Monro, Inc. Investor Presentation - EARNINGS CALL MAY 20, 2021
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Monro, Inc.
FOURTH QUARTER
InvestorFISCAL
Presentation
2021
EARNINGS
June 2021 CALL 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 9. 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 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
▪ 1,292 company operated stores in 32 states and 91 franchised
locations as of June 4, 2021
▪ 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 – 431 stores
Store locations as of 5/11/21
• 75% maintenance service, 25% tires
• $675,000 a year in sales per store
−Tire brand stores – 861 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 5/11/21 4
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)
20 290,000
18
280,000
16
14 270,000
12 260,000
10
8 250,000
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 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Source: FRED Economic Data, Light weight Vehicle Sales: Autos and Light Trucks (annual average data) Source: Auto Care Association Factbook
Total Miles Traveled in U.S. Key Highlights
3,300,000
3,225,000
▪ Although a slight decrease in 2021, an overall growing
trend in total vehicle population related to consumers
3,150,000
owning vehicles longer
3,075,000
▪ 270+ million vehicles on the road
3,000,000
▪ Increasing age of vehicles (average of ~12 years)
2,925,000
▪ Increasing complexity of vehicles
2,850,000
▪ Since March 2020, vehicle miles traveled has been
2,775,000 negatively impacted due to the COVID-19 pandemic
05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20
Source: FRED Economic Data, Moving 12-Month Total Vehicle Miles Traveled (annual average data) 5
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 ▪ Strong growth in new vehicles (0-5 years) between 2012
110 and 2017 is creating a significant tailwind for the 6-12
100 year old vehicle cohort for the next couple of years
90 ▪ 6-12 year cohort expected to grow the fastest at +3.9%
80 CAGR for the period 2017-2022
70 ▪ Monro’s targeted market segment is the 6-12 year
60 cohort
50
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Source for all data: Lang, IHS Markit, 2018 6
A 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 7
Fourth Quarter Fiscal 2021 Sales Highlights
Well Positioned to Drive Higher Sales and Generate Strong Cash Flow
Quarterly Comps Trends Monthly Comparable Store Sales
10%
100%
5% 80%
0% 60%
Q4FY20 Q1FY21 Q2FY21 Q3FY21 Q4FY21
-5% 40%
-10% 20%
-15% 0%
-20% -20%
-40%
-25%
-60% January February March April May MTD1
-30%
CY20 CY21
Q4FY21 Q4FY21
Key Highlights Key Highlights
▪ Comparable store sales of 9.4% driven by strong ▪ Sequential comp improvement in all product and service
demand recovery categories, with tires outperforming all other categories
▪ Sales from new stores added $5.1M, including sales ▪ Tires: 17%
from recent acquisitions of $4.6M
▪ Alignments: 15%
▪ Generated record operating cash flow of ~$185M in
fiscal 2021 driven by profitability and strong working ▪ Front End/Shocks: 1%
capital management ▪ Maintenance: 0%
▪ Brakes: -1%
1Preliminary results through May 15, 2021 and May 16, 2020 8Fourth Quarter Fiscal 2021 Results
Solid Results Reflect Strong Momentum Exiting Fiscal 2021
Q4FY21 Q4FY20 Δ FY21 FY20 Δ
Sales (millions) $305.5 $286.1 6.8% $1,125.7 $1,256.5 (10.4%)
Same Store Sales 9.4% -9.5% 1,890 bps -11.1% -2.3% (880 bps)
Gross Margin 35.1% 35.7% (60 bps) 35.1% 37.9% (280 bps)
Operating Margin 6.8% 0.1% 670 bps 6.4% 8.1% (170 bps)
Diluted EPS $.35 ($.12) NM $1.01 $1.71 (40.9%)
Excluded Costs1 $.03 $.20 $.12 $.29
Adjusted Diluted EPS2 $.38 $.08 375.0% $1.14 $2.00 (43.0%)
1Excluded costs in Q4FY21 include $.02 per share in Monro.Forward initiatives and $.01 per share related to management transition costs and a distribution center closure. Excluded costs in Q4FY20 include $.15 per share of store impairment costs, $.03 per share in Monro.Forward initiatives, $.01
per share of one-time costs related to the Company’s headquarters expansion and $.01 per share of costs related to litigation reserve. Excluded costs in FY21 include $.06 per share related to store closing costs, $.05 per share in Monro.Forward initiatives, $.01 per share of costs related to
acquisition due diligence, $.01 per share of costs related to management transition and a distribution center closure, and $.01 per share of benefit related to a reserve for litigation that was no longer necessary. Excluded costs in FY20 include $.15 per share of store impairment costs, $.09 per share
in Monro.Forward initiatives, $.03 per share of costs related to acquisition due diligence and integration, and $.02 per share of costs related to headquarters expansion costs and litigation reserve.
2Adjusted 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 May 20, 2021.
Note: The table may not add down +/- due to rounding 9Solid Financial Position
Ample Financial Flexibility to Support Growth Strategy and Business Operations
Disciplined Capital Allocation Strong Balance Sheet and Liquidity
Fiscal 2021
▪ Reduced bank debt, net of cash by ~$61M ▪ Generated record ~$185M of operating cash flow
during FY21
▪ Capex of ~$52M
▪ Net bank debt of $160M as of March 2021
▪ Spent ~$17M on acquisitions
▪ Net bank debt-to-EBITDA ratio as of March 2021 of
▪ Paid ~$30M in dividends 1.1x
▪ Strategically reduced cost structure ▪ Liquidity position of ~$380M as of May 15, 2021
10Go-Forward Priorities
A Renewed Focus on Operational Execution To Realize the Full Potential of Our Business
Enhance the customer experience and improve in-store execution to drive long-term organic growth
Capitalize on strategic acquisition opportunities in our highly fragmented industry
Generate strong cash flow through operational improvements and working capital optimization
11Driving Long-Term Sustainable Growth
Improve Customer Experience Optimize Product &
• Online reputation management Service Offering
• Consistent in-store experience • Redefined selling approach
• Consistent store appearance • Optimized tire assortment
Scalable Platform to
Enhance Customer-Centric Drive Sustainable Accelerate Productivity
Growth & Team Engagement
Engagement
• Customer retention • Optimized store staffing model
• Customer acquisition • Clearly defined career path and
• Omnichannel enhanced training program
• Aligned compensation
Investments in Technology and Data-Driven Analytics to Support Strategic Initiatives
12Monro.Forward Progress Update
Focused on Aspects of Business Within Our Control to Drive Profitable Growth and Operational Excellence
▪ Substantially completed the rebrand and reimage of ~360 stores in key markets
Improve Customer
Experience ▪ Migrated ~115 stores from service branded stores to a tire-oriented brand
▪ 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
▪ Completed rollout of tire category management and pricing tool
Optimize Product &
Service Offering ▪ Dynamically tracking demand trends to drive tire volume and margin expansion
▪ Focused on category management to capitalize on service attachment opportunities
▪ Completed rollout of cloud-based store staffing and scheduling software
Accelerate Productivity ▪ Well-positioned to drive labor efficiency
& Team Engagement ▪ Focused on leveraging Monro University and in-store training to drive operational excellence
and improved in-store execution
13Omnichannel: Amazon.com Collaboration
Collaboration With Amazon.com Supports Monro’s Online Tire Retailers Installation Strategy
Amazon.com Collaboration
▪ Monro’s tire installation services available to customers who purchase
tires online from Amazon.com and select the Ship-to-Store option
▪ Amazon tire installation services are now offered at all of Monro’s more
than 1,200 locations in 32 states
▪ Enhances customer-centric engagement efforts and omni-channel
service offerings, delivering a best-in-class customer experience and
building a scalable platform for sustainable growth
14A Proven Acquisition Strategy
Monro’s Acquisition Strategy Has Delivered Significant Growth Over the Years
A Proven Track Record
▪ 40 acquisitions in the past 9 fiscal years, adding 535 locations and $730M in revenue
▪ Entered 13 new states, expanding our presence in the Southern and Western markets
▪ Average acquisition size:
▪ 13 stores
▪ ~$20M in annualized sales growth
Recently Completed Acquisitions
▪ Completed acquisition of 30 Mountain View Tire & Service stores in the Los Angeles area
▪ Further expands the Company’s geographic footprint in the Western United States
▪ Represents $45M in annualized sales
▪ Sales mix of 70% service and 30% tires
Fiscal 2022 Acquisition Outlook
▪ Strategically located acquisitions with attractive valuations remain a pillar of our growth and we are committed
to executing on attractive opportunities in our highly fragmented industry
▪ Actively evaluating acquisition targets and capitalizing on robust pipeline
15Investment Highlights
▪ Leading chain of Company-operated undercar care facilities in the U.S. with a wide breadth of
product and service offerings
▪ Strong position in Northeast, Great Lakes and Mid-Atlantic and expanding into Southern and Western
markets with a presence in 32 states
▪ Low-cost operator with solid operating margins
▪ Well-positioned to capitalize on a favorable industry backdrop
▪ Monro.Forward strategy creating a scalable platform to drive sustainable growth, with a focus on
operational excellence to increase overall customer lifetime value
▪ Significant growth opportunity to execute disciplined acquisition strategy in a highly fragmented
industry
▪ Strong balance sheet and cash flow
▪ Delivering consistent shareholder returns through dividend program
16Appendix
17Fiscal 2022 Outlook – Financial Assumptions
Financial Assumptions as of May 20, 2021 Q1 Outlook Considerations as of May 20, 2021
Tire and Oil Costs Increase y/y
▪ Expect double digit comparable store sales
growth
Interest Expense ~$25M to ~$28M
– Fiscal first quarter-to-date comps of
Depreciation and Amortization ~$82M to ~$88M ~53% as of May 15, 2021
Tax Rate ~25% – Comps expected to moderate in June
due to less favorable y/y comparison
Capital Expenditures ~$40M to ~$55M
▪ Expect gross margin to reflect the negative
Weighted Average Number of Diluted impact of a higher sales mix of tires
~34M compared to Q1 Fiscal 2020
Shares Outstanding
Store Closure Operating Income Benefit ~$5M vs. Fiscal 2020
~$15M to $20M vs. Fiscal
Structural Cost savings
2020
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