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 December 25, 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.

(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<br><br>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, 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 x Accelerated filer ¨ Non-accelerated filer ¨ Smaller reporting company ¨ Emerging 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

As of January 21, 2022, 33,546,040 shares of the registrant's common stock, $0.01 par value per share, were outstanding.

PART I. FINANCIAL INFORMATION
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	8
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	15
Item 3. Quantitative and Qualitative Disclosures About Market Risk	23
Item 4. Controls and Procedures	23
PART II. OTHER INFORMATION
Item 1. Legal Proceedings	24
Item 6. Exhibits	25
Signatures	26

‎

Monro, Inc. Q3 2022 Form 10-Q	2

CONSOLIDATED FINANCIAL STATEMENTS

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

Consolidated Balance Sheets

(thousands, except footnotes) (unaudited)	December 25, 2021		March 27, 2021
Assets
Current assets
Cash and equivalents	$	9,514	$	29,960
Accounts receivable		14,709		15,324
Federal and state income taxes receivable		—		10,844
Inventories		169,664		162,282
Other current assets		57,349		48,115
Total current assets		251,236		266,525
Property and equipment, net		315,302		327,063
Finance lease and financing obligation assets, net		272,550		275,360
Operating lease assets, net		222,934		203,329
Goodwill		779,091		689,524
Intangible assets, net		26,082		26,068
Other non-current assets		17,099		18,332
Long-term deferred income tax assets		4,896		5,613
Total assets	$	1,889,190	$	1,811,814
Liabilities and shareholders' equity
Current liabilities
Current portion of finance leases and financing obligations	$	41,192	$	37,803
Current portion of operating lease liabilities		34,685		30,903
Accounts payable		117,893		112,378
Federal and state income taxes payable		55		—
Accrued payroll, payroll taxes and other payroll benefits		23,634		20,842
Accrued insurance		52,906		49,681
Deferred revenue		13,833		11,956
Other current liabilities		27,923		27,053
Total current liabilities		312,121		290,616
Long-term debt		195,000		190,000
Long-term finance leases and financing obligations		362,522		366,330
Long-term operating lease liabilities		201,081		177,724
Other long-term liabilities		11,496		16,649
Long-term deferred income tax liabilities		24,259		19,783
Long-term income taxes payable		1,200		1,028
Total liabilities		1,107,679		1,062,130
Commitments and contingencies - Note 10
Shareholders' equity:
Class C Convertible Preferred stock		29		29
Common stock		399		398
Treasury stock		(108,729)		(108,729)
Additional paid-in capital		243,349		238,244
Accumulated other comprehensive loss		(4,927)		(4,619)
Retained earnings		651,390		624,361
Total shareholders' equity		781,511		749,684
Total liabilities and shareholders' equity	$	1,889,190	$	1,811,814

Class C Convertible Preferred stock Authorized 150,000 shares, $1.50 par value, $0.064 conversion value; 19,664 shares issued and outstanding

Common stock Authorized 65,000,000 shares, $0.01 par value; 39,905,671 shares issued as of December 25, 2021 and 39,848,093 shares issued as of March 27, 2021

Treasury stock 6,359,871 shares, at cost

See accompanying Notes to Consolidated Financial Statements.

Monro, Inc. Q3 2022 Form 10-Q	3

CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Statements of Income and Comprehensive Income

	Three Months Ended				Nine Months Ended
(thousands, except per share data) (unaudited)	December 25, 2021		December 26, 2020		December 25, 2021		December 26, 2020
Sales	$	341,781	$	284,591	$	1,031,298	$	820,237
Cost of sales, including distribution and occupancy costs		221,199		188,453		654,102		532,119
Gross profit		120,582		96,138		377,196		288,118
Operating, selling, general and administrative expenses		93,146		80,450		287,366		236,603
Operating income		27,436		15,688		89,830		51,515
Interest expense, net of interest income		5,676		6,819		18,893		21,526
Other income, net		(43)		(65)		(138)		(132)
Income before income taxes		21,803		8,934		71,075		30,121
Provision for income taxes		5,516		2,251		18,122		7,605
Net income	$	16,287	$	6,683	$	52,953	$	22,516
Other comprehensive loss
Changes in pension, net of tax		(102)		(170)		(308)		(510)
Other comprehensive loss		(102)		(170)		(308)		(510)
Comprehensive income	$	16,185	$	6,513	$	52,645	$	22,006
Earnings per share
Basic	$	0.48	$	0.20	$	1.57	$	0.67
Diluted	$	0.48	$	0.20	$	1.56	$	0.67
Weighted average common shares outstanding
Basic		33,542		33,307		33,521		33,296
Diluted		34,056		33,827		34,036		33,840

See accompanying Notes to Consolidated Financial Statements.

‎

Monro, Inc. Q3 2022 Form 10-Q	4

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 September 26, 2020	22	$	33	39,667	$	397	6,360	$	(108,729)	$	231,095	$	(7,229)	$	620,800	$	736,367
Net income															6,683		6,683
Other comprehensive loss
Pension liability adjustment													(170)				(170)
Dividends declared
Preferred															(112)		(112)
Common															(7,328)		(7,328)
Dividend payable															(10)		(10)
Stock options and restricted stock																	—
Stock-based compensation											613						613
Balance at December 26, 2020	22	$	33	39,667	$	397	6,360	$	(108,729)	$	231,708	$	(7,399)	$	620,033	$	736,043
Balance at September 25, 2021	20	$	29	39,900	$	399	6,360	$	(108,729)	$	242,061	$	(4,825)	$	643,983	$	772,918
Net income															16,287		16,287
Other comprehensive loss
Pension liability adjustment													(102)				(102)
Dividends declared
Preferred															(120)		(120)
Common															(8,722)		(8,722)
Dividend payable															(38)		(38)
Stock options and restricted stock				6		—					30						30
Stock-based compensation											1,258						1,258
Balance at December 25, 2021	20	$	29	39,906	$	399	6,360	$	(108,729)	$	243,349	$	(4,927)	$	651,390	$	781,511
Balance at March 28, 2020	22	$	33	39,645	$	396	6,360	$	(108,729)	$	229,774	$	(6,889)	$	619,855	$	734,440
Net income															22,516		22,516
Other comprehensive loss
Pension liability adjustment													(510)				(510)
Dividends declared
Preferred															(337)		(337)
Common															(21,978)		(21,978)
Dividend payable															(23)		(23)
Stock options and restricted stock				22		1					(194)						(193)
Stock-based compensation											2,128						2,128
Balance at December 26, 2020	22	$	33	39,667	$	397	6,360	$	(108,729)	$	231,708	$	(7,399)	$	620,033	$	736,043
Balance at March 27, 2021	20	$	29	39,848	$	398	6,360	$	(108,729)	$	238,244	$	(4,619)	$	624,361	$	749,684
Net income															52,953		52,953
Other comprehensive loss
Pension liability adjustment													(308)				(308)
Dividends declared
Preferred															(350)		(350)
Common															(25,483)		(25,483)
Dividend payable															(91)		(91)
Stock options and restricted stock				58		1					1,975						1,976
Stock-based compensation											3,130						3,130
Balance at December 25, 2021	20	$	29	39,906	$	399	6,360	$	(108,729)	$	243,349	$	(4,927)	$	651,390	$	781,511

We declared $0.26 and $0.22 dividends per common share or equivalent for the three months ended December 25, 2021 and December 26, 2020, respectively, and $0.76 and $0.66 dividends per common share or equivalent for the nine months ended December 25, 2021 and December 26, 2020, respectively.

See accompanying Notes to Consolidated Financial Statements.

‎

Monro, Inc. Q3 2022 Form 10-Q	5

CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Statements of Cash Flows

	Nine Months Ended
(thousands) (unaudited)	December 25, 2021		December 26, 2020
Operating activities
Net income	$	52,953	$	22,516
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization		60,454		57,598
Share-based compensation expense		3,130		2,128
Gain on disposal of assets		(507)		(156)
Impairment of long-lived assets		—		99
Deferred income tax expense		9,633		4,041
Change in operating assets and liabilities (excluding acquisitions)
Accounts receivable		615		(788)
Inventories		(5,952)		23,787
Other current assets		(8,046)		7,848
Other non-current assets		26,042		2,288
Accounts payable		5,515		32,348
Accrued expenses		2,771		15,610
Federal and state income taxes payable		10,899		1,292
Other long-term liabilities		(30,442)		(9,491)
Long-term income taxes payable		172		96
Cash provided by operating activities		127,237		159,216
Investing activities
Capital expenditures		(17,445)		(39,214)
Acquisitions, net of cash acquired		(83,167)		(18,095)
Proceeds from the disposal of assets		1,030		388
Other		122		1,025
Cash used for investing activities		(99,460)		(55,896)
Financing activities
Proceeds from borrowings		139,862		—
Principal payments on long-term debt, finance leases and financing obligations		(163,985)		(400,657)
Exercise of stock options		2,110		9
Dividends paid		(25,713)		(22,315)
Deferred financing costs		(497)		(874)
Cash used for financing activities		(48,223)		(423,837)
Decrease in cash and equivalents		(20,446)		(320,517)
Cash and equivalents at beginning of period		29,960		345,476
Cash and equivalents at end of period	$	9,514	$	24,959
Supplemental information
Leased assets obtained in exchange for new finance lease liabilities	$	7,307	$	100,755
Leased assets obtained in exchange for new operating lease liabilities	$	8,114	$	20,364

See accompanying Notes to Consolidated Financial Statements.

Monro, Inc. Q3 2022 Form 10-Q	6

INDEX TO NOTES

Notes to Consolidated Financial Statements
Note 1 Description of Business and Basis of Presentation	8
Note 2 Impact of the COVID-19 Pandemic	9
Note 3 Acquisitions	9
Note 4 Earnings per Common Share	12
Note 5 Income Taxes	12
Note 6 Fair Value	12
Note 7 Cash Dividend	12
Note 8 Revenues	13
Note 9 Long-term Debt	13
Note 10 Commitments and Contingencies	14
Monro, Inc. Q3 2022 Form 10-Q	7
---	---

CONSOLIDATED FINANCIAL STATEMENTS

NOTES

Note 1 – Description of Business and Basis of Presentation

Description of business

Monro, Inc. and its direct and indirect subsidiaries (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 1,303 Company-operated retail stores located in 32 states and 81 franchised locations as of December 25, 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 December 25, 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 as one 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 brakes; mufflers and exhaust systems; and steering, drive train, suspension and wheel alignment.

Basis of presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) applicable to interim financial statements. While these statements reflect all adjustments (consisting of items of a normal recurring nature) that are, in the opinion of management, necessary for a fair presentation of the results of the interim period, they do not include all of the information and footnotes required by United States generally accepted accounting principles (“U.S. GAAP”) for complete financial statement presentation. The consolidated financial statements should be read in conjunction with the financial statement disclosures in our Form 10-K for the fiscal year ended March 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 are not necessarily indicative of the results that may be expected for other interim periods or the full year.

Fiscal year

We operate on a 52/53 week 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 26, 2022 and March 27, 2021, respectively.

Recent accounting pronouncements

In December 2019, the 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 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. We adopted this guidance during the first quarter of 2022. The adoption of this guidance did not have a material impact on our consolidated financial statements.

Other recent authoritative guidance issued by the FASB (including technical corrections to the ASC) and the SEC did not, or are not expected to have a material effect on Monro’s consolidated financial statements.

Supplemental information

Property and equipment, net: Property and equipment balances are shown on the Consolidated Balance Sheets net of accumulated depreciation of $405.2 million and $382.7 million as of December 25, 2021 and March 27, 2021, respectively.

Monro, Inc. Q3 2022 Form 10-Q	8

CONSOLIDATED FINANCIAL STATEMENTS

NOTES

Note 2 – Impact of the COVID-19 Pandemic

The novel strain of coronavirus (“COVID-19”) pandemic has been a highly disruptive economic and societal event that has affected our business and has a significant impact on consumer 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, we have adapted certain aspects of the business. Throughout the pandemic, we have monitored the rapidly evolving situation and will continue to adapt our operations to (i) address federal, state and local standards, (ii) meet the demand of customers, and (iii) implement standards that we believe to be in the best interests of the safety and well-being of our employees and customers.

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 customers, employees, vendors and other partners.

Note 3 – 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 note include acquisitions of five or more locations as well as acquisitions of one to four locations that are part of our greenfield store growth strategy.

2022

During the first nine months of fiscal 2022, we acquired the following businesses for an aggregate purchase price of $83.2 million. The acquisitions were financed through our Credit Facility, as defined in Note 9. The results of operations for these acquisitions are included in our financial results from the respective acquisition dates.

On December 6, 2021, we acquired 11 retail tire and automotive repair stores operating as Car-X franchise locations in Iowa from KR Jones Enterprises, Inc. These stores will operate under the Car-X name.

On November 14, 2021, we acquired three retail tire and automotive repair stores located in California from Bud’s Tire and Wheel, Inc. These stores will operate under the Tire Choice name.

On November 14, 2021, we acquired two retail tire and automotive repair stores located in California from Eagle Auto & Tire, Inc. These stores will operate under the Mountain View Tire & Service name.

On November 14, 2021, we acquired one retail tire and automotive repair store located in California from Golden Reflections. This store will operate under the Mountain View Tire & Service name.

On April 25, 2021, we acquired 30 retail tire and automotive repair stores located in California from Mountain View Tire & Service, Inc. These stores operate under the Mountain View Tire & Service name.

The acquisitions resulted in goodwill related to, among other things, growth opportunities, synergies and economies of scale expected from combining the businesses with ours, as well as unidentifiable intangible assets. All of the goodwill is expected to be deductible for tax purposes.

We expensed all costs related to the acquisitions in the nine months ended December 25, 2021. The total costs related to the completed acquisitions were $0.2 million and $0.6 million for the three months and nine months ended December 25, 2021, respectively. These costs are included in the Consolidated Statements of Income and Comprehensive Income primarily under operating, selling, general and administrative (“OSG&A”) expenses.

Sales related to the completed acquisitions for the three months and nine months ended December 25, 2021 totaled $13.7 million and $33.1 million, respectively, for the period from acquisition date through December 25, 2021.

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.

Monro, Inc. Q3 2022 Form 10-Q	9

CONSOLIDATED FINANCIAL STATEMENTS

NOTES

We accounted for the acquisitions 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	$	1,208
Other current assets		424
Property and equipment		1,455
Finance lease and financing obligation assets		15,568
Operating lease assets		35,815
Intangible assets		3,120
Other non-current assets		79
Long-term deferred income tax assets		4,332
Total assets acquired		62,001
Current portion of finance leases and financing obligations		1,569
Current portion of operating lease liabilities		3,324
Deferred revenue		1,273
Other current liabilities		273
Long-term finance leases and financing obligations		21,584
Long-term operating lease liabilities		39,401
Other long-term liabilities		1,055
Total liabilities assumed		68,479
Total net identifiable liabilities assumed	$	(6,478)
Total consideration transferred	$	83,175
Less: total net identifiable liabilities assumed		(6,478)
Goodwill	$	89,653

The total consideration of $83.2 million is comprised of $81.7 million in cash and $1.5 million in payables to certain sellers, of which $1.1 million is due upon finalization of certain lease assignment terms for one store location.

We recorded $3.1 million to amortizable intangible assets, including customer lists and a trade name, with a weighted-average amortizable period of approximately eight years. We have recorded acquired right-of-use (“ROU”) assets at the present value of remaining lease payments adjusted to reflect favorable or unfavorable market terms of the lease.

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 the 2022 acquisitions and expect to complete the valuations no later than the first anniversary date of the 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.

2021

On December 6, 2020, we acquired 17 retail tire and automotive repair stores located in California from Fred Allen Enterprises, Inc. for $17.1 million. These stores will operate under the Tire Choice name. The acquisition was financed through our Credit Facility. The results of operation for the acquisition are included in our financial results from the acquisition date.

Prior to this acquisition, our acquisition activity in 2021 was paused due to the impact of the COVID-19 pandemic.

The acquisition resulted in goodwill related to, among other things, growth opportunities, synergies and economies of scale expected from combining 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 a customer list intangible asset with a useful life of seven years at its estimated fair value of approximately $0.4 million. We have recorded acquired ROU assets at the present value of remaining lease payments adjusted to reflect favorable or unfavorable market terms of the lease.

We expensed all costs related to the acquisition in the three months ended December 26, 2020. The total costs related to the completed acquisition were $0.1 million and these costs are included in the Consolidated Statements of Income and Comprehensive Income primarily under OSG&A expenses.

Sales related to the completed acquisition totaled $0.9 million for the period from acquisition date through December 26, 2020.

Monro, Inc. Q3 2022 Form 10-Q	10

CONSOLIDATED FINANCIAL STATEMENTS

NOTES

We accounted for the 2021 acquisition as a business combination using the acquisition method of accounting and we finalized the purchase accounting related to the 2021 acquisition during 2022. As a result of the updated purchase price allocation for the 2021 acquisition, 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 as of December 25, 2021 and the Consolidated Statements of Income and Comprehensive Income for the three months and nine months ended December 25, 2021.

The acquired assets and liabilities assumed were recorded at their assigned acquisition-date fair values and were consolidated with those of the Company as of the acquisition date. The consideration transferred and net liabilities assumed were recorded as goodwill.

2021 Acquisition-date Fair Values Assigned
(thousands)
Inventory	$	1,017
Other current assets		172
Property and equipment		796
Finance lease and financing obligation assets		5,089
Operating lease assets		8,980
Intangible assets		418
Other non-current assets		31
Long-term deferred income tax assets		1,336
Total assets acquired		17,839
Current portion of finance leases and financing obligations		748
Current portion of operating lease liabilities		976
Deferred revenue		697
Other current liabilities		4
Long-term finance leases and financing obligations		7,911
Long-term operating lease liabilities		7,433
Other long-term liabilities		548
Total liabilities assumed		18,317
Total net identifiable liabilities assumed	$	(478)
Total consideration transferred	$	17,112
Less: total net identifiable liabilities assumed		(478)
Goodwill	$	17,590

During the nine months ended December 25, 2021, we paid $0.8 million to the seller of the 2021 acquisition as the lease assignment for one store location was finalized during the period.

Monro, Inc. Q3 2022 Form 10-Q	11

CONSOLIDATED FINANCIAL STATEMENTS

NOTES

Note 4 – Earnings per Common Share

Basic earnings per common share amounts are 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 potential common shares issuable from the conversion of preferred stock, as well as upon the assumed exercise of common stock options outstanding and from the vesting of restricted stock.

Earnings per Common Share	Three Months Ended				Nine Months Ended
(thousands, except per share data)	December 25, 2021		December 26, 2020		December 25, 2021		December 26, 2020
Numerator for earnings per common share calculation:
Net income	$	16,287	$	6,683	$	52,953	$	22,516
Less: Preferred stock dividends		(120)		(112)		(350)		(337)
Income available to common shareholders	$	16,167	$	6,571	$	52,603	$	22,179
Denominator for earnings per common share calculation:
Weighted average common shares - basic		33,542		33,307		33,521		33,296
Effect of dilutive securities:
Preferred stock		460		510		460		510
Stock options		13		—		17		16
Restricted stock		41		10		38		18
Weighted average common shares - diluted		34,056		33,827		34,036		33,840
Basic earnings per common share	$	0.48	$	0.20	$	1.57	$	0.67
Diluted earnings per common share	$	0.48	$	0.20	$	1.56	$	0.67

Weighted average common share equivalents that have an anti-dilutive impact are excluded from the computation of diluted earnings per share.

Note 5 – Income Taxes

For the three months and nine months ended December 25, 2021, our effective income tax rate was 25.3 percent and 25.5 percent, respectively, compared to 25.2 percent for the three months and nine months ended December 26, 2020, as discrete items, none of which are individually significant, resulted in a larger tax rate benefit in the prior year periods.

Note 6 – Fair Value

Long-term debt had a carrying amount that approximates a fair value of $195.0 million as of December 25, 2021, as compared to a carrying amount and a fair value of $190.0 million as of March 27, 2021. The carrying value of our debt approximated its fair value due to the variable interest nature of the debt.

Note 7 – Cash Dividend

We paid dividends of $25.7 million during the nine months ended December 25, 2021. Under our Credit Facility, we were permitted to 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 were in compliance with the financial covenants and other restrictions in the Credit Facility, as amended. The Credit Facility currently does not limit the amount we can pay in dividends. However, the declaration of and any determination 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 Credit Facility restrictions, and such other factors as the Board of Directors deems relevant. For additional information regarding our Credit Facility, see Note 9.

Monro, Inc. Q3 2022 Form 10-Q	12

CONSOLIDATED FINANCIAL STATEMENTS

NOTES

Note 8 – Revenues

Automotive undercar repair, tire replacement sales and tire 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 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.

Revenues	Three Months Ended				Nine Months Ended
(thousands)	December 25, 2021		December 26, 2020		December 25, 2021		December 26, 2020
Tires ^(a)^	$	190,086	$	162,442	$	544,395	$	454,217
Maintenance		78,363		65,648		248,793		193,754
Brakes		41,556		29,962		135,704		94,015
Steering		25,894		20,464		82,246		60,497
Exhaust		5,107		5,391		17,477		15,533
Other		775		684		2,683		2,221
Total	$	341,781	$	284,591	$	1,031,298	$	820,237

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

Revenue from the sale of tire road hazard warranty agreements 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 deferred revenue balances at December 25, 2021 and March 27, 2021 were $20.1 million and $16.7 million, respectively, of which $13.8 million and $12.0 million, respectively, are reported in Deferred revenue and $6.3 million and $4.7 million, respectively, are reported in Other long-term liabilities in our Consolidated Balance Sheets.

Changes in Deferred Revenue
(thousands)
Balance at March 27, 2021	$	16,712
Deferral of revenue		15,441
Deferral of revenue from acquisitions		2,181
Recognition of revenue		(14,237)
Balance at December 25, 2021	$	20,097

As of December 25, 2021, we expect to recognize $4.5 million of deferred revenue related to road hazard warranty agreements in the remainder of fiscal

2022

, $11.2 million of deferred revenue during our fiscal year ending March 25,

2023

, and $4.4 million of deferred revenue 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.

Note 9 – Long-term Debt

In April 2019, we entered into a new five year $600 million revolving credit facility agreement with eight 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 bore 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.

On June 11, 2020, we entered into a First Amendment to the Credit Facility (the “First Amendment”), which, among other things, 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 amended the interest rate charged on

Monro, Inc. Q3 2022 Form 10-Q	13

CONSOLIDATED FINANCIAL STATEMENTS

NOTES

borrowings to be based on the greater of adjusted one-month LIBOR or 0.75 percent. For the period from June 30, 2020 to June 30, 2021, the minimum interest rate spread charged on borrowings was 225 basis points over LIBOR. Additionally, during the same period, we 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 were permitted if we were in compliance with the financial covenants and other restrictions in the First Amendment and Credit Facility. As of July 1, 2021, the ability of our Board of Directors to declare, make or pay any dividend or distribution and our ability to acquire stores or other businesses is no longer restricted by the terms of the Credit Facility, as amended by the First Amendment. 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.

On October 5, 2021, we entered into a Second Amendment to the Credit Facility (the “Second Amendment”). The Second Amendment, which among other things, amends certain of the financial terms in the Credit Agreement, as amended by the First Amendment. Specifically, the First Amendment had amended the interest rate charged on borrowings to be based on the greater of adjusted one-month LIBOR or 0.75 percent. The Second Amendment amends the interest rate to be based on the greater of adjusted one-month LIBOR or 0.00 percent. In addition, the Second Amendment updates certain provisions regarding a successor interest rate to LIBOR. Except as amended by the First Amendment and Second Amendment, the remaining terms of the credit agreement remain in full force and effect.

Within the Credit Facility, we have a sub-facility of $80 million available for the purpose of issuing standby letters of credit. The sub-facility 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 $29.6 million outstanding letter of credit at December 25, 2021.

There was $195.0 million outstanding and $375.4 million available under the Credit Facility at December 25, 2021.

We were in compliance with all debt covenants at December 25, 2021.

Note 10 – Commitments and Contingencies

Commitments

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	$	195,000			$	195,000
Finance lease commitments/financing obligations ^(a)^		507,093	$	58,201		113,145	$	101,795	$	233,952
Operating lease commitments ^(a)^		271,396		41,202		75,114		60,941		94,139
Accrued rent		786		686		38		26		36
Other liabilities		533		533		—		—		—
Total	$	974,808	$	100,622	$	383,297	$	162,762	$	328,127

(a)Finance and operating lease commitments represent future undiscounted lease payments and include $104.3 million and $69.9 million, respectively, related to options to extend lease terms that are reasonably certain of being exercised.

Contingencies

We are currently a party to various claims and legal proceedings incidental to the conduct of our business. If management believes that a loss arising from any of these matters is probable and can reasonably be estimated, we will record the amount of the loss, or the minimum estimated liability when the loss is estimated using a range, and no point within the range is more probable than another. As additional information becomes available, any potential liability related to these matters is assessed and the estimates are revised, if necessary. Litigation is subject to inherent uncertainties, and unfavorable rulings could occur and may include monetary damages. If an unfavorable ruling were to occur, there exists the possibility of a material adverse impact on the financial position and results of operations of the period in which any such ruling occurs, or in future periods.

As previously disclosed by the Company, an action was filed against us on June 12, 2020 in 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 entered into a settlement agreement to resolve this matter that was approved by the court. The Company included the settlement amount of $3.7 million in OSG&A expenses in the Company’s Consolidated Statement of Income and Comprehensive Income during fiscal 2022. The Company paid this settlement in the third quarter of fiscal 2022 and does not expect to incur additional expenses with respect to the settlement.

Monro, Inc. Q3 2022 Form 10-Q	14

MANAGEMENT’S DISCUSSION AND ANALYSIS

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Financial Summary

Third quarter 2022 included the following notable items:

Diluted earnings per common share (“EPS”) were $0.48.

Adjusted diluted EPS, a non-GAAP measure, were $0.49.

Sales increased 20.1 percent, driven by an increase in comparable store sales.

Comparable store sales increased 13.8 percent from the prior year comparable period, driven primarily by an increase in average ticket amount.

Operating income of $27.4 million was 74.9 percent higher than the prior year comparable period.

Net income was $16.3 million.

Adjusted net income, a non-GAAP measure, was $16.6 million.

Earnings Per Common Share	Three Months Ended						Nine Months Ended
	December 25, 2021		December 26, 2020		Change		December 25, 2021		December 26, 2020		Change
Diluted EPS	$	0.48	$	0.20	140.0	%	$	1.56	$	0.67	132.8	%
Adjustments		0.01		0.01				0.09		0.09
Adjusted diluted EPS	$	0.49	$	0.22	122.7	%	$	1.66	$	0.77	115.6	%

Note: Amounts may not foot due to rounding.

Adjusted net income and adjusted diluted EPS, each of which is a measure not derived in accordance with U.S. GAAP, exclude the impact of certain items. Management believes that adjusted net income and adjusted diluted EPS are useful in providing period-to-period comparisons of the results of our operations by excluding certain non-recurring items and items related to store closings as well as Monro.Forward or acquisition initiatives. Reconciliations of these non-GAAP financial measures to GAAP measures are provided beginning on page 19 under “Non-GAAP Financial Measures.”

We define comparable store sales, or same store sales, as sales for stores that have been opened or owned at least one full fiscal year. We believe this period is generally required for new store sales levels to 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 industry. Therefore, our comparable store sales calculation is not necessarily comparable to similarly titled measures reported by other companies.

Impact of COVID-19

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 and distribution of the COVID-19 vaccines; the longer-term impact of the pandemic on the economy and consumer behavior; and the effect on our customers, referred to as “guests”; employees, referred to as “teammates”; vendors and other partners.

During this time, we are focused on protecting the health and safety of our teammates and guests, while seeking to continue operating our business responsibly.

During this period when vaccine distribution has increased and more businesses are operating at levels similar to pre-pandemic capacity, we have experienced labor inefficiencies and a shortage of teammates in some of our store locations. If we are unable to fill enough teammate positions, we may be unable to earn as much revenue as if we were fully staffed. We have had to pay more for labor because our teammates continue working overtime in order to meet the surge in demand, which, along with an incremental investment we made in technician labor costs to support current and future sales growth amidst improving consumer demand trends, increased our technician labor costs as a percentage of sales and may decrease our gross profit and net income if not offset by other factors. Although we are experiencing unprecedented challenges during this pandemic, we continue our focus to remain as efficient as possible while still offering safe and high quality service to our guests.

While we expect many teammates to return to our offices in the future, 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 ensure our offices are safe and functional for hybrid work that enable effective collaboration of both in-person and remote teammates.

Monro, Inc. Q3 2022 Form 10-Q	15

MANAGEMENT’S DISCUSSION AND ANALYSIS

Given the level of 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.

Analysis of Results of Operations

Summary of Operating Income	Three Months Ended						Nine Months Ended
(thousands)	December 25, 2021		December 26, 2020		Change		December 25, 2021		December 26, 2020		Change
Sales	$	341,781	$	284,591	20.1	%	$	1,031,298	$	820,237	25.7	%
Cost of sales, including distribution and <br>‎occupancy costs		221,199		188,453	17.4			654,102		532,119	22.9
Gross profit		120,582		96,138	25.4			377,196		288,118	30.9
Operating, selling, general and administrative expenses		93,146		80,450	15.8			287,366		236,603	21.5
Operating income	$	27,436	$	15,688	74.9	%	$	89,830	$	51,515	74.4	%

Sales

Sales include automotive undercar repair, tire replacement and tire related service sales, net of 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 comparable, prior-year period of equivalent length. There were 89 selling days in the three months ended December 25, 2021 and in the three months ended December 26, 2020, and 270 selling days in the nine months ended December 25, 2021 and in the nine months ended December 26, 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.

Sales	Three Months Ended					Nine Months Ended
(thousands)	December 25, 2021			December 26, 2020		December 25, 2021			December 26, 2020
Sales	$	341,781		$	284,591	$	1,031,298		$	820,237
Dollar change compared to prior year	$	57,190				$	211,061
Percentage change compared to prior year		20.1	%				25.7	%

The sales increase was primarily due to an increase in comparable store sales from an increase in average ticket amount as comparable store sales growth increased across our product categories with higher growth in our tires, maintenance and brakes categories. 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 for each of the three months and nine months ended December 25, 2021, as compared to the same period ended December 26, 2020.

Sales Percentage Change
	December 25, 2021		December 25, 2021
Sales change	20.1	%	25.7	%
Primary drivers of change in sales
Comparable stores sales	13.8	%	20.3	%
New store sales ^(a)^	6.5	%	6.2	%
Closed store sales	(0.1)	%	(0.6)	%

(a)Sales from 2022 and 2021 acquisitions contributed 6.4 percent and 6.0 percent of the sales change for the three months and the nine months ended December 25, 2021, respectively.

Monro, Inc. Q3 2022 Form 10-Q	16

MANAGEMENT’S DISCUSSION AND ANALYSIS

As the COVID-19 pandemic has evolved, demand for automotive undercar repair services as well as replacement tires and tire related services continues to be volatile. During the three months and nine months ended December 25, 2021, comparable store sales growth increased across our product categories with higher growth in our higher-margin brakes, alignment and maintenance categories, as well as our tire category, each of which experienced declines during the three months and nine months ended December 26, 2020.

Comparable Store Product Category Sales Change	Three Months Ended				Nine Months Ended
	December 25, 2021		December 26, 2020		December 25, 2021		December 26, 2020
Tires	11	%	(8)	%	15	%	(8)	%
Maintenance	11	%	(19)	%	22	%	(24)	%
Brakes	28	%	(21)	%	39	%	(30)	%
Alignment	28	%	(16)	%	37	%	(21)	%
Front end/shocks	14	%	(17)	%	23	%	(25)	%
Exhaust	14	%	(17)	%	18	%	(24)	%
Sales by Product Category	Three Months Ended				Nine Months Ended
---	---	---	---	---	---	---	---	---
	December 25, 2021		December 26, 2020		December 25, 2021		December 26, 2020
Tires	56	%	57	%	53	%	56	%
Maintenance	23		23		24		24
Brakes	12		11		13		12
Steering ^(a)^	8		7		8		7
Exhaust	1		2		2		1
Total	100	%	100	%	100	%	100	%

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

Change in Number of Company-Operated Retail Stores	Three Months Ended		Nine Months Ended
	December 25, 2021	December 26, 2020	December 25, 2021	December 26, 2020
Beginning store count	1,288	1,242	1,263	1,283
Opened ^(a)^	17	19	47	20
Closed	(2)	(1)	(7)	(43)
Ending store count	1,303	1,260	1,303	1,260

(a)The stores opened are primarily stores acquired from the 2022 and 2021 acquisitions.

Cost of Sales and Gross Profit

Gross Profit	Three Months Ended						Nine Months Ended
(thousands)	December 25, 2021			December 26, 2020			December 25, 2021			December 26, 2020
Gross profit	$	120,582		$	96,138		$	377,196		$	288,118
Percentage of sales		35.3	%		33.8	%		36.6	%		35.1	%
Dollar change compared to prior year	$	24,444					$	89,078
Percentage change compared to prior year		25.4	%					30.9	%

The increase in gross profit, as a percentage of sales, of 150 basis points (“bps”) for the three months and nine months ended December 25, 2021, as compared to the prior year comparable period, was primarily due to a decrease in material costs, as a percentage of sales, as a result of a shift in sales mix from tires to our higher margin service categories. Additionally, through the use of our tire category and management pricing tool, we expanded our gross profit per tire from the prior year comparable period. The increase in gross profit, as a percentage of sales, was also partially due to a decrease in distribution and occupancy costs, as a percentage of sales, as we gained leverage on these largely fixed costs with higher overall comparable store sales. Partially offsetting these decreases was an increase in technician labor costs, which increased as a percentage of sales, as we made an incremental investment in technician labor costs to support current and future sales growth amidst improving consumer demand trends for our product and service categories.

Monro, Inc. Q3 2022 Form 10-Q	17

MANAGEMENT’S DISCUSSION AND ANALYSIS

Gross Profit as a Percentage of Sales Change
	December 25, 2021		December 25, 2021
Gross profit change	150	bps	150	bps
Primary drivers of change in gross profit as a percentage of sales
Material costs	180	bps	190	bps
Distribution and occupancy costs	120	bps	160	bps
Technician labor costs	(150)	bps	(210)	bps

OSG&A Expenses

OSG&A Expenses	Three Months Ended						Nine Months Ended
(thousands)	December 25, 2021			December 26, 2020			December 25, 2021			December 26, 2020
OSG&A Expenses	$	93,146		$	80,450		$	287,366		$	236,603
Percentage of sales		27.3	%		28.3	%		27.9	%		28.8	%
Dollar change compared to prior year	$	12,696					$	50,763
Percentage change compared to prior year		15.8	%					21.5	%

The increase of $12.7 million and $50.8 million in OSG&A expenses for the three months and nine months ended December 25, 2021, respectively, as compared to the prior year comparable period is primarily due to increased expenses from comparable stores, mainly store management compensation and operating expenses needed to match demand. 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 for the three months and nine months ended December 25, 2021 was also partially due to increased expenses from 51 new stores, as well as an increase in litigation settlement costs (mainly related to the Cerini matter described in Note 10 to the Company’s consolidated financial statements). Partially offsetting these increases were lower expenses for the three months and nine months ended December 25, 2021 from eight stores closed compared to the prior year comparable period.

OSG&A Expenses Change
(thousands)	December 25, 2021		December 25, 2021
OSG&A expenses change	$	12,696	$	50,763
Drivers of change in OSG&A expenses
Increase from comparable stores	$	8,261	$	36,597
Increase from new stores	$	5,059	$	12,942
Increase in litigation settlement costs	$	89	$	4,009
Decrease from closed stores	$	(713)	$	(2,785)

Other Performance Factors

Net Interest Expense

Net interest expense of $5.7 million for the three months ended December 25, 2021 decreased $1.1 million as compared to the prior year period, and decreased as a percentage of sales from 2.4 percent to 1.7 percent. Weighted average debt outstanding for the three months ended December 25, 2021 decreased by approximately $26 million as compared to the three months ended December 26, 2020. This decrease is primarily related to a decrease in debt outstanding under our revolving credit facility (the “Credit Facility”). The weighted average interest rate decreased approximately 60 basis points from the prior year quarter due primarily to a decrease in Credit Facility borrowing rates.

Net interest expense for the nine months ended December 25, 2021 decreased $2.6 million as compared to the same period in the prior year, and decreased from 2.6 percent to 1.8 percent as a percentage of sales for the same periods. Weighted average debt outstanding decreased by approximately $137 million and the weighted average interest rate increased by approximately 30 basis points as compared to the same period of the prior year.

Provision for Income Taxes

Our effective income tax rate for the three months and nine months ended December 25, 2021, was 25.3 percent and 25.5 percent, respectively, compared with 25.2 percent in the comparable prior year periods.

Monro, Inc. Q3 2022 Form 10-Q	18

MANAGEMENT’S DISCUSSION AND ANALYSIS

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 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				Nine Months Ended
(thousands)	December 25, 2021		December 26, 2020		December 25, 2021		December 26, 2020
Net income	$	16,287	$	6,683	$	52,953	$	22,516
Store impairment charge		—		—		—		99
Store closing costs		5		(14)		(425)		2,496
Monro.Forward initiative costs		418		1,056		569		1,510
Acquisition due diligence and integration costs		170		122		590		161
Management transition costs		—		128		59		385
Litigation settlement costs		(161)		(250)		3,759		(250)
Provision for income taxes on adjustments		(104)		(234)		(1,101)		(1,022)
Adjusted net income	$	16,615	$	7,491	$	56,404	$	25,895

Adjusted diluted EPS is summarized as follows:

Reconciliation of Adjusted Diluted EPS	Three Months Ended				Nine Months Ended
	December 25, 2021		December 26, 2020		December 25, 2021		December 26, 2020
Diluted EPS	$	0.48	$	0.20	$	1.56	$	0.67
Store impairment charge ^(a)^		—		—		—		0.00
Store closing costs ^(a)^		0.00		(0.00)		(0.01)		0.06
Monro.Forward initiative costs		0.01		0.02		0.01		0.03
Acquisition due diligence and integration costs ^(a)^		0.00		0.00		0.01		0.00
Management transition costs^(a)^		—		0.00		0.00		0.01
Litigation settlement costs ^(a)^		(0.00)		(0.01)		0.08		(0.01)
Adjusted diluted EPS	$	0.49	$	0.22	$	1.66	$	0.77

(a)Amounts, in the 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.

Note: The calculation of the impact of non-GAAP adjustments on diluted EPS is performed on each line independently. The table may not add down by +/- $0.01 due to rounding.

The adjustments to diluted EPS reflect effective tax rates of 24.1 percent and 22.5 percent for the three months ended December 25, 2021 and December 26, 2020, respectively, and 24.2 percent and 23.2 percent for the nine months ended December 25, 2021 and December 26, 2020, respectively. See adjustments from the Reconciliation of Adjusted Net Income table above for pre-tax amounts.

Analysis of Financial Condition

Liquidity and Capital Resources

Capital Allocation

We expect to continue to generate positive operating cash flow as we have done in the last three fiscal years. The cash we generate from our operations allows us to support business operations and Monro.Forward initiatives as well as invest in attractive acquisition opportunities intended to drive long-term sustainable growth, while paying down debt and returning cash to our shareholders through our dividend program.

Monro, Inc. Q3 2022 Form 10-Q	19

MANAGEMENT’S DISCUSSION AND ANALYSIS

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.

Accordingly, we believe that our current sources of funds will provide us with adequate liquidity during the 12-month period following December 25, 2021, as well as in the long-term.

See the sections below for more details regarding material requirements for cash in our business and our sources of liquidity to meet such needs.

Material Cash Requirements

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 $40 million in the aggregate in 2022. Additionally, we have contractual finance lease and operating lease commitments with landlords through October 2040 for $604.3 million in lease payments, of which $98.7 million is due within one year. For details regarding these lease commitments, see Note 10 to the Company’s consolidated financial statements.

As of December 25, 2021, we had $195.0 million outstanding under the Credit Facility, 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.

We paid cash dividends totaling $25.7 million ($0.76 per share) during the nine months ended December 25, 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 December 25, 2021, we had $9.5 million of cash and equivalents. In addition, we had $375.4 million available under the Credit Facility as of December 25, 2021.

Summary of Cash Flows

The following table presents a summary of our cash flows from operating, investing and financing activities.

Summary of Cash Flows	Nine Months Ended
(thousands)	December 25, 2021		December 26, 2020
Cash provided by operating activities	$	127,237	$	159,216
Cash used for investing activities		(99,460)		(55,896)
Cash used for financing activities		(48,223)		(423,837)
Decrease in cash and equivalents		(20,446)		(320,517)
Cash and equivalents at beginning of period		29,960		345,476
Cash and equivalents at end of period	$	9,514	$	24,959

Cash provided by operating activities

For the nine months ended December 25, 2021, cash provided by operating activities was $127.2 million, which consisted of net income of $53.0 million, adjusted by non-cash charges of $72.7 million and by a change in operating assets and liabilities of $1.5 million. The non-cash charges were largely driven by $60.5 million of depreciation and amortization. The change in operating assets and liabilities was primarily due to our federal and state income taxes payable being a source of cash of $10.9 million due largely to an income tax refund that was received. This source of cash was partially offset by our inventory balance being a use of cash of $6.0 million due to increased inventory purchases to meet higher demand, as well as accounts payable and accrued liabilities, net of vendor rebate receivables, being a use of cash of $4.0 million driven by timing of payments.

For the nine months ended December 26, 2020, cash provided by operating activities was $159.2 million, which consisted of net income of $22.5 million, adjusted by non-cash charges of $63.7 million and by a change in operating assets and liabilities of $73.0 million. The non-cash charges were largely driven by $57.6 million of depreciation and amortization. The change in operating assets

Monro, Inc. Q3 2022 Form 10-Q	20

MANAGEMENT’S DISCUSSION AND ANALYSIS

and liabilities was primarily due to accounts payable and accrued liabilities, net of vendor rebate receivables, being a source of cash of $48.0 million driven by timing of payments, as well as our inventory balance being a source of cash of $23.8 million due to decreased inventory purchases to adjust to lower demand.

Cash used for investing activities

For the nine months ended December 25, 2021, cash used for investing activities was $99.5 million. This was primarily due to cash used for acquisitions and capital expenditures, including property and equipment, of $83.2 million and $17.4 million, respectively. Included in the $83.2 million used for acquisitions was $0.8 million paid to the seller of the 2021 acquisition as the lease assignment for one store location was finalized during the period.

For the nine months ended December 26, 2020, cash used for investing activities was $55.9 million. This was primarily due to cash used for capital expenditures, including property and equipment, and acquisitions of $39.2 million and $18.1 million, respectively.

Cash used for financing activities

For the nine months ended December 25, 2021, cash used for financing activities was $48.2 million which was primarily due to payment of finance lease principal and dividends of $29.1 million and $25.7 million, respectively. These uses of cash were partially offset by cash provided by borrowings on our Credit Facility, net of amounts paid during the period, of $5.0 million.

For the nine months ended December 26, 2020, cash used for financing activities was $423.8 million which was primarily due to payment of amounts previously borrowed on our Credit Facility and finance lease principal of $376.4 million and $24.3 million, respectively, as well as payment of dividends of $22.3 million.

Critical Accounting Policies and Estimates

The consolidated financial statements are prepared in accordance with GAAP. The preparation of the 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 historical experience, as appropriate, and on various other assumptions that we believe to be reasonable under the circumstances. Changes in the accounting estimates are reasonably likely to occur from period to period. Accordingly, actual results could differ significantly from the 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 operations and cash flows may be 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, self-insurance reserves and our ability to realize the tax benefits associated with deferred tax assets could be impacted. We 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.

For a description of our critical accounting policies and estimates, refer to

Part II

Item 7.

, “Critical Accounting Policies” of our Form 10-K for the fiscal year ended March 27, 2021. There have been no material changes to our critical accounting policies and estimates since our Form 10-K for the year ended March 27, 2021.

Recent Accounting Pronouncements

See “Recent Accounting Pronouncements” in Note 1 to our consolidated financial statements for a discussion of the impact of recently issued accounting standards on our consolidated financial statements as of December 25, 2021 and the expected impact on the 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,

Monro, Inc. Q3 2022 Form 10-Q	21

MANAGEMENT’S DISCUSSION AND ANALYSIS

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:

•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, inflation, 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, labor shortages, 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.

Monro, Inc. Q3 2022 Form 10-Q	22

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 December 25, 2021, excluding finance leases and financing obligations, we had no debt financing at fixed interest rates, for 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 $2.0 million based upon our debt position at December 25, 2021 and approximately $1.9 million based upon our debt position at March 27, 2021, respectively, given a change in LIBOR (or replacement index) of 100 basis points.

Debt financing had a carrying amount that approximates a fair value of $195.0 million as of December 25, 2021, as compared to a carrying amount and a fair value of $190.0 million as of March 27, 2021.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and 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 SEC pursuant to the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the 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

There were no changes in our internal control over financial reporting during the quarter ended December 25, 2021 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Monro, Inc. Q3 2022 Form 10-Q	23

LEGAL PROCEEDINGS

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

From time to time we are a party to or otherwise involved in legal proceedings arising out of the normal course of business. Legal matters are subject to inherent uncertainties and there exists the possibility that the ultimate resolution of one or more of these matters could have a material adverse impact on the Company, its financial condition and results of operations.

Monro, Inc. Q3 2022 Form 10-Q	24

EXHIBITS

Item 6. Exhibits

Exhibit Index
10.22b – Amendment No. 2 to Amended and Restated Credit Agreement, dated as of October 5, 2021 (October 2021 Form 8-K, Exhibit No. 10.22b)*
31.1 – Certification of Michael T. 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)

* Schedules and similar attachments have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company will furnish a copy of any omitted schedule or similar attachment to the Securities and Exchange Commission upon request.

Monro, Inc. Q3 2022 Form 10-Q	25

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: January 31, 2022	By:	/s/ Michael T. Broderick
		Michael T. Broderick
		President and Chief Executive Officer <br>‎(Principal Executive Officer)
DATE: January 31, 2022	By:	/s/ Brian J. D’Ambrosia
		Brian J. D’Ambrosia
		Executive Vice President – Finance, Chief Financial Officer and
		Treasurer<br><br>(Principal Financial Officer and Principal Accounting Officer)
Monro, Inc. Q3 2022 Form 10-Q	26
---	---

		Exhibit 311

Exhibit 31.1

CERTIFICATION

I, Michael T. Broderick, certify that: | 1. | I have reviewed this Quarterly Report on Form 10-Q of Monro, Inc.; | | --- | --- | | 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | | --- | --- | | 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | | --- | --- | | 4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: | | --- | --- | (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and | 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): | | --- | --- | (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: January 31, 2022

| | | | --- | --- | | | /s/ Michael T. Broderick | | | Michael T. Broderick | | | Chief Executive Officer (Principal Executive Officer) |

		Exhibit 312

Exhibit 31.2

CERTIFICATION

I, Brian J. D’Ambrosia, certify that: | 1. | I have reviewed this Quarterly Report on Form 10-Q of Monro, Inc.; | | --- | --- | | 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | | --- | --- | | 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | | --- | --- | | 4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: | | --- | --- | (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: January 31, 2022

| | | | --- | --- | | | /s/ Brian J. D’Ambrosia | | | Brian J. D’Ambrosia | | | Executive Vice President – Finance, Treasurer and | | | Chief Financial Officer (Principal Financial Officer) |

		Exhibit 321

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

(SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002)

Pursuant to, and solely for purposes of, 18 U.S.C. Section 1350 (Section 906 of the Sarbanes-Oxley Act of 2002), each of the undersigned hereby certifies in the capacity and on the date indicated below that:

1. The Quarterly Report of Monro, Inc. ("Monro") on Form 10-Q for the period ended December 25, 2021 as filed with the Securities and Exchange Commission on the date hereof (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Monro.

| | | | --- | --- | | /s/ Michael T. Broderick | Dated: January 31, 2022 | | Michael T. Broderick | | | Chief Executive Officer (Principal Executive Officer) | | | | | | /s/ Brian J. D’Ambrosia | Dated: January 31, 2022 | | Brian J. D’Ambrosia | | | Executive Vice President – Finance, Treasurer and | | | Chief Financial Officer (Principal Financial Officer) | |

10-Q

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 25, 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.

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

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

Table of Contents

TABLE OF CONTENTS

Table of Contents

CONSOLIDATED FINANCIAL STATEMENTS

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

Consolidated Balance Sheets

Table of Contents

CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Statements of Income and Comprehensive Income

Table of Contents

CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Statements of Changes in Shareholders’ Equity

Table of Contents

CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Statements of Cash Flows

Table of Contents

INDEX TO NOTES

Table of Contents

CONSOLIDATED FINANCIAL STATEMENTS

NOTES

Note 1 – Description of Business and Basis of Presentation

Description of business

Basis of presentation

Fiscal year

Recent accounting pronouncements

Supplemental information

Table of Contents

CONSOLIDATED FINANCIAL STATEMENTS

NOTES

Note 2 – Impact of the COVID-19 Pandemic

Note 3 – Acquisitions

2022

Table of Contents

CONSOLIDATED FINANCIAL STATEMENTS

NOTES

2021

Table of Contents

CONSOLIDATED FINANCIAL STATEMENTS

NOTES

Table of Contents

CONSOLIDATED FINANCIAL STATEMENTS

NOTES

Note 4 – Earnings per Common Share

Note 5 – Income Taxes

Note 6 – Fair Value

Note 7 – Cash Dividend

Table of Contents

CONSOLIDATED FINANCIAL STATEMENTS

NOTES

Note 8 – Revenues

2022

2023

Note 9 – Long-term Debt

Table of Contents

CONSOLIDATED FINANCIAL STATEMENTS

NOTES

Note 10 – Commitments and Contingencies

Commitments

Contingencies

Table of Contents

MANAGEMENT’S DISCUSSION AND ANALYSIS

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Financial Summary

Impact of COVID-19

Table of Contents

For the transition period from _ to _