Good morning, ladies and gentlemen, and welcome to Monro Inc.'s Earnings Conference Call for the Fourth Quarter of Fiscal 2019. At the 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] And as a reminder, ladies and gentlemen, this conference call 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. Maureen Mulholland, Senior Vice President, General Counsel and Secretary at Monro. Please go ahead.

Thank you. Hello, everyone, and thank you for joining us on this morning's call. Before we get started, please note that as a part of the call this morning, we will be referencing a presentation that is available on the Investors section of our website at corporate.monro.com/investor/investor-resources. If I could draw your attention to the Safe Harbor statement on Slide 2, I would like to remind participants on this morning's call, that our presentation includes some forward looking statements about Monro's future performance. Actual results may differ materially from those projected by our comments today. The most significant factors that could affect future results are outlined in Monro's filings with the SEC and in our earnings release. The Company disclaims any intention or obligation to update or revise any Forward-Looking Statements whether as a result of new information, future events or otherwise except as required by law. Additionally, on today's call management's statements include a discussion of certain non-GAAP financial measures. Reconciliations of such supplemental information to the comparable GAAP measures will be included as part of today's presentation. With that, I would like to turn the call over to our President and Chief Executive Officer, Brett Ponton. Brett.

Thank you, Maureen, and good morning, everyone. Thanks for joining us today. Before diving into our fourth quarter performance, I’m very pleased to report that we have delivered a very strong year in-line with our guidance and made tremendous progress towards the execution of our Monro Forward Strategy that we unveiled at our Investor Day, one year ago. We achieved several critical milestones in our effort to build a scalable platform for sustainable growth in fiscal 2019. And we are encouraged by the continued momentum we are experiencing in our business as we enter fiscal 2020. Most recently in our fourth quarter, we delivered solid top-line growth achieving a comparable store sales increase of 0.5% when adjusted for fewer selling days, primarily resulting from one less week compared to the prior year quarter. We are pleased to have achieved positive comps on top of positive comps in the fourth quarter of last year, posting our fifth consecutive quarter of comparable store sales growth and our first full-year of comparable store sales growth since fiscal 2012, on a 52 week basis. This is a testament to our focus and efforts in driving operational excellence and the outstanding commitment of our teammates, who have worked Tirelessly to deliver a consistent five star experience to all our customers. As illustrated on Slide 3 and in-line with what we discussed on our last earnings call, we experienced temporary softness around December holiday period and in early January. We experienced the rebound in comparable store sales in February and March despite more difficult year-over-year comparisons. As we enter the spring service selling season in the first quarter of fiscal 2020, we are encouraged to see this momentum has continued with comparable store sales up approximately 2% quarter to-date, despite cold and wet spring weather tempering…

Thank you, Brett and good morning everyone. Turning to Slide 10. We delivered solid top-line performance in the fourth quarter. Sales increased 0.6% year-over-year to $287.2 million, driven by sales from new stores of $17.7 million included $14 million from recent acquisitions; partially offset by a same-store sales decrease of 5.7% on a reported basis and a decrease in sales from closed stores of approximately $0.8 million. On an adjusted basis, same-store sales increased 0.5%. Please note fiscal 2019 was a 52 week year with 361 selling days as compared to 368 selling days in fiscal 2018, which included an extra week of sales in the fourth quarter. Gross margin increased 60 basis points to 38.3% in the fourth quarter of fiscal 2019, from 37.7% in the prior year period. This increase was largely due to the ongoing benefits of our service packages as well as the continued benefits from our optimized store staffing model, partially offset by the impact of sales mix from the free Service Tire acquisition. As we have previously mentioned, the commercial and wholesale locations we acquired as part of the part of the free Service Tire acquisition operate at a lower gross margin, primarily due to the higher mix of Tires and with respect to the wholesale business, a higher sales mix of Tire without installation. As a reminder, we will lap the impact of this acquisition in the first quarter of fiscal 2020. Operating expenses for the quarter increased $4.3 million and were $81.6 million or 28.4% of sales as compared with $77.3 million or 27.1% of sales for the prior year period. The year-over-year dollar increase includes $1.5 million in cost related to our Munro Forward initiatives, as well as expected from 47 net new stores, three net new wholesale locations and higher…

Thanks, Brian. In summary, we had a very good year in fiscal 2019. We delivered strong results in-line with our guidance, driven by solid comparable store sales growth throughout the year. Our Monro Forward initiatives continue to progress well one year after launch. Among the key milestones we reached in fiscal 2019, we implemented our good, better, best merchandising strategy, completed the first phase of our store staffing model optimization, developed our online presence with our Amazon.com collaboration and the modernization of our website, launched our data driven CRM platform and completed our Munro Playbook and store refresh pilot. Disciplined acquisition remain the cornerstone of our strategy with the acquisitions we announced this year, reaching 132 million in annualized sales. Building off this solid platform we believe we are well positioned to capitalize on future growth prospects and drive strong value for our shareholders in fiscal 2020 and beyond. With that, I will now turn the call over to the operator for questions.

[Operator instructions] Thank you. Our first question comes from the line of Brian Nagel with Oppenheimer. Please proceed with your question.

Hi good morning, thank you for taking my questions. So I have two questions I guess. First off, we discussed a bit in the prepared comments as weather, obviously there has been a lot of talk about weather once again been volatile. Looking to results, how should we think about the weather impacts here, and I’m thinking specifically if you could maybe call out the what - I assume a negative impact in fiscal Q4 results potentially negative here early in fiscal Q1. What kind of benefit could we get from a harsher winter as we progress further into spring into the new fiscal year.

Good morning, Brian this is Brett. If you recall our last call, we talked about pretty soft holiday selling season. December and January pretty soft primarily on Tires in particular. As we rolled into the new calendar year, we saw our comp sales progressively improve throughout the quarter, despite a strong comparable year we are up against. I think as we think about the harsher winter, you would expect that to translated into a strong spring selling season, which we still expect, just coming a little bit later in the year than we normally would see, typically around late March and April and May. So we are optimistic we are off to a good start, I think in Q1 despite that, but expect some of that normalized spring service demand, that you would expect to see as consumers prepare for the summer driving season is still ahead of us, as we have yet to see that the weather conditions to get consumers out and focusing on their vehicles to prepare for the summer.

Thanks, that is helpful. And then the second question I had with regard to Amazon and the expanding partnership there, any update on how we should consider or think about the economic sort of financial implications of this relation with Amazon for the Monro model? Brian D’Ambrosia: If you recall, the expansion with Amazon is just an extension of an existing strategy, the Company has executed relationships with other online Tire retailers and we are not going to comment or parse out the performance that we enjoy with Amazon relative to others. But we would characterize that performance towards the end with Amazon certainly is in-line with what we see with our other online partners. And certainly the motivation behind us wanting to expand that relationship to another 400 locations this quarter. And just to remind people on the thesis, the benefits that we see to our Company, certainly as we analyzed our historical relationships for the most part and up to about 50% of time, most of these consumers that we see for Tire installation are new to our brand. So it gives us a great opportunity, I think to drive traffic and build a relationship with a consumer that allows us to not only convert that Tire installation to other services when they are at the store, but also allows us to build long-term relationship with them via our CRM platform going forward. The Economics, certainly we don't sell the Tire as it relates to Tire installation, but the installation revenue itself certainly has high margins, given the high labor content and low material cost of installation, as well as the opportunity for us to add on incremental high margin sales when the consumer is at the store. So we still think this is a net creative strategy for our Company and we will look to expand relationships with Amazon as we progress throughout the year, as well as collaborate with other online retailers going forward. And you know it certainly doesn't change our go forward strategy to build out our own omni-channel strategy as we commented about, in the second half of this year, we intend to launch our own online transaction capability, online as well with consumers Brian.

Well, thank you very much. Best of luck for the coming quarter here. Brian D’Ambrosia: Thanks, Brian.

Thanks, Brian.

Our next question comes from the line of Bret Jordan with Jefferies. Please proceed with your question.

Hey, good morning, guys.

Good morning, Bret.

I guess to follow-up I mean not specifically on Amazon, but just as it relates to your all of your online installation partners. Could you give us a feeling for maybe that the volume that you do for third-party install versus your sold Tire?

Maybe to step this up Bret, I will remind everybody what the industry sees is the online penetration rate for consumers that buy Tires online, and that is been characterized as mid-to-high single-digits call it 7% to 8% of all Tire sold in the U.S. are bought online. And to give you a reference point for Monro, as we look at the amount of installations that we do, is in-line with what the industry is. So call it 7% to 8% of our installations would be incremental versus the tires that we sold and installed to consumers directly for Monro...

Okay, great. Okay, and then Brian, I guess, housekeeping. Could you give us the monthly comps breakout? Brian D’Ambrosia: Yes, sure. January was down two, February up three, March up one.

Okay, great. And then one final question, I guess, as you think about building out more stores in the Southeast. Where are we as far as distribution infrastructure? I know you talked about putting in a DC down there or possibly acquiring business with the DC. But what is the timing of that incremental side of the business?

Two points to consider on that Bret. One is, now that we have made a further acquisition in Southern Florida that takes our store accounts to north of 100 stores in the Florida area, it certainly [warrants] (Ph) I think a could distribution center. The second part of plans here is related to our shift in strategy. Given the fact we have acquired a pretty strong wholesale business, now, we operate under the brand Tires Now, our intention is to expand going forward using a Tires Now location that serves as both a distribution center, but also a profit center as we look to leverage scale and build out our presence in Florida as well. We are currently considering options in Florida to expand there, and we will likely make a decision in this next quarter for execution in the second half of FY 2020.

Okay, great. Thank you.

Thank you. [Operator Instructions] Our next question is from the line of Scott Stember with C.L.King. Please proceed with your question.

Good morning, guys and thanks for taking my questions.

Good morning, Scott.

Just the question on the last call, I guess, maybe we are talking about apples and oranges here. But you had said that your January sales were running up about 2% the same-store on a reported basis. But here you are saying they were down 2% for the month of January. Was there something that happened in between I guess when you guys reported towards the end of the month? Was there any different trends or are we just talking reported basis versus adjusted basis? Brian D’Ambrosia: Yes Scott, this is Brian, I will take that. We reported that January was up two on a reported basis and lower by low 300 basis points are down one when adjusted for days. So that down to number I gave you was also adjusted for days.

Okay, got it. Thanks. That clears that. Thank you very much. And maybe just going out to California, obviously it looks like a very nice deal for you guys, obviously in a different sandbox, maybe just talked about some of the economics of the stores there, the costs, the store density and competition, just give us an idea of, how these markets compared to some of your other core markets that you have over on the East Coast? Brian D’Ambrosia: Sure, Scott. I think maybe I will first start with the rationale for going to California. I think it probably goes without saying California is the single largest market for vehicles in the United States with over I think 15 million vehicles registered and that that puts it at roughly 2x the market potential that a state like Florida has. So tremendous amount of market potential out there, that we felt like Monro was well positioned to capitalize on and as we have desire to become a national retailer and certainly starting in the largest market out West and moving our way back to the East makes lot of sense. If you think about certified in general, we like to certify transaction because it gave us penetration and the three largest DMAs in California, store representation in San Diego, LA and San Francisco and also the fact that it had a distribution center with it allowed us to fully capitalize on our supply chain strengths virtually, immediately under our ownership. As it relates to the economics, I won't comment on the deal dynamics here, but I will say in terms of the price we paid for the acquisitions is in-line with other deals that we have done historically, so not on outsized in terms of valuation there. The actual economics of the store themselves as you can see with the revenue reported 45 million across 40 stores. So the [either] (Ph) economics are in-line, actually slightly higher than our service store revenue and as we commented on the call, we intend to banner these stores, Higher Choice Auto Service Centers to give us the opportunity to continue to maintain a focus on service, but also improve our relevancy on the Tire category as well.

Gout it. And just last question on the balance sheet at 2.15 times that the EBITDA ratio, what is your comfort zone, there is a good chance you will still be highly inquisitive. So what is your comfort threshold and max that you will go up to?

Yes. I think we have got at least another turn there, if you think about where that 2.15 is, a lot of that is capital leases on our balance sheet. We are currently less than one when you look at it, I’m sure lease funded bank debt. So still have a pretty conservative balance sheet and defiantly have a comfort to take on a little bit more leverage here.

Got it. Thanks again.

Thank you.

Thank you. At this time, I will turn the floor back to management for closing remarks.

Thank you all for joining us today and for your interest and support of Monroe. We are very pleased with our 2019 performance and believe we are well-positioned for another strong year ahead. As we continue to execute our strategy. We look forward updating you all on our progress next quarter. Have a great day.

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.