PART I [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) Monro, Inc.'s unaudited consolidated financial statements for Q1 FY2023 show increased sales but decreased net income and EPS [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) Total assets and liabilities decreased as of June 25, 2022, primarily due to reductions in goodwill, inventories, and long-term debt Consolidated Balance Sheet Highlights (in millions) | Account | June 25, 2022 (in millions) | March 26, 2022 (in millions) | | :--- | :--- | :--- | | **Total Assets** | **$1,815.7** | **$1,871.4** | | Cash and equivalents | $30.6 | $7.9 | | Inventories | $128.7 | $166.3 | | Goodwill | $730.3 | $776.7 | | **Total Liabilities** | **$1,046.1** | **$1,088.5** | | Long-term debt | $110.0 | $176.5 | | **Total Shareholders' Equity** | **$769.7** | **$782.9** | [Consolidated Statements of Income and Comprehensive Income](index=4&type=section&id=Consolidated%20Statements%20of%20Income%20and%20Comprehensive%20Income) Q1 FY2023 sales increased by 2.3% to $349.5 million, but net income and diluted EPS declined due to lower gross and operating profit Q1 Fiscal 2023 Income Statement Summary (in millions, except per share data) | Metric | Q1 FY2023 (ended June 25, 2022) | Q1 FY2022 (ended June 26, 2021) | Change | | :--- | :--- | :--- | :--- | | Sales | $349.5 | $341.8 | +2.3% | | Gross Profit | $122.2 | $125.9 | -3.0% | | Operating Income | $26.3 | $27.9 | -6.0% | | Net Income | $12.5 | $15.7 | -20.4% | | Diluted EPS | $0.37 | $0.46 | -19.6% | [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow increased, investing activities provided cash due to divestiture, while financing activities used cash for debt and repurchases Cash Flow Summary (in millions) | Activity | Three Months Ended June 25, 2022 (in millions) | Three Months Ended June 26, 2021 (in millions) | | :--- | :--- | :--- | | Cash provided by operating activities | $77.2 | $62.7 | | Cash provided by (used for) investing activities | $48.9 | $(66.8) | | Cash used for financing activities | $(103.4) | $(9.0) | | **Increase (decrease) in cash and equivalents** | **$22.7** | **$(13.1)** | - The significant positive cash flow from investing activities in Q1 2023 was driven by **$56.6 million** in proceeds from a divestiture, compared to the prior year's quarter which included **$62.1 million** used for acquisitions[18](index=18&type=chunk)[112](index=112&type=chunk)[113](index=113&type=chunk) [Notes to Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail business operations, accounting policies, the ATD divestiture, share repurchases, and revenue by category - Monro operates **1,303** company-operated retail stores and **80** franchised locations in **32** states, focusing on automotive undercar repair and tire services[23](index=23&type=chunk) - On June 17, 2022, Monro divested its wholesale tire and internal tire distribution operations to ATD for **$102 million**, consisting of **$62 million** at closing and a **$40 million** earnout, resulting in a pre-tax gain of **$2.4 million**[46](index=46&type=chunk) Revenue by Category (as % of Total) | Category | Q1 FY2023 | Q1 FY2022 | | :--- | :--- | :--- | | Tires | 50% | 52% | | Maintenance | 26% | 25% | | Brakes | 14% | 14% | | Steering | 9% | 8% | | Exhaust | 1% | 1% | - The company repurchased **413.6 thousand shares** for **$17.2 million** during the quarter under a **$150 million** share repurchase program authorized in May 2022[69](index=69&type=chunk)[70](index=70&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=15&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 FY2023 financial results, noting sales growth, operating income decline, and strategic capital allocation Q1 FY2023 Financial Summary | Metric | Q1 FY2023 | Q1 FY2022 | Change | | :--- | :--- | :--- | :--- | | Sales | $349.5M | $341.8M | +2.3% | | Comparable Store Sales | +0.4% | N/A | N/A | | Operating Income | $26.3M | $27.9M | -6.0% | | Diluted EPS | $0.37 | $0.46 | -19.6% | | Adjusted Diluted EPS (Non-GAAP) | $0.42 | $0.55 | -23.6% | - The decrease in gross profit margin by **180 bps** was primarily driven by a **200 bps** negative impact from increased technician labor costs and a **60 bps** impact from higher distribution and occupancy costs[85](index=85&type=chunk)[86](index=86&type=chunk) - The company expects capital expenditures for fiscal 2023 to be between **$40 million** and **$50 million**[100](index=100&type=chunk) [Analysis of Results of Operations](index=15&type=section&id=Analysis%20of%20Results%20of%20Operations) Sales increased by 2.3% driven by new stores and comparable sales, while gross profit margin declined due to higher costs Drivers of Sales Percentage Change | Driver | Contribution to Sales Change | | :--- | :--- | | New store sales | 3.3% | | Comparable store sales | 0.4% | | Closed store sales | (1.3)% | | **Total Sales Change** | **2.3%** | Comparable Store Product Category Sales Change (YoY) | Category | Q1 FY2023 | Q1 FY2022 | | :--- | :--- | :--- | | Tires | 0% | 25% | | Maintenance service | 1% | 42% | | Brakes | 2% | 57% | | Alignment | (2)% | 54% | | Front end/shocks | 5% | 40% | | Exhaust | 5% | 35% | - OSG&A expenses decreased by **$2.1 million**, driven by a **$3.9 million** reduction in litigation settlement costs and a **$1.2 million** net gain from the sale of wholesale assets[87](index=87&type=chunk)[89](index=89&type=chunk) [Non-GAAP Financial Measures](index=18&type=section&id=Non-GAAP%20Financial%20Measures) Non-GAAP measures, adjusted net income and diluted EPS, are presented to enhance comparability by excluding non-recurring items Reconciliation of Net Income to Adjusted Net Income (in millions) | Description | Q1 FY2023 (ended June 25, 2022) (in millions) | Q1 FY2022 (ended June 26, 2021) (in millions) | | :--- | :--- | :--- | | **Net income (GAAP)** | **$12.5** | **$15.7** | | Gain on sale of assets, net | $(1.2) | — | | Litigation settlement costs | — | $3.9 | | Certain discrete tax items | $2.6 | — | | Other adjustments | $0.0 | $0.1 | | **Adjusted net income (Non-GAAP)** | **$14.3** | **$18.8** | Reconciliation of Diluted EPS to Adjusted Diluted EPS | Description | Q1 FY2023 (ended June 25, 2022) | Q1 FY2022 (ended June 26, 2021) | | :--- | :--- | :--- | | **Diluted EPS (GAAP)** | **$0.37** | **$0.46** | | Gain on sale of assets, net | $(0.03) | — | | Litigation settlement costs | — | $0.09 | | Certain discrete tax items | $0.08 | — | | Other adjustments | $0.00 | $0.00 | | **Adjusted diluted EPS (Non-GAAP)** | **$0.42** | **$0.55** | [Analysis of Financial Condition](index=19&type=section&id=Analysis%20of%20Financial%20Condition) The company maintains strong liquidity, prioritizing acquisitions, debt reduction, dividends, and share repurchases in its capital allocation - Capital allocation strategy focuses on acquisitions, debt repayment, dividends, and share repurchases[98](index=98&type=chunk) - As of June 25, 2022, the company had **$30.6 million** in cash and equivalents and **$460.4 million** available under its Credit Facility[106](index=106&type=chunk) - Cash used for financing activities of **$103.4 million** included **$66.5 million** in net debt payments, **$17.2 million** in share repurchases, and **$9.5 million** in dividend payments[114](index=114&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=23&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate fluctuations on its floating-rate debt, impacting annual interest expense - The company's primary market risk is interest rate risk on its floating-rate debt[125](index=125&type=chunk) - A **100 basis point** change in interest rates would impact annual interest expense by approximately **$1.1 million** based on the debt position at June 25, 2022[125](index=125&type=chunk) [Item 4. Controls and Procedures](index=23&type=section&id=Item%204.%20Controls%20and%20Procedures) Management confirmed the effectiveness of disclosure controls and procedures with no material changes in internal controls - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of June 25, 2022[128](index=128&type=chunk) - No material changes were made to the internal control over financial reporting during the quarter ended June 25, 2022[129](index=129&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=24&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal proceedings, with no material adverse impact currently anticipated - The company is involved in legal proceedings incidental to its business, but notes that the ultimate resolution is subject to inherent uncertainties[131](index=131&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=24&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company authorized a new $150 million share repurchase program, repurchasing $17.2 million in Q1 FY2023 - A new share repurchase program for up to **$150 million** was authorized on May 19, 2022[132](index=132&type=chunk) Share Repurchase Activity (Q1 FY2023) | Total Shares Purchased | Average Price Paid per Share | Total Cost (in millions) | Remaining Authorization (in millions) | | :--- | :--- | :--- | :--- | | 413,600 | $41.60 | $17.2 | $132.8 | [Item 6. Exhibits](index=25&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including key agreements and executive certifications - The exhibit list includes key agreements related to the ATD transaction and required executive certifications[134](index=134&type=chunk) Signatures [Signatures](index=26&type=section&id=Signatures) The report is signed by the CEO and CFO, authorizing its content on August 1, 2022 - The Form 10-Q was signed on August 1, 2022, by the company's Principal Executive Officer and Principal Financial Officer[137](index=137&type=chunk)[139](index=139&type=chunk)

Financial Data and Key Metrics Changes - Sales increased by 2.3% year-over-year to $349.5 million in the first quarter [26] - Total comparable store sales increased by 0.4%, while sales from new stores increased by $11 million [26] - Gross margin decreased by 180 basis points from the prior year to 35% [26] - Operating income declined to $26.3 million or 7.5% of sales compared to $27.9 million or 8.2% of sales in the prior year [29] - Net income was $12.5 million compared to $15.7 million in the same period last year, with diluted earnings per share at $0.37 compared to $0.46 [31] Business Line Data and Key Metrics Changes - Comparable store sales in underperforming stores increased by 15% in the quarter, while comp sales in remaining stores were approximately flat [11][12] - Incremental investment in technician headcount and wages impacted gross margin by 200 basis points [27] - Total operating expenses were $95.9 million or 27.4% of sales, down from $98 million or 28.7% of sales in the prior year [28] Market Data and Key Metrics Changes - Tire unit market share increased during the quarter, with significant growth noted in the south, southeast, and northeast regions [13][47] - Consumer demand softened partly due to inflationary pressures, including higher fuel prices [12][63] Company Strategy and Development Direction - The company is focused on continuous improvement of in-store execution and enhancing underperforming stores [8][10] - A divestiture of non-core wholesale and tire distribution assets was completed for $102 million, allowing for a sharper focus on retail operations [17][18] - The company plans to return capital to shareholders through increased dividends and share repurchase programs while pursuing growth strategies [21][24] Management Comments on Operating Environment and Future Outlook - Management expressed optimism about the outlook for fiscal 2023, despite challenges in the consumer environment [39] - The company is preparing for deferred maintenance from customers and is focused on marketing initiatives and training [62] - Inflationary pressures are affecting consumer spending, but the company is introducing value offerings to meet customer needs [64] Other Important Information - The company generated a record $77 million of cash from operations during the first quarter, including $48 million in working capital reductions [34] - The effective tax rate increased to 39.6% due to tax impacts related to the divestiture [30] Q&A Session Summary Question: Insights on tire category performance and market share - Management noted growth in tire market share across the country, particularly in the south, southeast, and northeast regions, but overall industry units were down [47][48] Question: Status of staffing and employee training initiatives - Management confirmed that staffing initiatives are nearing completion and emphasized the importance of training for improving customer service and operational efficiency [50][52] Question: Impact of inflation on consumer behavior - Management indicated that inflation is broadly affecting consumer spending, with a shift towards lower-cost options observed [63][64] Question: Working capital reduction and cash flow expectations - Management highlighted a record cash flow in Q1 and expressed commitment to further improvements in working capital [78] Question: Monthly comparable store sales performance - Monthly comps were flat in April, up 6% in May, and down 2% in June [79]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _________________________________________ FORM 10-K _________________________________________ (Mark One) x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended March 26, 2022 OR o 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 __________________________________ ...

Financial Performance - Monro's Q4 Fiscal Year 2022 sales increased by 7.4% to $328 million[9] - Comparable store sales increased by 1.4% in Q4 Fiscal Year 2022[9] - Gross margin decreased by 320 basis points to 31.9% in Q4 Fiscal Year 2022, driven by investments in technician headcount and wages[9] - Adjusted Diluted EPS was $0.20 in Q4 Fiscal Year 2022[9] - Strong operating cash flow of approximately $174 million was generated in Fiscal Year 2022[11,17] Strategic Initiatives and Divestiture - Monro completed acquisitions of 47 stores, bringing annualized sales from acquisitions completed in fiscal 2022 to $70 million[6] - An agreement was entered into to divest Wholesale and tire distribution assets for approximately $105 million, expected to close in June 2022[13,21] - The divestiture is expected to be accretive to overall gross and operating margins, and neutral to earnings per share[21,30] Capital Allocation and Shareholder Returns - The Board of Directors approved a $0.02 per share increase in the company's cash dividend for the first quarter of fiscal 2023, bringing it to $0.28 per share[22] - The company authorized the repurchase of up to $150 million of its common stock[22] Fiscal Year 2023 Outlook - Capital expenditures are projected to be approximately $40 million to $50 million[29]

Financial Data and Key Metrics Changes - Sales increased by 7.4% year-over-year to $328 million in Q4 2022, with same-store sales rising by 1.4% [22] - Gross margin decreased by 320 basis points to 31.9%, primarily due to increased technician headcount and wages, which impacted gross margin by 250 basis points [22] - Net income was $8.6 million, down from $11.8 million in the same period last year, with diluted earnings per share at $0.25 compared to $0.35 [27] Business Line Data and Key Metrics Changes - Comparable store sales in medium and larger stores increased by about 5% compared to fiscal 2020, while small and underperforming stores saw a decline of about 8% due to understaffing [10] - Staffing initiatives in over 150 smaller stores led to an 8% increase in comparable sales, indicating a significant turnaround [11] Market Data and Key Metrics Changes - April's comparable store sales were 3% lower than the previous year, but May showed a 3% increase on a larger sales base, indicating a positive trend [12] Company Strategy and Development Direction - The company announced the divestiture of its wholesale and tire distribution assets to focus on retail operations, which is expected to enhance service availability and pricing [14][15] - The divestiture is valued at approximately $105 million and is expected to close in June, allowing the company to return capital to shareholders through dividends and share repurchase programs [16] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about fiscal 2023, highlighting strong demand for products and services and the effectiveness of staffing strategies [19][33] - The company anticipates continued improvement in sales and productivity as it resolves understaffing issues in smaller stores [19] Other Important Information - The company generated $174 million in cash from operations during fiscal 2022 and has a solid financial position with a net bank debt to EBITDA ratio of 0.9 times [28][29] - The board approved a $0.02 increase in the cash dividend to $0.28 per share, marking the 17th increase since the dividend was first issued [16] Q&A Session Summary Question: How far are the gross margins below average for the 300 underperforming stores? - Management indicated that gross profit margins for these stores are similar to most stores, emphasizing the need to align capacity and productivity to drive sales [38] Question: What were the trailing sales for the tire distribution assets sold? - The sold assets generated about $115 million in sales for the trailing 12 months, and the sale is expected to be accretive to gross and operating margins [41] Question: How do you expect to manage parts sourcing after the divestiture? - The company will rely on third-party partners for parts and tire sourcing, aiming to improve service and pricing through these relationships [50][53] Question: What was the monthly comp performance for the quarter? - Monthly comps were up about 1% in January, up 5% in February, and down about 2% in March [56] Question: How does the company plan to achieve mid-single-digit comp growth? - Management believes that achieving mid-single-digit comp growth is possible as they focus on improving productivity and addressing the needs of underperforming stores [74]

PART I. FINANCIAL INFORMATION This section presents Monro, Inc.'s unaudited condensed consolidated financial statements and comprehensive notes for periods ended December 25, 2021 [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This chapter presents Monro, Inc.'s unaudited condensed consolidated financial statements, including balance sheets, income statements, and cash flows [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) This section details the company's financial position, including assets, liabilities, and equity, as of December 25, 2021 Consolidated Balance Sheet Highlights (thousands) | Metric | December 25, 2021 | March 27, 2021 | | :--------------------------------- | :------------------ | :--------------- | | Total assets | $1,889,190 | $1,811,814 | | Total liabilities | $1,107,679 | $1,062,130 | | Total shareholders' equity | $781,511 | $749,684 | | Cash and equivalents | $9,514 | $29,960 | | Goodwill | $779,091 | $689,524 | [Consolidated Statements of Income and Comprehensive Income](index=4&type=section&id=Consolidated%20Statements%20of%20Income%20and%20Comprehensive%20Income) This section details Monro, Inc.'s sales, gross profit, operating income, and net income for the specified periods Consolidated Statements of Income and Comprehensive Income (thousands, except per share data) | Metric | Three Months Ended Dec 25, 2021 | Three Months Ended Dec 26, 2020 | Nine Months Ended Dec 25, 2021 | Nine Months Ended Dec 26, 2020 | | :--------------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Sales | $341,781 | $284,591 | $1,031,298 | $820,237 | | Gross profit | $120,582 | $96,138 | $377,196 | $288,118 | | Operating income | $27,436 | $15,688 | $89,830 | $51,515 | | Net income | $16,287 | $6,683 | $52,953 | $22,516 | | Basic EPS | $0.48 | $0.20 | $1.57 | $0.67 | | Diluted EPS | $0.48 | $0.20 | $1.56 | $0.67 | [Consolidated Statements of Changes in Shareholders' Equity](index=5&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Shareholders'%20Equity) This section details changes in Monro, Inc.'s shareholders' equity, including net income, dividends, and stock compensation Key Changes in Shareholders' Equity (thousands) | Metric | Three Months Ended Dec 25, 2021 | Nine Months Ended Dec 25, 2021 | | :-------------------------- | :------------------------------ | :----------------------------- | | Net income | $16,287 | $52,953 | | Common dividends declared | $(8,722) | $(25,483) | | Stock-based compensation | $1,258 | $3,130 | | Total shareholders' equity | $781,511 | $781,511 | - Dividends declared per common share were **$0.26** for the three months ended December 25, 2021, and **$0.76** for the nine months ended December 25, 2021[15](index=15&type=chunk) [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This section summarizes Monro, Inc.'s cash inflows and outflows from operating, investing, and financing activities Consolidated Statements of Cash Flows (thousands) | Activity | Nine Months Ended Dec 25, 2021 | Nine Months Ended Dec 26, 2020 | | :--------------------------------- | :----------------------------- | :----------------------------- | | Cash provided by operating activities | $127,237 | $159,216 | | Cash used for investing activities | $(99,460) | $(55,896) | | Cash used for financing activities | $(48,223) | $(423,837) | | Decrease in cash and equivalents | $(20,446) | $(320,517) | | Cash and equivalents at end of period | $9,514 | $24,959 | [Notes to Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) This section provides detailed explanations of Monro, Inc.'s accounting policies, business operations, and other financial disclosures [Note 1 Description of Business and Basis of Presentation](index=8&type=section&id=Note%201%20Description%20of%20Business%20and%20Basis%20of%20Presentation) This note describes Monro, Inc.'s business operations, store network, and the basis for its financial statement presentation - Monro, Inc. operates **1,303 Company-operated retail stores** and **81 franchised locations** across 32 states, primarily offering automotive undercar repair, tire replacement sales, and tire-related services[22](index=22&type=chunk) - The company's operations are organized as a single segment, providing a broad range of services including brakes, mufflers, exhaust systems, steering, drivetrain, suspension, and wheel alignment[25](index=25&type=chunk) - Monro adopted new FASB accounting guidance for income taxes in Q1 2022, which did not materially impact its consolidated financial statements[29](index=29&type=chunk) [Note 2 Impact of the COVID-19 Pandemic](index=9&type=section&id=Note%202%20Impact%20of%20the%20COVID-19%20Pandemic) This note discusses the ongoing impact of the COVID-19 pandemic on Monro, Inc.'s operations and financial outlook - Monro's retail stores, wholesale locations, and other facilities have remained open as an essential business throughout the COVID-19 pandemic, adapting operations for customer and employee safety[34](index=34&type=chunk) - The full impact of the pandemic remains uncertain, depending on factors like its duration, government responses, vaccine efficacy, and long-term effects on the economy and consumer behavior[35](index=35&type=chunk) [Note 3 Acquisitions](index=9&type=section&id=Note%203%20Acquisitions) This note details Monro, Inc.'s business acquisitions, including purchase prices and their contributions to sales - In the first nine months of fiscal 2022, Monro acquired multiple businesses for an aggregate purchase price of **$83.2 million**, adding **47 retail tire and automotive repair stores**, primarily in California and Iowa[37](index=37&type=chunk)[38](index=38&type=chunk)[39](index=39&type=chunk)[40](index=40&type=chunk) - These 2022 acquisitions contributed **$13.7 million in sales** for the three months and **$33.1 million** for the nine months ended December 25, 2021[42](index=42&type=chunk) - In fiscal 2021, Monro acquired **17 retail stores in California** for **$17.1 million**, which contributed **$0.9 million in sales** for the period from acquisition date through December 26, 2020[49](index=49&type=chunk)[51](index=51&type=chunk) [Note 4 Earnings per Common Share](index=12&type=section&id=Note%204%20Earnings%20per%20Common%20Share) This note provides a breakdown of basic and diluted earnings per common share calculations Earnings per Common Share (thousands, except per share data) | Metric | Three Months Ended Dec 25, 2021 | Three Months Ended Dec 26, 2020 | Nine Months Ended Dec 25, 2021 | Nine Months Ended Dec 26, 2020 | | :--------------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Income available to common shareholders | $16,167 | $6,571 | $52,603 | $22,179 | | Weighted average common shares - basic | 33,542 | 33,307 | 33,521 | 33,296 | | Basic earnings per common share | $0.48 | $0.20 | $1.57 | $0.67 | | Diluted earnings per common share | $0.48 | $0.20 | $1.56 | $0.67 | [Note 5 Income Taxes](index=12&type=section&id=Note%205%20Income%20Taxes) This note presents the effective income tax rates for the reported periods Effective Income Tax Rate | Period | December 25, 2021 | December 26, 2020 | | :--------------------------------- | :------------------ | :------------------ | | Three Months Ended | 25.3% | 25.2% | | Nine Months Ended | 25.5% | 25.2% | [Note 6 Fair Value](index=12&type=section&id=Note%206%20Fair%20Value) This note discloses the carrying amount and fair value of Monro, Inc.'s long-term debt Long-term Debt Carrying Amount and Fair Value (thousands) | Date | Carrying Amount | Fair Value | | :----------------- | :-------------- | :--------- | | December 25, 2021 | $195,000 | $195,000 | | March 27, 2021 | $190,000 | $190,000 |

THIRD QUARTER FISCAL 2022 EARNINGS CALL JANUARY 26, 2022 MONRO TIRECHSICE MR.TIRE 4 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 statements with words such as "anticipates," " ...

Monro, Inc. (NASDAQ:MNRO) Q3 2022 Earnings Conference Call January 26, 2022 8:30 AM ET Company Participants Mike Broderick ??? President and Chief Executive Officer Brian D???Ambrosia ??? Chief Financial Officer Felix Veksler ??? Senior Director of Invest Relations Conference Call Participants Jonathan Lamers ??? BMO Capital Bret Jordan ??? Jefferies Brian Nagel ??? Oppenheimer Rick Nelson ??? Stephens David Bellinger ??? Wolfe Research Scott Stember ??? C.L. King Stephanie Moore ??? Truist Operator Good mo ...

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 25, 2021 OR ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____________ ...

Financial Data and Key Metrics Changes - Sales increased by 20.5% year-over-year to a record $347.7 million in the second quarter, up approximately 7% compared to pre-COVID levels in fiscal 2020 [30] - Same-store sales increased by 14.8%, driven by broad-based strength across all product and service categories [31] - Gross margin increased by 140 basis points from the prior year to 37.6% due to higher comparable store sales and a favorable sales mix [31] - Operating income grew to $34.5 million or 9.9% of sales compared to $24.4 million or 8.5% of sales in the prior year [33] - Net income was $21 million compared to $12.8 million in the same period last year, with diluted earnings per share at $0.62 compared to $0.38 [35] Business Line Data and Key Metrics Changes - Service sales as a percentage of total sales increased during the quarter, contributing to improved gross margins [11] - Sales from new stores increased by $17.8 million, including $17.2 million from recent acquisitions [31] - The company is focused on improving in-store operational execution in five key areas: staffing, scheduling, training, attachment selling, and outside purchase management [13] Market Data and Key Metrics Changes - Comps were up approximately 14% in fiscal October compared to comps down 12% in the same period last year [12] - All regions experienced double-digit growth, with the Northeast and West outperforming due to recovery from prior underperformance [121] Company Strategy and Development Direction - The company is committed to its Monro.Forward initiatives, focusing on operational excellence and improving in-store execution [22] - The company plans to continue acquiring family-owned businesses, with 17 stores expected to be added to the portfolio in the next quarter [24] - A store reimage program is underway to align acquired stores with company standards [23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength of the business for the remainder of the fiscal year, citing improved vehicle miles traveled and consumer behavior trends [10] - The company remains optimistic about its performance despite the fluid COVID-19 situation and is not providing formal guidance for the remainder of fiscal 2022 [40] - Management highlighted the importance of partnerships with suppliers to navigate inflation and supply chain challenges [55] Other Important Information - The company generated $102 million of cash from operations in the first half of fiscal 2022 and maintained a strong balance sheet with net bank debt of $163 million [36] - The company is focused on enhancing its online presence, particularly in appointment scheduling and communication with customers [109] Q&A Session Summary Question: Opportunities for top line and margin expansion - Management emphasized the focus on in-store execution and expanding comp sales to improve acquisition potential and employee retention [48][49] Question: Impact of courtesy inspection services - Management noted that the courtesy inspection is crucial and has been supported by improved labor scheduling [51][52] Question: Labor shortages and supply chain challenges - Management acknowledged the importance of a strong HR organization and technology in addressing staffing needs and supply chain reliability [54][55] Question: Continued improvement in service sales - Management confirmed that service sales trends from Q1 continued into Q2, with most categories returning to pre-pandemic levels [56] Question: Market share insights - Management indicated that they are tracking at or above industry units in the tire segment and are seeing significant growth in service sales [65][66] Question: Inflation impact on pricing - Management stated that they are passing through cost increases while maintaining competitive pricing [74] Question: Acquisition strategy and geographic targeting - Management expressed enthusiasm for recent acquisitions and indicated a focus on both contiguous and new markets [75] Question: Staffing needs to meet demand - Management did not disclose specific staffing numbers but emphasized the goal of reducing overtime and managing capacity effectively [84] Question: Oil change business performance - Management noted that the oil change business is lagging behind other categories but is showing positive trends [122] Question: Future guidance - Management is considering reinstating guidance but is cautious due to ongoing COVID-19 management [124]