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Monro, Inc. (NASDAQ:MNRO), a leading provider of automotive repair and tire services with annual revenue of $1.21 billion, announced on Monday an amendment to its existing distribution and fulfillment agreement with American Tire Distributors, Inc. (ATD). According to InvestingPro data, the company’s stock has declined 28.52% over the past six months, currently trading near its 52-week low of $18.15. The amendment concludes the earnout period, initially set to end on January 1, 2025, with ATD agreeing to make two final payments totaling approximately $6.95 million to Monro.
The payments, part of an earnout provision under the original Asset Purchase Agreement between Monro and ATD, will be made in two installments. The first payment of $3,474,043 was made on February 21, 2025, and the second is scheduled for June 25, 2025. This completion of payments will satisfy the earnout obligations in full.
Additionally, the amendment introduces changes to the service level agreements to enhance the consistency of supply to meet Monro’s product demands under the agreement. ATD has committed to using commercially reasonable efforts to ensure a steady supply of products.
Under the revised terms, the initial expiration date of the distribution and fulfillment agreement is set for January 1, 2030, with automatic renewals for 12-month periods thereafter, unless otherwise terminated by the parties involved.
The details of the amendment will be fully disclosed in Monro’s upcoming Annual Report on Form 10-K for the fiscal year ending March 29, 2025. This strategic move is expected to provide Monro with improved operational efficiency and financial predictability in its partnership with ATD.
The information for this article is based on a press release statement.
In other recent news, Monro Inc. reported its financial results for the third quarter of fiscal year 2024, which showed a decline in both earnings per share (EPS) and revenue compared to analysts’ forecasts. The company’s EPS was $0.19, falling short of the expected $0.30, while revenue reached $305.8 million, slightly under the anticipated $311.33 million. This performance reflects ongoing challenges, as Monro’s net income dropped significantly to $4.6 million from $12.2 million in the same period last year. Analysts noted that the company’s financial results have led to a negative market sentiment, but Monro remains focused on operational improvements and cost management. The company aims to generate at least $120 million in operating cash flow for fiscal 2025 and plans to invest between $25 million and $30 million in capital expenditures. Despite the financial challenges, Monro’s management expressed confidence in their strategic initiatives, with CEO Michael Broderick highlighting the company’s focus on sales and unit growth. Additionally, the company is leveraging its Comfort Drive inspection process to enhance customer relationships and drive sales. Monro’s ongoing efforts to navigate the current market dynamics indicate a commitment to improving its financial performance.
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