<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1997.
-------------------
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 No. 0-19357
-------
MONRO MUFFLER BRAKE, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
New York 16-0838627
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification #)
200 Holleder Parkway, Rochester, New York 14615
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zipcode)
Registrant's telephone number, including area code 716-647-6400
----------------------------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
--- ---
As of October 31, 1997, 7,866,901 shares of the Registrant's Common Stock, par
value $ .01 per share, were outstanding after giving effect to the five percent
stock dividend, paid August 4, 1997, to stockholders of record as of June 20,
1997.
<PAGE> 2
MONRO MUFFLER BRAKE, INC.
INDEX
-----
<TABLE>
<CAPTION>
Part I. Financial Information Page No.
<S> <C>
Consolidated Balance Sheet at
September 30, 1997 and March 31, 1997 3
Consolidated Statement of Income for the quarter
and six months ended September 30, 1997 and 1996 4
Consolidated Statement of Changes in Common
Shareholders' Equity for the six months ended September 30, 1997 5
Consolidated Statement of Cash Flows for the
six months ended September 30, 1997 and 1996 6
Notes to Consolidated Financial Statements 7
Management's Discussion and Analysis of
Financial Condition and Results of Operations 9
Part II. Other Information
Item 4. Submission of Matters to a Vote of Security Holders 12
Item 6. Exhibits and Reports on Form 8-K 12
Signatures 13
Exhibit Index 14
</TABLE>
-2-
<PAGE> 3
MONRO MUFFLER BRAKE, INC.
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
<TABLE>
<CAPTION>
SEPTEMBER 30, MARCH 31,
1997 1997
--------- ---------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
ASSETS
Current assets:
Cash and equivalents, including interest-bearing accounts of $3,919
at September 30, 1997 and $6,438 at March 31, 1997 $ 3,919 $ 6,438
Trade receivables 820 1,128
Inventories, at LIFO cost 23,789 20,010
Federal and state income taxes receivable 0 296
Deferred income tax asset 1,790 1,790
Other current assets 2,815 2,935
--------- ---------
Total current assets 33,133 32,597
--------- ---------
Property, plant and equipment 164,468 151,906
Less - Accumulated depreciation and amortization (46,398) (42,223)
--------- ---------
Net property, plant and equipment 118,070 109,683
Other noncurrent assets 3,822 3,987
--------- ---------
Total assets $ 155,025 $ 146,267
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 3,128 $ 3,128
Trade payables 11,167 8,728
Federal and state income taxes payable 873 0
Accrued expenses and other current liabilities
Accrued interest 301 270
Accrued payroll, payroll taxes and other payroll benefits 4,103 4,260
Accrued insurance 2,193 2,110
Other current liabilities 3,206 4,522
--------- ---------
Total current liabilities 24,971 23,018
Long-term debt 54,848 54,864
Deferred income tax liability 1,760 1,760
--------- ---------
Total liabilities 81,579 79,642
--------- ---------
Commitments
Shareholders' equity:
Class C Convertible Preferred Stock, $1.50 par value, $.227 and $.239
conversion value at September 30, 1997 and March 31, 1997, respectively;
150,000 shares authorized; 91,727 shares issued and outstanding 138 138
Common Stock, $.01 par value, 15,000,000 shares authorized; 7,866,901
shares and 7,470,326 shares issued and outstanding at September 30, 1997
and March 31, 1997, respectively 79 75
Additional paid-in capital 29,257 22,190
Retained earnings 43,972 44,222
--------- ---------
Total shareholders' equity 73,446 66,625
--------- ---------
Total liabilities and shareholders' equity $ 155,025 $ 146,267
========= =========
</TABLE>
These financial statements should be read in conjunction with the financial
statements and notes thereto included in the Annual Report on Form 10-K (File
No. 0-19357), filed by the Company with the Securities and Exchange Commission
on June 27, 1997.
-3-
<PAGE> 4
MONRO MUFFLER BRAKE, INC.
CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
QUARTER ENDED SIX MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
1997 1996 1997 1996
------- ------- ------- -------
(DOLLARS IN THOUSANDS, EXCEPT
PER SHARE DATA)
<S> <C> <C> <C> <C>
Sales $41,540 $37,799 $82,313 $75,544
Cost of sales, including distribution and
occupancy costs (a) 23,231 20,291 45,862 40,957
------- ------- ------- -------
Gross profit 18,309 17,508 36,451 34,587
Operating, selling, general and
administrative expenses 11,735 10,386 23,227 21,031
------- ------- ------- -------
Operating income 6,574 7,122 13,224 13,556
Interest expense, net of interest income for
the quarter of $22 in 1997 and $3 in 1996 (a) 903 851 1,770 1,665
Other expense, net 86 55 172 71
------- ------- ------- -------
Income before provision for income taxes 5,585 6,216 11,282 11,820
Provision for income taxes 2,233 2,474 4,513 4,699
------- ------- ------- -------
Net income $ 3,352 $ 3,742 $ 6,769 $ 7,121
======= ======= ======= =======
Earnings per share $ .39 $ .43 $ .79 $ .83
======= ======= ======= =======
Weighted average number of shares of
common stock and common stock
equivalents used in computing earnings
per share 8,608 8,620 8,607 8,580
======= ======= ======= =======
<FN>
(a) Amounts paid under operating and capital leases with affiliated parties
totaled $474 and $500 for the quarters ended September 30, 1997 and 1996,
respectively, and $957 and $996 for the six months ended September 30, 1997
and 1996, respectively.
</TABLE>
These financial statements should be read in conjunction with the financial
statements and notes thereto included in the Annual Report on Form 10-K (File
No. 0-19357), filed by the Company with the Securities and Exchange Commission
on June 27, 1997.
-4-
<PAGE> 5
MONRO MUFFLER BRAKE, INC.
CONSOLIDATED STATEMENT OF CHANGES IN COMMON STOCKHOLDERS' EQUITY
(UNAUDITED)
<TABLE>
<CAPTION>
COMMON STOCK ADDITIONAL
------------ PAID-IN RETAINED
SHARES AMOUNT CAPITAL EARNINGS
------ ------ ------- --------
(Amounts in thousands)
<S> <C> <C> <C> <C>
Balance at March 31, 1997 7,470 75 $22,190 $ 44,222
Net income 6,769
Exercise of stock options 23 52
5% stock dividend 374 4 7,015 (7,019)
------ --- ------- --------
Balance at September 30, 1997 $7,867 $79 $29,257 $ 43,972
====== === ======= ========
</TABLE>
These financial statements should be read in conjunction with the financial
statements and notes thereto included in the Annual Report on Form 10-K (File
No. 0-19357), filed by the Company with the Securities and Exchange Commission
on June 27, 1997.
-5-
<PAGE> 6
MONRO MUFFLER BRAKE, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
SEPTEMBER 30,
-------------
1997 1996
---- ----
(DOLLARS IN THOUSANDS)
INCREASE (DECREASE) IN CASH
<S> <C> <C>
Cash flows from operating activities:
Net income $ 6,769 $ 7,121
-------- --------
Adjustments to reconcile net income to net cash provided
by operating activities -
Depreciation and amortization 4,541 3,958
Loss (gain) on disposal of property, plant and equipment 17 (10)
Decrease in trade receivables 308 252
Increase in inventories (3,779) (1,868)
Decrease (increase) in other current assets 120 (45)
Decrease (increase) in other noncurrent assets 24 (21)
Increase (decrease) in trade payables 2,439 (75)
(Decrease)increase in accrued expenses (1,359) 874
Increase in federal and state income taxes payable 1,169 1,140
-------- --------
Total adjustments 3,480 4,205
-------- --------
Net cash provided by operating activities 10,249 11,326
-------- --------
Cash flows from investing activities:
Capital expenditures (12,573) (11,971)
Proceeds from the disposal of property, plant and equipment 22 40
-------- --------
Net cash used for investing activities (12,551) (11,931)
-------- --------
Cash flows from financing activities:
Proceeds from the sale of common stock (option exercises) 52 515
Proceeds from borrowings 30,534 26,615
Principal payments on long-term debt and capital
lease obligations (30,803) (26,254)
-------- --------
Net cash used for financing activities (217) 876
-------- --------
(Decrease) increase in cash (2,519) 271
Cash at beginning of year 6,438 5,280
-------- --------
Cash at September 30 $ 3,919 $ 5,551
======== ========
</TABLE>
These financial statements should be read in conjunction with the financial
statements and notes thereto included in the Annual Report on Form 10-K (File
No. 0-19357), filed by the Company with the Securities and Exchange Commission
on June 27, 1997.
-6-
<PAGE> 7
MONRO MUFFLER BRAKE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1 - Stock Dividend
- -----------------------
On May 14, 1997, the Board of Directors declared a five percent stock
dividend, paid August 4, 1997, to stockholders of record as of June 20, 1997.
The consolidated financial statements, including all share information therein,
have been restated to reflect this dividend.
Additionally, in accordance with antidilution provisions of the Class C
Convertible Preferred Stock, the conversion value of the preferred stock was
restated from $.239 per share to $.227 per share.
Shares reserved for issuance to officers and key employees under
outstanding options and under the 1984, 1987 and 1989 Incentive Stock Option
Plans have also been retroactively adjusted for the five percent stock dividend.
Note 2 - New Accounting Standards
- --------------------------------
The Company will adopt the provisions of Financial Accounting Standards
("FAS") No. 128, "Earnings Per Share" effective for financial statements issued
for periods ending after December 15, 1997; earlier application is not
permitted. FAS 128 requires dual presentation of basic and diluted EPS on the
face of the income statement and requires a reconciliation of the numerator and
denominator of the basic EPS computation to the numerator and denominator of the
diluted EPS calculation. Basic EPS excludes the effect of common stock
equivalents and is computed by dividing income available to common shareowners
by the weighted average common shares outstanding for the period. Diluted EPS
reflects the potential dilution that could result if securities or other
instruments to issue common stock were exercised or converted into common stock.
Proforma earnings per share computed in accordance with FAS 128 is presented
below:
<TABLE>
<CAPTION>
Quarter Ended Six Months Ended
------------- ----------------
September 30, September 30,
------------- -------------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Basic earnings per share $0.43 $0.48 $0.86 $0.92
Diluted earnings per share $0.39 $0.93 $0.79 $0.83
</TABLE>
Note 3 - Inventories
- --------------------
The Company's inventories consist of automotive parts and tires.
Substantially all merchandise inventories are valued under the last-in,
first-out (LIFO) method. Under the first-in, first-out (FIFO) method, these
inventories would have been $740,000 and $544,000 higher at September 30, 1997
and March 31, 1997, respectively. The FIFO value of inventory approximates the
current replacement cost.
Note 4 - Cash and Equivalents
- -----------------------------
The Company's policy is to invest cash in excess of operating
requirements in income producing investments. Cash equivalents of $3,919,000 at
September 30, 1997 and $6,438,000 at March 31, 1997 include money market
accounts, which have maturities of three months or less.
-7-
<PAGE> 8
MONRO MUFFLER BRAKE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 5 - Supplemental Disclosure of Cash Flow Information
- ---------------------------------------------------------
The following transactions represent noncash investing and financing activities
during the periods indicated:
SIX MONTHS ENDED SEPTEMBER 30, 1997:
Capital lease obligations of $236,000 were incurred under various lease
obligations.
In connection with the declaration of a five percent stock dividend
(see Note 1), the Company increased accrued expenses, common stock and
additional paid-in capital by $1,000, $4,000 and $7,014,000, respectively, and
decreased retained earnings by $7,019,000.
SIX MONTHS ENDED SEPTEMBER 30, 1996:
Capital lease obligations of $162,000 were incurred under various lease
obligations.
In connection with the termination of a capital lease, the Company
reduced debt and fixed assets by $112,000.
In connection with the declaration of a five percent stock dividend
(see Note 1), the Company increased common stock and additional paid-in capital
by $4,000 and $4,584,000, respectively, and decreased retained earnings by
$4,588,000.
CASH PAID DURING THE PERIOD:
<TABLE>
<CAPTION>
SIX MONTHS ENDED
----------------
SEPTEMBER 30,
-------------
1997 1996
---- ----
<S> <C> <C>
Interest, net $1,983,000 $1,897,000
Income taxes 3,344,000 3,560,000
</TABLE>
Note 6 - Other
- --------------
These financial statements should be read in conjunction with the
financial statements and notes thereto included in the Annual Report on Form
10-K (File No. 0-19357), filed by the Company with the Securities and Exchange
Commission on June 27, 1997.
-8-
<PAGE> 9
MONRO MUFFLER BRAKE, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The statements contained in this Form 10-Q which are not historical
facts, including (without limitation) statements made in the Management's
Discussion and Analysis of Financial Condition and Results of Operations, may
contain statements of future expectations and other forward-looking statements
that are subject to important factors that could cause actual results to differ
materially from those in the forward-looking statements, including (without
limitation) product demand, the effect of economic conditions, the impact of
competitive services and pricing, product development, parts supply restraints
or difficulties, industry regulation, the continued availability of capital
resources and financing and other risks set forth or incorporated elsewhere
herein and in the Company's Securities and Exchange Commission filings.
RESULTS OF OPERATIONS
The following table sets forth income statement data of Monro Muffler
Brake, Inc. ("Monro" or the "Company") expressed as a percentage of sales for
the fiscal periods indicated.
<TABLE>
<CAPTION>
Quarter ended September 30, Six Months ended September 30,
--------------------------- ------------------------------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Sales .................................. 100.0% 100.0% 100.0% 100.0%
Cost of sales, including distribution
and occupancy costs ................... 55.9 53.7 55.7 54.2
----- ----- ----- -----
Gross profit ........................... 44.1 46.3 44.3 45.8
Operating, selling, general and
administrative expenses ............... 28.3 27.5 28.2 27.9
----- ----- ----- -----
Operating income ....................... 15.8 18.8 16.1 17.9
Interest expense - net ................. 2.2 2.3 2.2 2.2
Other expenses - net ................... .2 .1 .2 .1
----- ----- ----- -----
Income before provision for income taxes 13.4 16.4 13.7 15.6
Provision for income taxes ............. 5.3 6.5 5.5 6.2
----- ----- ----- -----
Net income ............................. 8.1% 9.9% 8.2% 9.4%
===== ===== ===== =====
</TABLE>
-9-
<PAGE> 10
SECOND QUARTER AND SIX MONTHS ENDED SEPTEMBER 30, 1997 COMPARED TO
SECOND QUARTER AND SIX MONTHS ENDED SEPTEMBER 30, 1996
Sales were $41.5 million for the quarter ended September 30, 1997
compared with $37.8 million in the quarter ended September 30, 1996. The sales
increase of $3.7 million, or 9.9%, was due to an increase in sales of
approximately $3.8 million relating to stores opened since April 1, 1996.
Comparable store sales were even with sales from the prior year period. Sales
for the six months ended September 30, 1997 were $82.3 million compared with
$75.5 million for the comparable period of the prior year. The sales increase
of $6.8 million or 9.0% was due to an increase in sales of approximately $7.2
million relating to stores opened since April 1, 1996, partially offset by a
comparable store sales decrease of .5%. At September 30, 1997, the Company had
332 stores in operation compared to 293 at September 30, 1996.
Gross profit for the quarter ended September 30, 1997 was $18.3 million
or 44.1% of sales compared with $17.5 million or 46.3% of sales for the quarter
ended September 30, 1996. Gross profit for the six months ended September 30,
1997 was $36.5 million, or 44.3% of sales, compared to $34.6 million or 45.8% of
sales, for the six months ended September 30, 1997. The decline in gross profit
as a percentage of sales was due, in part, to an increase in labor costs. During
periods of slower sales when technicians may not be fully productive, they will
receive a minimum base level wage. Additionally, there was an increase in
purchases at the store level of certain higher-cost parts ("Outside Purchases").
During periods of slower sales, store personnel more readily accept repair work
outside of the normal recurring services the store usually provides. Parts
proliferation also continues to present a challenge with regard to inventory
stocking levels and outside purchases.
Operating, selling, general and administrative expenses for the quarter
ended September 30, 1997 increased by $1.3 million to $11.7 million over the
quarter ended September 30, 1996, and were 28.3% of sales compared to 27.9% in
the same quarter of the prior year. For the six months ended September 30, 1997,
these expenses increased by $2.2 million to $23.2 million over the comparable
period of the prior year and were 28.2% of sales compared to 27.8% in the
comparable period of the prior year. The increase in total dollars expended is
primarily attributable to the increase in the number of stores and store related
operating costs such as supervision and utilities, against flat (for the
quarter) or slightly negative (for the six months) comparable store sales. These
increases were partially offset by a reduction in bonus and profit sharing
expense, and an increase in cooperative advertising credits.
Net interest expense for the quarter ended September 30, 1997 increased
by approximately $52,000 compared to the comparable period in the prior year,
and decreased from 2.3% to 2.2% as a percentage of sales for the same period.
Net interest expense for the six months ended September 30, 1997 increased by
$105,000 compared to the same period in the prior year, and was 2.2% of sales
for both periods. The increase in expense is due to an increase in the weighted
average debt outstanding for the quarter and six months ended September 30, 1997
as compared to the same periods in the previous year, partially offset by
decreases in the weighted average interest rates for each period.
Net income for the quarter ended September 30, 1997 of $3.4 million
decreased 10.4% from net income for the quarter ended September 30, 1996. For
the six months ended September 30, 1997, net income of approximately $6.8
million decreased 4.9%, due to the factors discussed above.
Interim Period Reporting
The data included in this report are unaudited and are subject to
year-end adjustments; however, in the opinion of management, all known
adjustments (which consist only of normal recurring adjustments) have been made
to present fairly the Company's operating results for the unaudited periods. The
results for interim periods are not necessarily indicative of results to be
expected for the fiscal year.
-10-
<PAGE> 11
CAPITAL RESOURCES AND LIQUIDITY
Capital Resources
The Company's primary capital requirement has been the funding of its
new store expansion program and the upgrading of facilities and systems in
existing stores. For the six months ended September 30, 1997, the Company spent
$12.8 million for equipment and new store construction. Funds were provided
primarily by cash flow from operations. Management believes that the Company has
sufficient resources available (including cash and equivalents, net cash flow
from operations and bank financing) to expand its business as currently planned
for the next several years.
Liquidity
The Company has a line of credit from a commercial bank of $7.5
million. No amounts were outstanding under this short-term borrowing facility at
September 30, 1997.
Through February 7, 1996, the Company had a real estate line of credit
of $25 million to be used for placement of mortgages. This line was terminated
in fiscal 1996 at the Company's initiative and replaced by a new unsecured
Revolving Credit facility with two banks. In June 1997, the Credit Agreement was
modified to increase the amount available under the facility from $30 million to
$50 million, and extend the term to March 2000. The facility bears interest at
the prime rate or other LIBOR-based rate options tied to the Company's financial
performance.
Prior to the termination of the real estate line, the Company had
utilized $13.2 million of the real estate line of credit for permanent
mortgages.
The Company has outstanding $3.7 million in principal amount of its
10.65% Senior Notes due 1999 (the "Senior Notes") with Massachusetts Mutual Life
Insurance Company pursuant to a Senior Note Agreement. The fourth of six equal
annual installments of principal in the amount of $1.8 million was paid on April
1, 1997.
The Company has financed its office/warehouse facility via a 10-year
mortgage with a current balance of $2.8 million, amortizable over 20 years, and
an eight-year term loan with a balance of $.6 million.
Certain of the Company's long-term debt agreements require, among other
things, the maintenance of specified current ratios, interest and rent coverage
ratios and amounts of tangible net worth, and also contain restrictions on
dividend payments and capital expenditures.
-11-
<PAGE> 12
MONRO MUFFLER BRAKE, INC.
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
The 1997 Annual Meeting of Shareholders of the Company (the
"1997 Meeting") was held on August 12, 1997. At the 1997 Meeting, the Company's
common shareholders elected management's nominees, Charles J. August, Frederick
M. Danziger, Lawrence C. Day, Jack M. Gallagher, and Peter J. Solomon to Class 2
of the Board of Directors, to serve until the election and qualification of
their respective successors at the 1999 Annual Meeting of Shareholders. Such
nominees for director received the following votes:
Name Votes For Votes Withheld
---- --------- --------------
Charles J. August 4,919,127 3,786
Frederick M. Danziger 4,921,182 1,731
Lawrence C. Day 4,921,182 1,731
Jack M. Gallagher 4,921,182 1,731
Peter J. Solomon 4,920,182 2,731
As required under the Company's Certificate of Incorporation,
such election of directors and other matters were confirmed by the holders of
all 91,727 outstanding shares of the Company's Class C Convertible Preferred
Stock, par value $1.50 per share, by written consent dated as of August 12,
1997.
In addition, Burton S. August, Robert W. August, Donald
Glickman, Lionel B. Spiro, and W. Gary Wood will continue as Class 1 directors
until the election and qualification of their respective successors at the 1998
Annual Meeting of Shareholders.
Also approved by the following votes were:
(i) a proposal to ratify the re-appointment of Price
Waterhouse LLP as the independent auditors of the Company for the fiscal year
ending March 31, 1998 (4,917,616 shares in favor, 2,663 shares against, 2,634
shares abstaining and zero broker non-votes);
(ii) a proposal to ratify the amendment to the Monro Muffler
Brake, Inc. Non-Employee Directors' Stock Option Plan to increase the number of
authorized shares (4,479,653 shares in favor, 208,881 shares against, 6,247
shares abstaining and 228,132 broker non-votes); and
(iii) a proposal to ratify the amendment to the Monro Muffler
Brake, Inc. 1989 Employee's Incentive Stock Option Plan to increase the number
of authorized shares (4,647,570 shares in favor, 23,840 shares against, 12,075
shares abstaining and 239,428 broker non-votes).
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
a. Exhibits
11 - Statement of Computation of Per Share Earnings.
b. Reports on Form 8-K
The Company was not required to file reports on Form
8-K during the quarter ended September 30, 1997.
-12-
<PAGE> 13
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MONRO MUFFLER BRAKE, INC.
DATE: November 13, 1997 By /s/ Lawrence C. Day
---------------------------
Lawrence C. Day
President and Chief Executive Officer
DATE: November 13, 1997 By /s/ Catherine D'Amico
---------------------------
Catherine D'Amico
Senior Vice President-Finance, Treasurer
and Chief Financial Officer
-13-
<PAGE> 14
EXHIBIT INDEX
Exhibit No. Description Page No.
- ----------- ----------- --------
11 Statement of computation of per share earnings 15
-14-
<PAGE> 1
MONRO MUFFLER BRAKE, INC. Exhibit 11
STATEMENT OF COMPUTATION OF PER SHARE EARNINGS
Earnings per share for each period was computed by dividing net income
for such period by the weighted average number of shares of Common Stock and
common stock equivalents outstanding during such period. All share data have
been restated to reflect the 5% stock dividend paid August 4, 1997. (See Note 1
of Notes to Consolidated Financial Statements).
<TABLE>
<CAPTION>
QUARTER ENDED SIX MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------- -------------
1997 1996 1997 1996
---- ---- ---- ----
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
EARNINGS
Net Income $3,352 $3,742 $6,769 $7,121
====== ====== ====== ======
SHARES
Weighted average number of shares of Common
Stock 7,867 7,832 7,859 7,751
Assuming conversion of Class C Convertible
Preferred Stock 605 605 605 605
Dilutive effect of outstanding options 136 183 143 224
------ ------ ------ ------
Weighted average number of common and common
equivalent shares 8,608 8,620 8,607 8,580
====== ====== ====== ======
EARNINGS PER SHARE $ .39 $ .43 $ .79 $ .83
====== ====== ====== ======
</TABLE>
-15-
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-START> APR-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 3,919
<SECURITIES> 0
<RECEIVABLES> 820
<ALLOWANCES> 0
<INVENTORY> 23,789
<CURRENT-ASSETS> 33,133
<PP&E> 164,468
<DEPRECIATION> (46,398)
<TOTAL-ASSETS> 118,070
<CURRENT-LIABILITIES> 24,971
<BONDS> 0
0
138
<COMMON> 79
<OTHER-SE> 73,229
<TOTAL-LIABILITY-AND-EQUITY> 155,025
<SALES> 82,313
<TOTAL-REVENUES> 82,313
<CGS> 45,862
<TOTAL-COSTS> 45,862
<OTHER-EXPENSES> 23,399
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,770
<INCOME-PRETAX> 11,282
<INCOME-TAX> 4,513
<INCOME-CONTINUING> 6,769
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6,769
<EPS-PRIMARY> 0.79
<EPS-DILUTED> 0.79
</TABLE>
