Monro, Inc. Investor Presentation - EARNINGS CALL MAY 20, 2021 - March 2022
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Monro, Inc.
FOURTH QUARTER
InvestorFISCAL
Presentation
2021
EARNINGS
March 2022CALL MAY 20, 2021
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,” “believes,” “expects,” “estimates,” “is likely,” “predicts,” “projects,” “forecasts,” “may,” “will,” “should,” and
“intends” and the negative of these words or other comparable terminology. These forward-looking statements are based
on Monro’s current expectations, estimates, projections and assumptions as of the date such statements are made, and are
subject to risks and uncertainties that may cause results to differ materially from those expressed or implied in the forward-
looking statements, to include the significant uncertainty relating to the duration and scope of the COVID-19 pandemic and
its impact on our customers, executive officers and employees. Additional information regarding these risks and
uncertainties are described in the Company’s filings with the Securities and Exchange Commission, including in the “Risk
Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of our
most recently filed periodic reports on Forms 10-K and Form 10-Q, which are available on Monro’s website at
https://corporate.monro.com/investors/financial-information/. Monro assumes no obligation to update or revise these
forward-looking statements for any reason, even if new information becomes available in the future.
In addition to including references to diluted earnings per share (“EPS”), which is a generally accepted accounting
principles (“GAAP”) measure, this presentation includes references to adjusted diluted earnings per share, which is a non-
GAAP financial measure. Monro has included a reconciliation from adjusted diluted EPS to its most directly comparable
GAAP measure, diluted EPS in Slide 10. Management views this non-GAAP financial measure as a way to better assess
comparability between periods because management believes the non-GAAP financial measure shows the Company’s
core business operations while excluding certain non-recurring items and items related to store closings as well as our
Monro.Forward or acquisition initiatives.
This non-GAAP financial measure is not intended to represent, and should not be considered more meaningful than, or as
an alternative to, its most directly comparable GAAP measure. This non-GAAP financial measure may be different from
similarly titled non-GAAP financial measures used by other companies.
2
Company Overview
A Leading Chain of Independently Owned and Operated Tire and Auto Service Locations
Dominant in the Northeastern U.S. and expanding in Southern and
Western markets
Fiscal 2021 sales of $1,125.7 million
1,303 company operated stores in 32 states and 80 franchised
locations as of March 2, 2022
40 acquisitions in the past 9 fiscal years, adding 535 locations,
$730 million in revenue and entry into 13 new states
Operating two store formats in key markets
−Service brand stores – 438 stores
Store locations as of 3/2/22
• 75% maintenance service, 25% tires
• $675,000 a year in sales per store
−Tire brand stores – 865 stores (excluding wholesale)
• 55% tires, 45% maintenance service
• $1.0 million a year in sales per store
7 wholesale locations and 3 retread facilities
3
A Unique Operating Model
Monro Has a Diversified Supply Chain, Sourcing High Quality, Low-Cost Parts Direct and a Strong Portfolio of Tire Brands
PARTS
Monro sources these parts from leading Secondary parts distribution:
aftermarket parts suppliers:
Brake Rotors and Pads
Filters
Steering and Suspension
Wipers
Belts
TIRES
Store locations as of 3/2/22 4
Investment Thesis
Leading national
Focus on operational Scalable platform with
automotive service and Commitment to driving
excellence to increase significant growth opportunity
tire provider with 1,303 Monro.Forward Responsibly
customer lifetime value in acquisitions
locations in 32 states
Well-positioned to capitalize Delivering consistent
Low-cost operator with solid Strong balance sheet and
on a favorable industry shareholder returns through
operating margins operating cash flow
backdrop dividend program
5
A Favorable Industry Backdrop
Favorable Industry Backdrop for Automotive Services
Despite a Decrease in Miles Traveled in 2020 Resulting from the COVID-19 Pandemic
U.S. Annual Light Vehicle Sales U.S. Light Vehicles in Operation (VIO)
290,000
20
18 280,000
16
270,000
14
12 260,000
10
250,000
8
6 240,000
4
230,000
2
0 220,000
05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Source: FRED Economic Data, Light weight Vehicle Sales: Autos and Light Trucks (annual data) Source: Auto Care Association Factbook
Annual Vehicles Miles Traveled Key Highlights
3,300,000
3,225,000 Although a slight decrease in VIO for 2021, an overall
3,150,000 growing trend in total vehicle population related to
3,075,000
consumers owning vehicles longer
3,000,000 270+ million vehicles on the road
2,925,000 Increasing age of vehicles (average of ~12 years)
2,850,000 Increasing complexity of vehicles
2,775,000 Vehicle miles traveled recovering from 2020 lows
2,700,000
05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21
Source: FRED Economic Data, Moving 12-Month Total Vehicle Miles Traveled 6
A Favorable Industry Backdrop
Monro is Well-Positioned to Capitalize on Positive Industry Trends,
with Our Sweet Spot Experiencing the Fastest Growth in Vehicles in Operation
Vehicles in Operation – 0 to 5 Years Vehicles in Operation – 6 to 12 Years
120 120
110 +6.56% CAGR -.03% CAGR 110 -3.97% CAGR +3.90% CAGR
100 100
90 90
80 80
70 70
60 60
50 50
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Vehicles in Operation – 13+ Years Key Highlights
120 +4.27% CAGR +1.47% CAGR Monro’s targeted market segment is the 6-12 year
110 cohort
100 Strong growth in new vehicles (0-5 years) between 2012
90 and 2017 is creating a significant tailwind for the 6-12
80 year old vehicle cohort for the next couple of years
70 6-12 year cohort expected to grow the fastest at +3.9%
60 CAGR for the period 2017-2022
50
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Source for all data: Lang, IHS Markit, 2018 7A Favorable Industry Backdrop
Monro Operates in the $252 Billion Do-It-For-Me* Segment of $325 Billion U.S. Automotive Aftermarket Industry
Automotive Aftermarket DIFM vs. DIY Sales % %
2010 2020 CAGR
(outlets) (outlets)
350,000
Dealers 18,460 14.3% 16,623 12.5% (1.0%)
300,000
General Repair
250,000 76,108 58.8% 82,454 62.1% 0.8%
Garages
200,000
Tire Dealers 18,675 14.4% 20,327 15.3% 0.9%
150,000
Specialty Repair 8,663 6.7% 6,137 4.6% (3.4%)
100,000
50,000
Oil Change/Lube 7,518 5.8% 7,305 5.5% (0.3%)
0
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Total 129,424 100.0% 132,846 100.0%
DIFM DIY
Source: Auto Care Association Factbook Census data for 2012; estimates for 2013-2020; 2021 forecast Source: Auto Care Association Factbook
DIFM vs. DIY Trends Key Highlights
DIFM continues to account for a significant percentage Industry still highly fragmented, with significant
of the automotive aftermarket opportunities for further consolidation
Vehicle complexity continues to drive shift to DIFM from
DIY
Future technology advances expected to accelerate
shift to DIFM
* Includes Replacement Tire Segment 8Third Quarter Fiscal 2022 Highlights
Delivered Third Consecutive Quarter of Double-Digit Comparable Sales Growth; Topline Exceeded Pre-Pandemic Levels
Quarterly Comparable Store Sales Trends Monthly Comparable Store Sales Trends
34.5% 17.5%
13.8%
9.0%
14.8% 13.8% 3.1%
1.0%
9.4%
-6.4%
-12.3%
-13.0% -18.2%
1
Q3FY21 Q4FY21 Q1FY22 Q2FY22 Q3FY22 October November December January
FY21 FY22
Q3FY22 Q3FY22
Key Highlights Key Highlights
Sales increased 20.1% to $341.8M Double-digit comps in all product and service categories
Comparable store sales increase of 13.8%; Brakes: 28%
preliminary fiscal January ~4% above pre-COVID Alignments: 28%
performance
Front End/Shocks: 14%
Sales from new stores added $18.5M, primarily from
recent acquisitions Service: 11%
Generated strong operating cash flow of ~$127M Tires: 11%
driven by profitability and working capital Service categories increased to ~44% of total sales
management compared to ~43% in prior year period
1Preliminary results through January 22, 2022 9Third Quarter Fiscal 2022 Results
Solid Results Reflect Demand Recovery and Strong Operational Execution
Q3FY22 Q3FY21 Δ FY22 YTD FY21 YTD Δ
Sales (millions) $341.8 $284.6 20.1% $1,031.3 $820.2 25.7%
Same Store
13.8% -13.0% 2,680 bps 20.3% -16.8% 3,710 bps
Sales
Gross Margin 35.3% 33.8% 150 bps 36.6% 35.1% 150 bps
Operating
8.0% 5.5% 250 bps 8.7% 6.3% 240 bps
Margin
Diluted EPS $.48 $.20 140.0% $1.56 $.67 132.8%
Excluded
$.01 $.02 $ .10 $.09
Costs1
Adjusted
$.49 $.22 122.7% $1.66 $.77 115.6%
Diluted EPS2
1 Excluded costs in Q3FY22 include $.01 per share related to Monro.Forward initiatives. Excluded costs in Q3FY21 include $.02 per share related to Monro.Forward initiatives and a benefit related to the reversal of a reserve for potential litigation. Excluded costs for
FY22 YTD include $.08 per share related to one-time litigation settlement costs, $.03 per share of acquisition due diligence and integration costs and Monro.Forward initiatives and $.01 per share of benefit from an adjustment to the estimate for prior year store
closing costs. Excluded costs in FY21 YTD include $.06 per share related to store closing costs and $.04 per share related to Monro.Forward initiatives and management transition and $.01 per share benefit related to a reserve for potential litigation that is no longer
necessary.
2 Adjusted EPS is a non-GAAP measure that excludes certain non-recurring items and items related to our Monro.Forward or acquisition initiatives. A reconciliation of net income to adjusted net income and diluted EPS to adjusted diluted EPS is included in our
earnings release dated January 26, 2022.
Note: The table may not add down +/- due to rounding.
10Solid Financial Position
Strong Operating Cash Flow Supports Growth Strategy and Cash Dividends to Shareholders
Disciplined Capital Allocation Strong Balance Sheet and Liquidity
YTD Fiscal 2022
Capex of ~$17M Generated ~$127M of operating cash flow during
YTD fiscal 2022
Paid ~$83M for acquisitions
Net bank debt of ~$185M as of December 2021
Spent ~$29M in principal payments for financing
leases Net bank debt-to-EBITDA ratio as of December
2021 of 1.0x
Paid ~$26M in dividends
Liquidity position of ~$385M as of December
2021
11Strategic Priorities
Take Advantage of Growing Retail Demand to Sustain Long Term Growth
Improve in-store operational execution with a focus on the “Big Five” - Staffing, Scheduling,
Training, Attachment Selling and Outside Purchase Management
Execute store reimage program with current focus on recent West Coast acquisitions
Continue to be the acquirer of choice for family-owned businesses with our easily scalable platform
Further integrate Corporate Responsibility efforts into our strategy and operations
12Focus on In-Store Execution
Attachment Outside Purchase Store Reimage
Staffing Scheduling Training
Selling Management Program
Sustainable Comp Sales Growth
Gross Profit Operating Margin Acquisition
Improvement Expansion Growth
Creates Additional Value for Shareholders through:
Enhanced Significant Higher Returns
Earnings per Cash on Invested
Share (EPS) Generation Capital
13Monro.Forward Progress Update
Focused on Aspects of Business Within Our Control to Drive Profitable Growth and Operational Excellence
Focused on advancing vision to be a best-in-class field-led service organization to increase
Improve Customer the overall lifetime value for customers
Experience
Outperformance of rebranded and reimaged stores reinforces strength of strategy
Optimized marketing spend towards higher ROI channels to drive improved SEO
Enhance Customer- performance in tires and key service categories
Centric Engagement Leveraging modernized store infrastructure and phone system to improve customer
execution
Optimize Product & Dynamically tracking demand trends to drive tire volume and margin expansion
Service Offering Focused on category management to capitalize on service attachment opportunities
Well-positioned to drive labor productivity
Accelerate Productivity
Focused on leveraging Monro University and in-store training and providing the Automotive
& Team Engagement
Service Excellence certification to drive operational excellence and improved in-store execution
14A Scalable Platform: Recent Acquisitions
Executing Disciplined M&A Strategy to Capitalize on Significant Opportunities for Consolidation in the Aftermarket
Acquisitions
Completed the previously announced acquisitions of 17 stores, including six in Southern California
and 11 in Iowa
Further expands the Company’s geographic footprint in the Midwest and Western United States
Represents ~$25M in annualized sales
Brings fiscal year-to-date acquisition total to 47 stores and ~$70M in annualized sales
Fiscal 2022 Acquisition Outlook
Financial flexibility to continue to roll up attractive opportunities in a highly fragmented industry
Significant growth prospects in the attractive and dynamic Western region
Evaluating a robust pipeline of attractive M&A opportunities that support our strategy while
maintaining strong financial discipline
15Appendix
16Fiscal 2022 Outlook – Financial Assumptions
Financial Assumptions as of January 26, 2022 Q4 Outlook Considerations
Tire and Oil Costs Increase y/y
Preliminary fiscal January comps increased
~1% and were ~4% above pre-COVID levels
Interest Expense ~$25M to ~$27M
Expect continued investments in store labor
Depreciation and Amortization ~$82M to ~$85M and gross margin improvement versus prior
year as service category sales strengthen
Tax Rate ~25%
Capital Expenditures ~$30M to ~$40M
Weighted Average Number of Diluted
~34M
Shares Outstanding
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