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 June ~~27, 2020.~~26, 2021

¨ 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

____________________________________________________________

~~MONRO, INC.~~

Monro, 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 No.)

200 Holleder Parkway, Rochester, New York	14615
(Address of principal executive offices)	(Zip code)

Registrant’s telephone number, including area code: (585) 647-6400

_________________________________________

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading

Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.01 per share

MNRO

The Nasdaq Stock Market

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. x Yes ¨ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). x Yes ¨ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large ~~Accelerated Filer~~accelerated filer x Accelerated ~~Filer~~filer ¨ ~~Non-Accelerated Filer~~Non-accelerated filer ¨ Smaller ~~Reporting Company~~reporting company ¨

Emerging ~~Growth Company~~growth company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ¨ Yes x No

~~There were 33,285,901~~As of July 23, 2021, 33,505,537 shares of the registrant's common stock, $0.01 par value ~~$0.01~~ per share, ~~outstanding at July 24, 2020.~~were outstanding.

Monro, Inc. Q1 2022 Form 10-Q

Table of Contents

CONSOLIDATED FINANCIAL STATEMENTS

~~MONRO, INC.~~

PARTPART I - FINANCIAL INFORMATION

Item 1. Financial Statements

MO~~NRO, INC.~~

~~CONSOLIDATED BALANCE SHEETS~~

~~(UNAUDITED)~~

Consolidated Balance Sheets



	June 27,		March 28,
	2020		2020
	(Dollars in thousands)
(thousands, except footnotes) (unaudited)					June 26, 2021		March 27, 2021
Assets
Current assets:
Current assets
Cash and equivalents	$	147,174	$	345,476	$	16,878	$	29,960
Trade receivables		13,415		14,510
Accounts receivable						15,422		15,324
Federal and state income taxes receivable		7,345		8,056		3,085		10,844
Inventories		176,530		187,441		167,501		162,282
Other current assets		36,792		40,537		53,180		48,115
Total current assets		381,256		596,020		256,066		266,525
Property, plant and equipment		692,618		682,932
Less - Accumulated depreciation and amortization		(363,703)		(354,295)
Net property, plant and equipment		328,915		328,637
Property and equipment, net						321,465		327,063
Finance lease and financing obligation assets, net		253,956		196,575		285,573		275,360
Operating lease assets, net		206,252		199,729		219,694		203,329
Goodwill		671,831		671,843		757,667		689,524
Intangible assets, net		28,706		29,781		27,229		26,068
Other non-current assets		21,787		20,688		18,261		18,332
Long-term deferred income tax assets		6,139		6,184		5,813		5,613
Total assets	$	1,898,842	$	2,049,457	$	1,891,768	$	1,811,814
Liabilities and Shareholders' Equity
Current liabilities:
Liabilities and shareholders' equity
Current liabilities
Current portion of finance leases and financing obligations	$	33,744	$	32,257	$	39,986	$	37,803
Current portion of operating lease liabilities		30,696		30,181		32,752		30,903
Trade payables		110,853		99,504
Accounts payable						121,378		112,378
Accrued payroll, payroll taxes and other payroll benefits		17,873		14,429		29,157		20,842
Accrued insurance		42,461		43,387		52,684		49,681
Deferred revenue		12,281		13,129		12,669		11,956
Other current liabilities		33,868		22,049		31,634		27,053
Total current liabilities		281,776		254,936		320,260		290,616
Long-term debt		326,200		566,400		198,000		190,000
Long-term finance leases and financing obligations		350,212		298,373		379,711		366,330
Long-term operating lease liabilities		180,767		170,954		197,571		177,724
Other long-term liabilities		17,280		12,873		17,154		16,649
Long-term deferred income tax liabilities		10,461		10,069		19,398		19,783
Long-term income taxes payable		1,426		1,412		1,083		1,028
Total liabilities		1,168,122		1,315,017		1,133,177		1,062,130
Commitments and contingencies
Commitments and contingencies - Note 10
Shareholders' equity:
Class C Convertible Preferred Stock, $1.50 par value, $0.064 conversion value, ‎150,000 shares authorized; 21,802 shares issued and outstanding		33		33
Common Stock, $0.01 par value, 65,000,000 shares authorized; 39,645,772 and ‎39,644,228 shares issued at June 27, 2020 and March 28, 2020, respectively		396		396
Treasury Stock, 6,359,871 shares, at cost		(108,729)		(108,729)
Class C Convertible Preferred stock						29		29
Common stock						399		398
Treasury stock						(108,729)		(108,729)
Additional paid-in capital		230,683		229,774		239,738		238,244
Accumulated other comprehensive loss		(7,059)		(6,889)		(4,722)		(4,619)
Retained earnings		615,396		619,855		631,876		624,361
Total shareholders' equity		730,720		734,440		758,591		749,684
Total liabilities and shareholders' equity	$	1,898,842	$	2,049,457	$	1,891,768	$	1,811,814

Monro, Inc. Q1 2022 Form 10-Q

Table of Contents

CONSOLIDATED FINANCIAL STATEMENTS

M~~ONRO, INC.~~

~~CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME~~

~~(UNAUDITED)~~

Consolidated Statements of Income and Comprehensive Income



	Quarter Ended				Three Months Ended
	June 27,		June 29,
	2020		2019
	(Dollars in thousands, ‎except per share data)
(thousands, except per share data) (unaudited)					June 26, 2021		June 27, 2020
Sales	$	247,059	$	317,063	$	341,818	$	247,059
Cost of sales, including distribution and occupancy costs		159,605		188,916		215,887		159,605
Gross profit		87,454		128,147		125,931		87,454
Operating, selling, general and administrative expenses		76,053		91,776		98,014		76,053
Operating income		11,401		36,371		27,917		11,401
Interest expense, net of interest income		7,385		7,157		6,941		7,385
Other loss (income), net		9		(175)
Other (income) loss, net						(44)		9
Income before income taxes		4,007		29,389		21,020		4,007
Provision for income taxes		1,020		6,783		5,339		1,020
Net income	$	2,987	$	22,606	$	15,681	$	2,987
Other comprehensive loss:
Changes in pension, net of tax benefit		(170)		(89)
Other comprehensive loss
Changes in pension, net of tax						(103)		(170)
Other comprehensive loss		(170)		(89)		(103)		(170)
Comprehensive income	$	2,817	$	22,517	$	15,578	$	2,817
Earnings per common share:
Earnings per share
Basic	$	0.09	$	0.68	$	0.46	$	0.09
Diluted	$	0.09	$	0.67	$	0.46	$	0.09
Weighted average number of common shares outstanding ‎ used in computing earnings per share:
Weighted average common shares outstanding
Basic		33,285		33,183		33,498		33,285
Diluted		33,854		33,964		34,022		33,854

Monro, Inc. Q1 2022 Form 10-Q

Table of Contents

CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Statements of Changes in Shareholders’ Equity



	Class C											Accumulated
	Convertible									Additional		Other
	Preferred Stock			Common Stock			Treasury Stock			Paid-In		Comprehensive		Retained		Total
(thousands) (unaudited)	Shares	Amount		Shares	Amount		Shares	Amount		Capital		Loss		Earnings		Equity
Balance at March 28, 2020	22	$	33	39,645	$	396	6,360	$	(108,729)	$	229,774	$	(6,889)	$	619,855	$	734,440
Net income															2,987		2,987
Other comprehensive loss
Pension liability adjustment													(170)				(170)
Dividends declared
Preferred															(112)		(112)
Common															(7,323)		(7,323)
Dividend payable															(11)		(11)
Stock options and restricted stock				1							5						5
Stock-based compensation											904						904
Balance at June 27, 2020	22	$	33	39,646	$	396	6,360	$	(108,729)	$	230,683	$	(7,059)	$	615,396	$	730,720

Balance at March 27, 2021	20	$	29	39,848	$	398	6,360	$	(108,729)	$	238,244	$	(4,619)	$	624,361	$	749,684
Net income															15,681		15,681
Other comprehensive loss
Pension liability adjustment													(103)				(103)
Dividends declared
Preferred															(110)		(110)
Common															(8,042)		(8,042)
Dividend payable															(14)		(14)
Stock options and restricted stock				17		1					739						740
Stock-based compensation											755						755
Balance at June 26, 2021	20	$	29	39,865	$	399	6,360	$	(108,729)	$	239,738	$	(4,722)	$	631,876	$	758,591

~~NRO, INC.~~

~~CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY~~

~~(UNAUDITED)~~We declared $0.24 and $0.22 dividends per common share or equivalent for the three months ended June 26, 2021 and June 27, 2020, respectively.

~~(Dollars and shares in thousands)~~

Class C Convertible
‎Preferred Stock
Common Stock
Treasury Stock
Additional
‎Paid-in
Accumulated
‎Other
‎Comprehensive
Retained
Shares
Amount
Shares
Amount
Shares
Amount
Capital
Loss
Earnings
Total
Balance at March 30, 2019
22
$
33
39,511
$
395
6,360
$
(108,729)
$
220,173
$
(4,536)
$
592,174
$
699,510
Accounting change - cumulative effect
(582)
(582)
Adjusted balance
22
33
39,511
395
6,360
(108,729)
220,173
(4,536)
591,592
698,928
Net income
22,606
22,606
Other comprehensive loss:
Pension liability adjustment
‎ ($118) pre-tax
(89)
(89)
Cash dividends ⁽¹⁾:
Preferred
(112)
(112)
Common
(7,305)
(7,305)
Dividend payable
(10)
(10)
Activity related to equity-based plans
71
1
3,644
3,645
Stock-based compensation
925
925
Balance at June 29, 2019
22
$
33
39,582
$
396
6,360
$
(108,729)
$
224,742
$
(4,625)
$
606,771
$
718,588
Balance at March 28, 2020
22
$
33
39,645
$
396
6,360
$
(108,729)
$
229,774
$
(6,889)
$
619,855
$
734,440
Net income
2,987
2,987
Other comprehensive loss:
Pension liability adjustment
‎ ($226) pre-tax
(170)
(170)
Cash dividends ⁽¹⁾:
Preferred
(112)
(112)
Common
(7,323)
(7,323)
Dividend payable
(11)
(11)
Activity related to equity-based plans
1
—
5
5
Stock-based compensation
904
904
Balance at June 27, 2020
22
$
33
39,646
$
396
6,360
$
(108,729)
$
230,683
$
(7,059)
$
615,396
$
730,720

~~(1)First quarter fiscal year dividend payments of $0.22 per common share or common share equivalent paid on June 22, 2020 and June 17, 2019.~~

~~The~~See accompanying ~~notes are an integral part of these financial statements.~~

Notes to Consolidated Financial Statements.

‎

Monro, Inc. Q1 2022 Form 10-Q

Table of Contents

CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Statements of Cash Flows

MO~~NRO, INC.~~

~~CONSOLIDATED STATEMENTS OF CASH FLOWS~~

~~(UNAUDITED)~~

Quarter Ended
June 27,
June 29,
2020
2019
(Dollars in thousands)
Increase (Decrease) in Cash
Cash flows from operating activities:
Net income
$
2,987
$
22,606
Adjustments to reconcile net income to net cash provided by operating activities -
Depreciation and amortization
18,410
14,839
(Gain) loss on disposal of assets
(256)
122
Stock-based compensation expense
904
925
Net change in deferred income taxes
494
2,223
Change in operating assets and liabilities (excluding acquisitions):
Trade receivables
1,095
(2,763)
Inventories
10,985
51
Other current assets
3,745
(3,966)
Other non-current assets
7,294
7,741
Trade payables
11,349
1,226
Accrued expenses
17,555
14,250
Federal and state income taxes payable
711
5,586
Other long-term liabilities
(2,751)
(6,903)
Long-term income taxes payable
14
3,450
Total adjustments
69,549
36,781
Net cash provided by operating activities
72,536
59,387
Cash flows from investing activities:
Capital expenditures
(15,304)
(13,996)
Acquisitions, net of cash acquired
(200)
(54,720)
Proceeds from the disposal of assets
7
103
Other
323
34
Net cash used for investing activities
(15,174)
(68,579)
Cash flows from financing activities:
Proceeds from borrowings
—
119,603
Principal payments on long-term debt, finance leases and financing obligations
(247,364)
(103,257)
Exercise of stock options
9
3,730
Dividends paid
(7,435)
(7,417)
Deferred financing costs
(874)
(1,168)
Net cash (used for) provided by financing activities
(255,664)
11,491
(Decrease) increase in cash
(198,302)
2,299
Cash at beginning of period
345,476
6,214
Cash at end of period
$
147,174
$
8,513
Supplemental information:
Leased assets obtained in exchange for finance lease liabilities
$
64,216
$
3,099
Leased assets obtained in exchange for operating lease liabilities
13,796
3,632



	Three Months Ended
(thousands) (unaudited)	June 26, 2021		June 27, 2020
Operating activities
Net income	$	15,681	$	2,987
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization		20,278		18,410
Share-based compensation expense		755		904
Gain on disposal of assets		(168)		(256)
Deferred income tax expense		2,931		494
Change in operating assets and liabilities (excluding acquisitions)
Accounts receivable		(98)		1,095
Inventories		(4,110)		10,985
Other current assets		(4,853)		3,745
Other non-current assets		7,950		7,294
Accounts payable		9,000		11,349
Accrued expenses		15,648		17,555
Federal and state income taxes receivable		7,759		711
Other long-term liabilities		(8,114)		(2,751)
Long-term income taxes payable		55		14
Cash provided by operating activities		62,714		72,536
Investing activities
Capital expenditures		(5,199)		(15,304)
Acquisitions, net of cash acquired		(62,059)		(200)
Proceeds from the disposal of assets		429		7
Other		67		323
Cash used for investing activities		(66,762)		(15,174)
Financing activities
Proceeds from borrowings		77,000		—
Principal payments on long-term debt, finance leases and financing obligations		(78,661)		(247,364)
Exercise of stock options		779		9
Dividends paid		(8,152)		(7,435)
Deferred financing costs		—		(874)
Cash used for financing activities		(9,034)		(255,664)
Decrease in cash and equivalents		(13,082)		(198,302)
Cash and equivalents at beginning of period		29,960		345,476
Cash and equivalents at end of period	$	16,878	$	147,174
Supplemental information
Leased assets obtained in exchange for new finance lease liabilities	$	6,599	$	64,216
Leased assets obtained in exchange for new operating lease liabilities	$	1,382	$	13,796

~~The~~See accompanying ~~notes are an integral part of these financial statements.~~Notes to Consolidated Financial Statements.

Monro, Inc. Q1 2022 Form 10-Q

Table of Contents

INDEX

Monro, Inc. Q1 2022 Form 10-Q

Table of Contents

CONSOLIDATED FINANCIAL STATEMENTS

NOTES

~~NOTE~~Note 1 – ~~DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION~~Description of Business and Basis of Presentation

Description of ~~Business~~business

Monro, Inc. and its ~~wholly owned operating~~direct and indirect subsidiaries ~~Monro Service Corporation, Car-X, LLC, MNRO Holdings, LLC and MNRO Service Holdings, LLC~~ (together, “Monro”, the “Company”, “we”, “us”, or “our”), are engaged principally in providing automotive undercar repair and tire replacement sales and tire related services in the United States. Monro had 1,291 Company-operated retail stores located in 32 states and 91 franchised locations as of June 26, 2021.

A certain number of our retail locations also service commercial customers. Our locations that serve commercial customers generally operate consistently with our other retail locations, except that the sales mix for these locations includes a higher number of commercial tires.

As of June 26, 2021, Monro had seven wholesale locations and three retread facilities. The wholesale locations, in most cases, sell tires to customers for resale, although these tire sales do not include installation or other tire related services. The retread facilities re-manufacture tires through the replacement of tread on worn tires that are later sold to customers.

Monro’s operations are organized and managed inas one ~~operating segment. The internal management financial reporting that is the basis~~single segment designed to offer to our customers replacement tires and tire related services, automotive undercar repair services as well as a broad range of routine maintenance services, primarily on passenger cars, light trucks and vans. We also provide other products and services for ~~evaluation in order to assess performance~~brakes; mufflers and ~~allocate resources by our chief operating decision maker consists of consolidated data that includes the results of our retail, commercial~~exhaust systems; and ~~wholesale locations. As such, our one operating segment reflects how our operations are managed, how resources are allocated, how operating performance is evaluated by senior management~~steering, drive train, suspension and ~~the structure of our internal financial reporting.~~wheel alignment.

Basis of ~~Presentation~~presentation

The accompanying unaudited condensed consolidated financial statements ~~(“Consolidated Financial Statements”)~~ have been prepared in accordance with ~~U.S. generally accepted accounting principles~~the rules and regulations of the Securities and Exchange Commission (“~~GAAP”~~SEC”) ~~for~~applicable to interim financial ~~information and with~~statements. While these statements reflect all adjustments (consisting of items of a normal recurring nature) that are, in the ~~instructions to~~opinion of management, necessary for a fair presentation of the ~~Quarterly Report on Form 10-Q and Article 10~~results of ~~Regulation S-X. Accordingly,~~the interim period, they do not include all of the information and footnotes required by ~~GAAP~~United States generally accepted accounting principles (“U.S. GAAP”) for complete financial statement presentation. The ~~Consolidated Financial Statements include the~~ consolidated accounts of the Company with all intercompany transactions eliminated. In the opinion of management, the information furnished herein reflects all adjustments (consisting of items of a normal recurring nature), which are necessary for a fair statement of the results for the interim period. The Consolidated Financial Statementsfinancial statements should be read in conjunction with the ~~Company’s consolidated~~ financial ~~statements and related Notes to Consolidated Financial Statements presented~~statement disclosures in ~~the Company’s Annual Report on~~ our Form 10-K for the fiscal year ended March ~~28, 2020 (“fiscal 2020”). Operating~~27, 2021.

We use the same accounting policies in preparing quarterly and annual financial statements.

Due to the seasonal nature of our business, quarterly operating results and cash flows ~~for the quarter ended June 27, 2020~~ are not necessarily indicative of the results that may be expected for other interim periods or ~~for~~ the ~~fiscal year ending March 27, 2021 (“fiscal 2021”).~~full year.

Fiscal ~~Year~~year

We ~~report our results~~operate on a 52/53 week ~~fiscal year with the~~ fiscal year ending on the last Saturday in March. Fiscal years 2022 and 2021 each contain 52 weeks. Unless specifically indicated otherwise, any references to “2022” or “fiscal 2022” and “2021” or “fiscal 2021” relate to the years ending March ~~of each year. The following are the dates represented by each fiscal period reported in the Consolidated Financial Statements:~~


~~“Quarter Ended Fiscal June 2020”~~	26, 2022 and March ~~29, 2020 – June~~ 27, ~~2020 (13 weeks)~~
~~“Quarter Ended Fiscal June 2019”~~	~~March 31, 2019 – June 29, 2019 (13 weeks)~~

~~Fiscal~~ 2021, ~~is a 52 week year.~~

~~Reclassifications~~

~~Certain amounts in these financial statements have been reclassified to maintain comparability among the periods presented.~~respectively.

Recent ~~Accounting Pronouncements~~

~~In August 2018, the Financial Accounting Standards Board (“FASB”) issued new~~ accounting guidance which eliminates, adds and modifies certain disclosure requirements for fair value measurements. This guidance is effective for fiscal years and interim periods within those years beginning after December 15, 2019. Early adoption was permitted. We adopted this guidance during the first quarter of fiscal 2021. The adoption of this guidance did not have a material impact on our Consolidated Financial Statements.pronouncements

In December 2019, the ~~FASB~~Financial Accounting Standards Board (“FASB”) issued new accounting guidance intended to simplify the accounting for income taxes. The new guidance removes certain exceptions to the general principles in Accounting Standards Codification (“ASC”) Topic 740, ~~Income~~“Income Taxes,” and amends existing guidance to improve consistent application. This guidance is effective for fiscal years and interim periods within those years beginning after December 15, 2020. ~~Early adoption is permitted.~~We adopted this guidance during the first quarter of 2022. The adoption of this guidance isdid not ~~expected to~~ have a material impact on our ~~Consolidated Financial Statements.~~consolidated financial statements.

Other recent authoritative guidance issued by the FASB (including technical corrections to the ~~Accounting Standards Codification)~~ASC) and the ~~Securities and Exchange Commission~~SEC did not, or are not expected to have a material effect on ~~our Consolidated Financial Statements.~~Monro’s consolidated financial statements.

~~NOTE~~

Note 2 – ~~IMPACT OF THE~~Impact of the COVID-19 ~~PANDEMIC~~Pandemic

~~In response~~The novel strain of coronavirus (“COVID-19”) pandemic has been a highly disruptive economic and societal event that has affected the Company’s business and has a significant impact on consumer shopping behavior. To date, our retail stores, wholesale locations and other facilities have remained open as an essential business. To serve our customers while also providing for the safety of employees, the Company has adapted certain aspects of the business. Throughout the pandemic, the Company has monitored the

Monro, Inc. Q1 2022 Form 10-Q

Table of Contents

CONSOLIDATED FINANCIAL STATEMENTS

NOTES

rapidly evolving situation and will continue to ~~the unprecedented and rapid spread of COVID-19 (coronavirus), many U.S.~~adapt its operations to (i) address federal, state ~~governments, in states in which we operate, have taken preventative or protective actions, such as issuing stay-at-home restrictions and social distancing measures. State~~ and local ~~governments have ordered temporary closures~~standards, (ii) meet the demand of ~~some businesses~~customers, and ~~numerous other businesses have temporarily closed voluntarily. Further, individuals’ ability~~(iii) implement standards that the Company believes to ~~travel has been curtailed through mandated travel restrictions~~be in the best interests of the safety and ~~may be further limited through additional voluntary or mandated closures~~well-being of ~~certain businesses. Substantially all Company-operated retail stores operated under a reduced schedule throughout the quarter to match lower demand.~~its employees and customers.

~~Given the uncertainties surrounding the impacts~~The full impact of the COVID-19 pandemic will depend on factors such as the length of time of the pandemic; how federal, state and local governments are responding; the efficacy of the COVID-19 vaccines; the longer-term impact of the pandemic on the economy and consumer behavior; and the effect on our ~~future financial condition, results of operations~~customers, employees, vendors and cash flows, we have taken a number of actions in response to prevailing uncertain market conditions. In order to enhance our liquidity position, we took a precautionary measure and borrowed $350 million available to us under our Credit Facility in March 2020. We subsequently repaid $240 million of these borrowings during the quarter ended June 27, 2020. Additionally, we negotiated rent deferrals for a significant number of our stores, as well as other ~~rent reductions. See additional discussion of these rent deferrals and reductions under Note 10.~~partners.

~~NOTE~~Note 3 – ~~ACQUISITIONS~~Acquisitions

Monro’s acquisitions are strategic moves in our plan to fill in and expand our presence in our existing and contiguous markets, expand into new markets and leverage fixed operating costs such as distribution, advertising and administration. Acquisitions in this footnote include acquisitions of 5 or more locations as well as acquisitions of 1 to 4 locations that are part of our greenfield store growth strategy.

~~Fiscal 2020~~2022

~~During the first quarter of fiscal 2020,~~On April 25, 2021, we acquired the following businesses for an aggregate purchase price of $54.1 million. The acquisitions were financed through our existing credit facility. The results of operations for these acquisitions are included in our financial results from the respective acquisition dates.

~~On June 23, 2019, we acquired 2~~30 retail tire and automotive repair stores located in California from ~~BAW LLC.~~Mountain View Tire & Service, Inc. for $62.1 million. These stores will operate under the Mountain View Tire ~~Choice~~& Service name. The acquisition was financed through our Credit Facility, as defined in Note 9. The results of operations for the acquisition are included in our financial results from the acquisition date.

On May 19, 2019, we acquired 40 retail tire and automotive repair stores and 1 distribution center located in California from Certified Tire & Service Centers, Inc. These stores operate under the Tire Choice name.

~~On March 31, 2019, we acquired 12 retail tire and automotive repair stores located in Louisiana from Allied Discount Tire & Brake, Inc. These stores operate under the Tire Choice name.~~

~~These acquisitions~~The acquisition resulted in goodwill related to, among other things, growth opportunities, synergies and economies of scale expected from combining ~~these businesses~~the business with ours, as well as unidentifiable intangible assets. All of the goodwill is expected to be deductible for tax purposes. ~~We have recorded finite-lived intangible assets at their estimated fair value related to customer lists.~~

We expensed all costs related to ~~acquisitions~~the acquisition in the ~~quarter~~three months ended June ~~29, 2019.~~26, 2021. The total costs related to the completed ~~acquisitions~~acquisition were ~~$0.5~~$0.3 million ~~for the quarter ended June 29, 2019. These~~and these costs are included in the Consolidated Statements of Income and Comprehensive Income primarily under operating, selling, general and administrative (“OSG&A”) expenses.

Sales ~~for~~related to the ~~fiscal 2020 acquired entities for the quarter ended June 29, 2019~~completed acquisition totaled ~~$7.1~~$7.9 million for the period from acquisition date through June ~~29, 2019.~~26, 2021.

Monro, Inc. Q1 2022 Form 10-Q

Table of Contents

CONSOLIDATED FINANCIAL STATEMENTS

NOTES

We accounted for the acquisition as a business combination using the acquisition method of accounting in accordance with the FASB ASC Topic 805, “Business Combinations.” The assets acquired and liabilities assumed were recorded at their acquisition-date fair values and were consolidated with those of the Company as of the acquisition date. The acquisition-date fair values were assigned based on preliminary valuations and estimates, and the consideration transferred and net liabilities assumed were recorded as goodwill.



2022 Acquisition-date Fair Values Assigned
(thousands)
Inventory	$	1,034
Other current assets		217
Property and equipment		960
Finance lease and financing obligation assets		12,098
Operating lease assets		22,867
Intangible assets		2,211
Other non-current assets		63
Long-term deferred income tax assets		3,482
Total assets acquired		42,932
Current portion of finance leases and financing obligations		1,184
Current portion of operating lease liabilities		1,960
Deferred revenue		955
Other current liabilities		208
Long-term finance leases and financing obligations		17,480
Long-term operating lease liabilities		26,417
Other long-term liabilities		747
Total liabilities assumed		48,951
Total net identifiable liabilities assumed	$	(6,019)
Total consideration transferred	$	62,117
Less: total net identifiable liabilities assumed		(6,019)
Goodwill	$	68,136

The total consideration of $62.1 million is comprised of $61.0 million in cash, and a $1.1 million payable to the seller. The payable is due upon finalization of a lease assignment for one store location.

We assigned $2.2 million to amortizable intangible assets, including customer list and trade name, with a weighted-average amortizable period of approximately eight years. We have assigned acquired right-of-use assets at the present value of remaining lease payments adjusted to reflect favorable or unfavorable market terms of the lease.

Supplemental pro forma information for the current or prior reporting periods has not been presented due to the impracticability of obtaining detailed, accurate or reliable data for the periods the acquired entities were not owned by Monro.

We have recorded the identifiable assets acquired and liabilities assumed at their fair values as of their respective acquisition dates (including any measurement period adjustments), with the consideration transferred and net identifiable liabilities assumed recorded as goodwill as follows:



	~~As of~~ ‎~~Acquisition~~ ‎~~Date~~
	~~(Dollars in~~ ‎~~thousands)~~
~~Inventories~~	$	~~2,691~~
~~Other current assets~~		~~371~~
~~Property, plant and equipment~~		~~1,558~~
~~Finance lease and financing obligation assets, net~~		~~15,867~~
~~Operating lease assets, net~~		~~23,411~~
~~Intangible assets~~		~~1,598~~
~~Other non-current assets~~		~~103~~
~~Long-term deferred income tax assets~~		~~3,489~~
~~Total assets acquired~~		~~49,088~~
~~Current portion of finance leases and financing obligations~~		~~1,470~~
~~Current portion of operating lease liabilities~~		~~2,644~~
~~Deferred revenue~~		~~1,069~~
~~Other current liabilities~~		~~214~~
~~Long-term finance leases and financing obligations~~		~~20,750~~
~~Long-term operating lease liabilities~~		~~25,674~~
~~Other long-term liabilities~~		~~1,171~~
~~Total liabilities assumed~~		~~52,992~~
~~Total net identifiable liabilities assumed~~	$	~~(3,904)~~
~~Total consideration transferred~~	$	~~54,093~~
~~Less: total net identifiable liabilities assumed~~		~~(3,904)~~
~~Goodwill~~	$	~~57,997~~

~~The following are the intangible assets acquired and their respective fair value and weighted average useful life:~~

As a result of the updated purchase price allocations for the entities acquired during the fiscal year ended March 28, 2020, certain of the fair value amounts previously estimated were adjusted during the measurement period. These measurement period adjustments resulted from updated valuation reports and appraisals received from our external valuation specialists, as well as revisions to internal estimates.

~~The measurement period adjustments were not material to the Consolidated Balance Sheet and Statement of Comprehensive Income for the quarter ended June 27, 2020.~~

We continue to refine the valuation data and estimates primarily related to inventory, warranty reserves, intangible assets and real property leases and certain liabilities for ~~fiscal~~the 2022 acquisition and the 2021 acquisition that closed in December 2020 ~~acquisitions which closed subsequent to June 29, 2019,~~ and expect to complete the valuations no later than the first anniversary date of the ~~respective~~ acquisition. We anticipate that adjustments will continue to be made to the fair values of identifiable assets acquired and liabilities assumed and those adjustments may or may not be material.

During the three months ended June 26, 2021, we paid $0.8 million to the seller of the 2021 acquisition as the lease assignment for 1 store location was finalized during the period.

Monro, Inc. Q1 2022 Form 10-Q

Table of Contents

CONSOLIDATED FINANCIAL STATEMENTS

NOTES

~~NOTE~~Note 4 – ~~EARNINGS PER COMMON SHARE~~Earnings per Common Share

Basic earnings per common share amounts are ~~computed~~calculated by dividing income available to common shareholders, after deducting preferred stock dividends, by the weighted average number of shares of common stock outstanding. Diluted earnings per common share amounts are calculated by dividing net income by the weighted average number of shares of common stock and common stock equivalents outstanding. Common stock equivalents represent shares issuable upon the assumed exercise of common stock options outstanding.

~~A reconciliation of basic and diluted earnings per common share for the quarters ended June is as follows:~~



	Quarter Ended
	June 27,		June 29,
	2020		2019
	(Amounts in thousands,
	except per share data)
Earnings per Common Share					Three Months Ended
(thousands, except per share data)					June 26, 2021		June 27, 2020
Numerator for earnings per common share calculation:
Net income	$	2,987	$	22,606	$	15,681	$	2,987
Less: Preferred stock dividends		(112)		(112)		(110)		(112)
Income available to common shareholders	$	2,875	$	22,494	$	15,571	$	2,875
Denominator for earnings per common share calculation:
Weighted average common shares, basic		33,285		33,183
Weighted average common shares - basic						33,498		33,285
Effect of dilutive securities:
Preferred stock		510		510		460		510
Stock options		31		231		31		31
Restricted stock		28		40		33		28
Weighted average common shares, diluted		33,854		33,964
Basic earnings per common share:	$	0.09	$	0.68
Diluted earnings per common share:	$	0.09	$	0.67
Weighted average common shares - diluted						34,022		33,854

Basic earnings per common share					$	0.46	$	0.09
Diluted earnings per common share					$	0.46	$	0.09

Monro, Inc. Q1 2022 Form 10-Q

Table of Contents

CONSOLIDATED FINANCIAL STATEMENTS

NOTES

~~NOTE~~Note 8 – ~~REVENUES~~Revenues

Automotive undercar repair, tire replacement sales and tire ~~sales and~~related services represent the vast majority of our revenues. We also earn revenue from the sale of tire road hazard warranty agreements as well as commissions earned from the delivery of tires on behalf of certain tire vendors.

Revenue from automotive undercar repair, tire replacement sales and tire ~~sales and~~related services is recognized at the time the customers take possession of their vehicle or merchandise. For sales to certain customers that are financed through the offering of credit on account, payment terms are established for customers based on our pre-established credit requirements. Payment terms vary depending on the customer and generally range from 15 to 45 days. Based on the nature of receivables, no significant financing components exist. Sales are recorded net of discounts, sales incentives and rebates, sales taxes and estimated returns and allowances. We estimate the reduction to sales and cost of sales for returns based on current sales levels and our historical return experience. Such amounts are immaterial to our ~~Consolidated Financial Statements.~~consolidated financial statements.



Revenues	Three Months Ended
(thousands)	June 26, 2021		June 27, 2020
Tires ^(a)	$	176,229	$	137,270
Maintenance		84,459		57,620
Brakes		45,975		28,564
Steering		28,266		18,468
Exhaust		5,789		4,432
Other		1,100		705
Total	$	341,818	$	247,059

(a)Includes the sale of tire road hazard warranty agreements and tire delivery commissions.

Revenue from the sale of tire road hazard warranty agreements ~~(included in the Tires product group in the second table below)~~ is initially deferred and is recognized over the contract period as costs are expected to be incurred in performing such services, typically 21 to 36 months. The ~~amounts recorded for~~ deferred revenue balances at June ~~27, 2020~~26, 2021 and March ~~28, 2020~~27, 2021 were ~~$17.0~~$18.0 million and ~~$18.5~~$16.7 million, respectively, of which ~~$12.3~~$12.7 million and ~~$13.1~~$12.0 million, respectively, are reported in Deferred revenue and $~~4.7~~$5.3 million and ~~$5.4~~$4.7 million, respectively, are reported in Other long-term liabilities in our Consolidated Balance Sheets.

~~The following table summarizes deferred revenue related to road hazard warranty agreements from March 28, 2020 to~~ ~~June 27, 2020~~:



Changes in Deferred Revenue	~~Dollars in~~
	~~thousands~~
(thousands)
Balance at March ~~28, 2020~~27, 2021	$	~~18,506~~16,712
Deferral of revenue		~~3,169~~4,325
Deferral of revenue from acquisitions		—1,605
Recognition of revenue		~~(4,643)~~(4,637)
Balance at June ~~27, 2020~~26, 2021	$	~~17,032~~18,005

WeAs of June 26, 2021, we expect to recognize ~~$10.2~~$10.5 million of deferred revenue related to road hazard warranty agreements in the remainder of fiscal ~~2021, $5.6~~2022, $6.0 million of deferred revenue during our fiscal year ending March ~~26, 2022,~~25, 2023, and ~~$1.2~~$1.5 million of deferred revenue ~~thereafter.~~thereafter.

Under various arrangements, we receive from certain tire vendors a delivery commission and reimbursement for the cost of the tire that we may deliver to customers on behalf of the tire vendor. The commission we earn from these transactions is as an agent and the net amount retained is recorded as sales. ~~(Included in the Tires product group in the following table.)~~

~~The following table summarizes disaggregated revenue by product group:~~

Quarter Ended
June 27,
June 29,
2020
2019
(Dollars in thousands)
Revenues:
Brakes
$
28,564
$
46,776
Exhaust
4,432
6,953
Steering
18,468
26,232
Tires
137,270
154,065
Maintenance
57,620
82,174
Other
705
863
Total
$
247,059
$
317,063

~~NOTE~~Note 9 – ~~LONG-TERM DEBT~~Long-term Debt

In April 2019, we entered into a new five year $600 million revolving credit facility agreement with 8 banks (the “Credit Facility”). Interest only is payable monthly throughout the Credit Facility’s term. The borrowing capacity for the Credit Facility of $600 million includes an accordion feature permitting us to request an increase in availability of up to an additional $250 million.The Credit Facility bears interest at 75 to 200 basis points over the London Interbank Offered Rate (“LIBOR”) (or replacement index) or at the prime rate, depending on the type of borrowing and the rates then in effect.

Monro, Inc. Q1 2022 Form 10-Q

Table of Contents

CONSOLIDATED FINANCIAL STATEMENTS

NOTES

On June 11, 2020, we entered into a First Amendment to the Credit Facility (the “First Amendment”), which, among other things, ~~amends~~amended the terms of certain of the financial and restrictive covenants in the credit agreement through the first quarter of fiscal 2022 to provide us with additional flexibility to operate our business. The First Amendment ~~will~~ permanently ~~amend~~amended the interest rate charged on borrowings to be based on the greater of adjusted one-month LIBOR or ~~0.75%.~~0.75 percent. For the period from June 30, 2020 to June 30, 2021, the minimum interest rate spread charged on borrowings ~~will be~~was 225 basis points over LIBOR. Additionally, during the same period, we ~~may~~were permitted to declare, make or pay any dividend or distribution up to $38.5 million in the aggregate and the acquisition of stores or other businesses up to $100 million in the aggregate ~~are~~were permitted if we ~~are~~were in compliance with the financial covenants and other restrictions in the First Amendment and Credit Facility. The Credit Facility requires fees payable quarterly throughout the term between 0.125 percent and 0.35 percent of the amount of the average net availability under the Credit Facility during the preceding quarter. Except as amended by the First Amendment, the remaining terms of the credit agreement remain in full force and effect.

~~In order to enhance our liquidity position during~~Within the ~~COVID-19 pandemic,~~Credit Facility, we ~~took~~have a ~~precautionary measure and borrowed $350~~sub-facility of $80 million available for the purpose of issuing standby letters of credit. The sub-facility requires fees aggregating 87.5 to ~~us under our Credit Facility~~212.5 basis points annually of the face amount of each standby letter of credit, payable quarterly in ~~March 2020. We subsequently repaid $240~~arrears. There was a $29.6 million outstanding letter of ~~these borrowings during the quarter ended~~credit at June ~~27, 2020. The net availability~~26, 2021.

There was $198.0 million outstanding and $372.4 million available under the Credit Facility ~~was $240.2 million~~ at June ~~27, 2020.~~26, 2021.

We were in compliance with all debt covenants at June ~~27, 2020.~~26, 2021.

~~NOTE~~Note 10 – ~~COMMITMENTS AND CONTINGENCIES~~Commitments and Contingencies

~~Payments due by period under long-term debt, other financing instruments and commitments are as follows:~~Commitments



			Within		2 to		4 to		After
	Total		1 Year		3 Years		5 Years		5 Years
	(Dollars in thousands)
Commitments Due by Period														Within		2 to		4 to		After
(thousands)												Total		1 Year		3 Years		5 Years		5 Years
Principal payments on long-term debt	$	326,200					$	326,200			$	198,000		—	$	198,000		—		—
Finance lease commitments/financing obligations (a)		503,276	$	52,009	$	104,839		97,008	$	249,420		533,744	$	58,034		114,582	$	103,894	$	257,234
Operating lease commitments (a)		243,829		36,422		66,101		53,192		88,114		266,783		39,184		71,021		58,413		98,165
Accrued rent		3,118		2,764		319		18		17		1,348		1,191		87		27		43
Other liabilities		1,733		800		933		—		—		933		841		92		—		—
Total	$	1,078,156	$	91,995	$	172,192	$	476,418	$	337,551	$	1,000,808	$	99,250	$	383,782	$	162,334	$	355,442

Monro, Inc. Q1 2022 Form 10-Q

Table of Contents

MANAGEMENT’S DISCUSSION AND ANALYSIS

~~Ite~~mItem 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

~~Forward-Looking Statements~~Financial Summary

The statements contained in this Quarterly Report on Form 10-Q that are not historical facts, including (without limitation) statements made in this Management’s Discussion and Analysis of Financial Condition and Results of Operations, may contain statements of future expectations and other forward-looking statements made pursuant toFirst quarter 2022 included the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. When used in this Quarterly Report on Form 10-Q, the words “anticipates,” “believes,” “contemplates,” “expects,” “see,” “could,” “may,” “estimate,” “appear,” “intend,” “plans,” “potential,” “strategy,” “will” and variations thereof and similar expressions, are intended to identify forward-looking statements. Forward-looking statements are subject to risks, uncertainties and other important factors that could cause actual results to differ materially from those expressed. These factors include, but are not necessarily limited to, product demand, dependence on and competition within the primary markets in which Monro’s stores are located, the need for and costs associated with store renovations and other capital expenditures, the duration and impact of the COVID-19 pandemic and its impact on our customers, executive officers and employees, the effect of economic conditions, seasonality, the impact of weather conditions and natural disasters, the impact of competitive services and pricing, parts supply restraints or difficulties, our dependence on vendors, including foreign vendors, changes in U.S. or foreign trade policies, including the impacts of tariffs on products imported from China, industry regulation, risks relating to leverage and debt service (including sensitivity to fluctuations in interest rates), continued availability of capital resources and financing, advances in automotive technologies, disruption or unauthorized access to our computer systems, risks relating to protection of customer and employee personal data, business interruptions, risks relating to litigation, risks relating to integration of acquired businesses, including goodwill impairment and the risks set forth in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the fiscal year ended March 28, 2020. Except as required by law, we do not undertake and specifically disclaim any obligation to update any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements. References to fiscal 2021 and fiscal 2020 in this Management’s Discussion and Analysis of Financial Condition and Results of Operations refer to our fiscal years ending March 27, 2021 and March 28, 2020, respectively.following notable items:

~~Impact~~Diluted earnings per common share (“EPS”) were $0.46.

Adjusted diluted EPS, a non-GAAP measure, were $0.55.

Sales increased 38.4 percent, driven by an increase in comparable store sales.

Comparable store sales increased 34.5 percent, driven primarily by an increase in guest traffic and average ticket amount.

Operating income of $27.9 million was 144.9 percent higher than the ~~COVID-19 Pandemic~~prior year comparable period.

Net income was $15.7 million.

Adjusted net income, a non-GAAP measure, was $18.8 million.

In response to the unprecedented and rapid spread of COVID-19 (coronavirus), many U.S. state governments, in states in which we operate, have taken preventative or protective actions, such as issuing stay-at-home restrictions and social distancing measures. State and local governments have ordered temporary closures of some businesses and numerous other businesses have temporarily closed voluntarily. Further, individuals’ ability to travel has been curtailed through mandated travel restrictions and may be further limited through additional voluntary or mandated closures of certain businesses.


Earnings Per Common Share	Three Months Ended
	June 26, 2021		June 27, 2020		Change
Diluted EPS	$	0.46	$	0.09	411.1	%
Adjustments		0.09		0.06
Adjusted diluted EPS	$	0.55	$	0.15	266.7	%

AsAdjusted diluted EPS and adjusted net income, each of which are a ~~result, demand for automotive undercar repair~~measure not derived in accordance with U.S. GAAP, exclude the impact of certain items. Management believes that adjusted diluted EPS and ~~tire sales and services declined at a rapid pace and has remained depressed, which has had an unprecedented and materially adverse impact on our~~adjusted net income are useful in providing period-to-period comparisons of the results of our operations by excluding certain non-recurring items and ~~business operations. Although demand improved during the quarter ended June 27, 2020, we experienced a significant decline in traffic throughout the quarter,~~items related to store closings as ~~compared~~well as Monro.Forward or acquisition initiatives. Reconciliations of these non-GAAP financial measures to ~~the prior year, due to the COVID-19 pandemic. During the quarter in midst of the COVID-19 pandemic,~~GAAP measures are provided beginning on page 18 under “Non-GAAP Financial Measures.”

We define comparable store sales, ~~decreased 25.8% from the~~or same ~~period in the prior year. (We define comparable~~ store sales, as sales for stores that have been opened or ~~acquired~~owned at least one full fiscal ~~year prior~~year. We believe this period is generally required for new store sales levels to ~~March 29, 2020.) Substantially all Company-operated~~begin to normalize. Management uses comparable store sales to assess the operating performance of the Company’s stores and believes the metric is useful to investors because our overall results are dependent upon the results of our stores. Comparable sales measures vary across the retail ~~stores operated under a reduced schedule throughout the quarter~~industry. Therefore, our comparable sales calculation is not necessarily comparable to ~~match lower demand.~~similarly titled measures reported by other companies.

~~Given the uncertainties surrounding the impacts~~Impact of COVID-19

The full impact of the COVID-19 pandemic will depend on ~~our future financial condition, results~~factors such as the length of ~~operations~~time of the pandemic; how federal, state and ~~cash flows, we have taken a number~~local governments are responding; the efficacy and distribution of actions in response to prevailing uncertain market conditions. In order to enhance our liquidity position, we took a precautionary measure and borrowed $350 million available to us under our credit facility in March 2020. We subsequently repaid $240 million of these borrowings during the ~~quarter ended June 27, 2020. To improve our liquidity, we took~~COVID-19 vaccines; the following measures during the first quarter of fiscal 2021 to reduce costs and improve cash flows: (i) suspended all non-critical capital expenditures, including the suspension of all capital expenditures related to our store rebrand and reimage initiatives; (ii) reduced store hours and store labor to align with reduced demand across our store locations; (iii) undertook significant reductions in operating expenses across the Company, including non-store compensation expense through the furlough of or other reduction to certain members of our non-store workforce; and (iv) paused any acquisitions activity until we are able to better understand thelonger-term impact of the ~~COVID-19 pandemic. Additionally, we negotiated rent deferrals for a significant number of~~pandemic on the economy and consumer behavior; and the effect on our ~~stores,~~customers, referred to as ~~well~~“guests”; employees, referred to as “teammates”; vendors and other ~~rent reductions.~~partners.

To protect our employees and customers, we have implemented strict cleaning and sanitation measures. In addition, we have provided face masks and other protective equipment, including sneeze guards installed at each sales counter, necessary to ensure the safety our employees and customers. We have also implemented various measures intended to reduce the spread of COVID-19 among our non-store workforce including working from home and encouraging employees to adhere to prevention measures recommended by the Centers for Disease Control and the World Health Organization. Since our non-store workforce is able to work remotely using various technology tools,During this time, we are ~~able~~focused on protecting the health and safety of our teammates and guests, while seeking to ~~maintain~~continue operating our ~~operations and internal controls over financial reporting and disclosures.~~

~~Table of Contents~~

Despite the challenges, some positive signs have begun to emerge. Since the low point during the beginning of April, we have experienced steady improvement in sales driven by improvement in traffic. However, there can be no assurance as to the time required to fully recover operations and sales to pre-pandemic levels or if we will reach those levels again.business responsibly.

~~Current Trends~~While we expect many teammates to return to our offices later this calendar year, the timing of such a return could be affected by resurgences of COVID-19 in areas where our offices are located. When we return to our offices, we expect many teammates to continue to work in a hybrid of in-person and remote work. These changes to our operations going forward may present additional challenges and increased costs to insure our offices are safe and functional for hybrid work that enable effective collaboration of both in-person and remote teammates.

Although we ~~experienced a significant decline in traffic~~are experiencing unprecedented challenges during ~~the first quarter of fiscal 2021, Company-operated stores have experienced a steady improvement in sales. The following table presents information about~~this pandemic, we continue our current trends in the fiscal months of the first quarter of fiscal 2021, as well as the fiscal month of July subsequent to the end of the quarter. There is no assurance that these trends will continue.

Fiscal Month Ended
April
May
June
July
Comparable store sales % (year-over-year decline)
(41)
%
(24)
%
(14)
%
(12)
%

As we move through this transition and anticipate sales trends to improve, we expect to incur some labor inefficiencies as we adjust to new operating models and federal and local health and safety protocols with a goalfocus to remain as efficient as possible while still offering safe and high quality service to our customers. Those labor inefficiencies may include difficulty in hiring employees required to maintain store staffing levels needed to meet demand. We will also incur additional costs and investments in supplies necessary to keep our teams and customers safe, such as face masks, hand sanitizer and cleaning supplies, which are all expected to be ongoing costs for the duration of the COVID-19 pandemic and recovery period.guests.

Given the ~~unpredictable nature~~level of ~~this situation,~~volatility and uncertainty surrounding the future impact of COVID-19, we cannot estimate with certainty the long-term impacts of the COVID-19 pandemic on our business, financial condition, results of operations, and cash flows.

As of July 31, 2020, we had $143.3 million in cash on hand. During the month of July 2020, we have paid down an additional $19.9 million in borrowings from our five-year $600 million revolving credit facility with eight banks (the “Credit Facility”). We believe we have sufficient liquidity available from operating cash flow and, if necessary, cash on hand and/or bank financing to support our operations for at least the next 12 months.

~~Non-GAAP Financial Measures~~

This Management’s Discussion and Analysis of Financial Condition and Results of Operations includes certain financial measures, such as adjusted net income and adjusted diluted earnings per common share (“EPS”) not derived in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Non-GAAP financial measures should not be used as a substitute for GAAP financial measures, or considered in isolation, for the purpose of analyzing our operating performance, financial position or cash flows, and may not be comparable to similarly titled non-GAAP financial measures used by other companies. We have included reconciliations of the non-GAAP financial measures used in this Management’s Discussion and Analysis of Financial Condition and Results of Operations to their most directly comparable GAAP measures in the section titled “Reconciliation of Non-GAAP Financial Measures” below.

Monro, Inc. Q1 2022 Form 10-Q

Table of Contents

MANAGEMENT’S DISCUSSION AND ANALYSIS

Analysis of Results of Operations

~~The following table sets forth income statement data~~



Summary of Operating Income	Three Months Ended
(thousands)	June 26, 2021		June 27, 2020		Change
Sales	$	341,818	$	247,059	38.4	%
Cost of sales, including distribution and occupancy costs		215,887		159,605	35.3
Gross profit		125,931		87,454	44.0
Operating, selling, general and administrative expenses		98,014		76,053	28.9
Operating income	$	27,917	$	11,401	144.9	%

Sales

Sales include automotive undercar repair, tire replacement and tire related service sales, net of ~~Monro expressed as a percentage~~discounts, returns, etc., and revenue from the sale of warranty agreements and commissions earned from the delivery of tires. See Note 8 to the Company’s consolidated financial statements for further information. We use comparable store sales to evaluate the performance of our existing stores by measuring the change in sales for a period over the ~~fiscal periods indicated:~~comparable, prior-year period of equivalent length. There were 90 selling days in the three months ended June 26, 2021 and in the three months ended June 27, 2020.

Sales growth – from both comparable store sales and new stores – represents an important driver of our long-term profitability. We expect that comparable store sales growth will significantly impact our total sales growth. We believe that our ability to successfully differentiate our guests’ experience through a careful combination of merchandise assortment, price, convenience, guest experience, and other factors will over the long-term drive both increasing guest traffic and the average ticket amount.

Quarter Ended
June 27,
June 29,
2020 (a)
2019 (a)
Sales
100.0
%
100.0
%
Cost of sales, including distribution and occupancy costs
64.6
59.6
Gross profit
35.4
40.4
Operating, selling, general and administrative expenses
30.8
28.9
Operating income
4.6
11.5
Interest expense, net of interest income
3.0
2.3
Other income, net
—
(0.1)
Income before income taxes
1.6
9.3
Provision for income taxes
0.4
2.1
Net income
1.2
%
7.1
%



Sales	Three Months Ended
(thousands)	June 26, 2021			June 27, 2020
Sales	$	341,818		$	247,059
Dollar change compared to prior year	$	94,759
Percentage change compared to prior year		38.4	%

The sales increase was primarily due to an increase in comparable store sales from an increase in guest traffic and average ticket amount as the prior year period includes the low point of guest traffic during the COVID-19 pandemic to date. Additionally, there was an increase in sales from new stores. Partially offsetting these increases was a decrease in sales from closed stores. The following table shows the primary drivers of the change in sales between the three months ended June 26, 2021 and the three months ended June 27, 2020.



Sales Percentage Change	Three Months Ended
	June 26, 2021
Sales change	38.4	%
Primary drivers of change in sales
Comparable stores sales	34.5	%
New store sales ^(a)	5.7	%
Closed store sales	(1.3)	%

~~_____________~~(a)Sales from 2022 and 2021 acquisitions represented 5.5 percent of the change between the three months ended June 26, 2021 and the three months ended June 27, 2020.

~~(a) The table may not subtract down by +/- 0.1% due to rounding as percentages are calculated based on unrounded numbers.~~

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MANAGEMENT’S DISCUSSION AND ANALYSIS

~~First Quarter Ended June 27, 2020~~As the COVID-19 pandemic has evolved, demand for automotive undercar repair services as ~~Compared~~well as replacement tires and tire related services continues to ~~First Quarter Ended June 29, 2019~~

~~Sales were $247.1 million for~~be volatile. During the ~~quarter~~three months ended June ~~27, 2020 as compared with $317.1 million for the quarter ended June 29, 2019. The sales decrease of $70.0 million, or 22.1%, was due to a decrease in~~26, 2021, comparable store sales ~~for the quarter ended June 27, 2020 of 25.8%~~growth increased across our product categories with significant higher growth in our higher-margin brakes and maintenance service categories, as compared to the same period in the prior quarter. Additionally, there was a decrease in sales from closed stores amounting to $3.1 million in the quarter. Partially offsetting these decreases was an increase of $12.7 million related to new stores,well as our tire category, each of which ~~$11.1 million came from fiscal 2020 acquisitions. There were 90 selling days in the quarter ended June 27, 2020 and in the quarter ended June 29, 2019.~~

At June 27, 2020, we had 1,247 Company-operated stores in operation and 97 franchised locations as compared with 1,251 Company-operated stores in operation and 98 franchised locations at June 29, 2019. At March 28, 2020, we had 1,283 Company-operated stores in operation and 98 franchised locations. During the quarter ended June 27, 2020, we closed 36 Company-operated stores. Additionally, one franchised location was closedexperienced significant declines during the ~~quarter~~three months ended June 27, 2020.

~~Comparable store brakes, maintenance services,~~


Comparable Store Product Category Sales Change	Three Months Ended
	June 26, 2021		June 27, 2020
Tires	25	%	(14)	%
Maintenance	42	%	(35)	%
Brakes	57	%	(41)	%
Alignment	54	%	(32)	%
Front end/shocks	40	%	(36)	%
Exhaust	35	%	(37)	%



Sales by Product Category	Three Months Ended
	June 26, 2021		June 27, 2020
Tires	52	%	56	%
Maintenance	25		23
Brakes	14		12
Steering ^(a)	8		8
Exhaust	1		1
Total	100	%	100	%

(a)Steering product category includes front end/shocks and ~~tires~~alignment product category sales.



Change in Number of Company-Operated Retail Stores

Beginning store count at March 27, 2021		1,263
Opened ^(a)		30
Closed		(2)
Ending store count at June 26, 2021		1,291

(a)Related to stores acquired from the 2022 acquisition.

Cost of Sales and Gross Profit



Gross Profit	Three Months Ended
(thousands)	June 26, 2021			June 27, 2020
Gross profit	$	125,931		$	87,454
Percentage of sales		36.8	%		35.4	%
Dollar change compared to prior year	$	38,477
Percentage change compared to prior year		44.0	%

The increase in gross profit, as a percentage of sales, ~~for the quarter ended June 27, 2020 decreased by approximately 41%, 35%, and 14%, respectively,~~of 140 basis points (“bps”) from the prior year ~~quarter. Additionally, alignment, front end/shocks,~~comparable period was primarily due to a decrease in distribution and ~~exhaust category sales for the quarter ended June 27, 2020 decreased by approximately 32%, 36%, and 37%, respectively, on~~occupancy costs, as a comparable store basis as compared to the same period in the prior year. Comparable store sales were impacted by lower traffic resulting from the impact of the COVID-19 pandemic in our markets, partially offset by higher average ticket.

~~Gross profit for the quarter ended June 27, 2020 was $87.5 million or 35.4%~~percentage of sales, as ~~compared~~we gained leverage on these largely fixed costs with ~~$128.1 million or 40.4% of sales for the quarter ended June 29, 2019.~~higher overall comparable store sales. The ~~decrease~~increase in gross profit, ~~for the quarter ended June 27, 2020,~~ as a percentage of sales, was also partially due ~~primarily~~ to ~~an increase~~a decrease in material costs, as a percentage of sales, as a result of a shift in sales mix to ~~tires~~our higher margin brakes and ~~lower vendor rebates due to slower inventory turns, as well as an increase~~maintenance service categories. Additionally, through the use of our tire category and management pricing tool in ~~distribution and occupancy costs, as a percentage of sales, as~~place, we ~~lost leverage on these largely fixed costs with lower overall comparable store sales. Partially offsetting these increases was a decrease in labor costs, which decreased~~expanded our gross profit per tire from the prior year ~~quarter as a percentage of sales, due to reductions to store staffing levels related to our store staffing optimization initiative during the COVID-19 pandemic.~~

Operating expenses for the quarter ended June 27, 2020 were $76.1 million or 30.8% of sales as compared to $91.8 million or 28.9% of sales for the quarter ended June 29, 2019. The decrease of $15.7 million in operating expenses from the comparable period of the prior year is primarily due to decreased expenses as a result of focused cost control measures taken in response to the COVID-19 pandemic, including reducing store staffing to match lower demand and realigned marketing spend toward digital channels. The decrease in operating expenses from the comparable period of the prior year also reflect lower expenses from a net reduction of four stores compared to the prior year period. Partially offsetting these decreases was an increase in ~~store closure~~technician labor costs, which increased as a percentage of ~~$2.5 million.~~sales, as staffing levels continue to normalize during the three months ended June 26, 2021 as compared to minimum staffing levels in the prior year period which were adjusted to lower demand due to the COVID-19 pandemic. Also, more technicians working overtime, in order to meet the surge in demand, during the three months ended June 26, 2021 resulted in an increase in technician labor costs, as a percentage of sales, from the prior year comparable period.

Monro, Inc. Q1 2022 Form 10-Q

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MANAGEMENT’S DISCUSSION AND ANALYSIS



Gross Profit as a Percentage of Sales Change	Three Months Ended
	June 26, 2021
Gross profit change	140	bps
Primary drivers of change in gross profit as a percentage of sales
Distribution and occupancy costs	260	bps
Material costs	170	bps
Technician labor costs	(280)	bps

OSG&A Expenses

~~Operating income~~



OSG&A Expenses	Three Months Ended
(thousands)	June 26, 2021			June 27, 2020
OSG&A Expenses	$	98,014		$	76,053
Percentage of sales		28.7	%		30.8	%
Dollar change compared to prior year	$	21,961
Percentage change compared to prior year		28.9	%

The increase of $22.0 million in OSG&A expenses from the prior year comparable period is primarily due to increased expenses from comparable stores, mainly store management compensation to match demand and advertising expense. However, we gained leverage with higher overall comparable store sales, which resulted in the decrease in OSG&A expenses, as a percentage of sales, from the prior year comparable period. The increase in OSG&A expenses was also partially due to litigation settlement costs (related to the Cerini matter described in Note 10) as well as increased expenses from new stores. Partially offsetting these increases were lower expenses from 10 stores closed compared to the prior year period.



OSG&A Expenses Change	Three Months Ended
(thousands)	June 26, 2021
OSG&A expenses change	$	21,961
Drivers of change in OSG&A expenses
Increase from comparable stores	$	16,153
Increase in litigation settlement costs	$	3,920
Increase from new stores	$	3,185
Decrease from closed stores	$	(1,297)

Other Performance Factors

Net Interest Expense

Net interest expense of $6.9 million for the ~~quarter~~three months ended June ~~27, 2020 of approximately $11.4~~26, 2021 decreased $0.4 million ~~decreased by 68.7%~~ as compared to ~~operating income of approximately $36.4 million for~~ the ~~quarter ended June 29, 2019,~~prior year period, and decreased as a percentage of sales from ~~11.5%~~3.0 percent to ~~4.6%~~2.0 percent. Weighted average debt outstanding for the ~~reasons described above.~~

~~Net interest expense for the quarter~~three months ended June ~~27, 2020 increased~~26, 2021 decreased by approximately ~~$0.2~~$294 million as compared to the ~~same period in the prior year, and increased from 2.3% to 3.0% as a percentage of sales for the same periods. The weighted average debt outstanding for the quarter~~three months ended June 27, ~~2020 increased by approximately $486 million as compared to the quarter ended June 29, 2019.~~2020. This ~~increase~~decrease is ~~primarily~~ related to ~~an increase~~a decrease in debt outstanding under our ~~Credit Facility that~~five year $600 million revolving credit facility agreement with eight banks (the “Credit Facility”). Partially offsetting this decrease was ~~borrowed in response to the COVID-19 pandemic in late fiscal 2020, as well as~~ an increase in finance lease debt recorded in connection with the ~~fiscal 2020~~2022 and 2021 acquisitions and greenfield expansion, along with renegotiated leases. ~~Partially offsetting these increases~~Additionally, there was ~~a decrease~~an increase in the weighted average interest rate of approximately ~~350~~130 basis points from the prior year ~~quarter~~comparable period due primarily to ~~a decrease~~an increase in ~~Credit Facility borrowing rates, as well as lower~~ borrowing rates associated with ~~new leases.~~the Credit Facility.

Provision for Income before income taxes for the quarter ended June 27, 2020 of approximately $4.0 million decreased by 86.4% as compared to income before income taxes of approximately $29.4 million for the quarter ended June 29, 2019, and decreased as a percentage of sales from 9.3% to 1.6% for the reasons described above.Taxes

For the ~~quarter~~three months ended June ~~27, 2020,~~26, 2021, our effective income tax rate was ~~25.5%~~25.4 percent compared to ~~23.1%~~25.5 percent for the ~~quarter~~three months ended June ~~29, 2019, as discrete items, primarily related to employee share-based compensation, resulted in a larger tax rate benefit in the prior year period.~~27, 2020.

Net income for the quarter ended June 27, 2020 of $3.0 million decreased 86.8% from net income for the quarter ended June 29, 2019. Adjusted net income (a non-GAAP financial measure) was $5.1 million and $23.4 million for the quarters ended June 27, 2020 and June 29, 2019, respectively. Diluted EPS for the quarter ended June 27, 2020 of $0.09 decreased 86.6% as compared to diluted EPS of $0.67 for the quarter ended June 29, 2019. Adjusted diluted EPS (a non-GAAP financial measure) was $0.15 and $0.69 for the quarters ended June 27, 2020 and June 29, 2019, respectively. Please refer to the “Reconciliation of Non-GAAP Financial

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MANAGEMENT’S DISCUSSION AND ANALYSIS

Measures” section below for a discussion of these non-GAAP financial measures, adjusted net income and adjusted diluted EPS, and the reconciliations to their most comparable GAAP measures, net income and diluted EPS, respectively.

~~Reconciliation of~~ Non-GAAP Financial Measures

In addition to reporting net income and diluted EPS, which are GAAP measures, this Form 10-Q includes adjusted net income and adjusted diluted EPS, which are non-GAAP financial measures. We have included reconciliations to adjusted net income and adjusted diluted EPS from our most directly comparable GAAP measures, net income and diluted EPS, below. Management views these non-GAAP financial measures as indicators to better assess comparability between periods because management believes these non-GAAP financial measures reflect ~~the~~our core business operations while excluding certain non-recurring items and items related to store closings as well as Monro.Forward or acquisition initiatives.

These non-GAAP financial measures are not intended to represent, and should not be considered more meaningful than, or as an alternative to, their most directly comparable GAAP measures. These non-GAAP financial measures may be different from similarly titled non-GAAP financial measures used by other companies.

Adjusted net income is summarized as follows:



Reconciliation of Adjusted Net Income					Three Months Ended
	Quarter Ended
	June 27,		June 29,
	2020		2019
	(Dollars in thousands)
(thousands)					June 26, 2021		June 27, 2020
Net income	$	2,987	$	22,606	$	15,681	$	2,987
Store closing costs		2,527		—		(272)		2,527
Monro.Forward initiative costs		182		538		103		182
Acquisition due diligence and integration costs		17		482		310		17
Management transition costs						59		—
Litigation settlement costs						3,920		—
Provision for income taxes on adjustments		(641)		(255)		(997)		(641)
Adjusted net income	$	5,072	$	23,371	$	18,804	$	5,072

Adjusted diluted EPS is summarized as follows:

Reconciliation of Adjusted Diluted EPS
Quarter Ended
June 27,
June 29,
2020 (a)
2019
Diluted EPS
$
0.09
$
0.67
Store closing costs
0.06
—
Monro.Forward initiative costs
—
0.01
Acquisition due diligence and integration costs
—
0.01
Adjusted diluted EPS
$
0.15
$
0.69

~~_____________~~



Reconciliation of Adjusted Diluted EPS	Three Months Ended
	June 26, 2021		June 27, 2020
Diluted EPS	$	0.46	$	0.09
Store closing costs		(0.01)		0.06
Monro.Forward initiative costs^(a)		—		—
Acquisition due diligence and integration costs ^(a)		0.01		—
Management transition costs^(a)		—		—
Litigation settlement costs		0.09		—
Adjusted diluted EPS	$	0.55	$	0.15

(a)~~For~~Amounts, in the ~~quarter ended June 27, 2020, the Monro.Forward initiative and acquisition due diligence and integration costs are each~~periods presented, may be too minor in amount, net of the impact from income taxes, to have an impact on the calculation of adjusted diluted EPS.

The adjustments to diluted EPS reflect ~~adjusted~~ effective tax rates of ~~23.5%~~24.2 percent and ~~25.0%~~23.5 percent for the ~~quarters~~three months ended June 26, 2021 and June 27, 2020, ~~and June 29, 2019,~~ respectively. ~~These adjusted effective tax rates exclude the income tax impacts from stock based compensation.~~ See adjustments from the Reconciliation of Adjusted Net Income table above for pre-tax amounts.

Analysis of Financial Condition

Liquidity and Capital Resources ~~Commitments and Liquidity~~

Capital ~~Resources~~Allocation

~~Our primary capital requirements~~We expect to continue to generate positive operating cash flow as we have done in the last three fiscal ~~2021 are the upgrading of facilities~~years. The cash we generate from our operations allows us to support business operations and ~~systems~~Monro.Forward initiatives as well as invest in attractive acquisition opportunities intended to drive long-term sustainable growth, while paying down debt and the funding of our store expansion program, including potential acquisitions of existing store chains. For the quarter ended June 27, 2020, we spent approximately $15.5 million on these items, of which approximately $9.9 million was relatedreturning cash to our ~~Monro.Forward initiatives, including~~shareholders through our ~~store technology infrastructure upgrade project. Capital requirements were met primarily by cash flow from operations and from cash on hand. While we~~ suspended all capital expenditures related to our store rebrand and reimage initiatives during the first quarter of fiscal 2021, we expect to gradually resume this program in the second quarter of fiscal 2021.dividend program.

In addition, because we believe a large portion of our future expenditures will be to fund our growth, through acquisition of retail stores and/or opening greenfield stores, we continually evaluate our cash needs and may decide it is best to fund the growth of our business through borrowings on our Credit Facility. Conversely, we may also from time to time determine that it is in our best interests to voluntarily repay certain indebtedness early.

Monro, Inc. Q1 2022 Form 10-Q

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MANAGEMENT’S DISCUSSION AND ANALYSIS

~~We paid dividends~~

Accordingly, we believe that our current sources of ~~$7.4 million~~funds will provide us with adequate liquidity during the ~~quarter ended~~12-month period following June ~~27, 2020. However, the declaration of and any determination~~26, 2021, as to the payment of future dividends will be at the discretion of the Board of Directors and will depend on our financial condition, results of operations, capital requirements, compliance with charter and restrictions under the Credit Facility, and such other factorswell as ~~the Board of Directors deems relevant. Under our Credit Facility, we may declare, make or pay any dividend or distribution up to $38.5 million~~ in the ~~aggregate for the period from June 30, 2020 to June 30, 2021 if we are in compliance with the financial covenants and other restrictions in the Credit Facility, as amended.~~long-term.

Because acquisitions remain a pillar of our growth strategy, we are evaluating potential acquisition candidates that we believe would fit our growth strategy while maintaining financial discipline. We believe we have sufficient resources available (includingSee the sections below for more details regarding material requirements for cash ~~flow from operations and, if necessary, cash on hand and/or bank financing) to expand~~in our business ~~as currently planned for the next twelve months.~~and our sources of liquidity to meet such needs.

~~Commitments~~Material Cash Requirements

~~Payments~~We currently expect our capital expenditures to support our projects, including upgrading our facilities and systems as well as funding our Monro.Forward initiatives, to be $30 million to $45 million in 2022. Additionally, we have contractual finance lease and operating lease commitments with landlords through October 2040 for $618.3 million in lease payments, of which $96.3 million is due ~~by period under long-term debt, other financing instruments and~~within one year. For details regarding these lease commitments, ~~are as follows:~~see Note 10 to the Company’s consolidated financial statements.

Within
2 to
4 to
After
Total
1 Year
3 Years
5 Years
5 Years
(Dollars in thousands)
Principal payments on long-term debt
$
326,200
$
326,200
Finance lease commitments/financing obligations (a)
503,276
$
52,009
$
104,839
97,008
$
249,420
Operating lease commitments (a)
243,829
36,422
66,101
53,192
88,114
Accrued rent
3,118
2,764
319
18
17
Other liabilities
1,733
800
933
—
—
Total
$
1,078,156
$
91,995
$
172,192
$
476,418
$
337,551

~~_______________~~

~~(a)~~Operating and finance lease commitments represent future undiscounted lease payments and include $62.5 million and $96.1 million, respectively, related to options to extend lease terms that are reasonably certainAs of ~~being exercised.~~

~~In the first quarter of fiscal~~June 26, 2021, we negotiated rent deferrals for a significant number of our stores, with repayment at later dates, primarily in the third and fourth quarters of fiscal 2021 and the first and second quarters of fiscal 2022. These concessions provide a deferral of rent payments with no substantive changes to the original contract. Consistent with updated guidance from the FASB in April 2020, we have elected to treat the rent deferrals as accrued liabilities. The accrued rent reflected in the table above includes $1.5 million related to rent deferrals and $1.6 million due to timing of other lease related expenses.

In addition, we negotiated rent reductions with certain landlords on approximately 20% of our leases in exchange for extending our current lease term during the first quarter of fiscal 2021. As these agreements represent substantive changes to our contractual obligations, the leases were remeasured in accordance with existing guidance. As a result, finance lease and financing obligation assets, net and finance leases and financing obligations were increased by $59.8 million and $56.3 million, respectively, and operating lease assets, net and operating lease liabilities were increased by $13.8 million and $17.3 million, respectively. The negotiated terms were generally consistent with terms of normal renewal agreements.

~~Liquidity~~

In April 2019, we entered into a new five-year $600 million revolving Credit Facility with eight banks that will expire in April 2024. Interest only is payable monthly throughout the Credit Facility’s term. The borrowing capacity for the Credit Facility of $600 million includes an accordion feature permitting us to request an increase in availability of up to an additional $250 million. The Credit Facility bears interest at 75 to 200 basis points over LIBOR (or replacement index) or at the prime rate, depending on the type of borrowing and the rates then in effect. The Credit Facility requires fees payable quarterly throughout the term between 0.125% and 0.35% of the amount of the average net availability under the Credit Facility during the preceding quarter. There was $326.2had $198.0 million outstanding under the Credit Facility, ~~at June 27, 2020.~~none of which is due in the succeeding 12 months. For details regarding our indebtedness that is due, see Note 10 to the Company’s consolidated financial statements.

~~Within~~We paid cash dividends totaling $8.2 million ($0.24 per share) during the three months ended June 26, 2021. For details regarding our cash dividend, see Note 7 to the Company’s consolidated financial statements.

Sources and Conditions of Liquidity

Our sources to fund our material cash requirements are predominantly cash from operations, cash and equivalents on hand, and availability under our Credit Facility.

As of June 26, 2021, we had $16.9 million of cash and equivalents. In addition, we had $372.4 million available under the Credit Facility ~~we have a sub-facility~~as of ~~$80 million available for the purpose~~June 26, 2021.

Summary of issuing standby letters of credit. The line requires fees aggregating 87.5 to 212.5 basis points annually of the face amount of each standby letter of credit, payable quarterly in arrears. There was a $33.6 million outstanding letter of credit at June 27, 2020.Cash Flows

The ~~net availability under the Credit Facility at June 27, 2020 was $240.2 million.~~following table presents a summary of our cash flows from operating, investing and financing activities.

~~Mortgages~~



Summary of Cash Flows	Three Months Ended
(thousands)	June 26, 2021		June 27, 2020
Cash provided by operating activities	$	62,714	$	72,536
Cash used for investing activities		(66,762)		(15,174)
Cash used for financing activities		(9,034)		(255,664)
Decrease in cash and equivalents		(13,082)		(198,302)
Cash and equivalents at beginning of period		29,960		345,476
Cash and equivalents at end of period	$	16,878	$	147,174

Cash provided by operating activities

For the three months ended June 26, 2021 cash provided by operating activities was $62.7 million, which consisted of net income of $15.7 million, adjusted by non-cash charges of $23.8 million and ~~specific lease financing arrangements with other parties (with certain limitations) are permitted under~~by a change in operating assets and liabilities of $23.2 million. The non-cash charges were largely driven by $20.3 million of depreciation and amortization. The change in operating assets and liabilities was primarily due to accounts payable and accrued liabilities, net of vendor rebate receivables, being a source of cash of $19.8 million driven by timing of payments, as well as our federal and state income taxes receivable being a source of cash of $7.8 million due largely to an income tax refund that was received. These sources of cash were partially offset by our inventory balance being a use of cash of $4.1 million due to increased inventory purchases to meet higher demand.

For the ~~Credit Facility. Other specific terms~~three months ended June 27, 2020 cash provided by operating activities was $72.5 million, which consisted of net income of $3.0 million, adjusted by non-cash charges of $19.6 million and ~~the maintenance~~by a change in operating assets and liabilities of ~~specified ratios are generally consistent with~~$49.9 million. The non-cash charges were largely driven by $18.4 million of depreciation and amortization. The change in operating assets and liabilities was primarily due to accounts payable and accrued liabilities, net of vendor rebate receivables, being a source of cash of $37.0 million driven by timing of payments, as well as our ~~prior financing~~inventory balance being a source of cash of $11.0 million due to decreased inventory purchases to adjust to lower demand.

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Table of Contents

MANAGEMENT’S DISCUSSION AND ANALYSIS

~~agreement. Additionally, the Credit Facility is not secured by our real property, although we have agreed not to encumber our real property, with certain permissible exceptions.~~

On June 11, 2020, we entered into a First Amendment to the Credit Facility (the “First Amendment”), which, among other things, amends the terms of certain of the financial and restrictive covenants in the credit agreement to provide us with additional flexibility to operate our business through the first quarter of fiscal 2022. Except as amended by the First Amendment, the remaining terms of the credit agreement remain in full force and effect.

~~Specifically, from June 11, 2020 to June 26, 2021, the First Amendment (1) eliminates the covenant~~Cash used for us to maintain an interest coverage ratio above 1.55x; (2) requires us to maintain liquidity of $275 million as of the end of each fiscal month; and (3) adjusts the ratio of maximum adjusted debt to EBITDAR. The ratio of maximum adjusted debt to EBITDAR will vary by quarter as follows: (a) 5.50x in the first quarter of fiscal 2021; (b) 6.00x in the second quarter of fiscal 2021; (c) 6.25x in the third quarter of fiscal 2021; (d) 5.50x in the fourth quarter of fiscal 2021; (e) 5.00x in the first quarter of fiscal 2022; and (f) thereafter, returning to 4.75x.investing activities

For the ~~period from~~three months ended June ~~30, 2020~~26, 2021 cash used for investing activities was $66.8 million. This was primarily due to ~~June 30, 2021, we are permitted under the First Amendment to acquire stores or other businesses up to $100~~cash used for acquisitions and capital expenditures, including property and equipment, of $62.1 million and $5.2 million, respectively. Included in the ~~aggregate,~~$62.1 million used for acquisitions was $0.8 million paid to the seller of the 2021 acquisition as ~~long~~the lease assignment for one store location was finalized during the period.

For the three months ended June 27, 2020 cash used for investing activities was $15.2 million. This was primarily due to cash used for capital expenditures, including property and equipment, of $15.3 million.

Cash used for financing activities

For the three months ended June 26, 2021 cash used for financing activities was $9.0 million which was primarily due to payment of finance lease principal and dividends of $9.7 million and $8.2 million, respectively, partially offset by net borrowing under our Credit Facility of $8.0 million.

For the three months ended June 27, 2020 cash used for financing activities was $255.7 million which was primarily due to payment of amounts previously borrowed under our Credit Facility and finance lease principal of $240.2 million and $7.1 million, respectively, as ~~on a pro forma basis after taking the acquisition into account, we would comply with the financial covenants~~well as payment of dividends of $7.4 million.

Critical Accounting Policies and other restrictions in the First Amendment. In addition, from June 30, 2020 to June 30, 2021, we may declare, make or pay any dividend or distribution up to $38.5 million in the aggregate, if we are in compliance with the financial covenants and other restrictions in the First Amendment and Credit Facility.Estimates

The ~~First Amendment will permanently amend~~consolidated financial statements are prepared in accordance with GAAP. The preparation of the ~~interest rate charged~~consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, costs and expenses and related disclosures. We base our estimates on ~~borrowings~~historical experience, as appropriate, and on various other assumptions that we believe to be ~~based on~~reasonable under the ~~greater of adjusted one-month LIBOR or 0.75% and also added two levels of interest rate pricing applicable during the covenant relief period~~circumstances. Changes in the ~~event~~accounting estimates are reasonably likely to occur from period to period. Accordingly, actual results could differ significantly from the ~~ratio~~estimates made by management. We evaluate our estimates and assumptions on an ongoing basis. To the extent that there are material differences between these estimates and actual results, our future financial statement presentation, financial condition, results of ~~adjusted debt to EBITDAR is higher than 5.00x. During the covenant relief period, the minimum interest rate spread charged on borrowings will~~operations and cash flows may be ~~225 basis points over LIBOR.~~affected.

Due to the COVID-19 pandemic, there has been uncertainty and disruption in the economy, our business operations and financial markets. The estimates used for, but not limited to, determining fair value of long-lived assets, goodwill, self-insurance reserves and our ability to realize the tax benefits associated with deferred tax assets could be impacted. We ~~were in compliance with all debt covenants at June 27, 2020.~~have assessed the impact and are not aware of any specific events or circumstances that required an update to our estimates and assumptions or materially affected the carrying value of our assets or liabilities as of the date of issuance of this report. These estimates may change as new events occur and additional information is obtained. Actual results could differ materially from these estimates under different assumptions or conditions.

~~We believe that we can fulfill~~For a description of our ~~commitments~~critical accounting policies and ~~working capital needs utilizing~~estimates, refer to Part II, Item 7., “Critical Accounting Policies” of our ~~cash flow from operations~~Form 10-K for the fiscal year ended March 27, 2021. There have been no material changes to our critical accounting policies and ~~if necessary, cash on hand and/or bank financing~~estimates since our Form 10-K for ~~at least~~ the ~~next 12 months and the foreseeable future.~~

~~In addition, we have financed certain store properties with finance leases/financing obligations, which amounted to $384.0 million at June~~year ended March 27, ~~2020 and are due in installments through March 2049.~~2021.

Recent Accounting Pronouncements

See “Recent Accounting Pronouncements” in Note 1 to our ~~Consolidated Financial Statements~~consolidated financial statements for a discussion of the impact of recently issued accounting standards on our ~~Consolidated Financial Statements~~consolidated financial statements as of June ~~27, 2020~~26, 2021 and the expected impact on the ~~Consolidated Financial Statements~~consolidated financial statements for future periods.

Cautionary Note Regarding Forward-Looking Statements

This report contains “forward-looking statements” as that term is used in the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the fact that they address future events, developments and results and do not relate strictly to historical facts. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements include, without limitation, statements preceded by, followed by or including words such as “anticipate,” “appear,” “believe,” “contemplate,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “see,” “strategy,” “vision,” “will,” “would” and variations thereof and similar expressions. Forward-looking statements are subject to risks, uncertainties and other important factors that could cause actual results to differ materially from those expressed. For example, our forward-looking statements include, without limitation, statements regarding:

Monro, Inc. Q1 2022 Form 10-Q

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MANAGEMENT’S DISCUSSION AND ANALYSIS

•the potential effect of general business or economic conditions on our business, including the direct and indirect effects of the COVID-19 pandemic on the economy, consumer spending levels, and unemployment in our markets;

•the uncertainty of the impact of the COVID-19 pandemic and public health measures on our business and results of operations, including uncertainties surrounding possible disruptions in our supply chain or sources of supply, the physical and financial health of our customers, the effectiveness and duration of government assistance programs to individuals, households and businesses to support consumer spending, levels of traffic in our stores, changes in customer demand for our services, and increased expenses for higher wages and compensation paid to employees and the cost of personal protective equipment and additional cleaning supplies and protocols for the safety of our employees;

•our expectations regarding cost increases in the future, including costs relating to our COVID-19 response initiatives, increases in the minimum wage by states and localities, potential federal minimum wage legislation, increases in distribution and fuel costs and potential new legal requirements to provide increased pay for employees who work during pandemic restrictions;

•the effect of economic conditions, seasonality and the impact of weather conditions and natural disasters on customer demand;

•the dependence on and our expectation regarding competition within the primary markets in which our stores are located;

•our growth plans, including our plans to add, renovate, re-brand, expand, remodel, relocate or close stores and any related costs or charges, our leasing strategy for future expansion, and our ability to renew leases at existing store locations;

•the impact of competitive services and pricing;

•the reliability of, and cost associated with, our sources of parts supply, particularly imported goods such as those sourced from China;

•the impact of trade relations and the ongoing trade dispute between the United States and China, including the actual and potential effect of Section 301 tariffs on Chinese goods imposed by the United States Trade Representative, uncertainties surrounding the policies of the new presidential administration, and other potential impediments to imports;

•the impact of industry regulation;

•our ability to service our debt obligations, including our expected annual interest expense;

•our cash needs, including our ability to fund our future capital expenditures and working capital requirements;

•our anticipated sales, comparable store sales, gross profit margin, costs of goods sold (including product mix), OSG&A expenses and other fixed costs, and our ability to leverage those costs;

•advances in automotive technologies;

•risks relating to disruption or unauthorized access to our computer systems;

•our failure to protect customer and employee personal data;

•business interruptions;

•potential outcomes related to pending or future litigation matters;

•risks relating to acquisitions and the integration of acquired businesses with ours;

•the effect of changes in labor laws, and the effect of the Fair Labor Standards Act as it relates to the qualification of our managers for exempt status, minimum wage and health care law;

•our assessment of the materiality and impact on our business of recent accounting pronouncements adopted by the FASB;

•management’s estimates and expectations as they relate to income tax liabilities, deferred income taxes and uncertain tax positions; and

•management’s estimates associated with our critical accounting policies, including business combinations, self-insurance liabilities and valuations for our goodwill and indefinite-lived intangible assets impairment analyses.

Any of these factors, as well as such other factors as discussed in Part I, Item 1A., “Risk Factors” of our Form 10-K for the fiscal year ended March 27, 2021, as well as in our periodic filings with the SEC, could cause our actual results to differ materially from our anticipated results. The information provided in this report is based upon the facts and circumstances known as of the date of this report, and any forward-looking statements made by us in this report speak only as of the date on which they are made. Except as required by law, we undertake no obligation to update these forward-looking statements after the date of this Form 10-Q to reflect events or circumstances after such date, or to reflect the occurrence of unanticipated events.

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DISCLOSURES ABOUT MARKET RISK & CONTROLS AND PROCEDURES

Item 3. Quantitative and Qualitative Disclosures about Market Risk

We are exposed to market risk from potential changes in interest rates. As of June ~~27, 2020,~~26, 2021, excluding finance leases and financing obligations, we had no debt financing at fixed interest rates, offor which the fair value would be affected by changes in market interest rates. Our cash flow exposure on floating rate debt would result in annual interest expense fluctuations of approximately ~~$3.3~~$2.0 million based upon our debt position at June ~~27, 2020~~26, 2021 and approximately ~~$5.7~~$1.9 million based upon our debt position at March ~~28, 2020,~~27, 2021, respectively, given a change in LIBOR of 100 basis points.

Debt financing had a carrying amount that approximates a fair value of ~~$326.2~~$198.0 million as of June ~~27, 2020,~~26, 2021, as compared to a carrying amount and a fair value of ~~$566.4~~$190.0 million as of March ~~28, 2020.~~27, 2021.

Item 4. Controls and Procedures

Evaluation of Disclosure ~~controls~~Controls and ~~procedures~~Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in reports that we file or submit to the ~~Securities and Exchange Commission~~SEC pursuant to the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the ~~Securities and Exchange Commission’s~~SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

In conjunction with the close of each fiscal quarter and under the supervision of our Chief Executive Officer (our principal executive officer) and Chief Financial Officer (our principal financial officer), we conduct an update, a review and an evaluation of the effectiveness of our disclosure controls and procedures. It is the conclusion of our Chief Executive Officer and Chief Financial Officer, based upon an evaluation completed as of the end of the most recent fiscal quarter reported on herein, that our disclosure controls and procedures were effective.

Changes in ~~internal controls over financial reporting~~Internal Controls Over Financial Reporting

There were no changes in our internal control over financial reporting during the quarter ended June ~~27, 2020~~26, 2021 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

‎

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SUPPLEMENTAL INFORMATION

~~MONRO, INC.~~

PART II – OTHER INFORMATION

~~Ite~~mItem 1. Legal Proceedings

WeFrom time to time we are ~~not~~ a party to or ~~subject to any~~otherwise involved in legal proceedings ~~other than certain claims and lawsuits that arise in~~arising out of the normal course of ~~our~~ business. ~~We do not believe~~Legal matters are subject to inherent uncertainties and there exists the possibility that ~~such claims~~the ultimate resolution of one or ~~lawsuits, individually or in the aggregate, will~~more of these matters could have a material adverse ~~effect~~impact on ~~our~~the Company, its financial condition orand results of operations.

~~Item 1A.~~ ~~Risk Factors~~

~~Except as stated below, there have been no material changes from the risk factors~~As previously disclosed by the Company, an action was filed against us on June 12, 2020 in ~~Part I – Item 1A~~the U.S. District Court for the Western District of Pennsylvania by Mark Cerini. The plaintiff, who is a former service store manager, sought certification to represent similarly situated store managers in a nationwide collective action for unpaid overtime wages, damages and attorneys’ fees. Plaintiff alleged violations of the Fair Labor Standards Act and various state laws relating to, among other things, overtime and unpaid wages. The parties have reached an agreement in principle to resolve this matter. The Company included the potential settlement amount of $3.9 million in OSG&A expenses in the Company’s ~~Form 10-K~~Consolidated Statement of Income and Comprehensive Income for the ~~fiscal year~~three months ended ~~March 28, 2020.~~

~~Matters related to~~June 26, 2021. A settlement agreement is currently being reviewed and the ~~COVID-19 pandemic have and will continue to significantly and adversely impact our business, financial position, results of operations and cash flows.~~

The spread of COVID-19 has created a global public health crisis that has resulted in widespread volatility and deteriorations in household, business, economic and market conditions. We have experienced negative impacts to demand for our products and services from the COVID-19 pandemic, which has and will continue to adversely affect our results of operations, and we are continuing to experience significant disruption to our normal business operations and planned implementation of certain strategic initiatives.

Our business will continue to be affected by the broader economic effects from the COVID-19 pandemic and related regulatory and individual actions, including customer demand for our products and services. Because more people in the United States are working from home, those workers will likely drive less often, and are less likely to require our services or will require our services less often. If this trend continues, we may see a permanent decline in demand for our services. Although travel by car may replace air travel as the preferred means of transportation because of fearterms of the ~~spread of COVID-19, the recessionary economic environment resulting from the COVID-19 pandemic~~settlement may reduce levels of leisure travel, which would reduce the demand for our products and services. We anticipate disruption to the demand for our products and services throughout the course of the pandemic. For example, in the first quarter of fiscal 2021, we experienced significant declines in comparable store sales compared to the first quarter of fiscal 2020 due to lower store traffic and reduced store hours as a result of our, individuals’, and governmental responses to the COVID-19 pandemic. Additionally, our growth strategy was impacted by the pandemic, as we paused all store acquisition, rebrand, and reimage initiatives during the first quarter of fiscal 2021 in order to focus our efforts on determining the full impact of the COVID-19 pandemic on our business.

While we have so far been able to source required products at reasonable cost, the pandemic may also affect our supply chain in ways that are beyond our control. We may also incur costs or experience further disruption to comply with new or changing regulations in response to the pandemic.

In addition, our continuing response to the pandemic could divert management’s attention from our key strategic priorities, increase costs as we prioritize health and safety matters for our teammates and customers, cause us to reduce, delay, alter or abandon initiatives that may otherwise increase our long-term value, increase vulnerability to information technology or cybersecurity related risks as certain of our teammates work remotely and otherwise continue to disrupt our business operations. For example, we have and expect to continue to incur additional costs and investments in supplies necessary to keep our teams and customers safe, such as face masks, hand sanitizer and cleaning supplies. We expect to encounter labor inefficiencies as we adjust to new protocols and operating models to adapt to operating during the pandemic while experiencing what we believe will be an increase in sales activity from the first quarter of fiscal 2021. Those labor inefficiencies may include difficulty in hiring employees if enhanced unemployment benefits are signed into law. As our teammates return to more normalized store hours, there will also be increased risks to the health and safety of our employees and customers, particularly if there were to be one or more clusters of COVID-19 cases occurring at any of our stores or our corporate headquarters. We may also be subject to ~~enhanced legal risks, including potential litigation related~~change. Settlement is subject to court approval. In resolving the ~~COVID-19 pandemic.~~matter, the Company believes the settlement is, at this time, the best use of management’s time and other resources.

‎

The overall magnitude of the COVID-19 pandemic, including the extent of its direct and indirect impact on our business, financial position, results of operations or liquidity is inherently uncertain due to the rapid development and fluidity of the situation. Further, the ultimate impact of the COVID-19 pandemic depends on many factors that are not within our control, including, but not limited to: governmental, business and individuals' actions that have been and continue to be taken in response to the COVID-19 pandemic; the severity and duration of outbreaks of the virus; the impact of the COVID-19 pandemic and actions taken in response on global and regional economies, travel, and economic activity; the availability of federal, state, local or non-U.S. funding programs; general economic uncertainty in key global markets and financial market volatility; global economic conditions and levels of economic growth; and the pace of recovery, particularly in our markets, when the COVID-19 pandemic subsides.

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SUPPLEMENTAL INFORMATION

We are unable to estimate the impact of the COVID-19 pandemic with certainty on our business and operations at this time. The pandemic could cause us to experience impairment of our goodwill and other financial assets, further reduce demand for our products and services and other adverse impacts on our financial position, results of operations and cash flows. Sustained adverse effects may also prevent us from satisfying financial covenants in our credit agreement or result in downgrades in our credit ratings.

~~Ite~~mItem 6. Exhibits


		Exhibit Index

		~~10.22a~~3.02 – ~~Amendment No. 1 to~~ Amended and Restated ~~Credit Agreement,~~By-Laws of the Company, dated ~~as of June 11, 2020 (June 2020~~May 13, 2021. (May 2021 Form 8-K, Exhibit No. ~~22a).~~3.02)
10.67 – Letter Agreement by and between Monro, Inc. and Maureen Mulholland, dated April 15, 2021 (April 2021 Form 8-K, Exhibit No. 10.67)		*
10.72 – Employment Agreement by and between the Company and Matt Henson, dated July 6, 2021*
31.1 – Certification of ~~Brett~~Michael T. ~~Ponton~~Broderick pursuant to Section 302 of the Sarbanes – Oxley Act of 2002

		31.2 – Certification of Brian J. D’Ambrosia pursuant to Section 302 of the Sarbanes – Oxley Act of 2002

		32.1 – Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes – Oxley Act of 2002

		101.INS - XBRL Instance Document

		101.LAB - XBRL Taxonomy Extension Label Linkbase

		101.PRE - XBRL Taxonomy Extension Presentation Linkbase

		101.SCH - XBRL Taxonomy Extension Schema Linkbase

		101.DEF - XBRL Taxonomy Extension Definition Linkbase

		101.CAL - XBRL Taxonomy Extension Calculation Linkbase

		104 - Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

* Management contract or compensatory plan or arrangement.
‎

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SUPPLEMENTAL INFORMATION

~~SIGNATURES~~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, INC.

DATE: August ~~6, 2020~~2, 2021	By:	/s/ ~~Brett~~Michael T. ~~Ponton~~Broderick
		~~Brett~~Michael T. ~~Ponton~~Broderick
		President and Chief Executive Officer ~~and President~~ ‎(Principal Executive Officer)

DATE: August ~~6, 2020~~2, 2021	By:	/s/ Brian J. D’Ambrosia
		Brian J. D’Ambrosia
		Executive Vice ~~President-Finance,~~President – Finance, Chief Financial Officer and
		Treasurer (Principal Financial Officer and Principal Accounting Officer)

Monro, Inc. Q1 2022 Form 10-Q



Notes to Consolidated Financial Statements
Note 1 Description of Business and Basis of Presentation	8
Note 2 Impact of the COVID-19 Pandemic	8
Note 3 Acquisitions	9
Note 4 Earnings per Common Share	11
Note 5 Income Taxes	11
Note 6 Fair Value	11
Note 7 Cash Dividend	11
Note 8 Revenues	12
Note 9 Long-term Debt	12
Note 10 Commitments and Contingencies	13


~~Part~~PART I. ~~Financial Information~~FINANCIAL INFORMATION	~~Page No.~~
Item 1. Financial Statements (Unaudited)
Consolidated Balance Sheets	3
Consolidated Statements of Income and Comprehensive Income	4
Consolidated Statements of Changes in Shareholders’ Equity	5
Consolidated Statements of Cash Flows	6
Notes to Consolidated Financial Statements	78
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	1314
Item 3. Quantitative and Qualitative Disclosures About Market Risk	1822
Item 4. Controls and Procedures	1822
~~Part~~PART II. ~~Other Information~~OTHER INFORMATION
Item 1. Legal Proceedings	20
~~Item 1A. Risk Factors~~	2023
Item 6. Exhibits	2124
Signatures	2225



		Class C Convertible ‎Preferred Stock			Common Stock			Treasury Stock			Additional ‎Paid-in		Accumulated ‎Other ‎Comprehensive		Retained
		Shares	Amount		Shares	Amount		Shares	Amount		Capital		Loss		Earnings		Total
Balance at March 30, 2019		22	$	33	39,511	$	395	6,360	$	(108,729)	$	220,173	$	(4,536)	$	592,174	$	699,510
Accounting change - cumulative effect																(582)		(582)
Adjusted balance		22		33	39,511		395	6,360		(108,729)		220,173		(4,536)		591,592		698,928
Net income																22,606		22,606
Other comprehensive loss:
Pension liability adjustment ‎ ($118) pre-tax														(89)				(89)
Cash dividends ⁽¹⁾:	Preferred															(112)		(112)
	Common															(7,305)		(7,305)
Dividend payable																(10)		(10)
Activity related to equity-based plans					71		1					3,644						3,645
Stock-based compensation												925						925
Balance at June 29, 2019		22	$	33	39,582	$	396	6,360	$	(108,729)	$	224,742	$	(4,625)	$	606,771	$	718,588

Balance at March 28, 2020		22	$	33	39,645	$	396	6,360	$	(108,729)	$	229,774	$	(6,889)	$	619,855	$	734,440
Net income																2,987		2,987
Other comprehensive loss:
Pension liability adjustment ‎ ($226) pre-tax														(170)				(170)
Cash dividends ⁽¹⁾:	Preferred															(112)		(112)
	Common															(7,323)		(7,323)
Dividend payable																(11)		(11)
Activity related to equity-based plans					1		—					5						5
Stock-based compensation												904						904
Balance at June 27, 2020		22	$	33	39,646	$	396	6,360	$	(108,729)	$	230,683	$	(7,059)	$	615,396	$	730,720



	Fiscal Month Ended
	April		May		June		July
Comparable store sales % (year-over-year decline)	(41)	%	(24)	%	(14)	%	(12)	%

~~As of~~
‎~~Acquisition Date~~

~~Dollars in~~
‎~~thousands~~

~~Weighted~~
‎~~Average~~
‎~~Useful Life~~

~~Customer lists~~

~~7 years~~