Monro(MNRO) - 2021 Q2 - Quarterly Report

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].