Monro, Inc. (MNRO) 2017年年度報告「NASDAQ」.pdf

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1、KEEPING CUSTOMERS ON THE ROAD FOR 60 YEARS2017 Annual ReportABOUT THE COMPANY|MARKET AREAS|FINANCIAL HIGHLIGHTS|LETTER TO OUR SHAREHOLDERSMonro Muffler Brake,Inc.,headquartered in Rochester,New York,is a chain of primarily company-owned and operated stores in the United States.Our stores provide a b

2、road array of services with either an undercar repair emphasis or a tire sales and service emphasis.Life is a highway.As Monro celebrates its 60th year,we pledge to help our customers“Stay on the Road”,delivering industry-leading tire sales and undercar care for todays vehicles and the vehicles of t

3、omorrow.Brake systems Steering systems Exhaust systems Drive train systems Suspension systems Wheel alignmentsTire Sales and ServiceIn addition,the stores provide many routine maintenance services,including or involving:Oil changes Air conditioning systems(in select stores)Heating and cooling system

4、 flush and fills Transmission flush and fills Minor tune-ups Batteries,alternators and starters Belt and hose installations State inspections Scheduled maintenanceAs of March 25,2017,the Company had 1,118 Company-operated stores in Connecticut,Delaware,Florida,Georgia,Iowa,Illinois,Indiana,Kentucky,

5、Maine,Maryland,Massachusetts,Michigan,Minnesota,Missouri,New Hampshire,New Jersey,New York,North Carolina,Ohio,Pennsylvania,Rhode Island,South Carolina,Tennessee,Vermont,Virginia,West Virginia and Wisconsin.The Company was also franchisor to 113 Car-X stores as of March 25,2017.Monro Muffler Brake,I

6、nc.,a category leader in the Northeast and Great Lakes,with a growing presence in the Southeast,desires to be the dominant auto service and tire provider in the markets it serves by:Providing consumers and businesses with superior value via a quality job at a fair price with superior convenience and

7、 customer service Being a rewarding place for performance-oriented employees to work Providing superior returns to shareholdersBecause you need to trust whos working on your vehicle.STARTThe first Midas Muffler opens in Rochester19571966198419911998ACQUISITIONPeter Solomon and Donald Glickman acquir

8、e control of Monro 59 storesACQUISITIONMonro acquires 205 US Speedy Muffler King storesCHARLES AUGUSTS DECISIONBroke from the Midas organization;Monro name was bornSTOCK MARKETMonro begins trading on NASDAQunder“MNRO”143 stores ACQUISITIONMonro acquires 60 Tread Quarters,Kimmel andMr.Tire storesCELE

9、BRATINGYEARS20022004Undercar services encompass:ABOUT THE COMPANY|MARKET AREAS|FINANCIAL HIGHLIGHTS|LETTER TO OUR SHAREHOLDERSMaintaining dominance in the200520092012201520162017ACQUISITIONMonro acquires 41 Tire Warehouse storesACQUISITIONMonro acquires the Car-X franchise businessSALES$150M sales a

10、cquired;tops$1B sales STOCK MARKETMonro declares itsfirst cash dividendACQUISITIONMonro acquires 140 storesBUSINESSMonro tops 1,000 storesNortheastern United States andAS OF MARCH 25,2017:Company-Owned,Retail/Commercial Stores=1,118Tires Now Locations=5As of March 25,2017,the Company was franchisor

11、to 113 Car-X stores in the following states:Iowa,Illinois,Indiana,Kentucky,Minnesota,Missouri,Ohio,Texas and WisconsinServiceTireTiresStoresStoresNowConnecticutDelawareFloridaGeorgiaIllinoisIndianaIowaKentuckyMaineMarylandMassachusettsMichiganMinnesotaMissouriNew Hampshire New Jersey New York North

12、Carolina OhioPennsylvaniaRhode Island South Carolina Tennessee Vermont Virginia West Virginia Wisconsin Total COMPANY-OPERATED352786131451129333118 9 6536 921 4229201333118355821083910525921171311511607175345845growing in the Southeast 2017 2016%Change Sales$1,021,511$943,651 8.3%Gross Profit$396,88

13、9$385,703 2.9%Net Income$61,526$66,805(7.9%)Earnings Per Share Diluted$1.85$2.00(7.5%)Total Assets$1,185,264$999,438 18.6%Shareholders Equity$581,254$536,195 8.4%Number of Company-Operated Stores 1,118 1,029 8.6%Return on Shareholders Equity 11%13%Comparable Store Sales Growth(4.3%)(0.1%)ABOUT THE C

14、OMPANY|MARKET AREAS|FINANCIAL HIGHLIGHTS|LETTER TO OUR SHAREHOLDERSABOUT THE COMPANY|MARKET AREAS|FINANCIAL HIGHLIGHTS|LETTER TO OUR SHAREHOLDERS105010009509008508007507006506005505004504003503002502001501005002013201420152016$1,021,51120172.201.801.401.00.60.202013201420152016$1.8520171200110010009

15、00800700600500400300200100020132014201520161,1182017EARNINGS PER SHARE DILUTED(dollars per share)NUMBER OF STORES(stores open and operating at end of fiscal year)ANNUAL SALES(millions of dollars)FISCAL YEAR ENDCOMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*Among Monro Muffler Brake,Inc.,the S&P Indust

16、rials Index,and the S&P Specialty Stores Index*$100 invested on 3/31/12 in stock or index,including reinvestment of dividends.Fiscal year ending March 31.Copyright 2017 Standard&Poors,a division of S&P Global.All rights reservedPerformance GraphSet forth below is a line-graph representation comparin

17、g the cumulative shareholder return on the Companys Common Stock,on an indexed basis,against the cumulative total returns of the S&P Industrials and the S&P Retail Stores-Specialty Index for the sixty month period from March 31,2012 to March 31,2017(March 31,2012=100):$250$200$150$100$50$03/123/133/

18、143/153/163/17*$100 invested on 3/31/12 in stock or index,including reinvestment of dividends.Fiscal year ending March 31.Copyright 2017 Standard&Poors,a division of S&P Global.All rights reserved.ABOUT THE COMPANY|MARKET AREAS|FINANCIAL HIGHLIGHTS|LETTER TO OUR SHAREHOLDERSCOMPARISON OF 5 YEAR CUMU

19、LATIVE TOTAL RETURN*Among Monro Muffler Brake,Inc.,the S&P Industrials Index and the S&P Specialty Stores IndexMonro Muffler Brake,Inc.S&P IndustrialsS&P Specialty StoresCOMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*Among Monro Muffler Brake,Inc.,the S&P Industrials Index,and the S&P Specialty Stores

20、 Index*$100 invested on 3/31/12 in stock or index,including reinvestment of dividends.Fiscal year ending March 31.Copyright 2017 Standard&Poors,a division of S&P Global.All rights reserved 3/12 3/13 3/14 3/15 3/16 3/17 Monro Muffler Brake,Inc.100.00 96.86 139.98 161.57 179.13 132.13 S&P Industrials

21、100.00 114.69 145.98 158.73 163.83 193.94 S&P Specialty Stores 100.00 87.45 94.43 115.74 106.32 104.82To Monro Muffler Brake,Inc.Shareholders:Keeping Customers on the Road for 60 YearsOver the past 60 years,Monro Muffler Brake,Inc.has grown its business from one muffler shop to over 1,100 stores in

22、27 states producing over$1 billion in annual sales.This growth has been achieved through a constant focus on improving our business model,improving our customer experience and strong operational control of the business.These elements have combined to produce industry-leading operating margins(11.4%i

23、n fiscal 2017),even when reflecting pressures from a difficult year and dilution from acquisitions.Looking back over fiscal 2017,we were able to increase sales by 8%over fiscal 2016,through acquisitions and greenfield store growth,despite challenging economic conditions facing our customers,coupled

24、with unseasonable weather,which led to a decline in comparable store sales for the fiscal year of 4.3%.As we have in the past,we grew our business in this tough environment,while limiting our earnings downside through effective cost management.Importantly,during this past year we accelerated deploym

25、ent of tools to support our teams ability to drive sales and to improve customer loyalty and efficiency.Many of these changes involve using new technology in our stores,in our marketing,on our websites and in communications with our customers.These improvements cover enhanced online appointment func

26、tionality,new communication options with customers,store-level video sales aids,comprehensive online training for store staff and the introduction of the Drive Card,Monros own credit card.These enhancements are expected to have a positive impact on traffic,sales and customer and employee retention,w

27、hile continuing our progress in improving our customer experience.As our team has embraced these improvements and have increased their focus on our customer experience,we have seen an increase in the number of online reviews as well as our overall ratings.I am also pleased to say that we have identi

28、fied many more opportunities to use technology in smart ways to support our staff and business.Importantly,we expect macro trends will strengthen moving forward.Most beneficial to our business is that total vehicles in operation are expected to grow over the next five years,with vehicles in our swee

29、t spot of six years or older representing the vast majority of this growth.This is in contrast to the pressure on this group over the past several years,including a significant decline in the vehicles six to 10 years old.Our opportunities to improve our customers experience and improving industry tr

30、ends should combine to provide support for organic sales growth going forward.FY17 Acquisitions and Future GrowthAs we enter fiscal 2018,our fiscal 2017 acquisitions,which include 71 stores and approximately$150 million in annualized sales over fiscal 2016,or 16%sales growth,set a strong foundation

31、for future sales and earnings growth.Additionally,our significant greenfield expansion added 30 more stores in fiscal 2017,providing us with greater store density and sales in our core markets at very attractive costs.During fiscal 2017,we completed the acquisition of 16 Car-X stores late in the fou

32、rth quarter,13 of which are located in Illinois and three of which are in Iowa.We expect these stores to generate$15 million in annualized sales,representing a sales mix of 75%service and 25%tires.In mid-September,we acquired Clark Tire/Tires Now,which is expected to add approximately$85 million in

33、annualized sales,representing a sales mix of approximately 50%retail and commercial and 50%wholesale.And lastly,the acquisition of McGee Auto Service and Tires,completed in May of 2016,is expected to deliver$50 million in annualized sales,representing a sales mix of 40%service and 60%tires.These fis

34、cal 2017 acquisitions are strategically significant because they:1)Expand our retail and commercial business by 71 stores and$105 million in sales in the key markets of Florida,North Carolina and Illinois,while also adding$45 million of wholesale tire sales,which combined,increases both our scale an

35、d market share.2)Increase our tire unit purchases by approximately 25%,expanding our tire assortment and strengthening our purchasing power,which is particularly important as we enter the first year of tire cost increases in several years and we look to move tire purchasing volume to manufacturers w

36、ith the most attractive costs.3)Allow us to directly distribute tires to approximately 100 of our stores or roughly 10%of our chain,strengthening our position as an independent dealer and reducing our reliance on distributors,thereby allowing us to maximize profitability,while creating new organic g

37、rowth opportunities in the wholesale locations.And lastly,4)Expand our acquisition opportunities to include competitors with integrated retail,commercial and wholesale locations.ABOUT THE COMPANY|MARKET AREAS|FINANCIAL HIGHLIGHTS|LETTER TO OUR SHAREHOLDERSABOUT THE COMPANY|MARKET AREAS|FINANCIAL HIG

38、HLIGHTS|LETTER TO OUR SHAREHOLDERSWe believe these acquisitions will continue to strengthen our competitiveness in the market,while also providing another valuable avenue of growth over the next several years.As we have stated in the past,our long term acquisition growth opportunity is underpinned b

39、y independent dealers getting older and not having an internal succession option.That said,we continue to see an elevated level of acquisition opportunities in the marketplace as a result of the difficult operating environment.We have more than 10 non-disclosure agreements signed,each of them repres

40、enting between five and 40 stores within our existing markets.We expect to continue to capitalize on these attractive opportunities and aggressively grow and expand our business.Were also continuing our greenfield expansion with a goal of opening between 20 to 40 stores per year.In fiscal 2017,we op

41、ened 30 greenfield locations,and we expect to open a similar number in fiscal 2018,including approximately seven locations in the first quarter.As a reminder,greenfield stores for us include new construction as well as the acquisition of one to four store operations.These locations are expected to a

42、verage approximately$1 million in annual sales per location,and require roughly half the investment per store as compared to a larger acquisition.This should result in an even higher return on investment over time.Because of our balance sheet strength and our strong cash flow,in addition to generati

43、ng significant store growth through acquisitions and greenfield openings,we have increased our cash dividend payment 12 times during the past 12 years since a cash dividend was first issued.New MilestonesWe are very pleased with having reached another major milestone in our Companys history.In fisca

44、l 2016,we exceeded 1,000 stores and in fiscal 2017,we officially crossed the billion dollar annual sales mark by reporting sales of$1,021,500,000.These are significant achievements for a business that began back in 1957 with one muffler shop and our founder,Charles Augusts,determination to provide m

45、ore value and convenience to his customers.This summer,we celebrate our Companys 60th anniversary.With that in mind,I would like to recognize yet another milestone taking place in August,which is the change of our corporate name and logo,from Monro Muffler Brake,Inc.to the simpler“Monro,Inc.”.Our Co

46、mpany has changed significantly over the years,driven both by the expansion of our services into maintenance services and the opportunity to expand the business through acquisitions,particularly of stores that sell tires in addition to auto repair and maintenance services.This corporate name change

47、will not affect the brand names that we operate under and that our customers know for trust and confidence in maintaining their vehicles.Our new corporate name and logo honors our roots,while recognizing that our Company is so much more than mufflers and brakes.We are a national leader in tire sales

48、,tire service,maintenance and under car care service.I have been honored to lead our great company as President and Chief Executive Officer for the past five years and to have built a team of leaders that can continue the profitable growth of Monro for years to come under the leadership of Brett Pon

49、ton,who was selected to be my successor by our Board of Directors.Brett has more than 20 years of senior management experience in the auto and tire service industry,including most recently holding the CEO position at American Driveline Systems,the parent company of AAMCO Transmissions&Total Car Care

50、.I will be working with Brett over the coming months to ensure a smooth transition into his position.I am proud of our accomplishments over my 15 year tenure at Monro and the Companys position as a leading and rapidly expanding auto care and tire business.Since 2002,when I joined Monro,the Company h

51、as grown from 550 stores and sales of$250 million to more than 1,100 stores and sales of$1 billion this past year.Additionally,during my tenure with the Company,our market capitalization has grown from$170 million to over$1.3 billion.Overall,after its first 60 years in business,Monro is very well po

52、sitioned to continue to grow in an industry that is likely to favor larger chains;providing attractive returns for investors and significant career opportunities for our employees.I want to thank all of you-our shareholders and employees for your support of Monro and me.Best Regards,John Van HeelPre

53、sident and Chief Executive OfficerABOUT THE COMPANY|MARKET AREAS|FINANCIAL HIGHLIGHTS|LETTER TO OUR SHAREHOLDERSPARTIFORM10-KUNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington,D.C.20549FORM 10-K(MARK ONE)ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THESECURITIES EXCHANGE ACT OF 1934For Fis

54、cal Year Ended March 25,2017ORTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THESECURITIES EXCHANGE ACT OF 1934Commission File Number 0-19357MONRO MUFFLER BRAKE,INC.(Exact name of registrant as specified in its charter)New York16-0838627(State of incorporation)(I.R.S.Employer Identification No.

55、)200 Holleder Parkway,Rochester,New York14615(Address of principal executive offices)(Zip code)Registrants telephone number,including area code:(585)647-6400Securities registered pursuant to Section 12(b)of the Act:Common Stock,par value$.01 per shareName of each exchange on which registered:The NAS

56、DAQ Stock MarketSecurities registered pursuant to Section 12(g)of the Act:NONE(Title of Class)Indicate by check mark if the registrant is a well-known seasoned issuer,as defined in Rule 405 of the Securities Act.Yes No Indicate by check mark if the registrant is not required to file reports pursuant

57、 to Section 13 or Section 15(d)of the Act.Yes No Indicate by check mark if the registrant(1)has filed all reports required to be filed by Section 13 or 15(d)of the Securities Exchange Act of1934 during the preceding 12 months(or for such shorter period that the registrant was required to file such r

58、eports),and(2)has been subjectto such filing requirements for the past 90 days.Yes No Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site,if any,every Interactive DataFile required to be submitted and posted pursuant to Rule 405 of Regulati

59、on S-T during the preceding 12 months(or for such shorter periodthat the registrant was required to submit and post such files).Yes No Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein,and will not becontained,to the best of regi

60、strants knowledge,in definitive proxy or information statements incorporated by reference in Part III of thisForm 10-K or any amendment to this Form 10-K.Indicate by check mark whether the registrant is a large accelerated filer,an accelerated filer,a non-accelerated filer,a smaller reportingcompany

61、 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 Non-Accelerated Filer Smaller Reporting Company Emerging Growth Compan

62、y(Do not check if a smaller reporting company)Indicate by check mark whether the registrant is a shell company(as defined in Rule 12b-2 of the Exchange Act).Yes No The aggregate market value of the voting stock held by non-affiliates of the registrant,computed by reference to the closing price as of

63、 thelast business day of the registrants most recently completed second fiscal quarter,September 24,2016,was approximately$1,918,400,000.As of May 5,2017,32,692,965 shares of the registrants Common Stock,par value$.01 per share,were outstanding.DOCUMENTS INCORPORATED BY REFERENCE:Portions of the reg

64、istrants definitive proxy statement(to be filed pursuant to Regulation 14A)for the 2017 Annual Meeting of Shareholders(the“Proxy Statement”)are incorporated by reference into Part III hereof.1024527_Monro Annual Report_BWText_2017.qxp_6.26.14 7/14/17 12:17 PM Page 1Monro is a chain of 1,118 Company-

65、operated stores(as of March 25,2017),114 franchised locations,fivewholesale locations,two retread facilities and 14 dealer-operated stores providing automotive undercarrepair and tire sales and services in the United States.At March 25,2017,Monro operated Company storesin 27 states,including Connect

66、icut,Delaware,Florida,Georgia,Iowa,Illinois,Indiana,Kentucky,Maine,Maryland,Massachusetts,Michigan,Minnesota,Missouri,New Hampshire,New Jersey,New York,NorthCarolina,Ohio,Pennsylvania,Rhode Island,South Carolina,Tennessee,Vermont,Virginia,West Virginiaand Wisconsin,primarily under the names“Monro Mu

67、ffler Brake&Service”,“Tread Quarters DiscountTire”,“Mr.Tire”,“Autotire Car Care Center”,“Tire Warehouse”,“Tire Barn Warehouse”,“Ken TowerysTire&Auto Care”,“The Tire Choice”,“Car-X”and“McGee Tire”.Company-operated stores typically aresituated in high-visibility locations in suburban areas and small t

68、owns,as well as in major metropolitanareas.Company-operated stores serviced approximately 5.9 million vehicles in fiscal 2017.(Referencesherein to fiscal years are to the Companys year ended fiscal March e.g.,references to“fiscal 2017”are tothe Companys fiscal year ended March 25,2017.)The predecess

69、or to the Company was founded by Charles J.August in 1957 as a Midas Muffler franchise inRochester,New York,specializing in mufflers and exhaust systems.The Company was incorporated in theState of New York in 1959.In 1966,we discontinued our affiliation with Midas Muffler,and began todiversify into

70、a full line of undercar repair services.An investor group led by Peter J.Solomon and DonaldGlickman purchased a controlling interest in the Company in July 1984.At that time,Monro operated 59stores,located primarily in upstate New York,with approximately$21 million in sales in fiscal 1984.Since1984,

71、we have continued our growth and have expanded our marketing area to include 26 additional states.In December 1998,Monro appointed Robert G.Gross as President and Chief Executive Officer,who beganfull-time responsibilities on January 1,1999.Effective October 1,2012,Mr.Gross assumed the role ofExecut

72、ive Chairman and John W.Van Heel was appointed Chief Executive Officer.The Companys principal executive offices are located at 200 Holleder Parkway,Rochester,New York14615,and our telephone number is(585)647-6400.PART IFORWARD-LOOKING STATEMENTSThe statements contained in this Annual Report on Form

73、10-K that are not historical facts,including(without limitation)statements made in this Item and in“Item 1 Business”,may contain statements offuture expectations and other forward-looking statements made pursuant to the Safe Harbor provisions ofthe Private Securities Litigation Reform Act of 1995.Wh

74、en used in this Annual Report on Form 10-K,thewords“anticipates”,“believes”,“contemplates”,“expects”,“see”,“could”,“may”,“estimate”,“appear”,“intend”,“plans”and variations thereof and similar expressions,are intended to identify forward-lookingstatements.Forward-looking statements are subject to ris

75、ks,uncertainties and other important factors thatcould cause actual results to differ materially from those expressed.These factors include,but are notnecessarily limited to,product demand,dependence on and competition within the primary markets inwhich Monro Muffler Brake,Inc.s(“Monro”,the“Company”

76、,“we”,“us”,or“our”)stores are located,theneed for and costs associated with store renovations and other capital expenditures,the effect of economicconditions,seasonality,the impact of weather conditions,the impact of competitive services and pricing,parts supply restraints or difficulties,our depend

77、ence on vendors,including foreign vendors,industryregulation,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,disruptionor unauthorized access to our comp

78、uter systems,risks relating to protection of customer and employeepersonal data,business interruptions,risks relating to litigation,risks relating to integration of acquiredbusinesses,including goodwill impairment and the risks set forth in“Item 1A.Risk Factors”.Except asrequired by law,we do not un

79、dertake to update any forward-looking statement that may be made from timeto time by us or on our behalf.1PARTIPARTIItem 1.Business GENERAL1024527_Monro Annual Report_BWText_2017.qxp_6.26.14 7/14/17 12:17 PM Page 2Monro provides a broad range of services on passenger cars,light trucks and vans for b

80、rakes;mufflers andexhaust systems;and steering,drive train,suspension and wheel alignment.Monro also provides otherproducts and services,including tires and routine maintenance services,including state inspections.Monrospecializes in the repair and replacement of parts which must be periodically rep

81、laced as they wear out.Normal wear on these parts generally is not covered by new car warranties.Monro typically does notperform under-the-hood repair services except for oil change services,various“flush and fill”services andsome minor tune-up services.All of the Company-operated stores,except Tire

82、 Warehouse and Tire Barn Warehouse stores,provide theservices described above.Tire Warehouse and Tire Barn Warehouse stores only sell tires and tire relatedservices and alignments.However,a growing number of our Company-operated stores are more specializedin tire replacement and service and,accordin

83、gly,have a higher mix of sales in the tire category.TheseCompany-operated stores are described below as tire stores,whereas the remaining stores are described asservice stores.(See additional discussion under“Operating Strategy”.)Included in the number ofCompany-operated stores described as tire sto

84、res are certain locations that also service commercialcustomers.Our locations that serve commercial customers conduct tire and automotive repair activities thatare similar to our retail locations,other than with respect to the sales mix resulting from the sale ofcommercial tires.At March 25,2017,the

85、re were 534 stores designated as service stores and 584 as tirestores.During fiscal 2017,we acquired four wholesale locations and one retread facility located in North Carolina,South Carolina and Tennessee in connection with the Clark Tire&Auto,Inc.acquisition that operateunder the Tires Now name.Ad

86、ditionally,we acquired one retread facility located in Florida in connectionwith the McGee Tire Stores,Inc.acquisition that operates under the McGee Tire name.(See additionaldiscussion under Note 2 to the Companys Consolidated Financial Statements.)As of March 25,2017,Monro had five wholesale locati

87、ons and two retread facilities.The wholesalelocations,in most cases,sell tires to customers for resale,although these tire sales do not include installationor other tire related services.The retread facilities re-manufacture tires through the replacement of tread onworn tires that are later sold to

88、customers.Our sales mix for fiscal 2017,2016 and 2015 was as follows:Service StoresTire StoresTotal CompanyFY17FY16FY15FY17FY16FY15FY17FY16FY15Brakes.23%25%25%9%10%10%13%15%15%Exhaust.899111233Steering.11111189991010Tires.222019595657494544Maintenance.363536232423272728Total.100%100%100%100%100%100%

89、100%100%100%The Company has two wholly-owned subsidiaries,Monro Service Corporation and Car-X,LLC.Monro Service Corporation,a Delaware corporation qualified to do business in the states of Kentucky,Maryland,New Hampshire,New York,North Carolina,South Carolina,Tennessee and Virginia,holds allassets,r

90、ights,responsibilities and liabilities associated with our warehousing,purchasing,advertising,accounting,office services,payroll,cash management and certain other operations that are performed inthe aforementioned states.We believe that this structure has enhanced operational efficiency and provides

91、cost savings.On April 25,2015,we acquired the Car-X brand,as well as the franchise rights for 146 auto service centersfrom Car-X Associates Corp.(See additional discussion under Note 2 to the Companys ConsolidatedFinancial Statements.)Car-X,LLC,a Delaware limited liability company,operates as the fr

92、anchisorthrough a standard royalty agreement,while Car-X remains a separate and independent brand and businesswith franchise operations based in Illinois.2,Service StoresTire StoresTotal CompanyFY17FY16FY15FY17FY16FY15FY17FY16FY15Brakes.23%25%25%9%10%10%13%15%15%Exhaust.899111233Steering.11111189991

93、010Tires.222019595657494544Maintenance.363536232423272728Total.100%100%100%100%100%100%100%100%100%1024527_Monro Annual Report_BWText_2017.qxp_6.26.14 7/14/17 12:17 PM Page 33As of March 25,2017,Monro had 113 Car-X franchised locations.Monros operations are organized and managed in one operating seg

94、ment.The internal managementfinancial reporting that is the basis for evaluation in order to assess performance and allocate resources byour chief operating decision maker consists of consolidated data that includes the results of our retail,commercial and wholesale locations.As such,our one operati

95、ng segment reflects how our operations aremanaged,how resources are allocated,how operating performance is evaluated by senior management andthe structure of our internal financial reporting.INDUSTRY OVERVIEWDemand for automotive repair services,including undercar repair and tire sales and services

96、is correlated tothe overall number of vehicles in operation and the increasing average age of vehicles,and to a lesser extent,with increased average miles driven.The number of vehicles in operation is expected to continue to growover the next several years,with vehicles six years or older representi

97、ng the vast majority of this growth.This is in contrast to the past several years in which the number of vehicles six to 10 years old declinedsignificantly in response to the lower volume of new vehicles sold during 2008 to 2012.Additionally,vehicles continue to increase in complexity,making it more

98、 difficult for a vehicle owner to performdo-it-yourself repairs.At the same time as demand for automotive repair services has grown,the number of general repair outletshas decreased,principally because fewer gas stations now perform repairs.We believe that these factorspresent opportunities for incr

99、eased sales by the Company,even though the number of specialized repairoutlets(such as those operated by Monro and our direct competitors)has increased to meet growingdemand.EXPANSION STRATEGYMonro has experienced significant growth in recent years through acquisitions and,to a lesser extent,theopen

100、ing of new construction stores.Management believes that the continued growth in sales and profits ofthe Company is dependent,in large part,upon our continued ability to open/acquire and operate newstores on a profitable basis.Overall profitability of the Company may not meet expectations if acquired

101、 ornew stores do not attain expected profitability.Monro believes that there are significant expansion opportunities in new as well as existing market areas,which may result from a combination of constructing stores on vacant land and acquiring existing storelocations as well as purchasing existing

102、businesses.We believe that,as the industry consolidates due to theincreasingly complex nature of automotive repair,the expanded capital requirements for state-of-the-artequipment and aging of existing shop owners,there will be increasing opportunities for acquisitions ofexisting businesses or store

103、structures.In that regard,we have completed many acquisitions,including:INDUSTRY OVERVIEW EXPANSION STRATEGYDate of AcquisitionSellerNumber ofStoresAcquired(a)(b)Locationof StoresCurrent Brand(f)March 2004Atlantic Automotive Corp.26MD,VAMr.TireOctober 2004Rice Tire,Inc.5MDMr.Tire/Tread QuartersMarch

104、 2005Henderson Holdings,Inc.10MDMr.TireApril 2006ProCare Automotive ServiceSolutions LLC75OH,PAMonro/Mr.TireJuly 2007Valley Forge Tire&Auto Centers11PAMr.TireJuly 2007Craven Tire&Auto8VAMr.TireJanuary 2008Broad Elm Group7NYMr.TireJune 2009Am-Pac Tire Distributors26IL,MOAutotireOctober 2009Tire Wareh

105、ouse Central,Inc.41(c)ME,MA,NH,RI,VTTire Warehouse1024527_Monro Annual Report_BWText_2017.qxp_6.26.14 7/14/17 12:17 PM Page 4(a)Table includes only acquisitions of five or more Company-operated stores.(b)Forty stores were subsequently closed due to redundancies or failure to achieve an acceptable le

106、vel ofprofitability.See additional discussion under“Store Additions and Closings”.(c)Six franchised locations were initially acquired,and five have subsequently been purchased by Monroand converted to Company-operated stores.(d)Two heavy truck tire and truck repair stores,two wholesale operations an

107、d a retread facility were alsoacquired and subsequently sold.(e)One wholesale operation was also acquired and is operating under the Tires Now name.(f)In this table,“Monro”refers to the brand of“Monro Brake Tire”or“Monro Muffler Brake&Service”,not the corporation.(g)One acquired store was never open

108、ed.(h)One retread facility was also acquired and is operating under the McGee Tire name.(i)Four wholesale locations and one retread facility were also acquired and are operating under the TiresNow name.As of March 25,2017,Monro had 1,118 Company-operated stores,114 franchised locations,five wholesal

109、elocations,two retread facilities and 14 dealer locations located in 27 states.The following table shows thegrowth in the number of Company-operated stores over the last five fiscal years:4Date of AcquisitionSellerNumber ofStoresAcquired(a)(b)Locationof StoresCurrent Brand(f)March 2010Import Export

110、Tire,Co.5PAMr.TireJune 2011Vespia Tire Centers,Inc.24NJ,PAMr.TireOctober 2011Terrys Tire Town7PA,OHMr.TireApril 2012Kramer Tire Co.20(d)VAKramer Tire/Tread QuartersJune 2012Colony Tire Corporation18NCMr.Tire/Tread QuartersAugust 2012Tuffy Associates Corp.17SC,WIMonro/Tread QuartersOctober 2012Chesle

111、yCo,Inc.5NYMonro/Mr.TireNovember 2012Everybodys Oil Corporation31IL,IN,TNTire Barn WarehouseDecember 2012Ken Towerys Auto Care ofKentucky,Inc./Ken Towerys AutoCare of Indiana,Inc.27(e)IN,KYKen Towery Tire&AutoCareDecember 2012Tire King of Durham,Inc.9NCMr.TireDecember 2012Enger Auto Service,Inc.12OH

112、Mr.TireAugust 2013Currys Automotive Group10MD,VACurrys/Mr.TireNovember 2013Carl King Tire Co.,Inc.6DE,MDMr.TireJune 2014Kan Rock Tire Company,Inc.9(g)MIMonroJune 2014Lentz U.S.A.Service Centers,Inc.10(g)MIMonroAugust 2014Hennelly Tire&Auto,Inc.35FLThe Tire ChoiceSeptember 2014Wood&Fullerton Stores,L

113、LC9GAMr.TireDecember 2014Gold Coast Tire&Auto Centers9FLThe Tire ChoiceMarch 2015Martino Tire Stores8FLThe Tire ChoiceAugust 2015Kost Tire Distributors,Inc.27NY,PAMr.TireMay 2016McGee Tire Stores,Inc.29(h)FLMcGee TireSeptember 2016Clark Tire&Auto,Inc.26(i)NCMr.TireFebruary 2017Nona,Inc.16IL,IACar-X1

114、024527_Monro Annual Report_BWText_2017.qxp_6.26.14 7/14/17 12:17 PM Page 55STORE ADDITIONS AND CLOSINGS(a)Year Ended Fiscal March20172016201520142013Stores open at beginning of year.1,029999953937803Stores added during year.105(c)52(d)92(e)29(f)144(g)Stores closed during year(b).(16)(22)(46)(13)(10)

115、Stores open at end of year.1,1181,029999953937Service(including BJs)stores.534515509532540Tire stores.584514490421397(a)Table includes only Company-operated stores.No franchised,wholesale,retread or dealer locations areincluded.(b)Generally,stores were closed because they failed to achieve or mainta

116、in an acceptable level ofprofitability or because a new Company Store was opened in the same market at a more favorablelocation.Additionally,in fiscal 2015,we closed the 34 remaining stores operated in BJs WholesaleClubs.(c)Includes 90 stores acquired in the fiscal 2017 Acquisitions.(d)Includes 40 s

117、tores acquired in the fiscal 2016 Acquisitions.(e)Includes 85 stores acquired in the fiscal 2015 Acquisitions.(Excludes the Kan Rock and Lentz storesthat were never opened.)(f)Includes 24 stores acquired in the fiscal 2014 Acquisitions.(g)Includes 140 stores acquired in the fiscal 2013 Acquisitions.

118、We plan to add approximately 20 to 40 new greenfield stores in fiscal 2018 and to pursue appropriateacquisition candidates.Greenfield stores include new construction as well as the acquisition of one to fourstore operations.Key factors in market and site selection for selecting new greenfield store

119、locations include population,demographic characteristics,vehicle population and the intensity of competition.Monro attempts to clusterstores in market areas in order to achieve economies of scale in advertising,supervision and distributioncosts.All new greenfield sites presently under consideration

120、are within Monros established market areas.As a result of extensive analysis of our historical and projected store opening strategy,we have establishedmajor market profiles,as defined by market awareness:mature,existing and new markets.Over the nextseveral years,we expect to build or acquire a great

121、er percentage of stores in mature and existing markets inorder to capitalize on our market presence and consumer awareness.During fiscal 2017,59 of the storesadded(including acquired stores)were located in existing markets and 46 stores were added in new markets.We believe that management and operat

122、ing improvements implemented over the last several fiscal yearshave enhanced our ability to sustain our growth.Monro has a chain-wide computerized inventory controland electronic point-of-sale(“POS”)management information system,which has increased managementsability to monitor operations as the num

123、ber of stores has grown.We have customized the POS system to specific service and tire store requirements and deploy theappropriate version in each type of store.Being Windows-based,the system has simplified training of newemployees.Additionally,the system includes the following:Electronic mail and

124、electronic cataloging,which allows store managers to electronically researchthe specific parts needed for the make and model of the car being serviced;Electronic repair manuals that allow for instant access to a single source of accurate,up-to-date,original equipment manufacturer-direct diagnosis,re

125、pair and maintenance information;STORE ADDITIONS AND CLOSINGS(a)Year Ended Fiscal March20172016201520142013Stores open at beginning of year.1,029999953937803Stores added during year.105(c)52(d)92(e)29(f)144(g)Stores closed during year(b).(16)(22)(46)(13)(10)Stores open at end of year.1,1181,02999995

126、3937Service(including BJs)stores.534515509532540Tire stores.5845144904213971024527_Monro Annual Report_BWText_2017.qxp_6.26.14 7/14/17 12:17 PM Page 6Software which contains data that mirrors the scheduled maintenance requirements in vehicleowners manuals,specifically by make,model,year and mileage

127、for every major automobile brand.Management believes that this software facilitates the presentation and sale of scheduledmaintenance services to customers;Streamlining of estimating and other processes;Graphic catalogs;A feature which facilitates tire searches by size;Direct mail support;Appointmen

128、t scheduling;Customer service history;A thermometer graphic which guides store managers on the profitability of each job;The ability to view inventory of up to the closest 14 stores or warehouse;andExpanded monitoring of price changes.This requires more specificity on the reason for adiscount,which

129、management believes helps to control discounting.Enhancements will continue to be made to the POS system annually in an effort to increase efficiency,improve the quality and timeliness of store reporting and enable us to better serve our customers.The financing to build a new greenfield service stor

130、e location may be accomplished in one of three ways:astore lease for the land and building(in which case,land and building costs will be financed primarily by thelessor),a land lease with the building constructed by Monro(with building costs paid by Monro),or a landpurchase with the building constru

131、cted by Monro.In all three cases,for service stores,each new store alsowill require approximately$225,000 for equipment(including a POS system and a truck)and approximately$55,000 in inventory.Because we generally do not extend credit to most customers,stores generate almostno receivables and a new

132、stores actual net working capital investment is nominal.Total capital required tobuild a new greenfield service store ranges,on average,from$360,000 to$990,000 depending on thelocation and which of the three financing methods is used.In general,tire stores are larger and have moreservice bays than M

133、onros traditional service stores and,as a result,construction costs are at the high endof the range of new store construction costs.Total capital required to build a new greenfield tire(land andbuilding leased)location costs,on average,approximately$600,000,including$250,000 for equipment and$150,00

134、0 for inventory.In instances where Monro acquires an existing business,it may pay additionalamounts for intangible assets such as customer lists,covenants not-to-compete,trade names and goodwill,but generally will pay less per bay for equipment and real property.At March 25,2017,we leased the land a

135、nd/or the building at approximately 70%of our store locations andowned the land and building at the remaining locations.Monros policy is to situate new stores in the bestlocations,without regard to the form of ownership required to develop the locations.New service and tire stores,(excluding acquire

136、d stores),have average sales of approximately$400,000 and$1,050,000,respectively,in their first 12 months of operation,or$67,000 and$150,000,respectively,perbay.STORE OPERATIONSStore FormatThe typical format for a Monro store is a free-standing building consisting of a sales area,fully-equippedservi

137、ce bays and a parts/tires storage area.Most service bays are equipped with above-ground electricvehicle lifts.Generally,each store is located within 25 miles of a“key”store which carries approximatelydouble the inventory of a typical store and serves as a mini-distribution point for slower moving in

138、ventoryfor other stores in its area.Individual store sizes,number of bays and stocking levels vary greatly,even6 STORE OPERATIONS1024527_Monro Annual Report_BWText_2017.qxp_6.26.14 7/14/17 12:17 PM Page 7within the service and tire store groups,and are dependent primarily on the availability of suit

139、able storelocations,population,demographics and intensity of competition among other factors.(See additionaldiscussion under“Store Additions and Closings”).A summary of average store data for service and tirestores is presented below:AverageNumberofBaysAverageSquareFeetAverageInventoryAverageNumbero

140、f StockKeepingUnits(SKUs)Service stores(excluding ProCare).64,500$100,0002,300Tire stores(excluding Tire Warehouse and TireBarn Warehouse stores).86,500$127,0001,300Data for the acquired ProCare service stores has been excluded because the stores stock rooms are smallerthan those in typical service

141、stores,and therefore,they generally carry approximately half the amount ofinventory of a typical service store.Data for the Tire Warehouse and Tire Barn Warehouse stores has been excluded because these locationsprimarily install new tires and wheels and many perform alignments.Additionally,most Tire

142、 Warehousestores have one indoor service bay to perform alignments.The store building houses a waiting room,storagearea and an area to mount and balance tires on the cars wheels once the wheels and tires have beenremoved from the car.Removal of old tires and wheels from,and installation of new tires

143、 and wheels on,customers cars are performed outdoors under a carport.The average inventory carried by the TireWarehouse and Tire Barn Warehouse stores is$231,000 per store.Stores generally are situated in high-visibility locations in suburban areas,major metropolitan areas orsmall towns and offer ea

144、sy customer access.The typical store is open from 7:30 a.m.to 7:00 p.m.onMonday through Friday and from 7:30 a.m.to 6:00 p.m.on Saturday.A majority of store locations are alsoopen Sundays from 9:00 a.m.to 5:00 p.m.Inventory Control and Management Information SystemAll Company Stores communicate dail

145、y with the central office and warehouse by computerized inventorycontrol and electronic POS management information systems,which enable us to collect sales andoperational data on a daily basis,to adjust store pricing to reflect local conditions and to control inventoryon a near“real-time”basis.Addit

146、ionally,each store has access,through the POS system,to the inventorycarried by up to the 14 stores or warehouse nearest to it.Management believes that this feature improvescustomer satisfaction and store productivity by reducing the time required to locate out-of-stock parts andtires.It also improv

147、es profitability because it reduces the amount of inventory which must be purchasedoutside Monro from local vendors.Quality Control and WarrantiesTo maintain quality control,we conduct audits to rate our employees telephone sales manner and theaccuracy of pricing information given.We have a customer

148、 survey program to monitor customer attitudes toward service quality,friendliness,speed of service,and several other factors for each store.Customer concerns are addressed by customerservice and field management personnel.Monro uses a“Double Check for Accuracy Program”as part of our routine store pr

149、ocedures.This qualityassurance program requires that a technician and supervisory-level employee independently inspect acustomers vehicle,diagnose and document the necessary repairs,and agree on an estimate beforepresenting it to a customer.This process is formally documented on the written estimate

150、 by store personnel.We are an active member of the Automotive Maintenance&Repair Association(“AMRA”).AMRA is anorganization of automotive retailers,wholesalers and manufacturers which was established as part of anindustry-wide effort to address the ethics and business practices of companies in the a

151、utomotive repairindustry through the Motorist Assurance Program(“MAP”).Participating companies commit to7AverageNumberofBaysAverageSquareFeetAverageInventoryAverageNumberof StockKeepingUnits(SKUs)Service stores(excluding ProCare).64,500$100,0002,300Tire stores(excluding Tire Warehouse and TireBarn W

152、arehouse stores).86,500$127,0001,3001024527_Monro Annual Report_BWText_2017.qxp_6.26.14 7/14/17 12:17 PM Page 8improving consumer confidence and trust in the automotive repair industry by adopting“UniformInspection Communication Standards”(“UICS”)established by MAP.These“UICS”are available in oursto

153、res and serve to provide consistent recommendations to customers in the diagnosis and repair of avehicle.We offer limited warranties on substantially all of the products and services that we provide.We believe thatthese warranties are competitive with industry practices and serve as a marketing tool

154、 to increase repeatbusiness at our stores.Store Personnel and TrainingMonro supervises store operations primarily through our Divisional Vice Presidents who oversee ZoneManagers who,in turn,oversee Market Managers.The typical service store is staffed by a Store Managerand four to six technicians,one

155、 of whom serves as the Assistant Manager.The typical tire store,except TireWarehouse and Tire Barn stores,is staffed by a Store Manager,an Assistant Manager and/or ServiceManager,and four to eight technicians.Larger volume service and tire stores may also have one or two salespeople.The higher staff

156、ing level at many tire stores is necessary to support their higher sales volume.TireWarehouse and Tire Barn stores are generally staffed by a Store Manager and two to four technicians,oneof whom serves as the Assistant Manager.All Store Managers receive a base salary and Assistant Managersreceive ei

157、ther hourly or salaried compensation.In addition,Store Managers and Assistant Managers mayreceive other compensation based on their stores customer relations,gross profit,labor cost controls,safety,sales volume and other factors via a monthly or quarterly bonus based on performance in these areas.We

158、 believe that the ability to recruit and retain qualified technicians is an important competitive factor inthe automotive repair industry,which has historically experienced a high turnover rate.We make aconcerted effort to recruit individuals who will have a long-term commitment to the Company and o

159、ffer anhourly rate structure and additional compensation based on productivity;a competitive benefits packageincluding health,dental,life and disability insurance;a 401(k)/profit-sharing plan;as well as theopportunity to advance within the Company.Many of our Store Managers and Market Managers start

160、edwith the Company as technicians.Many of our new technicians join the Company in their early twenties as trainees or apprentices.As theyprogress,many are promoted to technician and eventually master technician,the latter requiringAutomotive Service Excellence(“ASE”)certification in eight different

161、categories.We will reimbursetechnicians for the cost of ASE certification registration fees and test fees and encourage all technicians tobecome certified by providing a higher hourly wage rate following their certification.We also offer freeonline ASE certification preparation courses,as well as a

162、tool purchase program through which traineetechnicians can acquire their own set of tools.Our training program provides multiple training sessions to both Store Managers and technicians in eachstore,each year.Management training courses are developed and delivered by our dedicated training departmen

163、t andoperations management,and are supplemented with live and on-line vendor training courses.Managementtraining covers safety,customer service,sales,human resources(counseling,recruiting,interviewing,etc.),leadership,scheduling,financial and operational areas,and is delivered on a regular basis.We

164、believe thatinvolving Operations management in the development and delivery of these sessions results in more relevantand actionable training for Store Managers,and helps to improve overall performance and staff retention.Our training department develops and coordinates technical training courses on

165、 critical areas of automotiverepair to Monro technicians(e.g.Antilock braking systems(“ABS”)brake repair,drivability,tire pressuremonitoring system(“TPMS”),etc.)and also conducts required technical training to maintain compliancewith state inspection licenses,where applicable,and AMRA/MAP accreditat

166、ion.Additionally,our trainingdepartment holds periodic field technical clinics for store personnel and coordinates technician attendanceat technical clinics offered by our vendors.We have electronic repair manuals installed in all of our stores fordaily reference.We also issue technical bulletins to

167、 all stores on innovative or complex repair processes,andmaintain a centralized database for technical repair problems.In addition,Monro has established atelephone technical help line to provide assistance to store personnel in resolving problems encountered81024527_Monro Annual Report_BWText_2017.q

168、xp_6.26.14 7/14/17 12:17 PM Page 99while diagnosing and repairing vehicles.The help line is available during all hours of store operation.InMarch 2017,we introduced a comprehensive set of on-line courses in automotive repair and tire service forour technicians to participate in.These courses are off

169、ered at no cost to our employees.Monro also maintains an employee website that contains many resources for both managers andtechnicians to reference including Human Resource information and forms.Additionally,there is aFacilities section containing important environmental and equipment information,a

170、s well as a Trainingsection that contains training programs,including on-line training videos,and documents for bothmanagers and technicians.OPERATING STRATEGYMonros operating strategy is to provide our customers with a wide range of dependable,high-qualityautomotive services at a competitive price

171、by emphasizing the following key elements.Products and ServicesThe typical store provides a full range of undercar repair services for brakes,steering,mufflers and exhaustsystems,drive train,suspension and wheel alignment,as well as tire replacement and service.These servicesapply to all makes and m

172、odels of domestic and foreign cars,light trucks and vans.As a percentage of sales,the service stores provide significantly more brake and exhaust services than tire stores,and tire storesprovide substantially more tire replacement and related services than service stores.Stores generally provide man

173、y of the routine maintenance services(except engine diagnostic),whichautomobile manufacturers suggest or require in the vehicle owners manuals,and which fulfillmanufacturers requirements for new car warranty compliance.We offer“Scheduled Maintenance”servicesin our stores whereby the aforementioned s

174、ervices are packaged and offered to consumers based upon theyear,make,model and mileage of each specific vehicle.Management believes that we are able to offer thisservice in a more convenient and cost competitive fashion than auto dealers can provide.Included in maintenance services are oil change s

175、ervices,heating and cooling system“flush and fill”service,belt installation,fuel system service and a transmission“flush and fill”service.Additionally,most storesreplace and service batteries,starters and alternators.Stores in Georgia,Illinois,Maine,Maryland,Massachusetts,Missouri,New Hampshire,New

176、York,North Carolina,Pennsylvania,Rhode Island,Vermont,Virginia,West Virginia and Wisconsin perform annual state inspections.Approximately 59%ofour stores also offer air conditioning services.The format of the Tire Warehouse and Tire Barn Warehouse stores are slightly different from Monrostypical ser

177、vice or tire stores(as described above)in that,generally,over 93%of the stores sales involve tireservices,including the mounting and balancing of tires,and the sale of road hazard warranties.Most ofthese stores also provide the installation of wiper blades.Currently,74%of Tire Warehouse and 90%ofTir

178、e Barn Warehouse stores perform alignments.In fiscal year 2018,Monro plans to expand the number ofTire Warehouse and Tire Barn Warehouse stores offering alignment services to 84%of total stores,ascompared to 80%of total Tire Warehouse and Tire Barn Warehouse stores offering alignment services infisc

179、al 2017.Customer SatisfactionMonros vision of being the dominant auto service provider in the markets we serve is supported by a set ofvalues displayed in each Company Store emphasizing TRUST:Total Customer SatisfactionRespect,Recognize and Reward(employees who are committed to these values)Unparall

180、eled Quality and IntegritySuperior Value andTeamwork OPERATING STRATEGY1024527_Monro Annual Report_BWText_2017.qxp_6.26.14 7/14/17 12:17 PM Page 10Also displayed in each Company Store are guiding principles in support of our commitment to customerservice:only present needed work;fix vehicles right t

181、he first time;complete vehicle service on time;andexceed the customers expectations.Additionally,each Company-operated store operates under the following set of customer satisfactionprinciples:free inspection of brakes,tires,shocks,front end and exhaust systems(as applicable);item-by-item review wit

182、h customers of problem areas;free written estimates;written guarantees;drive-inservice without an appointment;fair and reasonable prices;a 30-day best price guarantee;and repairs byprofessionally-trained undercar and tire specialists.(See additional discussion under“Store Operations:Quality Control

183、and Warranties”.)Competitive Pricing,Advertising and Co-branding InitiativesMonro seeks to set competitive prices for quality services and products.We support our pricing strategywith special offers and coupons distributed through a variety of channels including:direct mail,email,digital advertising

184、,newspaper,promotional store signage and in-store displays.In addition,to increaseconsumer awareness of the services we offer,Monro advertises through radio,cable television and yellowpage advertising.Our digital marketing efforts include paid and organic search on all major search engines,search re

185、marketing and banner and mobile advertising.We also manage social media profiles on a varietyof platforms.Ourwebsitesincludewww.M,www.MrT,www.TQT,www.AutoT,www.TireW,www.KenT,www.TireB,www.TheTireC,www.M and www.T.These sites help customers search for store locations,print coupons,make service appoi

186、ntments,shop for tires and access information on our services andproducts,as well as car care tips.Monro currently maintains mobile apps on the iPhone and Android platforms that enable customers toaccess information,coupons and specials and make appointments on their smart phones,as they do on ourwe

187、bsites.Centralized ControlWhile we both operate and franchise stores,we believe that direct operation of stores enhances our abilityto compete by providing centralized control of such areas of operations as service quality,store appearance,promotional activity and pricing.We also believe our experie

188、nce in operating stores makes us a morevaluable partner to our franchisees.A high level of competence is maintained throughout the Company,aswe require as a condition of employment,that employees participate in periodic training programs,including sales,management,customer service and changes in aut

189、omotive technology.Additionally,purchasing,distribution,merchandising,advertising,accounting and other store support functions arecentralized primarily in Monros corporate headquarters in Rochester,New York,and are provided throughour subsidiary,Monro Service Corporation.The centralization of these

190、functions results in efficiencies andgives management the ability to closely monitor and control costs.Comprehensive TrainingWe provide ongoing,comprehensive training to our store employees.We believe that such training providesa competitive advantage by enabling our technicians to provide quality s

191、ervice to our customers in all areasof undercar repair and tire service.(See additional discussion under“Store Operations:Store Personnel andTraining”.)PURCHASING AND DISTRIBUTIONThrough our wholly-owned subsidiary Monro Service Corporation,we select and purchase tires,parts andsupplies for all Comp

192、any-operated stores on a centralized basis through an automatic replenishmentsystem.Although purchases outside the centralized system(“outside purchases”)are made when needed atthe store level,these purchases are low by industry standards,and accounted for approximately 22%of allparts and tires used

193、 in fiscal 2017.10 PURCHASING AND DISTRIBUTION1024527_Monro Annual Report_BWText_2017.qxp_6.26.14 7/14/17 12:17 PM Page 11Our ten largest vendors accounted for approximately 68%of our parts and tire purchases,with the largestvendor accounting for approximately 25%of total stocking purchases in fisca

194、l 2017.In fiscal 2017,Monroimported approximately 20%of our parts and tire purchases.We purchase parts,oil and tires fromapproximately 120 vendors.Management believes that our relationships with vendors are excellent and thatalternative sources of supply exist,at comparable cost,for substantially al

195、l parts used in our business.Weroutinely obtain bids from vendors to ensure we are receiving competitive pricing and terms.Most parts are shipped by vendors to our primary warehouse facility in Rochester,New York,and aredistributed to stores by the Monro-operated tractor/trailer fleet.The majority o

196、f tires are shipped to ourstores directly by vendors pursuant to orders placed by our headquarters staff.During fiscal 2013,wecompleted an expansion of our Rochester warehouse from 80,000 square feet to 135,000 square feet.Storesare replenished at least bi-weekly from this warehouse,and such repleni

197、shment fills,on average,97%of allitems ordered by the stores automatic POS-driven replenishment system.The Rochester warehouse stocksapproximately 3,300 SKUs.Monro also operates warehouses in Maryland;Virginia;New Hampshire;Kentucky;North Carolina,including two warehouse locations;South Carolina and

198、 Tennessee.Thesewarehouses carry,on average,1,000;100;700;1,000;4,500;2,800;2,800 and 2,300 SKUs,respectively.We enter into contracts with certain parts and tire suppliers,some of which require us to buy(at marketcompetitive prices)up to 100%of our annual purchases of specific products.These agreeme

199、nts expire atvarious dates.We believe these agreements provide us with high quality,branded merchandise at preferredpricing,along with strong marketing and training support.COMPETITIONMonro competes in the automotive service and tire industry.This industry is generally highly competitiveand fragment

200、ed,and the number,size and strength of competitors vary widely from region to region.Webelieve that competition in this industry is based on customer service and reputation,store location,nameawareness and price.Monros primary competitors include national and regional undercar,tire specialty andgene

201、ral automotive service chains,both franchised and company-operated;car dealerships,massmerchandisers operating service centers;and,to a lesser extent,gas stations,independent garages andInternet tire sellers.Monro considers TBC Corporation(operating under the NTB,Merchants Tire,Midasand Tire Kingdom

202、 brands),Firestone Complete Auto Care service stores,The Pep Boys Manny,Moeand Jack service stores and Meineke Discount Mufflers Inc.to be direct competitors.In most of the newmarkets that we have entered,at least one competitor was already present.In identifying new markets,weanalyze,among other fa

203、ctors,the intensity of competition.(See“Expansion Strategy”and“ManagementsDiscussion and Analysis of Financial Condition and Results of Operations”.)EMPLOYEESAs of March 25,2017,Monro had 7,535 employees,of whom 7,097 were employed in the fieldorganization,158 were employed at the warehouses,220 wer

204、e employed at our corporate headquarters and60 were employed in other offices.Monros employees are not members of any union.We believe that ourrelations with our employees are good.REGULATIONWe are subject to various federal,state and local laws and governmental regulations relating to theoperation

205、of our business,including those governing workplace safety,zoning and the handling,storageand disposal of hazardous substances contained in the products that we sell and use in our service bays,therecycling of batteries,tires and used lubricants,and the ownership and operation of real property.Wemai

206、ntain programs to facilitate compliance with these laws and regulations.We believe that we are insubstantial compliance with all applicable environmental and other laws and regulations,and that the costof such compliance is not material to the Company.Monro stores new oil and recycled antifreeze and

207、 generates and/or handles used tires and automotive oils,antifreeze and certain solvents,which are disposed of by licensed third-party contractors.In certain states,as required,we also recycle oil filters.Thus,we are subject to a number of federal,state and localenvironmental laws including the Comp

208、rehensive Environmental Response Compensation and Liability Act11 EMPLOYEES COMPETITION REGULATION1024527_Monro Annual Report_BWText_2017.qxp_6.26.14 7/14/17 12:17 PM Page 12(“CERCLA”).In addition,the United States Environmental Protection Agency(the“EPA”),under theResource Conservation and Recovery

209、 Act(“RCRA”),and various state and local environmental protectionagencies regulate our handling and disposal of waste.The EPA,under the Clean Air Act,also regulates theinstallation of catalytic converters by Monro and all other repair stores by periodically spot checking repairjobs,and has the power

210、 to fine businesses that use improper procedures or materials.The EPA has theauthority to impose sanctions,including civil penalties up to$37,500 per violation(or up to$37,500 per dayfor certain willful violations or failures to cooperate with authorities),for violations of RCRA and theClean Air Act

211、.Monro is environmentally conscious,and takes advantage of recycling opportunities at our offices,warehouses and stores.Cardboard,plastic shrink wrap and parts cores are returned to the warehouse bythe stores on Monro stock trucks.There,they are accumulated for sale to recycling companies or returne

212、dto parts manufacturers for credit.SEASONALITYAlthough our business is not highly seasonal,customers do purchase more undercar service during theperiod of March through October than the period of November through February,when miles driven tendto be lower.In the tire stores,the better sales months a

213、re typically May through August,and Octoberthrough December.The slowest months are typically January through April and September.As a result,profitability is typically lower during slower sales months,or months where mix is more heavily weightedtoward tires,which is a lower margin category.Additiona

214、lly,since our stores are primarily located in thenortheastern and midwestern United States,profitability tends to be lower in the winter months whencertain costs,such as utilities and snow plowing,are typically higher.COMPANY INFORMATION AND SEC FILINGSMonro maintains a website at and makes its annu

215、al,quarterly and periodic Securities andExchange Commission(“SEC”)filings available through the Investor Information section of that website.Monros SEC filings are available through this website free of charge,via a direct link to the SEC website atwww.sec.gov.Any materials that we file with the SEC

216、 are also available to the public at the SEC PublicReference Room at 100 F Street,N.E.,Washington,D.C.20549 or by calling the SEC at 1-800-SEC-0330.12 SEASONALITY COMPANY INFORMATION AND SEC FILINGSItem 1A.Risk FactorsIn addition to the risks discussed elsewhere in this annual report,the following a

217、re the important factorsthat could cause Monros actual results to differ materially from those projected in any forward lookingstatements:We operate in the highly competitive automotive repair industry.The automotive repair industry in which we operate is generally highly competitive and fragmented,

218、and thenumber,size and strength of our competitors varies widely from region to region.We believe thatcompetition in the industry is based primarily on customer service,reputation,store location,nameawareness and price.Our primary competitors include national and regional undercar,tire specialty and

219、general automotive service chains,both franchised and company-operated,car dealerships,massmerchandisers operating service centers and,to a lesser extent,gas stations,independent garages andInternet tire sellers.Some of our competitors have greater financial resources,are more geographicallydiverse

220、and have better name recognition than we do,which might place us at a competitive disadvantage tothose competitors.Because we seek to offer competitive prices,if our competitors reduce prices,we may beforced to reduce our prices,which could have a material adverse effect on our business,financial co

221、nditionand results of operations.Further,our success within this industry also depends upon our ability to respondin a timely manner to changes in customer demands for both products and services.We cannot assure thatwe,or any of our stores,will be able to compete effectively.If we are unable to comp

222、ete successfully in newand existing markets,we may not achieve our projected revenue and profitability targets.Item 1A.Risk Factors1024527_Monro Annual Report_BWText_2017.qxp_6.26.14 7/14/17 12:17 PM Page 1313We are subject to seasonality and cycles in the general economy and customers use of vehicl

223、es,which mayimpact demand for our products and services.Although our business is not highly seasonal,our customers typically purchase more undercar servicesduring the period of March through October than the period of November through February,when milesdriven tend to be lower.Further,customers may

224、defer or forego vehicle maintenance at any time duringperiods of inclement weather.In the tire stores,the better sales months are typically May through August,and October through December.The slowest months are typically January through April and September.As a result,profitability is typically lowe

225、r during slower sales months or months where mix is more heavilyweighted toward tires,which is a lower margin category.Additionally,for our stores located in the northeastern and midwestern United States,profitability tends tobe lower in the winter months when certain costs,such as utilities and sno

226、w plowing,are typically higher.Sales can also be volatile in these areas in reaction to warm weather in winter months or severe weather,which can result in store closures.The automotive repair industry is subject to fluctuations in the general economy.During a downturn in theeconomy,customers may de

227、fer or forego vehicle maintenance or repair.During periods of good economicconditions,consumers may decide to purchase new vehicles rather than having their older vehicles serviced.We purchase products such as oil and tires,which are subject to cost variations related to commodity costs.If we cannot

228、 pass along cost increases,our profitability would be negatively impacted.Further,our industry is influenced by the number of miles driven by automobile owners.Factors that maycause the number of miles driven by automobile owners to decrease include the weather,travel patterns,gasprices and,as discu

229、ssed above,fluctuations in the general economy.Should a significant reduction in thenumber of miles driven by automobile owners occur,it would likely have an adverse effect on the demandfor our products and services.For example,when the retail cost of gasoline increases,the number of milesdriven by

230、automobile owners may decrease,which could result in less frequent service intervals and fewerrepairs.Accordingly,a significant reduction in the number of miles driven by automobile owners couldhave a material adverse effect on our business and results of operations.We depend on our relationships wi

231、th our vendors,including foreign sources,for certain inventory.Our businessmay be negatively affected by the risks associated with such relationships and international trade.We depend on close relationships with our vendors for parts,tires and supplies and for our ability topurchase products at comp

232、etitive prices and terms.Our ability to purchase at competitive prices and termsresults from the volume of our purchases from these vendors.We have entered into various contracts withparts suppliers that require us to buy from them(at market competitive prices)up to 100%of our annualpurchases of spe

233、cific products.These agreements expire at various dates.We believe that alternative sources exist for most of the products we sell or use at our stores,and we wouldnot expect the loss of any one supplier to have a material adverse effect on our business,financial conditionor results of operations.Ou

234、r dependence on a small number of suppliers,however,subjects us to the risksof shortages and interruptions.If any of our suppliers do not perform adequately or otherwise fail todistribute parts or other supplies to our stores,our inability to replace the suppliers in a timely manner andon acceptable

235、 terms could increase our costs and could cause shortages or interruptions that could have amaterial adverse effect on our business,financial condition and results of operations.1024527_Monro Annual Report_BWText_2017.qxp_6.26.14 7/14/17 12:17 PM Page 1414Further,we depend on a number of products(e.

236、g.brake parts,tires,oil filters)produced in foreign markets.We face risks associated with the delivery of inventory originating outside the United States,including:potential economic and political instability in countries where our suppliers are located;increases in shipping costs;transportation del

237、ays and interruptions;changes in U.S.and foreign laws affecting the importation and taxation of goods,including duties,tariffs and quotas,or changes in the enforcement of those laws;compliance with the United States Foreign Corrupt Practices Act,which generally prohibits U.S.companies from engaging

238、in bribery or making other prohibited payments to foreign officials;andsignificant fluctuations in exchange rates between the U.S.dollar and foreign currencies.Our industry is subject to environmental,consumer protection and other regulation.We are subject to various federal,state and local environm

239、ental laws,building and zoning requirements,employment laws and other governmental regulations regarding the operation of our business.For example,we are subject to rules governing the handling,storage and disposal of hazardous substances contained insome of the products such as motor oil that we se

240、ll and use at our stores,the recycling of batteries,tires andused lubricants,and the ownership and operation of real property.These laws and regulations can imposefines and criminal sanctions for violations and require the installation of pollution control equipment oroperational changes to decrease

241、 the likelihood of accidental hazardous substance releases.Accordingly,wecould become subject to material liabilities relating to the investigation and cleanup of contaminatedproperties,and to claims alleging personal injury or property damage as a result of exposure to,or releaseof,hazardous substa

242、nces.In addition,stricter interpretation of existing laws and regulations,new laws andregulations,the discovery of previously unknown contamination or the imposition of new or increasedrequirements could require us to incur costs or become the basis of new or increased liabilities that couldhave a m

243、aterial adverse effect on our business,financial condition and results of operations.National automotive repair chains have also been the subject of investigations and reports by consumerprotection agencies and the Attorneys General of various states.Publicity in connection with these kinds ofinvest

244、igations could have an adverse effect on our sales and,consequently,our business,financial conditionand results of operations.State and local governments have also enacted numerous consumer protectionlaws with which we must comply.The costs of operating our stores may increase if there are changes i

245、n laws governing minimum hourlywages,working conditions,overtime,workers compensation and health insurance rates,unemployment taxrates or other laws and regulations.A material increase in these costs that we were unable to offset byincreasing our prices or by other means could have a material advers

246、e effect on our business,financialcondition and results of operations.We are involved in litigation from time to time arising from the operation of our business and,as such,we couldincur substantial judgments,fines,legal fees or other costs.We are sometimes the subject of complaints or litigation fr

247、om customers,employees or other third partiesfor various actions.From time to time,we are involved in litigation involving claims related to,among otherthings,breach of contract,negligence,tortious conduct and employment law matters,including payment ofwages.The damages sought against us in some of

248、these litigation proceedings could be substantial.Although we maintain liability insurance for some litigation claims,if one or more of the claims were togreatly exceed our insurance coverage limits or if our insurance policies do not cover a claim,this couldhave a material adverse effect on our bus

249、iness,financial condition,results of operations and cash flows.1024527_Monro Annual Report_BWText_2017.qxp_6.26.14 7/14/17 12:17 PM Page 1515Business interruptions may negatively impact our store operations,availability of products and/or theoperability of our computer systems,which may have a mater

250、ial negative effect on our business and results ofoperations.A breach of our computer systems could damage our reputation and have a material adverse effecton our business and results of operations.If any of our locations in a particular region are unexpectedly closed permanently or for a period of

251、time,itcould have a negative impact on our business.Such closures could occur as a result of circumstances out ofour control,including war,acts of terrorism,extreme weather conditions and other natural disasters.Further,if our ability to obtain products and merchandise for use in our stores is imped

252、ed,it could have anegative impact on our business.Factors that could negatively affect our ability to obtain products andmerchandise include the sudden inability to import goods into the United States,for any reason and thecurtailment or delay of commercial transportation.While we do maintain busine

253、ss interruption insurance,there is no guarantee that we will be able to use such insurance for any particular location closure or otherinterruption in operations.Additionally,given the number of individual transactions we process each year,it is critical that wemaintain uninterrupted operation of ou

254、r computer and communications hardware and software systems.Our systems could be subject to damage or interruption from power outages,computer andtelecommunications failures,computer viruses,security breaches,including breaches of our transactionprocessing or other systems that result in the comprom

255、ise of confidential customer data,catastrophic eventssuch as fires,tornadoes and hurricanes,and usage errors by our employees.If our systems are breached,damaged or cease to function properly,we may have to make a significant investment to fix or replace them,we may suffer interruptions in our opera

256、tions in the interim,we may face costly litigation,and ourreputation with our customers may be harmed.The risk of disruption is increased in periods wherecomplex and significant systems changes are undertaken.Any material interruption in our computeroperations may have a material adverse effect on o

257、ur business or results of operations.If we experience a data security breach and confidential customer or employee information is disclosed,wemay be subject to penalties and experience negative publicity,which could affect our customer relationships andhave a material adverse effect on our business.

258、We may incur increasing costs in an effort to minimize thesecybersecurity risks.The nature of our business involves the receipt and storage of personally identifiable data of our customersand employees.This type of data is subject to legislation and regulation in various jurisdictions.Datasecurity b

259、reaches suffered by well-known companies and institutions have attracted a substantial amount ofmedia attention,prompting state and federal legislative proposals addressing data privacy and security.Wemay become exposed to potential liabilities with respect to the data that we collect,manage and pro

260、cess,and may incur legal costs if our information security policies and procedures are not effective or if we arerequired to defend our methods of collection,processing and storage of personal data.Futureinvestigations,lawsuits or adverse publicity relating to our methods of handling personal data c

261、ouldadversely affect our business,results of operations,financial condition and cash flows due to the costs andnegative market reaction relating to such developments.We may not have the resources or technical expertise to anticipate or prevent rapidly evolving types ofcyber-attacks.Attacks may be ta

262、rgeted at us,our customers,or others who have entrusted us withinformation.Actual or anticipated attacks may cause us to incur increasing costs,including costs to hireadditional personnel,purchase additional protection technologies,train employees,and engage third-partyexperts and consultants.In add

263、ition,data and security breaches can also occur as a result of non-technicalissues,including breach by us or by persons with whom we have commercial relationships that result in theunauthorized release of personal or confidential information.Any compromise or breach of our securitycould result in vi

264、olation of applicable privacy and other laws,significant legal and financial exposure,and aloss of confidence in our security measures,which could have a material adverse effect on our results ofoperations and our reputation.1024527_Monro Annual Report_BWText_2017.qxp_6.26.14 7/14/17 12:17 PM Page 1

265、616Our business is affected by advances in automotive technology.The demand for our products and services could be adversely affected by continuing developments inautomotive technology.Automotive manufacturers are producing cars that last longer and require serviceand maintenance at less frequent in

266、tervals in certain cases.Quality improvement of manufacturers originalequipment parts has in the past reduced,and may in the future reduce,demand for our products andservices,adversely affecting our sales.For example,manufacturers use of stainless steel exhaustcomponents has significantly increased

267、the life of those parts,thereby decreasing the demand for exhaustrepairs and replacements.Longer and more comprehensive warranty or service programs offered byautomobile manufacturers and other third parties also could adversely affect the demand for our productsand services.We believe that a majori

268、ty of new automobile owners have their cars serviced by a dealerduring the period that the car is under warranty.In addition,advances in automotive technology continueto require us to incur additional costs to update our diagnostic capabilities and technical training programs.Changes in vehicle and

269、powertrain technology and advances in autonomous vehicles and mobility couldhave a negative effect on our business,results of operations or investors perception of our business,any ofwhich could have an adverse effect upon the price of our common stock.We may not be successful in integrating new and

270、 acquired stores.Management believes that our continued growth in sales and profit is dependent,in large part,upon ourability to open/acquire and operate new stores on a profitable basis.In order to do so,we must findreasonably priced new store locations and acquisition candidates that meet our crit

271、eria and we mustintegrate any new stores(opened or acquired)into our system.Our growth and profitability could beadversely affected if we are unable to open or acquire new stores or if new or existing stores do not operateat a sufficient level of profitability.If new stores do not achieve expected l

272、evels of profitability,this mayadversely impact our ability to remain in compliance with our debt covenants or to make required paymentsunder our credit facility.Any impairment of goodwill,other intangible assets or long-lived assets could negatively impact our results ofoperations.Our goodwill,othe

273、r intangible assets or long-lived assets,are subject to an impairment test on an annualbasis and are also tested whenever events and circumstances indicate that goodwill,intangible assets and/orlong-lived assets may be impaired.Any excess goodwill resulting from the impairment test must be writtenof

274、f in the period of determination.Intangible assets(other than goodwill and indefinite-lived intangibleassets)and other long-lived assets are generally amortized or depreciated over the useful life of such assets.In addition,from time to time,we may acquire or make an investment in a business that wi

275、ll require us torecord goodwill based on the purchase price and the value of the acquired tangible and intangible assets.We have significantly increased our goodwill as a result of our acquisitions.We may subsequentlyexperience unforeseen issues with the businesses we acquire,which may adversely aff

276、ect the anticipatedreturns of the business or value of the intangible assets and trigger an evaluation of recoverability of therecorded goodwill and intangible assets.Future determinations of significant write-offs of goodwill,intangible assets or other long-lived assets,as a result of an impairment

277、 test or any accelerated amortizationor depreciation of other intangible assets or other long-lived assets could have a material negative impacton our results of operations and financial condition.We have completed our annual impairment test forgoodwill,and have concluded that we do not have any imp

278、airment of goodwill for the year endedMarch 25,2017.Store closings result in acceleration of costs.From time to time,in the ordinary course of our business,we close certain stores,generally based onconsiderations of store profitability,competition,strategic factors and other considerations.Closing a

279、 storecould subject us to costs including the write-down of leasehold improvements,equipment,furniture andfixtures.In addition,we could remain liable for future lease obligations.We rely on an adequate supply of skilled field personnel.In order to continue to provide high quality services,we require

280、 an adequate supply of skilled fieldmanagers and technicians.Trained and experienced automotive field personnel are in high demand,and1024527_Monro Annual Report_BWText_2017.qxp_6.26.14 7/14/17 12:17 PM Page 17may be in short supply in some areas.We cannot assure that we will be able to attract,moti

281、vate andmaintain an adequate skilled workforce necessary to operate our existing and future stores efficiently,orthat labor expenses will not increase as a result of a shortage in the supply of skilled field personnel,therebyadversely impacting our financial performance.While the automotive repair i

282、ndustry generally operateswith high field employee turnover,any material increases in employee turnover rates in our stores or anywidespread employee dissatisfaction could also have a material adverse effect on our business,financialcondition and results of operations.If we are unable to generate su

283、fficient cash flows from our operations,our liquidity will suffer and we may beunable to satisfy our obligations.We currently rely on cash flow from operations and our Revolving Credit Facility to fund our business.Amounts outstanding on the Revolving Credit Facility are reported as debt on our bala

284、nce sheet.While webelieve that we have the ability to sufficiently fund our planned operations and capital expenditures for theforeseeable future,various risks to our business could result in circumstances that would materially affectour liquidity.For example,cash flows from our operations could be

285、affected by changes in consumerspending habits,the failure to maintain favorable vendor payment terms or our inability to successfullyimplement sales growth initiatives,among other factors.We may be unsuccessful in securing alternativefinancing when needed on terms that we consider acceptable.In add

286、ition,a significant increase in our leverage could have the following risks:our ability to obtain additional financing for working capital,capital expenditures,storerenovations,acquisitions or general corporate purposes may be impaired in the future;our failure to comply with the financial and other

287、 restrictive covenants governing our debt,which,among other things,require us to comply with certain financial ratios and limit our ability to incuradditional debt and sell assets,could result in an event of default that,if not cured or waived,could have a material adverse effect on our business,fin

288、ancial condition and results of operations;andour exposure to certain financial market risks,including fluctuations in interest rates associatedwith bank borrowings could become more significant.If we do not perform in accordance with our debt covenants,our lenders may restrict our ability to draw o

289、nour Revolving Credit Facility.We cannot assure that we will remain in compliance with our debt covenantsin the future.We depend on the services of key executives.Our senior executives are important to our success because they have been instrumental in setting ourstrategic direction,operating our bu

290、siness,identifying,recruiting and training key personnel,identifyingexpansion opportunities and arranging necessary financing.Losing the services of any of these individualscould adversely affect our business until a suitable replacement could be found.It may be difficult to replacethem quickly with

291、 executives of equal experience and capabilities.Although we have employmentagreements with selected executives,we cannot prevent them from terminating their employment with us.Other executives are not bound by any employment agreements with us.New accounting guidance or changes in the interpretatio

292、n or application of existing accounting guidance couldaffect our financial performance adversely.New accounting guidance may require systems and other changes that could increase our operating costsand/or change our financial statements.For example,implementing accounting guidance related to leasesw

293、ill likely require us to make significant changes to our lease management system or other accountingsystems,and will likely result in changes to our financial statements.Additionally,implementing accountingguidance related to leases will likely impact certain performance metrics and financial ratios

294、.Unanticipated changes in the interpretation or application of existing accounting guidance could result inmaterial charges or restatements of our financial statements,which may further result in litigation orregulatory actions which could have an adverse effect on our financial condition and result

295、s of operations.171024527_Monro Annual Report_BWText_2017.qxp_6.26.14 7/14/17 12:17 PM Page 18The effect of recent changes to U.S.healthcare laws may increase our healthcare costs and negatively impactour financial results.We offer eligible employees the opportunity to enroll in healthcare coverage

296、subsidized by us.For variousreasons,many of our eligible employees currently choose not to participate in our healthcare plans.However,under the comprehensive U.S.healthcare reform law enacted in 2010,the Affordable Care Act,changes that became effective in 2014,and the employer mandate and employer

297、 penalties that becameeffective January 1,2015,may significantly increase our labor costs.Changes in the law that took effect in2014,including the imposition of increasing penalties on individuals who do not obtain healthcarecoverage,may result in more eligible employees deciding to enroll in our he

298、althcare plans.This may increaseour healthcare costs in the future.Additionally,implementing the requirements of the Affordable Care Acthas imposed some additional administrative costs on us,and those costs may increase over time.The costsand other effects of these new healthcare requirements cannot

299、 be determined with certainty,but they mayhave a material adverse effect on our financial and operating results.Further,other healthcare reformlegislation being considered by Congress that may be enacted in the future could significantly impact ourhealthcare cost structure and affect our healthcare-

300、related expenses.If we cannot effectively modify ourprograms and operations in response to healthcare reform legislation that may be enacted in the future,ourresults of operations,financial condition and cash flows may be adversely impacted.The market price of our common stock may be volatile and co

301、uld expose us to shareholder action includingsecurities class action litigation.The stock market and the price of our common stock may be subject to wide fluctuations based upongeneral economic and market conditions.Downturns in the stock market may cause the price of ourcommon stock to decline.The

302、market price of our stock may also be affected by our ability to meetanalysts expectations.Failure to meet such expectations,even slightly,could have an adverse effect on theprice of our common stock.In the past,following periods of volatility in the market price of a companyssecurities,shareholder

303、action including securities class action litigation has often been instituted againstsuch a company.If similar litigation were instituted against us,it could result in substantial costs and adiversion of our managements attention and resources,which could have an adverse effect on our business.Item

304、1B.Unresolved Staff CommentsNone.Item 2.PropertiesThe Company,through Monro Service Corporation,owns its office/warehouse facility of approximately165,000 square feet,which is located on 12.7 acres of land in Holleder Technology Park,in Rochester,NewYork.Monro Service Corporation also owns a second

305、office/warehouse facility of approximately 28,000square feet,which is located on 11.8 acres of land in Swanzey,New Hampshire.We lease additionalwarehouse space in Maryland,Virginia,Kentucky,North Carolina,including two warehouse locations,South Carolina and Tennessee,and office space in Illinois for

306、 our Car-X franchise operations.TheCompany also owns one retread facility in North Carolina.Of Monros 1,118 Company-operated stores at March 25,2017,331 were owned,689 were leased and for 98stores,only the land was leased.In addition to the Company-operated stores,five wholesale locations andone ret

307、read facility were leased at March 25,2017.In general,we lease store sites for a ten-year period withseveral five-year renewal options.Giving effect to all renewal options,approximately 66%of the leases(518stores)expire after 2027.Certain of the leases provide for contingent rental payments if a per

308、centage ofannual gross sales exceeds the base fixed rental amount.The highest contingent percentage rent of any leaseis 10.0%,and no such lease has adversely affected profitability of the store subject thereto.A former officerof Monro or members of his family are the lessors,or such former officer o

309、r family members have interestsin entities that are the lessors,with respect to six of the leases.No related party leases exist,other than thesesix leases,and no new related party leases are contemplated.18Item 2.PropertiesItem 1B.Unresolved Staff Comments1024527_Monro Annual Report_BWText_2017.qxp_

310、6.26.14 7/14/17 12:17 PM Page 1919Item 3.Legal ProceedingsMonro currently and from time to time is involved in litigation incidental to the conduct of our business,including employment-related litigation arising from claims by current and former employees.Although wediligently defend against these c

311、laims,we may enter into discussions regarding settlement of these and otherlawsuits,and may enter into settlement agreements,if management believes settlement is in the bestinterests of Monro and our shareholders.Although the amount of liability that may result from thesematters cannot be ascertaine

312、d,management does not currently believe that,in the aggregate,they will resultin liabilities material to Monros financial condition or results of operations.Item 4.Mine Safety DisclosuresNot applicable.Item 4.Mine Safety DisclosuresItem 3.Legal Proceedings1024527_Monro Annual Report_BWText_2017.qxp_

313、6.26.14 7/14/17 12:17 PM Page 2020PART IIItem 5.Market for the Companys Common Equity,Related Stockholder Matters and Issuer Purchases ofEquity SecuritiesMARKET INFORMATIONMonros common stock,par value$.01 per share,(the“Common Stock”)is traded on the NASDAQ StockMarket under the symbol“MNRO”.The fo

314、llowing table sets forth,for each quarter during the last twofiscal years,the range of high and low sales prices on the NASDAQ Stock Market for the Common Stock:Fiscal 2017Fiscal 2016Quarter EndedHighLowHighLowJune.$73.86$56.15$66.53$55.34September.$70.78$55.24$68.81$60.12December.$62.07$52.05$77.00

315、$62.25March.$61.10$51.65$71.03$59.66HOLDERSAt May 5,2017,Monros Common Stock was held by approximately 40 shareholders of record.This figuredoes not include an estimate of the indeterminate number of beneficial holders whose shares may be held ofrecord by brokerage firms and clearing agencies.EQUITY

316、 COMPENSATION PLAN INFORMATIONAs of March 25,2017,Monro maintained stock option plans under which employees and non-employeedirectors could be granted options to purchase shares of Monros Common Stock.The following tablecontains information relating to such plans as of March 25,2017.Plan CategoryNum

317、ber of SecuritiesTo Be IssuedUpon Exercise ofOutstanding Options(a)Weighted AverageExercise Price ofOutstanding Options(b)Number of SecuritiesRemaining Available forFuture Issuance UnderEquity CompensationPlans(Excluding SecuritiesReflected in Column(a)(c)Equity compensation plans approved bysecurit

318、y holders.896,344$51.671,549,716Equity compensation plans not approved bysecurity holders.Total.896,344$51.671,549,716DIVIDENDSIn May 2015,Monros Board of Directors declared its intention to pay a regular quarterly cash dividend of$.15 per common share or common share equivalent to be paid beginning

319、 with the first quarter of fiscal 2016.In May 2016,Monros Board of Directors declared its intention to pay a regular quarterly cash dividend of$.17 per common share or common share equivalent to be paid beginning with the first quarter of fiscal 2017.In May 2017,Monros Board of Directors declared it

320、s intention to pay a regular quarterly cash dividend of$.18 per common share or common share equivalent to be paid to shareholders of record as of June 2,2017.The dividend will be paid on June 12,2017.The declaration of and determination as to the payment of future dividends will be at the discretio

321、n of theBoard of Directors and will depend on our financial condition,results of operations,capital requirements,compliance with charter and contractual restrictions,and such other factors as the Board of Directorsdeems relevant.Under our Revolving Credit Facility,we are not permitted to pay cash di

322、vidends in excessof 50%of our preceding years net income.For additional information regarding our Revolving CreditFacility,see Note 6 to the Companys Consolidated Financial Statements.Fiscal 2017Fiscal 2016Quarter EndedHighLowHighLowJune.$73.86$56.15$66.53$55.34September.$70.78$55.24$68.81$60.12Dece

323、mber.$62.07$52.05$77.00$62.25March.$61.10$51.65$71.03$59.66Plan CategoryNumber of SecuritiesTo Be IssuedUpon Exercise ofOutstanding Options(a)Weighted AverageExercise Price ofOutstanding Options(b)Number of SecuritiesRemaining Available forFuture Issuance UnderEquity CompensationPlans(Excluding Secu

324、ritiesReflected in Column(a)(c)Equity compensation plans approved bysecurity holders.896,344$51.671,549,716Equity compensation plans not approved bysecurity holders.Total.896,344$51.671,549,716 DIVIDENDSItem 5.Market for the Companys Common Equity,Related Stockholder Matters and IssuerPurchases of E

325、quity Securities MARKET INFORMATION HOLDERS EQUITY COMPENSATION PLAN INFORMATIONPARTII1024527_Monro Annual Report_BWText_2017.qxp_6.26.14 7/14/17 12:17 PM Page 21Item 6.Selected Financial DataThe following table sets forth selected financial and operating data of Monro for each fiscal year in thefiv

326、e-year period ended March 25,2017.The financial data and certain operating data have been derivedfrom Monros audited financial statements.This data should be read in conjunction with the financialstatements and related notes included under Item 8 of this report and in conjunction with other financia

327、linformation included elsewhere in this Form 10-K.Year Ended Fiscal March20172016201520142013(Amounts in thousands,except per share data)Income Statement Data:Sales.$1,021,511$943,651$894,492$831,432$731,997Cost of sales,including distribution and occupancycosts.624,622557,948541,142511,458453,850Gr

328、oss profit.396,889385,703353,350319,974278,147Operating,selling,general and administrativeexpenses.280,505265,114243,561224,627204,442Operating income.116,384120,589109,78995,34773,705Interest expense,net.19,76815,54211,3429,4707,213Other income,net.(628)(374)(908)(659)(332)Income before provision f

329、or income taxes.97,244105,42199,35586,53666,824Provision for income taxes.35,71838,61637,55632,07724,257Net income.$61,526$66,805$61,799$54,459$42,567Earnings per shareBasic(a).$1.88$2.07$1.94$1.72$1.36Diluted(a).$1.85$2.00$1.88$1.67$1.32Weighted average number of Common Shares andequivalentsBasic.3

330、2,41332,02631,60531,39431,067Diluted.33,30133,35332,94432,64232,308Cash dividends per common share or commonshare equivalent.$0.68$0.60$0.52$0.44$0.40Selected Operating Data:Sales growth:Total.8.3%5.5%7.6%13.6%6.6%Comparable store(b).(4.3)%(0.1)%(1.4)%(0.5)%(7.3)%Company-operated stores open at begi

331、nning ofyear(c).1,029999953937803Company-operated stores open at end of year(c).1,1181,029999953937Capital Expenditures(d).$34,640$36,834$34,750$32,150$34,185Balance Sheet Data(at period end):Net working capital(e).$13,337$2,504$5,549$17,665$15,126Total assets(e).1,185,264999,438907,794759,816739,43

332、3Long-term obligations.395,503269,045255,688187,040214,809Shareholders equity.581,254536,195473,611415,984365,042Results from all fiscal years are based on a 52 week year.(a)See Note 10 to the Companys Consolidated Financial Statements for calculation of basic and dilutedearnings per share for fisca

333、l years 2017,2016 and 2015.(b)Comparable store sales data(not adjusted for days)is calculated based on the change in sales of onlythose stores open as of the beginning of the preceding fiscal year(c)Includes only Company-operated stores.No franchised,wholesale,retread or dealer locations areincluded.(d)Amount does not include the funding of the purchase price of acquisitions.(e)Fiscal years 2013 2