilities) Assets (as of March 28, 2020 and March 30, 2019, in thousands) | Category | March 28, 2020 | March 30, 2019 | | :-------------------------- | :------------- | :------------- | | Total deferred tax liabilities | ($198,208) | ($113,970) | | Total deferred tax assets | $194,323 | $116,136 | | **Net deferred tax (liabilities) assets** | **($3,885)** | **$2,166** | Stock Options Outstanding (as of March 28, 2020) | Range of Exercise Prices | Shares Under Option | Weighted Average Remaining Life (years) | Weighted Average Exercise Price | | :----------------------- | :------------------ | :-------------------------------------- | :------------------------------ | | $43.99 - $46.99 | 5,500 | 3.62 | $44.82 | | $47.00 - $48.28 | 328,043 | 3.37 | $47.25 | | $48.29 - $64.99 | 168,316 | 1.95 | $57.77 | | $65.00 - $88.63 | 300,907 | 4.20 | $71.56 | | **Total** | **802,766** | **3.4** | **$58.55** | Earnings Per Common Share Reconciliation (Fiscal Years 2020, 2019, 2018, in thousands, except per share data) | Metric | 2020 | 2019 | 2018 | | :------------------------------------------ | :------- | :------- | :------- | | Income available to common stockholders | $57,575 | $79,344 | $63,567 | | Weighted average common shares, basic | 33,246 | 32,980 | 32,767 | | Weighted average common shares, diluted | 33,953 | 33,675 | 33,341 | | **Basic earnings per common share** | **$1.73** | **$2.41** | **$1.94** | | **Diluted earnings per common share** | **$1.71** | **$2.37** | **$1.92** | Lease Cost Components (Fiscal Year Ended March 28, 2020, in thousands) | Component | Amount | | :-------------------------------- | :------- | | Operating lease cost | $38,525 | | Finance lease/financing obligations cost (Amortization) | $21,033 | | Finance lease/financing obligations cost (Interest) | $21,330 | | Short term and variable lease cost | $2,194 | | Sublease income | ($166) | | **Total lease cost** | **$82,916** | Future Maturities of Lease Liabilities (as of March 28, 2020, in thousands) | Year | Operating Leases | Finance Leases and Financing Obligations | | :--- | :--------------- | :------------------------------------- | | 2021 | $36,590 | $52,480 | | 2022 | $33,321 | $52,270 | | 2023 | $29,253 | $53,607 | | 2024 | $24,778 | $45,794 | | 2025 | $21,448 | $42,072 | | Thereafter | $93,232 | $214,964 | | **Total undiscounted lease obligations** | **$238,622** | **$461,187** | | Less: imputed interest | ($37,487) | ($130,557) | | **Net lease obligation** | **$201,135** | **$330,630** | Contractual Obligations (as of March 28, 2020, in thousands) | Obligation Type | Total | Within 1 Year | 2 to 3 Years | 4 to 5 Years | After 5 Years | | :------------------------------------ | :---------- | :------------ | :----------- | :----------- | :------------ | | Principal payments on long-term debt | $566,400 | — | — | $566,400 | — | | Finance lease commitments/obligations | $461,187 | $52,480 | $105,877 | $87,866 | $214,964 | | Operating lease commitments | $238,622 | $36,590 | $62,574 | $46,226 | $93,232 | | Other liabilities | $1,933 | $800 | $1,133 | — | — | | **Total** | **$1,268,142** | **$89,870** | **$169,584** | **$700,492** | **$308,196** | Selected Quarterly Financial Information (Fiscal Year Ended March 2020, in thousands, except per share data) | Metric | June 2019 | Sept. 2019 | Dec. 2019 | March 2020 | | :------------------------------------------ | :---------- | :---------- | :---------- | :---------- | | Sales | $317,063 | $324,113 | $329,281 | $286,066 | | Gross profit | $128,147 | $122,073 | $124,352 | $102,087 | | Operating income | $36,371 | $33,357 | $31,571 | $404 | | Net income (loss) | $22,606 | $20,314 | $18,880 | ($3,776) | | Diluted earnings (loss) per share | $0.67 | $0.60 | $0.56 | ($0.12) | PART III [Item 10. Directors, Executive Officers and Corporate Governance](index=67&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information on directors, officers, and governance policies is incorporated by reference from the company's proxy statement - Information concerning directors, executive officers, and corporate governance is incorporated by reference from the Proxy Statement[381](index=381&type=chunk)[382](index=382&type=chunk) - Monro's Code of Ethics for All Board Members, Executive Officers and Management Teammates is available on its website[383](index=383&type=chunk) [Item 11. Executive Compensation](index=67&type=section&id=Item%2011.%20Executive%20Compensation) Details on executive compensation are incorporated by reference from the company's proxy statement - Information concerning executive compensation is incorporated by reference to the Proxy Statement[384](index=384&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=67&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information on security ownership and equity compensation plans is incorporated by reference from the company's proxy statement - Information concerning security ownership of certain beneficial owners and management, and equity compensation plan information, is incorporated by reference from the Proxy Statement[385](index=385&type=chunk)[386](index=386&type=chunk) [Item 13. Certain Relationships and Related Transactions and Director Independence](index=67&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%20and%20Director%20Independence) Information on related party transactions and director independence is incorporated by reference from the company's proxy statement - Information concerning certain relationships and related transactions and director independence is incorporated by reference from the Proxy Statement[387](index=387&type=chunk) [Item 14. Principal Accountant Fees and Services](index=67&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information regarding principal accountant fees and services is incorporated by reference from the company's proxy statement - Information concerning principal accountant fees and services is incorporated by reference from the Proxy Statement[388](index=388&type=chunk) PART IV [Item 15. Exhibits and Financial Statement Schedules](index=68&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists all exhibits filed with the Form 10-K, while financial statement schedules have been omitted - Financial statements are referenced from Item 8 of Part II[391](index=391&type=chunk) - Financial statement schedules have been omitted because they are inapplicable, not required, or the information is included elsewhere[392](index=392&type=chunk) - A comprehensive index to exhibits is provided, detailing various corporate and contractual documents[396](index=396&type=chunk) [Item 16. Form 10-K Summary](index=70&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company has not provided a summary for its Form 10-K - No Form 10-K Summary is provided[398](index=398&type=chunk)

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ____________________________________________________________ FORM 10-Q ____________________________________________________________ (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 28, 2019. OR ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____________ ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ____________________________________________________________ FORM 10-Q ____________________________________________________________ (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 28, 2019. OR ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____________ ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ____________________________________________________________ FORM 10-Q ____________________________________________________________ (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 29, 2019. OR ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____________ to _ ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _________________________________________ FORM 10-K _________________________________________ (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended March 30, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ______ TO ______ Commission File Number 0-19357 __________________________________ ...