Good morning ladies and gentlemen and welcome to the Monro Muffler Brake’s Third Quarter 2013 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. (Operator Instructions). As a reminder, ladies and gentlemen, this conference is being recorded and may not be reproduced in whole or in part without permission from the company. I would now like to introduce Ms. Jennifer Milan of FTI Consulting. Please go ahead.

Thank you. Hello everyone and thank you for joining us on this morning’s call. I would just like to remind you that on this morning’s call management may reiterate forward-looking statements made in today’s release. In accordance with the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995, I would like to call your attention to the risks and uncertainties related to these statements which are more fully described in the press release and the company’s filings with the Securities and Exchange Commission. These risks and uncertainties include but are not necessarily limited to uncertainties affecting retail generally, such as consumer confidence and demand for auto repair, risks related to leverage and debt service including sensitivity to fluctuations in interest rates, dependence on, and competition within, the primary markets in which the company's stores are located and the need for and costs associated with store renovations and other capital expenditures. The company undertakes no obligation to release publicly any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. The inclusion of any statement in this call does not constitute an admission by Monro or any other person that the events or circumstances described in such statements are material. Joining us for this morning’s call from management are John Van Heel, President and Chief Executive Officer; Cathy D’Amico, Chief Financial Officer and Rob Gross, Executive Chairman. With these formalities out of the way, I would like to turn the call over to John Van Heel. John, you may begin.

Thanks Jen. Good morning and thank you for joining us on today's call. We are pleased that you are with us to discuss our third quarter fiscal 2013 performance. After some brief opening remarks, I will review our quarterly performance then provide you with an update on our business as well as our outlook for the remainder of the fiscal year. I'll then turn the call over to Cathy D’Amico, our Chief Financial Officer who will provide additional details on our financial results. I want to start out by saying that my long-term confidence in our business and the outlook for our industry remains very strong. There are still 240 million cars on the road in the US that are getting older, consumers still can't work on these vehicles and the number of overall service base is declining and the availability of suitable acquisition candidates is accelerating. Further, our key competitive advantages are still in place, including our low cost operations, superior customer servicing convenience along with our store density and few store brand strategy. That said, we continue to hear various concerns or myths in the marketplace in terms of how they affect our sector and especially Monro which I would like to offer my opinion on. Myth number one; increasing new car sales will cater our business. In our view, the 14.5 million new car sales in calendar 2012 or 15 million to 15.5 million in calendar 2013 will not then the increasing age of the average vehicle in the US fleet, now at record 10.8 years, which will continue to drive our business forward. In particular, with many households have the ability to sign up for 4,000 and annual new car payments when they are already paying more for food and gas and now paying about $1000…

(Operator Instructions) And we will go first to Bret Jordan with BB&T Capital Markets. Your line is open. Bret Jordan - BB&T Capital Markets: A couple of quick questions and one just John to start out of the tire pricing, you talked about seeing some price decreases on the import side as well as some of the domestic sourcing. If you gave us sort of a blended tire price decrease sort of accounting for what has been imported versus what's sourced domestically on the quarter what would the year-over-year deflation be?

Well, we've got for the quarter? Bret Jordan - BB&T Capital Markets: Yeah.

Yeah, for the quarter its down slightly about 2%, you got a 2% retail price increase working in there so the margin itself was up slightly, the cost was down just a touch. Bret Jordan - BB&T Capital Markets: Okay and I guess going forward, do you see continued price decreases coming to you from the manufacturers as costs of goods have come in?

Yes, absolutely. As I said, we got about 15% decrease since the tariff came up on the low cost [radial], low cost tires which are about 25% of units and the discounts, volume discounts, other discounts that we are getting from the branded manufacturers somewhere around 5% and we see that continuing in the next year. Bret Jordan - BB&T Capital Markets: And I guess we get tire pickup you got a positive comp in December when the weather got bad was that driven primarily by tires moving and I guess to some extent as you've seen a little bit in the last week or so weather deterioration or snow and ice in your markets, have you seen the same trend on tires?

Yeah, absolutely, tires was a driver in late December and I can tell you that the last week was our best week in January as well. It improved sequentially during the month. Bret Jordan - BB&T Capital Markets: In that case, it seems like you've got some correlation to weather and improving sales, does your comp guide for the current quarter, because as the quarter gets easier as you get through it, January being the toughest month year-over-year assume that the weather remains warmer and drier year-over-year. I'm just trying to handle on the guide down at the rate that you guide it down given what is an easing comparison as the quarter progresses and performance of signs of improvement in tires?

Yeah, I guess in first of all, our comp in January being down where it is, all the categories suck, tires leading the way. But our comps guidance for the quarter with limited visibility that we have from the January number, it basically says that on the low end, we’ve ran all the year and on the high end, we're going to run similar comp in February and March to what we did last year. We thought that was the most conservative way to go after being (inaudible) for the first nine months of the year.

(Operator Instructions) We will go next to Joseph Edelstein with Stephens. Your line is open.

Can you first just provide the comp numbers by month and remind us what you are going to be up against then, I guess the February, March number. I think you may have said that but I just want to double check?

Right, so the comps for the months in Q3 were downsized in October, adjusted for days, down seven in November and one in December. For the fourth quarter, for February and March, February was down 3.5 and March was down 2.5.

And January was up six.

And I certainly appreciate the breakdown by category that you put in the press release and John I think you also talked about oil changes being flat and how that indicates to you that it is literally deferral process but I have also noticed that the trends in the year-over-year performance in oil changes has also been coming down, so I am just trying to get a sense for what other indications is it that it’s just a deferral and not necessarily losing share to other participants in the marketplace?

For us importantly, we want to be at least flat. We want to be positive. We were up 2.5 in oil changing, it’s in the first quarter and we have been flat for the past six months. So we believe, I mean, that to me says we are not losing market share because customers aren’t going to come to our shop to get an oil change they go somewhere else to get their breaks done or get their tires. They are coming back to us because they trust us to do all of their work; they are deferring the more significant purchases.

Joe, this is Rob. We have bought eight (inaudible) in the year into our market. So we know what their numbers are. We have eight NDAs currently signed that we are working on, so we know what all their numbers are, we know the Rubber Manufacturer Association was running minus eight units in our geographic area and we have the breakdown between the national parts guys showing what’s going on within our specific regions. I think the one other public guy, their report is certainly doing better on pushing the oil changes at the lower price and taking margin heads commence for it which we are not willing to do. We have always been running plus two traffic in oil change is flat, oil change traffic in that generates our business. So when in various types talked about oil change is running down 3 or down 5, I think relative to your point where we would (inaudible) concerned in losing market share but running oil change number for us in a very difficult environment, again speaks very well that we are holding on to what we have, certainly not happy with the sell through and so many additional immediate work that these customers need to protect their vehicles, but we are two years in deferral cycle and now we will come around, but certainly we have qualitative grouping whether we brought them or looking about them, exactly what's going on moving our marketplace.

Right, I appreciate, the actually details. Yeah that is very helpful. And then if I can maybe just ask one other kind of clean up question related to the tax rate that number has balanced around a bit for the first couple quarters here, just generally where do you think that will come in for the fourth quarter and just as you look out even into next year? Cathy D’Amico: In Q4 should be around 36%, (inaudible) in tire because we take cash, credits that come and go and next year conservatively I think we are about 38% because we are in new state and below for (inaudible) more clarity when we talk about FY ‘14 that we normally do in the spring, but certainly its best to use right now.

And we will go next to James Albertine with Stifel Nicolaus. Your line is open.

Very quickly as always thank you so much for all the details going into your prepared remarks. I wanted to focus on one of the points to make sure I heard it correctly, because it sounded like you made a comment John that your comp leverage point, if you think about this deferral cycle and hopefully the turning of this deferral cycle back to the positive category. It sounds like your comp leverage points fall on to flat from that 2% or better before, just want to make sure I understood that correctly and if you could sort of by order of magnitude kind of lay out the drivers. It sounds like mostly in gross profit, did that get us there.

Yeah, absolutely you are exactly right in what we’ve said. For fiscal ’14 that rate through the lower oil costs and lower tire costs and us taking initiatives in this year and getting it and adjusting the business in terms of the expense structure to what our sales run rate is going after that $4 million of expense reductions on the base business that will bring it to flat that inflexion point from what's traditionally been 2% or a little bit better. Certainly we've never had an increase of 40% in tire units to work with before. So, for us that's extremely important and its going to be very powerful to driving those costs down which will be a big piece of the gross margin element of driving that inflexion point down.

That's great, I appreciate the additional detail, and I guess just as it relates to that maybe sort of asking the same question in a slightly different way. If you look at where gross profit is as a percentage of sales I think it was 36.6 this quarter, and I think a very helpful point that you mentioned as you grow on the tires sort of the non-warehouse, non-tire barn stores is a 50-50 split service in tires. So just trying to sort of gauge where you think gross profits can go and if they are in fact troughing in your opinion.

Yeah, they are giving a lot you know…

Back to where we had seen it before I guess is my question.

Yeah, I think back to where they were last year, two years ago, that's where I see them going. It obviously depends somewhat on the retail pricing environment, but again we haven't had cost decreases year-over-year like we are having right now 15 points on the low cost radials, 5% on the branded tires, going into next year and that's certainly going to get better.

Chiming to John’s point, third quarter 47% of our business is tires, it’s the highest we've ever been. We run about 40%, I think John was trying to give you a view that way down the road it never gets above 50, so if you are looking at third quarter gross margin couple that with the negative comps, it doesn't get worse than that and remember again, we have a fixed component of distribution and occupancy in there. So while we haven't given anything relating to 2014, certainly the fourth quarter should be better, but there's a huge opportunity to move that number up just remember that there will still be continuing quarter one year over another year sales mix shift towards tires which even as tire margins will get significantly better, based on the things John mentioned there will still be some negative pressure with the shift to more tire sales.

And we will go next to Peter Keith with Piper Jaffray. Your line is open.

This is actually [John Burgons] for Peter this morning. Just a couple of questions for you here. Do you believe you are seeing any incremental impact from the exploration of the payroll tax cut in month-to-date results? I know you commented that your core consumer continues to be challenged and it doesn’t seem like there is any differences this quarter and kind of what you are seeing, but have you even seen anything above and beyond that you think in January?

All we can say about January is minus 10 is worse than worse than minus 6.

Okay, got you.

I don't know, what pieces whether, what piece.

Weather certainly couldn’t help us. The payroll cash can’t help. So, break it out is not something I think we're going to be offering to you much John.

And I guess looking at kind of your acquisition outlook as you go forward, I know you said your number of NDAs are up and with kind of people, I think trying to rush and sell ahead of the end of the year last year. I mean, even though your NDAs are up, I mean, are you seeing any less as far as people enquiring about selling their business or is everything just kind of where it has been running?

No, we haven’t seen a slowdown in those discussions at all. As you know the NDAs are between five and 40 stores and seven are within our territories and one is in contiguous market. So very consistent to what we have looked at over the last several years.

Okay, excellent and just one last quick one and I apologize if I missed this, but did you quantify at all the comp headwind from Sandy at all in the quarter?

When I said hurricanes don’t help either that was all of our comments. It was about a 1% comp drain on November.

(Operator Instructions) We will go next to Michael Montani with ISI Group. Your line is open.

First was on just on traffic and ticket, I know you mentioned oil change traffic was flattish, should we assume that the overall traffic transaction counts were about flat or slightly down or how would you break it down?

No, they were just slightly down as Rob was alluding to. We have traditionally (inaudible) traffic between plus two, minus two. So the overall traffic was down.

Okay. And then just in terms of the SG&A leverage I know you mentioned the 4 million of expense reductions. Is there any way you can help just break that down a little bit further because the other piece that we were concerned about as affordable [caveats] which I think would impact you guys in fiscal 4Q of next year, but it sounds like you are still seeing that reduction despite that, so is that correct and then is there some specific initiative you can point to there?

Yeah, I guess with regard to the initiatives we have traditionally been very good at managing cost and in this environment we are absolutely taking another look at every aspect of the business, that incorporates payroll and fuel, it incorporates payroll back here again understanding that we are in a high period of growth, but there is significant leverage in that. Warehousing that is across the board in terms of where we are looking for the cost savings, and with regard to the affordable [carry-out], part of what we are doing right now will definitely help when we get around to the affordable [carry-out] and that's absolutely in our mind that as we approach how to manage payroll and other cost everywhere within the company, that will have at start have an impact next year in Q4, but the real impact will come through in fiscal year 2015, and we think with the initiatives we are taking right now we’ll only be in a better place to address, what is going to be a higher cost, and we like all other company are looking hard at the affordable [carry-out] and what impact it will have. I know its not going to reduce our cost, it’s going to increase it.

Sure. But when you mentioned that you might be able or you would be able to improve the expense rate on sort of a flattish comp, was that speaking specifically to the SG&A leverage or was that including the tire and the oil cost benefits too?

Its SG&A and non-tire and oil costs.

And our next question will come from Matthew Dodson Edmunds White Partners. Your line is open.

Real quick, when we look out to 2014, should we bake-in $200 million of acquisition revenue, is that a fair kind of run rate?

Yeah, we will, yeah we will have all of the acquisitions in for full 12 months. Its going to be something slightly less than that because several of these will still be kind of coming up for sales and from then this will hit that retake you know in the first six months of transition.

Yeah, I think from a sales standpoint we try and our new presentation which we will have on our website today breaks out the exact dates when we bought these stores, what the annualized sales is, just to help you guys starting with the 2012 acquisitions, so you can run the 12 months. Obviously, a lot of the deals we did in November and December we already have sales that will be included in our Q4, so you can double count that increase each year; I think we've given you perfect information to understand the accretive-ness when the deals turn over 12 months and we can start getting the $0.08 to $0.10 accretive on the 10% acquisition growth and your specific question on what adds to the sales base which we said for this year would be 725 to 735. I think you take those run rates with the dates we gave you with the annual sales and you can get a pretty good estimate of our sales numbers for next year which we will come out with in the April-May time period anyways and give you that so you should be able to work through it with the information we've given you.

That helps and my next question as you guys talked about snow tires, adding inventories, if we don't get more snow in the quarter, can you kind of talk about the headwind that would be with clearing the inventory out?

Well, it’s all good inventories. And one of these years soon, we are going to have a normal amount of snow and it’ll be less last year’s return rates with some tires and we are leaving this year with some additional tires but that product is no problem at all. It’s maybe couple of million dollars worth of inventory and as we said we borrow that LIBOR plus a 100, so the ordering and holding snow tires is somewhat of a (inaudible) each year and it’s not a significant cost for us to carry them. They are all given. I'm hoping to solve all of them next year.

And we will go next to Brian Sponheimer with Gabelli & Company. Your line is open. Brian Sponheimer - Gabelli & Company: Just a couple of real quick ones. With the series of acquisitions you made, what's the appetite for a largest (inaudible) and other targets that actually exist that are bigger than some other targets you’ve gotten in house over the course of the last six months? I guess we will start there.

Brian, Rob wants to know if you had something you wanted to buy? Brian Sponheimer - Gabelli & Company: I don't (inaudible) approach.

We can absolutely give completed additional acquisitions in the next year. Certainly, this level of growth is something that we haven't done in the past but our team, over the past 10 years, we had absolutely changed our company such that we could take in this amount of growth and we could absolutely do a couple more deals next year including larger deal that came about. I said our returned NDAs, size of 40 stores and we can absolutely get several of those done and a bigger deal that came along. Brian Sponheimer - Gabelli & Company: Going back to I guess about 18 months or now, the Midas acquisition a year ago anyway, the Midas acquisition disrupt the valuation multiples of other targets?

No. I think you can see that from the purchase price information that we gave you. You know, we bought these stores within our metrics, and the deals that we closed in November and December; we thought a third of the stores will bring those the real estate for a third of the stores within those metrics. So like I said I don’t think in a different year we would have been able to complete these many at these prices when tire cost already we know are going down. So there is no question there and we are going to get the entire benefit of that. Brian Sponheimer - Gabelli & Company: Alright and to actually segue from my last question here. With the added real estate from the acquisitions what are your plans regarding the parcels of land that you now hold under in-house? Any sale lease back opportunities, any conversion to a REIT MLP something along those lines?

No, not at all. We think owning good real estate at a level where we had it somewhere around 30% just short of that of our employer store base is a good thing long-term, and again with all of the LIBOR plus a 100 basis points with plenty of liquidity to get other deals done.

We are not looking to be trading the liquidation (inaudible).

And at this time we have one more question left in the queue. We will go next to Bret Jordan with BB&T Capital Market. Your line is open. Bret Jordan - BB&T Capital Market: Great, at least I finally had a follow-up. One question John as for the class of 2012 acquisitions because a lot of those came late in the year. I think I heard you say that you thought they might be contributing to earnings in the first fiscal quarter of 2014. So that would be less than the couple of quarters of integration period that you traditionally talk about. Are they on balance better stores that you picked up or more functional or you just become more effective?

Are you talking about the deals we have done in fiscal 2013? Bret Jordan - BB&T Capital Market: Right, I though that your fiscal ‘13 transactions, we are talking about possibly been additive to the earnings and the beginning of fiscal 2014 are right?

Yes. Bret Jordan - BB&T Capital Market: Yes, okay. It was my understanding you usually took a few quarters or a couple of quarters to get them to the point where they were not a drag on earnings yet a lot of these acquired sales came in the December quarter. So are they better in that it will only take a quarter to integrate? If they are going to be additive in the June quarter that's only the March quarter, that they are going to be sucking for everything?

We’ve got several of those acquisitions where we get earlier in the year, you know that will be contributing and whether it’s gone through the most difficult piece on these bigger deals which will be in the fourth quarter and we said that even it maybe slightly dilutive as a group there, but we would expect not to see that contribute in the first quarter and we are ourselves will take a better look at that as we look to issue guidance for next year. Certainly the cost of sales reductions in tire cost are absolutely a big piece of that with regard to how we talked about acquisitions over last couple of years in that rising cost environment. So again getting these deals done when tire cost for the seller were at their highest, and we are positioned to come down from the timing perspective is a big benefit to us. The thing we haven't been able to predict as when the consumers turned around but at least having that tailwind is very significant.

And that does conclude today's question-and-answer session. I would like to turn the conference back over to management for any additional or closing remarks.

Thank you. I would like to thank everyone for the time this morning. We are doing everything we can in this environment. We are committed to maintaining our market share and working hard to get back to the kinds of returns and earnings that you and we are accustomed to over the last number of years. We've taken advantage of this tough environment to significantly grow our store base at a time when we will be benefiting significantly from declining tire costs and other cost savings and will come out of this period with a lopsided operating margin and a lot bigger, more profitable company. We appreciate your continued support and certainly appreciate the efforts from all of our employees that are working hard everyday. Thank you and have a good day.

This does conclude today's conference. Thank you for your participation.